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Opening Remarks: The State's Role in the Quality Agenda

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On January 17, 2008, Anthony Rodgers gave opening remarks about the State's Role in the Quality Agenda at the State Healthcare Quality Improvement Workshop. This is the text version of the event's slide presentation. Please select the following link to access the slides: (PowerPoint® File, 5.0 MB; PDF File, 510 KB; PDF Help).

Slides: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 | 28 | 29 | 30


Slide 1: State Role in the Quality Agenda

Anthony Rodgers
Director
Arizona Health Care Cost Containment System

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Slide 2: Quality and Cost Containment Rationale and Focus of the State of Arizona

Quality and Cost Containment Rational and Focus of the State of Arizona.

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Slide 3: Statement of Rationale

The State of Arizona plays a key role in quality improvement and overall health care cost containment for its citizens.

Key Factors in Arizona's Quality Improvement and Cost Containment Focus:
 1. The State of Arizona is a key stakeholder in improving health care quality and containing cost for Arizonans.
 2. Arizona has significant state budget and program resources invested in the state Medicaid program, SCHIP, state employee health programs.
 3. Health care quality and cost have a significant impact on the state's business environment and overall competitiveness.

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Slide 4: Arizona's Health Care System Strategic Environment Scan

Environmental assessment by region/state:

  • Key Attributes
    • Growth
    • Age
    • Health Status
    • Etc.
  • Medical Cost Trends
    • Cost
    • Utilization
    • Drug Trend
    • Etc.
  • Medical Resources
    • Availability
    • Costs
    • Training
  • Regulatory Climate
    • Insurance
    • Mandates
    • Medicare
    • Medicaid
  • Payers
    • Public
    • Private
    • Employers
    • Self
  • Economic Trends
    • Economic Growth
    • Job Creation
    • Employer Sizes
    • Unemployment
    • Etc.
  • Health Care Delivery Systems
    • Stability
    • Availability
    • Practice Patterns
    • Level of Integration
  • Environment
    • Living Conditions
    • Community
    • Resources
    • Public Health
    • Local Knowledge

This environmental assessment by region/state flows into the strategic issues addressed:

  • Uninsured
    • Low income & others
    • Uncompensated care
    • Safety net
    • Public health
  • Access to Care
    • Primary care
    • Specialty Care
    • Urgent Care
    • Hospital/ER
    • HCBS
    • Institutional
  • Disease Management/Chronic Illness Management
    • System Effectiveness
    • Information System
    • Evidence-Based Models
    • Outcomes
  • Acute and LTC Service Needs
    • Networks
    • Infrastructure
    • Financing/Costs
  • Medical Management
    • Case management
    • Models
    • Patient Centered
    • Quality of Care

The strategic issues, plus cost and quality, flow into strategic initiatives:
  — Both the public sector and private sector impact communities and individuals.

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Slide 5: HEDIS Measurements

Typical System Performance Measures:

  • Effectiveness of Care:
     — Childhood immunization status
     — Adolescent immunization status
     — Treat child with upper respiratory infection
     — Test child with pharyngitis
     — Breast cancer screening
     — Cervical cancer screening
     — Chlamydia screening in women
     — Controlling high blood pressure
     — Beta blocker
     — Cholesterol management
     — Comprehensive diabetes care
     — Appropriate meds for asthmatics
  • Access & Availability
     — Adults' access
     — Children's access
     — Annual dental visits
  • Health Plan Stability
     — Practitioner turnover
     — Claims timeliness
     — Calls
  • Use of Services
     — Frequency of prenatal care
     — Well-child first 15 months
     — Well-child 3-6
     — Adolescent wellcare
     — Inpatient utilization - general hospital
     — Ambulatory care
     — Inpatient utilization - non-acute
     — Discharge & ALOS - maternity
     — C-section rates
     — Vaginal birth after c-section
     — Births & ALOS - newborns
     — Outpatient drug utilization
     — Board certification/residency comp

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Slide 6: State Scorecard Summary of Health System Performance Across Dimensions

This slide shows each state's rank on access, quality, avoidable hospital use & costs, equity, and healthy lives. The rankings are color-coded to indicate the top quartile, the second quartile, the third quartile, and the fourth quartile.

Overall, the top quartile consists of the following states:

  1. Hawaii
  2. Iowa
  3. New Hampshire
  4. Vermont
  5. Maine
  6. Rhode Island
  7. Connecticut
  8. Massachusetts
  9. Wisconsin
  10. South Dakota
  11. Minnesota
  12. Nebraska
  13. North Dakota

The second quartile consists of the following states:

  1. Delaware
  2. Pennsylvania
  3. Michigan
  4. Montana
  5. Washington
  6. Maryland
  7. Kansas
  8. Wyoming
  9. Colorado
  10. New York
  11. Ohio
  12. Utah

The third quartile consists of the following states:

  1. Alaska
  2. Arizona
  3. New Jersey
  4. Virginia
  5. Idaho
  6. North Carolina
  7. District of Columbia
  8. South Carolina
  9. Oregon
  10. New Mexico
  11. Illinois
  12. Missouri
  13. Indiana

The fourth quartile consists of the following states:

  1. California
  2. Tennessee
  3. Alabama
  4. Georgia
  5. Florida
  6. West Virginia
  7. Kentucky
  8. Louisiana
  9. Nevada
  10. Arkansas
  11. Texas
  12. Mississippi
  13. Oklahoma

Source: Commonwealth Fund State Scorecard on Health System Performance, 2007.

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Slide 7: Cost and Quality Factors

Think of all factors that need to be managed to maximize value based health system performance

This slide shows a transparent cube indicating the "patient episode of care." Along the length of the cube is the "Cost of Care", and "Quality of Care" runs along the width of the cube.

Inside the cube are the following terms:

  • Co-morbidities
  • Access to care
  • Med mgmt process
  • Compliance
  • Alternative therapies
  • Out of pocket
  • Disease burden/risk
  • Provider type
  • Time parameters
  • Fees and rates

Outside of the cube, at the bottom of the page, reads "Value Performance Transparency."

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Slide 8: Managed Care Cost and Quality Management Tools

  • Benefits packages
     — Benefit limitations
     — Co-pays
     — Deductibles
  • Administrative cost controls
     — Provider contracting
     — Medical Risk Management
     — Provider rate setting
     — General administrative expenses
     — Pay of Performance
  • Clinical management
     — Utilization management
     — Disease and care management
     — Case management of high risk cases
     — Quality improvement management

These tools have not driven health system transformation.

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Slide 9: Levels of Medical Management Strategies

This slide shows a pyramid of various population segments and their corresponding medical management process.

Patients and Beneficiaries: Medical management processes include health assessments, behavioral modification, and health information and prevention.

Patients: The medical management process includes care management.

Single High Impact Disease Population: Medical management process is disease management

High Disease Burden Population: Medical management process is case management

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Slide 10: Managing Health System Transformation in Arizona

1960s-1970s: Fee for Service

  • Fee for Service
     — Inpatient focus
     — O/P clinic care
     — Low reimbursement
     — Poor access and quality
     — Little oversight
  • No organized networks
  • Focus on paying claims
  • Little Medical Management

1980s-1990s: Managed Care

  • Prepaid healthcare
     — More comprehensive benefits
     — More choice and coverage
  • Contracted network
  • Focus on cost control and preventive care
     — Gatekeeper
     — Utilization management
     — Medical Management

2000+ : Integrated Health

  • Patient Care Centered
     — Personalized Health Care
     — Productive and informed interactions between Patient and Provider
     — Cost and Quality Transparency
     — Accessible/Affordable Choices
     — Aligned Incentives for wellness
  • Integrated networks and community resources
  • Aligned cost management processes
  • Rapid deployment of new knowledge and best practices in quality care
  • Patient and provider interaction
     — Information focus
     — Aligned care management
     — E-health capable

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Slide 11: The Vision of the Transformed Patient Care Management Process

This slide is a series of graphics and text boxes. At the top of the page reads, "electronic health record." In the center of the page reads, "productive interactions," with arrows to "informed, activated patient," and "prepared clinical team." On the bottom of page reads, "Clinical and value decision support tools."

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Slide 12: Overcoming Barriers to Quality Improvement and Cost Containment

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Slide 13: Quality Management & Cost Containment Maturity Model

This slide shows a model of "initial" hitting an infrastructure barrier; "managed" runs into quantitative knowledge barrier, and "optimized" runs into changeable barrier.

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Slide 14: Value Driven Cost and Quality Improvement Evolution

At the transactional level, there is utilization review and quality assurance management. Retrospective transactional activities occur. At the managed level, there is quality improvement management and public reporting. Proactive quality and cost management occurs at this level. At the optimizing level, there is value driven decision support management. Predictive modeling and simulation for optimization occurs at this level.

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Slide 15: Maturity Barriers

 

Infrastructure Barriers Quantitative Knowledge Barriers Optimized Health
Barriers
Information Systems do not support medical management data Limited medical management organization core competencies and know how Maintenance of effort is more important than optimizing results
Telecommunication technology does not adequately support customer care Quantitative analysis of data is limited and poorly integrated with evidence based medical knowledge Future view is limited
Information systems within network are not linked for transfer of medical information Data is not timely and integrated with other relevant information Organization becomes focused on internal processes only
Data from various parts of the health care system is not integrated No formal processes to convert information into useful disease management data No systematic organizational maturity plan
Limited web based applications and functionality Decision support systems are limited in capability and not part of executive decision making Limited integration of organizational goals
Limited performance and decision support capability No formal process to improve organizations core competencies No continuous and systematic evaluation process

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Slide 16: AHCCCS Value Driven Decision Support Environment

This slide is a flow chart. External data/profiles, beneficiary data, and program segmentation analysis flow into mega data.

External Data / Profiles include:

  • Population Survey; Performance Benchmarks
  • Evidence-Based Medicine
  • Public & Specialized Data Sets

Beneficiary Data include:

  • Encounter
  • Medical Data
  • Population
  • Prescription Drug
  • Premiums/Cap
  • Eligibility Data
  • Program Segmentation Analysis

Mega Data include:

  • Management
  • Integration
  • Profiles
  • Translation
  • Standards

Mega Data flows into a data warehouse, which flows into Chronic Illness Sub-databases and Registries and Decision Support Reporting Uses. These include:

  • Medical management
  • Fraud detection
  • Performance analysis
  • Eligibility analysis
  • Medical/drug U/R & cost

Environment includes the following Decision Support Analytics Tools and also flows into Decision Support Reporting Uses:

  • Episodes of Care
  • Performance Analytics
  • Disease Staging

Finally, medical management, fraud detection, performance analysis, eligibility analysis, medical/drug U/R & cost, as well as decision support analytics tools (episodes of care, performance analytics, disease staging) flow into policy and standards development and public reporting.

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Slide 17: Aligning Arizona Quality and Cost Containment Strategies between Policy Makers, Payers, Providers, and Patients

Aligning Arizona Quality and Cost Containment Strategies between Policy Makers, Payers, Providers, and Patients.

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Slide 18: MCO Levels of Cost and Care Management Effectiveness

 

Process Routine Moderate Highly Effective
Utilization Management Traditional UM focusing on prior authorization and concurrent review with standard industry criteria. No onsite UM; no relationship with providers; no assignment of staff to specific providers Assignment of UM staff to each hospital; good relationships with hospital staff and providers "Gold Standard" providers identified for less intensive UM; UM integrated with CM, DM, outreach, and contracting. Optimal use of trended UM data with appropriate benchmark data.
Case Management Catastrophic, high cost cases Incorporate CM with contracting department initiatives, focus on cost management; connect with member profiling and provider feedback ROI analyses at case and program wide level
Disease Management/Health Management Broad non-specific health management programs and/or the presence of an OB program OB (60% of cases), Asthma, 1-2 additional targeted health management programs based on volume Broad multi category programs based on epi studies, ROI analyses for all programs. OB program "touches" 80% + cases.
ER and High Utilizers focus No focus specific to ER utilization as evidenced by profiling reports or outreach efforts Committees/workgroups in place to examine opportunities to decrease costs for ER and high cost utilizers; ER utilization trended and monitored frequently; root cause behind rates analyzed; ER and cost triggers for CM with associated outcome measures for C Member and provider profiling, outreach, and noted reduction in costs
Data Analysis Broad category UM reporting with little benchmarking and trend analysis Trend analyses by volume, costs, disease categories, member, provider, hospital, geographic issues. Cost driver reduction analyses using data (inpatient, pharmacy, outpatient, ER, etc) pervasive throughout organization. Risk adjusted methodologies.
Health Promotion and Management Broad outreach with blind mailings; no focused DM Outreach and interventions tied to the efforts of the UM, CM programs. Predictive modeling (to identify potential high cost members before these costs are incurred), tied to UM, CM, and outreach interventions
Contracting Contracting with all providers regardless of cost or quality outcomes Feedback from UM and CM intricately tied to contracting Network based on quality improvement and cost reduction; Incentives for targeted cost reduction
Profiling No profiling Profiling of providers and members for monitoring purposes but with minimal improvement documented in outcomes or costs due to profiling efforts Profiling data used for provider and member outreach; Cost savings noted in ROI analyses of outreach interventions; Focused provider network; noted improvement in appropriate utilization results due to member outreach from profiling
Pharmacy Reimbursement Arrangements Non-competitive AWP and MAC reimbursement pricing (based on industry standards) Moderately competitive AWP and MAC reimbursement pricing (based on industry standards) Aggressive AWP and MAC reimbursement pricing (based on industry standards)
Formulary Structure Open formulary Closed formulary Closed formulary, 72 hour bridge supply and subsequent physician follow-up
Medication Utilization Management Programs Standard concurrent DUR program Standard utilization management programs: Standard Step Therapy; Standard Quantity Limit Lists; Prior Authorization for high cost medications Aggressive utilization management programs: Enhanced/Aggressive Step Therapy; Expanded Quantity Limit Lists; Physician Education Programs or Profiling; Targeted Fraud/Abuse Programs (polypharmacy, polyphysician, pharmacy lock-in)

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Slide 19: Hypothetical Illustration: Performance by MCO

This slide shows a graph entitled "Performance Index (PI) by MCO)" with an x-axis of MCO and a y-axis of PI. The graph indicates 1.21 PI for MCO1, 0.89 for MC02, and 0.98 for MC03.

Performance Index equals the Expected Paid divided by the Actual Paid and is controlled by ETG Case mix.

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Slide 20: MCO Performance Quality and Cost Analysis

  • Assign a score of 0-1-2 or 0-1/2-1 for Routine-Moderate-Highly Effective. Scoring rule depends on the process assessed.
  • Total up the scores for each MCO (adjustment for relative risk across MCOs )
MCO Pharmacy
0 - 4 points
Medical
0 - 16 points
Total
0 - 20 points
MCO 1 1.25 4.50 5.75
MCO 2 2.50 6.50 9.00
MCO 3 3.50 8.75 12.25
MCO 4 2.00 6.00 8.00
MCO 5 3.25 7.75 11.00
Weighted (based upon revenue) 10.20

The slide shows the example of a chart that depicts difference MCOs and the number of points they would receive for pharmacy and for medical. The point system indicates 0 for routine medical management, 10 for enhanced medical management, and 20 for highly effective medical management.

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Slide 21: The Life of a Care Episode

A "clean period" exists 60 days before the first "anchor" record and 60 days after the last "anchor" record.

First Anchor: You visit your Primary Care Physician for sinusitis. He gives you a prescription and orders blood work. He is concerned that you have a history of sinus infections, so he refers you to an ENT. The PCP visit becomes the first anchor and, because it has been more than 60 days since you have visited him for sinusitis, it begins the episode. The PCP visit, prescription and lab work together form a cluster within the episode.

Second Anchor: You visit the ENT. She orders a sinus X-ray and more blood work. You schedule a follow-up appointment. The ENT visit, X-ray and lab work form another cluster within the same episode.

Third Anchor: You visit the ENT for your follow-up appointment. She tells you that the results of the tests came back negative. She prescribes a preventative medication to help reduce the occurrence of sinusitis. The ENT visit and prescription form another cluster within the same episode.

Conclusion: The medication worked and you have not been back to either doctor within 60 days from your last visit for this illness. Since it has been 60 days since the last anchor record for this illness, the episode is now considered concluded.

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Slide 22: Hypothetical Illustration: Provider Cost Performance by Managed Care Organization

The slide shows a scatterplot of performance index (PI) by specialty OB/GYN. Along the x-axis is MCO and along the y-axis is PI. The graph shows the average for each MCO and expected costs.

Expected Cost Performance = 1.00. Higher than expected cost < 1.00. Better than expected cost > 1.00.

Performance Index equals the Expected Paid divided by the Actual Paid and is controlled by ETG Case mix.

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Slide 23: The Patient and Provider Quality Improvement and Cost Containment Alignment as the Essential Driver of Health System Transformation

The slide shows that productive interactions occur between informed, activated patients and a prepared clinical team.

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Slide 24: Individual Patient Episode of Care Life Cycle Tracked Through an EHR

The slide shows predicted costs for chronic sinusitis (without surgery) episode is $950, and the outcome cost is $1,020. Two drug therapy cost reduction opportunities occur in the life of a chronic sinusitis episode.

A "clean period" exists 60 days before the first "anchor" record and 60 days after the last "anchor" record.

First Anchor: You visit your Primary Care Physician for sinusitis. He gives you a prescription and orders blood work. He is concerned that you have a history of sinus infections, so he refers you to an ENT. The PCP visit becomes the first anchor and, because it has been more than 60 days since you have visited him for sinusitis, it begins the episode. The PCP visit, prescription and lab work together form a cluster within the episode.

Second Anchor: You visit the ENT. She orders a sinus X-ray and more blood work. You schedule a follow-up appointment. The ENT visit, X-ray and lab work form another cluster within the same episode.

Third Anchor: You visit the ENT for your follow-up appointment. She tells you that the results of the tests came back negative. She prescribes a preventative medication to help reduce the occurrence of sinusitis. The ENT visit and prescription form another cluster within the same episode.

Conclusion: The medication worked and you have not been back to either doctor within 60 days from your last visit for this illness. Since it has been 60 days since the last anchor record for this illness, the episode is now considered concluded.

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Slide 25: Hypothetical Illustration: Performance by Disease by Patient (Asthma)

The slide shows a scatterplot of performance index (PI) by Asthma. Along the x-axis is MCO and along the y-axis is PI. The graph shows the average for each MCO and expected costs.

Performance Index equals the Expected Paid divided by the Actual Paid and is controlled by ETG Case mix.

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Slide 26: Tools the State of Arizona Has to Drive Quality Improvement and Cost Containment

Tools the State of Arizona Has to Drive Quality Improvement and Cost Containment.

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Slide 27: State Tools to Improve Health System Quality and Control Cost

The slide shows a Venn diagram with three circles. One circle reads, "regulation/licensure." Another circle reads, "standards setting/public reporting." A third circle reads, "Program Contracts and Incentives." Outside of the "Standards Setting/Public Reporting" circle, text reads, "Hospital Network Performance Cost and Quality Information." Outside the "program contracts and incentives" circle, text reads "Medicaid/SCHIP and public employees."

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Slide 28: Policy and Programmatic Tools For Driving State Level Health System Transformation

Current State Level Tools for Driving Quality Improvement:

  • Regulation
  • Licensure
  • Public reporting
  • Setting standards
  • Medicaid and SCHIP program contracting
  • Public employee health care contracts

Future Health System Transformation Tools

  • Health information technology and public private e-health initiatives
  • New mega databases
  • New decision support tools for policymakers, payers, providers, and patients/consumers
  • Aligned incentives for patients and providers

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Slide 29: The Next Generation of Electronic Health Information Supported Decision Support Tools

  • The next generation of health care decision support applications will be provide payers, MCOs, providers, and patients the tools for value driven decision making.
     — Electronic health record will be used to populate the next generation of Health Care Decision Support tools.
     — Provide providers and patients with a common point of reference during the care episode that can provide patient care roadmap and a personal Performance Index with both quality and cost information.
     — New health care quality and cost simulation tools will provide policy makers, payers, providers, and patients common information and more personalized data.
     — New integrated decision support tools will create a whole new dimension of interaction at all levels of the care continuum.
     — Support consumer directed care and self management.
     — Provides the opportunity for alignment of patient and provider incentive programs.

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Slide 30: AHCCCS - Our first care is your healthcare

This slide has a large A on it. Beneath the "A" reads AHCCCS - Our first care is your healthcare.

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Internet Citation:

State Role in the Quality Agenda. January 2008. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/qual/kt/workshop0108/rodgers.htm


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