Presentation for a Graduate Course in Health Policy at Trinity College, Hartford CT. In two parts - part 1 presentation on Value-Based Systems. Part 2 is on Health Equity (in progress).

1. PBL 891 – Health Policy S.B. Chatterjee
POLICY BRIEF – Pay-for-Value in Healthcare & Equity – 1 (of 2 parts)

2. Agenda
POLICY BRIEF – Pay-for-Value in Healthcare & Equity - I
Defining Value in Healthcare
Alternate Payment Systems
Payment, Costs & Delivery Systems
Volume-based to Value-based
Strategies for Value-based
✓
✓
✓
✓
Massachusetts ✓ – P4P & Equity Lessons Learned
Connecticut Innovation Plan Proposal
✓
✓
1
2
3
4
5
6
7

3. Defining Value
In Healthcare
Mayo Clinic
New England Journal of Medicine
(Swensen, S. et al (2010))

4. Variables For Which The Provider Is At Risk Under Alternative Payment Systems.
Miller H D Health Aff 2009;28:1418-1428

5. Miller H D Health Aff 2009;28:1418-1428

6. How Different Payment Systems Solve Different Cost/Quality Problems.
Miller H D Health Aff 2009;28:1418-1428

7. Transition In Both The Payment And The Delivery Systems.
Miller H D Health Aff 2009;28:1418-1428

8. VoFluirmste C-Buarvseed to to S Veaclouned-B Causrevde MMaarrkkeettss
Source: HRET - Second Curve of Health Care http://www.hpoe.org/resources/hpoehretaha-guides/1360
8

9. Second Curve Evaluation Metrics:
SummVaalruye-Based Strategies
• Strategy #1: Aligning Hospitals, Physicians and Other
Providers Across the Continuum of Care
• Strategy #2: Utilizing Evidence-Based Practices to
Improve Quality and Patient Safety
• Strategy #3: Improving Efficiency through
Productivity and Financial Management
• Strategy #4: Developing Integrated Information
Systems
Source: HRET - Second Curve of Health Care http://www.hpoe.org/resources/hpoehretaha-guides/1360

10. Other Must-Do Health Care Transformation
Strategies Other (Value-Strategies Based #5-Strategies
10)
5. Joining and growing integrated provider networks and care
systems
6. Educating and engaging employees & physicians to create
leaders
7. Strengthening finances to facilitate reinvestment and innovation
8. Partnering with payers
9. Advancing an organization through scenario-based strategic,
financial and operational planning
10. Seeking population health improvement through pursuit of the
“Triple Aim” (improving patient experience of care including
quality and satisfaction, improving the health of populations, and
reducing the per capita cost of health care)
Source: HRET - Second Curve of Health Care http://www.hpoe.org/resources/hpoehretaha-guides/1360

11. Strategy #1: Aligning Hospitals, Physicians and Other Providers Across
the Continuum of Care
Strategy #1: Aligning Hospitals, Physicians and Other Providers
Across the Continuum of Care
11
Second-Curve
First-Curve
Metrics
Metrics
• Percentage of aligned and
engaged physicians
• Percentage of physician and
other provider contracts with
quality and efficiency incentives
• Availability of non-acute
services
• Distribution of shared savings /
gains to aligned clinicians
• Number of accountable
covered lives
• Percentage of clinicians in
leadership
• Number of physicians
on staff
• Financial profit and
loss from employed
physicians
• Hospitalist utilization
• Number of contracts
for non-acute services
Source: HRET - Second Curve of Health Care http://www.hpoe.org/resources/hpoehretaha-guides/1360

12. Massachusetts –
Spends More on Health Care than Any Other State
$10,000
$9,000
$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
NATIONAL AVERAGE
UT AZ GA ID NV TX CO AR CA AL VA SC TN NC OK MS OR KY MI MTNM IN IL KS WA LA HI IA MOWY NE SD OH FL WI MNMD NJ VT WV PA ND NH RI NY DE ME CT AK MA
State
BLUE CROSS BLUE SHIELD MARCH 2012 OF MASSACHUSETTS FOUNDATION
12
PER CAPITA PERSONAL HEALTH CARE EXPENDITURES, 2009
NOTE: District of Columbia is not included.
SOURCE: Centers for Medicare & Medicaid Services, Health Expenditures by State of Residence, CMS, 2011.

13. Massachusetts –
Total Health Spending Will Double from 2009 to 2020
$68
$72
$77
$81
$86
$92
$97
$103
$109
$116
$123
ACTUAL PROJECTED
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
13
ACTUAL AND PROJECTED MASSACHUSETTS TOTAL PERSONAL HEALTH CARE EXPENDITURES, 1991-2020
(BILLIONS OF DOLLARS)
$20 $21 $23 $24 $25 $27 $28 $30 $31 $33
$36
$39
$42
$45
$48
$52
$56 $58
$61
Year
SOURCES: Centers for Medicare & Medicaid Services, Health Expenditures by State of Residence, CMS, 2011; Massachusetts Division of Health Care Finance and Policy, “Massachusetts Health Care Cost
Trends, Historical (1991-2004) and Projected (2004-2020),” November 2009.

14. Massachusetts
Lessons learned for Health Equity
• Health equity metrics in Pay-for-Performance
• Population diversity – unsupported
assumptions for target hospitals
• Metrics burdensome adding to regular
reporting
• Top-down compliance – ineffective structural
changes
Source: Alberti, et al. Making Equity a Value in Value-Based Health Care - Acad Med. 2013;88:1619–1623.

15. Connecticut
Value-based Payment Proposal
• Two tracks
– Pay-for-Performance (P4P) – rewards for
quality & care experience
– Shared Savings Program (SSP) - share the
savings
• Alignment of payers to reward structures
tied to common scorecard (of P4P & SSP)
Source: Connecticut Healthcare Innovation Plan
http://www.healthreform.ct.gov/ohri/lib/ohri/sim/plan_documents/ct_ship_2013_12262013_v82.pdf

16. POLICY BRIEF – Pay-for-Value in Healthcare & Equity – 2
Focus on Health Equity
Thank you!