January 2011

STRATEGIC INNOVATIONS FOR AFFORDABLE, SUSTAINABLE HEALTH CARE:

A Model for Health System Reform Environmental Scan

Table of Contents

1 ACCOUNTABLE CARE ORGANIZATIONS 1 3 ELECTRONIC MEDICAL RECORDS 20 Accountable Care Organizations ...... 1 Application Service Provider (ASP) Hosting Strategy ...... 20 Physician Group Practice Demonstration ...... 2 EMR Facilitated Process Redesign – SIX SIGMA ...... 21 Brookings-Dartmouth ACO Collaborative ...... 3 Hospital Sponsored Incentives to Drive Physician EMR Adoption ...... 22 Carilion Clinic, Roanoke, VA ...... 3 Adoption of Common Security Frameworks (CSF) to Manage New Security Aultman Health Foundation, Aultman Hospital, and AultCare Health Plans, Canton, Requirements ...... 24 OH ...... 5 Integrated Practice Management, EMR & Revenue Cycle Management Solutions ...... 25 2 DISEASE MANAGEMENT 7 Disease/Risk Screening or Assessment ...... 7 4 MEDICAL TOURISM 28 Blue Cross Blue Shield (BCBS) ...... 9 Medical Tourism Insurance/Benefit Plans ...... 28 Kaiser Permanente (KP) ...... 9 BlueCross BlueShield of South Carolina & Companion Global Healthcare,, ...... 29 Electronic (EDSS) or Computerized Clinical Decision Support Systems Medical Tourism Facilitators ...... 30 (CDSS), Physician Reminders ...... 10 Healthbase Online Inc.: Healthcare Beyond Boundaries ...... 31 Patient Education/Self-Management Programs/Patient Action Plans/Goal Setting ...... 10 5 PATIENT-CENTERED MEDICAL HOME 33 Remote Monitoring and Patient Support ...... 11 Patient-Centered Medical Home ...... 33 Peer, Social, or Community Support Programs ...... 12 PCMH for Medicaid Populations ...... 35 Behavior and Lifestyle Modification Programs ...... 13 Community Care of North Carolina ...... 36 (Chronic) Disease Management Registries ...... 13 PCMH Within Large, Integrated Health Plans and Delivery Systems ...... 36 Holyoke Health Center Chronic Disease Registry ...... 15 UnitedHealthcare ...... 36 Clinical Guideline Creation and/or Execution Engines ...... 16 Purchaser-Sponsored Programs and the Patient-Centered Primary Care Provider Incentives/Pay-for-Performance ...... 16 Collaborative (PCPCC) ...... 37

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6 PAYMENT MODELS 39 Evidence-Based Medicine (EBM) ...... 59 Market-level reimbursement and payment approaches or incentives ...... 39 Employers Support For Primary Care ...... 59 Purchasing Pools ...... 39 Payment Systems Impact on Quality ...... 60 Preferred Provider ...... 40 Pay for Performance (P4P) ...... 61 Value-based purchasing ...... 40 California P4P Program, Integrated Healthcare Association (IHA) ...... 63 Report Cards ...... 40 8 PHARMACEUTICAL INNOVATIONS 67 The eValue8 Common RFI ...... 41 Incentive-based formularies (multi tier formularies) ...... 67 Payment approaches and incentives ...... 41 Pitney Bowes, Inc...... 70 Risk-adjusted Payment ...... 41 Generic Substitution ...... 70 Pay for Performance (P4P) ...... 42 Bundled Payment ...... 43 Coinsurance and Copayments ...... 71 Episode-based Payments ...... 44 Pharmacy Benefit Management ...... 72 The Prometheus Payment Model...... 44 Disease Management ...... 72 Global Payment or Capitation ...... 45 Utilization Management ...... 73 Condition-specific ―capitation‖ ...... 46 Quantity Limitations ...... 73 Gain-sharing ...... 47 Prior Authorization ...... 73 Gain-sharing Hospital-Physician Agreements ...... 47 Drug Utilization Review (DUR) ...... 73 Gain-sharing Payer-Provider Agreements ...... 48 Delivery Systems ...... 74 Gain-sharing Patient-payer Agreements ...... 48 Benefit Design and Consumer Cost Sharing ...... 74 Generic Incentives ...... 74 7 PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY 51 Multi-tiered Copayments ...... 74 Performance Measurement ...... 51 Coinsurance...... 75 National Performance Measurement Systems ...... 53 New England Tri-State Prescription Drug Purchasing Coalition ...... 75 CMS Hospital Compare ...... 53 Federal Employees Health Benefits Program ...... 76 Joint Commission ...... 54 Computerized real time alerts ...... 77 Consumer Assessment of Healthcare Providers and Systems (CAHPS), Agency for Carespeak Communications and Mount Sinai Hospital ...... 78 Healthcare Research and Quality (AHRQ) ...... 54 HEDIS, National Committee for Quality Assurance (NCQA) ...... 55 NCQA Quality Dividend Calculator (QDC) ...... 56 The Leapfrog Group ...... 56 National Health Equity and Cultural Competency Performance Measurement ...... 57 National Quality Forum (NQF), Measuring and Reporting Cultural Competency ...... 57 CAHPS Cultural Competency Item Set ...... 58 The Joint Commission: Hospitals, Language, and Culture ...... 58

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9 PRICE TRANSPARENCY 84 11 SOCIAL NETWORKING AND CONSUMER E-HEALTH 107 Quality and Cost Scorecards / Reports ...... 84 Social Networking and Internet Health Information Web Sites ...... 107 Pennsylvania Health Care Cost Containment Council Report on Cardiac Surgery in General Social Networking Sites ...... 107 PA Hospitals ...... 85 Health-specific social networking sites ...... 108 Web-hosted Cost Posting / Comparison Applications ...... 85 Patientslikeme® ...... 108 My Cost ...... 86 Patients Direct ...... 109 CarePricer ...... 86 Social Media and Health Information Sites ...... 109 Coalitions, Campaigns, State Reimbursement Changes and Legislation .. 87 Medscape ...... 110 The Nevada Partnership for Value Driven Health Care ...... 88 The Mayo Clinic ...... 110 Transparency in Pharmaceutical Purchasing Solutions (TIPPS) ...... 88 Consumer e-Health and Self Management Tools ...... 111 About Health Transparency ...... 88 Games ...... 111 The Transparency Imperative ...... 88 Decision Support Tools ...... 112 10 PURCHASING POOLS 92 www.cancerfacts.com ...... 113 Purchasing for Insurance: ...... 92 Patient-Provider Connectivity ...... 114 Cleveland’s Council of Smaller Enterprises (COSE) ...... 93 Personal Health Records (PHRs) ...... 114 ® HealthPass (NYC) ...... 94 FONEMED ...... 115 Health Connections Program, Connecticut Business and Industry Association (CBIA) . 94 Mobile Health: Smart Phone Applications...... 115 Buyers Health Care Action Group (BHCAG) Purchasing Model ...... 95 Prototype ...... 116 STEALTH HEALTH ...... 116 Purchasing for Pharmaceuticals ...... 96 Patient-Provider Connectivity and Care Management ...... 116 Multistate Purchasing and Collaboration ...... 96 AllOne MobileSM ...... 116 West Virginia: RXIS Multistate Pharmaceutical Purchasing Pool...... 97 LifeWIRE ...... 117 New England Tri-State Prescription Drug Purchasing Coalition...... 98 Applied Nanodetectors Phone Application ...... 117 Intrastate Purchasing ...... 98 BeWell Mobile Technology ...... 117 Georgia: Intrastate Consolidated Drug Management ...... 99 Organizational Initiatives ...... 118 Illinois: RX Buying Club ...... 100 mHealth Initiative ...... 118 State-negotiated Discounts and Drug-only Benefits ...... 100 Maine Rx Plus ...... 101 Substitutions, Evidence-based Preferred Drug List (PDLs) and Supplemental Rebates ...... 101 Hospital Purchasing Alliances ...... 102

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12 TELEMEDICINE 121 14 VALUE-BASED PURCHASING 134 Virtual Integrated Practices (VIPs) ...... 121 Pay for Performance ...... 134 John A. Hartford Foundation & Rush University Medical Center VIP, ...... 122 HighMark’s QualityBLUE Initiative ...... 135 Electronic Intensive Care Units (eICUs) ...... 123 Cost Consequence Analysis ...... 135 Sutter Health ...... 124 HealthGrades ...... 136 General rural patient remote and tele medicine interventions ...... 124 The American Medical Association Physician Consortium for Performance Mayo Clinic Hospital Stroke Telemedicine for Arizona Rural Residents (STARR) ...... 125 Improvement® (PCPI) ...... 136 Interventions by CMS ...... 136 13 VALUE-BASED BENEFIT DESIGN 128 Consumer Financial Incentives: A Guide for Purchasers ...... 137 Targeted Incentives ...... 128 Information Systems and Web Applications ...... 137 Targeted Health Promotion/ Disease Management ...... 129 eHealthInsurance ...... 138 Targeted Co-pays ...... 130 Purchasing Consortia and Cooperatives ...... 138 Non-targeted incentives ...... 130 The Council of Smaller Enterprises ...... 138 Preferred provider/supplier ...... 131 The Disease Management Purchasing Consortium (& Advisory Council) ...... 139 Model Programs and Hybrid Applications ...... 131 The Washington Prescription Drug Purchasing (WPDP) Consortium ...... 139 City of Asheville, NC ...... 131 15 WELLNESS AND HEALTH PROMOTION 141 City of Springfield, OR ...... 132 Hannaford Brothers ...... 132 Employee (Patient) Incentives ...... 141 Optimizing the Work Environment...... 143 Onsite Health Clinics and Coaches...... 144 Quad/Graphics ...... 144 Exercise and Physical Activity Promotion and Programs ...... 145 Vaccination Programs ...... 146 Tobacco Cessation Programs and Interventions ...... 147

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SECTION ● 1 1 ACCOUNTABLE CARE ORGANIZATIONS

Accountable Care Organizations (ACO) are a set of providers and institutions, such as primary care physicians, specialists, and hospitals, which have joint responsibility for the quality and cost of care for a population. To encourage physicians and hospitals to establish these organizations requires a bonus payment structure (in addition to standard fee-for- service model) that rewards ACOs for reducing cost growth and meeting established quality of care targets. This organization model is intended to address the lack of coordinated care across delivery settings, particularly for physicians and hospitals, and for patients that would benefit from coordinated care such as those with diabetes, asthma, and congestive heart failure. Cost savings from this model would result primarily from reduced hospitalizations and readmissions. Note: There is limited evidence, beyond the current Centers for Medicare and Medicaid Services (CMS) Physician Group Practice (PGP) demonstration, that this approach actually works to improve quality and reduce costs. In addition, there are a number of barriers that physician groups and hospitals would have to overcome for this type of arrangement to be successful, including substantial capital investment in technical infrastructure to share information across organizational settings and changing the physician and organizational culture toward a team-based approach. Sources: 1, 2, 3, 4, 5, 6, 7

ACCOUNTABLE CARE ORGANIZATIONS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

There is lack of coordinated care across Similar models have shown promise in quality The model requires strong market collaboration among ACCOUNTABLE CARE delivery settings, particularly for improvement (e.g., Physician Group Practice Demo). providers and may depend largely on the makeup of the ORGANIZATIONS physicians and hospitals. This lack of Cost savings are less clear. market. coordination may lead to increased Success likely depends on a number of factors, MedPAC, in its 2009 report, hospitalizations and readmissions for including the participation of large physician groups that states, ―Under our ACO patients with chronic conditions such as are part of an integrated delivery system. concept, a group of congestive heart failure, asthma, or physicians teamed with a diabetes. hospital would have joint responsibility for the quality and cost of care provided to a large Medicare patient population. By making providers jointly responsible

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ACCOUNTABLE CARE ORGANIZATIONS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

for quality and cost metrics, ACOs would be expected to improve the coordination of care and reduce duplication of services. Because ACOs would take responsibility for resource use, Medicare could constrain health care spending by using a system of bonuses and, in some cases, withholds. This system would be designed to counterbalance the incentives under FFS payment to increase volume.‖

Other Comments Physicians and hospitals have joint responsibility for the quality and cost of care delivered.

Case Example 1: Congress mandated in 2000 that CMS Results have been mixed. In July 2007, CMS reported Large physician groups that are part of integrated that in the first performance year, two participants delivery systems. Physician Group Practice conduct the Physician Group Practice (PGP) demonstration to test a hybrid earned a combined bonus of approximately $7.4 Physician groups with at least 200 physicians were Demonstration payment methodology that combines million, and all 10 achieved most of the quality targets eligible to apply, and 10 were selected by CMS. The 10 related to diabetes. (Medicare Demonstration) Medicare fee-for-service payments with physician groups were Billings Clinic, Dartmouth- new incentive payments. Though not In Performance Year 3, five physician groups received Hitchcock Clinic, The Everette Clinic, Geisinger Health referred to as an ACO model, the structure performance payments totaling $25.3 million as part of System, Integrated Resources for the Middlesex Area, and aims of the demonstration are similar. their share of $32.3 million of savings generated for Marshfield Clinic, Novant Medical Group, and Park The aims of the demonstration were to the Medicare Trust Funds. Nicolette Health Services. These groups, except for encourage the coordination of Part A and The U.S. Government Accountability Office (GAO) Marshfield Clinic, identified themselves as integrated Part B services, promote efficiency concluded in its evaluation of the results from the first clinics that, in addition to their physician group, through investment in administrative performance year that evidence so far indicted that the included hospitals, surgical centers, or laboratories. processes, and reward physicians for care coordination programs initiated by the Eight of the 10 were nonprofit, and most were in small improving health outcomes. participants showed promise, but the wider cities or rural areas. applicability of the payment methodology used in the demonstration may be more limited.

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ACCOUNTABLE CARE ORGANIZATIONS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

Quality has improved in the four areas that CMS has monitored: diabetes, congestive heart failure, coronary artery disease, and preventive care. Both GAO and MedPAC are less definitive in attributing cost savings from the PGP demonstration. Part of the ―savings,‖ for example, could be Other Comments better detection and coding of illness at the PGP sites relative to their comparison groups. PGP design created several challenges, including lack of timely feedback and bonus payments. Challenges exist on how best to set spending targets and how best to determine ―savings‖ to Medicare.

Case Example 2: The ACO Learning Network is a joint initiative of the Brookings Institution and the Dartmouth Institute for Health Policy and Clinical Practice with the principal Brookings-Dartmouth goal of engaging stakeholders in piloting the ACO model and producing a successful and replicable model that can be implemented nationwide (two case ACO Collaborative studies are described below). The ACO learning network provides four particular service activities: Pilot sites: In-depth consultation, technical assistance, and data analysis for participating health systems and payers. Learning network: Offers practical guidance and a forum for interested parties to learn from one another throughout the process of planning and implementation. Community initiatives: Serve as strategic support for regions interested in piloting this at the community level. Washington, DC, support: Serves as a resource for legislative and executive staff on delivery system reform specifically related to the ACO model.

Case Example 2A: Carilion is working to address the lack of The model is still a work in progress. Activities to date Carilion‘s model can be used in markets with a large, Carilion Clinic, Roanoke, coordination of care among primary care include: integrated physician practice with close hospital physicians and hospitals within the region. The formation of a planning workgroup, including the affiliations. VA Organizational structure: chief marketing officer, the chief financial officer, the Likely implementation challenges identified for Carillion There is a tertiary academic medical chief information officer, the primary care chair, the Clinic follow: center, a moderate regional community vice president of medical affairs, and the health plan Reliable, timely information provided in a quick hospital, and three or four critical medical director; turnaround sufficient to drive rapid-cycle improvements access hospitals. Active conversation with all payers, including an in care (e.g., registries, clinical outcomes, costs); There are 170 primary care providers overview, detailed follow-up, and a ―straw man‖ gain Balancing the need to reduce hospitalizations with across the region (50% in core areas). A share model; managing hospitals (i.e., success means ―parasitizing‖ medical home is in progress, as is the Internal conversation with all clinical leadership, yourself); foundation of the Massachusett‘s health SMT, and boards with strong buy-in; and Managing the transition from FFS and inpatient focus to plan. Biweekly conference calls with Brookings and something else (i.e., the gain share may not offset the There 350 specialists, including those Dartmouth on population and methodology revenue loss); for an integrated care model and an definitions, performance measurement, and payers.

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ACCOUNTABLE CARE ORGANIZATIONS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

accountable physician group. Payer commitment: high, though a bit uneven. Changing physician behavior, including being more Approximately 50% of primary care patient centered, adopting new practice styles, and being and specialist physicians are employed accountable for waste and evidence-based care; by Carilion; others are not organized A lack of large regional employers, making it hard to and are in single-specialty small engage large groups of patients in the changes that they groups. too need to make; and No other multispecialty physician Communities and patients not being ready to accept group in the area. changes. Carilion has approximately a 60% inpatient market share and a 40% outpatient market share.

Other Comments There is modest support for the ACO concept among business leaders and boards, but they are unsure how to get there. Specific issues of interest includes: o Performance measurement, o Defining success amidst moving targets, and o How to rationalize hospital services while reducing utilization in the current payment environment. o Some business leaders remain concerned about possible cost increases when hospitals, rather than physicians, provide the ACO base.

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ACCOUNTABLE CARE ORGANIZATIONS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

Case Example 2B: Aultman is working to address the lack of To be determined. The ACO team is in the due-diligence The model can be used in markets with a large, integrated coordination of care among primary care phase of the plan. physician practice with close hospital affiliations. Aultman Health physicians and hospitals within the region. Foundation, Aultman The goal is to build on other strategies: Likely implementation challenges identified follow: This nonprofit, vertically integrated health Implementing a patient-centered medical home pilot Capital to develop a technical infrastructure; Hospital, and AultCare system primarily serves a five-county this fall within the Medicare Advantage Plan; Engagement of independent medical staff in the ACO market in northeastern Ohio. Health Plans, Canton, OH Utilization of current participation in performance process; Aultman Hospital has a single managed measurement: CMS, Compare, Leapfrog, the The delivery system payment model changing from fee- care contract with AultCare, covering Consumer Assessment of Healthcare Providers and for-service payment; more than 200,000 enrollees (2,300 Systems, the National Quality Forum, and CAQH; employers). Aultman is self-insured for Building models for ongoing sustainability; and Value-based purchasing (P4P) programs between Uncertainty regarding Medicare participation. health benefits, with 5,000 employees and AultCare and physicians; and 10,500 enrollees. Adaptation of health IT implementation— Comprehensive post-acute care: residency computerized physician order entry, HER, the programs, the College of Nursing, strong Aultman Patient Information Network (PIN), and the regional hospital partnerships, and an foundation of a Regional Health Information independent hospital network. Organization. Organizational structure: Independent physicians jointly venture to sponsor our health plan. Primary care is based mostly in private practices, and an increasing specialist base is employed by Aultman.

Other Comments The leadership of the foundation identified a number of reasons for their participation (beyond financial): The ACO Learning Network provides an opportunity to consider how best to implement payment and delivery reforms. Specific actions can be tailored to the organization. They can learn from other organizations committed to value improvement in other communities. They need to adapt to emerging policies for delivery and payments reform. They must identify innovative approaches.

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SECTION 1● ENDNOTES

1 Medicare Payment Advisory Commission. ―Chapter 2: Accountable Care Organizations.‖ Report to the Congress: Improving Incentives in the Medicare Program. Washington, DC: MedPAC. (June 2009). 2 Fisher, Elliot S., et al. ―Creating Accountable Care Organizations: The Extended Hospital Medical Staff,‖ Health Affairs. 26: 1, w44-27. (January/February 2007). 3 Fisher, Elliot S., et al. ―Fostering Accountable Health Care: Moving Forward In Medicare,‖ Health Affairs. (January 27, 2009). 4 U.S. Government Accountability Office. ―Medicare Physician Payment: Care Coordination Programs Used in Demonstration Show Promise, but Wider Use of Payment Approach May Be Limited.‖ GAO-08-65. Washington DC: GAO. (February 15, 2008). 5 Fisher, Elliot S. and Mark B. McClellan. ―The Accountable Care Organization (ACO) Learning Network.‖ The Brookings-Dartmouth ACO Learning Network. Webinar presentation. (September 3, 2009). 6 Rittenhouse, Diane R., Stephen M. Shortell and Elliott S. Fisher. ―Primary Care and Accountable Care — Two Essential Elements of Delivery-System Reform,‖ New England Journal of Medicine. 361: 2301-2303. (2009). 7 Galvin, Robert S. ―Accountable Care Organizations: The Payer Perspective: Promising Direction, Complicated Roadmap.‖ National Health Policy Audioconference presentation. (May 21, 2009).

END SECTION 1

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SECTION ● 2 2 DISEASE MANAGEMENT

Definition: Disease management has proliferated as a method to improve the health of patients with chronic disease. Disease management has been defined as a multidisciplinary approach to care for chronic diseases that coordinates comprehensive care along the disease continuum across health care delivery systems.1 Alternately, Epstein, et al. defined disease management as a population-based approach to health care that identifies patients at risk, intervenes with specific programs of care, and measures outcomes.2 More recently, Weingarten, et al. adopted the following definition of disease management: an intervention designed to manage or prevent a chronic condition using a systematic approach to care and potentially employing multiple treatment modalities.3 The focus and structure of disease management programs vary by patient and provider/sponsor needs. Financial or other incentives are sometimes used to help motivate patient behavior change and/or to reward providers for their efforts to promote participation and achieve improved patient health outcomes. One innovative approach toward disseminating information about policy options for policy makers and other stakeholders related to health care interventions (including policy options for disease management interventions) is RAND COMPARE (Comprehensive Assessment of Reform Efforts). RAND COMPARE was developed to provide tools to help decision makers assess the effects of changes in health care policies on health care system performance (such as access, quality, and cost). COMPARE gives users a comprehensive framework for examining trade-offs across policies or across different dimensions of performance for a particular policy (e.g., a policy‘s effect on spending compared to the effect on insurance coverage or on patient experience). Few randomized controlled clinical trials have been conducted of these interventions, yet evidence indicates some degree of effectiveness for each.

DISEASE MANAGEMENT

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Disease screening programs aim to identify Studies indicate that screening is effective for Programs are broadly applicable across DISEASE/RISK SCREENING individuals at risk for or in the early stages early detection of disease. Program populations, diseases/conditions, and OR ASSESSMENT of illness or disease. Once identified, these evaluations typically assess the extent of geographic areas. individuals can be referred to risk reduction disease identified, rating cost-effectiveness by Groups that use disease management include: Disease screening programs and initiatives aim for and disease management programs, which cost per Quality Adjusted Life Years (QALY) early identification of a disease or its precursors. The may result in improved outcomes and gained. Health departments; population may be narrowly focused to a known reduced costs. A limited number of randomized controlled Schools; high-risk group or broadly focused to the general The Centers for Disease Control and trials (RCTs) indicate mixed results; factors Physician group practice; community. Prevention (CDC) and other organizations such as screening modality, target population Employers; publish recommendations for disease participation, disease focus, screening Community groups; The program may focus on a single disease or location, and frequency of screening may screening initiatives. Insurance providers and health multiple conditions. The initiatives may incorporate affect results. physical exams, blood testing, questionnaires, or Common broadly targeted screening maintenance organizations; and

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DISEASE MANAGEMENT

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? other screening tools. programs include: high cholesterol, high Cost effectiveness and cost-savings vary Hospitals (e.g., acute, community, rural, blood pressure, diabetes, cervical cancer, according to disease, screening modality, and urban, ambulatory care, long-term care). Screening programs may be conducted once, colon and rectal cancers, HIV, sexually frequency. cyclically, or continuously. transmitted diseases, obesity, and breast Successful screening programs targeting Screening programs may stand-alone or be a cancer. broad community populations focus on component of more comprehensive disease Use of risk profiling, prediction and common conditions, such as high cholesterol, management programs/strategies. economic modeling to identify high-risk diabetes, and high blood pressure. Some members earlier might increase the efficacy studies have found reduced disease Data Mining is an analytic process designed to of disease management programs, which prevalence following a screening program. explore data (usually large amounts of data) in can then intervene earlier with those Screening programs focused on less pervasive search of consistent patterns and/or systematic individuals whose behavior can be changed. conditions may identify at-risk individuals relationships between variables. The ultimate goal of when narrowly focused on a high-risk data mining is identification of patterns in the data population; such programs may require indicating likelihood of disease or risk for disease. recruitment initiatives. Several screening Data may be in the form of claims (pharmacy, programs demonstrate reasonable cost physician); clinical records; past health behavior; or effectiveness. other information. Ingenix, Inc., a consulting firm specializing in predictive modeling, reports that its retrospec- Predictive modeling is one data mining tive Episode Risk Group ( ERG) model approach/technique that is becoming increasingly achieves a .53-.57 R2 while the prospective popular. Predictive modeling can identify and ERG model realizes a .18-.30 R2.4 characterize health risk for individuals who have not Some data mining techniques have been yet exhibited obvious signs of health problems, but shown to have predictive power of >80% who may become high cost or high risk in the future with certain conditions when large data sets – this early identification provides disease are used.5 management program sponsors with sufficient lead- time to invite the individual to participate.

It is important to carefully consider program goals, focus, population, and recruitment methods before implementing a program due to the considerable variability in efficacy. Review current screening recommendations prior to implementing a screening program. Other Comments Recruitment strategies to avoid low participation rates if necessary. Ingenix, Inc., MEDai, DxCG and TC3 among other companies, provide predictive modeling software and consulting services. In general, data mining and predictive modeling achieve greatest accuracy with large data sets.

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DISEASE MANAGEMENT

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case Example 1: Predictive modeling allows BCBS to more BCBS of Rhode Island reported a 10% increase BCBS has a diverse and large membership Blue Cross Blue Shield (BCBS) accurately identify and characterize health in the accuracy of its underwriting and high-risk across the U.S. plan members who are at risk for a case and disease management models four BCBS of Massachusetts, of Rhode Island, of Western catastrophic clinical event.6 Early months after implementing predictive modeling New York and BlueShield of Northeastern New York identification and appropriate interventions software. BCBSRI deployed ACG Rx-PM, among others now employ predictive modeling in for these members can lead to improved which relies on retail pharmacy claims to their disease management screening efforts. quality of life, positive health outcomes, identify high-risk cases in real time. and more effective population-based care Predictive Modeling analysis is conducted on a management. Furthermore, the weekly basis to identify members who have an comprehensive clinical profiles will allow increased probability of incurring high cost medical BCBSMA to develop more meaningful expenses in the future. These members are then collaborations with their key partners - recruited into any one of a number of disease including employers and providers - to management programs. improve member health. For increased accuracy in prediction, most analysts recommend use of large, more comprehensive data sets, which may be Other Comments developed in data warehouses. Several statistical software options are available focused on predictive modeling approaches. Case Example 2: KP aims to improve patient health and A study of the effectiveness of this approach Kaiser Permanente (KP) reduce medical crises through predictive found that a disease management program modeling. providing 68,560 patients – identified as high Kaiser Permanente uses predictive modeling with its The Archimedes Model used predictive risk via the predictive modeling - with diabetes electronic health record data, KP HealthConnect, to modeling to forecast that ―bundled‖ or heart disease with a bundling of two generic, identify those at risk for heart attacks and stroke. cardioprotective medications would reduce low-cost drugs (a cholesterol-lowering statin and a blood pressure-lowering drug) prevented 1,271 KP’s Archimedes Model simulated the the risk of heart attack and stroke in a high- 7 heart attacks and strokes.8 pathophysiology, treatments, and outcomes of risk population by 71%. coronary artery disease and diabetes and its complications at the individual level and aggregated the results to project population-level effects.

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DISEASE MANAGEMENT

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

These tools aim to provide physicians and Improved patient outcomes associated with use EDSS and CDSS are not market specific ELECTRONIC (EDSS) OR COMPUTERIZED other health care providers with easy-to- of EDSS/CDSS have been found for the applications. CLINICAL DECISION SUPPORT SYSTEMS access, disease-specific clinical following areas: Users include: information; algorithms; and evidence- o Drug dose calculations, titration, and (CDSS), PHYSICIAN REMINDERS Health departments; based clinical treatment guidelines. The weaning; Physician group practices; and Computer-based information systems integrate functionality of these tools, in a practice o Preventive care disease management; setting, is enhanced by increased disease- Hospitals (e.g., acute, community, rural, clinical and patient information to support decision- o Patient outcomes; specificity capabilities of the software. urban, ambulatory care, long-term care). making in patient care. Disease risk estimation o Standardization of patient care; and Ease-of-access of these software packages algorithms, clinical guidelines, and risk-based patient o Disease risk communication. care advice are programmed into a software package. may increase their use, which may promote increased standardization of care and CDSS up-take and impact studies show The software may reside on individual desktops, adherence to clinical guidelines, thus generalized acceptance, use, and applicability PDAs, internal servers, or be Web-based. improving the quality of patient care. across countries, medical specialties, and practice settings. The software may accompany or be separate from These tools are appropriate for acute patient Technological capacity, user IT familiarity, Electronic Medical Records (EMR) systems. care as well as chronic disease management. and/or Internet availability may affect use. Quality of the information, automatic up-dating, and specificity to clinical practices may affect up-take. Some studies have found differences in the level of CDSS impact by patient care setting, with greater benefits realized in acute care settings than chronic (primary care).9,10

Patient education and self-management Patient action plans can improve health out- These programs are very broadly PATIENT EDUCATION/SELF-MANAGEMENT programs and patient action plans aim to comes for patients with a variety of chronic applicable across populations, PROGRAMS/PATIENT ACTION improve patient health outcomes, lower conditions. diseases/conditions, age groups, and PLANS/GOAL SETTING health care costs, and increase patient Statistically significant results have been geographic areas, including countries. autonomy over day-to-day health care obtained following patient education Users include: Patient education and self-management programs decisions. programs in the following areas: o Health departments; usually used for chronic illness, center on increasing These programs and tools are based on the o Better adherence to medical regimen, o Community groups; patients’ knowledge of their conditions and ability to belief that increased education will lead to o Better adherence to pharmaceutical regimen, o Insurance providers and health make informed decisions. more appropriate decision-making and self- o Increased knowledge of medical terms, maintenance organizations; care behaviors. Specifically, these Patient education programs traditionally focus on education programs and tools aim to o Improvements in patient disease control, o Employers; providing information and improving technical skills, increase patient knowledge about a specific o Increased disease-specific knowledge, o Physician group practices; and while self-management programs emphasize condition so that they have improved o Lower systolic blood pressure (in a o Hospitals (e.g., acute, community, rural,

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? decision-making and problem-solving skills. adherence to treatment and medication population of hypertensive patients who urban, ambulatory care, long-term care). regimens, and make more informed received disease specific education), Patient education and self-management training may decisions regarding when to seek physician o Fewer re-hospitalizations and death in chronic be offered via written materials, visuals, and one-on- or emergency room treatment. heart failure patients, one or group training sessions. o Improved adherence to diet restrictions, and Patient action plans are disease-specific written or o Reduced physician visits. computerized tools focused on assisting patients to Studies of patient self-management programs quickly detect and treat exacerbations. These tools report statistically significant results in: facilitate patient self-management. They may also o Proper medication use, provide some education in interventions to improve o Reduced exacerbations in COPD patients, and health status. o Self-efficacy in disease management. Other studies have found non-statistically significant improvements in the following: o Diabetic glycemic control, o Days off from work, o Reduced physician visits, and o Reduced emergency department visits. Studies evaluating efficacy of program by modality have found that Internet, self-paced programs more effective than physician-provided education.11

Remote monitoring aims to support patient Telemonitoring has been found to: These programs are applicable across REMOTE MONITORING AND PATIENT care and self-management to improve o Reduce hospital length of stay, populations, diseases/conditions, and SUPPORT patient health outcomes andlower health o Reduce mortality, geographic areas, including countries. care costs by providing patients with o Reduce the number of hospitalizations, Users include: These approaches include: continued support after hospital discharge o Health departments; or between physician appointments. o Improve health status measures, Telemonitoring, o Health maintenance organizations; Remote monitoring and support may o Lower health care costs, 12 o Larger physician practice groups; Telehealth, identify and/or prevent illness-related o Reduce the number of emergency room o 13 complications and maintain patient visits, Prisons; Telephone Reminders, and 14 compliance with treatment and medication o Increase patient compliance with treatment o Pre-hospital emergency services; and Postal Reminders. regimens, outcomes related to reduced regimen, and o Hospitals (e.g., acute, community, rural, Remote monitoring interventions may be used health care costs, and improved patient o Improve symptom control. urban, ambulatory care, long-term care). across disciplines for patients with chronic illness outcomes. Telehealth has been found to: and in primary care practices. They may utilize o Reduce hospital length of stay,

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? Internet, telephone, or other remote modality. They o Improve symptom control, may be used to monitor patient physical status or o Reduce mortality, and symptoms, review patient self-care efforts, answer o Improve adherence to medication regimen. patient questions, make changes to patient treatment Patient reminders have been found to increase regimens, provide patient education, and remind compliance with appointments and with patients of appointments. treatment regimen. Telemonitoring devices transmit health information to monitoring centers via telephone or Internet. May be combined with telehealth. Telehealth services are generally provided by nurses or allied health providers via telephone or Internet.

With pre-intervention education, these programs may be implemented successfully in individuals with no computer or previous remote monitoring experience. 15 Other Comments Remote monitoring may be particularly useful for patients in remote settings or who have difficulty accessing patient care centers. Regions with limited telephone or Internet connectivity may have difficulty implementing these programs effectively. These programs aim to increase patient Although support groups have been associated These programs are applicable across PEER, SOCIAL, OR COMMUNITY SUPPORT autonomy over day-to-day health care with certain improvements, limited studies of populations and geographic areas. Smaller PROGRAMS decisions and improve their ability to cope them have been conducted; no cost- geographic regions may have increased with disease exacerbations. Specifically, effectiveness analysis of U.S.-based support difficulty attaining goal participation rates. Support programs offer group or one-to-one support these programs provide a forum for sharing programs could be found. Some studies have for patients with chronic or long-term illness. They knowledge and support using peer and found no improvement in measured outcomes. provide a structured setting in which patients and/or social support networks. family members receive social support, guidance, and education about their disease or condition. These programs may be conducted in health care or community settings, though the Internet is an increasingly popular venue. Groups may be facilitated by a nurse or other health care provider. Peer-to-peer and lay-led programs are also common.

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

These programs aim to reduce occurrence Studies show mixed results, dependent on These programs are applicable across BEHAVIOR AND LIFESTYLE MODIFICATION of unhealthy behaviors, improve patient program details and participant motivation. populations and geographic areas, PROGRAMS health status, and improve patient health Financial and other incentives are sometimes including countries. outcomes. used to help motivate participants. Smaller geographic regions may have Behavior modification programs attempt to change or Internet-based behavior modification increased difficulty attaining goal adjust unhealthy behaviors, and are increasingly used programs may be less effective than in-person participation rates. as an intervention to manage chronic diseases. 16 sessions. Users include: Programs may incorporate topics such as anxiety and No cost-effectiveness analysis of U.S.-based o Health departments; stress reduction, exercise, healthy eating, weight loss, support programs was identified. and condition-specific self-management topics. o Health maintenance organizations; These programs may be offered as group or one-on- o Physician practice groups; one sessions over the course of several weeks or o Community organizations; months, in in-patient or community settings, led by o Disease-specific non-profit health care professionals or peers. organizations; o Employers; o Prisons; and o Hospitals (e.g., acute, community, rural, urban, ambulatory care, long-term care). Efficacy will vary dependent on program focus, structure, recruitment, implementation, and other factors. Other Comments Programs should be based on recommended guidelines and provide evidence-based information. (CHRONIC) DISEASE MANAGEMENT Registry programs seek to assist health care Registry use has been associated with: Registries are suitable for diverse market providers to more systematically provide Increased disease indicator monitoring, conditions, and are applicable across and monitor the health care for and status of populations and geographic areas. REGISTRIES Provision of tobacco advice, patients with chronic disease. Computerized disease registries track and manage Increased frequency of exams for co-morbid Users include: disease-specific information for individual patients and Systematic management and tracking of conditions, Health Departments; patients may lead to patients receiving populations. A registry supports care management, Health maintenance organizations; recommended care at increased rates. More Increased provision of self-management outreach, quality improvement, and outcome support, Physician practice groups; research.17 consistent provision of health care and evidence-based treatments improves health Greater provider adherence to clinical Community organizations; These registries offer several different report options, outcomes, lowers overall health care use, guideline recommendations, and Disease-specific non-profit organizations; such as patient-specific reports on disease status and and lowers health care costs. Improvement in certain disease-specific Prisons; and events, exception reports to identify patients over-due health indicators. for exams or other health care needs, and aggregate Hospitals (e.g., acute, community, rural, reports on efficacy of patient care teams or urban, ambulatory care, long- term care). organizations in disease-specific population care. Registries may be locally developed, purchased, or

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? publically available software. A registry may reside on a PC or on a local, vendor, or other server and accessed via Internet. The registry may handle a single or multiple diseases. It may be a stand-alone program or incorporated into an Electronic Medical Record (EMR). Patient information may be entered manually or be downloaded from sources, such as claims, disease or pharmacy systems, or EMRs. Basic Uses:18 Advanced planning of patient care, based on evidence-based protocols. Providing ‗opportunistic‘ care – that is, take every opportunity to provide care, even if it is not the reason for the visit. Monitoring quality indicators to evaluate effectiveness of process improvements. Identifying gaps in performance. Advanced Uses:19 Stratify patients by severity in order to target planned care. Provide patient-specific outreach reminders. Create individual patient care plans with goals, track patient progress against the plan, and identify subgroups of patients based on plan progress. Other Comments Identify subpopulations (by gender, age, geographic area) to differentiate process improvement interventions. Identify subpopulations with special needs. Provide performance feedback to providers and staff. Identify ‗non-compliant‘ patients to diagnose causes and target interventions. Organize, coordinate, and schedule ancillary and community-based services. Create and manage provider panels. Deliver transparent provider-specific feedback. Identify patients for clinical trials. Distribute a newsletter to patients including current performance data. Summarize utilization improvement and cost savings for negotiations with payers and networks, and to obtain grant funding.

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case Example 1: Asthma registry: Data entry form includes a The proportion of diabetic patients who had Registries are suitable for diverse market Holyoke Health Center Chronic short version of asthma guidelines to help been seen within the previous three years, but conditions. who had not had an appointment within the Disease Registry guide severity assessment and medication Registry up-take shows generalized management. Providers receive individual previous year decreased from 28.2% in acceptance and use by the staff of a 21 Since 1970, Holyoke Health Center (HHC), a data regarding asthma patients. The asthma January 2003, to 6.5% by January 2006. community health center. community health center located in Holyoke, MA, has case manager independently follows The average A1C for all patients with diabetes Practices and providers with larger been providing medical and dental care. Its two sites patients entered into the registry- a new was 8.4% in January 2003. By January 2006, numbers of patients with chronic disease 22 serve approximately 16,000 patients annually, most intervention as previously all patients had that figure was 7.5%. may realize most benefit from these of whom are Spanish speaking. Over 3,000 of the to be referred by a physician. In January 2003, the proportion of patients programs. center's adult patients have diabetes, asthma, HIV, or Depression registry is currently being with A1C levels > 10% was 18.2%. By 23 depression.20 HHC utilizes disease registries for validated. January 2006, it had declined to 10.8%. these four key chronic diseases to better manage Diabetes registry is used to print out HHC implemented several initiatives patient care. individual provider‘s outcomes and concurrently with the diabetes registry. combined provider data. Physician However, only an estimated 50% of patients Patients stay in the registry until three years have champion discusses outcome data with participated in other activities.24 This suggests elapsed in which there is no contact with clinical or providers on a monthly basis. Registry is a positive effect of improved management support services. utilized to identify and follow-up with and tracking on patient outcomes. patients who have not been seen by their Other CHCs employing diabetes disease providers in the last four months. Registry registries have reported similar findings.25 data are used to identify patients newly Data are not available on the other registry diagnosed with diabetes. All data are disease focus areas. reviewed and analyzed monthly. Approximately 1,188 patients registered. HIV registry: utilized to print out individual provider‘s outcomes and combined provider data. Physician champion discusses outcome data with providers monthly. Registry is used to identify and follow-up with patients who have not been seen by their providers in the last four months. Registry data are used to identify patients newly diagnosed with HIV.

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

These tools aim to provide physicians and Clinical guidelines are intended to shape CLINICAL GUIDELINE CREATION AND/OR other health care providers with the ability practice patterns, which may differ across EXECUTION ENGINES to store, analyze, create, and disseminate market areas. clinical treatment guidelines. The A Clinical Guideline creation or execution engine is a functionality of these tools, in a practice computerized platform that facilitates development setting, is enhanced with increased disease- or testing of clinical guidelines, or both.26 specificity capabilities of the software and Clinical guidelines are clinical standards of use of common software platforms. treatment, disease-specific, which serve to guide Increased use of clinical treatment patient management and to standardize care. guidelines will promote increased Historically, expert panels develop guidelines. More standardization of care and adherence to recently, computerized software programs have clinical guidelines, thus improving the been used to do so. quality of patient care. These tools are appropriate for acute patient care as well as chronic disease management.

Examples of creation and execution engines include: 27 Digital Electronic Guidelines Library (DeGeL), a web-based, modular and distributed architecture; GuideLine Acquisition, Representation and Execution (GLARE), a system to acquire and execute clinical guidelines;28 GLIF3 Guideline Execution Engine (GLEE), a tool for executing guidelines; Other Comments Health Care Services release 2 (HeCaSe2), an agent-based platform that offers health care services to users; NewGuide, a framework for modeling and executing clinical practice guidelines; Standards-based Sharable Active Guideline Environment (SAGE),29 the result of collaboration among research groups at six institutions; and Specification Execution and Management Plan (SpEM), a framework for supporting the management of clinical guidelines. Fee-for-service payments fail to promote This review did not identify RCTs evaluating Pay-for-performance incentives are PROVIDER INCENTIVES/PAY-FOR- and may even discourage guideline-based the impact of pay-for-performance incentives. suitable for diverse market conditions. PERFORMANCE treatment. An effective disease Most studies incorporated a pre-/post-analysis Programs may be tailored to meet local management program may lead to lower of patient outcomes and visits. capabilities and health situations. Incentives, financial or not, are inducements to revenues for providers under fee-for- Incentives may contribute to improved patient Up-take of incentive programs has been encourage or reinforce the delivery of evidence- service, since quality improvement outcomes and reduced health care utilization found to be significantly associated with based practices that promote better patient activities are not billable and acute care and costs. region, with HMOs in the northeast and outcomes. Incentives may be either desirable visits decrease with improved care. Non-financial incentives that will promote the west much more likely to offer these

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? rewards or undesirable consequences. Pay-for-performance programs attempt to participant in either patient or peer groups programs, and those in the south much less compensate for this discrepancy in focus by might be equally effective. likely.31 Pay-for-performance incentives are becoming an rewarding physicians, hospitals, and others Pay-for-performance is associated with increasingly popular tool in quality improvement, for initiatives undertaken to improve patient greater adherence to clinical treatment disease management, and wellness promotion care and care processes. guidelines, though findings are mixed. strategies. Pay-for-performance incentives award The goal is to improve patient outcomes by Incentives may have more impact on physicians, providers, medical practices, or hospitals rewarding physicians for achieving those physicians and smaller practices than larger an incentive bonus for good patient outcomes. outcomes. Improved patient outcomes will groups or facilities unless the reward reaches Pay-for-performance historically has been focused on lead to lower health care costs. a proportionate value of revenue from smaller patient outcomes, but increasingly focuses on quality. unit/entity to larger entity. Improvements may be structural, clinical process, Incentive structures focused on administrative satisfaction, quality focused, or a combination. improvements may indirectly result in worsened patient outcomes. Popular clinical indicators include high compliance This review identified one study examining with the desired frequency of immunizations, Pap cost-effectiveness of a hospital incentive smears, mammographic and colonoscopy screening, program. Results indicated cost-effectiveness and the use of hemoglobin A1c for screening and of the program in terms of Quality of Life management of diabetes. Years.30 Pay-for-Performance structures include: Cost-effectiveness analyses of pay-for- Competitive and non-competitive awards to performance programs are sparse. providers meeting a set target, Competitive and non-competitive awards to providers who improve, and Reward and penalty systems to reward high compliance or patient outcomes and to penalize low compliance.

The Centers for Medicare & Medicaid Services (CMS) uses many pay-for-performance strategies. Many state Medicaid programs have implemented some form of pay-for-performance program. Providers or hospitals with large high-risk or chronically ill populations may be disproportionately penalized. Risk adjusted Other Comments payments for patient mix differences may resolve this problem. Strict adherence to clinical treatment guidelines in all patients may not be appropriate. Some discretion should be allowed providers to exercise their clinical judgment. Pay-for-performance incentives may reward those providers with higher performance at baseline.

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SECTION 2 ● ENDNOTES

1 Ellrodt, Gray, et al. ―Evidence-based Disease Management,‖ Journal of the American Medical Association. 278: 20. (November 26, 1997). 2 Epstein, Wendy, Miguel Sanchez and Paul Kechijian. ―Conjunctivitis,‖ Archives of Dermatology. 121: 7. (July 1985). 3 Weingarten, Scott, et al. ―Interventions Used in Disease Management Programmes for Patients with Chronic Illness — Which Ones Work? Meta-analysis of Published Reports,‖ British Medical Journal. 325: 7370. (October 26, 2002). 4 Ingenix. ―Symmetry Episode Risk Groups: A Successful Approach to Health Risk Assessment.‖ http://www.ingenix.com/content/attachments/Symmetry_ERG_7-0_WhitePaper.pdf. (Accessed February 1, 2010). 5 Delen, Dursun, Glen Walker and Amit Kadam. ―Predicting Breast Cancer Survivability: A Comparison of Three Data Mining Methods,‖ Artificial Intelligence in Medicine. 34: 113. (June 2005). 6 Business Wire. ―Blue Cross Blue Shield of Massachusetts Selects IHCIS' Impact Pro For Predictive Modeling.‖ February 3, 2004. http://www.allbusiness.com/technology/software-services- applications-information/5627709-1.html. (Accessed February 1, 2010). 7 Kaiser Permanente Press Releases: National. ―Bundling Two Generic Low-Cost Heart Drugs Prevents Heart Attack and Stroke in Large, Diverse Population, Observational Clinical Study Shows.‖ http://xnet.kp.org/newscenter/pressreleases/nat/2009/100109drugbundlestudy.html. (Accessed February 2, 1010). 8 Ibid., Kaiser Permanente Press Releases. (2010). 9 Sintchenko, Vitali, Farah Magrabi and Steven Tipper. ―Are We Measuring the Right End-points? Variables that Affect the Impact of Computerised Decision Support on Patient Outcomes: A Systematic Review,‖ Medical Informatics and the Internet in Medicine. 32: 3. (September 2007). 10 Eccles, Martin, et al. ―Effect of Computerised Evidence Based Guidelines on Management of Asthma and Angina in Adults in Primary Care: Cluster Randomised Controlled Trial,‖ British Medical Journal (Clinical Research Ed.). 325: 7370. (October 26, 2002). 11 Keulers, Bram, Carlo Welters, Paul Spauwen and Peter Houpt. ―Can Face-to-Face Patient Education be Replaced by Computer-based Patient Education? A Randomised Trial,‖ Patient Education and Counseling. 67: 1. (2003). 12 Hunkeler, Enid, et al. ―Efficacy of Nurse Telehealth Care and Peer Support in Augmenting Treatment of Depression in Primary Care,‖ Archives of Family Medicine. 9: 8. (August 2000). 13 Piette, John, Morris Weinberger, Frederic Kraemer and Stephen McPhee. ―Impact of Automated Calls With Nurse Follow-Up on Diabetes Treatment Outcomes in a Department of Veterans Affairs Health Care System: A Randomized Controlled Trial,‖ Diabetes Care. 24: 202. (February 2001). 14 Meystre, Stephane. ―The Current State of Telemonitoring: A Comment on the Literature,‖ Telemedicine and e-Health. 11: 63. (February 2005). 15 Finkelstein, Joseph, Manuel Cabrera and George Hripcsak. ―Internet-Based Home Asthma Telemonitoring: Can Patients Handle the Technology?,‖ CHEST. 117: 148. (January 2000). 16 Wadden, Thomas, Meghan Butryn and Christopher Wilson. ―Lifestyle Modification for the Management of Obesity,‖ Gastroenterology. 132: 2226. (May 2007). 17 Lumetra. ―Registry – A Tool for Tracking Clinical Care.‖ 2003. http://www.familydocs.org/files/Diabetes%20Registry%20Products%20-%20Lumetra.pdf. (Accessed January 27, 2010). 18 Scoville, Richard. ―What Technology is Needed to Improve Care: EHRs or Registries?,‖ The Health Care Blog. June 17, 2009. http://www.thehealthcareblog.com/the_health_care_blog/2009/06/what-technology-is-needed-to-improve-care-ehrs-or-registries-.html. (Accessed February 1, 2010). 19 Ibid., Scoville, Richard. (2009). 20 Holyoke Health Center. ―Chronic Care Teams.‖ February 2005. http://www.diabetesinitiative.org/documents/6-HHCCollaborativepresentationChronicCareTeams.pdf. (Accessed February 1, 2010). STRATEGIC INNOVATIONS FOR AFFORDABLE, SUSTAINABLE HEALTH CARE: A Model for Health System Reform: Environmental Scan ALTARUM INSTITUTE January 2011 PAGE 18 SECTION 2 ● DISEASE MANAGEMENT:

21 Liebman, Jon and Dawn Heffernan. ―Quality Improvement in Diabetes Care Using Community Health Workers,‖ Clinical Diabetes. 26: 2. (2008). 22 Ibid., Liebman, John and Dawn Heffernan. (2008). 23 Op. cit., Liebman, John and Dawn Heffernan. (2008). 24 Liebman, Jon, Dawn Heffernan and Patricia Sarvela. ―Establishing Diabetes Self-Management in a Community Health Center Serving Low-Income Latinos,‖ The Diabetes Educator. 33: 132S. (2007). 25 Brownson, Carol. ―The Road to Effective Patient Self Management. Diabetes Initiative — A National Program of the Robert Wood Johnson Foundation.‖ 2007. http://diabetesnpo.im.wustl.edu/documents/MD4TheRoadtoEffectivePatientSelfManagementforWEB.pdf. (Accessed February 1, 2010). 26 Hommersom, Arjen, Perry Groot, Michael Balser and Peter Lucas. ―Formal Methods for Verification of Clinical Practice Guidelines,‖ Studies in Health Technology and Informatics. 139: 63. (2008). 27 Isern, David and Antonio Moreno. ―Computer-based Execution of Clinical Guidelines: A Review,‖ International Journal of Medical Informatics. 7: 787. (December 2008). 28 Terenziani, P., et al. ―The GLARE Approach to Clinical Guidelines: Main Features,‖ Studies in Health Technology and Informatics. 101: 162. (2004). 29 Berg, David, Prabhu Ram, Julie Glasgow and Jonathan Castro. ―SAGEDesktop: An Environment for Testing Clinical Practice Guidelines,‖ Conference Proceedings-IEEE Engineering in Medicine and Biology Society. 5: 3217. (2005). 30 Nahra, Tammie, et al. ―Cost-Effectiveness of Hospital Pay-for-Performance Incentives,‖ Medical Care Research and Review. 63: 49S. (2006). 31 Rosenthal, Meredith, et al. ―Pay for Performance in Commercial HMOs,‖ New England Journal of Medicine. 355: 1895. (November 2, 2006). END SECTION 2

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SECTION ● 3 3 ELECTRONIC MEDICAL RECORDS

Electronic Medical Records (EMR) – An EMR is a computer-based patient medical record. An EMR facilitates access to patient data by clinical staff at any given location; accurate and complete claims processing by insurance companies; building automated checks for drug and allergy interactions; clinical notes; prescriptions; scheduling; sending to and viewing by labs. The term has become expanded to include systems which keep track of other relevant medical information. The practice management system is the medical office functions which support and surround the electronic medical record.1 Note: The 2009 economic stimulus package (HITECH Act) aims at incenting more physicians to adopt EHR. The American Recovery and Reinvestment Act of 2009 (ARRA) promises incentive payments to those who adopt and use "certified EHRs" and, eventually, reduces Medicare payments to those who do not use an EHR. The research evidence on the overall merits of EHR implementation to support care delivery is strong (e.g., improved decision making, reduced medical efforts). However, evidence to support EMRs as a cost savings strategy is mixed. There are several landmark studies and reports (e.g., The New England Journal of Medicine, Medical Group Management Association (MGMA), Congress, Blue Cross, and National Research Council) that have clearly refuted the claims of EMR as a cost saving strategy. 2, 3, 4, 5, 6, 7, 8

ELECTRONIC MEDICAL RECORDS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

A review of several provider organizations that Model appears viable for most geographical markets. PPLICATION ERVICE In contrast to the traditional client/server A S model, the ASP strategy allows providers adopted the ASP model indicates that the approach Model appears suitable for diverse market conditions. PROVIDER (ASP) to save on the upfront costs and hardware does allow for reduced start up costs for EMR 9 Greatest concern has been in areas where internet HOSTING STRATEGY requirements of a client/server hardware, software, network connectivity, and labor. connectivity is not strong (e.g., rural markets).11 architecture, and instead make smaller The ASP model also allows practices to access new Dominant purchasers identified include, but may not be payments over time. B2B model where EMR and IT features almost immediately upon release instead vs. limited to: increased costs for enhancements as seen in the service providers team to o Independent Physician Associations (IPAs); and provide a packaged solution client/server model. This may become an increasingly important driver as health information exchange (HIE) o Small to mid-size provider organizations (physicians, to include hardware, EMR 12 requirements continue to evolve. small healthcare groups, etc). software, licensure, technical ASP model also allows providers to start off with a Other: support, and maintenance. hosted service (less cost and risk), then move to an in- o Relevance to Business Coalitions – 10 Application and data reside house solution over time. o Ability to negotiate vendor-provided service level on the vendor's servers, and Key concerns cited for organizations adopting a ASP agreement (SLA); access is provided via the approach include: vendor stability, reliance on internet o Ability to minimize the capital investment in EMR;

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ELECTRONIC MEDICAL RECORDS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

Internet, through a web connectivity, security, and data conversion o Ability to spread the cost of software, hardware and browser or specialized client capabilities. support over a monthly operating budget; and software (e.g., VPN). Stronger arguments in favor of ASP approach vs. o Minimizing the need for expensive internal IT client server strategy: (1) Higher upfront cost of personal to maintain a complex EMR system. Payment is based on a ownership as a server and software must be purchased smaller setup fee and upfront; (2) Manual product updates are usually ongoing monthly payments required (not in all cases); (3) Online backup must be based on usage and/or per purchased as add-on 3rd party software which provider. increases overall IT spend; and (4) Remote access to EMR is limited in functionality and is more complex.

A key consideration for ASP implementation will be whether the EMR is certified by the Certification Commission for Health Information Other Comments Technology (CCHIT), which will determine incentives or penalties for EMR ―Meaningful Use‖ by providers. ASP Vendors: eClinicalWorks (eCW), Allscripts, and NextGen.

Optimization of the value of EMR In general, most of the research evidence consists of No data were found to suggest that approach would be EMR FACILITATED implementation by focusing on staffing before-and-after comparisons of key outcomes limited to specific geographic markets. PROCESS REDESIGN – and workflow changes associated with measures (e.g., patient wait times, medical errors). Model appears suitable for diverse market conditions. SIX SIGMA new technology implementation (e.g., In 2005, one study estimated industry savings of $81 The majority of case examples identified focused on larger patient charting, clinical decision support, billion annually, with that number possibly doubling hospital systems where there is a greater need to integrate EMR and IT-driven clinical document and image management, once the data captured by EMRs is fully used in the all aspects of the care delivery system — from ambulatory 13 transformations to maximize reporting). prevention and management of chronic disease. care to the emergency department, to the inpatient setting, value realization for providers Primary focus is on patient access, A survey of 819 users of electronic medical records to post-acute care providers. and patients through workflow efficiency, communication, (EMRs) by the Medical Records Institute found that Dominant purchasers identified include, but may not be business process decision support use, and financial almost 50% of healthcare organizations were driven to limited to: performance. EMRs because they recognized the need to improve optimization and effective o Physician Group Practices, and clinical processes and workflow efficiency. organization change o Hospitals (e.g., Acute, Community, Rural, Urban, Reported results include:14, 15, 16 management. Ambulatory Care, Long Term Care). o Reduced clinical costs, Other: o Enhanced quality and access, o One group identified was a multispecialty group o Reduced hospitalizations, practice with more than 750 physicians and 6,000 o Reduced adverse events, staff serving more than 360,000 patients at 41 18, 19 o Reduced administrative costs, ambulatory care sites.

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ELECTRONIC MEDICAL RECORDS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

o Improved care management and coordination of care, o Relevance to Business Coalitions - Serves as ancillary o Expansion of services, and strategy to maximize EMR investment and contribute o Modification of practice patterns and behavior. to overall cost reductions. Several organizations identified that had implemented EMRs were also engaged in other concurrent transformational programs (e.g., Six Sigma, culture change, physician engagement, Baldridge Review, and ongoing initiatives around quality, patient safety, and cost-effectiveness).17 It is important to note that industry experts forecast that as many as 100,000 physicians and IPAs will be making decisions on EMR in the next 24 months, as the market reaches the so-called ―Tipping Point.‖ This is largely due to the EMR adoption mandates outlined in the ARRA.

Other Comments Two large health systems — Sutter Health in Northern California and Presbyterian Healthcare Services in Albuquerque, New Mexico — are taking this approach, using Lean Six Sigma design tools. They are first redesigning processes and workflows to eliminate waste, redundancy, and variation, and then automating these newly improved processes with EMR technology. The Marshfield Clinic (Wisconsin) has long used information systems to facilitate care process redesign for patients with chronic illnesses, and the organization expanded its efforts after becoming a participant in the Centers for Medicare and Medicaid Services (CMS) Physician Group Practice Demonstration Project. As a result of these expanded efforts, Marshfield Clinic reports enhanced quality and access to care; reduced hospitalizations, adverse events, and clinical and administrative costs; and earned performance bonuses in both years of the demonstration project.20, 21

Previously, the Stark Law enacted under Research suggests that there are a number of strategies Greatest presence seen in the U.S. Northeast Region - HOSPITAL SPONSORED the Omnibus Budget Reconciliation Act taken by hospitals to help encourage EMR adoption by where several hospitals were identified to have initiated INCENTIVES TO DRIVE of 1989 prevented hospitals from physician group practices. small-scale, phased rollouts of subsidized EMRs (e.g., PHYSICIAN EMR purchasing EMR software and other Factors driving hospital interest in supporting Beth Israel Deaconess Physicians Organization, equipment for private practice physicians physician EMR adoption include: (1) improving the Children's Hospital Boston, Caritas, Mt. Auburn ADOPTION in an effort to attract referrals. quality and efficiency of care, and (2) increasing Hospital, New England Baptist Hospital, Partners alignment between physicians hospital. Healthcare System, Winchester Hospital). A number of provider incen- In 2007, HHS and IRS related the Stark Law and now allow hospitals to bear up to Hospitals varied in the level and structure of the Model appears suitable for diverse market conditions. tives have been identified to 85% of the cost of EMR implementation subsidies and/or IT support services, such as training, Data also suggest that larger metropolitan communities help drive EMR adoption at the

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ELECTRONIC MEDICAL RECORDS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

physician level to include for physician offices.23 technical support, data storage, and enhanced clinical might expect to see small-scale, phased rollouts of EMR direct financial subsidies, The revised regulations are scheduled to data exchange between hospital IT systems and programs by larger hospitals. extension of EMR vendor sunset on Dec. 31, 2013, when physicians physician EMRs. Dominant purchasers identified include, but may not be discounts and technical must assume any ongoing EMR costs.24 Hospital information technology projects, budget limited to: support by hospital IT staff. 22 availability and physician interest are among the o Medium - Large hospitals, and factors influencing hospital decisions regarding o Hospital Systems. adoption.25, 26 Other: Most hospitals are picking ONE system for their employed physicians and then they are going to offer o A key incentive for hospitals adopting this strategy is to pay 85% If independent physicians use this ONE the ability to drive deeper volume discounts if all system. their doctors are on one EMR system (similar to pharmaceutical/PBM industry). Hospitals reported that they anticipate physicians will be more likely to maintain, and even expand, their o Relevance to Business Coalitions – Leverage relationship with the hospital because of the improved economies of scale, shared service model, minimize efficiency from interoperability with hospital‘s EMR scope/cost/risk/complexity of EMR integration with system.27 future information exchange initiatives. According to findings from the Center for Studying Health System Change‘s (HSC) 2007 Metropolitan Community site visit, a significant number of hospitals are evaluating strategies to help physicians purchase EMRs but many are proceeding cautiously.28 Data from the National Study of Physician Organizations conducted in 2007 revealed that physicians under capitated payments are more likely to adopt EMRs than otherwise similar organizations receiving payment on a fee-for-service (FFS) basis. However, groups with a high percentage of patients enrolled in HMOs are less likely to adopt EMRs than organizations whose patients are mostly enrolled in non-HMO insurance plans.

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ELECTRONIC MEDICAL RECORDS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

Other Comments The Massachusetts General Physicians Organization, working with Massachusetts General Hospital, designed an incentive and communications campaign to encourage doctors to use health information technologies (including a new EHR and electronic radiology ordering system), and to adopt other, department-specific quality and safety measures. The program, which offers rewards of up to $5,000 annually for physicians who meet pre-established goals, led to increased use of these technologies and to other quality and safety improvements. Several hospitals reported providing providers with EMR systems (e.g., eClinicalWorks, GE Centricity) o Johnson Memorial (Indiana), o Children‘s National Medical Center (Washington, DC), and o Stamford Hospital (Connecticut).

As of November 2009, new HHS rules The research evidence for this innovation is limited Model appears viable for most geographical markets. ADOPTION OF under the The Health Insurance since this is a fairly new strategy in anticipation of Model appears suitable for diverse market conditions. COMMON SECURITY Portability and Accountability Act widespread EMR adoptions under ARRA and new Dominant purchasers include, but may not be limited to: (HIPAA) call for financial penalties security provisions under HIPAA. (Note: ARRA FRAMEWORKS (CSF) o IPA, Physician Groups, Clinics, Hospitals, ranging from $100 to $50,000 for each provides for greatly increased penalties for security TO MANAGE NEW violation. HHS also sets a maximum breaches involving personal health information, and o Laboratory, and SECURITY yearly penalty of $1.5 million for all these are in effect now). o Retail Pharmacies. violations of an identical provision. REQUIREMENTS Anticipated results include: Other: Under the new rule, a health care o Lowered costs, reduced risks, increased efficiency o CSF could be relevant to payor based organizations as CSF is a new program to organization can no longer avoid penalties and decreased complexity; well due to the increased need to ensure PHI is evaluate and certify IT for not knowing about a violation unless it o Helps doctors and hospitals share patient records protected: security products and fixes the problem within 30 days of both on site and remotely; o Fee-for-Service plans, identifying it. services. o Allows health plans to exchange patient data with o Health Maintenance Organizations (HMO), HHS also calls for ―periodic audits‖ to doctors and protects online access to medical o Point-of-Service plans (POS), and CSF is an information ensure HIPAA compliance. records; and security framework that o Preferred Provider Organizations (PPO). o Provides organizations with the needed structure, harmonizes the requirements detail and clarity relating to information security of existing standards and tailored to the healthcare industry. regulations, including federal Note: CSF appears to be a preemptive move in (HIPAA, HITECH), third party anticipation of a new market for assisting hospitals, (PCI, COBIT) and government clinics and physicians in complying with privacy rules in (NIST, FTC). HIPAA and the HITECH Act; both are part of the federal stimulus package.

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ELECTRONIC MEDICAL RECORDS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

Other Comments Health Information Trust Alliance (HITRUST) is a coalition of more than 50 health care companies. HITRUST includes health providers, insurers, pharmacies, biotech firms, device manufacturers, and technology vendors that established a common security framework designed to be a benchmark for safeguarding the privacy of electronic medical records. The coalition's plan creates guidelines for addressing the security and regulatory aspects of establishing a broad network for the exchange of electronic health records.29 HITRUST Common Security Framework (CSF) is a certifiable framework that can be used by any and all organizations that create, access, store or exchange personal health and financial records. HITRUST members include Cisco Systems, CVS Caremark Corporation, Humana Inc., Johnson & Johnson, UnitedHealth Group Inc., and hospital chain HCA, Inc.

Focuses on providing physicians with the Research reveals that this is becoming a key No evidence was found to suggest that approach would INTEGRATED PRACTICE tools required to increase office differentiator in selecting EMR technology due to its be limited to specific geographic markets. MANAGEMENT, EMR & efficiencies, insurance and patient ability to improve the efficiency and profitability of Model appears suitable for diverse market conditions. REVENUE CYCLE collections, enhanced workflow medical practices. Dominant purchasers identified include, but may not be productivity and profit. Often it is touted as providing “end to end” management MANAGEMENT limited to: of medical practice, patient and production data. o The majority (if not all) health care facilities, SOLUTIONS Reported results include: including IPA, clinics, hospitals. o Revenues gained through more accurate procedure o Relevance to Business Coalition tracking, resulting in additional reimbursement; o Reduced operational costs, o Savings generated by eliminating transcription services; o Improved management of third party vendors, o Labor cost recovery from fewer support staff; and o Improved pricing strategies, o Increased effectiveness in meeting Federal and State o Improved diagnostic and service coding, quarterly reporting requirements. o Increased cash flow, According to the CEO of the Healthcare Billing and Management Association, the fact that the Medicare‘s o Improved business processes, and Recovery Audit Contractor (RAC) audits are affecting o Improved customer services. nearly every financial process for healthcare providers. As RAC auditors aim to find irregular claims information, providers need to ensure their systems can appropriately manage and process all financial data.30

Other Comments Bridge Community Health Clinic in Wausau, Wisconsin partnered with HealthPort to implement HealthPort Practice Management (PM), HealthPort Electronic Medical Record (EMR), and HealthPort Revenue Cycle Management (RCM). o Bridge County reported that the combined approach helped the organization move forward in terms of operations, patient care, and finance.

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ELECTRONIC MEDICAL RECORDS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

o They also indicated that the ability to have these three solutions from a single vendor was an important factor and that disparate vendors and systems added significantly more costs, time and complexity.

SECTION 3● ENDNOTES

1 Healthcare Information and Management Systems Study. ―HIMSS Electronic Health Record Definitional Model, Version 1.1.‖ www.himss.org/content/files/ehrattributes070703.pdf. (Accessed November 30, 2009). 2 Hartzband, Pamela and Jerome Groopman. ―Off the Record-Avoiding the Pitfalls of Going Electronic,‖ New England Journal of Medicine. (April 2008). 3 Gans, David N. “Off to a Slow Start.” MGMA Connexion, 42. October 2006. 4 Congressional Budget Office of the Congress of the United States. ―Evidence on the Costs and Benefits of Health Information Technology.‖ Washington, DC: CBO. (May 2008). 5 Dolan, Pamela Lewis. ―Insurer Finds EMRs Won‘t Pay Off for Its Doctors.‖ American Medical News. March 10, 2008. 6 DesRoches, Catherine M., et al. ―Electronic Health Records in Ambulatory Care—A National Survey of Physicians,‖ New England Journal of Medicine. 359: 50. (June 18, 2008). 7 ―Business Case Needed to Argue for EHR Adoption, Experts Say.‖ iHealthBeat. http://www.ihealthbeat.org/articles/2008/7/14/Business-Case-Needed-To-Argue-for-EHR-Adoption-Experts- Say.aspx?topicID=54. (Accessed November 27, 2009). 8 National Research Council. William W. Stead and Herbert S. Lin, Editors. ―Computational Technology for Effective Health Care: Immediate Steps and Strategic Directions.‖ (January, 2009). 9 AHRQ Information Technology Resource Center. ―Privacy & Security Section.‖ http://healthit.ahrq.gov/portal/server.pt?open=512&objID=1117&&PageID=14755&mode=2&in_hi_userid=3882&cached=true#Answer. (Accessed December 3, 2009). 10 Eastern Connecticut Physician Hospital Organization, Inc. ―Electronic Health Records: Tools for Your Practice‖. http://ecpho.org/?page_id=58. (Accessed December 17, 2009). 11 Terry, Ken. ―Are ASP-Model EHRs Ready for Prime Time? As Web Connections Get Faster and the Technology Improves, More Vendors are Delivering Acceptable Results,‖ Physician Practice, 19: 15. (October 1, 2009). 12 American Academy of Family Physicians, Center for Health Information Technology. ―EHR Pilot Project Shows ASP Model Has Benefits for Small Physician Practices.‖ (Accessed November 26, 2009). 13 Hillestad, Richard, et al.―Can Electronic Medical Record Systems Transform Health Care? Potential Health Benefits, Savings, and Costs,‖ Health Affairs. 24: 5, 1103-1117. (2005). 14 Zaroukian, Michael H. and Arlene Sierra. ―Benefiting from Ambulatory EHR Implementation: Solidarity, Six Sigma, and Willingness to Strive,‖ Journal of Healthcare Information Management. 20:1. (2006).

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15 Lohr, Steve. ―The Evidence Gap: Health Care That Puts a Computer on the Team.‖ New York Times. December 27, 2008. 16 McCarthy, Douglas. ―Case Study: Improving Quality and Efficiency in Response to Pay-for-Performance Incentives Under the Medicare Physician Group Practice Demonstration.‖ New York, NY: The Commonwealth Fund. (March 12, 2007). 17 Op. cit., Lohr, Steve. (2008). 18 Hsiao, Chun-Jo, et al. ―Preliminary Estimates of Electronic Medical Records Use by Office-based Physicians: United States, 2008.‖ Health E-Stat. National Center for Health Statistics. http://www.cdc.gov/nchs/data/hestat/physicians08/physicians08.pdf. (Accessed December 12, 2009). 19 Institute for Healthcare Improvement (IHI). ―Improvement Report: Improving Access in Primary Care—Virtually.‖ March 6, 2006. Available at: http://www.ihi.org/IHI/Topics/OfficePractices/Access/ImprovementStories/ImprovingAccessinPrimaryCareVirtually.htm. (Accessed November 2009). 20 Agency for Health Research and Quality Health Care Innovation Exchange. ―Electronic Medical Record–Facilitated Care Process Redesign Enhances Access to Care, Reduces Hospitalizations and Costs for Patients with Chronic Illnesses.‖ http://innovations.ahrq.gov/content.aspx?id=1725. (Accessed November 2009). 21 Op. cit., Institute for Healthcare Improvement (IHI). (2006). 22 Raths, David. ―Hospitals Will Underwrite EMRs for Associated Physician Groups.‖ February 2008. Healthcare Informatics. http://ww.healthcare- informatics.com/ME2/dirmod.asp?sid=9B6FFC446FF7486981EA3C0C3CCE4943&nm=Articles%2FNews&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE8 95F87F791&tier=4&id=72F82F7A44594288954AE989AE52A1BC. (Accessed February 1, 2009). 23 Hinkley, Gerry, Allen E. Briskin and Jill H. Gordon. ―OIG and CMS Adopt Final Regulations Permitting Donation of e-Prescribing and Electronic Health Records Technology,‖ Advisory Bulletin, Davis Wright Tremaine LLP, Seattle, Washington. (August 2006). 24 Schalla, Susan and LaVerne Woods. ―IRS Tries Again: More Guidance Regarding Health Information Technology Cost-Sharing Arrangements,‖ Advisory Bulletin, Davis Wright Tremaine LLP, Seattle, Washington. (July 2007). 25 Grossman, Joy and Genna Cohen, ―Despite Regulatory Changes, Hospitals Cautious in Helping Physicians Purchase Electronic Medical Records,‖ Research Brief No. 123, Center for Studying Health Systems Change, Washington DC. (September 2008.) 26 American Medical Association. Health Information Technology Donations: A Guide for Physicians. Chicago, IL, 2008. 27 Grossman, Joy M., Thomas S. Bodenheimer and Kelly McKenzie. ―Hospital-Physician Portals: The Role Of Competition In Driving Clinical Data Exchange,― Health Affairs. 25: 6. (November/December 2006). 28 Grossman, Joy M., Kathryn L. Kushner and Elizabeth A. November, ―Creating Sustainable Local Health Information Exchanges: Can Barriers to Stakeholder Participation be Overcome?,‖ Research Brief No. 2, Center for Studying Health System Change, Washington, DC. (February 2008). 29 Thomson Reuters. Reporting by Susan Kelly, Editing by Richard Chang. ―Industry Coalition Launches Health IT Security Plan.‖ http://uk.reuters.com/article/idUKTRE52167320090302?pageNumber=2&virtualBrandChannel=0&sp=true, (Accessed February 3, 2009). 30 Means, Chip. ―The Changing Face of RCM.‖ September 2, 2009. Healthcare Finance News. http://www.healthcarefinancenews.com/news/product-spotlight-revenue-cycle-management. (Accessed December 28, 2009).

END SECTION 3

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SECTION ● 4 4 MEDICAL TOURISM

The Medical Tourism Association (MTA) states ―medical tourism is where people who live in one country travel to another country to receive medical, dental, or surgical care while at the same time receiving equal to or greater care than they would have in their own country, and are traveling for medical care because of affordability, better access to care or a higher level of quality of care.‖1 The MTA (Global Healthcare Association) is the first and only international, non-profit trade association for the medical tourism and global health care industry made up of the top international hospitals, health care providers, medical travel facilitators, insurance companies, and other affiliated companies and members with the common goal of promoting the highest level of quality of healthcare to patients in a global environment.2 In 2008, the American Medical Association adopted guiding principles on medical tourism at its annual policymaking meeting. The nine principles are the first of their kind and outline steps for care abroad for consideration by patients, employers, insurers, and third-parties responsible for coordinating travel outside of the United States (U.S.). Select principles include medical care outside of the U.S. must be voluntary, patients should only be referred for medical care to institutions accredited by recognized international accrediting bodies, and patients should be informed of their rights and legal recourse prior to agreeing to travel outside the U.S. for medical care.3, 4

MEDICAL TOURISM

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

This approach seeks to cover and There is limited research evidence on the effectiveness of Medical tourism benefits are typically used by two MEDICAL TOURISM reduce costs of care for primarily specific medical tourism insurance or benefit plans and populations: 1) employers interested in keeping medical and INSURANCE/BENEFIT international medical procedures for their impact on the larger health care system. insurance costs down and employee access to health care PLANS consumers, and cost of insurance- and However, there is a clear difference between the cost of broad, and 2) consumers and employees interested in the health-related costs for employers. many U.S. medical procedures and the costs of getting widest range of cost effective medical options. It also allows consumers alternative these done in some international locations. For example: access to a wider range of high-quality A heart bypass costing $80,000 in a U.S. hospital medical procedures. costs just $16,000 in Thailand.5 A full facelift that would amount to $20,000 in the U.S. usually costs about $1,250 in South Africa.6 A knee replacement in the U.S. costs anywhere from $30,000 to $40,000, but at Hospital Clinica Biblica in San José, Costa Rica, the cost is $10,500, including airport pickups, personal assistance at the hospital, and post-discharge nursing care.7

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MEDICAL TOURISM

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Medical tourism benefits plans may be provided to employees through their employers or accessed directly by independent patients through insurers and insurers‘ subsidiaries. Health benefit plans with medical tourism pilot programs include: Anthem BlueCross BlueShield (WellPoint): Wisconsin,8 9 Other Comments BlueCross BlueShield: South Carolina (case example below), BlueShield and Health Net: California,10,11 and United Group Program: Florida.12 Certain limited and short-term medical tourism and travel insurance plans may also be offered by independent companies other than traditional insurance carriers. For example, Companion Global Healthcare‘s BasicPlus Limited Benefit Health Insurance Plan is offered through BasicPlus Insurance Services, LLC and Custom Assurance Placements Limited offers Global Protective Solutions Specialty Travel Insurance.13,14

Case example: This approach seeks to cover and There is no research evidence regarding the greater Medical tourism benefits are typically used by two BlueCross BlueShield of reduce costs of care for primarily impact of BCBS‘ medical tourism insurance plan populations: 1) employers interested in keeping medical and yet, but new companies have added international South Carolina & Companion international medical procedures for insurance costs down and employee access to health care consumers, and cost of insurance- and medical travel options through the BCBS-created broad, and 2) consumers and employees interested in the 15,16,17 18 Global Healthcare health-related costs for employers. Companion Global as recently as March 2010. widest range of cost effective medical options. In 2008, BlueCross BlueShield Companion Global partners continue to expand to (BCBS) South Carolina launched a hospitals in Brazil (Hospital Israelita Albert subsidiary, Companion Global Einstein), Mexico (CIMA Hermosillo and Monterrey), Puerto Rico (HIMAHEALTH), Spain Healthcare, to help U.S. patients (Teknon Hospital), among others. plan trips abroad for lower-cost medical procedures. BlueCross BlueShield will cover patients' procedures organized through Companion Global if their BCBS plan allows the travel. The insurer also will cover two follow-up visits with physicians at Doctors Care1 centers in the State.

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MEDICAL TOURISM

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Facilitators seek to connect individual Published research on the practices of medical Medical tourism facilitators appear applicable to many MEDICAL TOURISM consumers, businesses, insurance tourism facilitators is limited. groups interested in receiving or administering medical FACILITATORS carriers and agents, and third party Advantages of utilizing medical tourism facilitators tourism services (e.g., individual consumers, businesses and administrators to affordable and include, but are not limited to, immediate access to employers, and insurance carriers). innovative medical travel options, established relationships with international Facilitators could be particularly helpful to under- or primarily abroad. providers and convenient transfer of medical uninsured patients who have difficulty navigating and Medical tourism facilitators coordinate information. affording medical care. all medical tourism details, from Disadvantages include that the quality of facilitation Consumers for whom insurance is not needed and cost is no arranging surgery and financing services varies greatly from one provider to another issue could also benefit from the concept of medical and facilitators may possess biases toward certain tourism facilitators as medical travel is not just approached options to visas, travel, lodging, and 19, 20 tourism. hospitals and destinations. from a cost perspective, but can be from leisure perspective as well.

Medical tourism facilitators may be accessed directly by independent patients or may be contracted by insurers to provide facilitation services to plan members. The number of medical tourism facilitators, both U.S.-based and international, is growing. Select examples of medical tourism facilitators include: Carpatia Group: Romania;21 Other Comment Healthbase Online, Inc.: U.S.;22 (case example below) MEDICARE Travel: Slovakia;23 MEDTRAVEL: Ecuador;24 Patients Without Borders: U.S.;25 and Planet Hospital: U.S.26

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MEDICAL TOURISM

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case example: Facilitators seek to connect individual There is little or no research evidence regarding Medical tourism facilitators appear applicable to many groups Healthbase Online Inc.: consumers, businesses, insurance Healthbase practices. However, Healthbase lists interested in receiving or administering medical tourism 2 Healthcare Beyond carriers and agents, and third party testimonials describing positive patient experiences services (e.g., individual consumers, businesses and 27 administrators to affordable and and reports their sponsored procedures are up to 80% employers, and insurance carriers). Boundaries innovative medical travel options, less than typical U.S. hospital prices. Healthbase is a U.S.-based primarily abroad. medical tourism facilitator that arranges a variety of medical tourism services from basic consultations to full service treatment abroad.

Select Healthbase partners include Anadolu Medical Center (Turkey), Apollo Hospitals (India), Hospital Clinica Biblica (Costa Rica), Hospital Punta Pacifica (Panama), National Heart Center (Singapore), among others. Other Comments Healthbase arranges services at internationally accredited hospitals in over 10 countries (e.g., Belgium, Brazil, Costa Rica, and Thailand) and is expanding in additional areas (e.g., Argentina, Canada, and New Zealand).

SECTION 4 ● ENDNOTES

1 Medical Tourism Association. http://www.medicaltourismassociation.com. (Accessed May 12, 2010). 2 Ibid., Medical Tourism Association. (2010). 3 ―AMA Provides First Ever Guidance on Medical Tourism.‖ June 17, 2008. Medical News Today. http://www.medicalnewstoday.com/articles/111577.php. (Accessed May 24, 2010). 4 American Medical Association. ―New AMA Guidelines on Medical Tourism.‖ http://www.ama-assn.org/ama1/pub/upload/mm/31/medicaltourism.pdf. (Accessed May 24, 2010). 5 Higgins, Lisa A. ―Medical Tourism Takes Off, But Not Without Debate.‖ Managed Care Magazine. April 2007. http://www.managedcaremag.com/archives/0704/0704.travel.html. (Accessed June 3, 2010). 6 Healthbase: Healthcare Beyond Boundaries. https://www.healthbase.com/. (Accessed May 20, 2010).

2 https://www.healthbase.com/hb/pages/testimonials.jsp

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7 Magee, Devon. ―Get Well Soon – Love, C.R.‖ October 30, 2008. TicoTimes.net. http://www.ticotimes.net/Legacy/Front-Page/Get-Well-Soon-Love-C.R._Thursday-October-30-2008/. (Accessed June 3, 2010). 8 Deloitte Center for Health Solutions. http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/us_chs_MedicalTourism_111209_web.pdf. (Accessed May 12, 2010). 9 Ibid., Deloitte Center for Health Solutions. (2010). 10 Op. cit., Deloitte Center for Health Solutions. (2010). 11 Black, Thomas. ―Mexico Gets Medical Tourists as Health Net Sends U.S. Patients.‖ March 26, 2008. Bloomberg.com. http://www.bloomberg.com/apps/news?pid=20601080&sid=aFXAEi5eek5I&refer=asia. (Accessed June 3, 2010). 12 Op. cit., Deloitte Center for Health Solutions. (2010). 13 Companion Global Healthcare: BasicPlus. http://www.companionglobalhealthcare.com/patients/medicaltourisminsurance/basicplus.aspx. (Accessed June 3, 2010). 14 Custom Assurance Placements, Ltd.: Global Protective Solutions. http://www.customassurance.com/gps/. (Accessed June 3, 2010). 15 Medical News Today. ―BlueCross BlueShield of South Carolina Launches Subsidiary to Facilitate Medical Tourism.‖ May 29, 2007. http://www.medicalnewstoday.com/articles/72057.php. (Accessed May 20, 2010). 16 Einhorn, Bruce. ―Outsourcing the Patients.‖ March 13, 2008. Bloomberg Businessweek. (http://www.businessweek.com/magazine/content/08_12/b4076036777780.htm?chan=rss_topStories_ssi_5. (Accessed June 3, 2010). 17 Companion Global Healthcare. http://www.companionglobalhealthcare.com. (Accessed May 20, 2010). 18 Companion Global Healthcare. ―Georgia Firm Adds Medical Travel to Cut Costs, Provide Options for Workers.‖ March 18, 2010. http://www.companionglobalhealthcare.com/news.aspx?article=51. (Accessed June 3, 2010). 19 Medical Tourism.com. ―What is a Medical Tourism Facilitator?‖ http://medicaltourism.com/facilitator.php?lang=en. (Accessed June 1, 2010). 20 Jagyasi, Prem. ―Medical Tourism Facilitator: The Critical Fourth Dimension.‖ Medical Tourism Magazine. October 1, 2009. http://www.medicaltourismmag.com/detail.php?Req=283&issue=13. (Accessed June 1, 2010). 21 Carpatia Group. http://www.carpatiagroup.com/.(Accessed June 3, 2010). 22 Op. cit., Healthbase: Healthcare Beyond Boundaries. (2010). 23 MEDICARE Travel. http://www.medicaretravel.eu/home.(Accessed June 3, 2010). 24 MEDTRAVEL Ecuador. www.medtravelecuador.com. (Accessed June 3, 2010). 25 Patients Without Borders. http://www.patientswithoutborders.us/. (Accessed May 20, 2010). 26 Planet Hospital. http://www.planethospital.com. (Accessed June 3, 2010). 27 Op. cit., Healthbase: Healthcare Beyond Boundaries. (2010). END SECTION 4

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SECTION ● 5 5 PATIENT-CENTERED MEDICAL HOME

Patient-Centered Medical Home (PCMH) is a model for care provided by physician practices that seeks to strengthen the physician‐patient relationship by replacing episodic care based on illnesses and patient complaints with coordinated care and a long‐term healing relationship. Each patient has an ongoing relationship with a personal physician who leads a team that takes collective responsibility for patient care. The physician‐led care team is responsible for providing all the patient‘s health care needs and, when needed, arranges for appropriate care with other qualified physicians. A medical home also emphasizes enhanced care through open scheduling, expanded hours, and communication among patients, physicians and staff. Bottom Line Findings: A substantial evidence base is building for improved quality, improved patient and provider satisfaction, and decreased costs under the PCMH model. The concept is not new, and in many ways is a version of the classic definition of primary care, but this model leverages modern communication tools and information technology, and new reimbursement structures that realign incentives, but typically use a hybrid approach that reduces provider risk while compensating for increased costs and rewarding performance (typically FFS + PMPM fee + performance bonus). Like other innovative models of delivery, PCMH would seem to be most advantageous for systems or purchasers that can realize the benefits of cost reductions due to decreased utilization and that are already well-connected and technologically advanced. However, the model has been surprisingly adaptable to a wide variety of markets. Early lessons learned emphasize the need for time and sustained support of practice redesign that can be more transformational than incremental.1, 2

PATIENT-CENTERED MEDICAL HOME

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

The PCMH model is intended to improve Over the past several years, a number of prospective The PCMH model is applicable to all markets. PATIENT-CENTERED quality of care and reduce annual per evaluations of the PCMH model in a variety of PCMH has been successfully implemented in a MEDICAL HOME capita health care expenditures. Quality settings have shown higher quality, greater patient variety of settings and for a variety of populations. is improved through expanded access to satisfaction, improved access, and lower costs, For example, the American Academy of Family The American Academy of care, improved patient communication, mainly through reductions in hospitalizations and Physicians launched a National Demonstration Project Family Physicians (AAFP), and greater care coordination and care emergency department visits.4 In several cases, to test the model in a purposefully diverse set of 36 American Academy of management, especially of patients with returns on investment were shown to be 2:1. Not practices. Pediatrics (AAP), American chronic conditions. Costs are reduced by surprisingly, savings were greatest for patients with Lack of reimbursement for additional resources (e.g., College of Physicians keeping people healthier, providing care chronic conditions, although savings have been staff, HIT) to provide greater access and coordination (ACP), and American in more cost-effective settings (e.g., documented for patients without chronic conditions is a significant barrier to widespread adoption beyond expanded access to the PCP versus care as well. Some studies report increased provider Osteopathic Association the PCMH demonstration projects and employer or in an emergency room) and reducing satisfaction. There is also some evidence that the (AOA) developed the insurer-sponsored initiatives or particular integrated unnecessary care through better greater access, coordination, and care management delivery systems. following Joint Principles to coordination. associated with medical homes reduces health describe characteristics of disparities.5 Also, while clearly influential in directing care,

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PATIENT-CENTERED MEDICAL HOME

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? the PCMH3: The evidence is still being collected on increased primary care providers have less control over the care resource use associated with the transition to a being delivered by specialists, hospitals, and other Personal physician - each PCMH. While the concept dates back decades, care providers, and the degree to which information is patient has an ongoing specific PCMH guidelines and criteria are relatively shared by these providers. In this sense, the PCMH relationship with a personal new and are still undergoing evaluation and revision. model could potentially operate to greater effect physician trained to provide within an integrated ,innovative delivery approach More generally, numerous cross-sectional 8 first contact, continuous comparisons across nations, states, and regions such as an accountable care organization (ACO). and comprehensive care. within the U.S. have shown correlations between a Sites identified as ―medical home runs,‖ based on greater emphasis on primary care and higher quality achieving 15-20% reductions in risk-adjusted total Physician directed medical 9 practice – the personal and lower cost (e.g., the work of Starfield and health care spending with no decrease in quality: others6). Studies have also shown that patients who physician leads a team of o Urban Medical Group (working class urban identified a primary care physician (PCP) as their individuals who collectively Boston, many nursing home-eligibles, 10% personal physician had 33% lower annual spending HMO); take responsibility for the and 19% lower mortality than those whose personal o Leon Medical Centers (metro Miami, working ongoing care of patients. physician was a specialist.7 class, Medicare HMO); Whole person orientation – o CareMore Medical Group (urban Los Angeles, the personal physician is working class, Medicare HMO); and responsible for providing o Redlands Family Practice (California small for all the patient’s health town, lower middle class, multiple HMOs). care needs or taking responsibility for appropriately arranging care with other qualified professionals. This includes care for all stages of life, acute care, chronic care, preventive services, and end of life care. Care is coordinated and/or integrated across all elements of the complex health care system (e.g., subspecialty care, hospitals, home health agencies, nursing homes) and the patient’s community

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PATIENT-CENTERED MEDICAL HOME

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? (e.g., family, public and private community-based services). Care is facilitated by registries, information technology, health information exchange, and other means to assure that patients get the indicated care when and where they need and want it in a culturally and linguistically appropriate manner.

PCMH demonstrations are now underway in most states with broad support from government, employers, insurers, and professional organizations. 18 September 2009 memorandum from Office of the Assistant Secretary of Defense/Health Affairs establishes Department of Defense policy of implementation of PCMH model in all military treatment facilities. Other Comments In January 2008, the National Committee for Quality Assurance (NCQA) released standards for the Physician Practice Connections®– Patient Centered Medical Home (PPC PCMH™) to identify primary care practices that function as PCMHs. Practices can apply to be recognized in one of three levels of PCMH implementation. Recognition may be relevant to participation in a variety of demonstrations and/or payer reimbursement programs. Improved coordination, increasing Market is usually statewide PCMH can be more PCMH FOR MEDICAID quality of care, and reducing costs, challenging to implement in state Medicaid markets POPULATIONS10 particularly of hospitalization and because many providers are in small practices, are not Emergency Department (ED) visits. connected, and are not generously resourced. However, there are a number of states overcoming these challenges and creating success, demonstrating that it is possible. Examples include: Genesee Health Plan in Flint, Michigan; and Colorado Medicaid and SCHIP.

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PATIENT-CENTERED MEDICAL HOME

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case Example: Developed as a way to manage Medicaid Evaluations from Mercer Human Resource Consulting This is especially applicable to rural markets with small, patients in rural areas to link them with a Group comparing costs under the program with fragmented practices. Emphasis is on community-based Community Care of hospital and other safety net providers. historical benchmarks indicate significant net savings system development. North Carolina for FY04, FY05, and FY06. FY06 savings, for example, were estimated at close to $300M for the state. Savings were especially high for inpatient care, and care to patients aged 0 to 1 year old.11

Other Comments Program started in 1998 and has matured to include 3,000 physicians and 13 networks.

Greater quality of care, reduced costs, There are many successful PCMH implementations in Integrated delivery systems that include an insurer have PCMH WITHIN improved beneficiary satisfaction large, integrated delivery systems, including: an advantage in that they are able to receive some of the LARGE, INTEGRATED Group Health Cooperative of Puget Sound; benefits of cost reductions due to reduced hospitalizations and ED visits and greater coordination, offsetting reduced HEALTH PLANS AND Intermountain Healthcare; and provider reimbursement. DELIVERY SYSTEMS Geisenger Health System.

Case Example: Some lessons learned: UnitedHealthcare12 Critical mass is fundamental – patient panel size must make business sense, often requires multi-payer collaborations; Flexibility is critical – mixed bag of technology and capabilities in practices; and PCMH takes time.

Winner of 2009 NBCH eValue8 Health Plan Innovation Award for PCMH program and Diabetes Health Plan. One of 2 winners out of over 100 Other Comments programs submitted.

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PATIENT-CENTERED MEDICAL HOME

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

The PCPCC seeks to promote the PCMH PCPCC publishes a compilation of PCMH pilots and Applicable to all markets. PCPCC materials describe PURCHASER- as a means for purchasers to increase the demonstrations by state and a summary of evaluation strategies and case studies for a wide variety of markets, SPONSORED value of health care dollars spent. results. The 2009 edition covers nearly 30 projects, not including statewide rural Medicaid markets and multi- 15 PROGRAMS AND THE including public payer pilots. payer coalitions covering major metropolitan regions. PATIENT-CENTERED PRIMARY CARE COLLABORATIVE (PCPCC)13 ―PCPCC is a coalition of major employers, consumer groups, patient quality organizations, health plans, labor unions, hospitals, physicians and many others who have joined together to develop and advance the patient centered medical home. The Collaborative has well over 500 members.‖14

Sponsored by PCPCC, NBCH developed a purchaser‘s guide to PCMH highlighting advantages, strategies for purchasers, and case studies.16 Other Comments IBM was a leader in creation of PCPCC and is an active employer participant in PCMH programs.

SECTION 5 ● ENDNOTES

1 Nutting, Paul A., et al. ―Initial Lessons From the First National Demonstration Project on Practice Transformation to a Patient-Centered Medical Home,‖ Annals of Family Medicine. 7: 3, 254-260. (2009). 2 Rosenthal, Thomas C. ―The Medical Home: Growing Evidence to Support a New Approach to Primary Care,‖ Journal of the American Board of Family Medicine. 21 :5, 427-440. (2008).

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3 Patient-Centered Primary Care Collaborative. http://www.pcpcc.net/content/joint-principles-patient-centered-medical-home. (Accessed December 14, 2009). 4 Grumbach, Kevin, Thomas Bodenheimer and Paul Grundy. ―The Outcomes of Implementing Patient-Centered Medical Home Interventions: A Review of the Evidence on Quality, Access and Costs from Recent Prospective Evaluation Studies.‖ Washington, DC: Patient-Centered Primary Care Collaborative. (August 2009). 5 Beal, Anne C., et al. ―Closing the Divide: How Medical Homes Promote Equity in Health Care. Results from The Commonwealth Fund 2006 Health Care Quality Survey.‖ New York: The Commonwealth Fund. (June 2007). 6 Starfield Barbara, Leiyu Shi and James Macinko. ―Contribution of Primary Care to Health Systems and Health,‖ Milbank Quarterly. 83: 3, 457-502. (2005). 7 Franks, Peter and Kevin Fiscella. ―Primary Care Physicians and Specialists as Personal Physicians: Health Care Expenditures and Mortality Experience,‖ Journal of Family Practice. 47: 2, 105- 109. (1998). 8 Rittenhouse Diane, Stephen Shortell and Elliott Fisher. ―Primary Care and Accountable Care – Two Essential Elements of Delivery-System Reform.” New England Journal of Medicine. 361: 24. (December 10, 2009). 9 Milstein, Arnold and Elizabeth Gilbertson. ―American Medical Home Runs,‖ Health Affairs (Project Hope). 28: 5, 1317-1326. (2009). 10 Kaye, Neva and Mary Takach. ―Building Medical Homes in State Medicaid and CHIP Programs.‖ New York, NY: National Academy for State Health Policy, supported by The Commonwealth Fund. (June 2009). 11 Community Care of North Carolina. www.communitycarenc.com/PDFDocs/Mercer%20SFY05_06.pdf. (Accessed January 25, 2010). 12 Kueter, Dan. ―Patient Centered Medical Home (PCMH), UnitedHealth Group Update.‖ Davenport, IA: UnitedHealth Group. (September 2009). 13 Sepulveda, Martin-J., Thomas Bodenheimer and Paul Grundy. ―Primary Care: Can It Solve Employers‘ Health Care Dilemma?,‖ Health Affairs. 27: 1, 151-158. (2008). 14 Patient-Centered Primary Care Collaborative. http://www.pcpcc.net. (Accessed December 14, 2009). 15 Patient-Centered Primary Care Collaborative. ―Proof in Practice, A Compilation of Patient Centered Medical Home Pilot and Demonstration Projects.‖ Washington, DC: Patient-Centered Primary Care Collaborative. (2009). 16 Patient-Centered Primary Care Collaborative. ―The Patient-Centered Medical Home, A Purchaser‘s Guide, Understanding the Model and Taking Action.‖ Washington, DC: Patient-Centered Primary Care Collaborative. (2008).

END SECTION 5

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SECTION ● 6 6 PAYMENT MODELS

PAYMENT MODELS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

MARKET-LEVEL Reimbursement and payment approaches or incentives may include coalition-level or purchaser initiatives as well as systemwide, purchaser, payer, and REIMBURSEMENT AND consumer initiatives. These financial incentives appear to be most effective at the market level when a majority of players adopt the same or similar PAYMENT APPROACHES approaches. These are less effective when diverse, fragmented approaches are used in a market context. OR INCENTIVES

Purchasing Pools Regional or statewide purchasing pools or Results appear mixed depending on combined The model appears suitable for most markets but is most participant market share and items or services Purchasing pools include cooperatives offer purchasing power that effective in markets where participants compose a enables participating businesses to get purchased. majority. joint or volume purchasing better prices, rebates, and more flexible Studies of insurance pools by RAND show no direct [e.g., pharmaceuticals, 1 plans than they could find on their own. effect of pools on health spending. However, savings durable medical equipment regarding pharmaceuticals, DME, and other supplies (DME)]. can be considerable. Employers belonging to Wisconsin‘s first statewide prescription drug purchasing cooperative saved more than $18 million in the first year, according to an in- dependent audit: The cooperative‘s 381 employers saved 20% on drug costs, or about $275 per employee.2

Gregg Horstman, executive director of WisconsinRx, endorses the price transparency of this approach, noting that businesses would be Other Comments unable to obtain similar discounts unless they have 200,000 members.

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PAYMENT MODELS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

Preferred Provider Preferred provider approaches encourage This approach produces direct results, assuming The model is especially attractive in markets with many These approaches select or providers to meet standards of cost and/or sufficient provider availability in a market to eliminate providers that vary considerably in price. quality and to price services within ac- high-cost providers from local networks. limit access to providers ceptable ranges if they are to participate in whose quality or cost is health plan, payer, or purchaser outside parameters arrangements. acceptable to the purchaser and favor providers and services within acceptable bounds.

VALUE-BASED Value-based purchasing can refer to a variety of approaches that focus on the decisionmaker (e.g., purchaser, payer, patient) in assessing differences in PURCHASING value when selecting among options. Value may be defined in terms of efficiency, quality, cost, or another dimension.

Report Cards Report cards are intended to facilitate Evidence of success appears to be mixed. One study of Market success depends on the balance of power among 3 purchasers, health plans, and hospitals. Report cards for health care comparison of quality of care (or other coalition use of hospital report cards in 11 communities attributes such as cost) across providers in found six factors to limit success: organizations, typically A significant market share is needed for success. a market. hospitals, take various forms (1) ambiguity of report card goals, used by coalitions, (2) conflicts over methods of measuring quality, employers, and payers. (3) conflicts over the benefits of public release, (4) conflicts over the use of economic incentives, (5) lack of employer market power, and (6) failure to do collaborative planning. The study notes that only a few report cards have stimulated quality improvement.

While it seems clear that coalitions and employers must work closely with hospitals regarding the report card design, there appear to be no Other Comments clear set of report card characteristics that determine success.4 HEDIS measures from the National Committee for Quality Assurance and the Leapfrog Group (for hospitals) are often incorporated as part of report cards.

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PAYMENT MODELS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

The eValue8 eValue8 promotes market-level efforts to eValue8 is used annually by health care purchasers to eValue8 will be most effective in markets where Common RFI ensure that consumers receive safe and compare the quality and efficiency of health plans. participating providers and plans account for a significant efficient health care by increasing the Widespread adoption of the tool is reported to be a market share. This is used to assess health market power associated with specific catalyst for improved plan performance, efficiency, plan performance, negotiate interventions across purchasers in a and innovation. contracting provisions, and market. Evidence of impact on cost is not widely available and collaborate on programs to is likely to vary by market and application. improve treatment of costly chronic conditions.

Other Comments Developed by the National Business Coalition on Health in the mid-1990s, eValue8 is being used by employer purchasing coalitions as well as many of the Nation‘s largest private purchasers and involves nearly 300 health plans. This tool is used most commonly by large employers and purchasers and can effectively transform practice when participants‘ market share is significant.

PAYMENT Payment approaches and incentives to providers and health systems continue to shift from cost-based methods of reimbursement to a wide range of APPROACHES AND approaches that provide incentives for more efficient, effective delivery of care. Many of these approaches include case, condition, or episode groupings INCENTIVES and cost-sharing provisions, as below.

Risk-adjusted Payment Risk-adjusted payment methods are Risk-adjusted payment methods typically reflect The performance of risk-adjusted payment approaches provider costs, can more closely align payments and This approach is designed to intended to reduce provider overpayments depends on rate levels relative to provider costs in a and incentives to undertreat or reject high- resource use, and provide consistency in payment for market and may vary by provider. predict health care costs to cost individuals. This approach is patients with similar characteristics and conditions. align standard payments with attractive to providers but may or may not These methods are sensitive to rate levels in relation to an individual’s expected result in cost savings to purchasers. provider costs. health care costs. Linking payment to diagnostic or other patient groupings (e.g., DRGs, APGs) is one common form of risk adjustment. Bundled payments are another.

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PAYMENT MODELS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

Other Comments Other examples of risk adjustment approaches involving diagnostic groupings follow: The Adjusted Clinical Group Case-Mix System groups patients with similar comorbidities into groups with similar resource requirements and clinical characteristics. The Burden of Illness Score (MEDecision, Inc.) groups care into episodes of illness and assigns services, severity levels, and medications to these episodes. The Clinical Complexity Index (Solucient, Inc.) methodology considers age, severity, comorbidity, hospital admissions, and categories of diagnoses (acute, chronic, mental health, and pregnancy) to assign patients into mutually exclusive CCI risk categories. The Episode Risk Groups (ERGs, Symmetry Health Systems, Inc.) classify illness by episode risk groups to create risk scores based on age, 5 gender, and mix of ERGs.

Pay for Performance P4P is intended to incentivize providers to Evidence of impact has been mixed, especially regarding P4P is likely to be most effective at optimizing (P4P) deliver care according to defined cost reduction. Mechanic and Altman (2009) state that incentivized behaviors in markets with one or more large standards. P4P can incentivize evidence- P4P programs are ―unlikely to affect spending trends as purchasers, payers, or provider systems. These payments are based on based treatment for specific conditions long as their primary emphasis is rewarding providers for performance assessed (e.g., diabetes) or incentivize the use of delivering ‗underused‘ services rather than for judicious against a defined standard. particular resources in treatment to use of potentially ‗overused‘ treatments.‖ They also note Typically, other components improve quality, cost effectiveness, or that P4P does not encourage integration across providers, of the payment are other objectives. though programs that reward adoption of information independent of the amount at technology and care management processes may be 7 risk. Many current P4P beneficial on the margin. arrangements address quality-based measures, although performance objectives and metrics could target other variables (e.g., profitability, volume, customer or patient satisfaction).6 Financial incentives are typically used to reward incentivized behaviors.

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PAYMENT MODELS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

Other Comments MedPAC recommends that the P4P system be budget neutral, with the incentive pool to be funded by setting aside 1% or 2% of budgeted payments.8 P4P programs are shifting from process measures such as rates of mammography screening to outcomes measures and cost efficiency based on actual patient care outcomes. There has been little or no consistency in the selection of measures across P4P programs. For the P4P program to be successful, there needs to be agreement and buy-in among those being evaluated that the objectives are fair and the measures appropriate, that performance is accurately measured, and that the incentives make the effort worthwhile. Possible shortcomings and unintended consequences of a P4P program include having inappropriate measures and objectives, competing or uncoordinated efforts, insufficient or inappropriate incentives, and placing excessive focus on the reward.

Bundled Payment Bundled payment is intended to decrease Bundled payment systems can yield savings for payers Bundling can be used in all market types. Provider if a discounted rate is negotiated at the outset or if responses may depend on bundled rate levels and the This approach also known as spending by reducing the number of unnecessary physician services during a payment amounts are adjusted downward to reflect the pricing of providers relative to each other. ―case rates,‖ ―episode-based hospitalization; encouraging more judi- efficiencies achieved after the system is in place. Purchasers may see savings through bundling, payment,‖ or ―global cious use of health care resources during A small study (Casale et al., 2007) that compared the especially if combined with preferred provider status. payment,‖ is a single the hospital stay; and reducing post- 117 patients in the intervention with 137 patients from payment for all services discharge costs, including unnecessary a year prior to the implementation found that hospital related to a specific treatment post-acute care services and avoidable costs dropped by 5%. or condition (e.g., coronary readmissions (MedPAC, 2008). artery bypass graft surgery), possibly spanning multiple providers in multiple settings. Providers would assume financial risk for the cost of services for a particular treatment or condition as well as costs associated with preventable complications.9

Other Comments If the costs of an episode of care are less than the bundled payment amount, the providers (hospital and physicians) can keep the difference; if the costs of care exceed the bundled payment, the providers bear the financial liability. Savings will depend on the design of the payment system, the particular services that are bundled, and the performance of the participating system before implementation. Bundling often focuses on certain procedures (e.g., cardiac, orthopedic).

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PAYMENT MODELS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

Episode-based Payments Episode-based payment strengthens incen- Evidence of the effects of episode-based payment Episode-based payment can be used in all market types approaches on cost and quality is scant, though there but may be most effective with integrated delivery These reimburse providers tives for providers to deliver care efficiently and to contain the cost of are examples of episode-based programs having systems that have a dominant market share, such as on the basis of expected services delivered during clinical episodes positive influences on structure and process quality Geisinger. costs for clinically defined of care. Episode-based payments include measures as well as being associated with decreased Responses by providers may depend on rate levels and episodes of care. Episodes of financial incentives to encourage providers costs of care. the pricing of providers relative to each other. care are typically defined on to deliver quality care efficiently and in Evaluation of first year results of Geisinger‘s Purchasers may see savings, especially if combined with the basis of selected coordination with other providers involved ProvenCare coronary bypass program showed a 10% preferred provider status. conditions or major in shared episodes of patient care. reduction in readmissions, shorter ALOS, and reduced procedures and include hospital charges. More recent data show that over the clinically related services course of 18 months, the program achieved a 44% 11 provided by various drop in readmissions. providers over a period. Episode-based payments may also be adjusted for severity of illness and quality performance.10

Other Comments Current episode-based payment approaches address only a fraction of all patient care. There are a number of design and operational issues to be resolved or considered, including varying definitions of episodes, methods for calculating and distributing per-episode payments, and data infrastructure needs. Desired outcomes include (1) reducing unnecessary physician and ancillary services to compensate physicians for efficient resource use and (2) reducing complications and readmissions.12 However, some argue that paying for discrete episodes does nothing to control the total number of episodes and could actually encourage more episodes.13 Mechanic and Altman (2009) suggest that Geisinger‘s unique structure and market position may influence the strong results reported for the ProvenCare program.

The Prometheus The model encourages two behaviors that Analyses of pilots and several national and regional The model appears suitable for diverse market Payment Model fee-for-service payment discourages: (1) datasets show that potentially avoidable costs (PACs) conditions—integrated networks as well as fragmented, collaboration of physicians, hospitals, and account for 22% of private-sector health expenditures. geographically spread provider groupings. This is an approach to other providers involved in a patient‘s Even a modest reduction in PACs year to year will episode-based payment that care and (2) active efforts to reduce have a considerable effect on private health care pays for all care that a patient avoidable complications of care and costs spending.

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PAYMENT MODELS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

needs throughout the clinical associated with them. The model encourages integration of services and episode or set period of incentivizes hospital and physicians working together management of a chronic to avoid readmission. condition rather than paying Prometheus can be used for acute as well as chronic for discrete visits, conditions. discharges, or procedures (Brantes, Rosenthal, and Painter, New England Journal of Medicine, 2009;14 www.prometheuspayment.org)

Other Comments Prometheus has three pilots under way, supported by the Robert Wood Johnson Foundation (RWJF). It includes an evidence-based case rate that is adjusted for the severity and complexity of the patient‘s condition. It provides larger profit margins for providers who can eliminate complications, rewarding optimal care, not volume. Prometheus is said to avoid capitation‘s transfer of risk to providers, because rates are severity adjusted and opportunities for increasing financial gain are limited to decreases in PACs. Pilots show that hospital-centric provider organizations can expect increased internal tension when episode-based care and payment are implemented. Prometheus does not require that a single integrated organization accept payment for an entire episode, and it can be implemented in a fragmented, largely fee-for-service system if the payer serves as a financial integrator. Prometheus is not appropriate for reimbursements for all conditions but provides a good bridge from fragmentation to accountability, according to RWJF proponents. Prometheus is seen as a promising approach by some business and health coalitions.

Global Payment or Global payments are intended to contain Studies have shown that payment approaches Global payment or capitation appears suitable for all Capitation costs, reduce the use of unnecessary involving risk sharing with providers, including global market types. services, and encourage integration and payment or capitation, are associated with lower This is an all-inclusive coordination of services. Global payment service use and cost than with fee-for-service payment per enrollee for a may also include added incentives to arrangements.15 defined scope of services, improve the quality of care. Mechanic and Altman (2009) state that programs that regardless of how much care combine global payment and quality bonuses (e.g., is provided. Blue Cross Blue Shield of Massachusetts) can improve margins and reduce spending below rates of inflation.16

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PAYMENT MODELS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

Other Comments Potential problems or issues related to global payment involve concerns that providers may ―cherry-pick‖ less expensive patients, creating issues regarding access, quality, and equitable provider payment.

Condition-specific Patient Choice is value-based purchasing This system has encouraged patients to select more cost- The model appears suitable for diverse market conditions, “capitation” that combines provider incentives for effective providers and has encouraged providers to can be used by self-funded employers, and works with competitive pricing and consumer reduce costs while maintaining or improving quality in diverse provider and billing arrangements.19 (e.g., Patient Choice selection based on price and quality order to attract more consumers.18 System)17 transparency. This capitation approach, introduced in the 1990s by Minnesota’s Buyers Health Care Action Group (www.patientchoicehealthcar e.com), pays for condition- specific, risk-adjusted care according to capitated bids by cost- and quality-tiered provider groupings; consumers who select from higher tiers must pay the difference between bids and prices for higher-tier groupings.

Other Comments Under Patient Choice, ―care systems‖ (groups of providers, including physicians and hospitals) bid on the risk-adjusted (total) cost of caring for a population of patients. Care systems are placed in cost or quality tiers based on their relative bids. Consumers pay the difference in the bid price to select a care system in a higher-cost tier. Providers continue to bill using fee-for-service codes, with the addition of new codes to cover previously uncovered services, but fee levels are adjusted to keep total payments within budget. Budget is adjusted upward or downward based on relative illness and other characteristics of the patients the provider cares for. This prevents the provider from assuming insurance risk and makes them liable only for the performance risk component of their bid.20 Also, see ―bundled payment.‖

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PAYMENT MODELS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

GAIN-SHARING Gain-sharing (with consumers, providers, payers, and purchasers) involves identification of clinical practices that increase provider operating costs without improving quality of care, developing initiatives to reduce or eliminate such practices while maintaining quality of care, and sharing the resulting cost savings attributable to the clinical initiatives.

Gain-sharing Hospital- These agreements provide incentives for Studies of gain-sharing are limited, but some suggest Gain-sharing is likely to be most effective in higher-cost Physician Agreements physicians to reorganize care for delivery that this approach can effectively reduce ―waste‖ and markets with considerable ―waste‖ and inefficiency, which of quality care at significantly lower cost generate cost savings without reducing quality. this approach seeks to address. These involve aligning by being prudent in their clinical choices, Ketcham and Furukawa (2008)21 studied the effects of payment incentives for including procedures, supplies and 13 gain-sharing programs on coronary stent patients. physicians and other devices that comprise a considerable Compared to other hospitals, gain-sharing hospitals providers to improve portion of inpatient care costs. reduced costs by 7.4% per patient, with 91% of the efficiencies and reduce savings from lower prices and 9% from lower ―waste ― while maintaining utilization. The available measures of access and quality care. Under a gain- quality suggest that neither was reduced, nor was sharing arrangement, access to drug-eluting stents before 2006. physicians receive bonus The Centers for Medicare and Medicaid Services payments independent of firm (CMS) initiated a 3-year gain-sharing demonstration, profitability. Bonuses are beginning in January 2007 and ending in December 2009, to examine collaborative efforts between the based on specific behaviors hospital and the physician to improve overall quality and a narrowly defined and efficiency. In July 2009, CMS initiated a outcome and process. demonstration with a consortium of 12 New Jersey hospitals, called the Northern New Jersey Mobile Intensive Care Consortium, to examine the effects of gain-sharing aimed at improving the quality of care in a health delivery system to determine the impact of hospital-physician collaborations on preventing short- and longer-term complications, duplication of services, coordination of care across settings, and other quality improvements that hold great promise for eliminating preventable complications and unnecessary costs.22

Other Comments Gain-sharing is not profit sharing; arrangements typically involve payments from hospitals to physicians for assistance in generating cost savings. According to Healthcare Financial Management Association, ―such arrangements have the potential to foster efficiency and cohesiveness

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PAYMENT MODELS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

between physician groups and hospitals. But they also raise important legal questions and potentially threaten clinical quality.‖23 Following cautious introduction in the 1990s and early 2000s, by 2005 the Medicare Payment Advisory Committee strongly endorsed gain-sharing agreements (―Issues in Physician Payment Policy,‖ Report to the Congress:Medicare Payment Policy, March 2005), just as the Office of the Inspector General issued several advisory opinions in support of particular instances of gain-sharing.24 Careful monitoring is needed.25 So is a high degree of trust between parties.

Gain-sharing Payer- The model provides incentives for Although many contracts with providers involve a Gain-sharing is likely to be most effective in higher-cost Provider Agreements providers to reorganize care and eliminate global cost (e.g., diagnosis-related group), others, markets with considerable ―waste‖ and inefficiency, which inefficiency and unnecessary cost by depending on the market in which they are operating, this approach seeks to address. These payer-provider being prudent in their clinical choices. involve a separate payment (i.e., carve-out) for large agreements involve aligning expenses such as devices and implants. payment incentives for In the absence of negotiated discounts or rationalized providers with payers to physician purchasing of devices from implant and improve efficiencies and device manufacturers, payers find themselves seeking reduce ―waste― while to control high and rising costs. maintaining quality care. Payers are also viewing gain-sharing as a potential approach to improving the physician and hospital ―business case for quality.‖

Gain-sharing Patient- The model provides incentives for In Wisconsin, the Wisconsin Collaborative for Health Gain-sharing is likely to be most effective in higher-cost payer Agreements patients to be selective in their use of Care Quality and the Wisconsin Health Information markets where patient utilization of services and payer services, especially in selecting providers costs are relatively high. These involve aligning Organization have published extensive cost and for ancillary and outpatient services. quality data, much of which is available to patients on payment incentives to reward Incentives may also be offered for an interactive web site (www.wchq.org). consumers or patients for behavior change (e.g., weight reduction, selecting providers and smoking cessation). The availability of this information inspired one services that are more self-insured employer in South Bend, Indiana to efficient and less costly. They pay bonuses to patients to have radiology may also include financial examinations completed at lower-cost centers. Insured employees are paid $500 bonuses for incentives to patients for computed tomography and magnetic resonance achieving behavioral changes imaging scans completed at the lower-cost center, such as weight reduction that because the total cost for an examination is

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PAYMENT MODELS

INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

reduce patient care costs and $1,000 cheaper to the employer. align with quality.

Other Comments In an environment of increasing cost and quality transparency, a new type of gain-sharing that rewards patients for participating in generating cost savings is being considered. Patient rewards may be provided as bonus payments, reductions in coverage costs, and other approaches.

SECTION 6● ENDNOTES

1 RAND Compare. ―Analysis of Purchasing Pools.‖ http://www.randcompare.org/analysis-of-options/analysis-of-purchasing-pools. (Accessed November 5, 2009). 2 Price, Jenny. ―Drug Co-op Saves Millions in 2004 WisconsinRX Saves Money for Member Employers.‖ Wisconsin State Journal. April 28, 2005. http://host.madison.com/business/article_5738fea5-3564-576a-8235-feaab60f5e67.html. (Accessed November 5, 2009). 3 Mehotra, Ateev,Thomas Bodenheimer and R. Adams Dudley. ―Employers‘ Efforts to Measure and Improve Hospital Quality: Determinants of Success,‖ Health Affairs. 22: 2 (March/April 2003). 4 Ibid., Mehotra, Atev, Thomas Bodenheimer and R. Adams Dudley. (2003). 5 Thomas, J. et al. ―Economic Profiling of Primary Care Physicians: Consistency Among Risk Adjusted Measures,‖ Health Services Research. 39: 4 Pt 1, 985–1004. (August 2004). http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361048/pdf/hesr_268.pdf. (Accessed November 5, 2009). 6 Hahn, Jim. ―Pay for Performance in Health Care.‖ CRS Report for Congress. Washington, DC: Congressional Research Service. (November 2, 2006). http://www.vascularweb.org/professionals/Government_Relations/PDF_Doc/CRS%20report%20on%20P4P.pdf. (Accessed December 6, 2009). 7 Mechanic, Robert E. and Stuart H. Altman. ―Payment Reform Options: Episode Payment Is a Good Place to Start,‖ Health Affairs. Web Exclusives, w262-271. (January 27, 2009). http://content.healthaffairs.org/cgi/content/abstract/28/2/w262. (Accessed November 6, 2009.) 8 Op. cit., Hahn, Jim. (2006). 9 RAND Compare. ―Analysis of Bundled Payment.‖ http://www.randcompare.org/analysis-of-options/analysis-of-bundled-payment. (Accessed November 23, 2009). 10 Mathematica, Inc., ―Episode-based Payment: Summary.‖ http://www.mass.gov/Eeohhs2/docs/dhcfp/pc/2009_02_24_Episode-based_Payment-C1.pdf. (Accessed November 12, 2009). 11 Op. cit., Mechanic and Altman. (2009).

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12 MEDPAC, cited by Mechanic, Robert E. and Stuart H. Altman. ―Payment Reform Options: Episode Payment Is a Good Place to Start,‖ Health Affairs. Web Exclusives, w262-271. (January 27, 2009). http://content.healthaffairs.org/cgi/content/abstract/28/2/w262. (Accessed November 6, 2009.) 13 The Robert Wood Johnson Foundation. ―Spotlight on Payment Reform.‖ September 23, 2009. http://www.rwjf.org/pr/product.jsp?id=48828. (Accessed December 12, 2009). 14 Brantes, Francois de, Meredith Rosenthal and Michael Painter. ―Building a Bridge from Fragmentation to Accountability—the Prometheus Payment Model,‖ New England Journal of Medicine. 361: 11, 1033-1036. (September 10, 2009). 15 Op. cit., Mathematica, Inc. (2009). 16 Op. cit., Mechanic, Robert E. and Stuart H. Altman (2009). 17 Network for Regional Healthcare Improvement. ―Better Ways to Pay for Health Care: A Primer on Healthcare Payment Reform.‖ November 14, 2009. http://www.rwjf.org/healthreform/product.jsp?id=37448. (Accessed January 23, 2009). 18 Ibid., Network for Regional Healthcare Improvement. (2009). 19 Robinow, Ann. ―Patient Choice Health Care Payment Model Case Study.‖ Presentation to Massachusetts Special Commission on Health Care Payment System, March 13, 2009. http://www.mass.gov/.../2009_03_13__Global_Payments_Patient_Choice_Robinow.ppt. (Accessed November 23, 2009). 20 Op. cit., Network for Regional Healthcare Improvement. (2009). 21 Ketcham, Jonathan D. and Michael F. Furukawa. ―Hospital-Physician Gainsharing in Cardiology,‖ Health Affairs. 803: 12. (May/June 2008). 22 Centers for Medicare and Medicaid Services. http://www.cms.hhs.gov/DemoProjectsEvalRpts/. (Accessed December 9, 2009). 23 Jain, Sachin H. and Daniel Roble. ―Gainsharing in Healthcare: Meeting the Quality-of-Care Challenge.‖ http://www.hfma.org/publications/business_caring_newsletter/exclusives/gainsharing.htm. (Accessed November 23, 2009). 24 Ibid., Jain, Sachin H. and Daniel Roble. (2009). 25 Footnote: Jain and Roble name the following potential safeguards: ―ensuring clinical and financial transparency of quality indicators; using a proven risk-adjusted system; implementing ongoing measurement and monitoring to determine the program‘s success and to confirm that the program is not having an adverse impact on clinical outcomes; basing payments to physicians on all procedures to avoid disproportionate participation of federal health care program beneficiaries; capping potential payments to the physicians; using baseline thresholds to guard against inappropriate reductions in service; providing clear feedback to physicians about their quality and efficiency; terminating physician participation if noncompliant; defining fair market value in advance with the participating physicians; limiting total savings by meeting appropriate utilization standards‖.

END SECTION 6

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SECTION ● 7 7 PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY

Introduction: Quality of care is the degree to which health care services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.1 Pay for Performance refers to incentives that reward providers for achieving objectives established by a purchaser; these objectives may include improvements in efficiency, data submission, quality improvement, and/or patient safety.2

PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets? Performance measurement and public Several initiatives attempt to connect a nationally National accreditation measures are standard PERFORMANCE reporting have been identified as potential recognized group of measures. While there is across markets. However, there are wide MEASUREMENT levers to improve health care quality and development of performance measures across all care differences across markets in the type and number reduce costs. areas, the evidence has not definitively shown an of local or state level performance measures. National organizations that develop improvement in health care quality, reduced costs, or National measures include the HEDIS (Health Plan measures include The Joint On the national level, the Centers for return on investment. Employer Data and Information Set) for health Commission, CMS, NCQA, AHRQ, and Medicare and Medicaid Services (CMS), the Return on Investment (ROI) studies have proven plans and the Joint Commission and CMS the Leapfrog Group. National Committee for Quality Assurance difficult to conduct. For example, four sites studying measures for hospitals. Performance Measurement systems (NCQA), the Joint Commisssion, and others quality based purchasing in an Agency for Healthcare exist for multiple health care settings, have been accrediting, measuring, and reporting on the performance of health plans Research and Quality (AHRQ) study did not conduct including hospitals, health plans, an ROI analysis. Factors cited included difficulty of physician groups, and nursing and hospitals for more than a decade. In addition, some states are collecting and isolating the effects of its P4P initiative, small sample homes. 3 reporting on performance information sizes, and the short history of the programs. regarding procedures, health plans, medical groups, hospitals, and other entities. In 1999, the National Quality Forum (NQF) was created in response to a need to facilitate collaboration in multiple performance measurement systems. NQF organizes its work into the following categories: o Patient and Family Engagement, o Population Health, o Care Coordination,

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PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets? o Palliative and End of Life Care, o Overuse, o Health Information Technology, o Disparities, and o Safety. AHRQ supports resources on public report cards, including the Web-based Report Card Compendium, which is available on AHRQ‘s TalkingQuality.gov site, http:www.talkingquality.gov. The compendium provides a searchable database of over 200 report examples.4 In 2007, through its Aligning Forces for Quality (AF4Q) program, the Robert Wood Johnson Foundation launched a major initiative focusing on the measurement and improvement of health care quality in 20 communities around the country. Since 2008, the AHRQ has chartered 25 value exchanges in health care markets around the country with the chartering value exchanges (CVEs) program, some of which also participate in the AF4Q program.5 Many health plan report cards rely on HEDIS and CAHPS (Consumer Assessment of Healthcare Providers and Services) indicators. Other Comments The Consumer-Purchaser Disclosure Project is a coalition of more than 50 consumer, labor, and employer organizations that works to advance publicly reported, nationally standardized measures of clinical quality, efficiency, equity, and patient centeredness for health plans, hospitals, medical groups, physicians, other providers, and treatments. The Disclosure Project is supported by in-kind contributions of participating organizations and by a grant from the Robert Wood Johnson Foundation.6 Other initiatives include the High-Value Health Care Project, an initiative of the Quality Alliance Steering Committee that is supported by the Robert Wood Johnson Foundation and the Engelberg Center for Health Care Reform at the Brookings Institution; and the National Priorities Partnership, which is convened by the National Quality Forum and has 32 partner organizations.

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PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets?

NATIONAL PERFORMANCE MEASUREMENT SYSTEMS

Case Example 1: The medical conditions available on The CMS performance measurement system for Hospital Compare include heart attack, heart inpatient quality is not limited by market. CMS Hospital Compare failure, chronic lung disease, pneumonia, In December 2002, the American diabetes in adults, and chest pain. Several Hospital Association (AHA), the surgical procedures in five areas are Federation of American Hospitals included. The five areas are heart and blood (FAH), and the Association of vessels; abdominal; neck, back, and American Medical Colleges (AAMC) extremeties (arms and legs); bladder, kidney launched the Hospital Quality Alliance and prostate; and female reproductive. (HQA), a national public-private collaboration to encourage hospitals to voluntarily collect and report hospital quality performance information.7 The initiative grew into a consumer accessible website called Hospital Compare (www.hospitalcompare.hhs.gov), where consumers can search for hospitals in a specific geographic area and compare those hospitals according to performance, outcome, and structural measures related to certain medical conditions and surgical procedures. Over 4,000 hospitals voluntary participate in Hospital Compare, and since 2007, have received a 2% increase in Medicare payments as a result. Membership in the Hospital Quality Alliance (HQA) now includes the CMS, the Joint Commission, the AHA, the FAH, the AAMC, the American Medical Association, the American Nurses Association, the National Association of Children‘s Hospitals and Related Organizations, American Other Comments Association of Retired Persons (AARP), American Federation of Labor and Council of Industrial Organizations, the Consumer-Purchaser Disclosure Project, the Agency for Healthcare Research and Quality, the National Quality Forum, the Blue Cross and Blue Shield Association, the National Business Coalition on Health, America‘s Health Insurance Plans, National Association of Public Hospitals and Health Systems, Society for Critical Care Medicine, Wisconsin Collaborative for Healthcare Quality, and the U.S. Chamber of Commerce.

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PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets? Case Example 2: One reason that hospitals seek Joint In 2002, accredited hospitals began collecting data on The Joint Commission‘s accreditation process, and Commission accreditation is because it standardized—or ―core‖—performance measures. In performance measurement, is applicable in any Joint Commission provides deeming authority for Medicare 2004, the Joint Commission and CMS began working market. The Joint Commission accredits certification. The CMS designation means together to align measures common to both organizations. approximately 4,250 general, that hospitals accredited by The Joint These standardized common measures are called children’s, long-term acute, Commission may choose to be ―deemed‖ as ―Hospital Quality Measures.‖10 psychiatric, rehabilitation, and meeting Medicare and Medicaid surgical specialty hospitals and 358 certification requirements. CMS has critical access hospitals, through a consistently found that The Joint separate accreditation program. Commission‘s standards for hospitals meet Approximately 88% of the nation’s or exceed those established by the Medicare hospitals are currently accredited by and Medicaid program. Hospitals seeking the Joint Commission.8 Medicare approval may choose to be surveyed either by an accrediting body, such as The Joint Commission, or by state surveyors on behalf of CMS.9

Other Comments

Case Example 3: The Consumer Assessment of Healthcare The family of CAHPS instruments is used Providers and Systems (CAHPS) program is nationwide and in multiple market settings. Consumer Assessment of a public-private initiative to develop Healthcare Providers and standardized surveys of patients' experiences Systems (CAHPS), Agency for with ambulatory and facility-level care. Healthcare Research and Health care organizations, public and private purchasers, consumers, and researchers use Quality (AHRQ) CAHPS results to assess the patient- CAHPS was originally the Consumer centeredness of care, compare and report on Assessment of Health Plans Study, performance, and improve quality of care. beginning in the mid-1990s. In the first 5 years, an integrated set of standar- dized questionnairs and reporting formats for consumers enrolled in health plans was developed. From 2002, CAHPS expanded to a broad array of health care settings, including hospitals, nursing homes, and dialysis centers.11

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PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets? CAHPS Ambulatory Care Surveys include: CAHPS Health Plan Survey, CAHPS Clinician & Group Survey, CAHPS Surgical Surgical Care Survey (developed by the American College of Surgeons and the Surgical Quality Alliance), ECHO Survey (The Experience of Care and Health Outcomes Survey asks adult health plan enrollees about their experiences with behavioral health care and services provided by either managed behavioral health care organizations or managed care organizations), CAHPS Dental Plan Survey (originally developed for the TRICARE dental plan), CAHPS American Indian Survey (developed for the Choctaw Nation Health Service), and the CAHPS Home Health Care Survey. Supplemental Items Sets include CAHPS Item Set for Children with Chronic Conditions, CAHPS Item Set for People With Mobility Impairments, CAHPS Item Set for Addressing Health Literacy, CAHPS Health Information Technology Item Set, and the Other Comments CAHPS Cultural Competency Iitem Set. At the request of the CMS, the CAHPS Consortium is developing several surveys of patients‘ experiences in health care facilties. Facility surveys include the CAHPS Hospital Survey, CAHPS In-Center Hemodialysis Survey, and CAHPS Nursing Home Surveys. The CAHPS Consortium is comprised of Federal agencies and private research organizations. AHRQ works closely with the Centers for Medicare & Medicaid Services (CMS), which has funded the development of several of the CAHPS surveys. AHRQ also contracts with Westat to support the work of the Consortium and assist users of CAHPS products through the CAHPS User Network. Westat also manages the National CAHPS Benchmarking Database. Case Example 4: Altogether, HEDIS consists of 71 measures HEDIS is applicable in all markets. In some across eight domains of care. HEDIS markets it has become standard across plans. In HEDIS, National Committee for measures address a broad range of health other areas it has been less broadly adopted. Quality Assurance (NCQA) issues, including: The Healthcare Effectiveness Data and Asthma Medication Use, Information Set (HEDIS) is a tool used Persistence of Beta-Blocker Treatment by more than 90% of America's health after a Heart Attack, plans to measure performance on Controlling High Blood Pressure, important dimensions of care and Comprehensive Diabetes Care, service. Breast Cancer Screening, Antidepressant Medication Management, Childhood and Adolescent Immunization Status, and Advising Smokers to Quit. HEDIS results are included in Quality Compass, an interactive, Web-based comparison tool that allows users to view plan results and benchmark information. Other Comments HEDIS measures are one component of the NCQA Health Plan Accreditation process. More than half of the health maintenance organizations (HMOs) in the nation, covering three-quarters of all HMO enrollees, have been reviewed by NCQA. Additionally, CMS extends deeming authority to NCQA for Medicare Advantage (MA), Medicare‘s managed care program. This authority allows NCQA to review MA

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PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets? organizations on behalf of CMS in six categories: Access to Services, Antidiscrimination, Confidentiality and Accuracy of Enrollee Records, Information on Advance Directives, Provider Participation Rules, and Quality Assurance. Case Example 5: The QDC can be used to assess the impact Evidence is not available regarding impact of This innovation is applicable in all market settings. of health care quality on productivity and intervention. NCQA Quality Dividend absenteeism in an organization related to the Calculator (QDC) following conditions: alcohol abuse, asthma, The Quality Dividend Calculator: hypertension, heart disease, child Compass Edition is an online tool that immunization (chicken pox), depression, provides direct plan-to-plan compari- diabetes, and smoking. sons to analyze how health care quality affects cost among employee populations.

Other Comments

Case Example 6: Leapfrog advocates four leaps in hospital There is some concern that too few hospitals are The Leapfrog Hospital Survey is applicable to quality, safety, and affordability. These participating in the Leapfrog Hospital Survey to urban and rural hospitals.15 The Leapfrog Group include: document clinical and financial improvements using the Leapfrog was founded in November o Computer Physician Order Entry methods. There is some evidence that little change has 2000 by the Business Roundtable. The (COPE): resulted in hospital operating decisions. Some surveys 1999 Institute of Medicine report ―To o Evidence-based Hospital Referral (HER); have indicated that despitae a small increase in the Err Is Human‖ focused Leapfrog on the o ICU Physician Staffing (IPS); and number of consumers using performance data to guide aim of reducing preventable medical o Leapfrog Safe Practices Score (The their health care slections, the majority have not changed errors. Leapfrog Hospital Survey). the way they make health care decisions.14 The four leaps listed above comprise 20 of the 34 National Quality Forum-endorsed Safe Practices that reduce the risk of harm in certain processes, systems or environments of care.12 The Leapfrog Hospital Survey assesses hospital performance based on four quality and safety practices endorsed by the NQF. Any hospital in the U.S. is welcome to complete the Leapfrog Hospital Survey and the Leapfrog Safe Practices Leap is comprised of 17 of the 31 NQF-endorsed practices.13

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PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets? The Leapfrog Group is comprised of a consortium of major companies and other large private and public healthcare purchasers that provide health benefits to more than 37 million Americans in all 50 states.16 The Leapfrog Hospital Survey, Leapfrog‘s hallmark public reporting initiative, was launched in 2001 and is now in its fifth version. Other Comments Leapfrog Hospital Surveys are used by purchaser members to inform their employees and their purchasing strategies. In 2009, 1206 hospitals across the country completed the Leapfrog Hospital Survey.17 Leapfrog Hospital Survey ratings are posted on their website and free to the public; participation by hospitals is voluntary.

NATIONAL HEALTH EQUITY AND CULTURAL COMPETENCY PERFORMANCE MEASUREMENT

Case Example 1: The NQF-endorsed framework for cultural The 45 practices endorsed by NQF are intended to Given that the measures are not yet developed, competency establishes a conceptual model to improve the quality of care through cultural competency. applicability to markets is not yet determined. National Quality Forum (NQF), identify and organize preferred practices and They are intended to serve as the basis for identification Measuring and Reporting performance measures based on a set of seven and/or development of quality measures that can be used Cultural Competency interrelated domains (and multiple for public accountability for the delivery of culturally 18 The National Quality Forum (NQF) has subdomains) that are applicable to all settings competent care. Given that the measures are not yet endorsed 45 practices to guide and providers of care. Specifically, the seven developed, there is no evidence regarding their efficacy. healthcare systems in providing care primary domains for measuring and reporting that is culturally appropriate and cultural competency are: Leadership; patient centered. Integration into Management Systems and Operations; Patient-Provider Communication; Care Delivery and Supporting Mechanisms; Workforce Diversity and Training; Community Engagement; and Data Collection, Public Accountability, and Quality Improvement.

Other Comments

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PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets? Case Example 2: This item set asks patients to report on their The CAHPS Cultural Competency Item Set is not yet The CAHPS Cultural Competency Item Set is not experiences with issues such as language available, so no evidence exists regarding its efficacy. yet available, so no evidence regarding its market CAHPS Cultural Competency access, health literacy, trust, shared decision applicability exists. Item Set making, patient-provider communication, The CAHPS Team is completing work and discrimination. on a new set of supplemental items These items will be available for use with designed to capture the cultural the CAHPS Clinician & Group Survey. If competency of health care providers time and resources permit, the team will also from the patient’s perspective. adapt the items for use with the CAHPS Health Plan Survey.19

The CAHPS Cultural Competency Item set is shaped by work of The Commonwealth Fund. This work emphasizes aspects of culturally competent care from the patient‘s perspective. It categorizes measures in the following quality domains: Patient-provider communication, Other Comments shared decision-making and respect for patient‘s preferences, experiences leading to trust or distrust, experiences of discrimination, and linguistic competence.20

Case Example 3: The project explores how diversity, culture, At the earliest, any implementation of the proposed Implementation is scheduled for January 2011, so language, and health literacy issues can be requirements would occur in January 2011. So, there is no there is currently no information regarding market The Joint Commission: better incorporated into current Joint evidence regarding the actual measures. However, the specifics. Hospitals, Language, and Commission standards or drafted into new research framework is based on the Joint Commission‘s Culture requirements. ongoing Hospitals, Language, and Culture: A Snapshot of The Joint Commission, with funding the Nation (HLC) study. The HLC sudy is being from The Commonwealth Fund, is conducted in partnership with The California developing proposed accreditation Endowment. requirements for hospitals to advance effective communication, cultural competence, and patient-centered care.21 The Joint Commission, in collaboration with the National Health Law Program is developing an implementation guide to prepare Joint Other Comments Commission surveyors and accredited hospitals for the potential release of proposed requirements to advance effective communication, cultural competence, and patient-centered care.

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PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets? EBM is operationalized through the EBM is a key dimension underlying consumer decision EBM applies to all markets. EVIDENCE-BASED MEDICINE reporting of evidence-based measures to tools in health care. Although most of the focus has (EBM) organizations like the Joint Commission, been on developing clinical provider decision tools; CMS, and others that tie accreditation and e.g., care protocols, this activity is necessary in order to Evidence-based medicine is the pay-for-performance to the implementation create health care decision tools that have value to the practice of supporting clinical of specific evidence-based measures. consumer. decision making with systematic Guidelines or protocols may be provided. A There is some controversy in EBM as to the extent that research, while taking into account guideline is a systematically developed EBM either implies or explicitly requires an evidence the personal values, uniqueness, and statement to assist practitioners and patients hierarchy. For example, some hold that EBM the specific concerns of each patient. in choosing appropriate care for specific prioritizes randomized controlled trials and systematic clinical conditions. A protocol is a plan, or reviews of randomized trials above observational set of steps, to be followed in a study, studies, physiological studies, and unsystematic clinical investigation, or intervention.22 observations.24 As Sackett, et al. write, ―because the ―Evidence-based medicine impacts both the randomised trial, and especially the systematic review information patients receive about their of several randomised trials, is so much more likely to medical conditions and health care, and their inform us and so much less likely to mislead us, it has shared decision-making choices and become the ‗gold‘standard‘ for judging whether a skills.‖23 treatment does more good than harm.‖ They also hold that EBM is not restricted to randomised trials and meta-analyses. It involves tracking down the best external evidence with which to answer clinical questions.25 The Cochrane Collaboration is a worldwide endeavor dedicated to tracking down, evaluating, and synthesizing randomized clinical trials in all areas of medicine. The Cochrane Collaboration established a consumer website that links patients to articles on how to understand health Other Comments research and the consumer‘s role in health research and to the consumer version summaries on the effects of health care.26 UpToDate is an evidence-based (proprietary) electronic resource for clinicians that includes a free, evidence-based information section for patients.27 Zynx is another EBM tool for physicians. This approach seeks to reduce costs and Research studies (dozens) demonstrate that a strong This innovation is applicable to all markets. EMPLOYERS SUPPORT FOR improve quality. primary care foundation to the health system can 32 PRIMARY CARE The National Business Group on Health‘s reduce costs and improve quality. Primary Care is care provided by workgroup on primary care was formed to People with a PCP rather than a specialist as a personal personal physicians—family develop strategies for employers to increase physician had 33% lower annual health care spending physicians, general internists, and support for primary care. Its priorities for and 19% lower mortality; cost and mortality data were adjusted for age, sex, ethnicity, health insurance status, general pediatricians – who are action are patient-centered medical homes, reported diagnoses, and smoking status. Other studies responsible for the entire health of an health information technology (IT) for confirm that patients with a regular PCP have lower individual or family. Primary care is practice transformation, payment policies health care costs than those without.33 the patient’s entry into the health care that recognize the value of primary care

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PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets? system and the medical ―home‖ for services, and educational and loan programs For Medicare patients, hospitalization rates were 80% ongoing, personalized care.28 that encourage physicians and other health higher in areas with a shortage of PCPs than in other professionals to work in primary care.29 areas.34 The Patient-Centered Primary Care People with PCPs are more likely than those without Collaborative, a coalition of major employer PCPs to receive preventive services, to have better and physician groups, represents more than management of chronic illnesses, and to be satisfied 300,000 primary care physicians (PCPs).30 with their care.35 Its goals are to help transform how primary States with more PCPs per capita have lower total care is organized and financed to provide mortality rates, lower heart disease and cancer better patient outcomes; more appropriate mortality rates, and higher life expectancy at birth payment to physicians; and better value, compared with states that have fewer PCPs, adjusting accountability, and transparency to for other factors such as age and per capita income.36 purchasers and consumers.31 Individual employers are sponsoring demonstration projects. For example, the IBM Corporation has a patient-centered primary care initiative.

Health Employer Data and Information Set (HEDIS) performance measures are heavily weighted toward such primary care items as preventive Other Comments services and chronic disease management.37

Changing payment systems to incentivize It has become clear that under existing reimbursement State governments and nonprofit regional health PAYMENT SYSTEMS IMPACT quality seeks to alter providers‘ behavior structures, current market forces are insufficient to en- improvement collaboratives are playing a ON QUALITY indirectly. The end goals are improving sure either higher-quality or more cost-effective care.41 growing role in forging consensus on new quality and managing costs. payment systems among multiple payers. Fee-for-service, episode-of-care The evidence tends to compare FFS to capitated Fee-For-Service (FFS) payment puts the systems of payment. Quality is often disappointingly Without this collaboration, aligning multiple payment, traditional capitation, and payers is challenging, because antitrust laws and comprehensive care payment all provider at risk for the cost of processes poor for both FFS and capitated arrangements. The majority of studies of outcomes uncovers no difference policies at both the federal and state levels limit provide varying incentives. within each service, but there is no limit on the between FFS and HMOs. There is little evidence of any the ability of multiple payers to discuss and number of services. Providers get paid 43 regardless of quality or outcomes.38 consistent difference in clinical quality between FFS agree on changes in payment systems. and HMOs.42 Financial incentives must be sufficiently large The advantages of episode-of-care-payment and clear in order to have an impact on quality.44 include the flexibility for providers to decide how care is delivered within the episode and the incentive it creates to eliminate any unnecessary services within the episode. If the services of multiple providers are covered by the same episode-of-care payment, there is also an incentive for those providers to

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PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets? coordinate their services.39 Capitation models or payment are designed to control the number of episodes of care as well as the cost of individual episodes. In this model, providers have a strong incentive to avoid patients who are more costly to treat.40

Fee-for-service is where a predetermined amount is paid for each discrete service provided. Episode-of-care payment is paying a single price for all of the services needed by a patient during an entire episode of care. If services of multiple providers are covered by the same episode- of-care payment, this is called bundling payments. Capitation is when a provider (or a group of providers, working in a coordinated fashion) receives a single payment to cover all of the services their patients need during a specific period of time, regardless of how many or few Other Comments episodes of care the patients experience. In comprehensive care payment, a provider or group of providers would receive a single payment to cover all of the services their patients need during a specific period of time (such as a year). However, this payment would be adjusted based on the health of the patients and other characteristics that affect the level of services needed. A provider would receive a higher payment if he or she has more patients with severe rather than mild heart disease, but the payment would not depend on what kinds of treatment patients receive.45

This approach seeks to reward quality and The empirical foundations of Pay for Performance in P4P initiatives work better in more integrated PAY FOR PERFORMANCE efficiency via payment incentives. health care are rather weak.49 However, one systematic markets.56 Unilateral, small-scale bonus (P4P) Ideally, P4P should reward high quality, review of the literature did find partial or positive arrangements will be insufficient to motivate give all providers incentives to improve, and effects of financial incentives on measures of quality in substantial changes on the part of physicians and Pay for Performance (P4P) refers to five of six studies of physician-level financial hospitals.57 incentives that reward providers for create a payment gradient between high-and 47 incentives and seven of nine studies of the provider Because the U.S. health care system is achieving objectives established by low-performing hospitals. 50 group-level. There is a paucity of demonstrable return characterized by a large number of overlapping the purchaser. Following the Emerged from dissatisfaction with 51 on investment (i.e., evidence of net savings). contracts among payers (i.e., health plans and Principal-Agent model, existing reimbursement methods that reward quantity According to one report, the modest P4P incentives in government programs) and providers, financial payment mechanisms do not reward rather than the quality of health care the CMS Premier Hospital Quality Incentive incentives introduced by any one payer must be services.48 providers for higher quality as do Demonstration and the Physician Group Practice a relatively large percentage of total prices in most other markets. In Demonstration have succeeded. However, there is little reimbursement to justify any quality heatlh care, purchasers are not able evidence that small (2-5%) payment incentives are improvement effort with substantial fixed to contract for a given level of likely to drive individual specialists to changing prac- costs.58 46 provider quality. tices, such as joining accountable care organizations.52 There is no empirical evidence suggesting how large a payment gradient needs to be to stimulate quality improvement.53 Possible unintended consequences may include gaming, where participants find ways to maximize

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PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets? measurable results without actually accomplishing the desired objective; crème skimming of healthier patients for treatment; and the multitasking problem – where compensation based on available measures will distort effort away from unmeasured objectives.54 Limitations of P4P initiatives include: defining and unifying measures across the vast number of reporting initiatives, risk adjustment for clinical outcome measures, resource burdens on smaller versus larger hospitals, and the need for data on the effectiveness of P4P in improving care processes and outcomes.55 With the advantages and disadvantages, it is evident that there is no perfect P4P payment strategy for every setting. The decision about which P4P strategy to use likely depends on the goal of P4P (to improve quality among low-performing providers or to maintain quality among high-performing providers), the distribution of performance within and across providers (whether it is highly variable or uniformly high), the percentage of payment available for P4P programs, and the overall level of performance.59 Key elements of P4P programs include: individual vs. group incentives, paying the right amount, selecting high-impact performance measures, making payment rewards all high-quality care, and prioritizing quality improvement for underserved populations.60 Other Comments CMS and Premier Inc., a nationwide organization of not-for-profit hospitals teamed on a P4P initiative where hospitals are scored and ranked by condition measured. Top-tier hospitals (in top 10%) receive a 2% bonus on its Medicare payments; hospitals in the next decile receive a bonus of 1%. Bridges to Excellence (BTE) is a multilateral effort backed by a group of large employers to offer new financial incentives for physicians to improve health care quality in several target markets (Boston, Cincinnati/Louisville, and Albany/Schenectady). Three distinct initiatives were launched by BTE, including the Diabetes Care Link, the Physician Office Link, and the Cardiac Care Link. Each ―link‖ comprises a broad set of measures, each of which is accorded points toward an overall score.61

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PERFORMANCE MEASUREMENT AND HEALTH CARE QUALITY INTERVENTION AREAS What does the intervention What is the research evidence regarding How applicable to which AND Case Examples intend to address? impact of intervention? types of markets? Case Example 1: This program changes the incentives to Performance on the clinical quality metrics improved The medical group structure of managed care in providers from quantity of services provided by an average of 3% annually, while performance as California theoretically resolved the three thorniest California P4P Program, to a combination of quality and efficiency. measured by patient satisfaction surveys stagnated. A problems besetting episode initiatives in other Integrated Healthcare The episode of care is the unit of analysis— survey of physician and plan leaders by Cheryl contexts: small numbers, attribution, and Association (IHA) and episode of care is a series of health care Damberg and colleagues reported that the majority felt inconsistent benefit designs. Launched in 2003 for 6 California services related to a particular condition or that the P4P program had motivated improvements in health plans, 6.7 million enrolles, and event.63 the data systems and measurement capabilities but that no ―breakthrough‖ quality improvement had been 230 physician groups. 64 Although P4P principles were achieved. adopted by Medicare and by private Adoption of the P4P-specified types of information insurers across the nation, the CA technology (IT) increased annually by 7%. program remains the largest in terms of dollars distributed.62 The highly regulated HMO product in California had very similar levels of consumer cost sharing across competing health plans; thus, differences in the number of episodes per patient and in the average cost per episode would not be driven by differences in benefit design.65 Physician organization-based health care system – advantage for measuring efficiency in that organization as the unit of observation Other Comments overcome the small numbers that preclude valid episode measurement at the individual physician level. (The IHA technical committee decided that a physician organization must have at least 30 patients experiencing a type of episode during a year for the episode results to be valid for statistical purposes.)66

SECTION 7● ENDNOTES

1 Peterson, Laura A., et al. ―Does Pay-for-Performance Improve the Quality of Health Care?,‖ Annals of Internal Medicine. 145: 4, 265 – W-71. (August 15, 2006). 2 Agency for Healthcare Research and Quality (AHRQ). ―How Four Purchasers Designed and Implemented Quality-Based Purchasing Activities.‖ February 2007. http://www.ahrq.gov/qual/qbplessons.htm. (Accessed January 6, 2010). 3 Ibid., AHRQ. (2007). 4 Ibid., AHRQ. (2007). 5 Roski, Joachim and Min Gayles Kim. ―Current Efforts of Regional and National Performance Measurement Initiatives Around the United States,‖ American Journal of Medical Quality. Vol. XX: No. X. (September 3, 2009). 6 Consumer-Purchaser Disclosure Project. http://healthcaredisclosure.org/. (Accessed April 13, 2010).

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7 U.S. Department of Health and Human Services. http://www.hospitalcompare.hhs.gov/Hospital/Static/GlossaryPopUp.asp. (Accessed May 17, 2010). 8 The Joint Commission. ―Facts About Hospital Accreditation.‖ January 15, 2010. http://www.jointcommission.org/AboutUs/Fact_Sheets/hospital_facts.htm. (Accessed May 17, 2010). 9 The Joint Commission. ―The Joint Commission‘s Hospital Accreditation Recognized by CMS: Deeming Authority Continued for The Joint Commission.‖ November 30, 2009. http://www.jointcommission.org/NewsRoom/NewsReleases/nr_11_30_09.htm. (Accessed May 17, 2010). 10 Op. cit., The Joint Commission. (2009). 11 Agency for Healthcare Research and Quality. ―Program Brief, CAHPS: Assessing Health Care Quality from the Patient‘s Perspective.‖ https://www.cahps.ahrq.gov. (Accessed November 2009). 12 The Leapfrog Group. Fact Sheet. http://www.leapfroggroup.org. (Accessed May 25, 2010). 13 The Leapfrog Group. Leapfrog Hospital Survey. http://www.leapfroggroup.org/forhospitals/leapfrog_hospital_survey_copy. (Accessed May 25, 2010). 14 Galvin, Robert S., Suzanne Delbanco, Arnold Milstein and Greg Belden. ―From the Field: Has The Leapfrog Group Had an Impact on the Health Care Market,‖ Health Affairs. 228 – 233. (January/February 2005). 15 Op. cit., The Leapfrog Group, Leapfrog Hospital Survey. (2010). 16 Op. cit., The Leapfrog Group, Fact Sheet. (2009). 17 The Leapfrog Group. ―About Us.‖ http://www.leapfroggroup.org/about_us. (Accessed May 25, 2010). 18 National Quality Forum (NQF). ―A Comprehensive Framework and Preferred Practices for Measuring and Reporting Cultural Competency‖. Washington, DC. (April 2009). 19 Agency for Healthcare Research and Quality (AHRQ). ―CAHPS Cultural Competency Item Set.‖ https://www.cahps.ahrq.gov/contenet/products/CCI/PROD_CCI_Intor.asp. (Accessed May 18, 2010). 20 Ngo-Metzger, Quyen, et al. ―Cultural Competency and Quality of Care: Obtaining the Patient‘s Perspective.‖ New York: The Commonwealth Fund. (October 2006). 21 The Joint Commission. http://www.jointcommission.org. (Accessed May 18, 2010). 22 Scalise, Dagmara. ―Evidence-based Medicine.‖ Hospitals and Health Networks Magazine. December 2004. 23 Hendler, Gail Y. ―Why Evidence-Based Medicine Matters to Patients,‖ Journal of Consumer Health on the Internet. 8: 2. (2004). 24 Gupta, Mona. ―A Critical Appraisal of Evidence-based Medicine: Some Ethical Considerations,‖ Journal of Evaluation in Clinical Practice. 9: 2, 111-121. (2003). 25 Sacket, David, et al. ―Evidence Based Medicine: What It Is and What It Isn‘t,‖ British Medical Journal. 312, 71-72 (January 13, 1996). 26 The Cochrane Collaboration. http://www.cochrane.org/. (Accessed March 22, 2010). 27 UpTo Date. ―For Patients‖. http://patients.uptodate.com/frames.asp?page=tocmain.asp. (Accessed March 22, 2010). 28 Sepulveda, Martin J., Thomas Bodenheimer and Paul Grundy. ―Primary Care: Can It Solve Employers‘ Health Care Dilemma?,‖ Health Affairs. 27: 1,151-158. (January/February 2008). 29 Ibid., Sepulveda, Martin J., Thomas Bodenheimer and Paul Grundy. (2008).

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30 The ERISA Industry Committee (ERIC). ―ERIC Announces Release of Patient-Centered Primary Care Collaborative Principles.‖ May 10, 2007. http://www.eric.org/forms/documents/DocumentFormPublic/viewDoc?id=B3470000000F. (Accessed January 6, 2009). 31 Op. cit., Sepulveda, Martin J., Thomas Bodenheimer and Paul Grundy. (2008). 32 Op. cit., Sepulveda, Martin J., Thomas Bodenheimer and Paul Grundy. (2008). 33 Sepulveda, et al. 2008. (See P. Franks and K. Fiscella. ―Primary Care Physicians and Specialists as Personal Physicians: Health Care Expenditures and Mortality Experience,‖ Journal of Family Practice. 47: 2, 105-109. (1998).) 34 Sepulveda, et al., 2008. (See M.L. Parchman and S. Culler. ―Primary Care Physicians and Avoidable Hospitalizations,‖ Journal of Family Practice. 39: 2, 123 – 128. (1994); and M.L. Parchman and S.D. Culler. ―Preventable Hospitalizations in Primary Care Shortage Areas: An Analysis of Vulnerable Medicare Beneficiaries,‖ Archives of Family Medicine. 8: 6, 487 – 491. (1999)). 35 Sepulveda, et al. 2008. (See A.B. Bindman, et al. ―Primary Care and Receipt of Preventive Services,‖ Journal of General Internal Medicine. 11: 5, 269 – 276. (1996); D.G. Safran, et al. ―Linking Primary Care Performance to Outcomes of Care,‖ Journal of Family Practice. 47: 3, 213 – 220. (1998); and A.L. Stewart, et al. ―Primary Care and Patient Perceptions of Access to Care,‖ Journal of Family Practice. 44: 2,177-185. (1997)). 36 Sepulveda, et al. 2008. (See B. Starfield. Primary Care: Balancing Health Needs, Services, and Technology. New York: Oxford University Press, 1998.) 37 Grumbach, Kevin and Thomas Bodenheimer. ―A Primary Care Home for Americans: Putting the House in Order,‖ Journal of the American Medical Association. 288: 7. (August 21, 2002). 38 Miller, Harold D. ―From Volume to Value: Better Ways to Pay for Health Care,‖ Health Affairs. 28: 5, 1418. (September/October 2009). 39 Ibid., Miller, Harold. (2009). 40 Op. cit., Miller, Harold. (2009). 41 Nichols, Len M. and Ann S. O‘Malley. ―Hospital Payment Systems: Will Payers Like The Future Better Than The Past?,‖ Health Affairs. 25: 1, 81 - 93. (January/February 2006). 42 Dudley, R. Adams, et al. ―The Impact of Financial Incentives on Quality of Health Care,‖ The Milbank Quarterly. 76: 5, 649- 686. (1998). 43 Op. cit., Miller, Harold. (2009). 44 Op. cit., Dudley, R. Adams, et al. (1998). 45 Op. cit., Miller, Harold. (2009). 46 Rosenthal, Meredith and Richard G. Frank. ―What is the Empirical Basis for Paying for Quality in Health Care?,‖ Med Care Res Rev. 63, 135. (2006). 47 Werner, Rachel M. and R. Adams Dudley. ―Making the ‗Pay‘ Matter in Pay-for-Performance: Implications for Payment Strategies,‖ Health Affairs. 28: 5, 1498- 1508. (September/October 2009). 48 Robinson, James C., Thomas Williams and Dolores Yanagihara. ―Measurement of and Reward for Efficiency in California‘s Pay-For-Performance Program,‖ Health Affairs. 28: 5, 1438- 1447. (September/October 2009). 49 Op. cit., Rosenthal Meredith and Richard G. Frank. (2006). 50 Op. cit., Peterson, Laura A., et al. (2006).

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51 Rosenthal, Meredith B., et al. ―Climbing Up the Pay-for-Performance Learning Curve: Where are the Early Adopters Now?,‖ Health Affairs. 26: 6, 1674- 1682. (November/December 2007). 52 Crosson, Francis. ―Medicare: The Place to Start Delivery System Reform,‖ Health Affairs. Web Exclusive, w232- 243. (January 27, 2009). 53 Op. cit., Werner, Rachel M. and R. Adams Dudley. (2009). 54 Op. cit., Rosenthal Meredith and Richard G. Frank. (2006). 55 Op. cit., Nichols, Len M. and Ann S. O‘Malley. (2006). 56 Op. cit., Robinson, James C., Thomas Williams and Dolores Yanagihara. (2009). 57 Op. cit., Rosenthal Meredith and Richard G. Frank. (2006). 58 Op. cit., Rosenthal Meredith and Richard G. Frank. (2006). 59 Op. cit., Werner, Rachel M. and R. Adams Dudley. (2009). 60 Rosenthal, Meredith B. and R. Adams Dudley. ―Pay-for-Performance: Will the Latest Payment Trend Improve Care?,‖ Journal of the American Medical Association. 297: 7. (February 21, 2007). 61 Rosenthal, Meredith B., et al. ―Paying for Quality: Providers‘ Incentives for Quality Improvement,‖ Health Affairs. 23: 2, 127- 141. (March/April 2004). 62 Op. cit., Robinson, James C., Thomas Williams and Dolores Yanagihara. (2009). 63 Op. cit., Robinson, James C., Thomas Williams and Dolores Yanagihara. (2009). 64 Op. cit., Robinson, James C., Thomas Williams and Dolores Yanagihara. (2009). 65 Op. cit., Robinson, James C., Thomas Williams and Dolores Yanagihara. (2009). 66 Op. cit., Robinson, James C., Thomas Williams and Dolores Yanagihara. (2009).

END SECTION 7

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SECTION ● 8 8 PHARMACEUTICAL INNOVATIONS

Overview:Employers and purchasing groups use pharmaceutical innovations to manage costs and increase the value of prescription drug benefits. These include: incentive-based formularies (multi-tier formularies), generic substitution, coinsurance and copayments, pharmacy benefit management (PBM), and computerized real-time alerts. Definitions: Incentive-based formularies are an innovation designed to curb the increasing costs of prescription drugs. An incentive-based or tiered formulary provides financial incentives (i.e., lower copayments) for enrollees to choose drugs that are preferred by the payer.1 Generic substitution is the practice of providing the generic equivalent of brand name medications, when available, to patients. Copayments require consumers to pay a fixed percentage of a prescription‘s costs, with the remaining cost paid through the health or prescription drug benefit. A Pharmacy Benefit Manager (PBM) is a third party administrator of prescription drug programs. They are primarily responsible for processing and paying prescription drug claims. They also are responsible for developing and maintaining the formulary, contracting with pharmacies, and negotiating discounts and rebates with drug manufacturers. Today, more than 210 million Americans nationwide receive drug benefits administered by PBMs. Fortune 500 employers and public purchasers (Medicare Part D, the Federal Employees Health Benefits Program) provide prescription drug benefits to the vast majority of American workers and retirees. Computerized real time alerts include: electronic alerts to patients, reminding them to take medications; computerized order entry (and real-time decision support such as reminders and prompts) for physicians that provide prescribing alerts regarding medicines with potential contraindications and therapeutic alternatives; and faxed letters to prescribers regarding patients who have had gaps in refilling prescriptions.

PHARMACEUTICAL INNOVATIONS

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Incentive-based formularies are intended Different changes in formulary administration Incentive-based formularies are applicable to all markets. INCENTIVE-BASED to reduce health benefit costs. Criteria for may have dramatically different effects on FORMULARIES (MULTI placing drugs in different tiers should be utilization and spending and may in some TIER FORMULARIES) based on clinical outcomes and not on the instances lead enrollees to discontinue therapy. cost of ingredients and manufacturer The associated changes in copayments can rebates. If not, then the costs of substantially alter 1) out-of-pocket spending by pharmaceuticals may decrease, but overall enrollees, 2) the continuation of the use of 3 medical costs may increase.2 medications, and possibly 3) the quality of care. Several studies have found that the adoption of an incentive-based formulary and the accompanying changes in copayments resulted in lower

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PHARMACEUTICAL INNOVATIONS

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? aggregate utilization of and spending on drugs.4, 5, 6, 7, 8, 9, 10 However, most of the savings go to health insurance plans, not to consumers.11 There is greater spending by patients.12, 13, 14, 15, 16, 17 Adding tiers generally results with increased switching within drug classes (switching toward ―preferred‖ drugs on formulary occurring among 5% to 49.4% of patients).18,19, 20, 21, 22, 23, 24, 25 Adding tiers to copayment structures has been 26 associated with either no change or an increase in the rate of discontinuation of prescribed drug treatments.27, 28, 29, 30, 31 Also, whether these effects are beneficial overall depends on potential health effects and spillover effects on medical spending.32 These results are mixed. One study of chronically ill patients found that doubling copayments in a two-tier plan for antidiabetic, anti-asthmatic, and antiulcerant agents resulted in a 17% increase in predicted annual emergency department visits and a 10% increase in predicted annual hospital days for persons with the respective conditions.33 Other studies contradict these findings. One study found that a three-tier structure reduced the payer‘s prescription drug costs and increased consumers‘ out-of-pocket drug expenditures without affecting physician office visits, inpatient hospital stays, or emergency department visits.34 This study only observed effects up to 12 months after implementation. Another study confirmed these findings for 30 months after implementation. However, there were other limitations of this work, particularly that the study only examined one health plan.35 One study found a decrease in total drug spending of about 5% to 15% from changing from a single tier to a two- or three-tier formulary.36

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PHARMACEUTICAL INNOVATIONS

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

An example of an incentive based formulary is a three-tiered formulary. In this model, the first tier is comprised of generic drugs with the lowest Other Comments copayment. The second tier is comprised of brand name drugs that are preferred by the payer and have a higher copayment. The third tier generates the highest copayment, as it is comprised of brand-name drugs that are not preferred by the payer. As of 2005, almost 75% of commercially insured individuals had prescription drug coverage with an incentive formulary with three or more tiers, whereas a decade ago such coverage was rare.37 Many studies of tiered formularies are limited in conclusions for particular populations, including the elderly, those with low-incomes, and the chronically ill. Also, among the various plans studied, there were differences in drug benefit design features. Some plans had co-payments, others had coinsurance. Some had retail and other mail-order pharmacies. Some plans had generic substitution rules, and others a list of drugs or drug classes excluded from coverage. A key distinction is between price-based formularies, in which copayments are tied to the price of the drug, and value-based formularies, in which copayments are tied to the cost-effectiveness or therapeutic value of the drug.38

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case Example: This intervention lowers the cost of After two to three years, preliminary results in In all of Pitney Bowes‘ self-funded plans and a few of the others, Pitney Bowes, Inc. required projects. This single change in plan participants with diabetes indicate that the drug benefits are provided by a carve-out pharmacy benefit pharmaceutical benefit design immediately medication possession rates have increased manager. This coverage of approximately 90% of all employees shifted all diabetes drugs and made critical brand-name drugs available significantly, use of fixed-combination drugs has under one common pharmaceutical plan provides a potentially devices from tier two or three to most Pitney Bowes employees and their increased (possibly related to easier adherence), powerful single point of entry for studying – and leveraging – formulary status to tier 1. covered dependents for 10% co-insurance, average total pharmacy costs have decreased by long-term disease outcomes in the Pitney Bowes population.43 the same coinsurance level as for generic 7%, and emergency department visits have 40 drugs, versus the previous cost share of decreased by 26%. 39 25% to 50%. Hospital admission rates, although increasing slightly, remain below the demographically adjusted Medstat benchmark. Overall direct healthcare costs per plan participant with diabetes decreased by 6%. In addition, the rate of increase in overall per-plan participant health costs at Pitney Bowes has slowed markedly, with net per- plan-participant costs in 2003 at about $4,000 per year versus $6,500 for the industry benchmark.41 The percentage of members with suboptimal adherence with insulin decreased by two thirds. The percentage of members using fixed- combination oral hypoglycemic increased from 9% to 22%. Among insulin-dependent diabetic plan participants, the shift to newer brands of test strips in tier one was associated with a doubling in the usage rate of these test strips on glucometers (from 28% usage to 55% usage).42

The average annual increase in employee health cost from 2000 to 2003 was 8.1% versus composite annual increases of 12% to 15% for Other Comments 44 benchmark companies.

Generic substitution is intended to keep In surveys of more than 400 employers in the US: Generic substitution is applicable to all markets. GENERIC SUBSTITUTION costs down by providing lower cost 39% always require a generic to be used when generics in place of more expensive, available and appropriate, 31% charge a higher branded products. copayment for brands unless indicated as medically necessary by a physician.45,46 One study found that if a generic had been substituted for all corresponding brand-name outpatient drugs in 2000, the median annual

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? savings in drug expenditures per person would have been $45.89 (interquartile range, $10.35 to $158.06) for adults younger than 65 years of age and $78.05 (interquartile range, $19.94 to $241.72) for adults at least 65 years of age. In these age groups, the national savings would have been $5.9 billion (95% confidence interval, $5.5 billion to $6.2 billion) and $2.9 billion (CI, $2.6 billion to $3.1 billion), respectively, representing approximately 11% of drug expenditures.47

Both coinsurance and copayments are cost Higher levels of cost sharing result in reductions Coinsurance and copayments are applicable to all markets. 49 50 51 52 COINSURANCE AND sharing mechanisms to ensure that in prescription drug use. , , , However, However, even small increases in coinsurance and copayments COPAYMENTS consumers‘ decision making reflects that demand for prescription drugs is insensitive to can severely limit access for low-income populations. they assume at least some of the cost of the price changes. Most estimates of price elasticity product. Absent these mechanisms, suggest that a 10% increase in price, for example, consumers have no incentive to select cost- would decrease use by less than that, ranging from 53 effective treatments. 1% to 4%. However, the price elasticity of 54, 55 Coinsurance is attractive to employers different medication classes can vary widely. because, unlike fixed co-payments per RAND found that increased cost sharing resulted prescription, coinsurance rates keep pace in overall use reductions of 25% to 45% for with rising drug costs.48 common drugs, and reductions of 8% to 23% for drugs used by chronically ill patients. Individuals who use specialty drugs responded to increased cost sharing much less, ranging from about 1% to 21%.56 Several studies have found that increased cost sharing has detrimental effects on patient‘s health.57, 58, 59, 60, 61, 62 Modest increases in prescription copayments have been shown to have a negative impact on consumers‘ medication purchasing decisions. These increases may lead to pill splitting or other reduced-dosing methods, increased time between refills, and increased medication discontinuation, particularly for symptomatic medications, but also for classes of prescription medications used for long-term disease prevention.63

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? In one study that considered 75 different plans, increasing a single copayment from $5 to $10 cut annual per-person spending from $725 to $563, or more than 20%. Similarly, doubling co-payments in multi-tier plans reduced average drug spending by about one-third.64

Other Comment Patients respond differently to an increase in their out-of-pocket costs for prescription medications depending on the condition being treated, the absolute price increase, and the availability of treatment alternatives.65

PHARMACY BENEFIT MANAGEMENT General activities of a PBM that generate cost savings to plan sponsors include:66 efficient processing of prescription claims; providing a network of retail and mail-order pharmacy services to lower ingredient and dispensing fees (e.g., formulary management, generic-use programs, drug utilization review, disease management, manufacturer rebates); academic detailing (e.g., letters to prescribers, educational interventions, newsletters); and offering prescription drug insurance benefits with patient cost sharing and other incentives.

DISEASE MANAGEMENT

Disease Management attempts to decrease In a study of an HMO‘s diabetes management Disease management requires a long-term focus. health care costs and utilization and program decreased hospitalizations by 18% Programs are most common in large organizations (>50,000 improve health outcomes over the life of a among enrolled diabetic patients, and total gross employees). patient. Also aims to improve medication costs were decreased by $44/patient/month 67 compliance. (10.9%). In another study of self-insured diabetic beneficia- ries, implementation of a disease management program led to a 9.4% decrease in medical spending compared to baseline, and a 17% compared to expected.68 Disease management tends to target specific conditions (e.g., diabetes, heart disease, asthma). Other Comments Longitudinal information on benefits is not well documented.

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

UTILIZATION MANAGEMENT

Quantity Limitations This intervention seeks to control drug One study found that limiting the number of Utilization Management applies to all markets. costs and access by setting quantity limits. prescriptions covered by Medicaid to It may also set maximum allowable three/month/recipient resulted in a reduction in quantity limits. medication use and thus a savings in prescription costs.69 Longer-term studies have shown that this can have deleterious health effects.

Other Comments Limiting prescription access may lead to unintended consequences and should be carefully considered.

Prior Authorization Prior authorization is used to control Implementing a prior authorization policy for Prior authorization applies to all market settings. utilization and expenditures and helps higher-cost NSAIDs led to a drug cost savings of 70 prevent potentially harmful or unnecessary 53% in one study. utilization. It requires advanced physician There is a potential for high administrative costs, and insurance approval before dispensing a as well as patient dissatisfaction. prescription.

Other Comments Prescriptions most commonly restricted by prior authorization policies include fertility drugs, growth hormones, and medications with a potential cosmetic or "lifestyle" use.71

Drug Utilization Review (Typically automated) reviews conducted There is little evidence that Drug Utilization Review Computer-based systems are required. either before dispensing a prescription medi- programs actually lead to any health or financial (DUR) cation or retrospectively, after the prescrip- benefits. tion has been dispensed to the patient. Warnings are prompted by pharmacy computer systems at the time a prescription claim is processed. These include drug-drug interactions, drug duplication warnings, drug-disease interactions, allergy overlaps, early or late refill alerts, pregnancy alerts, incorrect dosage alerts, drug-age warnings, and drug-gender warnings.72

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

DELIVERY SYSTEMS

The intervention achieves cost savings Adding a mail-order pharmacy benefit has been This intervention applies to all markets. through offering restricted access to retail shown to: provide an opportunity for deeper pharmacies. discounts compared with retail networks; be A narrower network concentrates convenient for beneficiaries needing maintenance purchasing power by limiting the medications; and provide greater opportunity for effectively managing cost, utilization, and pharmacies at which members are covered, 75 thereby leveraging greater discounts.73 compliance. These types of arrangements are often Mail-order pharmacies are often utilized to inconvenient to beneficiaries and, therefore, may reduce costs. The Federal Trade decrease consumer satisfaction. In some cases, Commission has found that prescription mail order systems may be more expensive than drug plan sponsors generally pay lower point of purchase options. prices for drugs purchased through PBM- owned mail-order pharmacies.74 Although, mail-order pharmacies are not always more cost-effective. Over 87% of employers offered the option of mail-order service, with the ability to increase the supply of medication (90 days) for a decreased co- Other Comments 76 payment. 31 states have ―any willing provider‖ laws requiring PBMs to contract with any pharmacy willing to accept their reimbursement rate.77

BENEFIT DESIGN AND CONSUMER COST SHARING

Generic Incentives Blue Cross Blue Shieild of Michigan determined Generic incentives can be used in all markets. that increasing the use of generic medications by just 1% would result in $17M in savings.78 In surveys of more than 400 employers in the US: 39% always require a generic to be used when available and appropriate, 31% charge a higher copayment for brands unless indicated as medically necessary by a physician.79,80

Multi-tiered Copayments Above and beyond the brand/generic 71% of HMO panelists and 75% of PBM panelists Multi-tiered copayments can be used in all markets. distinction, plans categorize medications who use the three-tier system stated that the design according to their effectiveness, did save their organization money. More than 25% availability of therapeutic alternatives, and of HMO executives estimated that ~10% of the differential pricing and/or rebates pharmacy costs were saved as a result of

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? obtained from manufacturers or wholesale implementing a three-tier benefit.81 distributors. Typically, copayment tiers are based on formulary status.

Other Comments Multi-tiered copayments require sufficient cost gap to incentivize purchasing behavior.

Coinsurance Coinsurance raises consumer cost sharing This intervention is designed to sensitize consumers Cost sharing applies to all market settings. to proportionally reflect actual medication to the cost of medications, provide a stronger costs. financial incentive for use of lower-cost medications, and help protect payers from drug-price inflation.

Case Examples 1: The intervention manages pharmaceutical It is estimated that the tri-state initiative will save PBMs can be used in all market settings. New England Tri-State quality and costs. 10-15% a year on prescription drug costs. Prescription Drug Purchasing Coalition82 The coalition determined that the most comprehensive approach to managing quality and health care costs for their populations was through a PBM. Each state will contract separately with First Health Services for populations that it determines are most appropriate.

Other Comments This case example involved regional-level, large scale purchasers.

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PHARMACEUTICAL INNOVATIONS

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case Example 2: The intervention helps manage the FEHBP The average price PBMs negotiated for drugs PBMs can be used in all market settings. Federal Employees Health prescription drug benefits. from retail pharmacies was 18% below the average cash price customers would pay at retail Benefits pharmacies for 14 selected brand-name drugs and Program83 47% below the average cash price for 4 selected The FEHBP is the largest generic drugs. employer-sponsored health The average mail-order price was about 27% - insurance program in the 53% below the average cash price customers United States. would pay at a retail pharmacy for the selected brand name and generic drugs, respectively. The three PBMs examined achieved savings for FEHBP- Across the plans, rebates reduced total annual participating health plans by drug spending by 3% - 9% from 1998 to 2001. using three key approaches: PBMs achieved savings through intervention obtaining drug price techniques such as prior authorization and drug discounts from retail utilization reviews that identify excess use, pharmacies and dispensing duplicative therapies, or the availability of drugs at lower costs through effective, low-cost drug alternatives. their mail-order pharmacies; Enrollees benefited from cost savings from PBM passing on certain services through lower costs for mail-order manufacturer rebates to the prescriptions, lower cost sharing linked to PBMs‘ plans; and using intervention discounts obtained from retail pharmacies, and a techniques that reduce lower increase in premiums overall. utilization of certain drugs or PBM reductions in plan claims costs for substitute other, less costly, prescription drugs translate into lower premiums drugs. for enrollees in later years. Example Intervention Techniques include: Other Comments o Drug utilization review, o Prior authorization, o Therapeutic interchange, and o Generic substitution. Nearly all FEHBP enrollees had a retail pharmacy participating in their plan within a few miles of their residence. The plans reviewed were: Blue Cross and Blue Shield (BCBS), Government Employees Hospital Association (GEHA), and PacifiCare of California. Together, these plans accounted for about 55% of the 8.3M people covered through FEHBP plans as of July 2002 and represented various plan types and PBM contractors. These plans covered more than half of all FEHBP enrollees and paid $3.3B for about 65M prescriptions dispensed to these enrollees in 2001.

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PHARMACEUTICAL INNOVATIONS

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Patient-directed electronic reminders to There is very little scientific evidence regarding There is very little evidence regarding the types of markets in COMPUTERIZED REAL take medication combats lack of adherence the efficacy of using e-mail or text message which computerized real time alerts are either successful or TIME ALERTS84 to drug regimens that may result in reminders to patients in order to increase unsuccessful. However, real-time decision supports as reminders increased health care and emergency room prescription drug regimen adherence. and prompts to physicians often rely on electronic medical Includes: utilization. Several studies indicate improvements in care due records (EMRs), requiring a market that is utilizing EMRs. Electronic alerts to patients, Physician-directed computerized order to use of computerized order entry and real-time Computerized order entry requires the corresponding system. reminding them to take entry is intended to alert prescribing decision support such as reminders and prompts, medications. physicians of potential contraindications including: reduced dispensing rates of potentially contraindicated medicines and higher quality of Computerized order entry and therapeutic alternatives at the time of 85 86 87 88 89 care. , , , , (and real-time decision prescribing. Other real-time decision support such as reminders support, such as reminders and prompts One study evaluated the impact of alerting and prompts) for physicians that are often connected to an electronic prescribers via faxed letters about patients who provides prescribing alerts medical record, help to remind physicians had gaps of more than 10 days in refilling anti- regarding medicines with of particular prescriptions or tests that may depressant prescriptions during the first six potential contraindications help in a particular case. months of therapy. The faxed alerts to prescribers and therapeutic alternatives. Physician-directed faxed letters notify had no discernable effect on the proportion of non-adherent patients or the number of days Faxed letters to prescribers prescribers of patients who have gaps in refilling prescriptions. without antidepressant treatment during the 12- regarding patients who have month follow-up period.90 had gaps in refilling prescriptions.

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PHARMACEUTICAL INNOVATIONS

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case Example: The intervention is intended to increase The program increased adherence to medication The program appears applicable to all markets. Program Carespeak adherence to prescribed pharmaceutical regimens and significantly reduced the risk of developers are currently applying for funding to cover the organ rejection. costs of a national multicenter study of the program.96 Communications and regimens in pediatric liver transplant patients. In turn, this was intended to The standard deviation of mean serum tacrolimus Only patients or caregivers who had a cell phone and active Mount Sinai Hospital reduce the risk of organ rejection, end levels (a measure of the amount of tacrolimus–a cell phone service were allowed to participate in the 92 teamed up on a program to stage liver disease, and/or death. common immunosuppressant taken by all study program.97 send regular reminders to participants—in the blood) fell significantly, from Over 40% of participants in the initial study dropped out pediatric liver transplant 3.46 micrograms per liter in the year before the before the end of the year, with the inability to pay for cell patients (ranging in age from study to 1.37 micrograms per liter during the year- phone service being the single biggest reason for ending 1 to 27) and/or their long study. Lower standard deviations are participation. To address this issue, those considering caregivers via two-way text associated with higher levels of adherence, as they implementing a similar initiative may wish to provide pre-paid message. Follow-up alerts are suggest more consistent amounts of medication in cell phones with text-messaging capabilities to patients and/or sent to caregivers of those the blood. Results were consistent regardless of caregivers.98 who do not respond within a the number of medications being taken or who predetermined time range. (the caregiver or patient) took responsibility for Physicians can also medication intake.93 proactively monitor Among the 41 study participants, the number with performance and then send a standard deviation above the threshold level of motivational messages to 2.5 micrograms per liter (which puts the patient at encourage continued increased risk of a rejection episode) fell from 24 adherence, or identify and before program implementation to 6 afterwards.94 intervene with non-adherent Among participants, the number of episodes of patients before the risk of acute cellular rejection fell from 12 in the year rejection increases.91 before implementation to 2 during the study.95

SECTION 8 ● ENDNOTES

1 Huskamp, Haiden A., et al. ―The Effect of Incentive-Based Formularies on Prescription-Drug Utilization and Spending,‖ The New England Journal of Medicine. 349: 2224-32. (2003a). 2 RAND Health Research Highlights of Joyce, et al. (2002). 3 Op. cit., Huskamp, Haiden A., et al. (2003a). 4 Blumenthal, David and Roger Herdman, eds. Institute of Medicine. Description and Analysis of the VA National Formulary. Washington, DC: National Academy Press, 2000. 5 Motheral, Brenda and Kathleen A. Fairman. ―Effect of Three-tier Prescription Copay on Pharmaceutical and Other Medical Utilization,‖ Medical Care. 39: 1293-304. (2001).

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6 Motheral, Brenda R. and Rochelle Henderson. ―The Effect of a Closed Formulary on Prescription Drug Use and Costs,‖ Inquiry. 36: 481-91. (1999/2000). 7 Huskamp, Haiden A., Arnold M. Epstein and David Blumenthal. ―The Impact of a National Prescription Drug Formulary on Prices, Market Share, and Spending: Lessons for Medicare?,‖ Health Affairs. 22: 3,149-58. (Huskamp 2003b). 8 Horn, Susan D., Phoebe D. Sharkey and Cheryl Phillips-Harris. ―Formulary Limitations and the Elderly: Results from the Managed Care Outcomes Project,‖ American Journal of Managed Care. 4: 1105-13. (1998). 9 Joyce, Geoffrey F., et al. ―Employer Drug Benefit Plans and Spending on Prescription Drugs,‖ Journal of the American Medical Association. 288, 1733-9. (2002). [Erratum, JAMA 2002; 288: 2409.] 10 Thomas, Cindy Parks, et al. ―Impact of Health Plan Design and Management on Retirees‘ Prescription Drug Use and Spending,‖ Health Affairs. W408. (December 4, 2002). 11 Op. cit., RAND Health Research Highlights of Joyce, et al. (2002). 12 Op. cit., Motheral, Brenda and Kathleen A. Fairman. (2001). 13 Fairman, Kathleen A., Brenda R. Motheral and Rochelle Henderson. ―Retrospective, Long-Term Follow-Up of the Effect of a Three-Tier Prescription Drug Copayment System on Pharmaceutical and Other Medical Utilization and Costs,‖ Clinical Therapeutics. 25: 12. (2003). 14 Op. cit., Huskamp, Haiden A., et al. (2003a). 15 Landsman, Pamela B., et al. ―Impact of 3-Tier Pharmacy Benefit Design and Increased Consumer Cost-sharing on Drug Utilization,‖ The American Journal of Managed Care. 11: 10, 621-628. (October 2005). 16 Landon, Bruce E., et al. ―Incentive Formularies and Changes in Prescription Drug Spending,‖ American Journal of Managed Care. 13(part 2): 360-369. (2007). 17 Huskamp, Haiden A., et al. ―Impact of 3-tier Formularies on Drug Treatment of Attention-deficit/Hyperactivity Disorder in Children,‖ Archives of General Psychiatry. 62: 4, 435-441. (2005). 18 Op. cit., Motheral, Brenda and Kathleen A. Fairman. (2001). 19 Op. cit., Fairman, Kathleen A., Brenda R. Motheral and Rochelle Henderson. (2003). 20 Op. cit., Huskamp, Haiden A., et al. (2003a). 21 Nair, Kavita V., et al. ―Effects of a 3-tier Pharmacy Benefit Design on the Prescription Purchasing Behavior of Individuals with Chronic Disease,‖ Journal of Managed Care Pharmacy. 9: 2, 123- 133. (2003). 22 Gibson, Teresa B., Catherine G. McLaughlin and Dean G. Smith. ―A Copayment Increase for Prescription Drugs: The Long-term and Short-term Effects on Use and Expenditures,‖ Inquiry. 42: 3, 293-310. (2005). 23 Op. cit., Landsman, Pamela B., et al. (2005). 24 Op. cit. Landon, Bruce E., et al. (2007). 25 Op. cit., Huskamp, Haiden A., et al. (2005). 26 Op. cit., Huskamp, Haiden A., et al. (2005).

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27 Op. cit., Motheral, Brenda and Kathleen A. Fairman. (2001). 28 Op. cit., Fairman, Kathleen A., Brenda R. Motheral and Rochelle Henderson. (2003). 29 Op. cit., Huskamp, Haiden A., et al. (2003a). 30 Op. cit., Nair, Kavita V., et al. (2003). 31 Op. cit., Landsman, Pamela B., et al. (2005). 32 Op. cit., Landon, Bruce E., et al. (2007). 33 Goldman, Dana P., et al. ―Pharmacy Benefits and the Use of Drugs by the Chronically Ill,‖ Journal of the American Medical Association. 291, 2344-2350. (2004). 34 Op. cit., Motheral, Brenda and Kathleen A. Fairman. (2001). 35 Op. cit., Fairman, Kathleen A., Brenda R. Motheral and Rochelle Henderson. (2003). 36 Op. cit., Landon, Bruce E., et al. (2007). 37 Op. cit., Landon, Bruce E., et al. (2007). 38 Gilman, Boyd. H. and John Kautter. ―Consumer Response to Dual Incentives Under Multitiered Prescription Drug Formularies,‖ American Journal of Managed Care. 13(part 2), 353-359. (2007). 39 Mahoney, John J. ―Reducing Patient Drug Acquisition Costs Can Lower Diabetes Health Claims,‖ The American Journal of Managed Care. (August 2005). 40 Ibid., Mahoney, John J. (2005). 41 Op. cit., Mahoney, John J. (2005). 42 Op. cit., Mahoney, John J. (2005). 43 Op. cit., Mahoney, John J. (2005). 44 Op. cit., Mahoney, John J. (2005). 45 Pharmacy Benefit Management Institute, Inc. ―Wyeth-Ayerst Prescription Drug Benefit Cost and Plan Design Survey Report.‖ Albuquerque, NM: Wellman Publishing, Inc. (2001a). 46 Ibid., Pharmacy Benefit Management Institute, Inc. (2001a). 47 Haas, Jennifer S., et al. ―Potential Savings from Substituting Generic Drugs for Brand-Name Drugs: Medical Expenditure Panel Survey, 1997 – 2000,‖ Annals of Internal Medicine. 142, 891-897. (2005). 48 Op. cit., RAND Health Research Highlights of Joyce, et al. (2002). 49 Smith, Douglas G. and Duane M. Kirking. ―Impact of Consumer Fees on Drug Utilization,‖ Pharmacoeconomics. 2, 335-342. (1992). 50 Lexchin, Joel H. and Paul Grootendorst. ―Effects of Prescription Drug User Fees on Drug and Health Services Use and on Health Status in Vulnerable Populations: A Systematic Review of the Evidence,‖ International Journal of Health Services. 34, 101-122. (2004).

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51 Pauly, Mark V. ―Medicare Drug Coverage and Moral Hazard,‖ Health Affairs (Millwood). 23: 1, 113-122. (2004). 52 Leibowitz, Arleen W., Willard Manning and Joseph P. Newhouse. ―The Demand for Prescription Drugs as a Function of Cost-sharing,‖ Social Science & Medicine. 21, 1063-1069. (1985). 53 Gibson, Teresa B., Ronald J. Ozminkowski and Ron Goetzel. ―The Effects of Prescription Drug Cost Sharing: A Review of the Evidence,‖ The American Journal of Managed Care. 11: 11, 730- 740. (November 2005). 54 Op. cit., Goldman, Dana P., et al. (2004). 55 Johnson, Richard E., et al. ―The Impact of Increasing Patient Prescription Drug Cost Sharing on Therapeutic Classes of Drugs Received and on the Health Status of Elderly HMO Members,‖ Health Services Research. 32,103-122. (1997). 56 RAND Health. ―Prescription Drug Cost Sharing: A Powerful Policy Lever to Use With Care.‖ Santa Monica, CA: RAND Corporation. (2009). 57 Op. cit., Goldman, Dana P., et al. (2004). 58 Goldman, Dana P., Geoffrey F. Joyce and Pinar Karaca-Mandic. ―Varying Pharmacy Benefits with Clinical Status: The Case of Cholesterol-Lowering Therapy,‖ American Journal of Managed Care. 12: 1, 21-28. (January 2006). 59 Op. cit., Joyce, Geoffrey F., et al. (2002). 60 Joyce, Geoffrey F., et al. ―Pharmacy Benefit Caps and the Chronically Ill,‖ Health Affairs. 26: 5, 1333-1343. (September/October 2007). 61 Joyce, Geoffrey F., et al. ―Medicare Part D After 2 Years,‖ American Journal of Managed Care. 15: 8, 536-544. (August 7, 2009). 62 Solomon, M. D., et al. ―Cost Sharing and the Initiation of Drug Therapy for the Chronically Ill,‖ Archives of Internal Medicine. 169: 8, 740-748. (April 27, 2009). 63 Op cit., Landsman, Pamela B., et al. (2005). 64 Op cit., RAND Health Research Highlights of Joyce, et al. (2002). 65 Op. cit., Landsman, Pamela B., et al. (2005). 66 Olson, Bridget M. ―Approaches to Pharmacy Benefit Management and the Impact of Consumer Cost Sharing,‖ Clinical Therapeutics. 25: 1, 250-72. (January 2003). 67 Rubin, Robert J., Kimberly A. Dietrich and Anne D. Hawk. ―Clinical and Economic Impact of Implementing a Comprehensive Diabetes Management Program in Managed Care,‖ Journal of Clinical Endocrinology & Metabolism. 83: 8, 2635-42. (August 1998). 68 Slezak, Julie and Neal Stine. ―The Role of the PBM in Total Health Management Strategies for Individuals with Chronic Conditions,‖ Benefits Quarterly. 19: 1, 38-44. (2003). 69 Soumerai, Stephen B., et al. ―Effects of Medicaid Drug-payment Limits on Admission to Hospitals and Nursing Homes,‖ New England Journal of Medicine. 325: 15, 1072-7. (October 10, 1991). 70 Smalley, Walter E., et al. ―Effect of a Prior-authorization Requirement on the Use of Nonsteroidal Anti-inflammatory Drugs by Medicaid Patients,‖ New England Journal of Medicine. 332: 24, 1612- 7. (June 15, 1995). 71 Op. cit., Olson, Bridget M. (2003). 72 Vogenberg, F. Randy and Joanne M. Sica. ―Seeking Value in Working with Pharmacy Benefit Managers,‖ Benefits Quarterly. 19: 1, 7-12. (2003).

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73 Goff, Veronica V. ―Pharmacy Benefit Managers: A Model for Medicare?,‖ NHPF Issue Brief, 765: 1-12, National Health Policy Forum, Washington, DC. (July 9, 2001). 74 Op. cit., Vogenberg, F. Randy and Joanna M. Sica. (2003). 75 Op. cit., Pharmacy Benefit Management Institute, Inc. (2001a). 76 Pharmacy Benefit Management Institute, Inc. ―Takeda and Lilly Prescription Drug Benefit Cost and Plan Design Survey Report.‖ Albuquerque, NM: Wellman Publishing, Inc. (2001). 77 Op. cit., Goff, Veronica V. (2001). 78 Reuters Health Information. ―Blue Cross of Michigan Offers Coupons for Generic Drugs.‖ http://pharmacists.medscape.com. (Accessed December 10, 2009). 79 Op. cit., Pharmacy Benefit Management Institute, Inc. (2001a). 80 Op. cit., Pharmacy Benefit Management Institute, Inc. (2001a). 81 Scott-Levin. ―Benefit Design: How it‘s Changing Managed Care,‖ Managed Care Formulary Drug Audit, 2000. Research Triangle Park, NC: Quintiles Transnational Corporation. (2001). 82 Ventimiglia, Samantha. ―Pharmaceutical Purchasing Pools,‖ Issue Brief. National Governors Association Center for Best Practices, Washington, DC. (October 24, 2001). 83 Government Accounting Office. ―Federal Employees' Health Benefits: Effects of Using Pharmacy Benefit Managers on Health Plans, Enrollees, and Pharmacies.‖GAO-03-196. Washington, DC: Government Accounting Office. (January 2003). 84 Lu, Christine Y., et al. ―Interventions Designed to Improve the Quality and Efficiency of Medication Use in Managed Care: A Critical Review of the Literature – 2001-2007,‖ BMC Health Services Research. 8: 75. (April 7, 2008). 85 Kaushal, Rana, Kaveh G. Shojania and David W. Bates. ―Effects of Computerized Physician Order Entry and Clinical Decision Support Systems on Medication Safety: A Systematic Review,‖ Archives of Internal Medicine. 163: 1409-1416. (2003). 86 Smith, David H., et al. ―The Impact of Prescribing Safety Alerts for Elderly Persons in an Electronic Medical Record: An Interrupted Time Series Evaluation,‖ Archives of Internal Medicine. 166, 1098-1104. (2006). 87 Feldstein, Adrianne, et al. ―Electronic Medical Record Reminder Improves Osteoporosis Management After a Fracture: A Randomized Controlled Trial,‖ Journal of the American Geriatrics Society. 54, 450-457. (2006a). 88 Feldstein, Adrianne C., et al. ―Reducing Warfarin Medication Interactions: An Interrupted Time Series Evaluation,‖ Archives of Internal Medicine. 166, 1009-1015. (2006b). 89 Simon, Steven R., et al. ―Computerized Prescribing Alerts and Group Academic Detailing to Reduce the Use of Potentially Inappropriate Medications in Elder People,‖ Journal of the American Geriatrics Society. 54, 963-968. (2006). 90 Bambauer, Kara Zivin, et al. ―Physician Alerts to Increase Antidepressant Adherence: Fact or Fiction?,‖ Archives of Internal Medicine. 166, 498-504. (2006). 91 AHRQ Health Care Innovations Exchange. ―Regular Reminders via Text Message Increase Adherence to Medication Regimen, Significantly Reduce Risk of Organ Rejection in Pediatric Liver Transplant Patients.‖ www.innovations.ahrq.gov. (Accessed July 28, 2010). Also, see Miloh, Tamir, et al. ―Improved Adherence and Outcomes for Pediatric Liver Transplant Recipients by Using Text Messaging,‖ Pediatrics. 124: 5, e844-50. (November 2009). 92 Ibid., AHRQ Health Care Innovations Exchange. (2010/2009).

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93 Op. cit., AHRQ Health Care Innovations Exchange. (2010/2009). 94 Op. cit., AHRQ Health Care Innovations Exchange. (2010/2009). 95 Op. cit., AHRQ Health Care Innovations Exchange. (2010/2009). 96 Op. cit., AHRQ Health Care Innovations Exchange. (2010/2009). 97 Op. cit., AHRQ Health Care Innovations Exchange. (2010/2009). 98 Op. cit., AHRQ Health Care Innovations Exchange. (2010/2009).

END SECTION 8

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SECTION ● 9 9 PRICE TRANSPARENCY

Price Transparency – Price Transparency is the consideration of health care prices by consumers – customers, purchasers, and employers. The concept of quality transparency is often linked with price transparency because knowledge of quality in addition to price brings value to the concept of price transparency. ―Demand for payment reform arises when trust in the efficiency and fairness of the existing payment system breaks down.‖1 The causes of this distrust are price distortion2 and consumer disconnectedness, which reflect the lack of consumer participation in the health care payment process. Many economists believe that increased price transparency will result in lower health care costs, and that price transparency shifts health care affordability accountability to the public, although there is limited evidence to support these beliefs. It is thought that transparency will reduce price distortion and price discrimination, which will lead to improved market efficiency. However, no studies were discovered that accurately tested this hypothesis. The characteristics of the health market make it difficult to apply empirical evidence of the effects of price transparency observed in other markets. These characteristics include limits on competition among hospitals, complicated products that vary in quality, intermediate agents (physicians) who make choices, and third-party payment of costs through insurance.3 Note: The Health Care Price Transparency Promotion Act of 2009 (H.R.2249, introduced 5/5/09), amends title XIX (Medicaid) of the Social Security Act to require states to provide laws for Medicaid plan transparency of hospital charge information and out-of-pocket costs, and to provide for additional research on consumer information for charges and out-of-pocket costs. Most health care leaders think that increasing price and quality transparency is important for improving provider performance improvement, rewarding quality and efficiency, and helping patients make informed health care choices.4 Note: The Transparency in Medical Device Pricing Act of 2007 (S. 2221, introduced in October 2007), requires medical device manufacturers, as a condition of receiving direct or indirect payments under Medicare, Medicaid and CHIP, to submit average and median sales prices for all implantable medical devices used in inpatient and outpatient procedures. However, this is still in Committee and has not yet been passed.

PRICE TRANSPARENCY INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND CASE EXAMPLES intend to address? regarding impact of intervention? types of markets? Scorecards and reports offer a There is no direct evidence that the presence of a Most scorecards and report cards are state or regionally QUALITY AND COST retrospective examination of health care scorecard or report card results in decreased health specific. CORECARDS costs and trends in costs for providers. S / care costs. Many report cards contain Medicaid data. Most report REPORTS Organizations reporting cost information often just cards report quality results (mortality, safety issues, recommend the use of generic drugs (vs. brand) to etc.). For example, Maine Health Management Scorecards take several decrease costs. Coalition‘s hospital report cards measure patient different forms; many are Retrospective reporting contributes peripherally to experience, safety, and clinical quality; the report cards provided online. use a cost index based on what insurance and patients cost transparency by encouraging publication of cost 5 data, through publically available data, on the trends pay the hospitals. in health care costs. However, costs can change by the Much of the quality data are obtained from Medicare.6 time of publication, so it is difficult to use report cards

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PRICE TRANSPARENCY INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND CASE EXAMPLES intend to address? regarding impact of intervention? types of markets? as a basis for providing cost information that is useful New Hampshire has a similar report card. The state for consumer decision-making. created the New Hampshire Citizens Health Initiative and the New Hampshire Purchasers Group on Health.7

Case Example 1: As reported in the Pennsylvania Health Between 2004 and 2005, the average number of open Care Cost Containment Council Report heart procedures per hospital declined from 376 cases Pennsylvania Health on Cardiac Surgery in PA Hospitals:8 per hospital to 346 cases per hospital—down from 499 Care Cost Containment In 2000, the in-hospital mortality rate for in 2000. Council Report on patients undergoing a CABG procedure Cardiac Surgery in PA (without a valve procedure) was 2.39%. Hospitals The rate had declined to 1.98% in 2004, and further declined to 1.90% in 2005.

Web-based applications are targeted There are many case examples of innovations to Most of the online cost information tools are hospital WEB-HOSTED COST towards real-time decision making by improve cost transparency in health care; however, or plan specific, which is regional or state localized POSTING / health care customers. The decisions there are no clear studies relating the presence of based on the projected target audience. COMPARISON represent choices between health care these Web applications with a decrease in the cost of Health plans often have a uniform fee schedule for venues as opposed to decisions between care. If a consumer has a choice of health care small physician practices in a geographic area but APPLICATIONS health care plans. options, that choice may be based on price, which negotiate higher rates for larger practices depending could result in a lower-cost health care alternative; on their importance to the network.11 Web technology allows however, price is not the only important consideration posting of online query in health care decision making. programs that facilitate the o For example, The Leapfrog Group has an online dissemination of health care hospital comparative program; however, the information. primary focus is on quality and not price.9 Some of the Web ―applications‖ are simply forms that need to be filled out in order to inquire about health care costs. For example, the ―Texas Health Resources Cost Estimate Request‖ is a Web-based form that is filled out by a prospective patient, which is then emailed to a staff member who replies with information concerning deductibles and cost comparisons based on hospital charges.10

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PRICE TRANSPARENCY INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND CASE EXAMPLES intend to address? regarding impact of intervention? types of markets?

Other Comments Outofpocket.com was created to educate and help consumers understand health care prices. They have a price transparency portal that allows consumers to search for prices for health care services and invites consumers to collaborate by posting prices they paid for health care services.12 The AQA Performance Measurement Workgroup: Proposed ―Starter‖ Set of Conditions and Procedures is a measure of overall cost per patient for a physician or other clinician.13 Many payers have tools that provide consumers with pharmacy costs. Some examples include: CIGNA Pharmacy Management, Bloomfield, CT, Pharmacy Price Quote tool, which drills down to the costs of drugs at local pharmacies. Members can look at actual out-of-pocket prescription costs, the plan's cost, and the total cost. Also, Humana and RegenceRx enable members to access the estimated retail price of specific drugs. In addition, Subimo, based in Chicago, offers PharmaAdvisor, a Web-based tool that helps consumers make decisions about drug treatment options, both clinically and from a cost perspective, including possible interactions, efficacy, dosage and how drugs work for certain conditions in side-by-side comparisons.14 Vimo provides information on average list prices and average negotiated prices charged by hospitals for specific procedures.15

Case Example 1: Alegent Health‘s My Cost online tool They are a participating hospital in CMS‘ Hospital The My Cost tool is limited to Nebraska. provides cost estimates for inpatient and Quality Alliance program to assess quality. Hospitals are My Cost outpatient tests, procedures, and currently required to submit data on 27 indicators that appointments, including annual focus on clinical processes. Several additional clinical physicals, well-baby visits, process indicators have been defined by CMS but are mental/behavioral health services and not yet required for public reporting. cardiac rehabilitation.16

Case Example 2: The Health Alliance of Greater CarePricer creates an advance EOB for 200 of the most The CarePricer application is limited to the Greater Cincinnati‘s CarePricer Software common procedures, including radiology. Cincinnati area. CarePricer matches diagnosis and procedure codes with patient's insurance plan and payer contracts.17

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PRICE TRANSPARENCY INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND CASE EXAMPLES intend to address? regarding impact of intervention? types of markets? The federal government has launched a According to analysis of available data, the California Most coalitions are focused on limited geographical COALITIONS, health care price transparency initiative for Hospital Price Transparency Initiative has had markets; they are often state-based. Organizations and CAMPAIGNS, STATE Medicare and other health care payers.18 negligible or no observable effect on hospital prices. legislation are appropriate for diverse market regions. REIMBURSEMENT Some examples of state-backed price Hospitals are incentivized to keep charges high, even Other markets require transparent information on cost transparency programs are shown in though most consumers pay a discounted rate, which and quality to work efficiently; today's health care HANGES AND 19 24 C Table 1. is assumed to be based on the fact that Medicare system fails this requirement. LEGISLATION The policy-driven approach to greater outlier reimbursement and some managed care privatization uses three major tools: payments are based on charges, rather than negotiated Approximately 32 states 21 consumer-driven health care (CDHC), rates. have mandated that transparency of price and quality, and pay- In January 2008 Michigan's not-for-profit hospitals hospitals provide pricing for-performance initiatives. Knowledge of began posting online the prices for at least 50 information to the public. price and value (or quality) defines common medical procedures in response to transparency. Transparency is critical to consumers' and businesses' demands for more cost the success of CDHC. Note that the key information.22 component of CDHC is the high 20 The Smart Buy Alliance was founded to enable deductible health plan. Minnesotans to improve the quality and lower the cost of health care by making them more demanding consumers.23

Other Comments The Partnership for Value-driven Health Care is a consortium of influential business groups committed to improving the nation's health care system by empowering employees to make informed decisions about their health care.25 The AHA endorsed the Health Care Price Transparency Promotion Act, H.R. 1666; "sharing meaningful information with consumers about the price of their hospital care will greatly enhance the market-based approach to health care." The Healthcare Financial Management Association (HFMA) has a National Advisory Committee to encourage price transparency. The mission of the Coalition for Affordable Healthcare Coverage is to educate and advise members of Congress and the President on how to help people get health coverage.26 The Patient Friendly Billing Project was created by HFMA.27 ―Lawmakers should avoid direct ―price setting‖ because such interventions inevitably distort the market in ways that end up harming both suppliers and consumers. Lawmakers will need to reach agreement with stakeholders on the appropriate standards for calculating and communicating prices to consumers in the health system. While enhanced price transparency at the provider level will certainly improve the functioning of the health system, the bigger issue will be the rules for how insurers price their health plan offerings.‖28

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PRICE TRANSPARENCY INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND CASE EXAMPLES intend to address? regarding impact of intervention? types of markets? Case Example 1: The Nevada Partnership for Value Driven On September 3, 2008, the Nevada Partnership was The Nevada Partnership for Value Driven Health Care is Health Care is a multi-stakeholder designated a Chartered Value Exchange (CVE) and has specific to Nevada. The Nevada Partnership community health care collaborative made been designated as a "Community Leader" by the for Value Driven Health up of public and private payers, Agency for Healthcare Research and Quality (AHRQ). Care purchasers, providers (institutional and individual), and the public.29

Case Example 2: The Pharmaceutical Purchasing Coalition All TIPPS-credentialed pharmacy benefit managers TIPPS is a national program. (PPC) developed a certification charge employers a straight administrative fee instead of Transparency in process—named Transparency in making their profits through deals with the drug Pharmaceutical Pharmaceutical Purchasing Solutions industry. The certification fee is $50,000. Recertification Purchasing Solutions (TIPPS) that requires pharmacy benefits costs $30,000. (TIPPS) management organizations to disclose to their clients the actual acquisition costs for retail and mail-order drugs. They are required to pass drug company rebates directly to their clients.30

Case Example 3: About Health Transparency is a Web- The About Health Transparency service tracks new and based service that tracks new and updated updated health care reports on quality, pricing and About Health health care reports on quality, pricing, consumer satisfaction; news and information on health Transparency and consumer satisfaction.31 care transparency, value-driven health care, public reporting legislation, and health care report cards, including hospital report cards, nursing home report cards, and home health report cards.

Case Example 4: In Maine, the Consumers for Affordable The Transparency Imperative policy initiatives include: The Transparency Imperative policy initiatives are Healthcare published, The Transparency required reporting of total price for episodes of care, or regionally distributed in Maine. The Transparency Imperative, which is a consumer guide to for all services related to a particular diagnosis, Imperative public policy that is supposed to lower including doctor services; required price transparency, health care cost and improve quality.32 listing prices and negotiated prices by service, provider and payer; and required public reporting that includes cost and quality data in order to improve value purchasing.

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SECTION 9 ● ENDNOTES

1 Nichols, Len M. and Ann S. O‘Malley. ―Hospital Payment Systems: Will Payers Like the Future Better Than the Past?,‖ Health Affairs. 25: 1 (2006). 2 Price distortion refers to a disparity between price and cost, which can be created by charging a higher price to one buyer in order to afford charging a lower price to another buyer. 3 Austin, D. Andrew and Jane G. Gravelle. ―Does Price Transparency Improve Market Efficiency? Implications of Empirical Evidence in Other Markets for the Health Sector.‖ CRS Report for Congress RL34101. Washington, DC: Congressional Research Service. (April 29, 2008). 4 Shea, Katherine K., Anthony Shih and Karen Davis. ―Health Care Opinion Leaders' Views on the Transparency of Health Care Quality and Price Information in the United States,‖ Data Brief November 2007, http://www.commonwealthfund.org/Content/Publications/Data-Briefs/2007/Nov/Health-Care-Opinion-Leaders-Views-on-the-Transparency-of-Health-Care-Quality-and-Price- Information-i.aspx, The Commonwealth Fund, New York, NY. (Accessed March 19, 2010). 5 Maine Health Management Coalition. http://www.mhmc.info/ratings-explained/patient-experience/. (Accessed March 19, 2010). 6 U.S. Department of Health and Human Services. http://www.hospitalcompare.hhs.gov. (Accessed March 19, 2010). 7 New Hampshire Citizens Health Initiative. http://www.steppingupnh.org/index.cfm?id=2EB422EA-C43C-A523-4DF8E2DEAE7C7C34. (Accessed March 19, 2010). 8 Volavka, Marc P. ―Cardiac Surgery in Pennsylvania, 2005.‖ Harrisburg, PA: Pennsylvania Health Care Cost Containment Council. (June 2007). 9 The Leapfrog Group. http://www.leapfroggroup.org/home. (Accessed March 19, 2010). 10 Texas Health Resources. https://www.texashealth.org/body_secure.cfm?id=2239. (Accessed March 19, 2010). 11 Ginsburg, Paul B. ―Shopping for Price in Medical Care,‖ Health Affairs. 26: 2. (February 2007). 12 OutOfPocket.com. http://www.outofpocket.com/OOP/AboutUs.aspx. (Accessed March 19, 2010). 13 AQA. http://www.aqaalliance.org/performancewg.htm. (Accessed March 19, 2010). 14 Edlin, Marie. ―Pharmacy Transparency Tools Help Members Make Wise Drug Decisions.‖ Managed Healthcare Executive. November 2005. 15 VIMO. http://www.vimo.com. (Accessed March 19, 2010). 16 Sensor, Wayne A. ―Embracing Transparency.‖ Healthcare Executive.November/December 2009. 17 Rappuhn, Terry Allison. ―Advance Estimates: 4 Approaches to Price Transparency in Healthcare.‖ Healthcare Financial Management. August 2006. 18 Krizner, Ken. ―Federal Government Launches Price Transparency Initiative.‖ Managed Healthcare Executive. June 2006. 19 Examples of state programs relating to price transparency, from ―Many States Taking a Point-and-Click Approach to Transparency.‖ Healthcare Financial Management. September. 2006.

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Table 1

Arizona Posts cost information for hospitals and nursing home facilities on the Department of Health Services, Division of Public Health Services Web page.

Posts hospital cost comparisons on its state government web site and on the Office of Statewide Health Planning and Development Healthcare Quality and Analysis California Division Web page.

Florida FloridaCompareCare.gov enables consumers to obtain data on hospitals' charges and readmission rates.

Louisiana Louisiana Hospital Inform, maintained by the Louisiana Hospital Association, provides pricing data on the most common Medicare inpatient and outpatient services.

Maryland Hospital Pricing Guide, provided by the Maryland Health Care Commission, lists, for each acute care hospital in Maryland, the number of cases, the average Maryland charge per case, and the average charge per day for the15 most common diagnoses. Will create a new Web site that has much more information than its existing site; will allow consumers to compare the quality of hospitals and clinics, as well as prices for Massachusetts hospitals and for the cost of prescriptions at individual pharmacies. Some health insurers are unveiling or updating Web sites (some are members-only) that allow their members to compare pricing and quality information for a variety of Minnesota procedures and services. New Hampshire PricePoint, sponsored and maintained by the New Hampshire Hospital Association, allows health care consumers to receive basic, facility-specific New Hampshire information about services and charges. A bill introduced in 2006 that allows consumers to compare drug prices via a state Web site. Prices for the 150 most-commonly prescribed drugs will be listed, along with New Jersey retail pharmacy prices; consumers can search the Web site by zip code. Oregon PricePoint, sponsored and maintained by the Oregon Association of Hospitals and Health Systems, allows health care consumers to receive basic, facility-specific Oregon information about services and charges.

Wisconsin Price Point displays typical charges and lengths of stay for individual hospitals, as well as state and county averages.

20 Summers, Jim. ―Privatisation and Transparency: A Marketing Perspective,‖ Journal of Management & Marketing in Healthcare. 2: 1. (January 2009). 21 Clarke, Richard L. ―Price Transparency: Building Community Trust,‖ Frontiers of Health Services Management. 23: 3. (Spring 2007). 22 iHealthBeat. ― Michigan Hospital to Voluntarily Post Medical Prices Online.‖ August 16, 2007. http://www.ihealthbeat.org/articles/2007/8/16/Michigan-Hospitals-To-Voluntarily-Post-Medical-Prices- Online.aspx. (Accessed March 19, 2010). 23 The Minnesota Smart Buy Alliance. http://www.smartbuyalliance.com/. (Accessed March 19, 2010). 24 Coalition to Advance Healthcare Reform (CAHR). http://www.coalition4healthcare.org/about/principles/?_c=yiwa0k0h005kk7. (Accessed March 19, 2010).

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25 Partnership for Value-Driven Healthcare. http://www.valuedrivenhealth.org/About/. (Accessed March 19, 2010). 26 Coalition for Affordable Healthcare Coverage. http://www.cahc.net/. (Accessed March 19, 2010). 27 Healthcare Financial Management Association. http://www.hfma.org/library/revenue/PatientFriendlyBilling/default.htm. (Accessed March 19, 2010). 28 Haislmaier, Edmund F. ―Health Care Reform: Design Principles for a Patient-Centered, Consumer-Based Market.‖ Backgrounder #2128. Washington, DC: The Heritage Foundation. (April 23, 2008). 29 Health Insight: The Nevada Partnership for Value-Driven Healthcare. http://www.healthinsight.org/partnerships/transparency/nevada.html#mission. (Accessed March 19, 2010). 30 Sipkoff, Martin. ―More PBMs Agreeing to Pricing Transparency,‖ Drug Topics. 151: 22. (November 19, 2007). 31 AboutHealthTransparency.Org. http://www.abouthealthtransparency.org/. (Accessed March 19, 2010). 32 Ditre, Joseph P, Mia Poliquin Pross, Jill M. Conover and Cherilee Budrick. ―A Call to Action in Health Care Reform in 2009, The Transparency Imperative: A Consumer‘s Guide to Policies That will Lower Costs and Improve Quality.‖ Augusta, Maine: Consumers for Affordable Healthcare. (January 2009). END SECTION 9

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SECTION ● 10 10 PURCHASING POOLS

Purchasing Groups – Purchasing pools are intended to band together employers and other purchasers into a larger purchasing block. This creates a larger purchaser presence in the marketplace than the individual entities would create operating on their own. Pooled Purchasing – Group purchasing is a principal strategy by which companies in many sectors, especially health services, have sought to achieve cost containment, improve the quality of goods purchased, and allow staff to focus their efforts on other activities. Of every health care (acute care setting) supply dollar, 72% to 80% is acquired through group purchasing. The ―bottom-line‖ rationale for group purchasing is to achieve: (1) lower prices, (2) price protection, (3) improved quality control programs, (4) reduced contracting cost, and (5) monitored market conditions.

PURCHASING POOLS

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

PURCHASING FOR INSURANCE: The various prototypes for an Purchasing pools address the inability for RAND studied the three largest small-group When the purchasing alliances or co-ops failed, it is mostly exchange have operated in a small purchasers to participate in the health insurance purchasing ―alliances‖ begun in because they could not attract large numbers of small the mid-1990s and found that they did not reduce employers and covered lives — a lesson that the proposals for single metropolitan area insurance market due to prohibitive costs. They provide coverage for over 175,000 small-group market health insurance premiums, statewide insurance exchanges have taken to heart, since the (Cleveland’s COSE), across lives through more than 12,000 small nor did they raise small-business health statewide exchanges are similar in spirit to many of the co-ops an entire state (the employers.2 insurance offer rates.3 and alliances that were in place for a few years in the 1990s.8 Massachusetts Connector There is no strong evidence that Health Particularly sensitive to adverse selection issues. and CalPERS), and nationally Insurance Purchasing Cooperatives (HIPCs) Highly dependent on state insurance laws.9 (FEHBP).1 have had a major impact on the number of 4 When HIPCs have a small market share they just do not have people who are uninsured. much leverage to be effective bargainers.10 HIPCs have found that centralizing Unless sufficient numbers of quality, name brand health plans administrative functions have not produced the 5 participate initially and then stay on as partners with the HIPC, economies of scale expected. success is unlikely.11 HIPCs have clearly increased coverage options If HIPC doesn‘t hold a large share of the small market, plans for the self-employed, or so-called groups of are able to compete effectively without HIPC.12 one.6 Not all communities have health care delivery systems that can A reoccurring problem with employer coalitions be configured readily around competing groups of primary care is maintaining employers‘ commitment to the 7 physicians, nor is there enthusiasm among all local providers coalition‘s principles and activities over time. for doing so.

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PURCHASING POOLS

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Cleveland has the Council of Smaller Enterprises (COSE), which has provided health insurance options to small businesses in northeast Ohio for Other Comments more than 35 years. Unfortunately, other notable group purchasing cooperatives have failed in recent years, including PacAdvantage6 (closed at the end of 2006), the Florida Community Health Purchasing Alliances (closed in 2000), and the Alliance in Colorado (closed in 2002).

Case Example 1: This approach seeks to address choice. It COSE claims a significant price advantage.16 COSE operates in a single metropolitan area. allows small firms choice among Cleveland’s Council of COSE is wholly private. competing health plans. COSE offers over The bottom line is that no pool can succeed unless it lives by Smaller Enterprises 20 different plan designs. However, all the same rules as the outside market; or the pool, like a large (COSE) plans are provided by a single health employer, is endowed with compensating characteristics.17 insurer, Medical Mutual of Ohio (formerly COSE is the small business COSE dominates the small-group market in Cleveland (though Blue Cross). COSE is more like a portal to 18 division of the Greater that insurer than a purchaser.14 COSE is precise market-share figures are not available). Cleveland Growth also a member of National Small Business Association, one of the United, the nation‘s oldest bipartisan largest regional chambers of advocacy association for small business, commerce in the country. In representing over 65,000 small businesses 15 addition to offering benefits in all 50 states. to businesses in the greater Cleveland area, COSE also provides group health insurance services in the Toledo, Lima, Findlay, Fostoria, and Mansfield areas of the state of Ohio.13

COSE administers the program and sells it directly to small businesses with distribution costs that are 75% less than competing plans. COSE Other Comments provides direct customer service to their members for enrollment and administration, and provides additional products like dental, vision, life, and disability insurance.19

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Case Example 2: This approach seeks to reduce the The key to success is the way the program New York State has a community rating requirement. However, administrative burden for employers by combines a wide choice of benefit options with the state allows modified community rating by age, gender, and HealthPass (NYC) handling much of the back-end work.20 administrative simplicity for participating industry among employers with 50 to 2000 employees.27 25 HealthPass is an innovative It gives small companies access to more employers. Many employers will not join the program unless they can also than 30 coverage options from four Brokers appreciate the ―mix and match‖ benefit obtain more complete coverage for themselves and their non-profit founded by the 21 City of New York and The carriers. options because it allows them to make sales to familes; 25 – 34 year olds are the largest segment; Defined Choice and administrative simplicity.22 business owners who would not be interested in contribution approach.28 New York Business Group on 26 Health (NYBGH). Excellent third party administration and a single health plan for all of their employees. legal advice; excellent broker network; (http://www.healthpass.com/) brokers became the program‘s most important source of sales; inclusion of general agents as intermediaries in the network; absence of a ―silo‖ mentality.23 Employers‘ appreciated the range of products and prices available and the ability to offer a choice among these products to their employees under a defined contribution model.24 Founded with a grant from New York City. Other Comments HealthPass is administered by the New York Health Purchasing Alliance, a subsidiary of NYBGH, and provides access to a wide and growing range of health plans and prescription drug and dental options.29 Case Example 3: Managed competition model with multiple It seems highly unlikely that optional pools, by CBIA has operated since 1995, and, in 2007, served 88,000 insurers is represented. Insurers compete to themselves, can do much to reduce health members in almost 5,800 companies (NHPF 2009). CBIA is Health Connections attract individual enrollees on the basis of insurance premiums.31 wholly private. Program, Connecticut price and/or quality. In this model, the Small-employer worker-choice pools have done better in states Business and Industry participating plans offer the same rates that that do not allow health rating in that market, such as Association (CBIA) they offer to small employers purchasing Connecticut.32 outside the CBIA arrangement.30 CBIA has small-employer market penetration of more than 10%.33

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case Example 4: The Buyers Health Care Action Group Choice Plus has helped to create economic BHCAG faced challenges when two of their largest employers (BHCAG) is a model of direct incentives for employees to choose less costly – Wells Fargo and American Express – withdrew. Purchasing Buyers Health Care Action contracting from purchaser to provider, provider systems. The initiative has resulted in coalitions face challenges in retaining members‘ commitment Group (BHCAG) bypassing the health plan. The model some degree of restraint in cost growth.41 after large corporate mergers.45 Purchasing Model attempts to allow employees rather than In order to promote more-informed choices, Enrollment growth is a challenge for purchasing coalitions. In employers to choose their health care BHCAG required standardized benefit the case of BHCAG, it provides the opportunity to spread the Buyers Health Care Action 35 providers. In 1997, Choice Plus was packages and distributed the results of surveys fixed administrative costs over more patients. While the state Group is a coalition of over introduced which included direct of enrollees‘ satisfaction and comparisons of employees‘ group is an associate member of BHCAG, as of 30 employers including contracts with provider-controlled the care systems‘ performance. The early 2002, their 130,000 members did not participate.46 Minnesota Life, Jostens, delivery systems, annual care system indications were that many employees used The Choice Plus approach reveals which care systems are 42 SUPERVALU, and Park bidding, public reports of consumer this information to make their choices. more and less efficient, and consumers respond by selecting Nicollet with more than satisfaction and quality, uniform 36 At the same time that Patient Choice was less costly systems. The care system ―losers‖ in the process 500,000 members.34 benefits, and risk-adjusted payment. facing the problem of replacing exiting might conclude that they are better off under existing The stated purpose of the initiative, employers, some employers were becoming managed care contracts.47 called Choice Plus, was to foster dissatisfied with the cost of collecting quality In an attempt to transport BHCAG to Portland, Oregon, a new 43 competition among groups of providers information on the care systems. employer group – the Oregon Health Care Quality Coalition – (not licensed health plans) on price and Most providers appreciated that by organizing found that no coalition employers emerged as a ―product quality, with consumers‘ choices driving 37 as care systems, they could set their own prices champion.‖ This undermined the chances of this model being the process. through risk-adjusted bids.44 successful in Portland. Unlike in the Twin Cities, many large BHCAG has adopted some form of risk employers in Portland offered only fully insured products. 38 adjustment. Also hampering marketing efforts was the fact that the care An essential part of the model was that system network was limited to the Portland area at that time, providers submitted bids, in effect and most large Portland employers had employees statewide.48 39 setting their own prices. Factors for success in the Twin Cities: large number of The model requires building an multispecialty groups and the social network structure of attractive set of competing care system corporate headquarters.49 networks.40 Beginning in 1999, BHCAG contracted with a pharmacy benefit management company (PBM). The nonprofit part of BHCAG, HealthFront, focuses on improving patient safety, health care quality, and consumerism in the community.50 The successful resistance of key hospitals to the model was a major factor in delaying implementation and, ultimately, in abandoning efforts in Other Comments some communities. One interpretation is that the consolidation of local hospital markets created market power for the dominant institutions, which they used to forestall the entry of a new health plan that could be disadvantageous to them.51 In most communities, employers were hesitant to offer any product unless it permitted access to virtually all providers. Employers with national or statewide workforces posed even greater problems for the model, as they typically wanted benefit options to provide coverage for all employees in order to minimize the number of their health plan offerings.52

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? Tiered care system networks were sold to employees and employers in Minneapolis as an expression of consumer choice because, in comparison to HMOs, they would provide greater access to providers. In 1994, 78% of Minnesotans in managed care plans were enrolled in the ―Big 3‖ HMOs – Medica, HealthPartners, and Blue Cross – leading to demands by both purchasers and providers for more health plan options. By the time the Patient Choice model moved to other cities, broad provider networks had become the norm, and tiered networks were seen as offering less choice.53 PURCHASING FOR PHARMACEUTICALS Multistate Purchasing Pharmaceutical purchasing pools are Savings are enhanced when a pooling Multistate purchasing pools work particularly well for smaller and Collaboration intended to reduce the cost of arrangement is combined with a preferred drug states that do not represent a large number of covered lives pharmaceuticals. The states benefit by list, prior authorization requirements, and other individually. Through aggregation, states capturing rebates from the manufacturers mechanisms that shift individuals toward less 54 are able to enhance their and reducing per-unit administrative expensive prescription drugs. bargaining clout, generally expenses. West Virginia estimates that it saved $7 million through a common in its first year. pharmacy-benefits manager (PBM), when negotiating drug purchases with manufactur- ers. Because prices and rebates are tied to volume, potential savings to states rise as participation in a purchasing pool expands. States may pool purchasing for Medicaid beneficiaries, state employees, State Children’s Health Insurance Program (SCHIP) enrollees, and other groups on whose behalf states buy pharmaceuticals.

Multistate pools are particularly promising for smaller states that do not represent a large volume of covered lives on their own, but together can muster the purchasing power of larger states. Other Comments The Minnesota Multistate Contracting Alliance for Pharmacy (MMCAP) includes 41 states and achieves administrative efficiencies through lower inventory levels; it also incurs lower costs associated with the ordering process and with individual state pharmaceutical contracts.55

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States receive 100% of manufacturer rebates, Case Example 1: This approach‘s goal is to contain spending - thereby stretching limited which is a greater amount of money than the West Virginia: RXIS dollars - on pharmaceuticals. increase in administrative fees. So, overall, Multistate Pharmaceutical there is a cost savings. This arrangement with Purchasing Pool.56 the PBM is attributed in part to the collective power of the states that issued the RFP. West Virginia, Missouri, Rebates will grow along with drug-cost New Mexico, and Delaware escalation. (the ―Rx Issuing States,‖ or Administrative fees are based on a sliding scale RXIS) hired a common tied to volume. Pooling individuals in multiple PBM that negotiates and states means lower per-unit administrative purchases drugs for their costs. state employees (West As the pool grows, bulk purchasing should Virginia’s group also enable the PBM to negotiate lower drug prices includes its SCHIP and higher rebates. enrollees). Ohio joined the It‘s less expensive to conduct periodic audits of pool after it was initially the PBM when all participating states share the formed. The states benefit cost. by capturing rebates from West Virginia realized $7M in net savings the the manufacturers and first year, and expects $25M over the third reducing per-unit contract period. administrative expenses. Missouri expects savings of $1.4M, or 2% of the plan cost, in its first year. New Mexico Five states, nearly 700,000 expects $2.0M in savings. Delaware reports lives as of July 2004. $1.9M in rebates. Ohio anticipates savings of $15M over 3 years.57 In developing its program, the RXIS group had to grapple with multiple state regulations, garner political will (to change the status quo and take a chance with a project whose outcome was unknown), and make significant time commitments for planning and implementing the new PBM Other Comments arrangement. The elimination of Medicaid pharmacy coverage for people dually eligible for Medicaid and Medicare in 2006 (through the Deficit Reduction Act of 2006, DRA) reduced the volume and purchasing power of state Medicaid programs, even in large states.58

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The coalition collectively addresses rising Case Example 2: prescription drug costs for people covered New England Tri-State by public programs, and uninsured and Prescription Drug underinsured individuals. The goal is to Purchasing Coalition.59 enhance quality of care; control pharmacy expenditures for covered populations; This initiative unites Maine, reduce program administrative costs; and New Hampshire, and Vermont improve access. into one entity. Prescription drug expenditures for the three state Medicaid programs are estimated at $387 million.

Drug costs for the uninsured and public beneficiaries will be lowered through cost-management strategies including: Negotiation of price and rebates, Greater efficiency in pharmacy claims processing, Reduction of claims processing for ineligible populations, Other Comments Reduction of administrative costs, Cost avoidance of claims for individuals with third-party liability for pharmacy services, Preservation of health through prospective drug utilization review (PRO-DUR) to prevent inappropriate drug dispensing and/or use, Prevention of payment for fraudulent or duplicate claims, and Maintenance of positive relationships with providers. Intrastate Purchasing This innovation reduces the cost of Georgia selected one PBM to implement an Intrastate purchasing pools work at the state level, in states that pharmaceuticals through combining the intrastate drug-purchasing program for its have multiple agencies purchasing pharmaceuticals. The payers in Like multistate purchasing, purchasing power of agencies within a Medicaid, SCHIP, employees of higher-education this case are the state agencies involved in the pool. intrastate pooling within state. institutions, and state employees. The plan uses a agencies – pooling within a single preferred drug list (PDL) and covers almost state-- allows states to two million residents.61 stretch their dollars by enhancing their purchasing power through administrative streamlining.60

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Case Example 1: This approach stretches their dollars by The changes have helped reduce the enhancing their purchasing power through pharmaceutical cost growth trend from 26% in FY Georgia: Intrastate administrative streamlining. 2001 to 16% in FY 2002.63 Consolidated Drug Management62 Georgia selected one PBM to implement an intrastate drug-purchasing program for its Medicaid, SCHIP, employees of higher- education institutions, and state employees. The plan uses a single PDL and covers almost two million residents. The state designed a three- tiered formulary for state employees and the Board of Regents, and expanded its Maximum Allowable Cost (MAC) list, which sets price ceilings on generic drugs and encourages their use when appropriate.

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case Example 2: The approach reduces the cost of The club enrolled 62,450 individuals during its first 64 pharmaceuticals for its beneficiaries. three months and achieved average savings of Illinois: RX Buying Club 21%.65 Pooling the purchasing power of state employees, enrollees of various state- supported programs, and up to two million senior citizens and people with disabilities, the club negotiates discounts with drug manufacturers and pharmacies. State-negotiated The goal is to reduce the cost of Under Maine Rx Plus, the state serves as This type of plan works at the state level. Discounts and Drug- pharmaceuticals for individuals who are pharmaceutical-benefit manager for residents ineligible for Medicaid or who lack drug without prescription-drug insurance who have only Benefits coverage. incomes up to 350% of the federal poverty level. The state negotiates discounts in the Some states are using their form of manufacturer rebates, which are purchasing clout to extend distributed to participating pharmacies that discounts to individuals who pass on the savings to Maine Rx Plus are not eligible for Medicaid cardholders. and who may not have any Vermont spearheaded the ―Pharmacy Plus‖ drug coverage. Often taking approach in 1995 when it implemented drug- the form of ―pharmacy only coverage for elderly persons with income assistance programs‖ that up to 125% of the federal poverty level under are generally geared toward an 1115 waiver (which involves experimental, 66 the elderly and people with pilot, or demonstration projects). disabilities, a few states are extending such assistance to additional groups facing escalating drug costs.

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

A related strategy that not only extends Medicaid discounts to additional populations, but also taps federal matching funds involves an actual Other Comments expansion of Medicaid with a drug-only benefit. The result is a ―Pharmacy Plus‖ waiver that allows states to implement a Medicaid drug-only benefit to low-income elderly populations. The requirement for budget neutrality may be met based on the expected savings in institutional long-term care costs that result from improved access to outpatient medications.67

Case Example 1: The goal is to obtain prescription drug Enrollees are expected to save 15% on brand-name 68 discounts for the uninsured. drugs and up to 60% on generic drugs on the Maine Rx Plus state‘s Medicaid Preferred Drug List.69 The state serves as pharmaceutical benefit manager for residents without prescription drug insurance who have incomes up to 350% of the federal poverty level. The state negotiates discounts in the form of manufacturer rebates, which are distributed to participating pharmacies that pass on the savings to Maine Rx Plus cardholders.

Implementation is proceeding in steps, with ultimate enrollment expected to reach up to 270,000 members. As of July 2004, there were Other Comments approximately 100,000 members.70

Substitutions, The goal is to reduce the cost of Michigan has greatly enhanced its savings from the This type of system works at multiple levels. Individual state Evidence-based pharmaceuticals through the use of an National Medicaid Pooling Initiative by purchasers and multistate purchasers can take advantage of this evidence-based preferred drug list and incorporating its PDL into the arrangement (each purchasing strategy. It can also be utilized by non-state purchasers Preferred Drug List generic substitutions for brand participating state maintains its own PDL).71 and private entities in order to reduce drug costs. (PDLs) and medications. Supplemental Rebates Nearly all states encourage generic or therapeutic substitutions of pharmaceuticals to reduce

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? prescription drug costs. Generic substitution saves money through lower-priced versions of brand-name drugs. Some states require generic substitution in state pharmacy programs, while others simply encourage it by providing information about generic alternatives.

States may select ―preferred drugs‖ from different classes of pharmaceuticals, based on the drugs‘ therapeutic action, safety, clinical outcome, and Other Comments cost. Drugs not on the list are not covered, or they require that the prescribing physician obtain prior authorization. Most states using a PDL also obtain supplemental rebates from manufacturers that want their products to be included on the PDL and, thus, available without prior authorization.72

Hospital Purchasing The goal is to reduce drug costs by pooling Hospital purchasing group alliances succeed in This strategy works at the hospital level. There is no discussion of hospital purchasing resources. reducing health care costs by lowering product geographic differences in this strategy. Alliances prices, particularly for commodity and Hospital purchasing alliances pharmaceutical items. Alliances also reduce are voluntary consortia of transaction costs through commonly hospitals that aggregate their negotiated contracts and increase hospital contractual purchases of revenues via rebates and dividends. The annual cost avoidance per hospital using supplies from 74 manufacturers.73 group purchasing is $154,927.

Alliances may achieve purchasing economies of scale. Hospitals report additional value as evidenced by their long tenure and the large share of Other Comments purchases routed through the alliances.

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SECTION 10 ● ENDNOTES

1 Merlis, Mark. ―A Health Insurance Exchange: Prototypes and Design Issues,‖ NHPF Issue Brief No. 832, National Health Policy Forum, Washington, DC. (June 5, 2009). 2 Millard, Steve. ―How To Finance Health Care Reform Is The Wrong Focus. 2009. COSE, Council of Smaller Enterprises. http://www.cose.org/hcreformopinion/?axAuth=00000034. (Accessed November 2009). 3 Long, Stephen H. and M. Susan Marquis. ―Have Small-Group Health Insurance Purchasing Alliances Increased Coverage?,‖ Health Affairs. 20: 1, 154–163. (January/February 2001). 4 Wicks, Elliot K. and Mark A. Hall. ―Purchasing Cooperatives for Small Employers: Performance and Prospects,‖ The Milbank Quarterly. 78: 4, 511–546. (2000). 5 Ibid., Wicks, Elliot K. and Mark A. Hall. (2000). 6 Op. cit., Wicks, Elliot K. and Mark A. Hall. (2000). 7 Christianson, Jon B. and Roger Feldman. ―Evolution In The Buyers Health Care Action Group Purchasing Initiative,‖ Health Affairs. 21: 1. (January/February 2002). 8 Burke, Courtney and Katherine Swartz. ―Managing Risk in Health Insurance Markets: A Challenge for States in the Midst of Health Care Reform.‖ Albany, NY: The Nelson A. Rockefeller Institute of Government. (September 2009). 9 Op. cit., Wicks, Elliot K. and Mark A. Hall. (2000). 10 Op. cit., Wicks, Elliot K. and Mark A. Hall. (2000). 11 Op. cit., Wicks, Elliot K. and Mark A. Hall. (2000). 12 Op. cit., Wicks, Elliot K. and Mark A. Hall. (2000). 13 Ashmus, Keith. ―Testimony Presented to the House Small Business Committee.‖ March 5, 2003. Council of Smaller Enterprises. http://www.sbhealthequity.org/uploads/cose.pdf. (Accessed November 2009). 14 Op. cit., Merlis, Mark. (2009). 15 Op. cit., Ashmus, Keith. (2009). 16 Op. cit., Wicks, Elliot K. and Mark A. Hall. (2000). 17 California HealthCare Foundation. ―Insurance Markets: What Health Insurance Pools Can and Can‘t Do.‖ November 2005. http://www.chcf.org/topics/healthinsurance/index.cfm?itemID=117082. (Accessed November 2009). 18 Op. cit., Wicks, Elliot K. and Mark A. Hall. (2000). 19 Millard, Steve. ―How To Finance Health Care Reform Is The Wrong Focus.‖ Council of Smaller Enterprises. http://www..cose.org/hcreformopinion/?axAuth=00000034. (Accessed November 2009). 20 Badal, Jaclyne. ―Time for a Checkup?‖ The Wall Street Journal. November 26, 2007. http://online.wsj.com/article/SB119562615010500388.html. (Accessed November 2009). 21 Ibid., Badal, Jaclyne. (2007).

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22 Rosenberg, Stephen N. ―New York‘s Healthpass Purchasing Alliance: Making Coverage Easier for Small Businesses.‖ New York, NY: The Commonwealth Fund. (September 2003). 23 Ibid., Rosenberg, Stephen N. (2003). 24 Op. cit., Rosenberg, Stephen N.. (2003). 25 Op. cit., Rosenberg, Stephen N. (2003). 26 Op. cit., Rosenberg, Stephen N. (2003). 27 Op. cit., Rosenberg, Stephen N. (2003). 28 Op. cit., Rosenberg, Stephen N. (2003). 29 Op. cit., Rosenberg, Stephen N. (2003). 30 Op. cit., Merlis, Mark. (2009). 31 Op. cit., California HealthCare Foundation. (2005). 32 Op. cit., California HealthCare Foundation. (2005). 33 Op. cit., California HealthCare Foundation. (2005). 34 CVS Caremark. ―Buyers Health Care Action Group Selects PharmaCare as Preferred PBM; Company to Provide Services for Up to ½ Million Members.‖ November 4, 2004. http://info.cvscaremark.com/newsroom/press-releases/buyers-health-care-action-group-selects-pharmacare-preferred-pbm-company-pro. (Accessed November 2009). 35 Lyles, Alan, et al. ―Cost and Quality Trends In Direct Contracting Arrangements,‖ Health Affairs. 21: 1. (January/February 2002). 36 Ibid, Lyles, Alan, et al. (2002). 37 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 38 Op. cit., Merlis, Mark. (2009). 39 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 40 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 41 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 42 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 43 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 44 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 45 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 46 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). STRATEGIC INNOVATIONS FOR AFFORDABLE, SUSTAINABLE HEALTH CARE: A Model for Health System Reform: Environmental Scan ALTARUM INSTITUTE January 2011 PAGE 104 SECTION 10 ● PURCHASING POOLS

47 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 48 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 49 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 50 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 51 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 52 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 53 Op. cit., Christianson, Jon B. and Roger Feldman. (2002). 54 Silow-Carroll, Sharon and Tanya Alteras. ―Stretching State Health Care Dollars: Pooled and Evidence-based Pharmaceutical Purchasing.‖ #782. New York, NY: The Commonwealth Fund. (2004). 55 Ibid., Silow-Carroll, Sharon and Tanya Alteras. (2004). 56 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004), and Warn, D. ―Prescription Drugs: High Costs, Tough Choices.‖ Background Brief for A Regional Round Table Discussion, July 12, 2002, Boise, Idaho. (July 2002). 57 Op. cit., Silow-Carroll, Sharon and Tanya Alteras, and D. Warn. (2004/2002). 58 Op. cit., Silow-Carroll, Sharon and Tanya Alteras, and D. Warn. (2004/2002). 59 Op. cit., D. Warn. (2002). 60 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004). 61 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004). 62 Op. cit., Silow-Carroll, Sharon and Tanya Alteras.. (2004). 63 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004). 64 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004). 65 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004). 66 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004). 67 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004). 68 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004). 69 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004). 70 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004). 71 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004). STRATEGIC INNOVATIONS FOR AFFORDABLE, SUSTAINABLE HEALTH CARE: A Model for Health System Reform: Environmental Scan ALTARUM INSTITUTE January 2011 PAGE 105 SECTION 10 ● PURCHASING POOLS

72 Op. cit., Silow-Carroll, Sharon and Tanya Alteras. (2004). 73 Burns, Lawton R. and J. Andrew Lee. ―Hospital Purchasing Alliances: Utilization, Services, and Performance,‖ Health Care Management Review. 33: 3, 203-15. (July-September 2008). 74 Schneller, Eugene. ―The Value of Group Purchasing in the Health Care Supply Chain.‖ White Paper. School of Health Administration and Policy, College of Business at Arizona State University, Tempe, Arizona. (2000). END SECTION 10

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SECTION ● 11 11 SOCIAL NETWORKING AND CONSUMER E-HEALTH

Social Networking and Consumer e-Health – Social networking and e-Health include a variety of Internet-based communications, tools, and aids to help consumers and patients engage and empower themselves in their health and healthcare-related interactions. Recent research by The Pew Charitable Trusts and California Health Care Foundations shows that 74% of American adults go online, 61% of adults look online for health information—and these percentages are increasing for all age and ethnic groups.1 Social networking through the Internet facilitates interactions between people and groups who cannot easily meet in person, due to geographic distance or difficulty identifying needed skills, resources, or other information. In addition to the Internet, social networking can occur through the use of cell phones. Social Networking Web sites allow individuals to 1) construct a public or semipublic profile within a bounded system; 2) articulate a list of other users with whom they share a connection; and 3) view and traverse their list of connections and those made by others within the system.2 General social networking Web sites such as Facebook and My Space have open enrollment that is not based on specific characteristics, activities, or other common attributes of individuals; anyone can join. Health-specific sites typically direct content to specific health conditions and health care services. As a model of direct-to-consumer activity, social networking sites can enable people to use social networks to discuss and ask about health, and find others with the same conditions at the same stage of treatment. Consumer e-Health refers to a broader set of online and electronic tools to help consumers and patients manage their health care. These tools can include consumer information sites, interactive games, tools for patient-provider connectivity, and others. E-Health approaches can be used for managing health choices, budgets, and care that normally is difficult because of the disparate systems, various health plans, different geographic locations, and incomplete information. E-health includes what is often referred to as Health 2.0, defined by the use of social software and its ability to promote collaboration between patients and the rest of the medical industry.3 Few studies have addressed specific intervention characteristics and linked these to impact or effectiveness of these approaches. Methods for defining and measuring effects are developmental though growing as researchers seek to evaluate electronic communication tools. Typically, social networking, media, and e-Health are seen to enhance, but not replace in-person medical interactions.

SOCIAL NETWORKING AND CONSUMER E-HEALTH

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

SOCIAL NETWORKING AND INTERNET HEALTH INFORMATION WEB SITES General Social General social networking sites provide While general sites are used by 39% of Social networking and health information sites expand Networking Sites channels for consumers and patients to individuals who seek health information online, traditional definitions of markets and communities to include share information about health and health few use these sites to search for health care virtual communities that cross geographic markets and other These sites include Facebook, care. information.4 market configurations. My Space, Twitter, and other Studies of impact and effectiveness are limited. general social networking sites.

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Other Comments Individuals of all ages and ethnicities are using general and health-specific social networking sites to search for health information.5

Health-specific social Health-specific social networking sites Most consumers/patients use health-specific Social networking and health information sites expand networking sites provide channels for consumers and sites to search for health information. In addition traditional definitions of markets and communities to include patients to share information about health to seeking health information for themselves, virtual communities that cross geographic markets and other These sites may include and healthcare. individuals also seek information for family market configurations. message boards, chat rooms, members and friends. podcasts, audio and video- Little is known about the impact or effectiveness clips, and other forms of of online social networking or health social media. information sites for health decision making, behavior change, or health outcomes.

Search engines are critical and are used frequently by consumers seeking health information. Exercise and fitness has become the most frequently Other Comments searched for topic, followed by specific diseases; medical treatments and procedures; prescription and over-the-counter drugs; alternative treatments; depression, anxiety, and mental health; and experimental treatments.6

Case Example 1: This site helps to inform and empower Little quantitative data are available, as the Social networking and health information sites expand Patientslikeme® patients through peer sharing of PatientsLikeMe site recently launched. traditional definitions of markets and communities to include information about treatments, symptoms, Through PatientsLikeMe and the ALS community virtual communities that cross geographic markets and other This searchable site – side effects, and outcomes. The site it has been "discovered" that ALS (known as Lou market configurations. www.patientslikeme.com/ provides information and resources on a Gehrig‘s disease or Amyotrophic Lateral allows individuals to record wide range of conditions and treatments Sclerosis) is a multi-system disorder which their symptoms and from various sources posted by the site‘s definitely affects cognition. Another measure of responses to treatment research staff. Forums organized by success is the period that PatientsLikeMe's regimes and share these with condition are available for patients to members stay active. Sixty percent of joiners other community members. connect for online discussions. from one year ago are still active members. The site includes up-to-date resources on conditions and treatments.

Patientslikeme® generates income not from advertising revenue, but from aggregating and selling of the data to life science companies for treatments Other Comments (pharmaceuticals).7 The site has been labeled ―a home for users for whom privacy does not matter.‖8

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case Example 2: Patients Direct offers a web-based This site offers an innovative recruitment tool This site expands traditional markets and approaches for Patients Direct reporting system and seeks to provide that may facilitate recruitment across geographic recruiting participants in studies and trials. Patients Direct notes naturalistic data on safety and efficacy areas. that it ―has developed partnership arrangements with community This web-based system captured directly from patients. It serves pharmacists both individual and across a range of local and Little is known about how use of the site impacts 10 collects Patient Reported pharmaceutical companies and providers, consumer decision making or health outcomes. national companies.‖ Outcomes data online as a and provides a way for patients to make service to pharmaceutical their voices heard. The site also provides companies and other health information on clinical trials that may be care professionals. Patients available to patients. can complete surveys online to provide micro information about diseases, health, drugs, and other medical interventions with friends, families, and communities both locally and globally.9

Social Media and Health These sites provide consumers with a Evidence regarding the effectiveness of social Internet-based and other social media expand reach beyond Information Sites broad array of information and decision media and information sites is limited, and site- traditional market or community areas. tools to help empower and inform health specific. However, media interventions are Sites include consumer and health care choices. generally known to be more effective when decision sites and searchable combined with community and program 11 health information sites interventions. including health blogs, Internet access to community-specific and message boards, health- general health information can lead to increased related chat rooms, posting empowerment and appreciation of information 12 health content online (video technology. or audio), and online patient A recent study using 2005-2007 data for 10,000 support groups. participants showed that people who rely on print media for their health information and those who turn to community organizations tend to do better than web seekers at following a healthy lifestyle. The researchers note that changes in Internet access and telecommuni- cations (e.g., smart phones) are occurring

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? rapidly, and this must be considered in assessing the comparative effectiveness of health communications.13 New technologies and applications are constantly growing and improving functionality. Consumer use of social media and health information sites is also increasing at a rapid pace. Other Comments The Centers for Disease Control and Prevention and the American Cancer Society, among others, have utilized virtual worlds such as www.secondlife.com and are exploring the use of social media to spread the word about health promotion and prevention.14 Case Example 1: This site aims to provide access to up-to- The effectiveness of specific programs and offerings Internet-based and other social media expand reach beyond Medscape date information about medical research through Medscape is often assessed in terms of use traditional market or community areas. and findings as an information source for rates and user success completing CME/CE www.medscape.com is a physicians, other health care professionals, (Continuing Medical Education). health information and social and consumers/patients. network site for physicians and consumers/patients that includes discussions of recent medical research and case studies, and provides access to a network of medical and related resources, multi-media and slide shows, education, and interactive opportunities online.

Medscape describes its offerings as: ―In-depth specialty-focused medical news, CME/CE in engaging formats across 30 or more specialty areas, Other Comments conference coverage from across the globe, free full-text journal articles from 150 or more leading journals, peer-reviewed clinical reference across more than 6,000 topic areas and drug reference tools, complete access to MEDLINE, expert commentary features, discussion forums, and more.‖15

Case Example 2: This site serves as a consumer/patient Downloads of Mayo Clinic podcasts have increased Internet-based and other social media expand reach beyond The Mayo Clinic information portal to assist with health by more than 8,000% since 2005, because of using local market or community areas. knowledge, decision making, and three free social channels.16 www.mayoclinic.com is a empowerment. It includes a personal health comprehensive consumer manager using Microsoft Health Vault, health information site, which enables provision of individualized, searchable by condition, that actionable recommendations developed by Mayo Clinic experts. includes decision tools and STRATEGIC INNOVATIONS FOR AFFORDABLE, SUSTAINABLE HEALTH CARE: A Model for Health System Reform: Environmental Scan ALTARUM INSTITUTE January 2011 PAGE 110 SECTION 11 ● SOCIAL NETWORKING AND CONSUMER E-HEALTH

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? social media channels to promote and increase downloads of its podcasts. The clinic posts podcasts, with video and text, on its blogs. It also leverages a Facebook page, a Twitter account, and a YouTube channel.

Other Comments The Mayo Clinic states: ―More than 3,300 physicians, scientists, and researchers from Mayo Clinic share their expertise to empower you to manage your health.‖ Topics covered include: diseases and conditions, symptoms, drugs and supplements, tests and procedures, and healthy living.

CONSUMER E-HEALTH AND SELF MANAGEMENT TOOLS Games Use of games as an approach to inform and Interactive online health promotion interventions Online games expand reach beyond local market or community educate patients and consumers builds on overall are reported to be more effective in areas. A wide range of interactive the popularity of online games and promoting health-related behavioral change games have been developed expands content to health and health care. outcomes (exercise, weight loss maintenance, to help inform patients about knowledge of asthma treatment, etc.) than conditions such as diabetes, traditional offline approaches.17 Information obesity, mental health, and regarding the efficacy of online approaches on others. long-term behavior outcomes is limited. Few studies have been conducted to assess the impact and effectiveness of online games as a specific health promotion tool. Most online health intervention studies are unable to determine causality and long-term impacts on health.18 However, many games that have been assessed do appear to be helpful and effective interventions.

www.healthgames.org includes surveys and measures that can be used to evaluate games, including neighborhood population health questionnaires. Other Comments The National Network of Libraries of Medicine includes a list of consumer health topics developed for children and teens at: http://nnlm.gov/outreach/consumer/chforkids.html

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Health Games Research— www.healthgamesresearch.org —is a national program sponsored by the Robert Wood Johnson Foundation that funds research to advance the innovation and effectiveness of digital games and game technologies intended to improve health. This site includes a search feature to access games and related resources. Decision Support Tools Decision support tools aim to help There are many guides for consumers to select Decision support tools can be targeted to specific market areas, patients/consumers frame questions, learn health care; however, research that tracks the e.g., for provider choice options, and can expand reach beyond These include online tools to about treatment options, and clarify values application and related consequences of community market areas when options of care and treatment are assist with choice of and preferences. consumer decision support tools is limited. considered. providers, and tools related to Internet Web site ―calculators‖ are Studies generally find report cards can positively specific care and treatment designed to match unique patient influence consumer decision making when the options. information with an underlying evidence- information is easy to understand. based knowledge repository and sources of o Research shows conflicting results regarding potential feedback, e.g., tools for assessing the impact of report cards on quality topics an individual‘s cardiovascular risk, on consumer behavior. potential drug interactions and drug o Tools related to provider choice have shown dosing, and recommendations about improvements in users‘ knowledge, appropriate screening interventions for a satisfaction with decision making, likelihood 19 given patient.‖ of considering alternatives, and selection of Many payers have tools that provide plans that best meet consumers‘ personal consumers with pharmacy pricing: needs and preferences. Pharmacy Price Quote – this tool drills o Controlled trials have shown that decision down to the costs of drugs at a local aids improve knowledge regarding options, pharmacy. Members can look at actual enhance realistic expectations about options, out-of-pocket prescription costs, the reduce patient frustration with decision plan's cost, and the total cost;. Humana making, and stimulate people to take an 21 and RegenceRx enable members to active role in decision making. access the estimated retail price of A 2007 study in California concluded that Web- specific drugs. based decision tools performance varied widely Subimo, based in Chicago, offers and few met all of the key standards for PharmaAdvisor, a Web-based tool that effectiveness and usability. Nearly all fell short helps consumers make decisions about in providing relevant information regarding 22 drug treatment options, both clinically treatment costs. and from a cost perspective, including possible interactions, efficacy, dosage, and how drugs work for certain conditions in side-by-side comparisons.20

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Barriers to use include: Also: Lack of relevant content, e.g., comparative Low literacy levels; information; Lack of trust of information source; Poor design and presentation; and Lack of online access; Other Comments Limited consumer awareness of information. Lack of provider time and training to engage with patients; and Need for reimbursement incentives that reward practitioners for engaging in decision support.23

The Puget Sound Health Alliance consists of employers, unions, doctors, hospitals, health plans, patients, and others who work on constructive ways to improve the value of local health care. The Community Checkup is a report to the public about health care quality and value.24

Case Example 1: This online resource for cancer patients, Little is known about how use of the site impacts Decision support tools can be targeted to specific market areas, www.cancerfacts.com their families, and caregivers provides consumer decision making or health outcomes. e.g., for provider choice options, and can expand reach beyond personalized information via Cancer community market areas when options of care and treatment are Profiler Tools that help people with cancer considered. make informed treatment decisions for an optimal outcome. The site is developed by NexCura, and uses scientific evidence to populate the profilers.

Profilers are available for the following cancers:

Bladder Hodgkin Lymphoma Lung - Non-Small Cell Ovarian Other Comments Breast Kidney Lung - Small Cell Pancreatic Cervical Leukemia - Adult ALL Melanoma Prostate Colorectal Leukemia - Adult AML Multiple Myeloma Testicular Head and Neck Leukemia - Adult CML Non-Hodgkin's Lymphoma Uterine

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Patient-Provider These approaches aim to help improve Patient-physician connectivity has transformed Virtual visits between patients and providers enable Connectivity access and delivery of care, enhance relationships between patients and physicians. communication beyond conventional community/market patient/consumer and provider boundaries and may be especially helpful for patients and A wide range of devices and communication, and empower individuals providers across distances. technologies aim to provide to self-manage their care. patient-provider connectivity, reducing need for many face- to-face visits, improving availability of information, and facilitating access by patients/consumers and physicians.

More than 8 million U.S. adults sent or received email from their physicians in 2008. Other Comments Changes in reimbursement may be needed to encourage virtual connectivity. Case Example1: Patient Health Records provide consumers Research shows: Patient Health Records can be used in all markets, and expand Personal Health Records with online access to their medical records 7% of U.S. adults use PHRs; access to information across providers and distances. and enable individuals to share access to As a result of their PHR, users cite taking steps (PHRs) their medical information with other to improve their own health, knowing more providers. PHRs facilitate access to about their health care, and asking their doctors medical information across providers and questions they would not otherwise have asked; distances. Higher income individuals are more likely to have a PHR, but lower income individuals, those with chronic conditions and those without a college degree, are more likely to experience positive effects of having their information accessible online; and Most individuals with PHRs are not overly concerned with privacy issues.25

Other Comments 40% of individuals without a PHR express interest in having one.26

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case Example 2: FONEMED® uses communications For $4 per month, Jitterbug LiveNurse uses FONEMED® can be used in most if not all markets. FONEMED® technology to provide individuals with 24- FONEMED®, to provide 24-hour unlimited access hour telephone or Web-based access to to registered nurses; people can speak to an medical advice, information, products, and experienced, registered nurse 24 hours a day, 7 days services. They provide outsourced nurse triage a week; there is 24-hour access to a pre-recorded services and qualified partners with tools, health library; and the personal health history is technology, protocols, and know-how to updated each time a call is made.28 operate proprietary Medical Call Centers.27

A Health Information Center is a powerful, proven strategy to lower costs, improve access, and leverage clinical service and marketing programs. Other Comments Potential clients include government agencies, hospitals, clinics, insurance companies, and health maintenance organizations, as well as private companies and individuals.

Mobile Health: Smart Cell/smart phone applications aim to Research, albeit limited and with small sample Smart phone applications can be used in all market types and Phone Applications. provide information to assist sizes, suggests that online systems are superior expand applications beyond convention local markets. patients/consumers and providers in to traditional online interventions in their ability Smart phone applications are managing health conditions. These mobile to influence health behaviors.29 available to help people track devices and applications also facilitate in- A systematic review of evidence regarding smart weight loss, medication dosing, the-moment feedback and information phone technologies shows: and manage conditions such as capture regarding symptoms and o Frequency of prompts affects results; diabetes and others. Most use responses. prompts and text message o Medium used to communicate prompts did reminders. not matter; o Tailoring prompts produced positive results; and o More frequent prompts produced more positive results.30 Other Comments These technologies present a cost effective way to implement behavior change.

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? Prototype Case Example 1: STEALTH HEALTH is designed to increase STEALTH HEALTH is in prototype design. STEALTH HEALTH is designed for national application. STEALTH HEALTH youth activity, reduce obesity, and increase learning of positive healthy behaviors. It is a social networking application designed around improving young people‘s health. It is a project funded by the U.S. Department of Agriculture.31

STEALTHHEALTH reports that is aim is to develop a simple, customizable software application ("widget"), integrating communication (MySpace, Other Comments Facebook, instant messaging) and location-based (GPS, GIS, imagery) technologies with informal education (pop up nutrition and health messages), designed to promote increased physical activity and improved nutrition knowledge and behavior in youth. Patient-Provider Connectivity and Care Management Case Example 1: This cell phone application allows access AllOne MobileSM is an application that can be used across and AllOne MobileSM to consumers‘ personal health and within markets with Internet connectivity. insurance information. It is used in conjunction with MedFlash™, a product offered by Connectyx, which stores personal health and lifestyle information on a portable flash drive and in an online personal health record. The MedFlash Web site allows users to maintain and update their information and upload it to the flash drive. MedFlash can be worn as a bracelet or used as a key chain. The combined MedFlash and AllOne Mobile tools allow customers‘ health information to be viewed, managed, and shared with trusted health care partners using the owner‘s cell phone. 32

Other Comments AllOne Mobile was one of the highest profile mHealth services to date. The dissolution of its partnership with technology partner Diversinet became apparent as they began renegotiations in December 2009.

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case Example 2: LifeWIRE is a mobile, two-way interactive Studies are underway to test the impact and LifeWIRE is an application that can be used across and within LifeWIRE e-health management solution that allows effectiveness of LifeWIRE as used with several markets with Internet connectivity. individuals and their providers to use text clinical conditions. messaging, email or IVR-based interactions which are customized to track, monitor, and engage users to improve their health status or achieve other important health goals. LifeWIRE‘s platform provides a tool for users to manage their own health, and for providers and care managers to manage patients through having them respond to personalized reminders and motivations.33

Other Comments Altarum Institute has adapted and is currently testing LifeWIRE as a behavioral health adjunct to therapy.

Case Example 3: Applied Nanodetectors Phone Application The phone can also detect lung cancer, bad breath, Applied Nanodetectors Phone Application is an application that Applied Nanodetectors is a cell phone system that, when used in types of food poisoning and blood-alcohol levels. can be used across and within markets with Internet connectivity. conjunction with a breathalyzer, detects The phone can inform its user‘s doctor of its Phone Application health problems such as diabetes and findings. cancer by reading the levels of gasses such as nitrogen, carbon dioxide, and ammonia.34

A growing number of organizations are researching or releasing modified mobile phones and mobile apps that diagnose serious health problems Other Comments and disease patterns.

Case Example 4: BeWell Mobile Technology was founded San Mateo Medical Center distributed mobile BeWell Mobile Technology is an application that can be used BeWell Mobile Technology in 2004. It provides patient engagement phones with customized disease management across and within markets with Internet connectivity. software for the health care industry and software to young asthma patients, allowing them to medical research community. The software communicate with and receive real-time feedback is used in cell phones, wireless data from providers on at least a daily basis. The networks, and the Internet to collect valid communication focuses on how to better manage data and to help patients manage their asthma on an ongoing basis, with the goal of health. The software incorporates self- reducing exacerbations that might lead to costly monitoring via cell phones. Asthma and acute episodes. The initiative enhanced compliance diabetes are two of the most significant with the daily diary and with medication regimens, conditions being addressed by BeWell which, in turn, led to better patient outcomes, less Mobile Technology. Patients have access use of rescue medications, and fewer emergency

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? to personalized information that helps department visits and missed school days.36 35 them stay on track with their regimen. The program received a patient satisfaction score of 3.8 out of 4. Program has reduced HbA1c by 0.91 points for patients with starting HbA1c between 8% and 9%; Program has reduced HbA1c by 2.22 points for patients with HbA1c >9%; and Blood sugar range (low to high) was lowered by 50 mg/dl between first month of service and the last month of service.37

Other Comments Patient engagement is the key to self management and better medical outcomes, particularly for chronic conditions such as asthma and diabetes. Organizational Initiatives Case Example 1: mHealth Initiative, Inc. is a not-for-profit The mHealth field promotes technology integration mHealth Initiative is based in Massachusetts, but likely could be mHealth Initiative Massachusetts organization that uses cell in the health sector to promote healthy lifestyles, scaled to national distribution. phones and other mobile devices as health improve decision-making by patients and providers, care clinician tools. mDevices allow access and enhance health care quality by improving access to the Internet, medical information, to medical and health information and facilitating documentation systems, and decision communication in remote areas. support guidance for care. Participatory Health is a network of healthy people, patients, wellness and care providers, payers and researcher as active participants in a transparent health care system, allowing 24/7 communication patterns between healthcare participants, including observations of daily living.38

SECTION 11 ● ENDNOTES

1 Fox, Susannah and Sydney Jones. ―The Social Life of Health Information.‖ Washington, DC: Pew Internet and American Life Project. (June 11, 2009). 2 Boyd, Danah M. and Nicole B. Ellison. ―Social Network Sites: Definition, History, and Scholarship,‖ Journal of Computer-Mediated Communication. 13: 1 (2007).

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3 Health 2 Con. http://www.health2con.com/about/defining-health-2-0/. (Accessed April 5, 2010). 4 Op. cit., Fox, Susannah and Sydney Jones. (2009). 5 Op. cit., Fox, Susannah and Sydney Jones. (2009). 6 Op. cit., Fox, Susannah and Sydney Jones. (2009). 7 Patientslikeme®. http://www.patientslikeme.com/. (Accessed April 2, 2010). 8 Kay Center Cases E-Health Learning Objects. http://kcc.kaycentercases.org/index.php?content=cases&study=plm§ion=background. (Accessed April 27, 2010). 9 Patients Direct. http://www.patientsdirect.org/. (Accessed April 2, 2010). 10 Ibid., Patients Direct. (2010). 11 DeJong, William, PhD Lecturer, Harvard School of Public Health, Boston, MA. 12 Masi, Christopher, et al. ―Internet Access and Empowerment: A Community-based Health Initiative,‖ Journal of General Internal Medicine. 18. (2003). 13 Fauntleroy, Glenda. ―Seeking Health Info? Print Media Readers Make Healthier Choices.‖ Health Behavior News Service, Center for Advancing Health, citing Nicole Redmond, M.D., American Journal of Preventive Medicine. (June 2010). http://www.cfah.org/hbns/archives/getDocument.cfm?documentID=22249. (Accessed May 5, 2010). 14 Landro, Laura. ―Social Networking Comes to Health Care: Online Tools Give Patients Better Access to Information And Help Build Communities.‖ The Wall Street Journal, The Informed Patient. December 27, 2008. http://online.wsj.com/article/SB116717686202159961.html. (Accessed April 26, 2010). 15 Medscape. http://www.medscape.com. (Accessed April 27, 2010). 16 Mayo Clinic. http://www.mayoclinic.org/podcasts/. (Accessed April 2, 2010). 17 Duffett-Leger, Linda and Joanna Lumsden. ―Interactive Online Health Promotion Interventions: A Health Check.‖ National Research Council of Canada (NRC 49910). Proceedings of the 2008 IEEE International Symposium on Technology & Society. Fredericton, New Brunswick, Canada. June 26-28, 2008. http://www.infosihat.gov.my/artikelHP/bahanrujukan/HEandICT/Interactive%20Online%20Health%20Promotion.pdf. (Accessed April 30, 2010). 18 Ibid., Duffett-Leger, Linda and Joanna Lumsden. (2008). 19 Jadad, Alejandro R., et al. ―The Internet and Evidence-based Decisionmaking: A Needed Synergy for Efficient Knowledge Management in Health Care,‖ Journal de l'Association Médicale Canadienne. 162: 3 (2000). 20 Edlin, Mari. ―Pharmacy Transparency Tools Help Members Make Wise Drug Decisions.‖ Managed Healthcare Executive (15:1). November 2005. 21 Shaller Consulting. ―Consumers in Health Care: Creating Decision-Support Tools that Work.‖ California Health Care Foundation. http://www.chcf.org/publications/2006/06/consumers-in-health- care-creating-decisionsupport-tools-that-work. (Accessed April 30, 2010). 22 California HealthCare Foundation. ―Evaluation of Consumer Decision Support Tools: Helping People Make Health Care Decisions.‖ September 2007. http://www.chcf.org/topics/healthinsurance/index.cfm?itemID=133463. (Accessed March 22, 2010).

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23 California HealthCare Foundation. ―Consumers and Health Information Technology: A National Survey.‖ April 2010. http://www.chcf.org/publications/2010/04/consumers-and-health-information- technology-a-national-survey. (Accessed April 30, 2010). 24 Puget Sound Health Alliance. www.pugetsoundhealthalliance.org and www.WACommunityCheckup.org. (Accessed March 22, 2010). 25 Op. cit., California Health Care Foundation. (April 2010). 26 Op. cit., California Health Care Foundation. (April 2010). 27 FONEMED. http://fonemed.com/. (Accessed April 6, 2010). 28 Jitterbug. http://www.jitterbug.com/ServicesStore/LiveNurse.aspx. (Accessed April 6, 2010). 29 Op. cit., Duffett-Leger, Linda and Joanna Lumsden. (2008). 30 Wantland, Dean, et al. ―Periodic Prompts and Reminders in Health Promotion and Health Behavior Interventions,‖ Journal of Medical Internet Research. 11: 2. (April-June 2009). 31 Published on behalf of University of Arizona College of Medicine. http://www.reeis.usda.gov/web/crisprojectpages/216814.html. (Accessed April 27, 2010). 32 DocStoc. http://www.docstoc.com/docs/22504450/AllOne-Mobile-Cell-Phone-Application-Expands-Capabilities-of. (Accessed April 6, 2010). 33 LifeWIRE. http://www.lifewire.ca/. (Accessed April 27, 2010). 34 L'Atelier North America. http://www.atelier-us.com/mobile-wireless/article/mobile-health-cell-phones-as-medical. (Accessed April 5, 2010). 35 Be Well Mobile. http://www.bewellmobile.com/. (Accessed April 6, 2010). 36 AHRQ Innovations Exchange. http://www.innovations.ahrq.gov/content.aspx?id=1690. (Accessed April 27, 2010). 37 Kaiser Permanente presentation to Disease Management Association of America. http://www.dmaa.org/theforum08/presentations/Boland.pdf. (Accessed April 27, 2010). 38 mHealth Initiative, Inc. http://www.mobih.org/. (Accessed April 6, 2010).

END SECTION 11

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SECTION ● 12 12 TELEMEDICINE

Although the definitions vary with the source, remote medicine, or telemedicine, as it is more commonly called, has been generally defined by the Institute of Medicine as ―the use of electronic information and communication technologies to provide and support health care when distance separates the participants.‖1 In more recent years, the American Telemedicine Association (ATA) has further defined telemedicine as ―the use of medical information exchanged from one site to another via electronic communications to improve a patient's health.‖2 Delivery mechanisms for telemedicine may include, but are not limited to, networked programs that link tertiary care hospitals and clinics with outlying clinics and community health centers; point-to-point connections through private networks that are used by hospitals and clinics that deliver services directly or contract out specialty services at ambulatory care sites; or primary or specialty care to the home connections or home to monitoring center links connecting primary care providers, specialists, and nurses to their patients via phone- video services from the office and vice versa.3

TELEMEDICINE

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

VIPs seek to increase capacity of, for Research demonstrates that quality of care is VIPs appear applicable to any geographic market. They may VIRTUAL INTEGRATED example, small fee-for-service practices to improved when delivered by interdisciplinary be an especially helpful tool in areas where provider teams are PRACTICES (VIPS) offer multidisciplinary team care for teams, particularly care provided to those with at separate locations. 4, 5 patients with complex care needs. multiple, chronic health problems. VIPs appear applicable in and across multiple health care VIPs alleviate potential patient frustration Research evidence of VIP impact at a systems settings (i.e., hospitals, community health centers, private concerning whether their caregivers are in level is still limited and warrants further practices, etc.), but may be particularly applicable for smaller, touch with each other in managing their investigation, but results from model programs resource-light primary care practices. thus far include: medical problems and needs. VIPs appear applicable to many patient populations, but may o Increased patient satisfaction with care; and be particularly applicable for those with multiple, chronic VIPs coordinate patient care of team health problems, including the elderly. members who do not share office facilities o Increased patient understanding about medications and disease management.6 and reduce the obstacles of having clinicians meet in person. More specifically, in a Rush University Medical Center study of four practices using the VIP VIPs target reduction in crisis intervention model, among patients with poor physical and acute care management. functioning, those who were not treated in VIP practices were far more likely to use the emergency room (ER). Their usage of the ER was twice that of those in VIP practices.7

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TELEMEDICINE

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

As members of a VIP team traditionally already bill for the care they provide, the practice can be cost-neutral for providers.8 Versions of VIPs have also been developed for purposes other than patient care. For example, virtual ―alliances‖ have been formed to lessen the Other Comments administrative burden on providers where offsite partners manage for physicians medical practice financial transactions such as managed care contracting, as well as electronic medical records and payments.9 Case example: VIPs seek to increase capacity of, for Both the Hartford Foundation and Rush report the This model appears applicable to any geographic market. In John A. Hartford example, small fee-for-service practices to VIP as a successful promising practice, but the particular, it is applicable in smaller, resource-light primary care Foundation & Rush offer multidisciplinary team care for patients empirical evidence of the Rush VIP has not yet been practices and larger hospital partnerships. with complex care needs. reported in peer-reviewed research. University Medical Center 10, 11 In particular, this model coordinates patient VIP care of team members who do not share To help bridge the gap between office facilities and reduces the obstacles of the growing need for high- having clinicians meet in person. quality chronic care and the present fragmented, acute care- oriented delivery system, the John A. Hartford Foundation (Hartford) has made a long-term commitment to fund the creation and dissemination of new conceptual models of chronic care for the nation's older adult population.

Rather than hiring additional staff, the VIP concept calls for primary care physicians to identify practitioners in nearby health care settings or community organizations and develop working relationships among them. Teams are built among providers in the community who are seeing the same patients and addressing the same issues around aging and chronic disease management, but who don‘t otherwise interact with one another. Communication among these team members occurs primarily though e-mail, voicemail, and Internet-based medical informatics systems to Other Comments facilitate efficient teamwork. The VIP process begins with convening and training the virtual team members. The team members discuss clinical issues that they can work on together. For example, the physician may identify diabetes education as an area that he or she lacks the resources to comprehensively provide. The team can also utilize a toolkit of activities that were developed by the Rush team to facilitate the team process. The toolkits provide guidance on four improvement strategies: planned communications, process standardization, patient self-management, and group activities.

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TELEMEDICINE

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

eICUs allow a single specialist to There is extensive data showing improved ICU eICUs are applicable to rural and other areas. They may be ELECTRONIC INTENSIVE simultaneously monitor multiple patients outcomes with daily traditional ICU physician especially helpful where health care resources are limited. 12 CARE UNITS (EICUS) on a continuous basis. participation in the care of critically ill patients. eICUs appear applicable to hospital networks or hospitals with eICUs counter shortages of ICU The research evidence of eICU impact thus far ICUs. A company/facility‘s ability to invest in significant physicians (a.k.a. intensivists, nurses, and includes: eICU costs up front would be an important factor as to if and ancillary staff.) o Reduction in mortality rates, when an eICU could be implemented. eICUs expand the geographic range of o Reduction in length of stay, ICU physicians. o Reduction in ICU complications, and o Reduction in cost (by most estimates). 13,14, 15 The severity-adjusted hospital mortality rates over a 2-year period were 9.6% for 185,464 patients at 156 hospitals with a VISICU16 eICU Program, compared to the national hospital mortality rate of 13.5%. (The 29% reduction in hospital mortality translates to 7,233 lives saved in this sample alone.)17 Phillips Healthcare-VISICU reports decreased severity-adjusted mortality rates with eICUs. For example, they report a 63% reduction in pre- and post-data over a 3-year period.18 Less than 6,000 intensivists are actively practicing in the U.S. and only 13% of ICU patients receive dedicated intensivist care.19 While significant data support positive patient outcomes, a reported barrier to eICUs has been skepticism among providers. For example, according to a University of Texas-Memorial Hermann Center for Healthcare Quality and Safety some providers: o Worry about the effect on their relationships with patients and that it might adversely affect care; and Other Comments o Dislike someone ―looking over their shoulder all the time‖ and feel that constant, occasionally unnecessary reminders from remote clinicians ―bother their workflow.‖20 This lack of acceptance may make it difficult to assess the impact of telemedicine on patients who are less sick, but have much to gain. Redefining the patient-doctor relationship in the light of eICU technology may be required.21

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Case example: This model is particularly strong in Sutter Health‘s return on investment includes an The Sutter Health case shows that a company or facility‘s ability Sutter Health22 countering shortages of ICU physicians estimated 425 sepsis-related patient deaths to invest in significant up front eICU costs is an important factor (a.k.a. intensivists), nurses, and ancillary prevented; $2.6 million in treatment savings; and a in implementing an eICU. To combat the bacterial blood staff. reduction in ventilator-associated pneumonia from infection sepsis, Sutter 37 to 8 (from 2005 to 2006). Health, a Sacramento, California-based network of 26 not-for-profit hospitals and physician organizations serving 100 communities in Northern California and one affiliate in Hawaii, implemented a set of standard sepsis screening and treatment processes. In 2007, Sutter implemented eICUs in all facilities to enhance sepsis monitoring. The system includes video camera feeds from each ICU patient room and a system that sends patients’ vital signs to eICU computer screens monitored by doctors and nurses.

Other Comments The Sutter Health capital investment is reported to be $25 million. The cost includes VISICU servers and eICU software.

These interventions allow patients and Remote and telemedicine consultations and monitoring may be GENERAL RURAL providers in rural locations access to a wider applicable to a number of geographic areas and patient PATIENT REMOTE AND spectrum of care and consultants. populations. TELE MEDICINE These interventions counter geographic INTERVENTIONS maldistribution of clients and maldistribu- tion of certain types of specialists/facilities. Provide patients in rural locations better continuity and longevity with relocated providers.

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TELEMEDICINE

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

A growing number of varied remote and telemedicine interventions and programs designed to increase access to quality care for patients exist. Access to a wider variety of services for patients in rural locations can be improved with the utilization of remote and telemedicine consultations and monitoring. While these interventions can successfully bridge the gap between patients and experienced specialists to whom they might not Other Comments otherwise have access, the rural telemedicine literature also illustrates several considerations for further enhancement, for example: o Assuring the availability of a broadband communication infrastructure to all sectors of society, o Dedication of staff to telemedicine delivery, and o Allocation of resources to evaluate weaknesses and then correct those areas.23 24 Case example: In particular, this model allows patients The Pooled Analysis of the STRoKE DOC and Remote and telemedicine consultations and monitoring may be Mayo Clinic Hospital and providers in rural locations access to a STRoKE DOC-AZ Telemedicine Trials supports applicable to a number of geographic areas and patient the STARR hypothesis that telemedicine Stroke Telemedicine for wider spectrum of care and consultants. populations, but are widely investigated and used for these rural evaluation of stroke patients results in more populations and areas. Arizona Rural Residents accurate diagnoses, better emergency decision- (STARR)25 making, fewer complications, and encouraging long-term outcomes. Funded in part by the Arizona Results of the 5-year study showed that the correct Department of Health emergency stroke treatment decision-making was Services, the Mayo Clinic in made 96% of the time with the audio/video Arizona is organizing a new telemedicine technology, compared with 83% for network to bring stroke telephone only. Importantly, diagnosis by expertise to rural residents telemedicine means that use of clot-busting through telemedicine consults medications for stroke can be increased to 29%, with hospital-based providers. noting that one in three acute stroke patients is able to receive disability-reducing emergency clot-busting medications. Previously, fewer than 5% of patients in rural communities had access to such treatments.

The aim of the network — STARR — is to give rural Arizona residents who suffer a stroke access to the latest stroke care, including clot-dissolving therapies. The program connects rural hospital emergency rooms with stroke specialists at the Mayo Clinic in Phoenix via telemedicine. Using a Other Comments digital video camera and Internet telecommunications, vascular neurologists at the Mayo Clinic can quickly perform live, real-time audiovisual consultations on patients who have suffered acute strokes, increasing the likelihood that clot-dissolving therapies (thrombolytics) can be delivered in time to reduce stroke disability. STARR operates on a hub-and-spoke system.3 The Mayo Clinic Hospital is a primary stroke center and telemedicine hub serving Copper Queen, Kingman, La Paz, Verde Valley, and Yuma regional medical centers.

3 http://www.mayoclinic.org/stroke-telemedicine-az/hub-spoke.html STRATEGIC INNOVATIONS FOR AFFORDABLE, SUSTAINABLE HEALTH CARE: A Model for Health System Reform: Environmental Scan ALTARUM INSTITUTE January 2011 PAGE 125 SECTION 12 ● TELEMEDICINE

SECTION 12 ● ENDNOTES

1 Fishman, D.J. ―Telemedicine: Bringing the Specialist to the Patient,‖ Nursing Management. 28: 7, 30-32. (1997). 2 American Telemedicine Association. http://www.americantelemed.org. (Accessed May 12, 2010). 3 Ibid., American Telemedicine Association. (2010). 4 Rothschild, Steven K. and Stanley Lapidos. ―Virtual Integrated Practice: Integrating Teams and Technology to Manage Chronic Disease in Primary Care,‖ Journal of Medical Systems. 27: 1, 85- 93. (2003). 5 Clark, Phillip G., Donald L. Spence and Judy L. Sheehan. ―A Service/Learning Model for Interdisciplinary Team Work in Health and Aging,‖ Gerontology & Geriatrics Education. 6: 4, 316. (June 1987). 6 The John A. Hartford Foundation. Geriatric Interdisciplinary Teams in Practice. http://www.jhartfound.org/ar2007html/introduction.html. (Accessed May 25, 2010). 7 Ibid., The John A. Hartford Foundation. (2010). 8 Op. cit., The John A. Hartford Foundation. (2010). 9 ―ARM Installs First Virtual Integrated Practice Solution at DuPage Family Medicine,‖ Business Wire. (April 23, 2001). http://www.allbusiness.com/company-activities- management/operations/6063160-1.html. (Accessed May 26, 2010). 10 Op. cit., The John A. Hartford Foundation. (2010). 11 Rush University Medical Center: Virtual Integrated Practice. http://www.rush.edu/professionals/vip/. (Accessed May 12, 2010). 12 Groves, Robert H., Barry W. Holcomb and Marshall L. Smith. ―Intensive Care Telemedicine: Evaluating a Model for Proactive Remote Monitoring and Intervention in the Critical Care Setting,‖ Studies in Health Technology and Informatics. 131, 131-146. (2008). 13 Ibid., Groves, Robert H., Barry W. Holcomb and Marshall L. Smith. (2008). 14 ―Data from 185,000 ICU Admissions Show Significant Reduction in Mortality.‖ PRNewswire. May 20, 2008. http://multivu.prnewswire.com/mnr/visicu/33159/. (Accessed May 25, 2010). 15 Hoffman, Thomas. ―Saving Lives via Video.‖ Computer World. June 25, 2007. 16 Footnote: VISICU, Inc. is the leading provider of clinical information technology systems that enable critical care medical staff to actively monitor patients in hospital ICUs from remote locations. In February 2008, VISICU was acquired by the (Phillips) Healthcare business of Royal Phillips Electronics of the Netherlands, a diversified health and well-being company focusing on improving people‘s lives through timely innovations. 17 Ibid., Hoffman, Thomas. (2007). 18 Phillips VISICU: eICU Program. http://www.healthcare.philips.com/main/products/patient_monitoring/products/eicu/index.wpd. (Accessed May 26, 2010). 19 Seeman, Elaine D. and David A. Rosenthal. ―Electronic Intensive Care: A Technical Solution to the Intensivist Shortage,‖ Proceedings of the Academy of Healthcare Management. 1: 1, 13-17. 20 Chen, Pauline W. ―Are Doctors Ready for Virtual Visits?‖ New York Times. January 7, 2010.

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21 Ibid., Chen, Pauline W. (2010). 22 Op. cit., Hoffman, Thomas. (2007). 23 Darkins, Adam and Jay H. Sanders. ―Remote Patient Monitoring in Home Healthcare: Lessons Learned from Advanced Users,‖ Journal of Management & Marketing in Healthcare. 2: 3, 238 -252. (2009). 24 Whitten, Pamela and Inez Adams.―Success and Failure: A Case Study of Two Rural Telemedicine Projects,‖ Journal of Telemedicine and Telecare. 9: 3, 125-129. (2003). 25 Mayo Clinic: Stroke Telemedicine Network in Arizona. http://www.mayoclinic.org/stroke-telemedicine-az/. (Accessed May 17, 2010).

END SECTION 12

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SECTION ● 13 13 VALUE-BASED BENEFIT DESIGN

Value-Based Benefit Design refers to the use of health plan incentives to encourage enrollee adoption of one or more of the following: appropriate use of high-value services, including certain prescription drugs and preventive services; adoption of healthy lifestyles, such as smoking cessation or increased physical activity; and use of high-performance providers who use evidence-based treatment guidelines. Enrollee incentives can include rewards, reduced premium share, adjustments to deductible and co-pay levels, and contributions to fund-based plans, such as Health Savings Accounts.1 Value-based benefit design may be one strategy used as part of purchasers‘ value-based purchasing. While research shows that financial incentives can influence health related behaviors, cost of services, impacts of service use, and compliance rates, few studies have addressed these factors in relation to value-based benefit designs. Value-based benefit designs are intended to increase the likelihood that patients will comply with recommended treatment plans and engage in healthy behaviors. In turn, healthier people typically have lower health care costs. Patients with specific chronic conditions who maintain treatment regimens have also shown to demonstrate lower overall health care costs.2 Value-based benefit designs may also increase costs of care in pursuit of quality enhancements. Employers are cautioned not to adopt value-based benefits as a cost-saving strategy, but rather to increase value for the health care dollar.3 Return on Investment (ROI) is typically assessed by including both direct and indirect costs. According to the National Business Coalition on Health, ―ROI is determined by assessing costs to the purchaser of a) reduced co-pays or other financial incentives, and b) any increased utilization that results from the incentives. It then compares these costs to reductions in medical care costs that may occur as a result of increased treatment adherence.‖4 The time frame for demonstrating ROI is important to purchasers, as results may occur over time—within or beyond an enrollee‘s engagement with the employer. Evidence is limited regarding ROI associated with different benefit designs, as impact differs according to different conditions and contexts.

VALUE-BASED BENEFIT DESIGN INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Interventions seek to identify individuals Evidence, while limited, shows considerable variation These programs are applicable across market types. ROI TARGETED INCENTIVES at risk for specific conditions, high rates in impact across program types, conditions, and is most likely to be realized by employers with a stable, of utilization, and cost—and prevent or populations. Savings tend to accrue over time. long-term employee base, as programs may take time Target Incentives are better manage these conditions, Few comparative studies or trials have been (some advise at least two years post implementation) to directed to specific adherence, treatment, and cost. achieve results.5 enrollees based on their conducted of such interventions, many of which have been implemented with little or no evidence base. diagnosis, e.g., targeting initiatives for anti- hypertensive medications to limit co-pays to members with known hypertension or targeting participation in

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VALUE-BASED BENEFIT DESIGN INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? disease management or health promotion programs to members with known conditions or risk factors.

Programs that target participation often involve multiple interventions to address or prevent one or more specific conditions. Additionally, financial and other incentives may be offered for participation, and/or achieving specific outcomes, e.g., improved treatment adherence, management of chronic conditions, or behavior changes. It is important to coordinate across programs and vendors to track participation and Other Comments intervention impacts. Often, it is difficult to assess the relative impact of specific interventions and incentives—especially when multiple approaches are used. Many hybrid, mixed models have been implemented, including diverse components, with varying degrees of impact. Interventions seek to encourage Evidence of effects is mixed. A recent review of These approaches can be used in all types of markets. TARGETED HEALTH participation of high-risk employees in literature by Pacific Business Group on Health suggests: However, impact is likely to be greatest in settings with PROMOTION/ DISEASE health promotion/disease management Unhealthy behaviors are associated with higher large employee/ member groups with sophisticated data MANAGEMENT programs to reduce health care costs and health care costs; capabilities and highly targeted interventions. increase workforce productivity. Health promotion programs can be effective in These include a broad range reducing risks for targeted populations; of programs and Reducing health risks can reduce health care costs interventions, from smoking and reduce absenteeism; cessation and wellness The strength of the relationship between risky health programs to evidence- behavior and health costs/absenteeism is greater for based management of some behaviors than for others; and chronic conditions such as The effectiveness of programs designed to improve diabetes and asthma. health behavior also varies, based on the types of behavior change sought and the methods used to effect that behavior change.6 Careful selection of programs and targeting of individuals are key to achieving savings and clinical success. Health promotion and disease prevention programs do not necessarily reduce the costs of care—and in some cases, may increase overall costs to the employer. A recent review reports that cost offsets do occur, especially among those with chronic diseases. Studies have also shown that decreases in Other Comments prescription drug spending resulting from patient co-pays can lead to increases in utilization of other services, e.g., hospital, ER visits, etc. Offsets tend to be higher in targeted populations with chronic diagnoses.7 Several sources identify the need for sophisticated data systems to identify high value services, specific patients using them, and compliance.

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VALUE-BASED BENEFIT DESIGN INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

This approach intends to remove Financial impact depends on the level and precision of This approach appears to be applicable across market TARGETED CO-PAYS financial barriers to medications and clinical targeting and the extent of changes in co- types. services with the expectation of raising payments. Interventions that are carefully targeted are These incentives (for visits, compliance and avoiding more costly most likely to generate lower program costs. 8 medication, etc.) may services, such as hospitalization. reduce or eliminate co- payments that can serve as barriers to employee utilization of appropriate care for specific conditions. This approach typically targets high-cost chronic conditions such as diabetes or hypertension where appropriate treatment and management have been established.

Other Comments Considerations noted above for other value-based design features are also considerations for targeted co-pays.

This approach is available to all Non-targeted incentives are typically less effective than These designs can be applied across market types and NON-TARGETED employees/members regardless of health targeted incentives, and program costs are greater as employer settings. INCENTIVES or risk status. more employees/members‘ participate—including those for whom benefit may be marginal. However, some These include designs interventions may provide both value and savings. available to all enrollees regardless of diagnosis.

Non-targeted incentives do not require as sophisticated data systems and analytics as targeted programs (above), but purchasers/employers Other Comments should be careful in selecting specific interventions, given the potential cost implications.

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VALUE-BASED BENEFIT DESIGN INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

This approach provides direct incentives Preferred provider/supplier approaches have This approach can be applied at the local market level, but PREFERRED for employees to select providers based demonstrated effectiveness in most settings. can also expand market reach to regional, national, or PROVIDER/SUPPLIER on quality and cost effectiveness. international providers. Preferred provider and supplier approaches encourage or limit benefit choices to lower cost, high quality providers.

Application of preferred provider/supplier approaches can reduce purchasers‘ costs in all markets, including high-cost markets, if market parameters Other Comments are expanded to include high-quality providers in less costly markets outside the local area. One example is medical tourism.

Value-based benefit programs can take A limited number of studies have been conducted to Program applications and approaches can be used across MODEL PROGRAMS many forms targeted to the assess the effectiveness of value-based benefit designs. market types, and are likely to comprise different AND HYBRID employee/member population and Effectiveness depends on the particular combination of components in different markets. APPLICATIONS purchaser/payer requirements. incentives and approaches in relation to employee/member health status and risk, and the These programs usually appropriate targeting of benefits. include combinations of value-based design features and approaches.

Most model programs include several program components and features, making it difficult to assess the specific impact of individual interventions. Other Comments It is important to consider utilization across services to assess impact. Most purchasers also assess productivity, including absenteeism and disability costs, in considering ROI.

Case Example: This is a hybrid model that pairs diabetics The City of Asheville is reported to have achieved a This approach appears to be applicable across markets 9 with pharmacy students for health 30% reduction in sick days for diabetics who received with available pharmacy students for coaching, as applied City of Asheville, NC education and coaching support services, counseling support, compared to those who received with a long-term employee population. and waives medication and office co- only written educational materials. pays. Free medications and testing Another Asheville initiative addressed asthma.10 For equipment were provided for diabetics this program, co-pays were waived for patients with who attend educational seminars. asthma. Patients were also provided with information for self-care. Regular one-on-one meetings were held with asthma educators. Over the 5-year-period, $584,307 in direct and indirect costs were saved. Annual percentage of participants who visited the

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VALUE-BASED BENEFIT DESIGN INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? emergency department decreased from 9.9% to 1.3%. Participants with an asthma action plan increased from 63% to 99%. Participants were six times less likely to go to the emergency department for an asthma-related event. Annual percentage of participants requiring hospitalization decreased from 4% to 1.9%. Studies have not addressed the extent to which these results can be replicated in other settings.

This program was assessed through EMPOWER, a Case Example: Similar to the Asheville model, this randomized control study of diabetes management. City of Springfield, OR11 program was undertaken to address the rising cost of diabetes while lowering Clinical results showed dramatic improvement: treatment cost trends. Hemoglobin A1C levels in the control group dropped 30% in the control and 50% in the intervention group. HbA1C levels remained unchanged in the control group, improved from 46% to 63% in the intervention group. Productivity, measured as average sick leave, increased 2.7 hours in the control group, but decreased by 15.3 hours in the intervention group.

This approach was based on the Asheville community-based model. The City paired with its pharmacy school. Eligible employees with a diagnosis of Type I or Type II diabetes were enrolled and randomized into control and intervention groups. Clinical data were collected at the onset of the program. Co-pays were waived for all participants for medications and visits related to diabetes control. Educational materials (American Diabetes Other Comments Association approved) were provided to control group enrollees. Face-to-face consultations with pharmacists were provided to the intervention group. Clinical, financial, and productivity outcomes were tracked over time. Consultations with the pharmacist were required at least once per quarter.

Case Example: This value-based design was started in 2004 Hannaford reports improvements in diabetes biometrics This example demonstrates the influence purchasers can 12 to address incentives for selecting top- and has decreased risk of heart attacks, and increased have in moving market practice. Hannaford Brothers quality providers. In 2008, it expanded to cost savings through incentives for choosing low-cost address non-invasive surgery. providers.

This program promotes use of top tier providers, reduced co-pays for specified disease states, provides healthy behavior credits, tracks biometric outcome data for patients and providers, and offers incentives for using particular providers for selected procedures. The largest private employer in Other Comments Maine, Hannaford‘s push for less invasive techniques for hysterectomies, appendectomies, and gastric bypass has reportedly shifted surgical practice in the state, resulting in shorter lengths of stay, fewer complications, and faster return to work for employees.13

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VALUE-BASED BENEFIT DESIGN INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

SECTION 13 ● ENDNOTES

1 Houy, Margaret. ―Value-based Benefit Design: A Purchaser Guide.‖ Washington, DC: National Business Coalition on Health. (January 2009). http://www.nbch.org/NBCH/files/ccLibraryFiles/Filename/000000000222/VBBD%20Purchaser%20Guide.pdf. (Accessed December 5, 2009). 2 Ibid., Houy, Margaret (2009). 3 Fendrick, A. Mark. ―Value-based Insurance Design Landscape Digest.‖ July 2009. Reston, VA: National Pharmaceutical Council. http://www.sph.umich.edu/vbidcenter/pdfs/NPC_VBIDreport_7-22- 09.pdf. (Accessed December 28, 2009). 4 Op. cit., Houy, Margaret (2009). 5 Op. cit., Houy, Margaret (2009). 6 Hunt, Sandra, Susan Maerki and William Rosenberg. ―Assessing Quality-Based Benefit Design, California HealthCare Foundation and Pacific Business Group on Health.‖ April 2006. http://www.pbgh.org/documents/PBGH-CHCFQualityBenDesignPWC-04-2006.pdf. (Accessed January 20, 2010). 7 Ibid., Hunt, Sandra, Susan Maerki and William Rosenberg. (2006). 8 Op. cit., Hunt, Sandra, Susan Maerki and William Rosenberg. (2006). 9 Op. cit., Houy, Margaret (2009). 10 Center for Value-based Health Management. http://www.centervbhm.com/bp/asthmaashevilleproject.html#a1. (Accessed January 18, 2010). 11 Center for Health Value Innovation. ―Value-Based Design in Action: How Five Public Sector Employers are Managing Cost and Improving Health Using Value-Based Design.‖ August 2009. http://www.vbhealth.org/wp-content/uploads/2009/09/A-FINAL-Value-Based-Design-in-Action-8-25.pdf.(Accessed January 20, 2010). 12 Op. cit., Fendrick, A. Mark. (2009). 13 Op. cit., Fendrick, A. Mark. (2009). END SECTION 13

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SECTION ● 14 14 VALUE-BASED PURCHASING

Value-Based Purchasing – Value-based purchasing (VBP) involves products, money, and information in the context of the services, products, and options that are available, both within and across organizations. Examples of health care purchasers include mail-order distributors, group purchasing organizations, pharmaceutical wholesalers, medical-surgical distributors, independent contracted distributors, and product representatives. VBP include initiatives for quality considerations in health care purchasing; i.e., employer-sponsored quality measurement initiatives in the context of a value-based purchasing strategy. VBP has typically focused narrowly on pay-for-performance, specific diseases, or segments of the population; however, a more general definition of VBP includes a variety of tools to obtain the right kind and mix of health care services at a desired level of quality, at a reasonable cost. The key elements of VBP include contracts that describe the responsibilities of employers as purchasers with selected insurance, managed care, and hospital and physician groups as suppliers; information that supports the management of purchasing activities; quality management for continuous improvements in the process of health care purchasing and in the delivery of health care services; incentives such as pay for performance that encourage and reward desired practices by providers and consumers; and education that helps employees become better heath care consumers. Note: The Agency for Healthcare Research and quality (AHRQ) has published a revealing statement regarding the presence of VBP: ―There are a limited number of employers and coalitions acting in a bold and innovative fashion to implement the principles of value-based purchasing. These pioneers are collecting data on both cost and quality, using the data to select plans and providers, and developing financial incentives for employees to enroll in plans with good performance records. Some are also working directly with providers to identify and implement best medical practices. There are a moderate number of employer purchasers who are taking cautious first steps, most typically by asking providers and health plans for information. These dabblers rarely, however, feed that information into actual purchasing decisions. A very large number of employer purchasers are not undertaking any serious initiatives to build quality considerations into purchasing. The do-nothings look to carriers and plans to clamp down on providers' costs, and are largely indifferent to how that is done.‖1

VALUE-BASED PURCHASING INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND CASE EXAMPLES intend to address? regarding impact of intervention? types of markets? A study in 2006 demonstrated that more A 2005 study indicated that health plan pay-for- A hospital system or a physician group in a community PAY FOR than half of the 252 HMOs surveyed use performance efforts range in size from small pilot can influence how health plans develop their pay for PERFORMANCE pay for performance in their provider programs targeting particular diseases, such as performance programs. Local markets have health plans contracts. Of the 126 health plans with diabetes mellitus, to comprehensive efforts that customize their pay-for-performance programs to pay for performance programs, 90% had comprising separate components targeting primary reflect the willingness of providers to participate, the programs for physicians, and 38% had care physicians, specialists, and hospitals.4 effect of employer interest and influence, data availability, programs for hospitals. The use of pay information technology capabilities, and health plans‘ and A recent RAND study of PacifiCare Health Systems, 7 for performance was statistically a large HMO, determined mixed results following providers‘ leverage. associated with geographic regions, the one year of reward payments totaling $139M. Their use of primary care providers (PCPs) as findings indicate that benefits in quality are gatekeepers, the use of capitation to pay correlated with the size of the reward.5 PCPs, and whether the plans themselves received bonuses or penalties according

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VALUE-BASED PURCHASING INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND CASE EXAMPLES intend to address? regarding impact of intervention? types of markets? to performance.2 Some evidence exists showing that activities taken The Pay for Performance Summit is a to improve quality could actually increase disparities if specific groups are less able to respond to quality National Forum on Pay for Performance 6 and Payment Reform.3 activities than others.

Case Example 1: The purpose of the QualityBLUE QualityBLUE performance indicators and metrics The QualityBLUE Initiative is based in western HighMark’s QualityBLUE physician pay-for-performance initiative include: Pennsylvania. is to satisfy consumer demand for 1. Clinical Quality (16 indicators), The type of program should be applicable to other Initiative information on provider quality and regions based on health plan coverage area. safety, align reimbursement with 2. Generic/Brand Prescribing, performance, and build performance 3. Member Access, excellence in everyday health care 4. Electronic Health Record, operations.8 5. Electronic Prescribing, and 6. Best Practice. Bonus payment is up to 3% of total hospital payment. HighMark‘s reports claim a $52M savings and 375 lives saved based on ICU infection rate reduction.

Cost Consequence Analysis estimates the There are 5 key types of economic evaluation for health Cost Consequence Analysis is primarily applied to the COST CONSEQUENCE impact of a treatment on expected care programs: pharmaceutical industry; however, this approach could be ANALYSIS lifetime resource use and costs (including 1) cost analysis, which considers only the costs of 2 or used in a broader health care context. health care costs and productivity losses) more programs being compared; and health outcomes (including life 2) cost-minimization analysis, which seeks to determine expectancy and quality of life) of an the least costly of 2 programs, the outcomes of which individual or population with a particular are judged to be equivalent; disease. Consequence analysis can also 3) cost-effectiveness analysis, which examines the value include the number of quality adjusted 9 of the outcomes or consequences of comparative life-years. programs in terms of quality units (e.g., cost per day of pain avoided), without attempting to put a monetary value on that outcome; 4) cost-utility analysis, which adjusts the outcome units used in the cost-effectiveness analysis by utility scores (scores that weigh the outcomes analyzed in terms of patient preference for the health outcomes achieved); and

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VALUE-BASED PURCHASING INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND CASE EXAMPLES intend to address? regarding impact of intervention? types of markets? 5) cost-benefit analysis, which assigns a monetary value to the outcome, allowing comparisons across disease states. Cost Consequence Analysis includes costs and effects that are calculated but not aggregated into quality-adjusted life-years or cost-effectiveness ratios.10

Other Comments Examples of cost-consequence analyses in the published literature include clinical trial data associated with other demographic, quality, financial or other data, which provides the breadth of information required for more accurate decision-making.

Case Example 1: HealthGrades is a health care ratings No studies were reported concerning the outcomes Based in Colorado, HealthGrades provides data organization that offers online associated with the ratings, either for the hospitals or nationally. HealthGrades comparisons of doctors, nursing homes, consumers. and hospitals.11

Other Comments Note: There are several concerns related to the interpretation of their methodology, which apparently is not discussed on their Web site. Perhaps independent verification of their methods would be appropriate.

Case Example 2: The American Medical Association There has been little research to determine the impact of The PCPI was designed to be a national program. developed a Physician Consortium for the PCPI; most of the reports from AMA concern The American Medical Performance Improvement® (PCPI), process issues relating to development of measures, the Association Physician consisting of over 100 national medical use of their data, etc. Consortium for specialty and state medical societies, to Performance enhance the quality of care and patient safety through development, testing, and Improvement® (PCPI) maintenance of evidence-based clinical performance measures and measurement resources for physicians.12

CMS is developing principles to guide the CMS states that it will use a standardized, transparent INTERVENTIONS BY development of a standardized process for set of criteria to evaluate performance measures for CMS selecting, modifying, and retiring inclusion in the VBP program. CMS will align its measures for VBP as mandated by the measure-selection criteria with the criteria used by Deficit Reduction Act of 2005. CMS consensus-based measure endorsers, so that all VBP desires to develop measures that address measures could ultimately be endorsed. the three performance domains identified A national set of standardized measures will be used by the Institute of Medicine: clinical that could apply to all eligible hospitals nationwide, quality, patient-centered care (including and a systematic, transparent process for introducing care coordination), and efficiency. performance measures will be used following

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VALUE-BASED PURCHASING INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND CASE EXAMPLES intend to address? regarding impact of intervention? types of markets? The CMS Premier Hospital Quality consultation with relevant stakeholders. CMS is also Incentive Demonstration provides considering a composite aggregate measure instead of financial rewards to hospitals that using individual measures.14 demonstrate high quality performance in As of July 2009, results of the CMS Premier Hospital a number of areas within acute care. The Quality Incentive Demonstration showed that the demonstration is a partnership between average composite quality scores, which are an CMS and Premier, Inc., a national aggregate of all quality measures within each clinical organization of not-for-profit hospitals. area, improved significantly between the inception of The demonstration rewards participating the program and the end of Year 4. The incentive top performing hospitals by increasing program paid a 2 % bonus on Medicare their payment for Medicare patients (275 reimbursement rates to hospitals performing in the top 13 hospitals are currently participating). decile of a composite quality measure for certain conditions.15

Other Comments There is no agreed upon, standardized set of selection criteria for measures in a VBP or pay for performance. Although the National Quality Forum created consensus recommendations for a comprehensive framework for hospital performance measurement and reporting, these criteria may not be sufficient for VBP. Additional measures are required that are controllable by providers, independent of patient selection bias, which are applicable to the health care continuum.

Case Example 1: AHRQ developed a purchaser guide, the It is difficult to design incentives that will change the Although not specifically designed for geographic Consumer Financial Incentives: A Guide behavior of consumers. In health care, the practice of differences, value-based purchasing market research Consumer Financial for Purchasers, that can be used as a tool traditional marketing and social marketing suggests that tactics include the following: divide large populations into Incentives: A Guide for for employers, health plans, and state people change behavior voluntarily when they perceive segments of people who share common perceptions of Purchasers Medicaid agencies that are considering the new behavior as offering superior benefits to those what is easier and more popular for a particular behavior; implementation of consumer financial of the existing behavior; the new behavior should prioritize and target population segments that are most incentive strategies.16 involve fewer barriers than the existing behavior and the amenable to change and that also provide the greatest new behavior should be supported by people they value. potential for social good; provide products, services, and communications that effectively compete with the perceptions of existing behavior in terms of what is better, easier, and more popular; and monitor and adapt programs to meet changes in the target segment‘s perceptions.

The processes that are used to determine INFORMATION the ROI or value associated with an MIS SYSTEMS AND WEB are complicated, and there is no general APPLICATIONS agreement between researchers and practitioners about the best method of arriving at a value statement.17

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VALUE-BASED PURCHASING INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND CASE EXAMPLES intend to address? regarding impact of intervention? types of markets?

Case Example 1: This Web site promotes selection of The result is transparency of information about a broad eHealthInsurance is geographically located in 50 states. health insurance for individuals, families, array of health insurance plans (stated 180 health eHealthInsurance and small businesses for research, insurance companies), including a selection of price and analysis, comparison, and purchase of benefit options, availability of customer service health insurance products that meet representatives via a toll free number, online chat, email, consumers' needs.18 or fax.

The purpose of purchasing consortia and Many programs are geographically specific. PURCHASING cooperatives is to allow small employers CONSORTIA AND to have the kind of purchasing clout that COOPERATIVES large employers have in their negotiations with health plans.

Case Example 1: The Council of Smaller Enterprises There is no evidence that this model would be effective The Council of Smaller Enterprises is regionally located (COSE) in Cleveland, Ohio, is a group in different locations or with different health plans. in Cleveland, Ohio. The Council of Smaller purchasing program that includes Enterprises advocacy on legislative and regulatory issues, and networking and educational resources for Northeast Ohio‘s small businesses.19 COSE is not a prototypical purchasing co-op because a single health plan has accounted for nearly all of its sales (although COSE now offers a choice of two independent health plans and a number of plan types). The employers, rather than individual employees, choose the health plan.20

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VALUE-BASED PURCHASING INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND CASE EXAMPLES intend to address? regarding impact of intervention? types of markets? Case Example 2: The Disease Management Purchasing This consortium also has 67 organizational associate No geographical limitations are apparent for The Disease Consortium provides contracting members that have an interest in disease management, Management Purchasing Consortium. The Disease assistance in disease and population including vendors, pharmaceutical companies, venture Management Purchasing management. The consortium provides capital firms, regulatory and governmental bodies and Consortium (& Advisory 70% of all current contracted or trade associations, periodicals, consulting firms, Council) implemented outsourced disease and academic medical centers, and executive recruiters. population management programs. They include 86 health plans, 18 private and public sector employers/retirement systems, 2 unions, and 12 state Medicaid programs, covering a total of 80,000,000 lives.21

Case Example 3: The Washington Prescription Drug The WPDP Consortium offers a free WPDP discount This consortium is limited to Washington State. Purchasing (WPDP) Consortium, card that offers consumers (residents of Washington The Washington administered by the Washington State State) discounts on all prescription drugs (with no drug Prescription Drug Health Care Authority, was created by formulary or preferred drug list) at WPDP participating Purchasing (WPDP) the 2005 Legislature to allow state pharmacies, at prices comparable to those paid by large Consortium agencies, local governments, businesses, insurance companies that reimburse pharmacies for labor organizations, and uninsured or member purchases. underinsured consumers to pool their purchasing power to get better prices on prescription drugs.22

SECTION 14 ● ENDNOTES

1 AHRQ. http://www.ahrq.gov/qual/meyerrpt.htm. (Accessed March 22, 2010). 2 Rosenthal, Meredith B., et al. ―Pay for Performance in Commercial HMOs,‖ New England Journal of Medicine. 355: 18. (November 2006). 3 The National Pay for Performance Summit. March 8-10, 2010. http://www.pfpsummit.com/. (Accessed March 19, 2010). 4 Trude, Sally, Melanie Au and Jon B. Christianson. ―Health Plan Pay-for-Performance Strategies,‖ The American Journal of Managed Care. 12: 9. (September 2006).

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5 Mullen, Kathleen, Richard G. Frank and Meredith B. Rosenthal. ―Can You Get What You Pay For? Pay-For-Performance and the Quality of Healthcare Providers,‖ RAND Journal of Economics. 41: 1. (Spring 2010). 6 Hasnain-Wynia, Romana and Muriel Jean-Jacques. ―Filling the Gaps between Performance Incentive Programs and Health Care Quality Improvement,‖ Health Services Research. 44: 3. (2009). 7 Ibid., Hasnain-Wynia, Romana and Muriel Jean-Jacques. (2009). 8 Highmark Press Release. https://www.highmark.com/hmk2/about/newsroom/2009/pr120809.shtml. (Accessed March 30, 2010). 9 Mauskopf, Josephine A., et al. ―The Role of Cost-Consequence Analysis in Healthcare Decision-Making,‖ Pharmacoeconomics. 13: 3. (March 1998). 10 Drummond, Michael F., et al. Methods For The Economic Evaluation of Health Care Programs. New York: Oxford University Press, 2003. 11 Health Grades. http://www.healthgrades.com/. (Accessed March 19, 2010). 12 American Medical Association. http://www.ama-assn.org/ama/pub/physician-resources/clinical-practice-improvement/clinical-quality/physician-consortium-performance-improvement.shtml. (Accessed March 19, 2010). 13 Centers for Medicare and Medicaid Services. http://www.cms.hhs.gov/HospitalQualityInits/35_hospitalpremier.asp. (Accessed March 19, 2010). 14 CMS Hospital Pay-for-Performance Workgroup with Assistance from the RAND Corporation, Brandeis University, Booz | Allen | Hamilton, and Boston University. ―U.S. Department of Health and Human Services Medicare Hospital Value-Based Purchasing Plan Development.‖ (January 2007). Note: The principles developed are consistent with the National Quality Forum‘s ―Comprehensive Framework for Hospital Care Performance Evaluation‖. (2003). 15 ―Premier Hospital Quality Incentive Demonstration: Rewarding Superior Quality Care.‖ Fact Sheet, July 2009. http://www.cms.hhs.gov/HospitalQualityInits/35_hospitalpremier.asp. (Accessed March 19, 2010). 16 Dudley, R. Adams, et al. ―Consumer Financial Incentives: A Decision Guide for Purchasers.‖ Publication No. 07(08)0059. Washington, DC: Agency for Healthcare Research and Quality. (November 2007). 17 Shabati, Itamar, et al. ―The Value of Information for Decision-Making in the Healthcare Environment.‖ In Medical and Care Compunetics 4, edited by Lodewijk Bos and Bernd Blobel. IOS Press, 2007. 18 eHealth Insurance. https://www.ehealthinsurance.com/. (Accessed March 19, 2010). 19 Council of Smaller Enterprises. http://www.cose.com/. (Accessed March 19, 2010). 20 Wicks, Elliot K. ―Health Insurance Purchasing Cooperatives,‖ Issue Brief 567. New York, NY: The Commonwealth Fund. (November 2002). 21 Disease Management Purchasing Consortium International. http://www.dismgmt.com/. (Accessed March 19, 2010). 22 Washington Prescription Drug Program. http://www.rx.wa.gov/consortium.html. (Accessed March 19, 2010). END SECTION 14

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SECTION ● 15 15 WELLNESS AND HEALTH PROMOTION

Definition: Organizations sponsor on- or offsite wellness programs to promote good health or identify and correct potential health-related problems.1 Comprehensive wellness programs support primary, secondary, and tertiary prevention efforts. Primary prevention efforts target populations that are generally healthy, and include programs that encourage exercise and fitness, healthy eating, weight management, stress management, seat belt use, moderate alcohol consumption, recommended adult immunizations, and safe sex.2 Secondary prevention programs target individuals who are considered to be at high-risk due to behavior or abnormal health indicators, and include hypertension screenings and management programs, smoking cessation telephone quit lines, weight loss classes, and reduction of financial barriers to obtaining prescribed medications.3 Tertiary prevention programs target individuals who have chronic diseases. (Interventions for tertiary disease prevention were presented under the Disease Management Market Model.) Wellness promotion interventions may be delivered at the worksite, school, or community (e.g., signs to encourage stair use, health education classes); at other locations (e.g., gym membership discounts, weight management counseling); or through a health benefits plan (e.g., flu shots, cancer screenings).4 Evidence of impact and effectiveness of wellness and health promotion programs is mixed, with variable return on investment (ROI), depending on which programs, policies, and interventions are employed. A recent study found that health care costs decrease by approximately $3.27 for every dollar spent on wellness programs and that absenteeism-related costs fall by about $2.73 for every dollar spent.5 The Steps to a Healthier Austin program realized a return on investment of $2.43 for every dollar spent on a comprehensive wellness program.6 While one study suggests cost savings of $600 to $800 per employee,7 other studies indicate that the program must continue for two to three years to realize an economic benefit, although cost savings may be realized more quickly.8, 9,10 Note: Employers considering wellness programs and associated interventions need to be familiar with HIPAA and other relevant state and federal regulations regarding patient privacy and discrimination.11, 12, 13, 14

WELLNESS AND HEALTH PROMOTION

INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

A key objective of incentives is to Success of incentives may vary by incentive size. Incentives are suitable for diverse market EMPLOYEE (PATIENT) INCENTIVES motivate individuals to initiate action and No studies were found analyzing the differential conditions. maintain the new behaviors until their own impact of levels of incentives. Incentives are financial or nonfinancial inducements These programs are very broadly internal reinforcement takes over to sustain In many cases, incentives were a component of a applicable across populations, linked to specific behaviors. Incentives may be either 18 the positive change. wellness program and were not evaluated diseases/conditions, and geographic desirable rewards or undesirable consequences.15 If the incentive rewards and rules are well independently. areas. Incentives are valued that are flexible, relatively designed, it is hoped to produce a positive Use of incentives may positively impact: simple to comprehend, and easy to administer. change in behavior in the target population. o Completion of vaccination regimen

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? A 2004 National Worksite Health Promotion Survey o Amount of physical activity, indicated that 26% of employers use some form of o Participation in tobacco cessation programs, incentives to promote employee participation.16 o Participation in disease management programs, Typically, the higher the dollar value of an incentive, and the higher the participation levels. The monetary o Participation in wellness programs. value of incentives typically ranges from just a few Cost-savings were reported from incentives for 19 dollars to several hundred dollars. tobacco cessation. Financial incentives may be more effective than The most common type of incentives are activity- non-financial. Larger financial incentives may be based awards (Completion of a health risk more effective than smaller. assessment (HRA), participation in program activities), and achievement-based awards (measurable changes in health status or activity).17 Incentives can take the form of cash, gift cards, coupons, merchandise, time off, awards and recognition, drawings or lotteries, preferred benefit plan designs, premium and copay reductions or increases, and contributions to flexible spending accounts (FSA) and health savings accounts (HSA). Some examples include incentives for the reduction of certain indicators, such as BMI, cholesterol, and for lack of participation in wellness initiatives.

Some individuals may attempt to beat the system. Some incentives may inadvertently reward unhealthy behaviors. For example, a per-pound weight loss incentive with no limits may encourage unhealthy or hazardous weight loss practices. Incentives may also create a dependency, such that when the reward is removed, the desired behavior ceases.20, 21 Employers who want to link certain incentives (e.g., premium discounts, rebates, lower deductibles, and copayments) with Other Comments their health care plan may need to follow the HIPAA Final Nondiscrimination Rules, a federal law that became effective on February 12, 2007.22 Employers can currently offer a premium discount of up to 20% based on a worker‘s ability to hit certain health benchmarks. That discount may go as high as 50% with passage of pending federal legislation.23, 24

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Many workers have easy access to energy- Provision of nutrition information with and These interventions are suitable for OPTIMIZING THE WORK ENVIRONMENT dense (i.e., ―empty-calorie‖) foods and without a behavioral component is associated diverse market conditions. beverages.25 In combination with with weight loss and lowered cholesterol. Efforts to optimize the work environment are largely These programs are very broadly sedentary jobs, lack of physical exercise, Nutrition education is cost-saving by reducing applicable across populations, diseases low-cost initiatives to promote health at the worksite. and other factors, high-calorie and fatty health care costs related to obesity.27 and conditions, and geographic areas. These include: foods contribute to weight gain, obesity, 26 Increased availability of healthier snack items in Information provision, and lower productivity. vending machines with modest price reductions Positive corporate attitude to health promotion, Workplace injuries account for, at times, a is associated with 10-42% increased substantial component of corporate health consumption.28 Nutrition promotion, expenditures from lost productivity and Provision of fruit is associated with significantly 29 Wellness stations, health care costs. Reducing the number of increased consumption. injuries through employee education and Improvement in ergonomics is associated with Workplace redesign, and the provision and maintenance of equip- fewer employee absences.30 Injury prevention. ment translates into reduced health care costs and increased employee productivity. Corporate policies to promote health and wellness include prospectively monitoring workplace injury incidence and proactively effecting changes to prevent injuries, (e.g,. education, ergonomic improvements, and provision or upgrade of safety equipment.) Nutrition promotion might involve providing healthier food options in cafeterias and vending machines, nutrition information, and educational materials. Wellness stations are low-cost options to health clinics, being unstaffed. They often house health information and brochures, a scale to monitor weight, blood pressure cuffs, and information regarding fitness options.

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Lost time from work due to injury, illness, Return on investment (ROI) of clinics may be These interventions are suitable for ONSITE HEALTH CLINICS AND COACHES and physician‘s visits may significantly comparable to similar services delivered in the diverse market conditions. impact employee productivity. community, but is dependent on size of facility Onsite health clinics provide basic outpatient care, These programs are very broadly and use. applicable across populations, diseases including immunizations, screening, and exams as Onsite health clinics increase the Onsite clinics may be more cost effective than and conditions, and geographic areas. well as education and information provision to an accessibility of basic health care for employees, with the goal of increasing community clinics, when factoring in health care Larger employers are more likely to employee group. appropriate use, reducing health care costs, cost and productivity losses from labor lost realize cost-savings from onsite, inhouse These are often fully functional medical offices, providing continuous wellness promotion, visiting clinics in the community. clinics and coaches. staffed with (a) nurse(s) or physician or other and disease management services. Onsite nurse practitioners reduced health care 31 allied health provider. Health coaches focus on the screening, costs in one study. They may be contractually arranged or inhouse. education, and support components of wellness and disease management Health coaches provide health information, possibly programs. basic screening, goal setting and support, and monitoring of health status and progress toward goals. They may be physicians, nurses, or other allied health providers. They may be contractually arranged or inhouse.

Case Example 1: Quad/Graphic‘s motto is ―We‘ll keep you Self-reported high-use of clinic services. Quad/Graphics32 well; and by the way, if you get sick, we‘ll High employee satisfaction with services. take care of that, too.‖ Clinic patients meet recommended guidelines for Quad/Graphics, headquartered in Southeastern They aim to reduce health care costs by treatment at rates greater than the national Wisconsin, has 12,000 employees. providing employees and their dependents average on a number of targets. In 1991, the company began to provide onsite with easily accessible, full-service primary Employee medical costs average about 30% primary health care for its employees and their care clinics which operate on the latest lower than other employers in the state of dependents with one physician provider. evidence-based recommendations and Wisconsin.33 Quad/Graphics eventually incorporated its health practices. Annual health care costs are estimated to be 17- services into a wholly owned subsidiary, Quad/Med. Quad/Graphics is self-insured and the 19% below average per employee than for other health care benefit is structured so that Midwest employers.34 Currently, Quad/Med’s onsite clinics are located on employees have an incentive to use the each Quad/Graphics campus. onsite clinics; 80% of Quad/Graphic‘s QuadMed has Alcohol and Other Drug Abuse and employees and their dependents do so. Employee Assistance Program functions integrated into its clinics.

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

QuadMed provides a broad range of primary care services, including family practice, internal medicine, pediatrics, and obstetric/gynecologic services delivered onsite both by board-certified physicians and physician extenders. Selected specialties Other Comments include dermatology; ear, nose, and throat; orthopedics; and general surgery. Quad/Med also uses an online health portal. QuadMed has its own full-service pharmacy, with prescriptions shuttled to sites that do not yet have an onsite pharmacist.

Physical activity and exercise are Worksite exercise programs have been shown to These programs are very broadly applicable EXERCISE AND PHYSICAL ACTIVITY associated with improvements in health reduce: across populations, diseases/conditions, and PROMOTION AND PROGRAMS and health indicators, including reduced o Blood pressure, geographic areas, including countries. Body Mass Index (BMI), reduced weight, o Cholesterol, Initiatives to promote exercise and physical activity lowered blood pressure, lowered o BMI, include: cholesterol, reduced risk for cardiovascular disease, and increased energy and well- o Blood glucose, Discounted gym memberships; being. o Use of disability leave, Delivery of exercise programs targeted to Improvements in health status and o Low back discomfort, and populations or diseases; indicators is believed to improve health o Absenteeism. outcomes, reduce health care needs, and Some studies have shown that workplace fitness Urban design and land use policies; 35 reduce health care costs. activities, including online interventions to Creation of outdoors areas for exercise or activity; Improved health leads to increased worker promote activity, can lead to cost savings. Promotion of site-specific physical activity productivity and presenteeism and reduced Larger employers may find more cost savings options, such as use of stairs, parking options to rates of absenteeism. related to higher cost interventions. encourage walking; and Studies indicate that the following workplace Provision of onsite exercise facilities. interventions are effective in increasing employee physical activity: These programs and initiatives may target healthy o Prompts to increase stair use, individuals or those with health conditions. o Access to places and opportunities for physical activity, o Comprehensive worksite approaches, including education, employee and peer support for physical activity, o Incentives, and o Access to exercise facilities. A recent survey of employers offering wellness programs found a majority, primarily large employers, believe the program has positively impacted employee health and reduced costs.36 Efficacy of exercise programs is influenced by

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets? participation, location of exercise areas/facilities, level of employer encouragement, design of program, participant co-morbid conditions, and target population level of awareness, among others. Some studies have found limited, no, or contradictory evidence of effectiveness of workplace programs on BMI, pain, low back pain, use of sick leave. Employers should select interventions that provide choice, allow for preferred learning style, allow a broad number of employees easy access and affordability, are individually tailored, and meet privacy and nondiscrimination requirements. Worksite participation may be affected by quality/extent of the exercise facility available, and individual inhibitions to exercising Other Comments around co-workers. Financial or other incentives to encourage participation and success attaining health outcomes goals are often used and can affect positive change. Employee absence from work and lost Establishing a Vaccination Day with workplace- The programs are not market specific. They VACCINATION PROGRAMS productivity due to vaccine-preventable provided vaccinations may increase up-take of are very broadly applicable across illness are significant financial burdens on vaccinations substantially.37 populations, diseases and conditions, and This review focused on work-site interventions to employers. Email reminders and information regarding geographic areas. promote or increase vaccination rates among influenza and influenza vaccines increased employees. Vaccination programs aim to increase the number of employees vaccinated for employee rate of crowd avoidance behavior 38 Primary vaccinations delivered through workplace illnesses including influenza and during illness. interventions include influenza, pneumonia, and pneumonia in order to reduce health care Vaccination of working adults for influenza may hepatitis (usually in health care settings). cost and utilization, reduce employee use be cost saving in terms of days absent from work of sick leave, and increase productivity. and lost productivity.39,40 Vaccination programs may be offered through Influenza vaccination may result in substantial workplace clinics, be discounted or incentivized, During the winter, employee absence due to influenza-related illness may be as high health and productivity benefits.41 contracted for through health care agencies, and as 50% of all absences. Employer coverage of vacation cost is associated promoted via educational sessions and other with more successful programs.42 activities such as Vaccination Days. Efforts to promote awareness of vaccination initiatives may increase up-take.43,44

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INTERVENTION AREAS What does the intervention What is the research evidence How applicable to which AND Case Examples intend to address? regarding impact of intervention? types of markets?

Employee absence from work and lost In many studies, cessation programs were a These interventions are not market specific. TOBACCO CESSATION PROGRAMS productivity due to smoking related illness component of more comprehensive wellness They are very broadly applicable across AND INTERVENTIONS are significant financial burdens on programs, and effectiveness of stand-alone populations, diseases/conditions, and employers. cessation programs was not evaluated. geographic areas. Use of tobacco is associated with negative health Cessation programs aim to increase the Individual counseling and group therapy for outcomes, including chronic obstructive pulmonary number of employees quitting or reducing tobacco cessation have been shown to improve disease (COPD), emphysema, bronchitis, lower smoking in order to reduce health care cost rates of successful cessation among participants. quality of life45 and lung cancer.46,47 and utilization, reduce employee use of Smoke-free workplaces are effective at reducing Further, second-hand smoke negatively impacts the sick leave and increase productivity. smoking, reducing risk of heart attack, and increasing the number of quit attempts. health of those exposed.48, 49 Early cessation has been associated with reduced mortality from smoking.51 Internet-based worksite smoking cessation Interventions to reduce employee tobacco use program may increase rates of quitting among include non-smoking policies, incentives to quit, and participants.52, 53 provision or facilitation of cessation programs and Continued support for recent quitters may be pharmacotherapy. necessary to maintain their abstinence from One survey of employees found interest in contests, smoking. incentives, and free samples of nicotine replacement Women may have differing experiences than products as employer interventions to promote men in worksite cessation programs. Effort may need to be made to prospectively monitor tobacco cessation.50 women in these programs and evaluate for Cessation programs may be offered through worksite factors affecting their rates of cessation.54 clinics -- be discounted, incentivized, or contractually Overall cost to employer of a pharmacotherapy arranged. benefit was estimated in one study to be $0.13/person/month.55

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SECTION 15 ● ENDNOTES

1 Wolfe, Richard, Donald Parker and Nancy Napier. ―Employee Health Management and Organizational Performance,‖ The Journal of Applied Behavioral Science. 30: 22. (March 1, 1994). 2 Goetzel, Ron and Ronald Ozminkowski. ―The Health and Cost Benefits of Work Site Health-Promotion Programs,‖ Annual Review of Public Health. 29: 303. (April 2008). 3 Ibid., Goetzel, Ron and Ronald Ozminkowski. (2008). 4 Community Guide Branch, National Center for Health Marketing (NCHM), Centers for Disease Control and Prevention. ―Guide to Community Preventive Services. Worksite Health Promotion.‖ www.thecommunityguide.org/worksite/index.html. (Accessed February 2, 2010). 5 Baicker, Katherine, David Cutler and Zirui Song. ―Workplace Wellness Programs Can Generate Savings,‖ Health Affairs. 29: 2. (January 14, 2010). 6 Davis, Lynn, et al. ―A Comprehensive Worksite Wellness Program in Austin, Texas: Partnership Between Steps to a Healthier Austin and Capital Metropolitan Transportation Authority,‖ Prev Chronic Dis. 6: A60. (April 2009). 7 Jones, Jenna. ―Modeling Cost Savings Opportunities within Worksite Wellness Programs,‖ Master‘s Thesis, Drexel University, Philadelphia, Pennsylvania, 2009. 8 Meenan, Richard, et al. ―Economic Evaluation of a Worksite Obesity Prevention and Intervention Trial Among Hotel Workers in Hawaii,‖ Journal of Occupational and Environmental Medicine. 52: S8. (January 2010). 9 Heaney, Catherine and Ron Goetzel. ―A Review of Health-related Outcomes of Multi-component Worksite Health Promotion Programs,‖ American Journal of Health Promotion. 11: 290. (1998). 10 Aldana, Steven G. ―Financial Impact of Health Promotion Programs: A Comprehensive Review of the Literature,‖ American Journal of Health Promotion. 15:296. (2001). 11 Layton, Amanda and Vjera Silbert. ―Employers Considering Wellness Programs Are Advised to Look Before Leaping.‖ November 30, 2007. Metropolitan Corporate Counsel. http://www.metrocorpcounsel.com/current.php?artType=view&artMonth=November&artYear=2007&EntryNo=7425. (Accessed: February 5, 2010). 12 Rubenstein, Daniel. ―The Emergence of Mandatory Wellness Programs in the United States: Welcoming or Worrisome?,‖ Journal of Health Care Law & Policy. 12: 2. (2009). 13 Mello, Michelle and Meredith Rosenthal. ―Wellness Programs and Lifestyle Discrimination — The Legal Limits,‖ New England Journal of Medicine. 359: 2. (July 10, 2008). 14 Schmidt, Harold, Kristin Voigt and Daniel Wikler. ―Carrots, Sticks, and Health Care Reform — Problems with Wellness Incentives,‖ New England Journal of Medicine. 362: 2. (January 14, 2010). 15 Hall, Barry. ―Good Health Pays Off! Fundamentals of Health Promotion Incentives,‖ Journal of Deferred Compensation. 16-26. (October 7, 2005). http://www.ninestones.com/barry/articles/incentives_hall.pdf. (Accessed November 2009); J.P. Morgan. http://www.jpmorgan.com/cm/cs?pagename=JPM_redesign/JPM_Content_C/Generic_Detail_Page_Template&cid=1159308468819&c=JPM_Content_C. (Accessed February 5, 2010). 16 Linnan, Laura, et al. ―Results of the 2004 National Worksite Health Promotion Survey,‖ American Journal of Public Health. 98: 1503. (August 2008). 17 Op. cit., Hall, Barry. (2005). 18 Op. cit., Hall, Barry. (2005). 19 Leeks, Kimberly, et al. ―Worksite-Based Incentives and Competitions to Reduce Tobacco Use A Systematic Review,‖ American Journal of Preventive Medicine. 38: S263. (2010).

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20 Op. cit., Hall, Barry. (2005). 21 Chapman, Larry. ―Meta-evaluation of Worksite Health Promotion Economic Return Studies,‖ Art Health Promotion. 6: 1. (January/February 2003). 22 Eickhoff-Shemek, JoAnne and Nico Pronk. ―Applying the HIPAA Nondiscrimination Rules to Employer-Sponsored Wellness Programs,‖ ACSM's Health & Fitness Journal. 13: 35. (September/October 2009). 23 Carroll, John. ―Wellness Discount on Premiums: Some Say Useful, Others Say Harmful.‖ December 2009. Managed Care. http://www.managedcaremag.com/archives/0912/0912.regulation.html. (Accessed December 2009). 24 Chapman, Larry. ―Employee Participation in Workplace Health Promotion and Wellness Programs: How Important Are Incentives, and Which Work Best?,‖ North Carolina Medical Journal. 67:431. (November/December 2006). 25 Task Force on Community Preventive Services. ―A Recommendation to Improve Employee Weight Status Through Worksite Health Promotion Programs Targeting Nutrition, Physical Activity, or Both,‖ American Journal of Preventive Medicine. 37: 358. (October 2009). 26 Kumar, Sameer, Michael McCalla and Eric Lybeck. ―Operational Impact of Employee Wellness Programs: A Business Case Study,‖ International Journal of Productivity and Performance Management. 58: 581. (2009). 27 Katz, David, et al. ―Public Health Strategies For Preventing and Controlling Overweight and Obesity in School and Worksite Settings: A Report on Recommendations of the Task Force on Community Preventive Services,‖ Morbidity and Mortality Weekly Recommendations and Reports. 54: 1–12. (October 7, 2005). 28 French, Simone, et al. ―Pricing and Availability Intervention in Vending Machines at Four Bus Garages,‖ Journal of Occupational and Environmental Medicine. 52: S29. (January 2010). 29 Backman, Desiree, Dona Francis and Curtis Granger. ―Effect of Fresh Fruit Availability at Worksites on the Fruit and Vegetable Consumption of Low-wage Employees.‖ APHA Scientific Session and Event Listing. Abstract #149673. 5045. 0. (November 7, 2007). 30 Kuoppala, Jaana, Anne Lamminpää and Päivi Husman. ―Work Health Promotion, Job Well-Being, and Sickness Absences- A systematic Review and Meta-Analysis,‖ Journal of Occupational and Environmental Medicine. 50: 1216. (November 2008). 31 Chenoweth, David, et al. ―A benefit-cost Analysis of a Worksite Nurse Practitioner Program: First Impressions,‖ Journal of Occupational and Environmental Medicine. 47:1110. (November 2005). 32 Zastrow, Raymond and Len Quadracci. ―Engaging Quad/Graphics Employees in the Improvement of Their Health and Healthcare,‖ Journal of Ambulatory Care Management. 29: 225. (July/September 2006). 33 LuBuono, Charlotte. ―On-Site Pharmacies Help Employers Control Drug Costs,‖ Drug Topics. June 6, 2005. http://drugtopics.modernmedicine.com/drugtopics/ArticleStandard/article/detail/163716, (Accessed February 12, 2010). 34 Helwig, Amy, Dennis Schultz and Len Quadracci. ―Obesity and Corporate America: One Wisconsin Employer‘s Innovative Approach,‖ Wisconsin Medical Journal. 104: 15. (July 2005). 35 Op. cit., Layton, Amanda and Vjera Silbert. (2007). 36 Claxton, G., et al. ―Health Benefits In 2008: Premiums Moderately Higher, While Enrollment In Consumer-Directed Plans Rises In Small Firms,‖ Health Affairs. 27: 6. (September 24, 2008). 37 Kimura, Akiko, et al. ―The Effectiveness of Vaccine Day and Educational Interventions on Influenza Vaccine Coverage Among Health Care Workers at Long-Term Care Facilities,‖ American Journal of Public Health. 97: 4. (April 2007).

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38 Bourgeois, Florence, et al. ―Evaluation of Influenza Prevention in the Workplace Using a Personally Controlled Health Record: Randomized Controlled Trial,‖ Journal of Medical Internet Research. 10: 1. (January-March 2008). 39 Rothberg, Michael and David Rose. ―Vaccination Versus Treatment of Influenza in Working Adults: A Cost-Effectiveness Analysis,‖ The American Journal of Medicine. 118: 1. (January 2005). 40 Olsen, Geary, Marianne Steinberg and Carol Ley. ―Worksite Influenza Immunization Programs. Insight into the Implementation and Cost-Benefit,‖ American Association of Occupational Health Nurses Journal. 53: 3. (March 2005). 41 Nichol, Kristin, et al. ―Burden of Influenza-Like Illness and Effectiveness of Influenza Vaccination Among Working Adults Aged 50–64 Years,‖ Clinical Infectious Diseases. 48, 292-298. (February 1, 2009). 42 D‘Heilly, Sarah and Kristin Nichol. ―Work Site–Based Influenza Vaccination in Healthcare and Non-Healthcare Settings,‖ Infect Control and Hospital Epidemiology. 25: 11. (November 2004). 43 Blue, Carolyn and Juanita Valley. ―Predictors of Influenza Vaccine: Acceptance Among Healthy Adult Workers,‖ American Association of Occupational Health Nurses Journal. 50: 5. (May 2002). 44 Strunk, Cheryl. ―Innovative Workplace Influenza Program: Boosting Employee Immunization Rates,‖ American Association of Occupational Health Nurses Journal. 53: 10. (October 2005). 45 Heikkinen, et al. ―The Impact of Smoking on Health-Related and Overall Quality of Life: A General Population Survey in Finland,‖ Nicotine & Tobacco Research. 10: 7. (July 2008). 46 Cornfield, Jerome, et al. ―Smoking and Lung Cancer: Recent Evidence and a Discussion of Some Questions,‖ International Journal of Epidemiology. 38: 5. (2009). 47 Lubin, Jay, et al. ―Cigarette Smoking and Cancer Risk: Modeling Total Exposure and Intensity,‖ American Journal of Epidemiology. (June 21, 2007). 48 Barnoya, Joaquin and Stanton Glantz. ―Cardiovascular Effects of Secondhand Smoke,‖ Circulation. 111: 2684. (2005). 49 Environmental Protection Agency. ―Respiratory Health Effects of Passive Smoking: Lung Cancer and Other Disorders.‖ EPA/600/6-90/006F. (December 1992). 50 Tiede, Lara, et al. ―Feasibility of Promoting Smoking Cessation in Small Worksites: An Exploratory Study,‖ Nicotine & Tobacco Research. 9: S1. (2007). 51 Doll, Richard, et al. ―Mortality in Relation to Smoking: 50 Years' Observations on Male British Doctors,‖ British Medical Journal. 26: 328. (June 2004). 52 Graham, Amanda, et al. ―Effectiveness of an Internet-Based Worksite Smoking Cessation Intervention at 12 Months,‖ Journal of Occupational and Environmental Medicine. 49: 8. (August 2007). 53 Swartz, Lynne, et al. ―A Randomised Control Study of a Fully Automated Internet Based Smoking Cessation Programme,‖ Tobacco Control. 15: 1. (2006). 54 Burgess, Diana, et al. ―Employment, Gender, and Smoking Cessation Outcomes in Low-income Smokers Using Nicotine Replacement Therapy,‖ Nicotine & Tobacco Research. 11: 12. (2009). 55 Burns, Marguerite, Marjorie Rosenberg and Michael Fiore. ―Use and Employer Costs of a Pharmacotherapy Smoking-Cessation Treatment Benefit,‖ American Journal of Preventive Medicine. 32: 2. (February 2007).

END SECTION 15

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Altarum Institute Systems Change Model

For more information: www.altarum.org or contact Gloria N. Eldridge, PhD, MSc at [email protected].