Washington Report The Health Care Quality Revolution: A Front Line Report from the Nation’s Capital

1. Washington ReportThe Health Care Quality Revolution: A Front Line Report from the Nation’s Capital Bob Doherty, Senior Vice President Governmental Affairs and Public Policy, ACP New Jersey Chapter, ACP February 4, 2006

2. Key messages • American medicine is going through a revolution that will change the way care is delivered, how doctors are paid, and how physicians and patients relate to each other • Until recently, this revolution has been driven by those who pay the bills, not by those who deliver or receive the care • The health care quality revolution is too important to leave to the purchasers • Physicians need to be there as advocates for patients • ACP is leading an effort to advocate for reforms that will improve quality by supporting and recognizing the value of internists’ services

3. Are we really talking about a revolution? Oxford American Dictionary: Revolution (n): A complete change of method or conditions The effort to improve health care quality through measurement, reporting and re-alignment of payment incentives will result in a complete change of method or conditions in American health care

4. How will the methods and conditions in American medicine change? • Traditionally, quality improvement was something that physicians and other “providers” did for their own internal purposes, often using subjective criteria • Now and in the future, physicians and other providers will report to the public, employers, government and health plans on progress in maintaining and improving qualitybased on objective evidence-based quality and efficiency measures

5. How will the methods and conditions in American medicine change? • Traditionally, physicians relied on training, judgment, continuing education, peer consultation and recall in diagnosing and treating patients • Now and in the future, physicians’ judgment will be enhanced by expert guidance based on actionable evidence-based guidelines at the point of care

6. How will the methods and conditions in American medicine change? • Traditionally, physicians have been paid based on the work and costs involved in each visit or procedure • Now and in the future, an increasing portion of payments will be based on achieving measurable quality improvements

7. How will the methods and conditions in American medicine change? • Traditionally, physicians were compensated for diagnosis and treatment of acute episodes of illness and only for their own contributions • Now and in the future, physicians will be compensated for direction and coordination of care of patients with chronic diseases involving multi-disciplinary teams

8. How will the methods and conditions in American medicine change? • Traditionally, patients selected physicians based on “word of mouth” and convenience, with little or no objective basis to evaluate quality • Now and in the future, patients will be informed by public reports on physician performance and will use such information in selecting a doctor or clinic (“reputation” will no longer be sufficient)

9. Seeds of the quality revolution • Documented gaps in quality • The Institute of Medicine Report “Crossing the Quality Chasm” presented a call to action to improve health care in the US. (Institute of Medicine, 2001) • Studies showing an inverse relationship between costs and quality • Rising health care expenditures in both the private and public sectors

11. Seeds of the quality revolution • Increases in private sector insurance premiums and concern over lack of value for money spent • Federal expenditures increasing at double digit rates, resulting in bigger federal deficit, less money for competing priorities, and higher beneficiary out-of-pocket costs

12. Increased spending on physician services is driving up beneficiaries’ premiums: • Part B premium increased 13.2% percent on 1/1/06 due to increased spending. According to CMS: • “The most important single factor, accounting for most of the 9.9 percent increase in total Part B benefit payments, is rapid growth in the volume and intensity of Part B services” • “For physicians’ services, increases in utilization and intensity during 2004 were 6.3 percent, and are estimated to be 5.6 percent for 2005 and projected to be 6.4 percent for 2006.  These figures are much higher than the average utilization and intensity increase of about 1 percent per year between 1992 and 1999, and reflect an upward trend since 2000”

13. Medicare value based purchasing • Value-based purchasing: using the enormous purchasing power of the federal government (Medicare) to require “value” for the money being spent • Value involves some relationship between cost and quality • Value can’t be objectively assessed without measuring quality and efficiency

14. Medicare value based purchasing • VBP is evolving, but key components will likely include: • Pay for reporting ($ for submitting data to demonstrate structural capabilities and care consistent with evidence-based measures) • Pay for performance ($for achieving improvements based on quality, efficiency, and patient experience) • Ratings of providers based on quality, efficiency and patient experience measures • Report cards on provider performance (tiered rankings or listing of all those who surpass performance thresholds)

15. The link between the SGR and VBP • The SGR cuts payments to physicians whenever expenditures exceed growth in per capita GDP • Result is that the SGR cut Medicare payments by 4.4% on 1/1/06 • Cut occurred even though Congress gave preliminary approval to bills to extend 2005 pay rates through 2006 • On 2/1/06, Congress gave final approval to legislation to restore pay to 2005 rates

16. The link between SGR and VBP • Physicians will be made “whole” because claims submitted while the cuts were in effect will be automatically reprocessed by CMS and paid at higher 2005 rates • Future claims will be paid at 2005 fees • But Congress will need to act again to prevent another round of SGR cuts in 2007 • Because halting the SGR cuts will be very expensive, Congress will likely insist on VBP as the “price” for getting a longer-term SGR fix

17. How can the medicine profession respond to the quality revolution? On revolutions: “We live in an age of revolution and explosion. In such an age, we have only two choices, no more. We shall learn to be masters of circumstance—or we shall be its victims.” Nelson Rockefeller

18. Becoming a master of circumstances • The medical profession can become a master of circumstances by: • Developing and articulating our own policies on how VBP should work for patients • Challenging policies from others that are not consistent with our recommendations • Engaging in discussions with key stakeholders (business and government) • Insisting that purchasers go beyond P4P and correct the overall dysfunctional payment system

19. New ACP position paper, Linking Payments to Quality, articulates four key principles for evaluating VPB: • The current payment system should be replaced with new methods that reward those who follow evidence-based standards • Rewards should reflect the level of work and commitment to quality, which will differ among physicians and across specialties • P4P systems should rely on valid and reliable clinical measures, data collection and analysis, and reporting mechanisms • The value of health information technology should be recognized and supported financially

20. Key ACP positions on linking payment to quality: • Potential P4P rewards should be significant enough to support continuous quality improvement, directed at positive--not negative—rewards, and be balanced between rewarding high performance and substantial improvement over time • Adding an additional portion of reimbursement on top of the current dysfunctional payment system will not achieve the desired results

21. Key ACP positions on linking payment to quality: • Public and private payers should work on fundamental redesign of payment methodologies to: • Fairly compensate for work and practice expenses including inflation • Reward physician-guided care coordination, rather than paying based only on volume of services and episodes of illness • Enable physicians to share in system-wide savings (such as from reduced Part A hospital expenses) resulting from quality improvement

22. Key ACP positions on linking payment to quality: • Programs should use the least burdensome methods of collecting data from physicians • Physicians must have a key role in developing and selecting measures and all measures must be transparent and based on best evidence • Data should be fully adjusted for case-mix and other variables in patients treated

23. Key ACP positions on linking payment to quality: • Performance data should be reported only after physicians participating in the programs are provided an opportunity to review and comment on such data • Educational feedback should be provided on a timely and routine basis, be user-friendly, and standardized • Results of P4P programs should not be used against physicians in credentialing, licensure or certification • Any Medicare VBP program should be phased in gradually and meet the College’s principles on linking payments to quality

24. The Collapse of Primary Care Medicine and Implications for the State of the Nation’s Health Care • On January 30, 2006 ACP released a comprehensive report on the impending collapse of primary care medicine, including general IM • Report documents that increased demand will occur at the same time that fewer physicians are going into primary care and those in practice will be seeking an “exit strategy” • Report has received widespread press coverage nationally and worldwide, including CNN, Washington Post, WSJ, CBS Radio, MSNBC

25. The Collapse of Primary Care Medicine: Key Findings • Within 10 years, 150 million Americans will have one or more chronic diseases • Population aged 85 and over will increase 50 percent from 2000 to 2010 • Demand for general internists will increase by 38% from 2000 to 2020 • An increase in primary care physicians is associated with a significant increase in quality as well as a reduction in costs

26. The Collapse of Primary Care Medicine: Key Findings • In 2003, only 27 percent of third year IM residents planned to practice general IM, down from 54% in 1998, and only 19 percent of first year IM residents planned to go into primary care • Percentage of medical school seniors choosing general internal medicine has dropped from 12.2 percent in 1999 to 4.4 percent in 2004 • 2004 survey of board certified internists found that after ten years of practice, 21 percent of general internists were no longer working in IM compared to 5 percent for subspecialists • High student debt, coupled with dysfunctional Medicare payment policies, are among the reasons why primary care is collapsing

27. The Collapse of Primary Care Medicine: Key Findings • How is Medicare contributing to the collapse of primary care? • Medicare pays too little for time that internists spend with their patients • Medicare will pay $30,000 under Part A for a limb amputation on a diabetic patient, but virtually nothing to the internist for keeping the patient out of the hospital • Medicare’s SGR cuts fall hardest on those who can least afford to absorb them: primary care physicians in small practices • Medicare discourages internists from organizing their practices to achieve optimal results because it won’t reimburse for physician-directed care coordination, health information technology, or email consultations

28. The Collapse of Primary Care Medicine : ACP’s Recommendations • ACP is proposing a new model for financing and delivering primary care called the Advanced Medical Home • AMH is based on the premise that a patient’s personal physician (internist), working in systems of care centered on patients’ needs, offers the best value in health care • The AMH has the potential of: • Providing sufficient revenue for internists to organize their practices to better meet patients’ needs • Improving quality while lowering costs • Reducing paperwork through standardized processes supported by HIT and less documentation to get paid • Increasing patient satisfaction • Offering a practice model to appeal to young physicians

29. What is the advanced medical home? • Patients would choose a physician in an AMH practice to manage all of their health care needs • Practices would seek voluntary certification as an AMH. To qualify as an AMH, they would need to demonstrate patient-centered capabilities such as: • Accessibility: ease of scheduling and access to non-urgent advice through email • Evidence-based medicine: Practice uses clinical decision tools support at point-of care and reports on evidence based measures • Care Coordination supported by health information technology: physician partners with patient to manage chronic diseases; HIT used to track patients to assure they are getting care consistent with guidelines, practice has arrangements with other professionals to provide needed services • Accountability: practice provides regular reports on quality, efficiency and patient experience measures

30. What is the advanced medical home? • For the AMH to work, the practice must have a sustained and sufficient revenue stream that recognizes the value of the services provided • ACP is developing a new payment model to support care coordinated through an AMH • Key elements may include: a care management fee to cover physician work outside of the visit, per patient/per month severity-adjusted payments to support investment in practice systems, pay-for-performance bonus payments, and separate billing for face-to-face visits • Pilot test will allow us to refine the proposal and prove its value to physicians, patients and payers

31. The Collapse of Primary Care Medicine and Implications for the State of the Nation’s Health Care: ACP’s Recommendations • ACP also recommends that Medicare: • Increase payments for office visits and other evaluation and management services • Allow separate payment for e-mail and telephone consults • Provide an “add on” to office visit fees when supported by a certified EMR that is used to measure and report quality • Assure that P4P provides sufficient and positive incentives that recognize the value of care coordinated by an internist • Replace the SGR with an alternative that assures positive updates and is aligned with assuring an adequate supply of primary care

32. How can you become involved? • By participating in the College’s policy and advocacy activities, including signing up as a “key congressional contact” (www.acponline.org/advocacy) • By learning more about the issues and the College’s activities through our new quality website (www.acponline.org/quality) • By sharing your ideas with us on how to fix the dysfunctional payment system • By taking advantage of new tools being developed by ACP’s Practice Management Center and Center for Practice Innovation

33. Conclusions • The Health Care Quality Revolution is unstoppable and will happen with or without physician leadership • ACP has embraced the challenge of being a master of circumstances, not its victim • ACP is uniquely qualified and positioned to affect the course and pace of revolutionary changes, because no other medical organization has earned a comparable degree of credibility with policymakers and purchasers • Our policy papers on linking payments to quality, averting the collapse of primary care, and the AMH provide a persuasive and powerful alternative voiceon how to improve quality, centered on the internists’ role in delivering value to patients

34. One final thought: • ACP’s leadership and advocacy on VBP is essential to our mission: “To enhance the quality and effectiveness of health care by fostering excellence and professionalism in the practice of medicine” • If the College isn’t there advocating for quality, effectiveness and professionalism, who will be?