1. Health Information Technology, Quality Improvement, and the Delivery System Reform: The Case for the Health Care Phalanx October 5, 2010 Maryland Health Care Commission Ben Steffen 1

2. Phalanx defined The phalanx (Ancient Greek: φάλαγξ, Modern Greek: φάλαγγα, phālanga) (plural phalanxes or phalanges; Ancient and Modern Greek: φάλαγγες, phālanges) is a rectangular mass military formation, usually composed entirely of heavy infantry armed with spears, pikes, sarissas, or similar weapons 2 Steffen

3. State culture & environment Demographics and economics: - 5.7 mil. In 2008-2009 14.5% uninsured, minorities account for 35% of population. High median family income and moderate unemployment. Significant budget challenges. Politics: Democrats controls both Houses & Governor’s office. Achieving political consensus is easier. Some options won’t be considered. All office holders up for reelection in 2010 – Governor’s race may be competitive 3 Steffen

4. State culture and environment (continued) Health Environment An all-payer hospital rate-setting system. Strong support for system among all stakeholders. Health organizations accept quality reporting. Few large systems & many health professionals in small practices Business coalitions weak Health Coverage BCBS dominates the private market. Medicaid operates 1115 waiver program, SCHIP focus on eligibility for kids about 160% FPL. Well established high-risk pool in individual market Sense that Maryland could do better – uninsured, quality , health disparities concern 4 Steffen

5. Pre-Health Care Reform Health Care quality and access – longstanding quality improvement efforts – HMO, MCO, nursing homes, and hospitals. Shared authority across organizations. Health IT – Health Information Exchange planning began in 2006. Rate-setting source for funding. All payer claims data base data back to 1995 reform, used to examine payment reforms for health care professionals. Increased interest to link hospital payments and quality. 2007 Medicaid coverage expansion increased eligibility for kids and parents. Governor forms Quality and Cost Council to raise visibility & increase coordination, sharpen targeting, ensure delivery. 5 Steffen

6. Quality and Cost Council –Increasing Coordination & Raising Awareness Steffen 6

7. HIT Diffusion –Initial Focus on the Exchange Backbone Health Care Commission (MHCC) – Launched 18-month planning process. Multi-stakeholder groups made recommendations on policy issues and deployment strategy. Health Services Cost Review Commission (HSCRC) funds implementation through adjustment to hospital rates. Competitive process to select planning and implementation vendor. Chesapeake Regional Information System for our patients (CRISP), a collaborative effort among the Johns Hopkins Health System, MedStar Health, and the University of Maryland Medical System. MHCC and multiple stakeholders retain control over implementation via Advisory Board. Steffen 7

8. Approach and Connectivity Goals Establish a secure exchange for a defined set of clinical information between appropriate participating entities. Enable the consumer to control the flow of their electronic health information. Connect 46 Maryland acute care hospitals to the HIE. Enable roughly 7,900 physician practices with certified EHRs to connect to the HIE. Eventually connect the 234 nursing homes in the state to the HIE. Initial transactions – lab results, radiology reports, continuity of care records. Steffen

10. Regulations require private carriers to offer incentives to primary care physicians for meaningful use.

11. Incentive may be in reimbursement or equivalent up to ~$15K per physician. Steffen

12. Delivery System Reform More Difficult –the Case of Hospitals Linking hospital payment to readmissions 3M classification methodologies capable of identifying highly avoidable readmissions. Hospital push back… question methodology data adequacy Who is accountable for a readmission if primary care may be inadequate? Implementation delayed ~2 years. Demonstration may be an interim approach. 10 Steffen

13. Medical Homes (PCMHs) and Accountable Care Organizations (ACOs) Legislation passed in 2010 – exempts PCMHs and ACOs from prohibitions on cost-based incentive payments and information sharing. Multi-payer PCMHs – envisioned as pilots, but single payer programs permitted after state approval. Law permits a single hospital system to establish an ACO in western Maryland Hospital already dominates in the area and owns a number of physician practices. FTC staff opinion found no restrain of commerce. Possible carrier pushback– “we have not yet begun to fight.” State hospital regulators need to take action. Steffen 11

14. PCMH Value Proposition is Compelling Underlying Assumptions: Medical homes must generate savings (which are validated through the performance measures) to be self-sustaining. The medical home payment model must guarantee support for the investments that practices make in transformation and operation as a medical home. Practices must share (significantly) in savings that result. Practices are responsible for performance (as measured through specified process and outcome indicators or through financial claims analysis) to earn incentive payments. How will we generate savings? Enhanced primary care will improve health status and outcomes for patients (especially the chronically ill). The result will be fewer complications, ER visits, and hospitalizations. Savings from these improved outcomes can be used to fund increased payment to primary care practices. Stakeholders and policymakers have accepted these assumptions. 12 Steffen

16. PCMH Workgroup recommended that the program focus on alignment with other initiatives and eliminate redundancy. Maryland’s program aligns requirements with CMS “meaningful use” final regulations.

17. Carriers want performance alignment – PCMH quality measures aligned with the standards that plans understand and use in MHCC’s Quality Report Card and NCQA’s Quality Compass©. Some measures will align with carriers requirements..

18. Health Reform Coordinating Council 14 Steffen

19. Linking HIT, Quality Improvement, Delivery System Reform Easy to commit to collaboration on technology. Primary care is easy to support, to a point. Changes in hospital payments will be more challenging. Changes are easier to accept if the changes maintain a level playing field. Linking quality improvement to payment is most challenging. Quality and Cost Council support leverages support. Saying it does not make it so. 15 Steffen

20. The Phalanx: Maryland’s Strategy for Implementation of Quality, Technology, and Delivery Systems Large number of stakeholders Mutually defensive – shields can be configured to defend against thrusts from the right or left flanks. Consequences – each line is pushed forward by the line behind – if you stop you will get poked in the behind! Leaders take ownership and serve on the first line. 16 Steffen