Applying Science to Transform Lives

TREATMENT RESEARCH INSTITUTE

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Payment Reform for Substance Use Disorder

Treatment

Mid-Atlantic CTNRegional Dissemination Workshop

June 3-4, 2010

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Overview

• Addiction is a Health Care issue• Chronic not acute condition

• Health care financing/payment reform

• Some new models• Implications for Addiction Treatment

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Core Foundation

• Health Care Arena – Addiction is a HEALTH problem:

• Part of mainstream healthcare

• Chronic not acute condition:• Purchasers will need to change contracts, funding

mechanisms and expectations• Treatment programs will need to change from acute to

chronic care design and service delivery

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Core Foundation

• Medication Assisted Treatment (MAT)• New medications for addiction• Psychotropic meds for co-occurring MH disorders

• Recovery is the goal• Treatment prepares for recovery• Continuing care• Disease & self management not program completion

• Recovery Support• Recovery Coaches/Linkage Coordinators• Family and other “community strengths” support• Return to treatment program for “tune ups”, etc.

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Acute Care Assumptions

• Some fixed amount or duration of treatment will resolve the problem

• Treatment Completion is a goal and expected outcome

• Evaluation of effectiveness should occur following completion

• Poor outcome means failure

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In Chronic Care

• The effects of treatment do not last very long after care stops

• Patients who are out of contact are at elevated risk for relapse

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New Expectations

• Programs are responsible for results during treatment

• Treatment offers choices – patient centered/adaptive care

• Easy transition between levels of care and treatment programs

•Collaboration vs. competition among programs

• Recovery Oriented Systems of Care:•Continuing care and self-management

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Health Care Payment/Financing Reform

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Congressional Research ServiceHealthcare Payment Reform

• Institute of Medicine issued several reports recommending differential payments based on quality in 1999, 2001 and 2006.

• Medicare Payment Advisory Committee has recommended paying providers different rates based on differences in quality in 2004, 2005 and 2006.

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Disruptive Innovation(NY Times 2/1/09)

• Concept pioneered by Clayton Christensen from Harvard Business School

• Old business models based on treating illness not promoting wellness– Hospitals benefit from full beds and repeat

visits– No financial incentive to keep patients healthy

• Acute disease drove the costs

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Disruptive Innovation

• Disruptive innovation will shape healthcare systems to provide a continuum of care focused on each individual’s needs, instead of focusing on the crises.

• Fixed fee, integrated systems• Routine cases handled through lower cost

facilities• Follow patients wherever they go within an

integrated system• Integrated systems are the disruptive

innovation needed to be turned loose on healthcare

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Health CEO’s for Health Reform

• 30% of resources spent on health care in US are a result of too few efforts to coordinate care and not enough attention to quality.

• Realign current incentives to create new payment structures that reward high-quality, patient centered, efficient care, while discouraging the fragmented and low –value care that drives health care cost today.

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Health CEO’s for Health Reform

• Improve the way we deliver care by moving toward more integrated, coordinated delivery models.

• Align incentives across multiple providers to give efficient, high-quality care both medical and business value.

• Link payment to value not volume.

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Health CEO’s for Health Reform“VISION”

• System should deliver the right care, at the right time, at the right place, with the right outcome.

• Payment policy should be refocused to reward:

• Clinical quality of care• Patient satisfaction• Better health • Efficient resource use.

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Health CEO’s for Health Reform“Specific Proposals”

• Fee for service is unsustainable:

• Transition the entire delivery system away from fee for service payment and toward outcome driven, bundled payments that encourage provider accountability.

• Payment will be dependent on compliance with standards related to quality of care, patient outcomes and satisfaction, and patient-centeredness.

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Health CEO’s for Health Reform“Specific Proposals”

• Develop and transition toward bundled payment models:

• Linking payment to quality and patient outcomes within an episode or continuum of care delivery and allowing clinicians to share in the potential savings will encourage care coordination, increase quality and efficiency, and refocus health care on the patient.

• Bundled payments can be used to set “efficient” payment rates for groups of services that should be delivered to specific types of patients.

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Build Systems of Care Through Partnerships

• Providers must act in concert:– Handoffs: adequate communication, sharing of

patient information (transparency), clear lines of accountability

– Transitions: carefully planned and executed with adequate patient and family caregiver involvement

– Referrals to specialists: informed by complete information on services performed and the benefits of additional services

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Build Systems of Care Through Partnerships

– Adherence to practice guidelines: the responsibility of all providers of the complete bundle of services

– Provision of ongoing support: to patients for self-management and maintenance of healthy lifestyles

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Build Systems of Care Through Partnerships

• Providers must look beyond walls of their own institutions or practices

• Providers will likely pursue various types of “partnership’ arrangements to work more closely and effectively, and to share financial rewards

• Some of the greatest gains will come from the collective efforts of the multiple stakeholders in the system

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Payment Reform Models

• Pay for Performance

• Prometheus Payment

• Accountable Care Organizations (ACO’s)

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Pay For Performance

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Theory and Conceptual Foundation

• Economic theory holds that individual purchasers compare their implicit assessment of value against the explicit price to make optimal purchasing decisions.

• In health care, this relationship has been almost non-existent because buyers and payers are not typically the patients who receive the care.

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Theory and Conceptual Foundation

• Insurers and payers have not made any distinctions in payments to providers who exhibit differences in quality.

• P4P programs are an attempt to bring this relationship between prices and value, as reflected in quality care, into a closer balance.

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A P4P Research ReportMed-Vantage

• Fee for service payments encourage overuse, while capitated payments encourage under-use.

• Neither systematically rewards excellence in quality.

• P4P incentive programs are designed to overcome these limitations by aligning financial reward with improved outcomes.

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Congressional Research ServiceReport for Congress

P4P Defined• A pay for performance system is a

remuneration arrangement in which a portion of the payments is based on performance assessed against a defined measure.

• Typically, there is another component of the remuneration that is independent of the amount at risk.

• The terms merit and bonus pay are also used to describe similar systems.

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Elements Common to P4P Programs

• A set of targets or objectives that define what will be evaluated

• Performance standards for establishing the target criteria

• Measures to determine whether the targets have been achieved

• Rewards – typically financial incentives – that are at risk, including the amount and the method for allocating payments among those who meet or exceed the reward threshold.

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Impact of Private Sector P4P Programs

• Rewarding Results grant program funded by RWJF and California Healthcare Foundation, and administered by the Leapfrog Group

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Impact of Private Sector P4P Programs

• Financial incentives motivate change – provided they are large enough to make a difference.

• Non-financial incentives also can make a difference.

• Engaging physicians is a critical activity – they must be brought in early as collaborators to ensure that the goals are clinically meaningful.

• There is no clear picture yet of return on investment.

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Impact of Private Sector P4P Programs

• P4P is not a magic bullet – it is one of a number of activities that can work to improve healthcare quality and change the way it is delivered and financed.

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MedVantage P4P Survey (2008)

N = 62 P4P Program Responses• What Results do you attribute to P4P?

• 84% - Performance on clinical measures improved• 66% - Improvement was statistically significant

• What changes do you anticipate making?• 65% - Expand scope or number of measures used• 53% - Change performance domains or relative

weighting of measures• 0% - Discontinue the program

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Prometheus Payment

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PROMETHEUS Payment

• Taking up IOM’s challenge, a group of experts from healthcare financing, law, medicine, quality improvement, research and economics, convened in 2004 to develop a new provider payment model.

• Seeks to transform health care payment by moving away from unit of service payment to episode of care payment.

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PROMETHEUS Payment

• Tests paying for individual, patient centered treatment that fairly rewards providers for coordinating and providing high quality care.

• Centers on packaging payment around a comprehensive episode of care that covers all patient services related to a single illness.

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PROMETHEUS Payment

• Covered services are determined by commonly accepted clinical guidelines or expert opinion that lay out tested, medically accepted methods for best treating the condition from beginning to end.

• The services are calculated into “Evidence-informed Case Rates” (ECR’s), which creates a specific budget for the entire care episode.

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PROMETHEUS Payment

• ECR’s include all the covered services related to the care of a single condition, bundled across all the providers who would treat a given patient for a given condition.

• What makes PROMETHEUS different is its strong incentive for clinical collaboration to ensure positive patient outcomes.

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PROMETHEUS Payment

• Provider is paid monthly for the duration of the ECR an amount which reflects 90% of the agreed upon rate.

• 10% holdback is paid based on the results of the Scorecard:

• Quantifies whether the salient elements of the Clinical Practice Guideline (CPG) were provided, the patient’s experience of the care, and the patient’s outcomes.

• 70% of the score based on what the provider himself does; 30% reflects what other providers treating the patient does.

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PROMETHEUS Practice Nexus

• Intended to foster clinical collaboration and flexibility in how care is provided, so long as the salient elements of the CPG are present.

• Because all providers in the ECR do better financially when they improve quality, PROMETHEUS encourages collaboration among providers, especially those who score highly on the scorecards.

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Accountable Care Organizations (ACO’s)

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Accountable Care Organizations

MedPac Report to Congress – 2009

• Basic concept – holding a set of providers responsible for the health care of a population

• This set of providers is an Accountable Care Organization

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ACO’s

• Includes at least primary care physicians, specialists and hospitals

• Defining characteristic – the ACO members agree to accept joint responsibility for the quality and cost of care received by their ACO patients.

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ACO’s

• Goal – to create an incentive for providers to constrain growth in volume while improving quality of care

• ACO member providers are held jointly responsible for quality and cost metrics

• Expected to improve coordination of care and reduce duplication of services

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ACO’s

• If the ACO meets both quality and cost targets, members receive a bonus

• If the ACO fails to meet both, no bonus and possible withholds

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ACO’s

• Idea is to create a set of incentives strong enough to overcome the incentives in fee-for-service system for increased volume without improving quality

• ACO’s are being envisioned as one tool to induce change in the health care delivery system

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Concluding Thoughts

• Why do people who know the least know it the loudest?

• If you’re going to try cross-country skiing, start with a small country.

• Health is merely the slowest possible rate at which one can die.

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Contact Information

Jack KempTreatment Research Institute

jkemp@tresearch.org 215-399-0980