[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
EXAMINING PAY-FOR-PERFORMANCE MEASURES AND OTHER TRENDS IN EMPLOYER-
SPONSORED HEALTHCARE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS
of the
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
May 17, 2005
__________
Serial No. 109-17
__________
Printed for the use of the Committee on Education and the Workforce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
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COMMITTEE ON EDUCATION AND THE WORKFORCE
JOHN A. BOEHNER, Ohio, Chairman
Thomas E. Petri, Wisconsin, Vice George Miller, California
Chairman Dale E. Kildee, Michigan
Howard P. ``Buck'' McKeon, Major R. Owens, New York
California Donald M. Payne, New Jersey
Michael N. Castle, Delaware Robert E. Andrews, New Jersey
Sam Johnson, Texas Robert C. Scott, Virginia
Mark E. Souder, Indiana Lynn C. Woolsey, California
Charlie Norwood, Georgia Ruben Hinojosa, Texas
Vernon J. Ehlers, Michigan Carolyn McCarthy, New York
Judy Biggert, Illinois John F. Tierney, Massachusetts
Todd Russell Platts, Pennsylvania Ron Kind, Wisconsin
Patrick J. Tiberi, Ohio Dennis J. Kucinich, Ohio
Ric Keller, Florida David Wu, Oregon
Tom Osborne, Nebraska Rush D. Holt, New Jersey
Joe Wilson, South Carolina Susan A. Davis, California
Jon C. Porter, Nevada Betty McCollum, Minnesota
John Kline, Minnesota Danny K. Davis, Illinois
Marilyn N. Musgrave, Colorado Raul M. Grijalva, Arizona
Bob Inglis, South Carolina Chris Van Hollen, Maryland
Cathy McMorris, Washington Tim Ryan, Ohio
Kenny Marchant, Texas Timothy H. Bishop, New York
Tom Price, Georgia John Barrow, Georgia
Luis G. Fortuno, Puerto Rico
Bobby Jindal, Louisiana
Charles W. Boustany, Jr., Louisiana
Virginia Foxx, North Carolina
Thelma D. Drake, Virginia
John R. ``Randy'' Kuhl, Jr., New
York
Paula Nowakowski, Staff Director
John Lawrence, Minority Staff Director
------
SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS
SAM JOHNSON, Texas, Chairman
John Kline, Minnesota, Vice Robert E. Andrews, New Jersey
Chairman Dale E. Kildee, Michigan
John A. Boehner, Ohio Donald M. Payne, New Jersey
Howard P. ``Buck'' McKeon, Carolyn McCarthy, New York
California John F. Tierney, Massachusetts
Todd Russell Platts, Pennsylvania David Wu, Oregon
Patrick J. Tiberi, Ohio Rush D. Holt, New Jersey
Joe Wilson, South Carolina Betty McCollum, Minnesota
Marilyn N. Musgrave, Colorado Raul M. Grijalva, Arizona
Kenny Marchant, Texas George Miller, California, ex
Bobby Jindal, Louisiana officio
Charles W. Boustany, Jr., Loiusiana
Virginia Foxx, North Carolina
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C O N T E N T S
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Page
Hearing held on May 17, 2005..................................... 1
Statement of Members:
Andrews, Hon. Robert E., Ranking Member, Committee on
Education and the Workforce................................ 3
Johnson, Hon. Sam, Chairman, Subcommittee on Employer-
Employee Relations, Committee on Education and the
Workforce.................................................. 2
Prepared statement of.................................... 3
Statement of Witnesses:
Galvin, Dr. Robert, Director of Corporate Health Care and
Medical Programs, General Electric, Fairfield, CT, on
behalf of the Human Resources Policy Association........... 21
Prepared statement of.................................... 23
Hanson, Jeffrey R., Regional Health Care Manager, Verizon
Communications, President, Bridges to Excellence, Portland,
ME......................................................... 34
Prepared statement of.................................... 36
Ignagni, Karen, Chief Executive Officer, America's Health
Insurance Plans, Washington, DC............................ 5
Prepared statement of.................................... 7
Rosenthal, Dr. Meredith B., Assistant Professor of Health
Economics and Policy, Harvard School of Public Health,
Boston, MA................................................. 27
Prepared statement of.................................... 29
EXAMINING PAY-FOR-PERFORMANCE MEASURES AND OTHER TRENDS IN EMPLOYER-
SPONSORED HEALTH CARE
----------
Tuesday, May 17, 2005
U.S. House of Representatives
Subcommittee on Employer-Employee Relations
Committee on Education and the Workforce
Washington, DC
----------
The subcommittee met, pursuant to call, at 2:02 p.m., in
room 2175, Rayburn House Office Building, Hon. Sam Johnson
[chairman of the subcommittee] Presiding.
Present: Representatives Johnson, Kline, Boustany, Andrews,
Kildee, Payne, Tierney, Holt and McCollum.
Also Present: Representative Norwood.
Staff Present: Kevin Frank, Professional Staff Member; Ed
Gilroy, Director of Workforce Policy; Aron Griffin,
Professional Staff Member; Richard Hoar, Staff Assistant; Jim
Paretti, Workforce Policy Counsel; Molly McLaughlin Salmi,
Deputy Director of Workforce Policy; Deborah L. Emerson
Samantar, Committee Clerk/Intern Coordinator; Kevin Smith,
Senior Communications Advisor; Jody Calemine, Minority Counsel,
Employer-Employee Relations; Margo Hennigan, Minority
Legislative Assistant/Labor; and Michele Varnhagen, Minority
Labor Counsel/Coordinator.
Chairman Johnson. A quorum being present, the Subcommittee
on Employer-Employee Relations of the Committee on Education
and the Workforce will come to order. We are holding this
hearing today to hear testimony of Examining Pay-For-
Performance Measures and Other Trends in Employer-Sponsored
Health Care under committee Rule 12(b).
Opening statements are limited to the chairman and ranking
minority member of the subcommittee. Therefore, if other
members have statements, they will be included in the hearing
record. With that, I ask unanimous consent for the hearing
record to remain open for 14 days to allow member statements
and other extraneous material referenced during the hearing to
be submitted in the official hearing record.
Hearing no objection, so ordered.
STATEMENT OF HON. SAM JOHNSON, CHAIRMAN, SUBCOMMITTEE ON
EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON EDUCATION AND THE
WORKFORCE
Chairman Johnson. Good afternoon to you all, and thank you
for being here.
Employers serve as the backbone of health insurance in the
United States, voluntarily providing health coverage to nearly
two-thirds of Americans with health insurance under the age of
65. Without their commitment to keep their employees healthy,
the population of the uninsured would surely change
dramatically.
This afternoon's hearing will focus on ways that employers
are moving and, in some cases, dragging the health care
industry into the 21st century. The fact is, even with all of
today's technology, all too often people are getting the wrong
care at the wrong time. Most of us have heard what the
Institute of Medicine inferred, based on available data in
1999, that as many as 98,000 people die in hospitals each year
because of preventable medical errors.
I can't think of a single industry where it is standard
business practice to pay the same rate to people who provide
good services as to people who provide bad ones.
Mr. Andrews. Major League Baseball.
Chairman Johnson. He said Major League Baseball. Well,
maybe we can all get on steroids, and we all won't have to
worry about it.
That is the way the government and purchasers of other
health care do business, which does not provide much of an
incentive to improve care. Shouldn't we reward doctors and
hospitals for delivering high-quality results for patients,
rather than paying them the same amount regardless of how well
they deliver services to patients?
Some innovative employers and insurers decided to do just
that, to become better purchasers of their health care and to
seek out the providers that had figured out how to increase
quality while keeping costs at a minimum. Our witnesses today
will tell us about a few of the programs that came out of that
decision to become smarter shoppers. It is worth mentioning
that this move toward better purchasing comes at a crucial time
in the development of consumer-driven health insurance
products.
Since we put the spotlight on quality, we found out that
hospitals that spend more money aren't necessarily those that
are the highest quality. In fact, more money is a pretty good
indication of a lack of efficiency. Our consumers need to know
information like that in order to get the most out of their
ability to choose.
The best thing about pay for performance, though, is not
that it saves money, it saves lives.
Medicare is one example of the success of improved
quality--improvement. Mark McClellan, the man responsible for
making sure Medicare and Medicaid are working properly--and
that is not an enviable job--recently announced that all of the
270 hospitals participating in their pay-for-performance
demonstration program reported improved quality of care. That
is just in the first year.
Today we want to hear from a few of the pioneers of pay for
performance and find out what your experience has been,
including any predicted or unforeseen challenges that you face.
I now yield to the distinguished ranking minority member of
the subcommittee, Mr. Andrews, for whatever opening statement
you wish to make.
[The prepared statement of Chairman Johnson follows:]
Statement of Hon. Sam Johnson, Chairman, Subcommittee on Employer-
Employee Relations, Committee on Education and the Workforce
Good afternoon. Thanks for being here today.
Employers serve as the backbone of health insurance in the united
states, voluntarily providing health coverage to nearly two-thirds of
Americans with health insurance under the age of 65.
Without their commitment to keep their employees healthy, the
population of uninsured would surely change dramatically.
This afternoon's hearing will focus on ways that employers are
moving--and in some cases dragging--the health care industry into the
21st century.
The fact is, even with all of today's technology, all too often
people are getting the wrong care at the wrong time. Most of us have
heard what the institute of medicine inferred based on available data
in 1999:
As many as 98,000 people die in hospitals each year because of
preventable medical errors.
I can't think of a single industry where it's a standard business
practice to pay the same rate to people who provide good services and
people who provide bad ones.
But that is the way the government and other purchasers of health
care do business--which does not provide much of an incentive to
improve your care.
Shouldn't we reward doctors and hospitals for delivering high
quality results for patients, rather than paying them the same amount
regardless of how well they deliver services to patients?
Some innovative employers and insurers decided to do just that--to
become better purchasers of their health care, and to seek out the
providers that had figured out how to increase quality, while keeping
costs at a minimum.
Our witnesses today will tell us about a few of the programs that
came out of that decision to become smarter shoppers.
It is worth mentioning that this move towards better purchasing
comes at a crucial time in the development of consumer-driven health
insurance products.
Since we've put the spotlight on quality, we've found out that
hospitals that spend more money aren't necessarily the ones with the
highest quality.
In fact, more money is a pretty good indication of a lack of
efficiency. Our consumers need to know information like that in order
to get the most out of their ability to choose.
The best thing about pay-for-performance, though, is not that it
saves money. It saves lives.
Medicare is one example of success of improved quality improvement.
Mark McClellan--the man responsible for making sure medicare and
medicaid are working properly (not an enviable job!)--recently
announced that all of the 270 hospitals participating in their premier
pay-for-performance demonstration program reported improved quality of
care.
And that's just in the first year.
Today we want to hear from a few of the pioneers of pay-for-
performance and find out what their experience has been--including any
predicted or unforeseen challenges that you've faced.
______
STATEMENT OF ROBERT E. ANDREWS, RANKING MEMBER, SUBCOMMITTEE ON
EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON EDUCATION AND THE
WORKFORCE
Mr. Andrews. Thank you, Mr. Chairman.
I wish to thank the witnesses for their preparation today
and for what will no doubt be an informative and lively
discussion and like to thank you for calling us together.
We are in the midst of a productivity revolution in our
economy. A handful of people are now able to do the work that
dozens or even hundreds used to do. The advent of technology
has made down time or dead time almost nonexistent in many
occupations. We are able to measure quality and progress in
ways that we could not before. I think that across the board we
benefited from that in manufacturing, in telecommunications,
medicine and education. So I think this hearing is timely as a
way of understanding how this productivity revolution can be
brought in the most effective and humane way to the healing
arts and to the medical arts.
One of the other things that we have learned in this
productivity revolution is that a technology or a process can
either be a tool or a weapon. If it is used properly, it
empowers a better result. It benefits the entire community
because we invest relatively fewer resources for a relatively
better result.
But if the tool is misused and used as a way to exploit a
situation or to unfairly characterize a situation, it can have
negative results for all those involved.
I think with this concept, for which I have great sympathy,
with respect to the issue of pay for performance and health
care, I think the key issue is designing measurements that are
fair and comprehensive. I think that is a uniquely apolitical
exercise. I think it has political consequences, but the
exercises itself should be apolitical.
We ought to be able to draw together the best thinkers--
which I believe we have this afternoon--to help us think
through the problem of how we can devise fair, comprehensive
and accurate measures of quality and productivity improvement
and then use those in such a way that they empower the provider
of health care services, the payer for health care services
and, most importantly, the recipient of health care services,
the patient.
So whether it is health club memberships that help deal
with the obesity problem or whether it is sessions that would
help people see the early warning signs of mental illness or
substance abuse or whether it is regular screenings for
malignancies, there are already examples of this productivity
revolution already happening in America. It makes perfect sense
for us to find a way in the marketplace to link the intelligent
use of those methods with better outcomes and reward people for
doing so.
So I look forward to hearing from the witnesses this
afternoon. I approach this enterprise in the spirit of
understanding ways that we can fashion tools that help us bring
this beneficent productivity revolution to healers and patients
and payers.
I thank you for this opportunity.
Chairman Johnson. Thank you, Rob.
We have got a distinguished panel of witnesses before us
today, and I thank all of you for being here.
We will hear from Ms. Karen Ignagni--is that correct?
Ms. Ignagni. Close.
Chairman Johnson.--CEO of America's Health Insurance Plans
located right here in Washington.
Following her will be Dr. Robert Galvin, Director of
Corporate Health Care and Medical Programs at General Electric.
Dr. Galvin will be testifying on behalf of the Human Resources
Policy Association today.
Next, Dr. Meredith Rosenthal, Assistant Professor of Health
Economics and Policy at Harvard School of Public Health.
Finally, from Mr. Jeffrey Hanson, President of Bridges to
Excellence, a group of employers, physicians, health plans and
patients, the purpose of which is to create programs that
realign health incentives around higher quality.
I want to thank you all for being here. If you understand
our light system, green is go; yellow is watch out, you got a
minute; and red, we would like for you to get it closed off if
you can.
Chairman Johnson. With that, Ms. Ignagni, you are welcome
to begin.
STATEMENT OF KAREN IGNAGNI, CHIEF EXECUTIVE OFFICER, AMERICA'S
HEALTH INSURANCE PLANS, WASHINGTON, DC
Ms. Ignagni. Thank you, Mr. Chairman, Mr. Andrews, members
of the subcommittee. We appreciate the opportunity to testify
today.
My written testimony focuses on four areas, and I would
like to briefly summarize them now.
First, rising health care costs are placing a growing
burden on employers, small and large, State governments, the
Federal Government and consumers and making it difficult to
address the growing problem of the uninsured.
A significant contributor, as the committee has already
identified, to this cost problem is the fact that we are
devoting a greater share of resources, payroll, personal
savings and State and Federal budgets to a system that has
uneven quality across the country and where only 55 percent of
treatments are in accordance with best practice. We think there
are opportunities to give purchasers and consumers a value for
their investment by redesigning payment mechanisms and also by
focusing government policy on this objective.
There is broad recognition that paying for health care
services without measuring their effectiveness and efficiency
has prevented the health care system from performing optimally.
In other words, paying the same for good quality and bad
quality has provided little incentive for the system to do
better. This approach has rewarded over-utilization and misuse
of service and resulted in higher payments when health care
complications arise.
Our written testimony outlines numerous examples of
initiatives our members have launched, including financial
rewards to physicians in the form of increased payments or
nonfinancial rewards--also equally important--in the form of
public recognition, preferential marketing or streamlining
administrative procedure.
Additionally, some members are offering consumers reduced
co-payments, deductibles and premiums in exchange for using
providers, leading to higher quality based on specific
performance measurements.
Lessons learned. I apologize, Mr. Chairman, for the voice.
I have allergies. It is the time of the year. So please----
Chairman Johnson. You need some health care----
Ms. Ignagni. No, I have excellent health care, I assure
you. I just need the weather to change.
Chairman Johnson.--and treat that.
Ms. Ignagni. We have shared with the committee key
principles approved by the board of directors in terms of
lessons we have learned to encourage the transition to a
quality based system. I would like to highlight several.
First, a critically important issue in the development of
pay for performance is a uniform, coordinated strategy for
measuring, aggregating and recording a provider performance. If
we continue the proliferation of measurement systems, there
will be no clarity or consistency in what is done. I believe
both of you in your opening statements indicated that you are
concerned about this.
As a member of the Ambulatory Care Quality Alliance, AQA,
AHIP has been working with other stakeholders, particularly the
American College of Physicians and the Academy of Family
Physicians. We recently reached consensus on a common set of 26
ambulatory care performance measures as a starter set. It is a
beginning, targeting conditions on which significant resources
are spent, including heart disease, diabetes and depression;
and more measures are now being adopted and will be ready in
the future.
AQA has also worked on the plan to combine public and
private data. This is particularly important because it would
provide stakeholders with a more comprehensive view of
performance across marketplaces.
Such an initiative would have three positive results: It
will give the consumers more clout, because they will be
allowed to make more informed decisions about their health care
treatments. It will insure fairness for clinicians, because
they would be evaluated based on their entire practice, not
simply patients covered by a particular insurer. It will focus
attention on health care outcomes, raising the quality bar and
allowing physicians to be recognized for good results.
In addition, involvement of physicians, hospitals and other
health care professionals and the design and implementation of
programs that reward quality is essential, in our view, to
their feasibility and sustainability. Our members believe these
programs need to be transparent, and they need to be
predictable. Reporting of reliable, aggregated performance
information will promote accountability for all stakeholders
and facilitate informed consumer decisionmaking.
Indeed, the importance of these principles is highlighted
by a recent physician survey showing an overwhelming majority
of physicians supporting pay for performance if the performance
measures are developed by physicians in that particular medical
specialty, if they are communicated ahead of time to physicians
so that the rules are clear and that the performance measures
are often based and grounded in science.
Finally, I would like to briefly identify a number of
additional steps our members support as part of a broad-based
strategy for further improving quality and efficiency in the
U.S. health care system. Let me highlight several.
First, Mr. Chairman, as you know, Mr. Andrews, the Nation
now spends roughly $30 billion in the most robust health care
research apparatus in the world through the National Institutes
of Health. We spend only $300 million in terms of our
investment in health care effectiveness analysis through AQHR,
through the Agency for Quality Healthcare and Research. So $30
billion versus $3 million, this is an R&D issue that I believe
both of you were probing. We do need to do more in terms of
shedding a spotlight on what works under what conditions and
when.
Second, there is a diffusion issue. Notwithstanding that
robust expenditure through the National Institutes of Health,
there is very little organized and effective approaches to
translate that quickly into practice. So physicians at the
bedside are asking for more help in getting access to
information that is developed through clinical trials quickly
and effectively.
Third, there is a need, in our view, to develop the
framework for evaluating technology for effectiveness and
efficiency. We are on the verge of a brave new world in
pharmaceuticals, in devices, in bios. There is a great deal to
celebrate, but without a mechanism to assess the usefulness of
these procedures, again, under what conditions and at what
time, employers and consumers will be left in the dark in terms
of how to proceed. So we think that is an important issue that
should be teed up as we go forward with moving a delivery
system to a quality-based system.
Fourth, encouraging the development of a connected health
care system. The committee has done a great deal of work and
probing in that regard. We think it is very important to have
uniform standards with respect to an interconnected health care
system so we can look across the country and, again, have
uniformity with respect to rules, with respect to the
transmission of data, to be sure that consumers being treated
in one region are getting the same level and effectiveness of
care as would be the case in another region and that doctors
and hospitals and other clinicians in those different regions
can confer with one another.
Finally, overhauling the medical liability system. There
has been a great deal of discussion in this Congress about the
need to do that. We firmly believe in that. We are spending $30
billion on direct liability expenses and another $100 billion
on defensive medicine, which goes hand in hand with reducing
defensive medicine, moving the system toward an outcome-based,
quality-based system.
So I hope, Mr. Chairman, this short version of our
testimony has been helpful to the committee. Again, I apologize
for the voice, and I appreciate your indulgence in that regard.
Thank you.
Chairman Johnson. Your voice sounds fine to us. Thank you,
Ms. Ignagni.
[The prepared statement of Ms. Ignagni follows:]
Statement of Karen Ignagni, Chief Executive Officer, America's Health
Insurance Plans, Washington, DC
I. INTRODUCTION
Good morning, Mr. Chairman and members of the subcommittee. I am
Karen Ignagni, President and CEO of America's Health Insurance Plans
(AHIP), which is the national trade association representing nearly
1,300 private sector companies providing health insurance coverage to
more than 200 million Americans. Our members offer a broad range of
health insurance products in the commercial marketplace and also have
demonstrated a strong commitment to participation in public programs.
We appreciate this opportunity to testify about initiatives that
reward health care providers for quality performance. Our member
companies have demonstrated strong leadership by designing and
implementing a range of provider payment arrangements--often referred
to as pay-for-performance programs--that are promoting high quality and
efficiency throughout the U.S. health care system.
Our members'' experiences clearly indicate that paying for quality
is a promising strategy for improving overall wellness and advancing
evidence-based medicine, which translates into better health outcomes
and greater value for employers and consumers. To provide context for a
discussion of these innovative programs, our testimony today will focus
on four broad areas:
The challenges posed by rising health care costs and
uneven quality throughout the health care system and how redesigned
payment mechanisms can be an integral part of improving the value that
purchasers and consumers receive;
The importance of pay-for-performance programs as part of
a broad-based strategy for meeting the cost and quality challenges;
Examples of pay-for-performance initiatives our members
individually have chosen to implement and a core set of principles
AHIP's Board of Directors has embraced to provide ideas for aligning
payment incentives with quality; and
Parallel steps that should be taken in several other
areas--in addition to pay-for-performance programs--to further improve
the quality and affordability of health care.
II. CHALLENGES FACING THE U.S. HEALTH CARE SYSTEM
As we enter the 21st Century, the U.S. health care system faces a
number of significant challenges. Rising health care costs are
threatening to make health coverage unaffordable for more Americans,
and are complicating efforts to meet the needs of the uninsured. One of
the factors contributing to this cost problem is the serious concern
that health care quality and patient safety are not optimal for many
consumers. Moreover, traditional payment systems in some instances have
created disincentives to control costs and improve quality.
We believe bold, but thoughtful strategies are needed to directly
address the root causes of these problems. Before offering our
recommendations, we would like to review the background of these cost
and quality issues.
Rising Costs
The most recent data from the Department of Health and Human
Services (HHS) project that national health care spending increased by
an estimated 7.5 percent in 2004. Although this is the lowest rate of
increase since 2000, health care costs still are growing faster than
the overall economy and, as a result, large and small employers are
finding it more difficult to provide or maintain coverage for their
employees.
AHIP and our members are encouraged about what we can do in the
private sector to reduce growth in health care spending. From 1994
through 1999, national health expenditures were in line with overall
economic growth, because health insurance plans implemented a variety
of tools to constrain costs. This had a direct impact on the ability of
employers to purchase affordable coverage for their employees. Indeed,
the Lewin Group estimated that up to 5 million people \1\ who otherwise
would have been uninsured were able to receive coverage as a result of
these costs being restrained.
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\1\ The Lewin Group LLC, Managed Care Savings for Employers and
Households: 1990 through 2000; 1997
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More recently, as the policy debate shifted away from containing
costs, legislative proposals at both the federal and state levels
focused on rolling back the mechanisms that were keeping health care
affordable. This led to a new cycle of accelerating health care costs
that has had an impact on purchasers and consumers.
Recognizing this challenge, our members have developed a new
generation of cost containment tools that already are having a positive
impact and showing promise for the future. For example, the rates of
increase in pharmaceutical expenditures have significantly declined as
a result of our members'' implementation of programs to encourage
greater use of generic drugs and other measures that encourage case
management of chronic conditions. The Center for Studying Health System
Change has reported \2\ that growth in prescription drug spending fell
to 8.8 percent in the first half of 2004, down from almost 20 percent
in the second half of 1999.
---------------------------------------------------------------------------
\2\ Strunk, B., & Ginsburg, P. (December 2004). Tracking Health
Care Costs: Spending Growth Slowdown Stalls in First Half of 2004.
Center for Studying Health System Change. Issue Brief No. 91.
Washington, D.C.
---------------------------------------------------------------------------
The Center also has noted that hospital prices continue to be a
major factor behind increased spending, accounting for almost half of
the annual rate of increase in health care expenditures. At the same
time, innovative drugs, devices and other therapies--while they can
provide undeniable benefits in life expectancy and improved quality of
life--are significant cost drivers. Without any organized way to assess
the impact of this technology or compare the effectiveness of various
therapies, employers and their employees are absorbing these higher
costs without information about what works and the conditions under
which certain therapies are effective.
As purchasers assess the impact of these rising health care costs,
they also are questioning whether they are receiving the best value for
their health care investment.
Quality Concerns
Through its landmark reports released in 1999, To Err is Human, and
in 2001, Crossing the Quality Chasm, the Institute of Medicine (IOM)
focused the nation on the critical need to improve health care quality
and patient safety, coordinate chronic care, and support evidence-based
medicine. Variation in medical decision-making has led to disparities
in the quality and safety of care delivered to Americans. The 1999 IOM
report \3\ found that medical errors could result in as many as 98,000
deaths annually, and a 2003 RAND study \4\ found that patients received
only 55 percent of recommended care for their medical conditions.
---------------------------------------------------------------------------
\3\ ``To Err is Human,'' Institute of Medicine, 1999
\4\ ``The Quality of Health Care Delivered to Adults in the United
States.,'' Elizabeth A. McGlynn, RAND, June 25, 2003
[GRAPHIC] [TIFF OMITTED] T1243.005
A wide range of additional studies indicate that Americans
frequently receive inappropriate care in a variety of settings and for
many different medical procedures, tests, and treatments. Such
inappropriate care includes the overuse, underuse or misuse of medical
services. Studies also show that patterns of medical care vary widely
from one location to another, even among contiguous areas and within a
single metropolitan area--with no association between higher intensity
care and better outcomes. For example:
The Dartmouth Atlas of Health Care \5\ documents wide
variation in the use of diagnostic and surgical procedures for patients
with coronary artery disease, prostate cancer, breast cancer, diabetes,
and back pain. For example, the rates of coronary artery bypass graft
(CABG) surgery were found to vary from a low of 2.1 per 1,000 persons
in the Grand Junction, Colorado hospital referral area, to a high of
8.5 per 1,000 persons in the Joliet, Illinois region. The Atlas'' most
recent findings \6\ reveal wide variation in hospital care and outcomes
for chronically ill Medicare patients. For example, the length of
hospital stays varied--depending on a patient's geographic location--by
a ratio of 2.7 to 1 for cancer patients and by a ratio of 3.6 to 1 for
congestive heart failure patients. Other examples of wide-ranging
variations in care are illustrated in the visual below.
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\5\ Center for the Evaluative Clinical Sciences, Dartmouth Medical
School, The Dartmouth Atlas of Health Care, ``The Quality of Medical
Care in the United States: A Report on the Medicare Program,'' 1999
\6\ Fisher, E., Health Affairs, October 7, 2004
[GRAPHIC] [TIFF OMITTED] T1243.006
The longstanding nature of quality problems in the U.S.
health care system is evidenced by a 1999 article \7\ in The New
England Journal of Medicine, which stated: ``A number of studies have
demonstrated overuse of health care services; for example, from 8 to 86
percent of operations--depending on the type--have been found to be
unnecessary and have caused substantial avoidable death and
disability.''
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\7\ Dr. Bodenheimer, T., The New England Journal of Medicine, Vol.
340, No. 6, pp. 488-492, 1999
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The National Committee for Quality Assurance (NCQA) \8\
documents the state of health care quality annually, reporting in 2004
that ``enormous ``quality gaps''' persist as ``the majority of
Americans still receive less than optimal care'' with between 42,000
and 79,000 avoidable deaths occurring each year. While health care
quality is improving in some areas, the health care system remains
``deeply polarized, delivering excellent care to some people, and
generally poor care to many others.''
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\8\ NCQA, The State of Health Care Quality: 2004, 2004
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These research findings clearly indicate the need for innovative
strategies to improve quality and efficiency throughout the U.S. health
care system. Decisive action is needed to address these wide-ranging
variations in medical decision-making, as well as the overuse, underuse
and misuse of health care services.
Traditional Payment Models
Having reviewed the challenges posed by cost and quality concerns,
we now turn to the issue of payment arrangements.
In general, health care practitioners have not been paid based on
the quality of care they deliver. Until recently, clinical outcomes,
patient satisfaction, and improvements in processes typically have not
been rewarded. Instead, reimbursement has been based on the volume and
technical complexity of services rendered. This approach has rewarded
the over-utilization and misuse of services, and resulted in higher
payments when health care complications arise, creating disincentives
to improve quality and efficiency.
Physicians have expressed concerns about not being recognized and
rewarded for providing high quality care. A 2004 survey \9\ of 400
primary care and specialty physicians, conducted on behalf of AHIP by
Ayres, McHenry & Associates, found that 86 percent of physicians are
concerned that the current payment system does not reward practitioners
for providing high quality medical care. Other findings of this survey
indicate that 71 percent of physicians favor payments based in part on
the quality of care they provide, and 62 percent believe that
information on the quality of care provided by a physician should be
made available to the public.
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\9\ ``National Survey of Physicians Regarding Pay-for-
Performance,'' Ayres, McHenry & Associates, Inc., September/October
2004
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III. MEETING THE COST AND QUALITY CHALLENGES BY
REWARDING QUALITY PERFORMANCE
Health insurance plans have long been at the forefront of
developing innovative payment arrangements that have promoted
population-based health care, improved care for the chronically ill,
and emphasized systematic investment in prevention.
Many of our members currently are offering financial awards to
physicians in the form of increased per-member-per-month payments or
non-financial rewards in the form of public recognition, preferential
marketing or streamlined administrative procedures. Additionally, some
plans are offering consumers reduced co-payments, deductibles, and/or
premiums in exchange for using providers deemed to be of higher
quality, based on specific performance measures. The categories of
performance measures most commonly reported include clinical quality,
utilization experience/efficiency, patient satisfaction, and
information technology infrastructure.
Common Features of Programs That Reward Quality Performance
Based on the experiences of our member companies, we know that
programs for rewarding quality performance have a number of common
features:
Reason for Implementation: To enhance and sustain
clinical quality, facilitate excellence across provider networks, and
improve and promote patient safety.
Role of Clinicians: Nearly all plans indicate that
clinicians are actively involved in key aspects of rewarding quality
performance programs, including program development, selection of
performance measures, and determination of how rewards are linked to
provider performance.
Emphasis on Specific Measures: In rewarding quality
performance programs for physicians and medical groups, achieving
clinical quality goals plays the most significant role in the formula
for determining financial rewards. In programs for hospitals,
utilization experience/efficiency and patient safety objectives tend to
play equivalent roles.
Consumer Incentives: Efforts are being launched to
encourage consumers through reduced co-payments, deductibles, and/or
premiums to use providers that are achieving quality performance.
IV. SPECIFIC INITIATIVES AND PRINCIPLES FOR REWARDING
QUALITY PERFORMANCE
To provide a better understanding of pay-for-performance
initiatives in the private sector, we are providing brief examples of
programs being implemented by our members across the country.
Aetna has launched a network of specialist physicians who
demonstrate effectiveness based on certain clinical measures, such as
hospital readmission rates over a 30-day period, reduced rates of
unexpected complications by hospitalized patients, and efficient use of
health care resources. Consumers who choose these specialists benefit
through lower co-payments, and providers benefit through increased
patient volume. The Aexcel network, which is currently available in
nine markets across the country, includes physicians in twelve medical
specialties--cardiology, cardiothoracic surgery, gastroenterology,
general surgery, obstetrics/gynecology, orthopedics, otolaryngology,
neurology, neurosurgery, plastic surgery, vascular surgery, and
urology.
HealthPartners has implemented an Outcomes Recognition
Program that offers annual bonuses to primary care clinics that achieve
superior results in effectively promoting health and preventing
disease. Since 1997, this program has awarded more than $3.95 million
in bonuses to primary care groups that meet performance goals focusing
on diabetes, coronary artery disease, tobacco cessation, generic
prescribing, and consumer satisfaction.
Highmark Blue Cross Blue Shield has adopted a Quality
Incentive Payment System that rewards primary care physicians for
demonstrating improvement in measures for preventive screenings,
treatment of chronic conditions, and other quality and service issues.
In the tenth year of the program (2003), more than $12 million in
bonuses were paid to primary care physicians who exceeded the average
performance measure on various indicators.
Independent Health uses a Quality Management Incentive
Award Program that involves a physician advisory group in developing
performance targets for key issues such as patient satisfaction,
emergency room utilization/access, office visits, breast and colorectal
screening, immunizations, and treatment for diabetes and asthma. In
addition to paying bonuses to physicians who exceed these targets, this
program has documented significant improvements in clinical care for
enrollees.
PacifiCare Health Systems has developed a Quality Index''
profile that uses clinical, service, and data indicators to rank
medical groups. Enrollees pay lower co-payments for office visits if
they select physicians from a ``value network'' of higher quality,
lower cost providers. Additionally, PacifiCare's Quality Incentive
Program incorporates a subset of the Quality Index profile and has
demonstrated an average improvement of 20 percent in 17 of 20 measures,
with rewards to high performing physicians exceeding $15 million in the
past three years.
WellPoint's quality programs provide increased
reimbursement to hospitals and physicians based, in part, on achieving
improved quality measures. For example, hospitals selected for Anthem
Blue Cross and Blue Shield's Coronary Services Centers program in
Indiana, Kentucky, and Ohio must meet stringent clinical quality
standards for patient care and outcomes for certain cardiac procedures.
Anthem Blue Cross and Blue Shield of Virginia's Quality-in-Sights
Hospital Incentive Program (QHIP) rewards hospitals for improvements in
patient safety, patient health, and patient satisfaction. The 16
hospitals that participated in the first year of QHIP in 2004 are
receiving a total of $6 million for actively working to implement
nationally recognized care and safety practices that can save lives.
Blue Cross of California has a comprehensive physician pay-for-
performance program that paid $57 million in bonus payments to 134
medical groups based on quality criteria in 2003. Blue Cross of
California also has a PPO Physician Quality and Incentive Program
(PQIP) that allows more than 4,000 physicians in six counties in the
San Francisco area to receive financial bonuses for superior
performance on clinical quality, service quality, and pharmacy
measures.
Importance of Uniform Performance Measurement, Data
Aggregation and Reporting
A critically important step in moving forward with programs that
reward quality performance is the development of a uniform, coordinated
strategy for measuring, aggregating and reporting clinical performance.
Disseminating information derived from aggregated performance data--
which provides stakeholders with a more comprehensive view of
performance across marketplaces--would yield benefits on several
levels. Consumers would be allowed to make more informed decisions
about their health care treatments. Physicians, hospitals and other
health care professionals would be better able to improve the quality
of care they provide. Purchasers would receive greater value for their
investment in health care benefits. Health insurance plans could
continue to develop innovative products that meet consumer and
purchaser needs.
AHIP has been working with the American College of Physicians
(ACP), the American Academy of Family Physicians (AAFP), the Agency for
Healthcare Research and Quality (AHRQ), the Centers for Medicare &
Medicaid Services (CMS), and other stakeholders to identify what should
be measured for ambulatory care and how, and develop an effective and
efficient data aggregation model that would comprehensively assess
provider performance.
The collaborative effort now called the Ambulatory Care Quality
Alliance (AQA) recently reached consensus on a common set of 26
ambulatory care performance measures. These measures are grouped under
eight separate categories: (1) prevention; (2) coronary artery disease;
(3) heart failure; (4) diabetes; (5) asthma; (6) depression; (7)
prenatal care; and (8) overuse or misuse of medical services. Many of
the measures under these categories are ``bundled'' measures--i.e.,
multiple measures which if used collectively, have the potential to
more comprehensively and accurately assess physician performance and
provide improved outcomes for patients.
These measures are intended to serve as a ``starter set'' that will
provide clinicians, consumers, and purchasers with a set of quality
indicators that can be used for quality improvement, public reporting,
and pay-for-performance programs. This starter set will be expanded in
a multi-phase process, resulting in a more complete set of measures
which address a wide range of additional quality indicators addressing
efficiency, patient experience, sub-specialties and other key areas.
In addition to working toward a strategy for performance
measurement, AQA is developing a uniform data aggregation strategy. The
aggregation model developed by this alliance would include the
following key attributes:
trusted, third party data aggregator(s) capable of
maintaining appropriate restrictions on privacy and confidentiality;
an independent governing structure that would establish
rules, policies and standards for data aggregation;
a process that allows provider performance to be compared
against both national and regional benchmarks;
collection of both public and private data so that
physician performance can be assessed as comprehensively as possible;
standardized and uniform rules associated with
measurement and data collection;
transparency with respect to framework, process and
rules;
protection of privacy and confidentiality of data while
ensuring necessary access to appropriate stakeholders; and
systems or processes to share, collect, aggregate and
report quality and efficiency performance data that are affordable and
that minimize burdens.
Lastly, AQA is exploring strategies for reporting reliable and
useful quality information to consumers, providers and other
stakeholders. The Alliance recently developed two sets of fundamental
principles for reporting. The first set of principles, which addresses
reporting to consumers and purchasers, aims to facilitate more informed
decision-making about health care treatments and investment. The second
set of principles, which addresses reporting to physicians and
hospitals, is designed to facilitate quality improvement and informing
providers of their performance.
The AQA will continue to move forward in the areas of measurement,
aggregation and reporting, and encourage various stakeholders to become
involved in this important effort to improve health care quality and
patient safety.
Principles for Rewarding Quality Performance
AHIP's members are committed to working with stakeholders across
the health care community, particularly health care professionals who
work on the frontlines every day, to develop a strategy that accounts
for the quality of care delivered to patients. In November 2004, AHIP's
Board of Directors demonstrated this commitment by approving principles
for guiding the development and implementation of programs that advance
a quality-based payment system. They include eight key elements:
Programs that reward quality performance should promote
medical practice that is based on scientific evidence and aligned with
the six aims of the IOM for advancing quality (safe, beneficial,
timely, patient-centered, efficient, and equitable).
Research is urgently needed to inform clinical practice
in priority areas currently lacking a sufficient evidence-based
foundation.
The involvement of physicians, hospitals and other health
care professionals in the design and implementation of programs that
reward quality performance is essential to their feasibility and
sustainability.
Collaboration with key stakeholders, including consumers,
public and private purchasers, providers, and nationally recognized
organizations, to develop a common set of performance measures--
process, outcome and efficiency measures--and a strategy for
implementing those measures will drive improvement in clinically
relevant priority areas that yield the greatest impact across the
health care system.
Reporting of reliable, aggregated performance information
will promote accountability for all stakeholders and facilitate
informed consumer decision-making.
The establishment of an infrastructure and appropriate
processes to aggregate--across public and private payers--performance
information obtained through evidence-based measures will facilitate
the reporting of meaningful quality information for physicians,
hospitals, other health care professionals, and consumers.
Disclosure of the methodologies used in programs that
reward quality performance will engage physicians, hospitals, and other
health care professionals so they can continue to improve health care
delivery.
Rewards, based upon reliable performance assessment,
should be sufficient to produce a measurable impact on clinical
practice and consumer behavior, and result in improved quality and more
efficient use of health care resources.
Significantly, these principles recognize the views that physicians
have expressed on pay-for-performance. The physician survey we
previously noted--conducted by Ayres, McHenry & Associates in
September/October 2004--included additional findings showing that an
overwhelming majority of physicians would support pay-for-performance
programs if the performance measures were developed with physicians in
that particular medical specialty (87 percent), if the performance
measures were clearly communicated to physicians before they were used
in payment arrangements (84 percent), and if the performance measures
were evidence-based and grounded in science (83 percent).
V. OTHER ELEMENTS OF A QUALITY IMPROVEMENT STRATEGY
While programs that reward quality performance can go a long way
toward address cost and quality challenges, this is only one component
of a broad-based strategy for transforming the health care system.
Policymakers should at the same time encourage and pursue a variety of
other programs and initiatives to further advance quality and
efficiency.
Invest in Cost Effectiveness and Translational Research
While the federal government invests heavily in clinical research,
it makes only modest investments in research that compares the relative
effectiveness of existing versus new therapies that are designed to
treat the same condition. The federal government should assign a high
priority to this kind of research and also direct more funding to
promote the widespread adoption of best practices and reduce the
overuse and misuse of health care.
A National Center for Effective Practices should be created to
ensure that the results of cost effectiveness research are translated
into usable information for providers and consumers. This new entity
could identify and make publicly available the latest advances in
evidence-based medical practices, and also shed light on procedures
determined to be less effective.
Develop a Framework for Evaluating Technologies for
Effectiveness and Efficiency
To address the rapid development of new procedures, devices and
other technologies, a public-private framework should be established to
evaluate and compare the effectiveness and efficiency of these
technologies. Moreover, new post-marketing surveillance models should
be developed to assess the appropriate use and long-term value of
certain breakthrough drugs, devices and biologicals.
Encourage the Development of an Interconnected Health Care
System and Uniform Standards
The delivery of health care in America is complex with individuals
seeking care from a variety of physicians, hospitals, and specialists.
The ultimate goal of modernizing the health care system is to improve
personal health and the delivery of care by providing meaningful
personalized information to consumers and providers in a usable form
and in a timely manner. To achieve this aim, we need uniform, national
standards that enable the exchange of health information by and between
clinical electronic health record (EHR) systems and consumer-centric
individual health records.
Overhaul the Medical Liability System to Ensure Effective
Dispute Resolution and Promote Safety and Value
The flaws in the current medical liability system should be
addressed with reforms that place reasonable limits on health care
litigation. Additionally, patient safety legislation is needed to
establish legal protections for medical error information reported by
health care providers, and to permit the aggregation of data that can
be used to determine the causes of medical errors and develop
strategies for improving patient safety. Also needed is a uniform,
national administrative process to resolve malpractice disputes between
patients and health care providers in a fair and efficient manner, thus
avoiding the need for litigation as often as possible.
Modernize and Maximize the Effectiveness of the Regulatory
System.
Encourage choice with uniform rules in the small group
market: A common set of rules would encourage competition, enhance
consumer choice, and provide greater predictability for employers. The
solution is not to waive all requirements for particular groups, but to
establish an appropriate and consistent framework for all participants
to ensure that small employers have maximum options to meet their
needs. This means that the federal and state governments need to work
together to encourage ``best practice'' regulation. This process has
begun with the development of draft legislation--known as the State
Modernization and Regulatory Transparency (SMART) Act--that would
promote uniformity in plan processes, particularly internal and
external review of coverage disputes, speed-to-market and market
conduct standards.
Encourage prompt product approval and consistency in
regulatory processes. Steps should be taken to ensure that states adopt
a mechanism by which health insurance plans can bring innovative
products to the market in a timely manner. Ideally, the federal
government should encourage states to be forthcoming regarding their
standards for policy rate and form filing requirements and to abandon
unwritten ``desk-drawer rules.'' This ultimately will create oversight
mechanisms that allow companies to provide consumers with the products
they need in a timely manner.
Establish an independent advisory commission to evaluate
the impact of mandates on health care costs and quality. Such a
commission could advise policymakers on the safety and effectiveness of
proposed and existing mandated health benefits, and assess whether
proposed mandates result in improved care and value. The commission's
findings also could inform public program coverage and decision-making
to ensure that evidence-based standards are applied consistently in
Medicare, Medicaid, and other public programs.
Provide Funding for High-Risk Pools
AHIP's Board of Directors approved a statement in June 2004
indicating support for federal funding for state high-risk pools to
cover individuals who have unusually high health care costs. This
legislation fits within the parameters of what Congress is able to
accomplish from a budgetary standpoint at this time. This initiative is
one of the next steps Congress should take as part of a long-term
strategy for strengthening our nation's health care safety net.
Expand Tax Credits to Encourage the Purchase of Health Care
Coverage
To address the needs of working Americans who are uninsured and
ineligible for public programs, Congress can help make health coverage
more affordable by expanding tax credits for low-income persons. This
approach will be particularly helpful to Americans who do not have
access to employer-sponsored coverage and to those who decline such
coverage because of the high cost. Moreover, tax credits could prompt
more small businesses to offer employee health benefits. The Employee
Benefits Research Institute (EBRI) \10\ has reported that among small
employers that do not offer employee health benefits, 71 percent would
be more likely to seriously consider offering health benefits if the
government provided assistance with premiums.
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\10\ Employee Benefit Research Institute, Small Employers and
Health Benefits: Findings from the 2002 Small Employer Health Benefits
Survey, January 2003
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VI. CONCLUSION
It is increasingly clear that the U.S. health care system faces
significant quality challenges that are further heightened by rising
medical costs. Taken together, these factors create an urgency for
stakeholders to work collaboratively to improve the quality, safety and
efficiency of the health care system. Programs that recognize and
reward quality performance should be an important part of this effort.
We applaud the subcommittee for focusing on the value of payment
arrangements that align reimbursement with quality performance.
Rewarding Quality Performance: Health Insurance Plan Examples
Aetna
Hartford, Connecticut
In January 2004, Aetna launched a network of specialist physicians
developed based on quality and efficiency indicators. The new Aexcel SM
network was created by identifying medical specialties associated with
a large portion of health care spending and features specialists who
demonstrate effectiveness against certain clinical measures such as
hospital readmission rates over a 30-day period, and reduced rates of
unexpected complications by hospitalized patients; volume of Aetna
enrollees'' cases; and efficient use of health care resources. Aexcel
SM benefits consumers through lower copayments for seeking services
from more efficient providers, and providers benefit through increasing
the volume of patients to their practices.
Physicians in six medical specialties--cardiology, cardiothoracic
surgery, gastroenterology, general surgery, obstetrics/gynecology, and
orthopedics--who have met the established measures were designated to
participate initially in the network option. Aetna also recently
expanded its network to include additional six specialties (e.g.,
otolaryngology, neurology, neurosurgery, plastic surgery, vascular
surgery, and urology). The Aexcel SM network is currently available in
the nine markets of Atlanta, Houston, metropolitan Washington DC, Los
Angeles, Connecticut, metropolitan New York/New Jersey, Dallas/Fort
Worth, North Florida and Seattle/Western Washington. Additional
geographic regions will be added over the next two years.
Blue Cross Blue Shield of Michigan and Blue Care Network
Detroit, Michigan
Blue Cross Blue Shield of Michigan (BCBSM) and Blue Care Network
(BCN) have designed and implemented a number of provider incentive
initiatives and are continuing to expand and evolve these efforts.
The BCBSM Hospital Incentive Program rewards hospitals that
demonstrate achievement in three major categories: clinical quality,
patient safety, and community health. Through this program, hospitals
can earn up to an additional four percent on their inpatient payments.
BCBSM's participating hospital agreements establish the incentive
program; up to four percent is added to each Diagnosis Related Group
(DRG) payment, based on each hospitalization or admission, if the
standards are met. The actual amount a hospital earns is based on its
individual performance. Hospital performance has improved each year the
program has been in place. In 2004, performance in the program has
earned participating hospitals an average incentive payment of over
three percent, the average incentive, which is added to the DRG
payment.
The BCBSM Cardiac Centers of Excellence program established in 1996
helps enrollees make informed decisions when selecting a hospital to
meet their cardiac needs. Ten Michigan hospitals currently meet the
quality criteria for this program. As a result of this initiative,
BCBSM has observed lower mortality rates, fewer unplanned coronary
artery bypass grafts, fewer heart attacks, and fewer cases of kidney
failure requiring dialysis. These improvements are associated with
approximately $8 million in annual savings.
The BCBSM Physician Group Incentive Program rewards physician
groups for their ability to: create registries for patients with
particular medical conditions; provide performance feedback to
individual physicians; promote consistent delivery of care according to
evidence-based guidelines; refer to care management programs; and
demonstrate improvement in generic drug prescribing and cost-effective
prescribing. A pay-for-performance pool is distributed quarterly to
selected medical groups. The share of the incentive pool for each group
is based on the numbers of enrollees served and in meeting performance
expectations. Ten physician groups were selected to participate in 2004
and two more joined in 2005.
Blue Care Network Performance Recognition Program (PRP) and Blue
Reward'' programs reward primary care physicians and medical groups for
surpassing quality and patient satisfaction benchmarks and for other
focused short-term performance improvements. From 2001-2003, BCN has
rewarded approximately 80 percent of nearly 3,000 eligible primary care
physicians for performance improvements each year across the state of
Michigan. The rates of breast cancer screening, cervical cancer
screening, childhood immunization, smoking cessation, and patient
satisfaction all increased through the PRP program. The innovative Blue
Reward'' program (short term, focused) has also recorded early
successes with Prilosec OTC'' and electronic referral initiatives.
CIGNA HealthCare
Hartford, Connecticut
CIGNA HealthCare of California participates in the Integrated
Healthcare Association's (IHA) quality incentive program. CIGNA uses
IHA's common measurement set to evaluate performance. CIGNA then
rewards the top 50 percent of contracted physician groups for meeting
each of the IHA clinical and member satisfaction metrics. Fifty-percent
of the overall pool is being rewarded to providers for meeting HEDIS/
clinical measures, such as breast cancer screening, cervical cancer
screening, and appropriate medications for asthma; 40 percent for
enrollee satisfaction; and ten percent for the adoption and
implementation of health information technology. Top-performing groups
in all components of the Rewards Program are eligible to receive a
minimum of $1.60 per member per month. Payment is based upon the total
annual member months of the group's population. In the first year of
the program, the payout in California for IHA was $4 million.
CIGNA also uses other non-financial strategies to recognize their
network providers. Participating physicians and hospitals that have met
certain quality criteria are recognized in its online Provider
Excellence Recognition Directory. Physicians are recognized for being
certified by the National Committee for Quality Assurance for providing
high quality diabetes or heart/stroke care. Hospitals are highlighted
for meeting the Leapfrog Group's three patient safety standards (e.g.,
Computer Physician Order Entry systems, Intensive Care Unit Physician
Staffing, and Evidence-based Hospital Referrals).
Harvard Pilgrim Health Care
Wellesley, Massachusetts
Harvard Pilgrim Health Care (HPHC) implements a multi-faceted
Provider Network Quality Incentive Program that includes a Physician
Group Honor Roll, a Quality Grant Program, and a Rewards for Excellence
program. These activities are highlighted below.
HPHC participating physician groups are eligible for inclusion in
the Harvard Pilgrim Physician Group Honor Roll by exceeding performance
levels in clinical areas, such as breast cancer screening, appropriate
diabetes care, and childhood immunizations. On an annual basis, HPHC
publishes the names of all Primary Care Physicians affiliated with the
physician groups that have achieved Honor Roll or Honorable Mention in
print and online physician directories.
HPHC's Quality Grant Program provides support to local physician
offices to implement quality improvement interventions that may face
particular challenges in achieving high performance targets. These
grants help practices to address important issues, such as geographic
access to needed services, language or cultural barriers, and outreach
and other services to disadvantaged populations. These practices, in
turn, support Harvard Pilgrim Health Care's mission to improve the
health of its members and the community at large. In 2003 and 2004, a
total of 2.5 million dollars was granted for 34 grants.
Another component of the Provider Network Quality Incentive Program
is Rewards for Excellence. This initiative recognizes and rewards the
exemplary performance of local quality efforts. HPHC has identified a
subset of areas of focus. These areas targeted include key Health Plan
Employer Data and Information Set (HEDIS) performance measures where
effective clinical interventions have been identified and/or where
current levels of performance--nationally, regionally, and within
Harvard Pilgrim--are less than clinically optimal. Current measures
include such measures as eye exams and kidney screening for people with
diabetes, appropriate anti-depressant medication management, asthma
management, and chlamydia screening. HPHC offers its providers
financial rewards for achieving excellent levels of performance in the
defined target areas. In 2003, Harvard Pilgrim rewarded 55 out of 66
eligible practices.
HealthNet
Woodland Hills, California
HealthNet is an active participant in the Integrated Health
Association initiative, a quality incentive program in California with
six participating health insurance plans and 215 medical groups,
representing 45,000 physicians. A common measurement set across all
health insurance plans is used to evaluate provider performance. The
measurement set includes quality indicators for both preventive and
chronic care, such as breast cancer screening, and appropriate
medications for asthma, patient satisfaction, and the investment and
adoption of health information technology. Each health insurance plan
then uses its own methodology and formula to calculate the physician
group bonus. Collectively, health insurance plans paid approximately
$50 million to physician groups in its first year.
HealthNet has seen the following results from this initiative:
increasing numbers of contracted medical groups eligible for such
rewards (70 groups in 2004 as compared to 30 groups in 2003); and HEDIS
rate increases on average of two percent for all paying for performance
program measures.
HealthPartners
Minneapolis, Minnesota
HealthPartners'' Outcomes Recognition Program (ORP) offers annual
bonuses to primary care clinics that achieve superior results in
effectively promoting health and preventing disease. Eligible primary
care groups are annually allocated a pool of bonus dollars that is
awarded if a group reaches specific performance targets. Measures focus
on important clinical issues, such as diabetes, coronary artery
disease, tobacco cessation, generic prescribing, and consumer
satisfaction. ORP bonus awards are an addition to the standard provider
payment for primary care provider groups. In 2004, eligible clinics
were able to earn financial rewards ranging from $90,000 to $290,000,
depending on the size of their HealthPartners' enrolled populations and
the number of measurable targets reached. In 2004, 19 of the 26
eligible primary care groups received a total of $656,250 in ORP bonus
awards. Since 1997, ORP bonus awards have totaled over $3.95 million.
Highmark Blue Cross Blue Shield
Pittsburgh, Pennsylvania
Highmark Blue Cross Blue Shield's Quality Incentive Payment System
(QIPS) rewards physicians in 20 counties in Western Pennsylvania for
improvements in measures based, in part, on the Health Plan Employer
Data and Information Set (HEDIS) for preventive screenings and
treatment for chronic conditions. Additional quality and service
performance measures include generic versus brand prescribing patterns,
electronic submission of claims, and the use of Highmark's provider
portal. Highmark's QIPS rewards are for Primary Care Physicians (PCPs)
who participate in Highmark's HMO/POS product lines with panel sizes of
at least 300 patients. These physicians are eligible for a bonus in
addition to capitation. Scoring is based on meeting or exceeding the
Highmark network average for each indicator.
In the tenth year of the program (2003), primary care physicians
were reimbursed $12.3 million for 12.6 million member months or
approximately $0.98 per member per month. Over time, ninety-eight
percent of the participating PCPs have met or exceeded some of the
clinical indicators being evaluated and fifty percent of the eligible
physicians meet the benchmarks for each quarter for all clinical
indicators. Later this year, Highmark plans to expand this program to
its PPO product line and to central Pennsylvania.
Since 2001, Highmark has also worked with its hospitals within its
network to improve quality. Individual hospitals work with Highmark in
its QualityBlue SM program to develop projects that focus on medication
safety, patient safety, and infection control and meet their individual
facility needs. Baseline improvement goals are established at the onset
of the program to evaluate the hospital performance. A portion of the
hospital's contracted reimbursement is placed at risk based on their
performance. The participating hospitals represent over 50% of
Highmark's total hospital claim payments.
Currently operating in 29 western Pennsylvania counties,
participating hospitals in the QualityBlue SM program have achieved
remarkable results in their indicators. Some of the achievements have
been reducing or eliminating infections in targeted hospital units,
preventing medication errors though implementation of technology,
reducing readmissions for cardiac patients, and reducing or eliminating
patient identification errors.
Independence Blue Cross (IBC)
Philadelphia, Pennsylvania
Independence Blue Cross (IBC) offers a quality of care incentive
payments system (QIPS) to both PCPs and hospitals. The PCP QIPS
program, for HMO capitated primary care practices, promotes both
quality of care, including member satisfaction, and quality of service
goals of the Plan. The program began in 1992, and was redesigned in
2002 to include clinical quality measures of effectiveness of care,
such as screening rates for women's health issues, care of patients
with diabetes, members with asthma, and selected cardiac conditions,
and service measures of extended office hours, appropriate use of
generic drugs, electronic connectivity, and the use of that
connectivity for referrals and encounters. PCPs in approximately 1,350
locations caring for about 870,000 members are eligible for quality of
care payments; 85% received payments as high as $2.30 Per Member Per
Month over and above their regular capitation rate.
A hospital quality incentive payment system was designed in 2002
that currently includes one system with six hospitals. Hospitals agree
to base a significant part of their annual rate increase on performance
against agreed-upon quality indicators. Indicators are based on third
party measures broadly accepted as good barometers of quality from
organizations such as the Pennsylvania Health Care Cost Containment
Council, the Joint Commission on Accreditation of Healthcare
Organizations, the Leapfrog Group, the Agency for Healthcare Research
and Quality, and others. Since 2002, a number of hospitals in the
system have improved on several measures.
Independent Health
Buffalo, New York
The goal of Independent Health's Practice Excellence program has
been to improve enrollee health through improved access/timeliness of
care, preventive screening, and adherence to evidence-based guidelines
for the treatment of chronic conditions.
A physician advisory group has helped to develop key program
elements and has helped establish ``performance targets'' in areas such
as patient satisfaction, emergency room utilization, access/office
visits, breast and colorectal screening, immunizations, and treatment
for diabetes and asthma.
Physicians earn an award based on their level of performance: high,
average and below average. Unique to the Independent Health model, the
diabetes and asthma adherence to guideline components are awarded based
upon participation and active engagement in the program only (not
performance-based). The overall award amount is based upon an
additional per member per month reimbursement for the level of
performance and participation achieved. Primary care physicians can
earn up to $2 PMPM for high-level performance in all five areas.
Independent Health's Practice Excellence program has a continued
record of success, with significant improvements in preventive health
services and double-digit improvement in over twenty performance
metrics associated with diabetes and asthma.
Oxford Health Plans
Trumbull, Connecticut
Oxford Health Plans created the Best Practices Program (BPP) for
diabetes to recognize and reward quality performance among physicians.
Oxford's BPP initiative is designed to reach those individuals who are
not engaging in the appropriate activities (e.g., diet, exercise and
regular visits to specialists) to manage their conditions. Oxford works
collaboratively with providers within their network to motivate members
to: 1) become actively engaged in the care they receive; 2) modify
behaviors to appropriately manage their health conditions; and 3) be
accountable for personal health outcomes.
Currently, more than 380 high-risk members with diabetes have been
referred to endocrinologists in Oxford's BPP initiative for diabetes.
Of those members with confirmed visits to specialists, Oxford has seen
an average decrease in A1C levels of about 8%. In addition, over 60% of
members enrolled in the program improved their A1C results by the
second physician visit.
In the initial phase of this program, Oxford selected high-quality
endocrinologists or endocrinology groups across seven counties in New
York to participate. These endocrinologists have achieved or have
agreed to apply for the Diabetes Physician Recognition Program co-
sponsored by the American Diabetes Association and the National
Committee for Quality Assurance that measures the physician's ability
to meet certain measures of diabetes care. A cross-functional team was
developed to provide outreach calls to program participants to arrange
appointments with a participating endocrinologist.
PacifiCare Health Systems
Cypress, California
PacifiCare Health Systems has adopted a comprehensive and
integrated strategy to improve quality and affordability through
Quality Index'' profiles, value networks, a quality incentive program,
health and disease management programs, and consumer rewards. Since
1998, PacifiCare's semi-annual Quality Index'' profile of Medical
Groups has used clinical, service, and data indicators to rank medical
groups. The measures are sorted into five categories: Staying Healthy
(e.g., includes cervical and breast cancer screening, chlamydia
screening and childhood immunizations); Appropriate Care (e.g.,
appropriate care for diabetes care and coronary artery disease);
Patient Safety (appropriate use of antibiotics and cholesterol-lowering
drugs); Service & Satisfaction (e.g., satisfaction with medical groups
or primary care physicians, and Primary Care Physician communication);
and Affordability. PacifiCare profiles the medical groups and then
posts the results as ``report cards'' on its Web site and includes a
summary in its provider directory to members.
In addition, in 2003, PacifiCare began publishing an annual Quality
Index'' of Hospitals which serves as a report card on the relative
performance of contracted hospitals on 56 measures of risk-adjusted
complication rates and mortality rates, patient safety measures,
utilization and patient satisfaction related to common medical,
surgical, obstetrical, orthopedic and pediatric conditions. The
profiles are available on PacifiCare's public website.
Enrollees who select physicians from PacifiCare's ``value network''
of higher quality, lower cost providers, also may pay $10 per visit for
their primary care physician and $20 per visit for a specialist,
whereas co-payments for office visits using physicians and specialists
in the ``standard network'' may double those amounts. Furthermore,
PacifiCare's Quality Incentive Program (pay for performance)
incorporates a subset of the Quality Index(r) profile and has
demonstrated an average improvement of 25 percent in 17 of 20 measures,
with rewards exceeding $15 million in the past three years to better-
performing providers.
Regence BlueShield
Seattle, Washington
Regence BlueShield's Clinical Performance Recognition Program
acknowledges primary care providers who exhibit strong performance in
both clinical quality ``adherence to evidence-based guidelines and
cost-efficiency ``reducing condition-specific cost variation over the
course of patient care. To be recognized, providers receive aggregate
quality and efficiency scores, with each area given equal weight, and
then each clinician's percentile rank is averaged. Only clinical
specialties with at least 20 participating physicians are eligible for
recognition. Clinicians within the top ten percent of the composite
metric are acknowledged for their performance. To introduce their
program, Regence awarded $5,000 to 200 primary care physicians who met
these performance criteria.
In addition, Regence and The Boeing Company have implemented a
Hospital Safety Incentive program. The program is intended to encourage
members of Boeing's largest unions to use hospitals that meet the
Leapfrog Group patient safety standards. Patients requiring any of six
procedures, such as Coronary Artery Bypass Graft and Abdominal Aortic
Aneurysm repair must use a network hospital that meets the Leapfrog
Group's Evidence-Based Hospital Referral volume standard in order to
receive the incentive. For all other hospital services, patients must
use a hospital that meets the Leapfrog Group's standards for
Computerized Physician Order Entry as well as the Intensive Care Unit
staffing requirements. Patients seeking care from hospitals that meet
the required standards receive 100 percent coverage after their
deductible (compared to 95 percent if they receive care from hospitals
that have not met these standards).
Rocky Mountain Health Plans and Mesa County Physicians IPA
Grand Junction, Colorado
Rocky Mountain Health Plans (RMHP) and the Mesa County Physicians
IPA jointly developed a three-year pilot project in late 2002-early
2003 to reward primary care physicians for performance in the
management of chronic illnesses. The project uses a three-part strategy
to recognize quality performance through strong outcome measures and
support of quality improvement efforts of physicians. First, the
project creates an opportunity for providers to share in the benefits
of improving chronic illness outcomes through timely performance
payments from the IPA. Second, practices can opt to access guidance and
assistance, without charge from RMHP, in implementing a system for
improved outcomes (``chronic care model''). Third, RMHP provides
ongoing support for offices implementing the model through monthly
collaborative educational lunches and a quarterly case management fee
payment.
A physician committee established the clinical outcome measures
used based on peer-to-peer comparisons. Initially, all measures are
being equally weighted. Eligibility for physician rewards is based on
levels of participation in the program:
If no data is submitted, physicians are not eligible for
performance payments.
If data is submitted on an approved flow sheet or report,
physicians are eligible for performance payments.
If data is submitted on an approved flow sheet or report
and criteria has been met for a chronic care office meeting, physicians
are eligible for performance payments and quarterly case management
fees per diseased member.
Within the first twelve months of the project, 100 percent of the
primary care physicians in Mesa County who have RMHP members with
diabetes were submitting data quarterly on nearly 1800 members.
Approximately 50 percent of the primary care physicians are using an
improved process for delivering care to their entire population with
diabetes or asthma.
Significant improvement is being seen in diabetes clinical outcomes
in all lines of business. There is also early evidence of the
anticipated cost saving trend in the commercial line of business.
Documented first year savings in the commercial line of business is
about $41,500.
WellPoint Inc.
Indianapolis, Indiana
WellPoint's quality programs provide increased reimbursement to
hospitals and physicians based, in part, on achieving improved quality
measures. Below are several examples of proven quality programs at
WellPoint:
Approximately 15,000 physicians in Anthem Blue Cross and Blue
Shield networks receive a portion of their reimbursement through
bonuses for improving care to health plan members. For example,
hospitals selected for Anthem Blue Cross and Blue Shield's Coronary
Services Centers program in Indiana, Kentucky, and Ohio must meet
stringent clinical quality standards for patient care and outcomes for
certain cardiac procedures. Examples of quality standards used for
evaluation include: Cesarean-section rates, the percentage of patients
who were prescribed beta-blockers after discharge, the number of
discharged heart failure patients prescribed ACE inhibitors, and
adoption of patient safety as a strategic goal. Since the program's
inception in Ohio more than 10 years ago, participating hospitals in
the state have seen a 38-percent decrease in mortality rates, and
improved rates for beta blocker use after heart attacks.
Anthem Blue Cross and Blue Shield of Virginia's Quality-in-Sights
Hospital Incentive Program (QHIP) rewards hospitals for improvements in
patient safety, patient health, and patient satisfaction. The 16
hospitals that participated in the first year of QHIP in 2004 are
receiving a total of $6 million for actively working to implement
nationally recognized care and safety practices that can save lives.
Hospitals are measured on such indicators as the adoption of JCAHO
patient safety goals, implementation of computerized physician order
entry systems, administration of beta blockers after heart attack,
pneumococcal vaccination, and rates of serious complication following
diagnostic cardiac catheterization. Hospitals can earn up to an
additional one percent from Anthem, with the reward added to
reimbursements going forward. In 2005, 45 Virginia hospitals are
participating in QHIP.
Blue Cross of California (BCC) is implementing comprehensive
physician pay-for-performance programs. In 2003, BCC paid $57 million
in bonus payments to 134 medical groups based on quality criteria. The
quality indicators evaluated within the HMO program include member
satisfaction, compliance with preventive screenings, such as
mammograms, appropriate treatment of asthma, and smoking cessation. BCC
is also a member of a coalition of six health insurance plans that
awarded $50 million in bonus payments to 215 physician groups in 2004
based on clinical benchmarks.
In October 2002, Blue Cross of California also expanded these
programs to include a PPO Physician Quality and Incentive Program
(PQIP). The payment rewards are currently limited to six counties in
the San Francisco area. Over 4,000 physicians located in six counties
in the San Francisco area are eligible to participate in the Physician
Recognition Program and receive a financial bonus for superior
performance on clinical quality (e.g., breast cancer screening,
childhood immunizations, and eye exams and Hemoglobin A1C testing for
diabetes), service quality (e.g., enrollee complaints) and pharmacy
measures (e.g., generic substitutions). Nearly $3 million in bonuses
were distributed to close to 2,000 physicians in Spring, 2004 based on
first year PQIP performance. Going forward, PPO physicians could be
eligible for a fee schedule increase up to 14 percent above the plan's
standard PPO fee schedules.
______
Chairman Johnson. Dr. Galvin, you are welcome to begin.
STATEMENT OF DR. ROBERT GALVIN, DIRECTOR OF CORPORATE HEALTH
CARE AND MEDICAL PROGRAMS, GENERAL ELECTRIC, FAIRFIELD, CT, ON
BEHALF OF THE HUMAN RESOURCES POLICY ASSOCIATION
Dr. Galvin. Good. Thank you, Chairman Johnson, Congressman
Andrews and other distinguished members of the subcommittee.
Thank you for asking me to testify on the challenging issue of
employer-sponsored health benefits.
My name is Robert Galvin, and I am the Chief Physician of
Global Health Care for General Electric. I am appearing today
on behalf of the H.R. Policy Association, where I am serving as
director of Health Care Value initiatives.
In my position at GE, I am responsible for the design and
operation of GE health benefits. To cover over 350,000 U.S.
employees and retirees costs the company $2 billion annually,
growing at a rate that is three or four times faster than the
CPI. Like most large companies, GE believes healthy employees
and families contributes to our success as a company. We remain
committed to helping our employees staying healthy and
providing them access to highest-quality treatment when they
are ill.
However, I cannot overestimate or stress enough the level
of concern both to GE management and to GE employees about the
relentless increase in health costs. H.R. Policy Association, a
group representing chief human resource officers from more than
25 large employers, and the Business Roundtable, an
organization representing CEOs of large employers, have
declared that health costs are the biggest issue facing senior
leadership. This shows how this has reached the radar of top
leadership of American corporations.
In 2003, the H.R. Policy Association Board of Directors
created the health care Policy Roundtable to use the collective
buying power of the 20 million workers employed by HRPA
companies to leverage health care reforms within existing
policies. Two private-sector initiatives by the Roundtable that
are relevant to the discussion today are explored in greater
detail in my written statement, called the National Health
Access and the Regional Health Care Quality Reform initiatives.
The most important trend, I think, going on among employers
today is that, in response to both the unpopularity of managed
care in the last decade and the new research, which Ms. Ignagni
mentioned, showing the serious gaps in quality and the
variation, employers have moved from a focus purely on cost to
one based on value. What we mean by value is the highest
quality and quality first at the best price.
To be able to buy value, employers believed two fundamental
changes are needed and that without these fundamental changes
it won't be possible to move forward. First, comprehensive
information about the performance of doctors and hospitals
needs to be publicly available as quickly as possible. Second,
existing financial incentives which currently drive the wrong
behaviors need to be changed.
Let me give you a real-world example of how our current
system plays out for employees and patients.
Last month I got a call from a very concerned employee
seeking advice about whether the place that a primary care
doctor had recommended she get treated was really the best
place for her to go for a diagnosis of cancer.
Despite searching every data base I could find, I was
unable to answer this person's question. I called a colleague
who collects this kind of data, and I asked him if he could
help. He replied that he would like to help but that the
doctors and hospitals that agreed to send him data only if he
refused to reveal their individual performance. I asked if he
were willing to help the patient and me by doing the following.
As I mentioned possible treatment sites, would he cough
once as I mentioned the best one and would he cough twice when
I mentioned the second best. I quickly named the facilities and
hearing first a single cough, then two coughs, I realized what
he was telling me. I then had a long discussion with the
employee and her family to help them make the decision.
In this case, it turned out that she went to an alternative
center from where she was going because they had much more
experience in treating her kind of cancer. So as strange as it
my be to hear that true story in our information rich country
in the year 2005, it is also true and equally strange that the
best facility and the worst facility get paid exactly the same.
Employees also do not have incentives around their choices.
Our data at GE shows that in every metropolitan area where we
are, which is most of them in the country, among the hospitals
with the highest quality costs differ by 30 percent. Yet in
almost every benefit design that employers have created--and
employers pay the same whether they choose the most expensive
option or the one with the best value--a recent analysis we
just did of GE data shows that our employers are going to the
highest quality doctors and hospitals best judged by available
measures only 30 percent of the time. If those employees were
to go to the best providers all the time, GE would save at
least $100 million annually, and our employers would get
improved quality.
In a recent survey, 80 percent of our employees told us
that they would change doctors and hospitals if they had the
data they trusted, just like the employee I mentioned a minute
ago. A majority of doctors with whom we have spoke have told us
that getting rewarded for quality not only seems fair but would
help them save to have more money to invest in important
improvements like having computer-based medical records.
Programs like Leapfrog and Bridges to Excellence, which you
will hear about in a couple of minutes, are examples of what
health care can do. Our employees in Louisville, Kentucky,
where we make refrigerators, now know that there are 40 doctors
recognized to have superior performance in treating diabetes,
when they had no such knowledge a couple of years ago, all due
to this program Bridges to Excellence.
The question now is how to increase the momentum. Since all
significant change in health care creates controversy, it is
important that public and private sectors work together. The
most important steps that the Federal Government would take
would be, one, to support the recommendations of the March,
2005, MedPath report to immediately integrate performance-based
payment into Medicare; and, two, to become value-based
purchasers yourself in your own programs, by which I mean the
program you have for Federal employees and the one that the DOD
provides through TRICARE for employees of the Department of
Defense.
Partnership between private sector employers and the public
sector would be a powerful message that I believe would not
only begin to change our system to get better, but it will help
us preserve an employer-based system.
Thank you for the time.
Chairman Johnson. Thank you, sir. We appreciate your
testimony.
[The prepared statement of Dr. Galvin follows:]
Statement of Dr. Robert Galvin, Director of Corporate Health Care and
Medical Programs, General Electric, Fairfield, CT, on behalf of the
Human Resources Policy Association
Chairman Johnson, Congressman Andrews, and other distinguished
members of the Subcommittee, I am Dr. Robert Galvin. I appreciate the
opportunity to share the employer perspective on the topics of the day:
pay-for-performance measures and other trends in employer-sponsored
health care. This is an important issue and I applaud the Subcommittee
for creating a forum for Members of Congress and the public to learn
more. I am Director, Global Health, for General Electric. I also serve
as Director, Health Care Value Initiatives for HR Policy Association's
Health Care Policy Roundtable. In my position at GE I am responsible
for the design, operations and financial performance of the health
benefits GE offers its employees, family members, and retirees as well
as for the overall health of this population. Our population totals
about a million people with an annual expenditure exceeding two billion
dollars.
HR Policy Association represents the chief human resource officers
of more than 250 large employers. The Chairman of the Association is
William J. Conaty, Senior Vice President of Corporate Human Resources
for GE. The number one concern among HR Policy members is the
unsustainable increases in health care costs and deficiencies in health
care quality that threaten the viability of our nation's health care
system. In 2003, the HR Policy Association Board of Directors created
the Health Care Policy Roundtable to take decisive action using the
collective influence of America's largest private employers to address
health care cost and quality issues that plague both private employers
and government payers. The Roundtable is chaired by J. Randall
MacDonald, Senior Vice President of Human Resources for IBM. Its
strategies are premised on the recognition that companies, which employ
more than 20 million employees worldwide, can use their collective
buying power to leverage health care market reforms within existing
public policies. In turn, these reforms may provide guidance to
policymakers in addressing needed changes in U.S. health care policy.
Two private sector initiatives being undertaken by HR Policy's
Roundtable are relevant to the discussion today--the National Health
Access program and the Regional Health Care Quality Reform Initiatives.
National Health Access is a program created by a coalition of 60
companies within the Association to create improved health insurance
options for workers without access to employer provided coverage, and
simultaneously drive two key market principles: transparency, meaning
the public release of measures of performance about doctors and
hospitals, and pay-for-performance. The program has the potential to
affect 3 million individuals and will launch with the first round of
employers this fall. The efforts of the Roundtable's Regional Health
Care Quality Reform Initiatives, which are chaired by John D. Butler,
Executive Vice President, Administration and Chief HR Officer of
Textron, Inc., are a critical component of the Roundtable's reform
agenda and are directly in line with the focus of today's hearing. The
Roundtable has worked with a number of companies and organizations in
specific regions to accelerate the measurement, reporting, and
dissemination of health care provider quality and efficiency data. I
will describe the early efforts of one of these initiatives in Phoenix
in more detail later.
The Problem
Many of us are too familiar with the problems that plague our
health care system. Purchasers, providers, and patients of health care
services can no longer accept the status quo. The U.S. spends
significantly more on health care, both in terms of dollars per capita
and as a percentage of Gross Domestic Product, than any of our trading
partners, yet it is difficult to make the case that sufficient value is
being derived to justify the enormous cost. At the same time it is
large employers, the private sector, who bear a significant portion of
the financial burden for this difference with our trading partners, and
for that we suffer the competitive consequences. Health care purchasers
face double digit increases each year with no sign of a decline in
costs or more manageable inflation in the foreseeable future. As such,
health care is crippling America competitively and draining our federal
budget.
Of equal concern is the fact that the huge resources we plow into
our health care system do not provide access and high quality care for
all. It is estimated that 45 million Americans are without health
insurance coverage. Simply layering our existing, opaque, health care
system across 45 million uninsured Americans is not the solution. This
would increase overall cost without addressing the systemic flaws in
our health care system. In addition to a coverage gap, there is a
serious quality gap. A recent study by the RAND Corporation found that
adults received recommended care only about 55 percent of the time.
Clearly meaningful reform is needed. Fundamental components of the
solution to these quality deficiencies lies in greater transparency and
disclosure about cost and quality throughout the system, engaging
consumers who have a stake in the financial as well as clinical
outcome, and basing payment to doctors and hospitals on performance.
Focus of Testimony
I am fortunate to share the panel with two individuals who are very
knowledgeable about pay-for-performance measures. In particular, Jeff
Hanson of Verizon is an expert on the topic and as President of Bridges
to Excellence, he is heading a successful practical application of a
pay-for-performance model. As a result, I will focus my testimony on
other efforts that employers are collectively and individually
undertaking to create incentives for doctors and hospitals to improve
patient care and patient outcomes. Specifically, I'll describe three
emerging trends among employers: 1) purchasing aimed at finding
providers that provide the best clinical outcomes at the best value; 2)
efforts to inject greater transparency about the clinical effectiveness
and efficiency of providers into the health care system accompanied by
a payment that rewards performance; and 3) increasing involvement of
business leaders at the corporate executive level in health care
purchasing. I'll also provide some examples of these trends.
Employers Are Shifting to Value Based Purchasing in Health Care
Employers recognize that the purchase of health care is unique and
personal for a company's workforce. There has to be a sense of trust
between those making decisions on benefits and those for whom the use
of the benefits is critically important. Therefore, there cannot be a
perfect comparison between purchasing health care and selecting a
supplier for other services. However, the basic premise of demanding
high standards and holding suppliers (health care providers in this
instance) accountable is transferable to health care purchasing.
It was not too long ago that the dominant employer model for
purchasing health care focused on finding the lowest unit cost of care.
This short-sighted approach may have resulted in short-term savings for
a limited time, but did nothing to improve the overall health of our
workforce. In addition, as demonstrated by the double-digit increases
in health care premiums that employers have faced over the last several
years, it is clear this approach failed to lower health care inflation
for any appreciable time. Employer purchasing of health care is no
longer simply a matter of finding the cheapest deal. This would be a
disservice to employees and do nothing to address deficiencies in the
system.
Employers are moving from purchasing based on cost to purchasing
based on value, meaning health care that delivers optimal clinical
outcomes in the most efficient manner. Experts have continuously
demonstrated that there are significant differences between doctors and
hospitals in how well and how efficiently they deliver medical care. At
GE, our analysis shows that in every major market that we have
employees the same level of quality is available at prices that differ
by 30-40 percent. Our data shows that less than 35 percent of our
hospital admissions occur at hospitals that score highest on both cost
and efficiency. Large employers are beginning to demand more and hold
providers and health plans accountable for delivering high quality
care. They are sending the message that it is no longer tolerable to
accept these deficiencies.
Transparency is the Foundation of Meaningful Efforts to Lower Costs and
Improve Quality
GE, along with the members of HR Policy's Health Care Policy
Roundtable, believe a fundamental component of the solution to quality
deficiencies lies in greater transparency and disclosure about cost and
quality throughout the system, and engaging consumers who have a stake
in the financial as well as clinical outcome. True market reforms can't
occur when purchasers and consumers have no idea what the true cost of
certain health care services and products are. Employers and employees
must be exposed to the real net cost of the product or service. At a
minimum, health care purchasers and consumers want to lift the veil to
find out who the best health care suppliers are--including hospitals
and physicians--for specific procedures. This information can then be
used to provide incentives to consumers to use high performing
providers and the best treatment alternatives and to pay providers
differentially based on their performance.
A major positive advance over the past decade has been the
development of metrics that can measure quality at the level of doctors
and hospitals. While it is true that these measures are still being
perfected, most private sector employers and employer organizations
like the Health Care Policy Roundtable, as well as many physicians,
believe that they are accurate enough for public release. Recent
efforts to develop a standardized set of these measures have been
successful, including the Ambulatory Quality Alliance, a collection of
professional trade organizations which recently agreed on a starter set
of measures acceptable to organized medicine and health insurance
companies, and the HR Policy Association which developed a more
complete core set of measures. Although there is little scientific data
to cite, it is common sense in the business world that what is measured
is managed, and that making public the performance of doctors and
hospitals will spur improvement.
Injecting greater transparency into the system is even more
important as more employers and employees shift to designs that give
consumers more control over their health care decisions. Health savings
accounts and high deductible health plans are based on the premise that
patients as consumers will be more sensitive to costs when using these
products, and therefore more engaged in demanding value for their
health care. At GE, when we ask our employees, over 80 percent say they
want the kind of information that can be provided through available
metrics and will use it to make decisions about who to see and where to
go for treatment. Without transparency, consumers are denied the
ability to make informed choices about the care they receive. Needed
reform must have the support of both government and private payers. The
business community is pleased that some government leaders, such as
Mark McClellan who heads the Centers for Medicare and Medicaid
Services, are embracing these concepts.
Health Care Has Gained the Attention of Corporate Executives
The experiences of the Roundtable's various Regional Health Care
Quality Initiatives is an eye-opener as to what it takes to address
some of the problems of our health care system. The effort has evolved
to recognize that deficiencies will not be addressed unless the payers
force a solution, which can only be done if they work together and
exercise their leverage to achieve improvements. Health care has been
the number one concern of chief human resource officers for the past
several years and is likely to remain a priority concern for several
years to come. However, until now, the prevailing model has been for
senior executives to delegate involvement in collaborative efforts to
those at a lower level within the company. Those individuals are
critical to the success of such efforts. They are skilled and
knowledgeable about the specifics of benefit design and employee
communications. However, without the involvement of key strategic
decision-makers, there are limits to what they can accomplish.
The kind of collaboration and long range planning that is needed is
unlikely to occur if left exclusively to corporate benefit managers
whose primary focus is meeting the company's benefits needs in the year
at hand and putting something workable in place for the following year.
They often lack the decision-making authority to institute strategic
change at their companies. It is essential, therefore, that chief human
resource officers and other senior executives become much more involved
in setting benchmarks for the purchase and delivery of health care on a
broad collaborative basis, ensuring that those standards are followed,
evaluating and ensuring the proper execution of market reform
strategies, and creating a climate of accountability to focus all
players on the objectives of lowering costs and improving the quality
of care purchased for employees. The ultimate solutions for fixing the
health care system will involve setting a vision for the purchasing
community, reaching consensus on objectives, and executing a
collaborative strategy. This can only be achieved by the direct
involvement of those at the highest levels among purchasers. Just as
the overall direction of the company is set by those at its highest
level, the company's role in the future direction of health care must
also be shaped at that level as well. The ultimate goal is to drive the
health care system toward the ``Six Sigma'' standards that GE and many
employers have embraced within their own organizations.
Though the Roundtable's Regional Health Care Quality Reform
Initiatives has focused its efforts at the regional level, where an
immediate impact is most feasible, coalition members understand that it
is important to not lose sight of the importance of maintaining a
national perspective as well. The reality is that, while change is
often a great deal more achievable at the local level, the broad
structure of our health care system--currently an employment-based
model--will still likely be a national paradigm, enormously influenced
by how federal dollars are collected and spent. For this reason,
members of the Roundtable believe it is equally important that senior
human resource executives play a role at that level as well. These
senior executives plan for their involvement not to be simply reactive,
but to entail the shaping of a vision of the ideal future role of
employers in the health care system with the formulation and promotion
of federal policies that achieve that ideal.
Examples of Existing and Emerging Successes in Health Care Purchasing
Individual company and collaborative efforts that incorporate the
three trends described above are emerging. Some hold the promise of
producing needed reform, and others that have already demonstrated
considerable success. At GE, while we have not found a ``silver
bullet,'' we are proud of our progress in addressing deficiencies in
the health care system through our internal purchasing system. We have
learned that a combination of flawless execution of purchasing basics
plus a willingness to be innovative, using purchasing clout to address
fundamental problems in our health care system, yields optimal results.
The Leapfrog Group. Employers have learned that through united
efforts they can successfully catalyze change. The progress achieved by
private and public sector purchasers through The Leapfrog Group is an
example. The Leapfrog Group is a coalition of more than 165 Fortune 500
companies and other large private and public sector purchasers of
health benefits. Its members work to trigger ``leaps'' in the safety,
quality and affordability of healthcare by supporting informed health
care decisions and promoting high-value health care through incentives
and rewards. Leapfrog has identified and refined four hospital quality
and safety practices: computer physician order entry; evidence-based
hospital referral; intensive care unit (ICU) staffing by physicians
experienced in critical care medicine; and quality index of measures of
safe practices.
Leapfrog members work to trigger ``leaps'' in the safety, quality
and affordability of healthcare by supporting informed health care
decisions and promoting high-value health care through incentives and
rewards. Leapfrog's strategy is for each of its members to insist on
transparency and pay-for-performance in its contracts with health
plans. Leapfrog recently launched its Hospital Rewards program, which
is essentially a private sector version of the highly successful CMS
Premier Hospital Incentive Program. If enough purchasers include the
Leapfrog language in their contracts and insist that plans participate
in the Hospital Rewards Program, health plans will then change their
contracts with doctors and hospitals, insisting on data release and
paying for performance.
Phoenix Project. One of the Regional Health Care Quality Reform
Initiatives being undertaken by the Health Care Policy Roundtable in
Phoenix, Arizona is just getting off the ground, but holds great
promise. Several HR Policy Association member companies with a
significant number of employees and/or retirees in the Phoenix region,
such as GE, IBM, and Honeywell, have teamed up with health plans and
health care improvement organizations to enhance the depth of
information about provider quality and efficiency available to
employers and consumers. Major partners in the endeavor include CIGNA,
The Leapfrog Group and Bridges to Excellence. CIGNA's decision to
publicly release information on a core set of performance measures,
moving away from a proprietary model for measuring quality, is a
groundbreaking approach that will advance transparency greatly.
Recently, St. Luke's Health Care Initiatives, an Arizona-based
nonprofit dedicated to improving community health, and other national
health carriers in the region have expressed interest in joining the
effort.
Working together, the organizations will broaden access to
standardized quality and efficiency measurements and to make that
information publicly available to patients and purchasers. Phoenix
partners have agreed to take the project on two paths. First, they will
pursue a short-term goal of promoting pay-for-performance through
existing programs such as Bridges to Excellence and The Leapfrog Group.
At the same time, the stakeholders involved will work toward a more
ambitious longer-term goal of aggregating data across health plans and
employers on provider efficiency and quality, and making that
information publicly available.
All comers are welcomed to this initiative, including additional
health plans, regional coalitions and employers of all sizes. The more
companies and organizations that are on board, the better our chances
are for success. The Phoenix project creates a powerful and
comprehensive approach to regional quality reform for care that can be
emulated in other markets across the country. Though the Phoenix
project will begin as a local endeavor, it can serve as a model for the
sharing of data and information among employers, consumers and other
health plans.
Conclusion
Consistent and dedicated efforts by employers can achieve
significant improvements to our health care system despite the
formidable challenges that we face. GE and the Health Care Policy
Roundtable are examples of the business community's dedication to
ensure that our nation's workforce receives the highest quality health
care, and that health care purchasers and consumers have access to
important quality information about doctors and hospitals upon which to
make important decisions. Only then can purchasers begin to pay
providers differentially based on the quality of care delivered. We are
encouraged that the federal government, particularly through
innovations in quality improvement and an examination of moving toward
pay-for-performance in the Medicare program, is taking a lead on these
important issues. We welcome efforts to partner with the government to
move our nation's health care in the right direction.
______
Chairman Johnson. Dr. Rosenthal, you have got quite a
varied experience. Please begin.
STATEMENT OF DR. MEREDITH B. ROSENTHAL, ASSISTANT PROFESSOR OF
HEALTH ECONOMICS AND POLICY, HARVARD SCHOOL OF PUBLIC HEALTH,
BOSTON, MA
Ms. Rosenthal. Thank you.
Thank you, Chairman Johnson, Congressman Andrews, members
of the subcommittee. Thank you for inviting me here to discuss
pay for performance and health care.
The most recent estimates suggest that there are more than
100 new pay-for-performance programs in the U.S. health care
sector. Variously, these programs reward physicians, medical
groups and hospitals for health care quality goals. Typically,
providers are evaluated and rewarded based on a set of quality
measures which usually capture problems of underuse.
For example, physicians may be rewarded based on providing
cholesterol screening to their patients with coronary artery
disease. Hospitals are also sometimes rewarded based on
outcomes measures, including complication rates and in-hospital
mortality rates.
Pay for performance has significant positive potential in
the health care sector, where reimbursement has traditionally
been based only on the utilization of services and patients are
often not in any position to distinguish high-quality providers
from low-quality providers. Financial incentives for quality
are new, however, and payers face a number of challenges in
implementing these programs.
My review will highlight three key issues for policy.
First, there is insufficient evidence to inform the design of
pay-for-performance programs; second, there is a need for
coordination across payers; and, third in its current form pay
for performance is not positioned to deliver relief from the
spending trend facing health benefit purchasers.
Let me describe briefly each point.
First, despite concurring enthusiasm for pay for
performance, there is remarkably little evidence in the
literature for purchasers of health plans to reference when
they set out their pay-for-performance programs. Moreover, an
existing analysis of pay-for-performance programs indicates
that there are opportunities to improve the cost-effectiveness
of these programs and to increase the likely gains in quality
for all consumers.
For example, with few exceptions, pay-for-performance
programs reward the best performers, either by reference to a
fixed benchmark or by comparison to one another by ranking
providers. Economic theory, however, would suggest that
rewarding all providers for improvement would generate more
improvement for a given fund.
In addition, there may also be concerns that if rewards
only go to the top providers based on, again, the level of
performance, there will be a downward spiral among the lower
quality providers who may be serving vulnerable populations,
populations who already have poor access to health care. There
is simply no evidence as to the practical importance, the
magnitude of these potential negative consequences.
Going forward, purchasers in health plans need timely
evaluations of a broad range of programs, including assessments
of negative, unintended consequences, as well as targeted
decision support to help them sort through research findings
and make appropriate tradeoffs. Congress could facilitate
progress toward this end by enhancing the capacity of the
agency for health care research and quality, which has played a
critical role in this area.
My second point concerns the need for coordination among
payers on the clinical domains and specific quality measures to
target. As you have heard earlier, the issue is that if only a
few of the many payers that a provider contracts with are
paying for performance, or if they are all paying based on
difference sets of measures, the effects will be deluded.
Some private sector employers--two on either side of me--
have already begun aligning their efforts through coalitions
such as the Leapfrog group Bridges to Excellence and a number
of others, which sets standards for measurement and reporting,
among other activities.
CMS's leadership role in this area will also go a long way
toward this goal as private payers have historically emulated
the CMS in terms of their payment reforms, including the
respective payment system. CMS could also support pay-for-
performance programs by further contributing deidentified--
sorry, provider identified, deidentified data to these pooled
efforts to profile providers using all pair data.
The third and final issue is that, despite the hopes of
some benefits purchasers, the current generation of pay for
performance is not designed to reap cost savings. This is in
large part due to the fact that the greatest performance
measurement has so far been on measures of underuse. Therefore,
if we improve quality in that way, we will lead to increased
use.
There is some indication, however, that pay for performance
is being reoriented toward cost efficiency metrics. Along these
same lines, payers could greatly benefit from a public
investment in the development of quality measures that capture
the negative consequences of overuse.
To summarize, there several ways in which Federal
policymakers could enhance private sector pay-for-performance
efforts.
First, increase the capacity of the agency for health care
research and quality to support evaluation and dissemination of
research on pay for performance, including research on the
unintended strategies of particular strategies. Second,
encourage the CMS to continue to take a leadership role in
quality measurement and pay for performance. Third, facilitate
the sharing by CMS of patient-deidentified provider-identified
data to an all-patient base data set. Fourth, through AQHR or
CMS, support efforts to approve the measurement of cost
efficiency and overuse.
Thank you, Mr. Chairman.
Chairman Johnson. Thank you. We appreciate your testimony.
[The prepared statement of Ms. Rosenthal follows:]
Statement of Dr. Meredith B. Rosenthal, Assistant Professor of Health
Economics and Policy, Harvard School of Public Health, Boston, MA
Chairman Johnson, distinguished Committee members, thank you for
inviting me to discuss pay-for-performance in health care. In my
remarks, I will describe recent efforts by health plans and employers
to reward physicians and hospitals for providing high value health care
and discuss the economic incentives inherent in the design of these
programs. My comments derive from my research in this area over the
past several years, which has been funded by the Agency for Healthcare
Research and Quality, the Commonwealth Fund, and the Robert Wood
Johnson Foundation's Health Care Financing and Organization initiative.
The views expressed in my testimony are, of course, my own and should
not be attributed to any of these funding agencies.
Pay-for-performance has significant positive potential in the
health care sector, where reimbursement has traditionally been based
only on utilization of services and patients are often not in a
position to discern high quality from low. In this environment,
incentives to deliver high value health care are often absent or even
negative (e.g., preventing a hospital admission will generally reduce
the net revenues of a health system that includes a hospital). Pay-for-
performance is still new to health care, however, and payers face a
number of challenges in implementing these programs.
First, there is little guidance in the literature for purchasers
and health plans to reference when they set out to design their pay-
for-performance programs. An analysis of the features of the first
generation of programs indicates that there are opportunities to
improve the cost-effectiveness of pay-for-performance and increase the
likely gains in quality and value. To help them design more effective
pay-for-performance programs, purchasers and health plans need timely
evaluations of a broad range of programs and targeted decision support.
Congress could facilitate progress towards this end by enhancing the
capacity of the Agency for Healthcare Research and Quality (AHRQ),
which has played a critical role in this area.
Second, coordination among payers on the clinical domains and
specific quality measures to target is desirable. If only a few of the
many payers that a provider contracts with are paying-for-performance
or if each payer focuses on a different measure set, the effects of
pay-for-performance may be diluted. Some private sector employers have
already begun aligning their efforts through health care quality
improvement coalitions such as the Leapfrog Group, Bridges to
Excellence, and others, which offer standardized programs of
performance measurement, reporting, and reward. CMS'' leadership role
in this area may go a long way towards this goal as private payers have
historically emulated many of Medicare's more significant payment
reforms, such as the Prospective Payment System. CMS could also support
pay-for-performance efforts further by contributing de-identified data
to an all-payer data set from which more reliable performance
evaluation could be conducted (because of larger denominators).
Finally, despite the hopes of some benefit purchasers, the current
generation of pay-for-performance is not designed to reap cost savings,
particularly since most of the quality measures it targets are measures
of under use. In my view, it would be desirable to enlist pay-for-
performance in the service of enlightened cost control in order to
preserve the availability of private insurance coverage. There is some
indication that pay-for-performance is being reoriented towards cost
savings with the incorporation of increasingly robust cost-efficiency
metrics, which are being refined by a number of researchers. Along
these lines, payers could also greatly benefit from a public investment
in the development of quality measures that capture the negative
consequences of over use.
Pay-for-performance should be viewed as one element of the set of
strategies that employers, health plans, and government programs are
undertaking to improve the value of health care spending and make
insurance coverage more affordable. Other promising tools that are
taking hold alongside pay-for-performance include public reporting of
quality and cost information, tiered benefit designs that give
consumers incentives to choose higher quality and lower cost providers
and treatments, shared risk payment models such as the one being
evaluated under the Centers for Medicare and Medicaid Services Provider
Group Practice demonstration, and disease management. All of these
approaches to cost control and quality improvement are evolving and
come with their own set of advantages and disadvantages. Because there
is very little evidence base that can be drawn upon to inform the
design and implementation of these efforts, it is critical that the
natural experiments being undertaken by both public and private
insurers be evaluated and the results disseminated effectively to key
decision makers.
Payers Increasingly Align Financial Incentives with Quality Goals
During the past three years, numerous employers, purchasing
coalitions, and health plans in the U.S. have announced new efforts to
pay providers for performance on quality and cost-efficiency measures.
The most recent estimates suggest that there are more than 100
individual pay-for-performance efforts underway in the U.S. health care
sector. These programs vary along a number of dimensions including
(among others) the type of sponsor, the size of the bonus, the formula
for determining the bonus allocation, and the clinical areas targeted.
I describe several examples to illustrate the diversity of approaches
and then highlight the most prevalent program features and their
economic and policy implications.
In California, seven health plans are coordinating pay-for-
performance programs under the auspices of the Integrated HealthCare
Association (IHA), a multi-stakeholder coalition. The seven plans,
which constitute more than 60% of the commercial market for physician
services in the state, are awarding bonuses to large, multispecialty
physician groups based on clinical process measures such as rates of
childhood immunizations and cholesterol screening, patient
satisfaction, and investments made in technology and infrastructure.
While the performance measures are common across the seven IHA health
plans, the structure of the bonus varies. Most plans have opted to
reward the top performers only (e.g., the top deciles or quartiles)
using a bonus that is proportional to the number of the plan's patients
cared for by the group.
Similarly, Anthem's New Hampshire Blue Cross/Blue Shield plan pays
bonuses to physicians who screen patients for breast, cervical, and
prostate cancer and high cholesterol, help patients manage diabetes,
and provide other recommended preventive health care. Anthem's
performance bonus was $20 per patient for the top quartile of
physicians and about half of that for physicians ranked between the
50th and 75th percentile. Physicians were also eligible for an
additional payment of $20 per patient for participating in the plan's
disease management program.
Another noteworthy physician reward program is Bridges to
Excellence, a growing collaborative effort started by several large
employers including General Electric and Verizon Communications. The
program offers $100 per diabetic patient to physicians who become
certified by National Committee for Quality Assurance/American Diabetes
Association's provider recognition program. A similar program for
cardiac care has also been launched. Finally, doctors can receive $55
per patient for establishing clinical information systems in their
offices that aid in regular follow up in the care of chronically ill
patients, and implementing patient education programs. Many of the
measures within each of the areas targeted by Bridges to Excellence are
structural in nature (i.e., they catalogue the existence of specific
elements of infrastructure or capacity such as an electronic medical
record), although both process and outcome measures are also featured
in the scorecards associated with each area of focus.
Finally, as you may know, the Centers for Medicare and Medicaid
Services (CMS) have been actively developing their own pay-for-
performance programs. In July 2003, CMS and Premier, Inc., a nationwide
organization of not-for-profit hospitals, announced a demonstration
project to provide quality bonuses for hospitals based on performance
related to treatment in five clinical areas that are particularly
critical for Medicare's elderly population: heart attack, heart
failure, pneumonia, coronary artery bypass surgery, and hip and knee
replacements. Performance measures include both process and outcome
measures. For example, the set of measures for coronary artery bypass
surgery includes rates of aspirin prescribed at discharge, inpatient
mortality, and post-operative hemorrhage or hematoma. Hospitals are
scored and ranked on the measures condition by condition and any
hospital in the top 10% for a given condition will receive a 2% bonus
on their Medicare payments; hospitals in the next 10% will receive a
bonus of 1 percent. In the third and final year of the demonstration,
the hospitals with the worst performance (those that fall below a
predetermined threshold) will be financially penalized. Early results
disseminated by CMS suggest that substantial improvement has occurred
among the participating Premier hospitals in the targeted clinical
domains.( See http://www.cms.hhs.gov/media/press/
release.asp?Counter=1441) In addition to the Premier demonstration, the
CMS has incorporated pay-for-performance features into its Provider
Group Practice and Health Support demonstrations. For example, in the
Health Support program, disease management contractors have guaranteed
savings to CMS and will also be made financially accountable for a
variety of performance measures including patient satisfaction.
Common Themes among Pay-for-Performance Programs
The majority of pay-for-performance arrangements target both
measures of clinical quality and patient experience. Particularly for
physicians, clinical quality measures are typically rates of preventive
care and other ``process measures'' that can be easily extracted from
administrative data. Nearly all of these process measures address
problems of under use--they measure the rate of use of recommended care
for specific population groups. The focus on process measures reflects
the state of quality measurement (particularly our ability to account
for underlying patient differences across physicians and hospitals)
rather than priorities for quality improvement. Thus, in the current
context, paying-for-performance almost always means rewarding
physicians and hospitals for delivering more services, for which they
may also be able to bill (depending upon the reimbursement system).
Perhaps in recognition of the cost implications of correcting under use
through pay-for-performance, as pay-for-performance programs have
evolved payers are also increasingly providing incentives for
performance on cost-efficiency metrics. (Baker and Carter, 2004)
Almost without exception current pay-for-performance programs
reward the best providers--all those either above a specific threshold
or percentile ranking. Quality improvement is not explicitly required
for the receipt of a bonus so that in practice the incentives to
improve will vary with baseline performance. Particularly with an
absolute performance threshold (e.g., an 80% childhood immunization
rate), physicians or hospitals that already meet the standard need only
to maintain the status quo to receive payment. Similarly, for bonuses
that are tied to the use of information technology or other
``structural'' measures of quality (such as having a patient registry)
payments will go not only to those providers that improve their
infrastructure, but also to every provider that already conforms to the
standards. Most payers understand this very clearly and believe that it
is important to reward providers that deliver the best quality care
even if the rewards do not provide incentives for change.
It is also noteworthy that among pay-for-performance programs in
the U.S., few payers put at risk more than 5% of payments. Moreover,
because of the small market shares of some pay-for-performance program
sponsors, the percent of a physician's overall revenue that is at stake
can be much less than 5 percent. From an economic standpoint, the gain
from quality improvement must counterbalance the cost, so if the
quality improvement goals we set for providers are costly to achieve
the current levels of payment may be insufficient to generate the
desired response.
What is Known About the Effectiveness of Pay-for-Performance?
Two recent reviews document the scarcity of evidence to support the
effectiveness of pay-for-performance in health care (Rosenthal and
Frank In Press; Dudley et al. 2004). These reviews identify only seven
evaluations in the health care literature that are pertinent (Amundson
2003, Fairbrother et al. 1999; Geron 1991; Hillman et al. 1998; Hillman
et al. 1999, Kouides et al; 1998; Roski et al. 2003), one of which
offered no interpretable results (Geron 1991). Among the other six
studies, three (among which were those with the strongest research
designs) yielded null results (Hillman et al. 1998; Hillman et al.
1999; Fairbrother et al. 1999). Two other controlled studies found
modest improvements with pay-for-performance (Kouides et al. 1998;
Roski et al. 2003) while the sixth study demonstrated substantial
performance improvement but no evidence with regard to how much of this
was due to the program rather than secular trends. (Amundson et al.
2003) Five of these six studies involved interventions targeting only a
single dimension of care such as childhood immunizations (Fairbrother
et al. 1999; Geron 1991; Hillman et al. 1998; Hillman et al. 1999,
Kouides et al; 1998; Roski et al. 2003) and most of these provided only
small rewards. In one of the two studies with positive findings linked
to pay-for-performance, it was found that most of the gain in
performance was achieved through better documentation of immunizations
provided outside the physician's practice rather than improvements in
immunization rates per se. While improved documentation may be
valuable, it was certainly not the main goal of the program.
Outside of the health care sector, there are a variety of studies
of similar incentive programs, the results of which are relevant to
health care (Rosenthal and Frank, In Press.) Pay-for-performance
programs have been used in schools and several recent experiments have
documented improvements in test scores and other outcomes under these
programs (Lavy 2002; Clotfelter and Ladd 1996; Hanushek and Jorgenson
1996.) One of these studies, by Lavy (2002), also demonstrated that
pay-for-performance was more cost-effective (produced a larger impact
for the same expenditure) than direct subsidies for new programs and
additional staff time. Pay-for-performance has also been incorporated
into Federal contracts for job training programs. Studies examining
these programs found that pay-for-performance had a positive impact on
the rate of job placement and average earnings, even after accounting
for gaming on the part of contractors.
Empirical evidence regarding the existence of unintended
consequences of pay-for-performance both inside and outside of health
care is relatively well-established. Gaming has been shown to occur
with pay-for-performance systems among return-to-work programs and
schools, largely in the form of selecting trainees and students with
the highest ex ante probability of success. In health care, both
physicians and hospitals have been found to attempt to select healthier
patients under prospective payment to maximize net revenues. Other
possible negative effects of targeted incentives including reductions
in quality of care in areas not targeted for financial rewards, which
may be a particular concern in primary care because of the broad scope
of practice, have simply not been evaluated empirically.
Key Policy Issues
Through the lens of economic theory and empirical evidence, my
review of current pay-for-performance programs yields three key policy
issues. First, there is little guidance in the literature for
purchasers and health plans to reference when they set out to design
their pay-for-performance programs. An analysis of the features of the
first generation of programs indicates that there are opportunities to
improve the cost-effectiveness of pay-for-performance and increase the
likely gains in quality of care. To help them design more effective
pay-for-performance programs, purchasers and health plans need timely
evaluations of a broad range of programs and targeted decision support.
Congress could facilitate progress towards this end by enhancing the
funding capacity of the Agency for Healthcare Research and Quality,
which has played a critical role in this area.
Second, coordination among payers on the clinical domains and
specific quality measures to target is desirable. If only a few of the
many payers that a provider contracts with are paying-for-performance
or if each payer focuses on a different measure set, the effects of
pay-for-performance may be diluted. Some private sector employers have
already begun aligning their efforts through health care quality
improvement coalitions such as the Leapfrog Group, Bridges to
Excellence, and others, which offer standardized programs of
performance measurement, reporting, and reward. CMS'' leadership role
in this area may go a long way towards this goal as private payers have
historically emulated many of Medicare's more significant payment
reforms, such as the Prospective Payment System. CMS could also support
pay-for-performance efforts further by contributing de-identified data
to an all-payer data set from which more reliable performance
evaluation could be conducted (because of larger denominators).
Finally, despite the hopes of some benefit purchasers, the current
generation of pay-for-performance is not designed to reap cost savings,
particularly since most of the quality measures it targets are measures
of under use. In my view, it would be desirable to enlist pay-for-
performance in the service of enlightened cost control in order to
preserve the availability of private insurance coverage. There is some
indication that pay-for-performance is being reoriented towards cost
savings with the incorporation of increasingly robust cost-efficiency
metrics, which are being refined by a number of researchers. Along
these lines, payers could also greatly benefit from a public investment
in the development of quality measures that capture the negative
consequences of over use.
Pay-for-performance should be viewed as one element of the set of
strategies that employers, health plans, and government programs are
undertaking to improve the value of health care spending and make
insurance coverage more affordable. Other promising tools that are
taking hold alongside pay-for-performance include public reporting of
quality and cost information, tiered benefit designs that give
consumers incentives to choose higher quality and lower cost providers
and treatments, shared risk payment models such as the one being
evaluated under the Centers for Medicare and Medicaid Services Provider
Group Practice demonstration, and disease management. All of these
approaches to cost control and quality improvement are evolving and
come with their own set of advantages and disadvantages. Because there
is very little evidence base that can be drawn upon to inform the
design and implementation of these efforts, it is critical that the
natural experiments being undertaken by both public and private
insurers be evaluated and the results disseminated effectively to key
decision makers.
References
Amundson, G., L.I. Solberg, M. Reed, E.M. Martini, and R. Carlson.
2003. Paying for Quality Improvement: Compliance with Tobacco
Cessation Guidelines. Joint Commission Journal on Quality and
Safety, 29(2):59-65.
Baker, G. and Carter, B. 2004. The Evolution of Pay for Performance
Models for Rewarding Providers, Introduction to Case Studies in
Health Plan Pay-for-Performance. Atlantic Information Services.
Washington DC.
Clotfelter, C.T., and H.F. Ladd. 1996. Recognition and rewarding
success in public schools. In Holding schools accountable:
performance-based reform in education, edited by H. F. Ladd.
Washington: Brookings Inst.
Dudley et al .2004. Strategies To Support Quality-based Purchasing: A
Review of the Evidence. Agency for Healthcare Research and
Quality, Technical Review 10.
Fairbrother, G. , K.L. Hanson, S. Friedman, and G.C. Butts. 1999. The
impact of physician bonuses, enhanced fees, and feedback on
childhood immunization coverage rates. Am J Public Health 89
(2):171-5.
Geron, S.M. 1991. Regulating the behavior of nursing homes through
positive incentives: an analysis of Illinois' Quality Incentive
Program (QUIP). Gerontologist 31 (3):292-301.
Hanushek, E.A., and D.W. Jorgenson, eds. 1996. Improving America's
schools: The role of incentives. Washington, D.C.: National
Academy Press.
Hillman, A.L., K. Ripley, N. Goldfarb, I. Nuamah, J. Weiner, and E.
Lusk. 1998. Physician financial incentives and feedback:
failure to increase cancer screening in Medicaid managed care.
Am J Public Health 88 (11):1699-701.
Hillman, A.L., K. Ripley, N. Goldfarb, J. Weiner, I. Nuamah, and E.
Lusk, 1999. The Use of Physician Financial Incentives and
Feedback to Improve Pediatric Preventive Care in Medicaid
Managed Care. Pediatrics 104 (4):931-35.
Kouides, R.W., N.M. Bennett, B. Lewis, and J.D. Cappuccio. 1998.
Performance-based physician reimbursement and influenza
immunization rates in the elderly. The Primary-Care Physicians
of Monroe County. American Journal of Preventive Medicine 14
(2):89-95.
Lavy, V. 2002. Evaluating the effect of teachers' group performance
incentives on pupil achievement. Journal of Political Economy
110 (6):1286-1317.
Rosenthal M.B. and Frank R.G. In Press. What Is The Empirical Basis for
Paying for Quality in Health Care? Medical Care Research and
Review.
Roski, J., R. Jeddeloh, L. An, H. Lando, P. Hannan, C. Hall, and S.H.
Zhu. 2003. The impact of financial incentives and a patient
registry on preventive care quality: increasing provider
adherence to evidence-based smoking cessation practice
guidelines. Preventive Medicine 36 (3):291-9.
______
Chairman Johnson. Mr. Hanson, you may begin.
STATEMENT OF JEFFREY R. HANSON, REGIONAL HEALTH CARE MANAGER,
VERIZON COMMUNICATIONS, PRESIDENT, BRIDGES TO EXCELLENCE,
PORTLAND, ME
Mr. Hanson. Mr. Chairman, Congressman Andrews and members
of the subcommittee, my name is Jeffrey Hanson; and I am the
regional health care manager for Verizon Communications and
President of the Bridges to Excellence initiative. I want to
thank you for giving me the opportunity to testify on what
private companies such as Verizon are doing in the area of pay
for performance.
Verizon provides health care coverage to nearly 800,000
employees, retirees and their family members at an annual cost
to the company of more than $3.2 billion. The quality of health
care received by our employees, retirees and covered family
members is of paramount importance to Verizon. One of the
cornerstones to obtaining real transformation of our health
care system is provider quality differentiation, quality data
transparency and realignment of the provider payment system
based on quality performance.
The number of pay-for-performance programs has increased
rapidly over the past few years, numbering now over 100
programs across the country. Verizon participates either
directly or indirectly in many of these programs. We are a
founding player in two of the more prominent initiatives,
Bridges to Excellence and the Leapfrog hospital incentives and
rewards program. Bridges to Excellence is a physician-based
program, and the Leapfrog program is a hospital-based pay-for-
performance program.
These two initiatives found their genesis in two very high-
profile reports generated by the Institute of Medicine,
Crossing the Quality Chasm and To Err is Human. These reports
grabbed the attention of senior executives in corporations
coast to coast. It was literally a call to action.
Bridges to Excellence is a not-for-profit organization
organized to create significant advances in the quality of
health care by developing reimbursement models that encourage
the recognition of health care providers who have implemented
changes in their delivery of health care to achieve better
patient outcomes.
There are three components of this program. The Physician
Office Link component enables physician office sites to qualify
for bonuses based on their implementation of specific processes
to reduce errors and increase quality. They can earn up to $50
per year for each patient covered by a participating employer
or health plan.
In addition, a report card for each physician office
describes its performance on the program measures and is made
available to the public.
The Diabetes Care Link portion of the program enables
physicians to achieve 1-year or 3-year recognition for high
performance in diabetes care. Qualifying physicians receive up
to $80 for each diabetic patient covered by a participating
employer or plan. In addition, the program offers tools to help
diabetic patients get engaged in their own personal care,
achieve better outcomes and identify local physicians that meet
the high-performance measurements.
Finally, the Cardiac Care Link portion of the program
enables physicians to achieve 3-year recognition of high
performance in cardiac care. Qualifying physicians are eligible
to receive up to $160 for each cardiac patient covered by a
participating employer or plan.
Bridges to Excellence programs are currently in progress in
four markets, Cincinnati, Louisville, Boston and Albany, New
York. In addition, we are looking to implement Bridges to
Excellence in several new markets in the coming months,
including Houston, Phoenix and Omaha, to name only three.
To date, the results of our program have been very
encouraging. We have 282 recognized physicians in our pilot
markets who qualify for the Diabetes Care Link program and 571
physicians who qualify for our Physician Office Link program.
We have distributed over $1.5 million in physician rewards to
these physicians. Early program analysis shows that physicians
rewarded through our diabetes care program are approximately 10
to 15 percent more efficient than the nonrecognized diabetes
physicians. In the Physician Office Link program, rewarded
physicians are approximately 10 percent more efficient than
those not recognized.
The Leapfrog group, formed in 1998 by Verizon, along with
other employees, was brought about to focus on hospital patient
safety. Leapfrog now has over 160 member companies and
organizations, both private and public. Together, we spend over
$64 billion annually on health care and cover over 34 million
individuals in all 50 States.
Leapfrog is now augmenting its patient safety measurement
function with a new initiative, the Leapfrog hospital incentive
and rewards program. This program measures hospitals on both
quality and efficiency and creates incentives and rewards for
performance improvement. This program is currently being
launched in Albany, New York, in partnership with the Bridges
to Excellence program.
As described above, the private sector has begun to use its
leverage as a purchaser to provide incentives to physicians and
hospitals to install quality improvements in their operations,
much as we have in our daily business activities.
The government, with its power as a purchaser for Medicare
and to some extent Medicaid services, should work with the
private sector on these initiatives to securitize efforts to
reward the same quality improvement objectives.
In an age of rapidly rising health care costs, combined
with little or no system accountability for outcomes, there is
a greater risk than ever for purchasers, providers and
especially patients to find their interests at odds. This is
unacceptable. Peoples lives are at risk. We need to work to
solve these systemic problems.
Verizon has recognized this and is involved. We hope you
will join this effort. Taking steps now to encourage better
performance and reduce inefficiencies will pave the way for a
better system of care, one that provides better outcomes for
patients as well as meets the goals of purchasers and
providers.
I want to thank you, Mr. Chairman, Mr. Andrews and members
of the subcommittee, for the opportunity to discuss these
important initiatives and would be pleased to answer any
questions. Thank you.
Chairman Johnson. Thank you.
[The prepared statement of Mr. Hanson follows:]
Statement of Jeffrey R. Hanson, Regional Healthcare Manager, Verizon
Communications, President, Bridges to Excellence, Portland, ME
Mr. Chairman and members of the Committee, my name is Jeffrey
Hanson, and I am the Regional Healthcare Manager for Verizon
Communications, as well as the President of the Bridges to Excellence
initiative. I want to thank you for giving me the opportunity to
testify on what private companies are doing in the area of Pay-for-
Performance.
Verizon provides health care coverage to nearly 800,000 employees,
retirees, and their family members, at an annual cost to the company of
more than $3.2 billion. The company subsidizes approximately 80 percent
of the health plan costs for management employees and 99 percent for
associates. The rising cost of care challenges a company's bottom line.
Verizon works aggressively to preserve quality health care while
trying to curtail costs. However health care spending is increasing at
a rate faster than company revenues. Cost shifting from medical
providers, health care disparities, untapped technology options and
rising health care industry prices contribute to the problem.
The quality of healthcare received by our employees, retirees and
covered family members is of paramount importance to Verizon.
Inadequate quality of care from medical providers
requires corporations to pay twice: once for the expensive but less-
than-optimal care, and then again for decreased productivity, i.e.,
time not worked and increased costs for sick pay and disability pay.
Inappropriate treatments force patients to suffer longer.
In 2003, the Rand Corporation found that 45% of the time, on average,
patients did not receive the recommended care required for their
condition.
Studies by the Institute of Medicine and others estimate
the nationwide annual costs of inappropriate care is in the $300-$500
billion range, or one third of national expenditures on health care. To
a large degree ``the system is broken.''
[GRAPHIC] [TIFF OMITTED] T1243.001
As one of the largest employers in the country, Verizon is
committed to ensuring that the people we cover, and all Americans, have
access to quality, innovative and affordable health care options.
Therefore, Verizon has taken a leadership role to advance a proactive
public policy agenda for health care reform. Pay-for-performance is an
important cornerstone in our efforts to advance the quality improvement
imperative. And it is an important part of a long-term cost reduction
strategy for employer health benefits. Plan design and administrative
changes produce only short-term, temporary savings. The identification
and rewarding of higher quality, more efficient healthcare will produce
long-term value for employers and employees alike.
[GRAPHIC] [TIFF OMITTED] T1243.002
Pay-for-Performance
One of the cornerstones to obtaining real transformation of our
healthcare system is provider quality differentiation, quality data
transparency, and realignment of the provider payment system based on
quality performance. Quality measures encompass several areas including
process systems, clinical systems and outcomes. The number of pay-for-
performance programs has increased rapidly over the past two years, now
numbering over 100 programs across the country. Verizon participates
either directly or indirectly with many of these programs.
Verizon advocates for the agenda set for by the National Health
Information Infrastructure, including:
Deliver high quality, safer care through rewards around
common sets of metrics for use of interoperable Electronic Health
Records and data standards through NHII and outcomes from their
implementation with a view to accelerate the transformation of care
processes and increased accountability.
Reform reimbursement to incent appropriate use of health
IT including care coordination, disease/care management, data sharing,
publishing/subscribing performance accountability and quality.
Equitable payments by all payers for the ongoing use of
and improved outcomes from HIT.
We are a founding player in two of the more prominent national
initiatives, Bridges To Excellence and the Leapfrog Incentives &
Rewards Program, both of which provide incentives to the provider
community based on nationally recognized quality metrics. Bridges To
Excellence is a physician-based program and the Leapfrog program is a
hospital-based program.
These two initiatives found their genesis in two very high-profile
reports generated by the Institute of Medicine, To Err is Human and
Crossing the Quality Chasm. These reports grabbed the attention of
senior executives in corporations coast-to-coast. It was literally a
``call-to-action.''
Bridges To Excellence
In the 2001 report, ``Crossing the Quality Chasm'', the IOM
identified six key attributes around which the health care system
should be redesigned. They said the system needs to be more: Safe,
Timely, Effective, Efficient, Equitable, and Patient-centered (STEEEP).
Redesigning the healthcare system around these attributes will not
be easy. In fact, it will require changes at every level, including:
Environments such as insurers, purchasers and regulators;
Organizations such as hospitals and medical groups;
Micro-environments such as office practices and hospital
units;
Individual clinicians;
And at the center, the patient.
In one major recommendation, the IOM said payments for care should
be redesigned to encourage providers to make positive changes to their
care processes. Ideally, this shift will begin with purchasers and
insurers, and filter down through the delivery system to help encourage
improvements at all levels.
In response to this challenge, a group of employers, physicians,
health plans and patients have come together to create Bridges to
Excellence. Bridges to Excellence is a not-for-profit organization with
a Board composed of representatives from employers, providers and
plans. The Corporation is not formed for pecuniary profit or financial
gain. The Corporation is organized to create significant advances in
the quality of health care by:
Providing tools, information and support to consumers of
health care services,
Conducting research with respect to existing health care
provider reimbursement models,
Developing reimbursement models that encourage the
recognition of health care providers who demonstrate that they have
implemented comprehensive solutions in the management of patients and
deliver safe, timely, effective, efficient, equitable and patient-
centered care which is based on adherence to quality guidelines and
outcomes achievement.
Guided by three principles, its purpose is to create programs that
will realign everyone's incentives around higher quality:
Reengineering care processes to reduce mistakes will
require investments, for which purchasers should create incentives;
Significant reductions in defects (misuse, underuse,
overuse) will reduce the waste and inefficiencies in the health care
system today;
Increased accountability and quality improvements will be
encouraged by the release of comparative provider performance data,
delivered to consumers in a compelling way.
Three programs guided by these principles are already underway:
Physician Office Link, Diabetes Care Link and Cardiac Care Link.
Physician Office Link enables physician office sites to qualify for
bonuses based on their implementation of specific processes to reduce
errors and increase quality. They can earn up to $50 per year for each
patient covered by a participating employer or plan. In addition, a
report card for each physician office describes its performance on the
program measures and is made available to the public.
Diabetes Care Link enables physicians to achieve one-year or three-
year recognition for high performance in diabetes care. Qualifying
physicians receive up to $80 for each diabetic patient covered by a
participating employer and plan. In addition, the program offers a
suite of products and tools to help diabetic patients get engaged in
their care, achieve better outcomes, and identify local physicians that
meet the high performance measures. The cost to employers is no more
than $175 per diabetic patient per year with savings of $350 per
patient per year. Cardiac Care Link enables physicians to achieve
three-year recognition for high performance in cardiac care. Qualifying
physicians are eligible to receive up to $160 for each cardiac patient
covered by a participating employer and plan. In addition, the program
offers a suite of products and tools to help cardiac patients get
engaged in their care, achieve better outcomes, and identify local
physicians who meet the high performance measures. The cost to
employers is no more than $200 per cardiac patient per year with
savings up to $390 per patient per year.
[GRAPHIC] [TIFF OMITTED] T1243.003
Bridges To Excellence programs are currently underway in four
markets, Cincinnati, Louisville, Boston and Albany. These programs are
all employer-driven and reward monies being paid to the physicians are
paid by the employer participants. Recently health plans have expressed
interest in the program and we are working with them to launch BTE in
several new markets including, Phoenix, Houston, and Omaha, to name
only three. In addition, BTE is coordinating efforts with CMS as they
implement the MCMP (Medicare Care Management Project) in four markets
around the country. We are working collectively to align our provider
quality measures to promote all stakeholders working to transform the
healthcare system do so using mutually-developed standards.
[GRAPHIC] [TIFF OMITTED] T1243.004
BTE Results to Date
282 DPRP recognized and 571 PPC recognized physicians in
pilot markets
Distributed over $1.5M in physician rewards
DPRP physicians are approximately 10-15% more efficient
that non-DPRP physicians
PPC recognized physicians are approximately 10% more
efficient than non-PPC recognized physicians
Leapfrog Incentive & Rewards Program
In 1998 a group of large employers, including Verizon, came
together to discuss how they could work together to use the way they
purchased health care to have an influence on it's quality and
affordability. They recognized that there was a dysfunction in the
health care market place. Employers were spending billions of dollars
on health care for their employees with no way of assessing its quality
or comparing health care providers.
Leapfrog now has over 160 member companies and organizations, both
private and public. Together they spend over $64 billion annually on
healthcare, covering over 34 million individuals in all 50 states.
A 1999 report by the Institute of Medicine, To Err is Human, gave
the Leapfrog founders an initial focus--reducing preventable medical
mistakes. The report found that up to 98,000 Americans die every year
from preventable medical errors made in hospitals alone. In fact, there
are more deaths in hospitals each year from preventable medical
mistakes than there are from vehicle accidents, breast cancer, and
AIDS. The report actually recommended that large employers provide more
market reinforcement for the quality and safety of health care. The
founders realized that they could take ``leaps'' forward with their
employees, retirees and families by rewarding hospitals that implement
significant improvements in quality and safety.
The Leapfrog Group and its members work to initiate breakthrough
improvements in the safety, quality and affordability of health care
for Americans. Research has shown that patients receive recommended
health care only 55% of the time, and 30% of health care costs are due
to poor care. Poor quality also means up to 98,000 deaths per year due
to medical mistakes.
The Leapfrog Incentive and Rewards Program:
Inspired by the current CMS-Premier demonstration program
Measure both effectiveness (quality) and efficiency
(cost)
The primary goal is to create incentives for performance
improvement, both on quality and cost
Purchasers and plans can make this work in their current
environments
Hospitals can participate with very minimal additional
reporting
All aspects of the program were reviewed by experts and
vetted by stakeholders
This program is being launched currently in Albany, NY in
partnership with the Bridges To Excellence program, already underway in
that market. In it another example of bringing together stakeholders
from across the healthcare system in a concerted effort to drive
quality reform using common sets of standards and measures.
Recommendation
As described above, the private sector has begun to use its
leverage as a purchaser to provide incentives to physicians and
hospitals to install quality improvements in their operations, much as
we have in our daily business activities. The federal government with
its power as a purchaser for Medicare and to some extent Medicaid
services should work with the private sector on these initiatives to
synchronize efforts to reward the same quality improvement objectives.
Summary
In an age of rapidly rising health care costs, combined with little
or no system accountability, there is a greater risk than ever for
purchasers, patients and providers to find their interests at odds.
This can lead to intractable gridlock and the creation of few, if any,
solutions to systemic problems.
Taking the steps now to encourage better performance and reduce
inefficiencies will erase this gridlock and pave the way for a better
system of care--one that meets the goals of purchasers, providers and
patients alike. Implementing systems to support physicians is a great
place to start. We hope you will join us in this effort.
I thank the Committee for the opportunity to discuss these
important initiatives and would be pleased to answer any questions.
______
Chairman Johnson. Let me ask you one. Just because it is
more efficient, does that make it better?
Mr. Hanson. It is a step to making it better. Efficiency--
--
Chairman Johnson. What do you mean by efficiency? I mean,
you know, does that require more nurses or better or what?
Mr. Hanson. No, I think the statement was made well earlier
that efficiency really is the best value, is value. It is the
best care at the best price.
Chairman Johnson. So if you go in for heart surgery, for
example, if they roll you right into the operating room, they
are more efficient, does that make it better?
Mr. Hanson. No, that is not our definition of efficiency.
Chairman Johnson. OK, tell me what it is.
Mr. Hanson. No, our definition of efficient is that you
deliver the best-quality care at the best price.
Chairman Johnson. How do you measure that? I guess it falls
back to CMS--and all of you are welcome to answer this
question. How many of you think they are doing the right job
and can we do better through them? Because, really, they are
the ones that have contacts with all the hospitals and doctors
in the country.
Go ahead.
Mr. Hanson. I think currently----
Chairman Johnson. How many do you think are doing a good
job? Let me ask you that question.
Mr. Hanson. Do you think they are doing a good job?
Chairman Johnson. No. I asked you that question. Are they?
Mr. Hanson. I think we are all trying to do a better job,
and that is why we are sitting here at the table.
Chairman Johnson. Karen--you don't mind me calling you
that?
Ms. Ignagni. No, sir, please.
Chairman Johnson. I think I remember that.
Ms. Ignagni. I was going to give you an allergy example on
your efficiency question.
But on CMS I think they are. They have set out specific
goals. They have met each one of the goals. They have put
quality on the table. They have put the whole effectiveness and
value issue on the table. So I think they deserve to be
commended, and they are bringing stakeholders in to participate
in a strategy, in designing a strategy to get it right.
In terms of the answer to the efficiency point that I think
Mr. Hanson made very well--and bringing it back to an allergy
example, a simple concept. For me, an asthma patient, for
example, what is not an efficient expression of health care
utilization is for me to end up in the hospital emergency room.
So as part of a disease management program to understand my
medicines, to understand when I should take them and to have
someone, my physician, looking over the shoulder to advise on
the appropriate combination, that is a good example of
efficiency.
Dr. Galvin. I think CMS is doing a good job, and I think
most people in the private sector feel that way, I think for
many of the reasons Karen mentioned. They have reached out to
do partnership. They are really leaders in this idea of they
are using all in their power to be a purchaser, not just a
regulator. That has really resounded. I think they are doing a
fabulous job.
Chairman Johnson. Go ahead.
Ms. Rosenthal. I have to agree that the main thing that CMS
has done that has been really important is improving the
transparency of performance across their providers, which is
pretty much all of the providers in the United States, but
through the hospital quality alliance, other public reporting
interventions that they have done.
On the payment side, that is mostly in the demonstration
stage. But there are, through the provider group, practice
demonstrations, for example, working with trying to reorganize
the reimbursement system to reward efficiency in the sense of--
again, getting to a certain outcome at the least cost,
including all kinds of costs that might be in the future, for
example, getting to the least cost through the reimbursement
system. They are well targeting performance improvements on the
quality of care side, including patient experience, patient
satisfaction. So I think they are moving in the right
direction.
Chairman Johnson. Do you all see any resistance from
doctors?
Ms. Rosenthal. I suspect there will be significant
resistance from physicians. Because, again, this is all about
measurement and transparency. No one necessarily wants to have
their grades posted on the Web.
Chairman Johnson. You are getting it from patients, too,
because they don't want to put their stuff on a computer, you
know.
Dr. Galvin. To the question about physicians, what I have
learned is there is no one physician response. So I think
organized medicine has a lot of hesitations and are really
concerned about this.
We have found tens of thousands and collectively more than
that of physicians who really get it, who think that being
measured makes them better.
There is a great example in this Bridges to Excellence
program. A doctor in Louisville actually treats inner city--it
is not a doctor that treats GE patients--agreed to join the
program. His comment was, you know, I thought I was doing a 100
percent great job. I got my actual measures back, and it turns
out I was only doing the right thing about 60 or 65 percent of
the time. His attitude was, that is great. Now how do I get
better? So I feel there is variation among doctors about this.
Chairman Johnson. That is good, and don't try to rank us up
here.
Yes, ma'am.
Ms. Ignagni. Mr. Chairman, a great example of the doctors
coming to the table. Washington is full of examples of strange
bedfellows. Our organization has been working for 9 months with
the College of Physicians, the family physicians, and now the
AMA is involved, to get a number of employers and consumers to
try to wrestle with this idea of how do you create uniformity
in measurement. CMS has been involved. ARC has been involved.
It has been a great example of physicians leading the
conversation--and with their colleagues--about what is the
right thing to measure under what circumstances. It is a great
example of partnerships between public and private entities.
Chairman Johnson. Thank you.
Mr. Andrews.
Mr. Andrews. Thank you.
I want to thank you for your testimony, and I wanted to ask
Mr. Hanson about the Bridges to Excellence program. My
understanding is you are coming up on 2 years of experience in
Cincinnati or Louisville.
Mr. Hanson. That is correct.
Mr. Andrews. There are about 200,000 lives in the program?
Mr. Hanson. Across all four markets, yes.
Mr. Andrews. It says that 7,000 are in the diabetes
section. Explain to me how that works. If I understand it
correctly--or study a certain set of materials. Then if that
physician does, then he or she is identified in the program as
sort of a diabetes person, or get some kind of Good
Housekeeping Seal of Approval.
Mr. Hanson. We work collaboratively. One you are
specifically talking about is a diabetes recognition program,
which was collaborative with the American Diabetes Association,
which is producing outcomes or the right kind of thing.
Mr. Andrews. Presumably that educates that physician with
how to deal with diabetes. They get paid for it? They get a
certain amount per patient per year?
Mr. Hanson. Correct.
Mr. Andrews. I know it is early, but what kind of incidence
are there on reduced strokes or heart attacks or bad outcomes
for those diabetes patients?
Mr. Hanson. The level of that data we are just getting to.
I have a feeling, when I talked about there is more efficiency
in the system, 10 to 15 percent, we think a lot of that is part
of the reduction and the ER visits that you mentioned. I think
that is a level of the data that we are just now beginning to
analyze.
Mr. Andrews. I would assume the way we would approach this
study is to say, all right, among these 7,000 people, if they
behave like their cohorts, given their age and demographic
profile, we could expect X numbers of strokes, Y number of
attacks, Z number of emergency room visits and other problems
in a 2-year period. Are you then going to measure how these
7,000 people did against those expected norms?
Mr. Hanson. Right. We use a data base that includes people
that are not taking part in the controlled program.
Mr. Andrews. Is there, in fact, going to be such a
systematic evaluation? If so, who will do it?
Mr. Hanson. We currently work with a number of companies
who specialize in this kind of thing to work with the right
data and get the right data base.
Mr. Andrews. When will they get their assessment?
Mr. Hanson. They are in the process of doing the initial
assessments now.
As I say, we are 2 years into the program. We are going to
do assessments every year. We will actually look at trending.
You know, how do these people trend from year to year? Is the
same amount of savings from there? Is it exponential every
year? If we see X amounts of savings this year if we continue
to see a certified doctor, is that savings?
Mr. Andrews. Will those data be publicly available on the
script of their proprietary or personal criteria? With specific
reference to the diabetes study in the Cincinnati-Louisville
markets, what percentage of physicians have become diabetes
certified, to use my term? Do you know?
Mr. Hanson. Well, I think it is probably a very low
percentage, the reason being that physicians that get rewarded
are those physicians or employees and family members of the
companies that are participating in the program.
Mr. Andrews. That is a lot, 200,000 people. I think there
aren't many physicians that don't see the employees of those
companies.
Mr. Hanson. Well, but you are talking over four different
markets.
Mr. Andrews. Two hundred thousand out of 4 million people
or something.
Mr. Hanson. Yes.
Mr. Andrews. I see. Will there be an effort to recruit more
employers into the BTE program?
Mr. Hanson. There is an effort. We had a couple of new
employers join recently in the Boston program. We are already a
year in. It is a 3-year program. My point is, in Cincinnati and
Louisville, we are starting up on the third year. We wouldn't
look to recruit a new employer at this point in time. We are
looking to evaluate----
Mr. Andrews. The question I have for any of the panel--you
can supplement your answer in writing, because it is a longer
issue. Do you see any embedments in the ERISA law that would
retard progress in this field?
Let us assume that the study that is done by BTE comes back
the way we hope it does. It says that there are significant
quality improvements in the outcomes, we have fewer strokes,
fewer ER visits, fewer heart attacks, a lot of healthier people
and that this worked--and that more companies then, more
employers want to join a program like this, and they
voluntarily do so for good, sound business reasons.
I am not aware of any, but are there any problems or
limitations in the ERISA statute that would retard against that
progress? Or, conversely, are there changes in the ERISA
statute you would make that you would think would enhance and
facilitate that kind of access?
Again, anybody could answer it, but I would be interested
in the written comments that any of you would make on that.
Dr. Galvin. I would be happy to take a swing at it, if you
like.
Mr. Andrews. Sure???????
Dr. Galvin. Just to get back to a prior question about more
employers joining, Mr. Hanson was right. Part of the strategy
was also to go to health plans and to have them license. We
actually developed the licensing for this product.
So over the past about 8 months, we have had some leading
health plans--United Health Care with about over 20 million
covered lives. They have Humana with about 8 million or 10
million covered lives. We have CareFirst in Maryland. So we
have about 30 or 35 million covered lives under these health
insurers who cover multiple employers who have the capacity now
to do Bridges to Excellence. So the expansion strategy is both
other employers individually, and I think it is a much better
multiplier to go to health plans who have millions of covered
lives.
In terms of the ERISA, we didn't get a formal assessment,
but our own counsel looked this over, and ERISA itself did not
seem to either be an impediment or really affected positively
or negatively, so we didn't see the ERISA statute either way.
Mr. Andrews. That would be my assumption as well. But I
want to be sure in the subcommittee's jurisdiction that we
think about that issue and the terms of that statute.
Ms. Ignagni. Mr. Andrews, we haven't looked at that
specifically. We will now and get back to you. My sense now is
the same as Dr. Galvin's, but I want to make sure that I am
right about that.
Mr. Andrews. Thank you. Thanks very much.
Chairman Johnson. Thank you, Mr. Andrews.
Mr. Boustany, do you care to question?
Mr. Boustany. Thank you, Mr. Chairman. I have a few
questions.
Let me start by saying that pay for performance is an
important step in health care. I am a physician, a cardiac
surgeon. I had one of the busiest practices in Louisiana. I led
the effort to bring in a national data base on cardiac surgery
in all hospitals where I work.
I took a lot of criticism from my colleagues, but we did it
nonetheless. As a cardiac surgeon and a physician, I make
decisions for my family on health care issues based on
anecdote. That is a side indictment of our system.
I am on the board of the hospital and sit on some of the
numerous committees at the other hospitals. Again, my decisions
are based on anecdote. I have sat down and shared my data with
two of the largest insurers in our State and asked to see their
data and compared notes. The quality of their data was
deplorable. It was again an indictment of our system. We have
got serious problems, but I think we are on the right track
with that this.
A few questions. One, is this a potential tool to just
enhance profits without providing education to physician
groups? Certainly we do need to make sure that we provide
proper transparency. Because I am convinced in health care, if
we are going to create competition, to bring down costs and
enhance quality, we have got to provide information with
transparency to the consumer, ultimately. We need to provide
choices to the consumer, and we need accountability.
So I want to make sure that there is going to be a proper
dialog in all of this with physician groups, hospitals and so
forth, so that we are all measuring the right things and going
about this properly.
Ms. Ignagni. I think that you have made a very important
point about the issue of transparency, and it starts before we
get to consumer transparency. You need to have transparency
with respect to clinicians. They need to be involved in the
development of the standard. They need to be not only involved
in the development of the standard, they need to be confident
that it is the right proxy, the right measure. Otherwise, we
are not going to move to a quality-based system.
This is why, in our view, it is key for physicians to lead
this conversation, to help point us in the right direction, to
have a consensus about uniformity of measure, so that when the
standards are developed then the physicians have confidence in
them. They will be very strong advocates for their colleagues
to follow those standards, and we will quickly shrink the kind
of variation and practice patterns that now exist across the
country.
We have provided some evidence of that in our testimony.
There have been legions of articles about it.
So we couldn't agree with you more about the importance of
transparency. It starts with the clinicians. It starts with the
partnership between insurer, health plan and physician to then
move out to get the kind of measurement and trust that
consumers can rely upon. But, most importantly, the clinicians
can trust and feel that they are, in fact, in charge of
creating a system that best represents their talent.
We go out and talk to physicians. This is what we--in
talking with the chairman and Mr. Andrews, this is what we
found in our partnership with the key physician groups, that
they feel very, very excited about the possibility to get this
right and to move in a direction that finally rewards the best
physicians and the best care, which I think is a testimony to
the point that I think you have made very compellingly.
Dr. Galvin. On the comments you made, I just wanted to add
a couple of things. I think that--let us assume that we can get
the right measures that are agreed upon by everyone. You have
raised another point, which is, is there an education point?
Some of the things we have heard in the Bridges to Excellence
program were two things that weren't in our original planning.
First, all the physicians wanted a chance to win. In other
words, they didn't want the bar so far from where they were, or
they didn't want to be demoralized from the beginning.
Second, particularly individual doctors in individual
practices asked if we could help think through some way to help
them improve. Because let us say when this doctor I mentioned
in Louisville got his numbers back, he was only scoring 60 or
65 percent when he thought it was 100. What he then looked for,
is there someone to help me figure out how I can improve? Do I
need to change the system? What do I need to do?
So I think those two, everyone having an opportunity to
win, second, thinking through how to support physicians if we
get the measures right, which I think we will, I think are
important issues also.
Mr. Boustany. The other issue will be dealing with the
information technology gap that we have in health care. It is a
real critical problem. Payers have somewhat of a gap. It is
clearly evident on the side of the providers, both hospitals
and physician practices. So somehow we are going to have to
bridge that gap.
Then the other issue would be the dynamic state of outcomes
analysis right now. Because it is not static. With new
technology rapidly coming upon us, new drug therapies,
measuring outcomes and keeping up with it and coming up with
some sanity to the whole process is going to be quite
challenging.
I applaud what you are doing. I know you are all experts in
the field. I have read some of your work. I thank you for your
testimony.
Chairman Johnson. Mr. Kildee, do you care to question?
Mr. Kildee. Thank you, Mr. Chairman.
First of all, Dr. Rosenthal, my son attended the Harvard
School of Public Health and got his Master's Degree in health
care finance, so he advises me regularly. He knows far more
about it than I do, however.
Ms. Rosenthal. Excellent. Well, I would expect a graduate
of our program to know quite a bit.
Mr. Kildee. Certainly more than any of us here. So thank
you for being here today.
I have a question of Dr. Galvin. What should we do in the
Congress or the government to improve on the coughing method of
determining quality of performance? What--really, what type of
legislation might help discover really and reveal to people
where quality can be found?
Dr. Galvin. I would answer there are two things. The first
wouldn't be legislation. I think the first would be something
that I mentioned in my final couple of sentences, which is you,
as purchasers through the Federal employees and their families,
that is 9 million covered lives; through TRICARE and the
Department of Defense, it is another 9 million covered lives.
Eighteen million covered lives. That is about 18 times the size
of what GE covers.
Yet really none of these programs have any of these
fundamentals we are talking about. There is no insistence that
the health insurers with whom they can track can show this
information about doctors and hospitals. There is no
requirement in their contracts that they start paying based on
performance. So they are really neutral. So that is not
statutory. It is just a practice. But that is 18 million
covered lives in our system, is a very big deal.
In terms of the statutory, I think the immediate
opportunity is what is going on in physician payment. I think
kind of the dilemma that you are facing with the SGR and what
to do about physician payments and Medicare is an opportunity
to do something. Because what I am told by CMS is they don't
think they have authority, existing authority, to really move
pay for performance or performance-based payments out of
demonstration into the core of fee-for-service Medicare. Trying
to integrate that pay for performance into whatever update you
do with physicians I think is an opportunity that will take
immediate statutory change.
Mr. Kildee. Can we possibly anticipate civil action when
certain medical providers are not listed among the quality
providers?
Dr. Galvin. I think that is an excellent question. We have
not faced that yet. I would have to think that through. It is
something we worry about.
We did that with Leapfrog, where basically we listed the
hospitals that met these safety leaps, meaning the ones that we
thought were the most likely to do the best job. We did not
have any civil action. But I would think it is something you
would have to think about. If you were a provider and you were
not listed and you lost businesses as a result of it, I would
think that would be an issue you would have to think about.
Mr. Kildee. It would seem to me to be a fundamental
consideration.
Ms. Ignagni. I think this is a very important question you
are probing. I know that the specialty borders, as they
reevaluate and recredential essentially specialty physicians
and primary-care physicians, are now beginning to move in the
direction of baseline standards with respect to quality
performance. I think that is a very important start as well.
So I think were there someone here from the specialty
boards it would be to compellingly talk about the shift that is
going on--which is a very important shift--and this is post the
Institute of Medicine report directly aimed toward those
improvement aims that were enumerated in that report.
Mr. Kildee. Thank you very much.
Mr. Chairman, thank you for assembling a such great panel.
It has been very, very good. Thank you very much.
Chairman Johnson. Thank you, Mr. Kildee.
Mr. Kline, do you care to question?
Mr. Kline. Thank you, Mr. Chairman.
I thank all the panelists for being here, a really, really
great panel. We often get great panels here, but this is
perhaps extra special.
I am a little bit intrigued by the one-cough, two-cough
method. I thought that was a great example. We didn't determine
if there was any head turning involved.
It seems to me that I am looking at a couple of projects in
my district that are moving forward very rapidly and well, I
think, with electronic medical records. There is an opportunity
there to prevent an awful lot of mistakes and lower costs,
provide better care, at least in my judgment.
When you are looking at places to go, either in the BTE or
from your roundtable or something, if you are--if you could put
in your list those clinics and hospitals that have such a
system, that would be a way of sort of stepping out toward
paying for performance, if you will, in the sense of the
hospital and clinic and not be an individual evaluation. Is
that something you are already in the mix?
Dr. Galvin. I can comment that the Leapfrog group that Mr.
Hanson mentioned, it was called that because it came up with
three initial leaps to make quality much better. The first of
those leaps was to have those kinds of computerized systems in
hospitals, particularly focused on drug ordering.
So this was--we found the most avoidable errors that were
occurring in hospitals had to do with drugs. Either the
physician's writing was illegible, or physicians can't remember
100,000 facts, and so they might have prescribed a dose that
wasn't right for the patient on that day. So that was actually
the No. 1 that we put out.
Now what is interesting is that, although all the urban
hospitals in the country--we asked if they would fill it out--
only 1,000 out of the 3,000 or so non-rural hospitals agreed to
fill it out. So one of the challenges we have is that, as long
as it is voluntarily, and completely voluntary, it is
difficult. Because now the 2,000 that didn't fill it out--many
of them were in the same town where some did and some didn't--
we didn't know the quality of their value. So I think it is a
challenge.
Mr. Kline. Let me just follow up on that. It seems to me we
are looking for a way--and we would ask the question a number
of different ways up here if it is something we can do in
legislation or policy. But if you have clinics or hospitals
that have the electronic medical records--and we will just
stick with that one example--it would seem to me that the
insurers and perhaps the different programs that we are talking
about here would reward that, right, because they are on the
list.
You have such an electronic medical record you are going to
be rewarded because the patients are going to be referred
there. That would be some incentive for them to move with even
more alacrity to get that in place.
So I am a little confused. Why would it be in somebody's
interest to not be forthcoming? So they will not be rewarded?
Dr. Galvin. I agree. I think up till now there haven't been
rewards. I think, in the absence of that, it isn't quite as
compelling, the Leapfrog project hospital program that Mr.
Hanson talked about that was just launched. In fact, we have a
workshop on Friday with 150 employers to explain it to them.
That will be actually the first time we start our rewarding
based on having computerized systems. Now employers need health
plans.
The partnership is particularly important. Because even as
big as GE and Verizon are, we are not nearly as big as most of
the health plans. So we will work very hard through our
contracts and through our bidding process to try to move
business to those health plans that also think this is a good
idea, and we will begin to institute this.
Mr. Hanson. Can I----
Mr. Kline. We will try to do both in the seconds.
Ms. Ignani.
Ms. Ignani. Thank you, sir.
One of the things you will see in our testimony is we have
given the examples of where a number of our health plans are
incorporating incentives from the conversion from paper to
electronic, both in the physician level as well as the hospital
level. And I think you will see more of that.
The way we have approached it is to set--develop a
consensus with the providers with respect to what is measured,
what the outcomes are, and, as part of achieving those
outcomes, then moving to an electronic-based system is often
very desirable.
So rather than simply reward the technology in a silo with
no connection to the outcome or the goal, establish the goal,
recognizing that the technology is a part of that. And we would
be glad to submit more information for the record if that would
be useful to the committee.
Chairman Johnson. Thank you.
Mr. Hanson. I would just like to echo what Karen has said,
and that is that it isn't so much just having the technology,
but how you use it. There is evidence out there now that even
hospitals who have computerized physician order entry, only 25
to 30 percent of the physicians at that hospital are using that
technology.
So I think, to throw out a caution, is that while it is
admirable that people are adopting technology, the benchmark
really is, as Ms. Ignani has said, is how do you use that
technology, and what kind of outcomes are you getting with it,
and what are you looking for? So it is a bigger picture than
just going out and purchasing your technology and having it in
place in the long run.
Chairman Johnson. Thank you.
Ms. Rosenthal. Can I just contribute two quick points on
that? First, on the issue of getting hospitals to actually
report their capabilities and their quality measures, the CMS
had a very successful initiative that you may be aware of. They
had a voluntary hospital reporting system, and in the second
year you could volunteer to give up half a percent of your
revenues. And surprise, surprise, all the hospitals reported in
the second year. So I do think having CMS can very much take
strong action if they asked hospitals to do CPOE----
Mr. Galvin. Statutory.
Ms. Rosenthal. Yes, statutory. But that is an example of
how it could be done in any case. And the second thing is being
on the Leapfrog Website in and of itself may not be a reward,
because as much as we all think that consumers should be
motivated to use this information, should choose hospitals on
that basis, most of them don't. And even when the information
is made available to them, to date they are a little reluctant
to use quality information.
We need to think of better ways to get them to understand
the information and why it is important to them and make
decisions on that basis.
Mr. Kline. Thank you.
Thank you, Mr. Chairman.
Chairman Johnson. Mr. Tierney, care to question.
Mr. Tierney. Yes, I would, Mr. Chairman, thank you. Thank
the members of the panel for the questioning.
In Massachusetts there have been some concern among some at
the Mass Medical Society. They are skeptical. They say they are
skeptical of the current methods that are employed to gather
the physician performance data. I am sure you have this before.
Those that don't yet have an electronic medical recordkeeping
system think that evaluating it on claims forms isn't fair to
them.
Can you just discuss that a little bit if it is
appropriate? Is it fair to them, and should we be doing that
without the electronic recordkeeping data? How do we move more
quickly through the electronic data?
I know there has been a few experiments, one in my district
up in Newbury Port, up in other places around the country, as
well as my State. Who pays for it? What is the incentive for
somebody who is, say, in a small practice to undergo that risk
and the cost?
Dr. Galvin. I know a lot of licensed physicians still in
Massachusetts, and I trained there, so I will take the answer
first.
There is a lot of concern among physicians everywhere, in
Massachusetts as well. I think there are two issues. I think
the first is really the original kind of chicken and egg; in
other words, I think from the purchaser of health care point of
view, we are wondering when we will be able to start publishing
this data. When will we give this woman I talked about actual
information about where she should go to get her cancer
treated? So some of it is the physicians rightfully say, wait a
minute, be careful, the claims forms aren't perfect, we don't
have it. We say we have been talking to you for about 30 years.
When will the time be right?
So I think we have moved ahead with some trepidation,
because we don't want to alienate the physicians, but we feel
we had to get things started.
I do agree with you that the answer, or part of the answer,
is to get this information technology much more established in
offices. A couple of many issues, one is kind of the coding,
but the other one is who pays for it.
One of the Bridges to Excellence's modules actually has
extra payment if you have a computer in your office, and you
show that you have better outcomes for it. That is one way we
have tried to build it into the rewards is to help pay for the
technology.
Mr. Tierney. Can I ask you something? Is that working?
Dr. Galvin. So far it is working. I think 600 doctors have
signed up.
Mr. Tierney. They are willing to take the risk if they know
down the line they will get something back?
Dr. Galvin. Mainly in Boston, if I am right.
Mr. Hanson. Mainly in Boston. Boston market is the biggest
market for the program. Just to echo, too, I think the way
Bridges to Excellence is structured is that the first year you
will get 100 percent if you qualify to be recognized in the
program. You are going to get 100 percent. And you may have an
Excel spreadsheet that happens to be the disease registry for
your office.
Our hope is that the incentive reward that you get that
first year, then you will capitalize on that, invest in the
technology, because the second and third years we are going to
be looking at how has your office improved to actually reach
the top benchmarks. So there is some built-in, which I think is
a critical issue--built-in improvement steps for offices to
take.
Mr. Tierney. I am pleased to hear that. I am just
surprised, because the physicians that have been visiting my
office all seem very reluctant to make the outlay themselves.
They were looking at some of the different directions. Some of
the smaller practitioners thought that that was just too large.
Some told me it was a few thousand dollars. Others said it was
10- to 15- to 20,000, depending on what the size of your
practice was.
Mr. Hanson. In Bridges to Excellence, actually, we cap the
amount an individual physician can earn in rewards, and that is
$20,000, because that seems to be about what it might take to
capitalize, to invest and bring your office up to the
infrastructure and process infrastructure that it would take.
So it reimburses them for all that investment almost 100
percent.
Ms. Ignani. Mr. Tierney, Dr. David Brailer has launched a
whole conversation at the Department about connectivity with
respect to health care, and they are having very productive
discussions, and, in our, view a very solid approach to moving
forward.
We hope that one of the things--that as this work comes
through, not only will we be talking about the standards, how
do we create uniformity with respect to the exchange, and how
do we create uniformity across the country, but also at the
same time how do we deal with the financing question.
We think that there can be things done very productively in
the reimbursement system, but with employers appropriately
telegraphing that there is a great deal of stress, there is a
competitiveness issue, then that is a serious issue, and it
is--we think that that could be joined, the issue of--in the
conversation about connectivity, could be joined with financing
to maybe begin thinking about tax credits, in terms of R&D,
there is a productivity enhancement here.
And we think you can draw a direct line in the research
between a tax credit for this kind of purchase, and it could be
done over time, and the productivity that would result.
And the Chairman started talking about the conversation--
you framed the conversation in terms of productivity. So we
think that there is some opportunity here to bring all of these
things together, not in one-stop shopping or one size fits all,
but various components that could be looked at together.
Mr. Tierney. They already get a tax break. That is a
business expense. It is a business expense. They are already
getting a sizable tax break.
Ms. Ignani. There could be other things that have been done
in the past in certain R&D areas that could encourage the
purchase and do it more swiftly.
Mr. Tierney. Do we run a risk of having a lot of people
implement this electronic recordkeeping before you have the
standards for connectivity, either statewide or nationwide?
Ms. Ignani. We think the standards are absolutely
essential. They need to be on a fast track. They need to be
laid down so that physicians from the standpoint do not make a
purchase that is not useful to them, No. 1----
Mr. Tierney. Is it already too late, though?
Ms. Ignani. No. It is not too late at all.
And you asked the question about is the Department doing a
good job? This is an area in which they are launching a series
of activities to get to the question of standards, to talk
about how they get developed and how they get developed quickly
and uniformly. And we think that is just the right
conversation.
Chairman Johnson. Mr. Holt, do you care to question? I
think your time has expired.
Did someone have an answer that wanted to answer out there?
Dr. Galvin. Just one other comment, if I may, and that is
when you go back to your physicians in Massachusetts, I just
want to make sure that if you represent what I said that--you
know, I don't get a phone call--but I do think the standards
are a big deal. It reminds me very much of those of us who
remember VHS or Betamax, and if you chose wrong, it was a big
deal. We are still in that era. So it really is an the issue,
and Karen is right that we need to expedite that.
And the second is Bridges to Excellence isn't enough. The
funding in many of the creative ways she talked about from the
Federal side also needs to be a big part of the solution, so--
--
Chairman Johnson. Go ahead.
Mr. Hanson. In answer to the same thing, I know the
Commission on Systemic Interoperability which has been set up,
and Ivan Seidenberg, CEO of Verizon, is sitting on that, is
dealing with this very issue of connectivity, interoperability,
funding sources. And I know that report is due out in October.
As Ms. Ignani says, it can't come soon enough.
There are several trains moving down the track, and right
now we are pretty much in sync, but we are looking forward to
that report.
Mr. Tierney. Thank you all.
Thank you, Mr. Chairman.
Chairman Johnson. Mr. Holt, you are recognized.
Mr. Holt. Thank you, Mr. Chairman, and I thank the
witnesses. I apologize if I go over some ground that has
already been covered here, but I guess I need to pursue a
little bit this issue of kind of the faith in the market to
straighten things out here.
First of all, the rewards that would be provided for good
performance, is this new money, or is this taken out of the
system? And then, I guess, a fundamental question is by
rewarding the good performers--and we could have some
questions, and maybe there will be time for that, to talk about
how the benchmarks are actually set to determine who is a good
performer--don't we end up, if we carry this to its extreme,
with a small number of good performers in the system and
everybody else out of business? Have we found some way to
improve the performance of the bad performers rather than just
threatening or punishing them, you know, and the floggings will
continue until morale improves?
So let me throw out those two questions, and if there is
time, I have a few others.
Ms. Rosenthal. May I? Just to start out, as an economist I
have to--even though I know you print money around here, I
think there is no such thing as new money. And even, with all
due respect to everyone, if the employers and health plans say
that this is new money, it will eventually come out of the old
money.
There are no places where that is just--you know, as it is
we are spending $1.7 trillion on health care, as you know. Do
we need to spend more to get the right quality care?
And so, I think fundamentally it is going to be a
redistribution, and that does raise the question if we are
redistributing moneys from some providers to others, is that
desirable? And, of course, the whole point is to redistribute
money to the best providers, so some of that must be desirable.
But there are ways probably of doing that to improve the
quality more across the board. Cost savings have to come out of
somewhere. If we are not going to be driving some providers
out, it must mean that we have to find cost savings. And I
suggested in my remarks that they are not built into these pay-
for-performance programs yet. They could be.
I do think there are lots of ways to try to provide
technical assistance to poorly performing providers. And like
Bridges to Excellence provides steps so that even providers who
are starting at a relatively low level, they have some
opportunity to make small improvements and get some of the
resources to make larger improvements. And I think it is very
important to consider that.
Chairman Johnson. Let me add that the dollars are not being
cut. You know, there is a steady increase out of Medicare, and
that is where those dollars are coming from. All they are
saying is they are going to reward the guys that do a better
job. And docs aren't going to get out of business. They can
improve. That is what she is talking about, I believe.
And by looking at the docs that are doing a good job, maybe
they can change their techniques or their performance to
improve. And I will give you some more time. Go ahead.
Mr. Hanson. I would just like to build on the statements
just made, and that is that clearly one of the efforts in the
Bridges to Excellence program is not from a punitive
standpoint. I can't imagine that if we have 100 docs in the
Boston market who qualify for the program, that we are going to
be able to shift an enormous amount of capacity to those
doctors. Our goal is to build in these step processes so that
even doctors who think they may not qualify have some level of
entry into the program, and at which step it becomes a step
process.
And I think that is going to be true with the Leapfrog
incentives and rewards program, that although a hospital may
not meet all the standards when they come out of the chute and
apply initially for the program, there is some effort to reward
those that have some minimal qualification to the program and
show some signs that over time they have a plan to get there.
We have to raise the benchmark for the entire system. We
can't, as you say, have a lot of docs go out of business, and I
don't think that is the intent of any of these pay-for-
performance programs.
Mr. Holt. In the short time that is remaining, let me ask
one more question then. Will doctors and hospitals avoid taking
on high-risk patients? Will the good performers be the ones who
have been smart enough to choose good patients?
Dr. Galvin. I think that is a major concern. I think you
are really kind of accurately hitting some of the big
challenges, because no change is without these challenges. I
think you are accurately hitting them, and either--certainly
through surveys and anecdotal kind of experience, the idea that
that will happen, and I think built into the system has to be
some audit of that, or some kind of guarding against that. In
other words, I think we would be naive and be going down the
wrong road if we just assumed that that wouldn't happen. So I
think the tendency will be to game it, and that would be one of
the ways.
And I just think we have to be smart enough to anticipate
it. And I think it is really an audit kind of technique we are
going to have to build in to guard against that.
Ms. Ignani. One of the things that I think that stands out
here in our conversation this afternoon, politics is local. But
if health care is local, you get into trouble. And we are now
moving from a system that has been based primarily on the way
it has always been done to one that is moving to a more
objective, scientific, evidence-based system. But we are not
going to leap there overnight. And so what we have tried to do
through our health plans is we go across the country and work
with physicians to reorient the incentives, is to start with
the positive.
You asked the question, positive versus negative, and in
deference to the very important point that Dr. Rosenthal made,
if you incent physicians and reward them for best practices,
according to the science, and if they are confident in the data
that are chosen, and they have participated in that choice,
then we are going to begin to move the system in a way that is
productive for all.
So, to the extent that--and that also gives us an
opportunity to evaluate the issues that you probe quite
correctly, how do you deal with risk adjustment? How do you
deal with not intentionally--the unintentional consequences of
having a particular physician who is isn't appropriately
recognized for complications that he or she may treat?
So as you move in a critical path fashion, systematically
as opposed to trying to do everything overnight, that allows
for the kind of collaboration that is necessary to make this
tectonic shift, if you will, but at the same time will allow us
to get the kinds of results that I think all of you expect and
that employers, the purchasers and ultimately the consumers
expect as well. So in our view, that is how systematically we
are approaching it.
Mr. Holt. Thank you, ladies and gentlemen.
Thank you, Mr. Chairman.
Chairman Johnson. You bet.
Mr. Payne, you are recognized. Do you care to question?
Mr. Payne. Yes. Thank you very much.
I came in, I was a little bit taken aback by the
terminology ``pay for performance.'' In New Jersey there is a
pay to play. So I didn't know whether this was in New Jersey or
whatnot, we New Jersey people. So that is--they get it; you all
don't.
But let me just say, I am sorry that I missed your
testimony. I have been quickly looking through the material,
but I do have a question that, when looking at pay for
performance, and any of you respond, has anyone looked at a
system problem? For example, in rewarding good performance,
what I mean by that is, for example, one standard imposed on
many hospitals is what they call the 4-hour rule, where a
patient should receive antibiotics for pneumonia, for example,
within 4 hours of walking into an emergency department.
Now, oftentimes in urban areas, where emergency rooms are,
you know, used as a physician's office because of the lack of
accessibility to health care, oftentimes the emergency
department is overcrowded, and therefore it actually prevents a
patient from being seen and diagnosed by a provider for more
than 6 hours, which is sometimes common.
So my question is, you know, so this is the example that is
the hospital penalized due to a more widespread health care
system problem to access to care, and how can you kind of break
that down?
Ms. Rosenthal. May I? That goes somewhat to Mr. Holt's
question as well. I do think the issue is that one size does
not fit all, and there will be some providers, particularly
safety net providers, who are already stretched thin, have very
few resources, and we don't want to drag those providers into a
worse situation by reallocating resources away from them. And I
think that we need to be very conscientious of those problems
as private payers thinking about developing these programs, and
making sure that technical assistance, again, or, perhaps some
kind of different program, is tailored for providers such as
the one that you have described.
I do think it is a real problem, and we don't know the
extent to which these pay-for-performance programs are going to
exacerbate existing strains on the system. And it is something
that needs to be monitored.
Mr. Payne. Thank you.
I just have a general question. I know the whole question
is trying to contain the escalating cost of health care, but I
wonder is this pay for performance, do you see it actually
being the method to control health care costs, increases or to
limit it, or do you think that it might just slow the increase
down? Will it provide better health care? Will it make,
therefore, funds available for all of those shut-out people?
That is a whole different subject. What would you like to see
achieved, if you could, say, maybe in a couple of sentences?
Ms. Ignani. I think, Mr. Payne, one of the most compelling
pieces of data now in the health care arena suggests that only
55 percent of what is done is best practice. So clearly we have
a long way to go. And the incentive through the reimbursement
system has been to pay pretty much the same for good practice,
bad practice, mediocre practice. We haven't differentiated.
With this movement toward setting goals and objectives,
rewarding clinicians who meet those objectives, that can be a
powerful incentive to improving the value that we are all
getting out of the health care system.
The conversation has been very relatively simple with
respect to health care costs. It has been about the trajectory
of the cost curve. That is serious enough. But when we look at
the amount of money going into the system, and we match it with
the data that suggests that only 55 percent of what is done is
best practice, then it indicates there is a great deal of room
to reorient and refocus health care resources and do a much
better job.
So I think as the committee has opened up this
conversation, we appreciate very much the thoughtfulness and
the breadth of the conversation because it really does go to
that issue of value: Are we getting value for our health care
investment?
Mr. Hanson. Just to add to that, it is a complex issue. I
don't think it is the silver bullet, but I think it is part of
what the health care system needs to transform itself into.
There is a whole lot of consumer behavior involved with
mitigating the costs of health care. I see this as only one
part. It is an important part, but it is only one part of an
enormous, complex transformation.
Mr. Payne. Thank you very much.
Earlier this morning we had a hearing on education, and two
Governors, one from Iowa and one from Massachusetts, said the
same thing, that we have to somehow differentiate pay for poor
teachers that get the same pay as good teachers. I think that
is sort of what you put your finger on. So thank you very much.
Chairman Johnson. Ms. McCollum, do you care to question.
Ms. McCollum. Thank you, Mr. Chair.
I am from Minnesota where we have done a few things a
little differently. We have not-for-profits and all kinds of
things, and now we are ranking our hospitals. And from what I
am starting to see kind of get shifted out on that is the
health insurance companies, when faced with some tough
questions about is this really comparing apples to apples, is
comparing a teaching hospital, a teaching hospital that also
does indigent care, a hospital that handles pediatrics
primarily, are we really--are we really ranking all this pay
for performance accurately? And after all the names were
published pretty much, in ranking, in the local papers, you
started sifting through the next year or two, and there were a
few like little whoops. So I think we need to be careful when
moving forward with this, and I think there is a lot of things
that have to be taken in account.
In reading through here, one of the things is diabetic
care. I couldn't agree more that there should be, you know, a
standard for performance for diabetic care. But how does this
work for a physician who maybe has multiple insurers, and one
group of insurers is going to pay for test strips and
everything; oh, and we will pay for your how to live with
diabetes class, and we will make sure it is offered at a time
that is flexible for you to take off of work, versus a doctor
who has another patient who has bare-bones insurance that
doesn't really cover too much of anything, to be supportive of
that diabetic? So I am confused as to how this is going to work
for doctors with multiple insurance.
And then when we start looking at protocol, protocol still
isn't really shifted out based on gender and the way drugs
interact with women. There is even still challenges for the
pediatrics. I believe--and I served on a the State Medical
board for a while. I believe there are physicians and nurse
practitioners and a whole lot of people who can do a whole lot
better. I also believe that there is a lot of people out there
working really hard with a lot of different systems in place.
And so when you start putting all these things together, if
there isn't one standard protocol for diabetes that is going to
be nationwide, and then we start judging the physician, how
they are doing on that, not even taking into account the
patient responsibility on the end of it, I am wondering how do
we really get there in a way that is just, and a way that is
fair to the physician; to blow the whistle on someone who is
not doing a good job, but not to penalize somebody because
either their patient isn't cooperative, or they have 12
different insurance plans with all different kinds of menus
with how to handle, and I will use diabetes as the example.
Ms. Ignani. You have asked a 20-minute question, but I am
going to give you a succinct answer. But I would like to follow
up, if that would be appropriate, because I don't want to give
the short shrift.
First, you should be, and I know you are, proud of what is
going on in Minnesota. All of our health plans in partnership
with the medical society and the hospital association have done
some things that haven't been replicated in other States. So it
is a great laboratory for best practice.
What we have learned in Minnesota, and also other places,
and that--and this is one of the reasons that we have placed so
much emphasis on the question of uniformity of protocols and
selection of measures, is that it is very important that a
physician who may be treating a subset of the community not be
disadvantaged because they may have the individuals who are the
least healthy, they have the most chronic conditions,
comorbidities, et cetera.
So one of the things we have been working hard to do is to
get consensus about what is measured, but also that is only
part one; deal with the issue that you raised quite rightly,
which is how do you put these data together so we can get a
sense of--across all of the patients that the physician is
treating of how they perform, as opposed to necessarily the
patients that are just hooked to a particular insurer. That
would give equity inherently in the system for physicians, and
we have been working with a number of physician groups we talk
about in our testimony, and I would like to provide more data
on that.
We have gone a long way on the measures, step 2. We are
moving forward; we are moving forward rapidly. We are not
completely there yet. But it is going to be very important not
only to put the private sector data, but the public sector data
so we can look together at the entire population that the
physicians and the hospitals are treating.
So I think you have opened up a very important series of
compelling questions that, Mr. Chairman, I would like to
provide more detail on, because it really deserves a more
thoughtful answer than I think in the time we have today. But
this is very important.
The bottom line is I think we can feel hopeful that because
of the way this is being rolled out, that we are doing positive
incentives as a first step to try to elicit all of the issues,
get them on the table, and see what needs to be done to do this
right. It is a much more responsible way to proceed than go the
other way.
Ms. McCollum. Mr. Chair, I appreciate that, but--and I look
forward to seeing what you have to say. One thing that comes
into this argument that I don't know, I didn't see it being
discussed in the testimony, and I didn't hear every word of the
testimony, is you are getting to patients' right to privacy.
And we have been struggling with that at the legislative State
level when your medical records start becoming part of a group
medical record, starting to become part of analysis issues,
having your medical records, your right to privacy and who is
looking at what.
So that is, if we are going farther on this, Mr. Chair, I
would suggest to tackle that in a hearing earlier on so that
you are not confronted with it on the floor of the House,
because it is a very sticky wicket, to use a colloquial term.
Chairman Johnson. You had another, Doctor, did you want to
make.
Dr. Galvin. If I could, I wanted to just respond to your
initial concern about kind of where was the patient in the
process, and were they engaged. And I think that is an awfully
important question.
When Leapfrog and Bridges to Excellence were formed,
employers did it because we couldn't get any health insurance
plans to do it. But we could not get the system moving a number
of years ago. It is good to see that a few of them are starting
to move in that direction.
And one of the things we learned from managed care in the
last decade was that who got excluded were the two most
important players in the system, which were the doctors and the
patients. And so when we started out to create these, it was we
are going to have them at the table, and we are going to kind
of only develop a plan if it meets their needs.
And just in terms of the consumer, a very interesting thing
happened in Bridges to Excellence, which is we were moving down
trying to figure out what a reward was, what the measures were,
and at one point the physician said, you know what? We are not
going to participate unless you also build in incentives for
our patients, because I can do the best thing, I can draw my
blood sugars, I can do everything right, and if the patient
then goes out and goes to McDonald's or doesn't follow what I,
you know, have prescribed, I don't want to be disadvantaged for
that.
And so there are pretty significant consumer incentives for
basically living a healthy lifestyle. I just want to make it
clear that I do think it is awfully important that consumers
get engaged.
Chairman Johnson. Thank you.
In regard to your idea of sending us some more information
based on your own opinions, we would appreciate that, and we
would dutifully accept anything that you send to us and have it
put in the record, and I thank you for the offer to elaborate.
I would carry on with that idea of how do we necessarily
protect, you know, the docs and hospitals and the privacy issue
that she is talking about personally.
You know, I know we have wrestled with that in other
committees. I happen to be on the Medicare committee, too, and
I think that with today's, he and I were talking about eye
scan. We use that in the airports now to get through. There
isn't any reason why you can't use something like that to
identify patients. But her question, more to the point, was how
do you prevent people using them for analysis publicly? Have
you got protections figured out? Anybody think about that?
Ms Ignani. Mr. Chairman, we have thought a great deal about
this, and one of the ways to begin to get to--from a physician
standpoint--and we have spent a lot of time talking about this
this afternoon, it is very important to have not simply a
snapshot of the patients that he or she is treating associated
with a particular health plan, but to have their entire
practice looked at from the standpoint of equity, to make sure
that we are dealing with the high risk, low risk, medium risk,
et cetera. In doing that, as you aggregate data, it is less
important to know who I am personally. It is much more
important to know what was done given my condition to ensure
that certain objectives are met.
So in statistics we talk about deidentify data. It is a
great deal of you just--it means you don't have to have the
patient associated with that particular analysis.
And there has been a great deal of work done in the context
of disease management and a number of other strategies with
respect to care coordination that are going on that we think
can inform this very productively. But clearly, this is new
territory. It needs to be proceeded with caution. There needs
to be a cautious path followed.
But we think that there are ways to address the issues of
equity, but at the same time protect the patients. But where
you put the balance point is an important thing to talk about
prospectively as opposed to in retrospect, or retrospectively.
Chairman Johnson. Thank you. I appreciate it.
Yes, sir.
Dr. Galvin. I agree it is an awfully important issue, and I
think we, again, as large employers, address it early on
because we all have a policy that we don't want to know any
specific information about any of our employees. So it is
something that we delegate to our health plans to do.
That all being said, we don't make any step in this pay for
performance without having a council of our own employees and
have our privacy committee at the company look at it, because I
think these are delicate issues.
I think, as Karen said, we are kind of plowing new ground,
and so I think that having it built into the structure from the
beginning with the right people at the table is our best way to
address it moving forward.
Chairman Johnson. Thank you.
Mr. Andrews.
Mr. Andrews. I again want to express my pleasure to the
members of the panel for a very edifying, interesting testimony
today. And I share Mr. Johnson's desire that you supplement the
record with further thoughts. I think that is an excellent
idea.
Mr. Kildee and I were talking during the testimony that--
this discussion is reminiscent of a discussion that was held in
this room and others over the last couple years over the No
Child Left Behind Act. We started out with a concept that we
wanted to articulate meaningful and high standards for every
public school and every student, and we went about the business
of trying to build measurements that would animate those goals.
The jury is very much out on whether the standards that we--or
the tools that we created successfully do that or not.
One of the other issues that is reminiscent of No Child
Left Behind is something Mr. Payne brought up, and that is
about the need for remedial investment when an institution is
failing to meet a standard not because it doesn't know how to
or won't, but can't because of resource limitations. And I
would urge in your written comments to think about this
problem.
I have several hospitals in my district, one in particular
that is in an urban area, where probably 85, 86 percent of the
revenue stream is either Medicare, Medicaid, what we call
Uncompensated Care in New Jersey, which is a State fund for the
uninsured. And probably this hospital is not following
practices in certain areas that would be generated out of a
study like this not because they are not aware of them, not
because they are resistant to the change, because they don't
have the resources. And we do want to be careful that, in
identifying practices and areas that are not meeting the
standard, that we discriminate or distinguish between
institutions that can meet the standard but won't, and
institutions that would meet the standard but can't because of
resource allocation problems.
And whether we address that through graduate medical
education, reimbursement for teaching hospitals, whether we
address it through some kind of supplemental Medicare payment
or what have you, it is a very serious consideration, because
it is true that the driving concept here is to take dollars you
are already spending, as Dr. Rosenthal said, and allocate them
more wisely. But in some cases, even wise reallocation of those
dollars won't cover what needs to be done because of gunshot
wounds, and HIV problems in huge numbers, and low-birth-weight
babies, and kids with lead poisoning, and lots of other things
that these kind of hospitals deal with.
So I don't know the answer to that question, but it is a
question that I would like you to take into account when you
think this through.
Thank you, Mr. Chairman.
Chairman Johnson. Thank you. He is right; all hospitals
aren't the same. So we need to think about that.
I want to thank you all for your valuable time and your
testimony. You are a very good panel. And I want to thank the
members for their participation as well.
I would encourage you to tell your cancer patient M.D.
Anderson is a good place.
Dr. Galvin. That is a one-cough hospital.
Chairman Johnson. That is it. And I think you will make
your plane, Dr. Rosenthal.
Thank you all for being here. If there is no further
business, this committee stands adjourned.
[Whereupon, at 3:43 p.m., the subcommittee was adjourned.]