HIT Summit for Government Leaders Building Public-Private Partnerships: Strategies that Work February 3, 2010 Cindy Ehnes, Esq Director California Department of Managed Health Care
California is the Nation s #1 Managed Care Market More than 25% of America s HMO enrollees live in California 106 California health plans cover more than 24 million people Three of every five Californians are enrolled in an HMO product (22 million) 12 million are in the large group market (more than 50 employees) 90% are enrolled in HMOs 4 million are in the small group market (2-30 employees) 82% are enrolled in HMOs 21 million are in the individual markets (not employer based) 62% are enrolled in HMOs CAHP 2008 Annual Report 2
CA Medical Groups Use More HIT Tools 3
State s Role in Advancing HIT Initiatives Regulatory imperatives can overcome inertia Bully pulpit is a powerful tool Control of purse strings is even more powerful Privacy and security concerns a critical underpinning Development of predictable standards and rules essential Give voice to concerns for the underdogs Focus on sustainability and business case Partnership with private participants and capital 4
DMHC Public-Private HIT Initiatives DMHC s Right Care Initiative: a collaborative for clinical quality improvement utilizing best practices and HIT tools United/PacifiCare CA Investment program: a taxable bond financing program for healthcare and technology infrastructure Multi-payer portal: a consortium for reducing administrative costs for providers and payers California Telehealth Network (CTN): a project to expand secure, high-quality broadband capacity and services to rural and underserved areas 5
The Right Care Initiative A Public/Private Partnership In 2007, the DMHC convened a collaborative of all of the health care communities (health plans, medical groups, academic community, quality experts) at one table with clear goals: Raise HEDIS scores to national 90th percentile of performance for cardiovascular disease (prioritizing hypertension and lipid control) and diabetes Reduce hospital acquired infections Called the Right Care Initiative, this quality improvement effort is built on the foundation of Governor Schwarzenegger s health reform principles, and aligned with those of President Obama to improve value of coverage and clinical outcomes for patients Goals incorporate planning for the appropriate technology tools and active identification of grant and vendor funding opportunities 6
Outstanding Public & Private Partners California Department of Managed Health Care California Department of Public Health NCQA California health plans and medical groups Pacific Business Group on Health California Quality Collaborative California Medical Association Foundation UCLA, UC Berkeley, UCSF, UC San Diego University of Southern California RAND CA Chronic Care Coalition Clinical quality experts - Lumetra Supporting businesses and vendors 7
Barriers to Best Practices As much as 1/3 of every health care dollar, about $700 billion nationally, goes for unneeded or inexact care It takes (on average) 17 years to translate research on best practices into practice Efforts to modernize medical offices with HIT requires practice redesign The cost and impact of adoption of best practices is poorly articulated and seldom compensated Physicians often receive conflicting guidance regarding best practices Health plans have proprietary disease management programs that have generally been unsuccessful 8
Right Care: What is the Value-Add of Yet Another Collaborative? (Yawn!) Regulator at the table is unique Compels active engagement of health plans Assemblage of notable participants Focus on areas of collaboration vs competition Avoids not my patient disincentives Group commitment to float all boats Not inventing best practices, but focusing on standardizing and scaling Identification of resource constraints in a problem-solving environment Breadth of participants allows smaller-scale collaborations to grow 9
Focus on Limited Number of Interventions for Healthy Patient Outcomes Patient Activation 1) Patient Incentives 2) Stanford Patient Self Management toolkit Clinical Pharmacists on Care Team Home Blood Pressure Monitoring Practice Redesign Team based Continuous Not Episodic Web Supported Medical Home Proactive Outreach Medication Adherence ALL/PHASE Protocol (Kaiser) 10
United/PacifiCare California Investment Program: Investment Policies Make capital more accessible to health care entities serving California s low-income urban and rural underserved communities and improve the health status of underserved Californians Make capital more accessible through a value added approach that may include, but is not limited to: Lower cost of borrowing options Paid costs of issuance Flexibility of term structure Support with the investment requirements and process Work for the development of specialized programs, securities and investments that can assist the flow of capital to qualified health care entities throughout California 11
California Health Care Investment Program Capital Access Small Issuance Program Dedicated investment portfolio for health care entities that provide or facilitate the delivery of health care services to underserved, low-income and underinsured communities Designed for smaller healthcare entities seeking $5 million or less for: Upgrade of physical and technology infrastructure Improvement of electronic healthcare technology, including HIE Support for the coordinated care model Expansion of services, and equipment purchases Costs of construction or modernization of healthcare facilities Program Investment Team helps streamline the overall financing process Combines advantages of the lower cost financing options offered through the CHCIP, with those of the UnitedHealth Grant Program through a subsidy of the cost of issuance Advantages include: lower interest costs associated with taxexempt bond financing, flexibility in design of maturity and term structures, financial representation from a dedicated underwriter, and an assembled team of program participants 12
Investment Update Activity Overview (cont) Mendocino Coast HCD, Fort Bragg $5,000,000 10/09 North Sonoma Hospital District, Healdsburg $10,100,000 9/08 St Rose Hospital, Hayward $20,000,000 5/09 Asian Health Services, Oakland $4,005,000 10/09 Institute on Aging, San Francisco $17,540,000 8/08 Tulare District Hospital, Tulare $5,785,000 11/07 Sacramento San Francisco Lompoc Valley Medical Center, Lompoc $4,060,000 5/09 The Help Group Sherman Oaks $5,395,000 11/09 San Gorgonio Memorial HCD, Banning $13,995,000 8/08 Plumas District Hospital, Quincy $3,200,000 11/08 Tahoe Forest Hospital District, Truckee $19,940,000-7/08 Los Angeles Northern Inyo Hospital District, Bishop $15,034,000 4/09 Valley Health Team, San Joaquin $2,250,000 2/08 Sierra Kings District Hospital, Reedley $4,000,000 8/09 Sierra View Local HCD, Porterville $2,000,000 9/07 Family Healthcare Network, Porterville $7,910,000 4/08 Tehachapi Valley Healthcare District, Tehachapi $2,500,000 7/09 Children s Institute Los Angeles $14,300,000 12/09 Clinicas de Salud del Pueblo, Brawley $4,000,000 2/08
California Telehealth Network CTN is a University of California pilot program created through a three-year $221 million grant from the Federal Communications Commission Rural Health Care Pilot Program The CTN project will provide managed, sustainable, medical grade broadband access to community anchor institutions throughout California, as the basis for a technology-enabled health care system Additional funds include a $36 million grant from the California Emerging Technology Fund, and a $5 million grant from the United PacifiCare merger undertakings negotiated by the DMHC 14
CTN Builds on California s Existing Programs Governor Schwarzenegger's 2006 HIT Executive Order allocated $240 million to achieve full information exchange between health care providers and stakeholders within ten years Governor s 2006 Broadband Executive Order established a broadband task force to promote broadband access and usage California Emerging Technology Fund, established and funded by the SBC-AT&T and Verizon-MCI merger agreements approved by the California Public Utilities Commission (PUC) in 2005 to achieve access to broadband and advanced services in California s underserved communities, through the use of existing and emerging technologies 15
CTN Builds on California s Existing Programs Telemedicine and ehealth Center's regional ehealth network, working collaboratively to increase the technological expertise of California health care organizations through capacity building, training, education, and re-granting California Teleconnect Fund, administered by the Public Utilities Commission to provide discounts on advanced telecommunications services, ie, broadband, for qualifying schools, hospitals, libraries and communitybased organizations, including community technology programs, such as an ongoing 50% discount to connect to the Internet, financed by a 013% surcharge placed on every telephone bill University of California's Proposition 1D, a 2006 education bond providing UC with $200 million for infrastructure to expand medical school enrollment and to build and enhance telemedicine statewide 16
California Telehealth Network to Expand Access to High-Quality Broadband Broadband access network will connect public and not-for-profit sites through a high speed network to academic centers, data centers, application service providers, and insurers Telemedicine can also be provided, using live interactive video-conferencing to provide health care at a distance Telemedicine can provide increased access to specialty medical care through video-based consultations, emergency room and intensive care consultation, video-interpreting, telepharmacy, and store-and-forward services 17
Additional Benefits of CTN Consultation services in more than 40 specialties Continuing education/distance learning Facilitate research opportunities Disaster preparedness training for health professionals Access to new technologies being developed, such as in-home monitoring HIPAA-compliant security 18
Administrative Simplification Why Is It So Important? A national Health Affairs survey has shown that the average physician spends nearly three weeks a year interacting with health plans at an estimated annual cost to practices of $31 billion, or $68,274 on average per physician per year Nursing staff spent 23 weeks per physician per year (131 hours per week) Clerical staff spend 44 weeks per physician per year This amounts to 69% of all US expenditures for physician and clinical services Dealing with formularies took the most time 19
Multi-Payer Portal The DMHC is working with the Integrated Healthcare Association in their Assessment of a Multi-Payer Portal for Administrative Simplicity The project goals are to complete the following and make recommendations to CHCF by February 2010: Conduct a landscape analysis Assess and monitor pilots in Ohio and New Jersey Comparative assessment of relevant health plan marketplaces vs California Assess existing eligibility and claims query practices (volumes, modalities, etc) Assess current technical environment Survey all key players Feasibility Assessment Assess technology platforms of leading vendors Ensure consistency with national and state HIT initiatives Provide options and recommendations regarding scope and adoption Establish Business Case Key variables and assumptions Documented evidence of savings Steps and proposed scope Participation requirements and adoption standards Costs and savings Adoption issues and concerns Next steps 20
CORE Initiative The Council for Affordable Quality Healthcare is encouraging a national approach to reducing healthcare costs through their CORE (Committee on Operating Rules for Information Exchange) Initiative CORE is a stakeholder collaboration to facilitate the development and adoption of industry-wide operating rules for administrative transactions, such as eligibility, billing, and benefit information More than 100 organizations in the health care industry are participating, representing more than 130 million lives CORE s 3-phase voluntary business rules build on existing standards, such as HIPAA, and business rules used daily in banking for ATM transactions, and in the airline industry for online reservations To become CORE certified, an entity must pass a testing of its system, and pay a certification fee 21
CORE Adoption Saves Money and Time Based on IBM study results, an industry-wide implementation of CORE Phase I rules could yield $3 billion in savings in only three years Early adopters of Phase I have found that all stakeholders achieved cost savings Provider groups working with CORE-participating health plans saw 10-12% fewer claim denials, a 20% increase of patients verified prior to visit, and higher rates of paid accounts Electronic verifications by providers took about 7 minutes less that telephone verifications, saving about $210 per transaction Health plans realized payback in less than one year Every plan saw savings average can be more than $25 million per plan 22