Health Services Research:
    Helps Us Get Our Money’s Worth

   What works?

   For whom?

   Under what circumstances?

   At what cost?
Research-Driven Solutions for
         Innovative State Policy

Joseph W. Thompson, MD, MPH
Surgeon General, State of Arkansas   September 27, 2012
Health Care’s Iron Triangle
            Quality




   Cost               Access
Arkansas Health System Improvement
Agency Organizational Structure
                                             Governor
State Leadership                            Mike Beebe




State Leadership                       Governor’s Policy Staff
Implementation                          & Dr. Joe Thompson
& Coordination                                 ACHI



                   Workforce
                                                                                Insurance
                   Chancellor     Payment & Quality      Health Information
                                                                               Exchange
Implementation     Dan Rahn         Improvement             Technology
                                                                              Commissioner
                   & Dr. Paul       Mr. John Selig         Mr. Ray Scott
                                                                              Jay Bradford
                   Halverson



                      UAMS         Steering Group:            AFMC            AID (Exchange)
Workgroup          ADH & ACHI     DHS, ADH, BCBS,             UAMS              DHS (Mcd
Participation       Higher Ed       QualChoice,                DIS              eligibility &
                    (2- & 4 yr)     United, ACHI             Medicaid         expansion) EBD




                                                                                                4
National and Arkansas Childhood Obesity Trends
                                               23     Arkansas Assessments
                               Percent Obese
                                               22
                25                                       Grades 8 & 10
                                                         Grades K, 2, 4, 6
                                               21                                                    AR grades 8 & 10
                                                                                                     AR grades K, 2, 4, 6
                20                             20
                                                    2004 2005 2006 2007 2008 2009 2010
Percent Obese




                15


                10
                                     US 12–19 yr
                                     US 6–11 yr
                5


                0
                     1963-65                           1971-74                           1988-94                     01-02      05-06
                                     1966-70                        1976-80                                     99-00      03-04     07-08


                       NHANES data sources: Ogden et al. Prevalence of Obesity Among Children and Adolescents: United States,
                       Trends 19631965 Through 20072008. NCHS Health E-Stat, June 2010. Available at
                       http://www.cdc.gov/nchs/data/hestat/obesity_child_07_08/obesity_child_07_08.htm. Accessed 04/18/11.
                       Arkansas data source: Arkansas Center for Health Improvement, Little Rock, AR, September 2010.
Preliminary working draft; subject to change


Our vision to improve care for Arkansas is a comprehensive, patient-
centered delivery system…


                  For          ▪   Improve the health of the population
                  patients     ▪   Enhance the patient experience of care
   Objectives                  ▪   Enable patients to take an active role in their care

                  For          ▪   Reward providers for high quality, efficient care
                  providers    ▪   Reduce or control the cost of care

                  Population-based care                   Episode-based care
   How care is
   delivered
                  ▪ Medical homes                         ▪ Acute, procedures or
                  ▪ Health homes                            defined conditions

                  ▪   Results-based payment and reporting

   Four aspects   ▪   Health care workforce development
   of broader
   program        ▪   Health information technology (HIT) adoption

                  ▪   Expanded access for health care services

                                                                                                           6
Preliminary working draft; subject to change


Payers recognize the value of working together to improve our system, with
close involvement from other stakeholders…


                                      Coordinated multi-payer leadership…

                                      ▪   Creates consistent incentives and standardized
                                          reporting rules and tools

                                      ▪   Enables change in practice patterns as program
                                          applies to many patients

                                      ▪   Generates enough scale to justify investments in
                                          new infrastructure and operational models

                                      ▪   Helps motivate patients to play a larger role in
                                          their health and health care




1 Center for Medicare and Medicaid Services                                                                               7
Spending Breakdown for CHF 30-day Episodes
           with and without a Readmission
N=4,992 CHF                             $10,569
episodes                                            Avg Total Episode Cost = $23,511
                         $6,305
                                                   $3,975
    24%
                                                                      $1,453     $832
                                                             $379

                          Index        Readmits     PAC      OPD     Physician   Other
             % Total
                           27%           45%        17%       2%        6%        4%
              Costs
    76%
                       $5,936
                                                     Avg Total Episode Cost = $9,440

                                                   $2,510


 Number of                                $0                 $288      $337      $368
 Episodes               Index         Readmits     PAC       OPD     Physician   Other
             % Total
                          63%            0%        27%        3%        4%         4%
              Costs
                                                                                         8
          Source: Medicare FFS claims data, 2010
Preliminary working draft; subject to change


Case for change: variation in costs by episode are substantial even after
adjusting for risk
 Total average cost per episode post-risk adjustment by Principal Accountable Provider, 2008-2010
 Simple upper respiratory infection1                                                           Pregnancy2
  $120                                                                                                                   Total episodes   ~30,000
               Total episodes            ~80,000                                              $5,000                     Median cost      $3,608
    100        Median cost               $57                                                                             10% percentile   $3,208
               10% percentile            $44                                                                             90% percentile   $4,071
     80        90% percentile            $76                                                   4,000
     60
                                                                                               3,000
     40
                                                                                               2,500
     20                                                                                          500
       0                                                                                              0

 ADHD3                                                                                        Total hip replacement
$12,000
                                                                                             $20,000                     Total episodes   140
 10,000                                                                                                                  Median cost      $7,953
                     Total episodes            ~20,000                                                                   10% percentile   $5,867
  8,000              Median cost               $1,641                                          15,000
                                                                                                                         90% percentile   $12,814
                     10% percentile            $1,073
  6,000              90% percentile            $7,046                                          10,000
  4,000
                                                                                                5,000
  2,000
        0                                                                                              0
1 Episode costs for children less than 10 risk-adjusted by a historically-derived multiplier.
2 Individual episode costs risk-adjusted for clinical drivers of severity based upon historically-derived multipliers.
3 Eligible defined as ADHD without comorbidities between ages 6 and 17.


SOURCE: Arkansas Medicaid claims data; Team analysis                                                                                                                         9
                                                                                                                                                                             9
Preliminary working draft; subject to change



                            Wave 1 episodes               Principle Accountable Provider

Total Hip/ Knee   ▪   Surgical procedure plus all
replacement           related claims from 30 days            Orthopedic surgeon
                      prior to procedure to 90 days
                      after
                  ▪   Pregnancy-related claims for
Perinatal             mother from 40 weeks before
(non-NICU1)           to 60 days after delivery              Delivering provider
                  ▪   Excludes neonatal care
                  ▪   21-day window beginning with

Ambulatory URI
                      initial consultation                   First provider to diagnose
                  ▪   Excludes inpatient costs and            patient in-person
                      surgical procedures
Acute/post-
                  ▪   Hospital admission
                                                             Admitting hospital
acute heart
failure           ▪   Care within 30 days of discharge

                                                             Depends care pathway
                  ▪   12-month episode                         • Physician
ADHD              ▪   Includes all ADHD services +             • Licensed clinical
                      pharmacy costs (with exception of          psychologist, and/or
                      initial assessment)
                                                               • RSPMI provider
                                                                                                         10.5
Preliminary working draft; subject to change


What’s next
                                     Examples
       Hip/ knee        • Stents
     replacements       • Pacemakers

       Perinatal        • Include NICU

                        • Urinary tract infections
    Ambulatory URI
                        • Ear infections

   Acute / post-acute   • Pneumonia
          CHF           • Myocardial infarction

         ADHD           • Depression

    Developmental       • Long-term care
     disabilities       • Severe and persistent mental
                          illness
Research-Driven Solutions for Innovative State Policy

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Research-Driven Solutions for Innovative State Policy

  • 1. Health Services Research: Helps Us Get Our Money’s Worth  What works?  For whom?  Under what circumstances?  At what cost?
  • 2. Research-Driven Solutions for Innovative State Policy Joseph W. Thompson, MD, MPH Surgeon General, State of Arkansas September 27, 2012
  • 3. Health Care’s Iron Triangle Quality Cost Access
  • 4. Arkansas Health System Improvement Agency Organizational Structure Governor State Leadership Mike Beebe State Leadership Governor’s Policy Staff Implementation & Dr. Joe Thompson & Coordination ACHI Workforce Insurance Chancellor Payment & Quality Health Information Exchange Implementation Dan Rahn Improvement Technology Commissioner & Dr. Paul Mr. John Selig Mr. Ray Scott Jay Bradford Halverson UAMS Steering Group: AFMC AID (Exchange) Workgroup ADH & ACHI DHS, ADH, BCBS, UAMS DHS (Mcd Participation Higher Ed QualChoice, DIS eligibility & (2- & 4 yr) United, ACHI Medicaid expansion) EBD 4
  • 5. National and Arkansas Childhood Obesity Trends 23 Arkansas Assessments Percent Obese 22 25 Grades 8 & 10 Grades K, 2, 4, 6 21 AR grades 8 & 10 AR grades K, 2, 4, 6 20 20 2004 2005 2006 2007 2008 2009 2010 Percent Obese 15 10 US 12–19 yr US 6–11 yr 5 0 1963-65 1971-74 1988-94 01-02 05-06 1966-70 1976-80 99-00 03-04 07-08 NHANES data sources: Ogden et al. Prevalence of Obesity Among Children and Adolescents: United States, Trends 19631965 Through 20072008. NCHS Health E-Stat, June 2010. Available at http://www.cdc.gov/nchs/data/hestat/obesity_child_07_08/obesity_child_07_08.htm. Accessed 04/18/11. Arkansas data source: Arkansas Center for Health Improvement, Little Rock, AR, September 2010.
  • 6. Preliminary working draft; subject to change Our vision to improve care for Arkansas is a comprehensive, patient- centered delivery system… For ▪ Improve the health of the population patients ▪ Enhance the patient experience of care Objectives ▪ Enable patients to take an active role in their care For ▪ Reward providers for high quality, efficient care providers ▪ Reduce or control the cost of care Population-based care Episode-based care How care is delivered ▪ Medical homes ▪ Acute, procedures or ▪ Health homes defined conditions ▪ Results-based payment and reporting Four aspects ▪ Health care workforce development of broader program ▪ Health information technology (HIT) adoption ▪ Expanded access for health care services 6
  • 7. Preliminary working draft; subject to change Payers recognize the value of working together to improve our system, with close involvement from other stakeholders… Coordinated multi-payer leadership… ▪ Creates consistent incentives and standardized reporting rules and tools ▪ Enables change in practice patterns as program applies to many patients ▪ Generates enough scale to justify investments in new infrastructure and operational models ▪ Helps motivate patients to play a larger role in their health and health care 1 Center for Medicare and Medicaid Services 7
  • 8. Spending Breakdown for CHF 30-day Episodes with and without a Readmission N=4,992 CHF $10,569 episodes Avg Total Episode Cost = $23,511 $6,305 $3,975 24% $1,453 $832 $379 Index Readmits PAC OPD Physician Other % Total 27% 45% 17% 2% 6% 4% Costs 76% $5,936 Avg Total Episode Cost = $9,440 $2,510 Number of $0 $288 $337 $368 Episodes Index Readmits PAC OPD Physician Other % Total 63% 0% 27% 3% 4% 4% Costs 8 Source: Medicare FFS claims data, 2010
  • 9. Preliminary working draft; subject to change Case for change: variation in costs by episode are substantial even after adjusting for risk Total average cost per episode post-risk adjustment by Principal Accountable Provider, 2008-2010 Simple upper respiratory infection1 Pregnancy2 $120 Total episodes ~30,000 Total episodes ~80,000 $5,000 Median cost $3,608 100 Median cost $57 10% percentile $3,208 10% percentile $44 90% percentile $4,071 80 90% percentile $76 4,000 60 3,000 40 2,500 20 500 0 0 ADHD3 Total hip replacement $12,000 $20,000 Total episodes 140 10,000 Median cost $7,953 Total episodes ~20,000 10% percentile $5,867 8,000 Median cost $1,641 15,000 90% percentile $12,814 10% percentile $1,073 6,000 90% percentile $7,046 10,000 4,000 5,000 2,000 0 0 1 Episode costs for children less than 10 risk-adjusted by a historically-derived multiplier. 2 Individual episode costs risk-adjusted for clinical drivers of severity based upon historically-derived multipliers. 3 Eligible defined as ADHD without comorbidities between ages 6 and 17. SOURCE: Arkansas Medicaid claims data; Team analysis 9 9
  • 10. Preliminary working draft; subject to change Wave 1 episodes Principle Accountable Provider Total Hip/ Knee ▪ Surgical procedure plus all replacement related claims from 30 days  Orthopedic surgeon prior to procedure to 90 days after ▪ Pregnancy-related claims for Perinatal mother from 40 weeks before (non-NICU1) to 60 days after delivery  Delivering provider ▪ Excludes neonatal care ▪ 21-day window beginning with Ambulatory URI initial consultation  First provider to diagnose ▪ Excludes inpatient costs and patient in-person surgical procedures Acute/post- ▪ Hospital admission  Admitting hospital acute heart failure ▪ Care within 30 days of discharge  Depends care pathway ▪ 12-month episode • Physician ADHD ▪ Includes all ADHD services + • Licensed clinical pharmacy costs (with exception of psychologist, and/or initial assessment) • RSPMI provider 10.5
  • 11. Preliminary working draft; subject to change What’s next Examples Hip/ knee • Stents replacements • Pacemakers Perinatal • Include NICU • Urinary tract infections Ambulatory URI • Ear infections Acute / post-acute • Pneumonia CHF • Myocardial infarction ADHD • Depression Developmental • Long-term care disabilities • Severe and persistent mental illness