The Maine Experience

1. The Maine Experience In Pursuit of Value-Based Purchasing August 4, 2009

2. Background • Self-insured POS plan of 34,000 (with additional 6,800 Medicare retirees) • Largest employer-sponsored plan in Maine • Governed by State Employee Health Commission, twenty-two member labor/management organization • Slightly older working population • Higher incidence of chronic illness

3. The Path to Value-Based Purchasing • Founding member of Maine Health Management Coalition – multi-stakeholder organization of employers, hospitals, health plans, and physician groups • External factors • Institute of Medicine reports • Juran Institute report for MBGH • NEJM study findings on treatment of chronic illness • Dartmouth Atlas

4. Commission Adopts Value-Based Purchasing Strategy • Growth in plan expenses is unsustainable • Resisted traditional cost shifting tactics in favor of value equation (quality, utilization, efficiency) – trying to change behavior • Gaps in care and unwarranted variation cannot be adequately addressed without changes in benefits and reimbursement

5. Phase I – TDES (1/1/05) • Telephonic Diabetes Education & Support program • Improve participation in self-management program and improve adherence to prescribed treatment • Partnership with TPA (Anthem) and non-profit Medical Care Development • Adapted traditional education and self-management model to telephonic pilot

6. TDES Basic Design • 1st and 12th sessions require face-to-face encounter with nurse educator for pre/post assessment & biometric measures • Intervening 10 sessions are conducted via telephone at convenient times • Plan waives Rx copays for diabetic medications and supplies for duration of member’s participation

7. Results of TDES Pilot • Participants received recommended care evidenced by: physician visits, foot exams, retinal eye exams, HbA1c levels • Members participating in TDES had statistically significant improvement in adherence to oral diabetes medications • Compared to randomly selected control group TDES participants had an adjusted average cost $1,300 less than control group over 12-month follow-up

8. Phase II – Hospital Tiering (7/1/06)Goals & Objectives • Encourage public disclosure of provider performance • Establish attainable performance benchmarks to be incrementally adjusted • Drive quality improvement • Give members tools to make informed decisions • Provide incentives to shape decision-making

9. Hospital Tiering Basic Design • Completion of Leapfrog safe practices survey • Performance on Maine Health Management Coalition medication survey indicating “has made good progress to implement recommended safe practices” • Met or exceeded national average on CMS clinical core measures • Services billed by “preferred hospital” exempt from annual deductible • All hospitals remain in the network • Over 60 sessions conducted statewide to inform members

10. What Happened? • Only 14 of 36 acute care hospitals met the criteria for preferred hospital • Members voiced concern to local hospital officials for failing to meet criteria • By 1/1/07 all Maine hospitals had completed the Leapfrog safe practices survey and the MHMC medication safety survey • Number of preferred hospitals jumped to 25 by 1/1/07

11. The Next Phase of Hospital Tiering • Providers became more engaged in process • Agreement to use MHMC as “trusted” source of measures and reporting • State aligned with MHMC hospital ratings – blue ribbon designations (7/1/07) • Financial incentives for members become more meaningful (10/1/08)

13. What Do We Know About Hospital Tiering? • Design was quite benign and non-threatening but it produced results • Incremental approach helped ensure members were not disenchanted • Focus on quality and safety insulated initiative from provider complaints • Anecdotally, hospital QI staff and pharmacists told us the initiative helped secure resources • In first year there was 5% shift in outpatient services from non-preferred to preferred hospitals

14. What Have We Learned? • There is strong evidence to support that initial objectives have been met • Individually and collectively hospital quality performance has improved – at least for dimensions of care we measure • Incentives do have some impact on both provider and enrollee behavior

15. What Do We Need To Know? • Is there a link between higher-performing hospitals and efficiency? • How do we design incentives to produce desired results? • Can we adapt this model to specific high-volume or high-risk procedures? • How do we demonstrate the continued effectiveness of this strategy?

16. Phase III – Primary Care Physician (PCP) Tiering • Maine Health Management Coalition’s Pathways to Excellence (PTE) developed metrics to measure management of patients with chronic conditions • Measures office systems, treatment of diabetes, treatment of heart disease, treatment of pediatric asthma and results of childhood immunizations

18. How Does PCP Tiering Work? • Preferred practices must be awarded two or three blue ribbons • Office visit copays to preferred practices are waived • Services billed by preferred practices not subject to deductible

19. Developments in PCP Tiering • From 2007 to 2008 35% increase in the number of practices with 3 blue ribbons and 20% increase in number of practices with 2 blue ribbons • By 2009 over 50% of the better than 400 primary care practices were preferred • MHMC moving to national measures – Bridges to Excellence and NCQA

20. Phase IV • Adapt TDES principle to asthma and congestive heart failure (7/1/09) • Centers of Excellence for bariatric surgery (7/1/09) • Health credit program (10/1/09)

21. Next Steps • Minimally invasive surgery • Introduction of efficiency measures (to include utilization) for PCPs, specialists and hospitals • Shared decision-making for preference-sensitive services • Regional medical tourism • Payment reform