THE COMMONWEALTH FUND
Delivery System Reform: Moving From Fragmentation To High Performance Stephen C. Schoenbaum, MD, MPH Executive Vice President for Programs www.commonwealthfund.org
[email protected] National Congresses September 22, 2008
Commonwealth Fund Commission on a High Performance Health System: 2008 US Scorecard: Why Not the Best?
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Chairman: James J. Mongan, M.D. President and CEO Partners HealthCare System, Inc.
THE COMMONWEALTH FUND
Scores: Dimensions of a High Performance Health System
75 72
Healthy Lives
2006 Revised 2008
72 71
Quality 67
Access
58 52 53
Efficiency
70 71
Equity
67 65
OVERALL SCORE 0
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
100 3
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So, Why Do We Need Health Reform? • Poor coverage, access • Inefficient care – Unnecessary hospitalizations; high readmissions – Unnecessary duplication of tests
• Poor quality & safety – Poor application/execution of known effective practices – Frequent adverse events/error
Furthermore: • Enormous variation in performance • Overall high cost THE COMMONWEALTH FUND
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Five Key Strategies for High Performance/Health Care Reform 1. Extend affordable health insurance to all 2. Align financial incentives to enhance value and achieve savings 3. Organize the health care system around the patient to ensure that care is accessible and coordinated 4. Meet and raise benchmarks for high-quality, efficient care 5. Ensure accountable national leadership and public/private collaboration Source: Commission on a High Performance Health System, A High Performance Health System for the United States: An Ambitious Agenda for the Next President, The Commonwealth Fund, November 2007
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The Promised Land: Higher Value Care: Higher Quality; Affordable Cost
Can We Reach It?
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Organization and Payment CEO
• Organizations Matter – Organizations are necessary but not sufficient for providing better, more coordinated care – Why?
Senior Manager 1
Middle Manager 1
Senior Manager 2
Senior Manager 3
Middle Manager 2
Front Line 1
Front Line 3
Front Line 2
Front Line 4
Front Line 5
Front Line 6
• Payment methods – Incentives need to be aligned with performance (ultimately outcomes) not quantity of care THE COMMONWEALTH FUND
The Problem “The American health care system is the poster child for underachievement… The largest limiting factor is not lack of money, technology, information, or even people but rather a lack of an organizing principle that can link money, people, technology, and ideas into a system that delivers more costeffective care (in other words, more value) than current arrangements.” Source: Stephen M. Shortell and Julie Schmittdiel, in Toward a 21st Century Health System, edited by Alain C. Enthoven and Laura Tollen, 2004.
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Evidence on “Organization” - 1 • Large practices perform better than solo/small practices – Large practices are twice as likely to engage in quality improvement and utilize EMRs (Audet et al, 2005) – Large practices have lower mortality in heart attack care than solo practices (Ketcham et al, 2007)
• Integrated Medical Groups perform better than IPAs (Independent Practice Associations) – Integrated medical groups have more IT, more QI (quality improvement) programs, and better clinical performance than IPAs (Mehrota et al, 2006) – HMOS that use more group or staff model physician networks have higher performance on composite clinical measures (Gillies et al, 2006) THE COMMONWEALTH FUND
Evidence on Organization - 2 • Any network affiliation is better than no affiliation – Although integrated medical groups perform better than IPAs, IPAs are still twice as likely to use effective care management processes than small groups with no IPA affiliation (Rittenhouse et al, 2004) – Physician group affiliation with networks is associated with higher quality; impact is greatest among small physician groups (Friedberg et al 2007)
• Medical groups may be more efficient – Costs are about 25 percent lower in pre-paid group practices than in other types of health plans, but primary data are old (Chuang et al 2004) – Physician-to-population ratio is 22-37 percent below the national rate across 8 large pre-paid group practices (Weiner et al, 2004) THE COMMONWEALTH FUND
Organization as an Enabler of High Performance Case studies of high-performing organizations clearly demonstrate that only organized systems can dramatically improve quality, efficiency, and patient experience. Organizations can: – Ensure that relevant patient information is available to all providers who need it (information continuity) – Coordinate patient care across providers and care settings – Be accountable for care delivered – Have providers work together to improve quality, efficiency, and patient experience (teamwork, peer review) – Facilitate appropriate/easy 24/7 patient access to care – Innovate and improve continuously Source: D. McCarthy et al. Case studies of high-performing organized delivery systems, summarized in: Shih et al. “Organizing the U.S. Health Care Delivery System for High Performance”, The Commonwealth Fund 2008 (Pub.#1155)
THE COMMONWEALTH FUND
Performance Enablers in Organizations • Capital – Infrastructure
• Management – Goals/targets – Day-to-day supervision – Targeted programs THE COMMONWEALTH FUND
Physician Trends: Away from Small Practices but not Towards High Performing Organizations • Proportion of physicians in solo and two physician practices dropping: 40.7% to 32.5% from 1996-7 to 2004-05 (Liebhaber and Grossman, 2007)
• But trend is towards mid-sized, single specialty groups of 6 to 50 physicians, not towards large, multispecialty group practices • Trend is consistent with decline of risk-based capitation – in the current fee-for-service environment, mid-size singlespecialty groups can negotiate higher payments, concentrate capital, and provide high-profit services (Pham and Ginsburg, 2007)
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We Need to Change the Incentives!
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Integrated system capitation Global DRG fee: hospital and physician inpatient Global DRG fee: hospital only
Outcome measures; large % of total payment
Less Feasible
Global ambulatory care fees
Care coordination and intermediate outcome measures; moderate % of total payment
More Feasible
Global primary care fees Blended FFS and medical home fees
Simple process and structure measures; small % of total payment
FFS and DRGs Small practices; unrelated hospitals
Independent Practice Associations; Physician Hospital Organizations
Fully integrated delivery system
Continuum of Organization Source: The Commonwealth Fund, 2008
Continuum of P4P Design
Continuum of Payment Bundling
Organization and Payment Methods
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For You and Your Family: Perfection is the Expectation
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Focus on Quality of Care Delivery
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We’re Far From Perfection, But: • Improvement can occur and is occurring
THE COMMONWEALTH FUND
QUALITY: COORDINATED CARE
Heart Failure Patients Given Complete Written Instructions When Discharged, by Hospitals and States Percent of heart failure patients discharged home with written instructions* 100
94
2004
2006
87 80 75
69
68
61 50
50
56
49 36
33
25
9 0 U.S. mean
90th %ile
Hospitals
10th %ile
Median
90th %ile
10th %ile
States
* Discharge instructions must address all of the following: activity level, diet, discharge medications, follow-up appointment, weight monitoring, and what to do if symptoms worsen. Data: A. Jha and A. Epstein, Harvard School of Public Health analysis of data from CMS Hospital Compare; State 2004 distribution —Retrieved from CMS Hospital Compare database at http://www.hospitalcompare.hhs.gov. Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
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Association Between Quality and Cost: Based on Premier analysis of 1.1 million patients Hospital Level Cost Trend Emerges Over 3 Years Median Severity Adjusted Cost per Case from October 2003 – September 2006 AMI Patients
Knee Replacement Patients
( 19,000 cases per qtr +/- 2,500)
(7,000 cases per qtr +/- 850)
Pneumonia Patients (34,000 cases per qtr +/- 13,000)
Average Severity Adjusted Total Cost
10000
9500
9000
8500
8000
7500 Q4-03
N of hospitals = 233 +/- 12
N of hospitals = 191 +/- 7
Q1-04
Q2-04
Q3-04
Q4-04
Q1-05
Q2-05
Q3-05
Q4-05
Q1-06
Q2-06
Heart Failure Patients
Hip Replacement Patients
CABG Patients
(27,500 cases per qtr +/- 5,000)
(3,150 cases per qtr +/- 350)
(8,300 cases per qtr +/- 1,750)
N of hospitals = 250 +/- 10
N of hospitals = 145 +/- 8
Q3-06
N of hospitals = 253 +/- 10
N of hospitals = 130 +/- 5
Statistical Significance: Cost -- AMI (p
