health financing summit by Dr. Madz Valera


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health financing summit by Dr. Madz Valera

  1. 1. 04.14.10 Health Financing Summit Building bridges between financing and quality Dr. Madeleine Valera
  2. 2. Q Quality is the enabling frame that begins, sustains and grows any health financing _initiative.
  3. 3. Healthcare costs will continue to be out of reach for many Americans as long as patients believe that "more care" equals "better care.” At least, that's the opinion of New York Times economics columnist David Leonhardt, who argues that more knowledgeable patients and value- based rewards are just two steps toward righting healthcare's sinking economic ship. 
  4. 4. International studies in acute care hospitals Date No. of No. of adverse Adverse event admissions events rate (%) 1984 30195 1133 3.8 1992 14179 2353 16.6 1992 1014 119 11.7 1998 1097 176 9.0
  5. 5. How much pays for Medical Error, Injuries, Death 7
  6. 6. It is estimated that the following occur every year in US hospitals due to errors in treatment: 98,000 people are injured with an estimated $ At a cost % Only 2 to 3% of major errors are reported 12,000 deaths of $33 billion through incident reporting arising from systems these errors Whittaker PPT
  7. 7. The US estimates that: 15.3% Cost to a hospital of One hospital pressure appendectomies each ADE is $2,000 ulcer in average cost were assessed as per event and about was $37,288 unnecessary, $3.8M per hospital (nationally a cost of costing $740M per year ($1M preventable) $2.2B to $3.6B) annually Flum and Koepsell The UK estimates that: Hospital acquired infection cost Costs of ADEs 25% of radiological $1.6B a year are £0.6B procedures are not (15-30% ($922M) necessary preventable) Ovretveit J, 2009
  8. 8. Adverse 16.6% 15% of 10% Events in of hospital patients suffer Errors are Due to of hospital patients suffer Health an adverse event in Patient Handovers an adverse Care Australia (US study) event 5-10% of 5 million 100,000 Unsafe hospitalized HAI cases are cases of HAI Surgery: patients acquire Estimated to in the UK lead 234 million cases HAI (up to Occur in to 5,000 globally/year; 7 million 37% in Europe per deaths complications, and HAI ICUs) HAI year HAI a year 1 million deaths About 100,000 1.5 million hospital deaths are harmed and 67% in the US thousands are of patients’ every year killed in the US/ medication are caused year due to histories by medical RX medication RX have errors error errors Whittaker PPT
  9. 9. 3 step process that will NO! ultimately lead patients to say no to excessive treatments more often: 3 Tweaking 2 the system so it Arming each rewards the patient with all of the facts about a quality of care rather 1 given treatment. This than the quantity of Providing sometimes results in care. patients with patients opting for a less access to aggressive, less risky (and Leonhardt less costly) course of information action. about the most effective treatments.
  10. 10. KANO categories of QI KANO Type 1 Improvements are reducing defects KANO Type 2 Improvements are reductions of cost while maintaining or improving the experience of patients KANO Type 3 Improvements are innovations or new things that you can do that sometimes cost more money
  11. 11. What is Pay for Performance or “P4P”? Pay-for-Performance (P4P) is “Transfer of money or material goods conditional on taking a measurable health related action or achieving a predetermined performance target” * Financial risk is the assumed driver of change “No results, no payment” *From the Center for Global Development Working Group on Performance-Based Incentives
  12. 12. What is P4P? P4P incentives are provisions in health plan contracts that modify payment to a physician group based on the group’s performance on a measure
  13. 13. Pay-For-Performance Concept Payers (Donors, Government, NGOs, Health Programs, Insurers, Communities) Money Goods Results Other rewards Recipients (Households, Service Providers [Facilities, Health Workers], Health Programs, Local Government, National Government)
  14. 14. Why Enthusiasm for P4P? • Slow progress in improving quality • Societal emphasis on market-based solutions – Public release of performance data – Increased patient cost-sharing
  15. 15. Increasing enthusiasm for P4P • Private Health Plans – Rapidly increasing use of P4P incentives • Federal and State Governments – Current discussions on introducing P4P into Medicare reimbursement
  16. 16. What health systems problems is P4P addressing? Strengthening capacity Improving quality to provide services • Catalyzes changes that • Preventive care services utilized strengthen management. by more people • Improves information systems and the use of information for • Rewards correct diagnosis and decisions. treatment • Motivates health worker Increasing utilization Improving efficiency • Overcoming financial and physical barriers to access that • Better use of inputs to achieve poor households face health results • Overcoming information and cultural barriers that inhibit utilization Eichler et al on P4P
  17. 17. A “menu” of options to consider for " supply side payment •  Sub-national level: –  Aligned with facility or population level targets •  Institution level: –  Frequency of performance payment –  Amount at risk –  Stepped –  Per service provided –  Adjustment for quality score –  Combination Eichler et al. on P4P
  18. 18. Supply side payment options cont’d •  Payment tied to attainment of targets –  “all or nothing approach” – clear and fewer transaction costs –  Stepped– partial payments for partial attainment of targets; perceived as more fair, but imposes increased transaction costs and weakens incentives to attain full target –  Strength: Incentives linked to population based coverage, stimulates strategic planning to address systemic issues. –  Weakness: More difficult to understand that fee for service. •  Per service provided (FFS) –  Fee for each service provided on a list. Fee may or may not cover the cost of providing the service. Note: FFS is paid by purchaser (not equivalent to “user fees” which are paid by patient). –  Strength: Increases production of services, Easy to understand… therefore motivating, stimulates use of preventive services that are underutilized –  Weakness: Can generate excessive provision of services beyond what is needed to ensure good health. Eichler et al. on P4P
  19. 19. Supply side payment options cont’d •  Establish Thresholds or “Tournaments” –  Impose that only those that reach x% of population coverage receive performance payments. –  Tournament- only those in the top x percentile of performance will receive rewards. –  Challenges with these approaches: may reward those that are already top performers and fail to motivate the weak performers to improve. •  Adjustment for quality –  E.g. ‘patient responsiveness’ measured by short exit survey –  Quality deflator based on facility assessment score –  Quality index –  Reward scores on clinical vignettes –  *** Innovations are needed to reward quality. E ichler et al. on P4P
  20. 20. Supply side payment options cont’d •  Rules for how incentive payments can be used –  Specify portion for individual rewards vs. facility/ system investment –  Specify rules for how teams distribute facility payments to individuals? –  Individual provider level: Salary plus? (or withhold and “bonus”) Amount at risk? Eichler et al. on P4P
  21. 21. Demand Side Payment Options Payment for a series of Payment for discrete health-related actions health-related actions taken by a household • e.g. conditional cash transfer • e.g. pay pregnant women who programs that provide income deliver at health facility support to families that receive a package of health and other interventions Payment for long-term Payment for evidence treatment of chronic of behavior change conditions • e.g. drug-free, quit smoking, • e.g. patients are compensated lose weight or provided food packages when • Payment conditional on results they present to take medicines of spot verification techniques
  22. 22. Implications for Policy (QIDS study) •  Accreditation and PHIC payments are shown to be potentially powerful tools in either screening for or for raising quality –  The positive relationship found between PHIC accreditation and receipt of PHIC payments to facility and physician quality already suggest the expected power of such regulatory instruments These tools work in two ways: (1)  accreditation and payment regulations screen out lower quality docs; and (2)  In a dynamic setting, accreditation and payments can be used to raise quality of care as in the use of multi-tiered accreditation and quality bonuses Peabody et al. on QIDS Study
  23. 23. Paying for results Financing incentives be used only when there is strong evidence of effectiveness and specific outcomes can be articulated Remove financial barriers to improve care: reinforce positive performance through additional payments or removing payment mechanisms McLoughlin, QSHC 2003
  24. 24. Common Mistakes in P4P Design •  Failure to consult with stakeholders to gain input to design, maximize support, and minimize resistance •  Failure to adequately explain rules (or rules that are too complex) •  Too much or too little financial risk •  Fuzzy definition of performance indicators and targets, too many performance indicators, and targets, and targets for improvement that are unreachable •  Tying the hands of managers so that they are not able to fully respond to the new incentives •  Insufficient attention to the systems and capacities needed to administer programs •  Failure to monitor unintended consequences, evaluate, learn, and revise Eichler et al on P4P
  25. 25. Possible pitfalls •  Excessive attention to reaching targets, to detriment of other (harder to measure) types of performance •  Undermining intrinsic motivation, turning health care delivery into “piecework” •  “Gaming,” including erosion in quality of institutions’ service statistics
  26. 26. Key points to ponder •  There are significant problems with the quality of health care •  This is reflected in the perceptions of stakeholders, in unintentional harm to patients, overuse of ineffective care and underuse of effective interventions •  Poor quality generates additional costs, yet current financing arrangements may actually impede improvements •  Financing issues are usually debated in terms of the level and method of funding without clarity about what needs to be achieved to address quality of care •  Achieving improvements requires attention to stable investments
  27. 27. Thank you!
  28. 28. Slides adapted from: •  Eichler and Levine. November 17, 2008. Pay for Performance: Changing Incentives to Achieve Results Presented at World Bank Conference on Impact Evaluation, Nov. 17, 2008. •  Eichler, Rena and Susna De. December 2008. Paying for Performance in Health: A Guide to Developing the Blueprint. Bethesda, MD: Health Systems 20/20, Abt Associates Inc. •  McNamara, Peggy. May 2005. Quality-based payment: six case examples. Intl Journal for Quality in Health Care •  McLoughlin and Leatherman. April 2010. Qual. Saf. Health Care