Webinar Transcript - National Quality Strategy: Using Payment to Improve Health and Health Care Quality

February 4, 2015

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National Quality Strategy Webinar: Using Payment to Improve Health and Health Care Quality. February 4, 2015 [Slide 1]

Operator: Thank you for joining today's event, National Quality Strategy Levers in Action: Using Payment to Improve Health and Health Care Quality. I will now turn the floor over to our facilitator, Ann Gordon, to kick off the conference.

Housekeeping [Slide 2]

Ann Gordon: Great. Thank you and hello, everyone. Welcome to today's National Quality Strategy webinar on using payment to improve health and health care quality.

Before we get started, just a few housekeeping items. If you have technical questions, please submit them via the chat feature and one of our technical representatives will get back to you with an answer. If you should lose your connection, you can rejoin by clicking on the link in your confirmation email and use the access code that was provided. And if you require closed captioning, a link to the closed captioning service was also available in your confirmation email or you can click on it on this slide. If you need support from ReadyTalk, our webinar provider, that toll free number is 1-800-843-9166.

Agenda [Slide 3]

Ann Gordon: Today's agenda includes a presentation of the National Quality Strategy levers followed by remarks from Buying Value's Gerry Shea and Blue Cross Blue Shield of Massachusetts Alternative Quality Contract's Dana Gelb Safran, followed by a facilitated discussion amongst our presenters and a question-and-answer section.

So, without any further ado, I'd like to turn it over to Dr. Nancy Wilson, Director of the National Quality Strategy, to welcome everybody today and talk about our levers in action. Nancy?

The National Quality Strategy: Using Measurement for Quality Improvement [Slide 4]

Nancy Wilson: Thank you, Ann, and welcome, everybody. I think we have an exciting hour of presentation and discussion, and I am going to emphasize that we really hope that you share questions and that we get some dialogue going.

As the executive lead for the National Quality Strategy, I work directly with the Director of the Agency for Healthcare Research and Quality to implement the Strategy across the country. I've been involved with this since its inception. I've held a variety of positions in the public and private sectors while working to improve health care delivery, focusing on organizational change and quality improvement strategies.

Background on the National Quality Strategy [Slide 5]

Nancy Wilson: So I'm going to move on to the next slide just so that you know a little bit about me and go on to talking about the background of the National Quality Strategy. It was established by the Affordable Care Act, and the goals that were mandated by Congress were to improve the delivery of health care services, patient health outcomes, and population health. So, it's a broad challenge for us all. We first published in 2011, and we really see this as a nationwide effort. It's something that HHS was given the lead for, but it's not a federal government strategy and it's not simply a private sector strategy. It's all of us together. And it was really designed iteratively by public and private stakeholders with a lot of input and back and forth.

The IHI Triple Aim and NQS Three Aims [Slide 6]

Nancy Wilson: So, what is the Strategy? Well, if you look at this slide and you are familiar with the Triple Aim and then you look over at the National Quality Strategy, you should see some similarities here. The National Quality Strategy's aims really resemble the IHI and build, purposely build, on the work that IHI has done, you know, in groundbreaking work in the 90s. I think that some of the emphasis that we try to elaborate on was focusing on the total experience of better care in addition to patients and patient experience. And when we talk about improving the health of populations, we really wanted to expand on the idea of healthy communities at different levels. Same with affordability. We wanted to focus on more than the affordability for the society as a whole, but really thinking about individuals and families in addition to society.

Six National Quality Strategy Priorities [Slide 7]

Nancy Wilson: So, along with our three aims, we identified six national priorities as per what was required by the Affordable Care Act. And we see these priorities as reflecting the concerns that affect most Americans — patient safety, person– and family-centered care, effective communication, and care coordination, prevention and treatment of leading causes of morbidity and mortality the well-being of communities, and making care more affordable. So, I can't say that enough. We see these as cross-cutting issues that are very important. And that if we can all focus on these, we are much more likely to improve on our performance on each of these areas.

Nine National Quality Strategy Levers [Slide 8]

Nancy Wilson: So, how do you improve on and make progress on patient safety? How do you make progress on person-centered care? I mean there are a lot of specific initiatives. What we wanted to do with the National Quality Strategy was outline what we think of as nine critical levers for — or interventions that will prompt improvement on the priorities and, therefore, improve our three aims.

We really see this as wherever you are in your organization, looking at this list and saying, "Oh, well, I can focus on the priorities in workforce development, or measurement and feedback," or "Perhaps this is – I play a role in public reporting, and I can do something in terms of what we report." It's not that every organization would be able to use all of these levers, every lever – it's that there's something in here for everyone wherever you – whatever aspect of health and health care you work in whether it's policy, or delivery, or accreditation, or certification, et cetera.

Payment [Slide 9]

Nancy Wilson: So, today, we're really focusing on payment. And of course, that's a critical lever for providing the incentives and support for providers to deliver high quality person-centered care. And today we're going to hear from two presenters providing some samples of how they've applied the payment lever in their respective organizations just to give you examples of how people are working with this.

First, we'll hear from Gerry Shea, Director of Buying Value, which is an initiative of private health care purchasers advancing value-based purchasing in healthcare. Then we'll hear from Dana Safran, Senior Vice President for Performance Measurement and Quality at Blue Cross Blue Shield of Massachusetts about how the Alternative Quality Contract — which is an innovative way to pay for care that focuses on promoting quality and rewards positive health outcomes — has improved health outcomes and reduced cost for their population. Then we'd love to hear from the rest of you during the question-and-answer session about how you're thinking of incorporating payment innovations within your own organization.

Now, I'd like to turn the floor over to Gerry to discuss Buying Value's work in refocusing payment on person-centered value. Gerry, take it away.

Switching from Volume Buying to Value Buying - THE Quality Challenge for Private Purchasers: Gerry Shea, Buying Value Director, NQS Webinar, February 4, 2015 [Slide 10]

Gerry Shea: This is Gerry Shea. I'm Director of the Buying Value Project. And I'm very pleased to be joining you this afternoon for this webinar. And I'm pleased to be joining two people who've been so effective and so diligent on the national scene about quality improvement in health care, Dana Safran and Nancy Wilson. And, Nancy, a particular tip of the hat to you. You're the steward for the National Quality Strategy, and you've both led us and prodded us to keep it front and center. And I think that's totally appropriate because even though the National Quality Strategy is sort of a framework piece, it is really a benchmark and a landmark achievement in the history of health care in the United States.

And today, with quality improvement virtually going on everywhere in the country, we all tend to focus on what we're doing locally. And there's a little bit of a reaction like, "Well, the National Quality Strategy, that's kind of obvious stuff. And of course, we salute it," and so forth. But, believe me, we're a long way from where we were 25 years ago. And people like us used to sit in rooms and say, "Well, where should we start? And what should the priorities be? And what are the important areas? And how do we talk about them in similar ways?" So, the National Quality Strategy is just – it's a big deal and we need to keep it in front of us all the time.

Value-Based Purchasing is a Key Design Element in the ACA [Slide 11]

Gerry Shea: I'm going to talk about value-based purchasing today and what private purchasers have been doing about that. This slide just makes the point that, that is a key element in the design of the Affordable Care Act. And I point to the last bullet here that the quality the Affordable Care Act calls for is alignment of private and public purchasing. And really, if we're going to make any significant progress in either improving quality or lowering cost, there has to be good alignment.

Value Purchasing Is The Primary Way Private Purchasers Support Quality Improvement [Slide 12]

Gerry Shea: And going from volume-purchasing, which is the way unfortunately private purchasers have generally paid for health care—that is, we paid for the bill that came in the door, not knowing what kind of care was being given. Going from there to value-purchasing is the single most important thing that purchasers can do. It's putting our money where our mouth is. And I'm pleased to say that after 25 years of just a few pioneer companies, union funds, business groups I've helped, there's now a widespread belief among private purchasers that this the way to go, that is value purchasing.

And a survey last fall found that 40 percent of private purchasing is tied in some way to quality metrics. And that's up from less than 10 percent just a couple years ago. But I'd caution you that the 40 percent doesn't speak to the quality or strength of the value programs. It just speaks to a rough number. And we're still in the first generation of modest, quality programs, and it's not enough to get the job done that we need to do.

To Be Successful, Value Purchasing Requires Good Measures & Alignment [Slide 13]

Gerry Shea: Our measures are getting better and better, and we're producing a lot more measures than we've ever had. But, unfortunately, there's been a paradigm developed in, as I've watched over the past few years, that build it and they will come. In other words, once we have – next year we'll have the best set of measures and then everybody will, you know, rally behind those, and we won't have this proliferation of many different kinds of measures. And I want to say to you today, just conceptually, that is the wrong way to look at the job ahead of us. We need to both work on getting better and better measures, and work on aligning those measures because the problem today of poor alignment is really swamping a lot of our resources.

Even the biggest purchasers can't do very much if they have to deal with measures that are different sets or different purposes. We did a study in 2014 that found in a sample of 48 measure sets in 25 states. Only 20 percent of the measures appeared in more than one, just one, of those measure sets. And then we're going to get some data later this spring from a national study that I'm told replicates that small sample. And this has to be – for private purchasers to get value purchasing, it has to be a virtual plug-and-play process. The garden-variety employer or union fund simply doesn't have the resources to figure out the quality landscape and determine their own measures, nor should they. We should all be following common measure sets. And, of course, the lack of alignment of measures overwhelms everybody who's delivering care and gets asked to measure this, and measure that, and measure the other thing.

Medicare Hospital Value Payments 2011-2017 [Slide 14]

Gerry Shea: This is a chart which CMS staff created at our request in 2011. And I'm not going to go through all of these little numbers. But it shows the life-cycle of value programs for hospitals only in the Medicare program. And the bottom line, if you were to go to the lower right-hand corner and add everything up, is that by 2017, over 13 percent of hospital payments will be tied to quality measurement. And if this chart were updated this year, that number would be even bigger. So, this is starting to be a big deal in Medicare, and that is what has opened the door for private purchasers.

The Buying Value Project [Slide 15]

Gerry Shea: So, the Buying Value Project, and it's just that, it's a project. It's not a permanent organization. It's really an alliance of a lot of private purchasers who have been trying for 20 years to do value purchasing but making little headway. And it was launched in 2012. Our idea here is that private purchasers will contribute to better health and lower health cost by buying on value. Our objective is to have widespread adoption of value purchasing.

Our strategy has been two-fold. And this is speaking over the last two years. One is a measure alignment campaign. We've been doing both research and discussion about how could we come to agreement, consensus; how can we reach consensus on core measure sets that everybody could use? And then secondly, we've been providing direct help to stakeholders of the local, regional and state level, and how to create measure sets that learn from the experience of measure sets that have already been established. And I'll come back to that in a minute and tell you about the latest information there.

Buying Value Work On Accelerating Value Purchasing in Private Sector [Slide 16]

Gerry Shea: The Buying Value website, as you see there, began with just the basic information for private purchasers, the primer on value purchasing, a legal memo, et cetera. We then had a fascinating nine months of discussions with all the national payers, the large consumer groups, the health plans, the insurers, federal agencies led by CMS over what would be a common set of measures we could get started with. And we actually reached an agreement on a modest set; as I say, a starter set.

But before we did anything with it, we decided that we needed to go out and take a look at what was happening in the state. And that led us to discover just how poor the alignment is among states, between states and national programs, and even within the state.

So, we then moved on and we developed a model for how to develop consensus core measure sets that operate at the national level and then the state, local, or regional level. So, there would be two complementary sets of core measures, actually many core measure sets because you need them for different clinical areas and so forth. But you'd have national consensus on core measure sets, and that would be supplemented; not replaced but supplemented at the regional, state or local level. And paper on this model is available on our website. And then the last thing we did was we developed an online measure selection tool, which is the practical help for state and local programs.

I want to skip the next couple of slides because I've already touched on them. This is from our study in 2012.

2013 Buying Value Research Found Little Alignment Across Measure Sets [Slide 17 - Skipped]

How Often are "Shared Measures" Actually Shared? [Slide 18 - Skipped]

How Did We Get Into this Mess? [Slide 19]

Gerry Shea: And let's go to, you know, just how did we get here? Well, for one, everybody that I talked to supports the idea of alignment. What we all recognize is their strong forces that pull against alignment. When you get a group of people together around the table, any place in the country you're going to get different opinions of what are the best measures in a particular area. And that produces this difference, wide variation and proliferation of different measures. We're all measuring the same basic things, but we're doing them with slightly different measures. And that's what produces the big problems.

And I really think that reflecting on my own work, being a founding board member of the NQF, it reflects a failure of national organizations to make alignment a priority. As I said, I really believe that the paradigm has built the best measures, and they will come without paying much attention to alignment and particularly without giving much help to the people at the regional, state, and local level. We just said, "You have to use measure sets for your programs and go off and develop them." So, my point here is that alignment needs to be an equal priority with the development of better measures.

Buying Value Model for Consensus Core Measure Sets – Spring, 2014 [Slide 20]

Gerry Shea: I've also already talked about this. This is the model, the consensus model for core measure steps.

Buying Value Assistance for Those Creating/Revising Measure Sets [Slide 21]

Gerry Shea: It was developed by a very large stakeholder group in the spring of last year. Again, it's available on our website. And you see the description there, which I've already reviewed.

How to Build a Measure Set [Slide 22]

Gerry Shea: So, in regard to the direct assistance to states, we've been providing technical assistance under a grant from the Robert Wood Johnson Foundation. And part of that was to develop this online tool, which is a decision-making aid for anybody who has to make a measure set. And you see the little graphic there. We've updated it just a few weeks ago to include the 2015 updates in key federal measure sets. And we've added two more of the state measure sets that we wanted to include. And we're going to have a webinar on Tuesday, February 24th, which everyone is invited to. We'll try to send out a reminder to you about this where you'll actually hear the experience of one state, Maine, in applying this tool to revise a draft measure set that had been put together a year ago. And people have found this to be very valuable. It doesn't tell you what the answer is to what measure set you should have, but it just lays out all the different factors in one big spreadsheet with a lot of database connections that can then tell you what are the ones that other people have chosen that they have found to be effective.

Success Story: Federal Agencies Agree to Cut Measures in 7 Areas from 567 to 35! [Slide 23]

Gerry Shea: I'm going to finish with a success story. And that is one of the things that we first heard when we started going into states was, "Well, sure, yes. Measure alignment is a great idea. When are the Feds going to do their share of this?" And the truth is that federal agencies were just like the states. They had different measure sets for different programs. But a lot of hard work by the federal measures council, which Nancy co-chairs along with Kate Goodrich from CMS, changed this dramatically. So, you see that they've cut, in seven big areas, they've cut the total number of measures from 567 measures that were in use in one way or another down to 35 that they agreed upon.

Now, word of caution, it takes time to change measure sets. So, I'm not saying they're down to 35 measures, but they've come to agreement on 35 measures. And that is what we really need to focus on nationally and locally. And only when we make real progress in reducing the number of measures and aligning the measures that are used is it going to be practical for private purchasers to engage in value purchasing. And if we don't do that, we're going to wind up with this big gulf between public programs, like Medicare and Medicaid, and all the private purchasers that weren't going to continue to go in a hundred different directions.

For More Information… [Slide 24]

Gerry Shea: So, thanks very much for the time to present to you. I look forward to questions later.

Nancy Wilson: Dana, we'll turn it over to you.

The Alternative Quality Contract (AQC): Improving Quality While Slowing Spending Growth [Slide 25]

Dana Safran: Great. Well, thank you very much and good afternoon, everybody. I'm going to take the next few minutes to talk with you about the alternative quality contract or AQC, which is a payment model that we developed at Blue Cross Blue Shield of Massachusetts in 2007 and launched in 2009.

So, I'll cover three broad categories over the next few minutes. First is some context about why we decided to develop this model and how the model works; second is what the results have been; and third is, given this audience and the topic, I thought you'd be interested to hear a little bit about perspectives on the model and our next steps.

The Alternative Quality Contract: Twin goals of improving quality and slowing spending growth [Slide 26]

Dana Safran: This will help with a bit of the context. In 2007, why was it, before there was any significant conversation locally in Massachusetts or nationally about payment reform, that Blue Cross of Massachusetts set out to develop a global budget on quality contract model? And the answer is we were in the early months of implementing our now quite famous coverage reform law and knew that as we began to have individuals participating in large numbers, buying insurance for themselves because the state law said they had to have it, and they didn't have a way to receive it through an employer or public program--individuals would, for the first time really, be coming face-to-face with the significant rate of growth in health care spending and how that so far exceeded the rest of the economic growth.

And that's what's illustrated on the graph on this slide. The blue trend line that you see there is the real live Blue Cross of Massachusetts medical expense trend over that time period from 2000 to 2009. So, you can see, as we were sitting there in 2007, looking back, there were double digit increases in medical spending every single year. And that's contrasted with the green line, which is general economic growth, and the red line, which is growth in worker's earnings.

So, we knew this was going to become a very public issue and we set about to develop a model that would accomplish what we called our twin goals of significantly improving quality while at the same time significantly slowing the rate of spending growth; in fact, to have spending growth that would look more like the rest of the economy. And our CEO at the time put it this way, he said, "We spend about $13 billion a year on claims. I'm not looking to take money out of the system, but I am looking to get more for what we buy and to significantly slow the rate of growth on that $13 billion." So, those were our twin goals.

The Alternative Quality Contract [Slide 27]

Dana Safran: This is an overview of some of the things that are distinct about the AQC model from our traditional contract models. So, first and probably most importantly, is that a provider organization that comes into an AQC contract agrees to be accountable for a patient population over time. And for all the care received across all settings from pre-natal care to end-of-life care, the cost and quality of outcomes of that care become their accountability.

Now, just to underscore how different that is from a provider's accountability under a traditional fee-for-service contract, that provider in a fee-for-service contract is accountable for the patient in front of them for as long as that visit or hospital stay or encounter lasts. And their accountability is done when the visit is over until and unless the patient returns. So, accountability across time and space for a whole population is a dramatically different proposition.

We also, as you can see, establish a global budget for that patient population. Very importantly, the model builds that budget specific to each provider organization based on the historic rate of spending for their population. So, why is that important? Well, both from a provider adoption perspective, but also a public acceptance perspective, we felt it was absolutely critical in a model that was going to try to find waste and get waste out of healthcare spending to start providers off with the same amount of resources they had had under the fee-for-service system, but now have them have incentives to find where could there be waste and to share in the savings if they did find that waste.

Imagine if we had said, "You know, there's all these Institute of Medicine reports and other academic studies that tell us there's 30 percent or so of medical care is not providing value," so, you know, we'll take what's been spent to take care of your population over the last year and just – you know, we're not going to shave off 30 percent, but we'll shave off 2 percent, 3 percent." We'd still be sitting here waiting for our first adopters. But maybe more importantly, a public that today unfortunately still is very concerned that any bit of health care held back from them and as something that could cause harm would have been extremely suspicious of the model.

So, it's very important to have this feature where baseline budgets were set based on historic spending. As you can see, it's a two-sided risk model that providers share in savings, but also in deficits if they overspend their budget in a given year. And trend targets, very importantly, are set at the beginning before the contract is signed for each year over the five-year contract. And why this is important is so that the provider knows how much their budget is going to grow in year two, in year three, in year four, and in year five. And to have this be known and to have it be limited so that, unlike the medical trends we were looking at in the previous slide, we actually begin to control cost growth and do it in a way that's transparent and known to the providers who are accepting this accountability.

Second really important distinction in the model is that there is a very significant upside potential on earnings based on quality. Our quality measure set includes both ambulatory and hospital measures; 64 measures in total about evenly split across those two settings. And in both settings, it includes clinical process measures, clinical outcome measures, and patient experience measures. All of these are NQF, nationally endorsed, accepted measures.

One of the important innovations that we made was to have the performance target include a range of scores, not just the single number. And that's really transformed providers' motivation and the way that they engage with a pay-for-performance type of model because it laid out for them essentially an agenda for improvement over the five-year contract because for every measure, there is a range of performance targets that represent good to exceptionally good care. And every single increment of improvement on that measure across the whole continuum earns additional payout.

In addition, starting in 2011 contracts, the quality score had a second function, which is that it became the determinant of shared savings and shared deficits. The higher the quality score, the better you are with respect to your shared savings or deficit. If you are in a deficit, you can owe as little as 20 percent of that deficit if you're all the way at the top of our quality continuum. As much as 80 percent if you're at the only at the beginning of good quality. And if you're in a surplus, you get to keep up to 80 percent of the surplus if you're at the best possible quality. But you only keep 20 percent if you're at the lower quality scores.

And finally, this is, as I said already, a long-term contract, five years. And as I'll describe in a few minutes, one in which the health plan works in a very collaborative way with the provider organization to support ongoing performance improvement over the five years. And the way that we do this, I'll say a few words about, but it is different from anything that we or other payers have offered to providers in a contract in the past.

Results Under The AQC: Improvement of the 2009 Cohort of AQC Groups from 2007-2012 [Slide 28]

Dana Safran: So, here, I share a little bit about some of the quality results. After this, I'll share with you about the cost results. This is, of course, the subset of the quality measures. What you're looking at here are a composite of the adult chronic care process measures. In the middle, a composite of pediatric acute and preventive care measures, and on the right, a composite of adult clinical outcome measures dealing with good control of serious chronic illnesses. The blue line represents changes over time in the scores of our initial AQC cohort, the 2009 cohort of AQC groups.

The orange line represents national trends on these same measures. So you notice right away for all of these domains significant improvement over time for the AQC groups. And by the way, the timeline begins before the AQC contracts just as a sort of pre- versus post-view of things: 2007 and 2008 were prior to the start of the contract. And for this cohort that I'm picturing here, 2009 was the launch of the contract.

So, significant improvements all along the way. A somewhat different story for the different types of measures. You can see in pediatrics, the providers were already well above the national average, but continued to gain. I think the most important and key accomplishment here is reflected in the right side because it was audacious for Blue Cross of Mass in 2008 as we negotiated these contracts to ask providers to become accountable, not just for process, not just for patient experience, but for the actual clinical outcomes that they were achieving. There was nobody else who was doing that at the time. And frankly, I thought, as a measurement scientist for my whole career, that they would say, "These are all valid measures. We like the NQF endorsement, but you must be kidding me if you think we'll be accountable for what happens when the patient is out of our view."

But, the early adopters actually embraced these measures more than every other measure and said, "These are so important to population health." And as a result, we triple-weighted the measures. And you can see the significant accomplishment, where before the AQC contract began they were running right about where the national average was with only about 62 percent of adults with chronic illness being under good control to where now 74 percent are under good control.

Now, just to underscore that, that's not, you know, for one disease, or one measure, or one medical group. This is across all of our 2009 contracts, which is about 25 percent of our network for all adult chronic illnesses that we measure in this contract. And what you also notice is, nationally, this number just hasn't budged. It is hard to change outcomes. You really have to engage differently with patients.

AQC Results: Formal Evaluation Findings [Slide 29]

Dana Safran: So, on this slide here, what I'm showing you are the results published by the Harvard Medical School team led by Dr. Michael Chernew that has been doing a longitudinal evaluation of the AQC. The four-year results were published late in 2014 in the New England Journal of Medicine. And what they found was consistent with some of the earlier findings that the AQC, right from year one, was driving reduced medical spending. And what in particular they found is that the ability to achieve savings over the control group, savings over what is otherwise happening in the environment, has been accelerating over time. So, about 2 percent in the first year, and about 3 percent in the second year, and then up to 6 percent, and then up to about 10 percent by year four.

And this is consistent, like I said, with what we see in our work with the groups in that, you know, in year one, they're just starting to understand how to begin to think about medical savings when they've up to that point been incentivized around a model that says more is better. You make more money if you do more things. So, turning that ship and beginning to behave differently was a significant change for providers. And so, seeing them gain momentum has been really, really an important thing.

Total Cost Results [Slide 30]

Dana Safran: This shows you is how did the medical cost trend looks over time. One of the concerns or criticisms that some people had of the way the analyses were done in the academic study is they looked just at the medical claims trends. And some folks have said, "Well, what about all those bonuses and so forth that Blue Cross is paying in order to accomplish this? What about the shared savings, the quality bonuses, the infrastructure investments?" So, this slide is showing on a total cost basis after you include all the additional payments what was happening in the AQC total cost trends. And what you'll notice is the green horizontal line there is where medical trends were when we started the AQC. In year one with our original cohort, which as I said was about 25 percent of the network, we spent more than we were spending before.

There was an investment that we knew we had to make to get this going. But you notice that by the third year we had cut that in half. And by the end of the fourth year, we were down in low single digits below the purple line, which is our state benchmark signifying growth – spending growth should be no greater than the state economic growth at 3.6 percent. So, we beat that quite significantly by 2012. And by the way, by 2012, we had 85 percent of the network contracted in this model. So, the network is really producing remarkably lower medical trends than what we had in the earlier slide that I showed you.

Components of the AQC Support Model [Slide 31]

Dana Safran: This slide here – I mentioned before about our AQC support program. This is the way that we work together collaboratively with providers to come in to the contract model, and that really has four main components to it — a large, large number of data and actionable reports that we give to providers, an on-site consultative support where our leadership works together with their leadership on a regular basis; quite a number and variety of best sharing forums and opportunities for best practice sharing; and then some formal training and educational programming as well, including a nine-month leadership curriculum that we developed with the American College of Physician Executives.

Account View: Illustration [Slide 32]

Dana Safran: Here I want to just give you an account view of this and talk to you about one of the challenges that I hope that this audience can think about and help to address. And that is that as we move from what many have called volume-based to value-based payment, there's an adjustment that employers who buy insurance for their employees and the consultants and brokers who help them have to make. And it's well illustrated by this slide.

So, what I'm showing you here is the blue line represents business as usual trends, and the red line represents the AQC trends. And these are our sort of hypothetical diagrams but resembling real life. So, what you notice on the top left is what we talked about a moment ago, lower medical cost trends; so the AQC definitely producing savings over business as usual. Then you move to the incentive payments that we're giving. And compared with the types of the types of incentive payments we were giving to providers before in a typical, you know, kind of vanilla pay for performance program, the AQC is paying them significantly higher dollars; shared savings, and significant earnings on quality, and some infrastructure investment.

And then when you put it all together in the bottom left, you can see the AQC is still saving dollars over what business as usual is. But here's the rub is that consultants, brokers, accounts would get stuck on that top right number and say, "Why do we have to pay anything extra? Why can't we just have that top left? That looks so great, all those savings. Why do you have to pay providers, you know, for their shared savings? Why do you have to pay them to reward them for the quality?" And we wanted to really understand what those PMPM, per member per month, amounts were for. What are they actually buying with that? And the interesting thing is, you know, these are accounts who've been receiving for years because they're self-insured, claims data sets, and just kind of taking at face value that every single claim, every single piece of health care that gets delivered is a value. And yet, you know, struggling with the question of what is the value inherent in the payments being made for buying value. So, this is an important change that we really have to help the market adjust to. And I think Gerry's leadership and the Buying Value group can play an important role in that.

Summary and Priority Issues Ahead [Slide 33]

Dana Safran: So, let me just sum up very quickly with this next slide. On the left side, the summary on the right side, a few priority issues ahead. Payment reform, clearly, is giving rise to significant delivery system changes. Rapid and substantial improvements in performance are possible when you change payment. And for payment reform, deep provider relationships and significant market share definitely have been advantageous as the local Blue plan, our on-the-ground relationships with our providers, have really allowed us to accomplish a lot of what we've been able to accomplish and what is probably possible, but harder if you're a remote or have a remote relationship as a national or regional payer.

The priority issues ahead for us. Number one, we're in the process now of expanding this model to include our PPO members. Right now, it's just been implemented for HMO. And that is expected to launch with the first contracts in 1/1/16. There are, as Gerry talked about, continued important gaps in our quality measure sets even as much as we have, we're overwhelmed by the measures we have. We all understand there's still many, many important things, especially outcomes, for which we do not have good measures that are ready for prime-time use in high-stakes ways like a performance-based contract. And that's important to continue to evolve this measure set.

And the delivery system itself has to continue to evolve. The hospitals, which are now seeing, you know, fewer admissions, fewer emergency room use, have to reinvent themselves and are doing so in our market as part of larger delivery systems, where they don't necessarily need so many beds, but they do need other things. They need more primary care. They need more behavioral health care. And so, we're starting to see some of those delivery system evolutions take place.

And then finally, it's incredibly important to also continue to involve the financial and non-financial incentives to frontline clinicians because this payment model is directed to the organization. How the organization filters those incentives down to the frontline has been and continues to be their decision and their call, and can vary tremendously. But doing it in a way that really engages clinicians in the important work of affordability, and better quality and outcomes is critical, and payment will play a very important role there.

For More Information [Slide 34]

Dana Safran: So, let me stop there and we can move to discussion.

Facilitated Discussion [Slide 35]

Nancy Wilson: Thanks, Dana. That's terrific. I'm excited to see that we've already got a number of questions that have come over the chat box. So, I'm going to lob these to Gerry and to you.

Gerry, the first one that came in for you was how does the Buying Value movement compare to Healthcare Effectiveness Data and Information Set (HEDIS) and core measures? And sort of along that line, were you only looking at hospital measures?

Gerry Shea: On the last point, no. We were looking mostly at clinician measures, actually. The hospital measures have been underway for a much longer period of time. Generally, Medicare has played such a strong role there that we don't think we need to focus on that. It's really the clinician measures that need attention. And then what was the first part of the question, Nancy?

Nancy Wilson: The first part was, how do the measures that you're talking about compare to HEDIS?

Gerry Shea: Most of the measures that we find people use are HEDIS measures, but that doesn't alone solve the problem of duplication or slightly different measures. In other words, people in different places will pick slightly different measures that are within the HEDIS world or within the NQF library of measures. So, you've got to get a more defined level of, degree of alignment than that, and that takes a process. And this is what we're short right now. We don't have the process to reach consensus.

There are some encouraging efforts being made. I want to point out particularly the Strategic Innovation Model program now in 38 states. Yes, it's still in its beginning stages, but – and it's focused initially on public programs, but its long-term goal is to align public and private purchasing. And so that creates the kind of body that could wrestle with these problems. It just – it has to be, however, that we can't do it state by state. We've got to find a way to tie one state to another and with a national scene.

Nancy Wilson: Thanks. That's helpful. Dana, I'm going to shift things a little bit and share one of the first questions that came in for you, which is can you give a brief explanation of what you mean by triple weighting the scores.

Dana Safran: Oh, absolutely. So, as I mentioned, there are 64 measures in total. So, if you imagine each of those measures kind of having a weight of one. The clinical outcome measures on the ambulatory side count three times.

Nancy Wilson: Perfect.

Nancy Wilson: One other one that I'm going to give you is did the populations that you served include Medicaid?

Dana Safran: No. They did not include Medicaid. We do, however-this is probably a very important point for this audience. We have done some very interesting analyses related to what happened with quality for providers in the AQC who do serve a disproportionately low socioeconomic status population. And one of the really encouraging findings here is that two of our provider organizations who serve the lowest socioeconomic status mix, the most vulnerable population, achieved some of the biggest quality gains and the highest quality scores since starting this contract. And why is it important is that we made the decision to adjust the budgets for the population being served, but hold the same performance standards for everybody on the quality scores because I just could not in my own mind feel comfortable saying I'm going to set a lower standard of care for patients who go to a provider that serves a socioeconomic status population.

So seeing that, what these providers did was really innovate. What does it mean to get to your highest levels of performance on these measures given that I have a population that looks like this? And seeing them not only succeed but actually close disparities in care that have existed for so long and now have a population that has better quality scores than some of the advantaged populations, I think, is a very important victory.

Nancy Wilson: Gerry, one person has asked, how do you implement a plug-and-play core measure set?

Gerry Shea: The first challenge is creating it. So you have to have agreement on what the core measure set would be. And then the second step is to actually go to all the stakeholders and see if they'll sign on to use that core measure set. So, in a particular state, you would go to the various health systems, and very importantly to the payers, the insurers, to see if they will accept that measure set. Understanding that to go from an existing set of measures to a different set of measures does take a transition period. There's just no way around that. But we envision the day when you could say, for instance, to, you know, your garden-variety employer or union fund, "Here's the core set of measures. It's being used by Medicare. It's being used by the big private payers. It's being used by the health plans. This is what you should expect will happen when you buy health care."

Nancy Wilson: Thanks. I think that's a great vision for us. Gerry, how does harmonization of all of these measures address the needs of specialist and sub-specialists? I'm wondering if this might be in relationship to providers wanting measures that they believe are actionable. I'm not sure.

Gerry Shea: Yes. I think it would be and it's a very important issue. When I spoke first about core measure set, I think I corrected myself and said, "Core measure set," because you really need measure sets that fit a lot of different circumstances. If you're having hand surgery, you don't want to know about general surgeons. You want to know about hand surgeons. And so, we have to establish core sets that apply to specialties as well as to all the shared clinical areas. And that's part of the plan that we're developing.

Nancy Wilson: My experience working on the federal side is we had a lot of opportunity for alignment even within a single topic like hypertension; so control of hypertension, for example. So, I would agree with you that there's a lot of opportunity for harmonization that doesn't eliminate measures that matter to a particular specialist or sub-specialist.

Dana, there are two questions that have come in for you a little bit in terms of what you were measuring as far as results. Did you measure enrollee satisfaction with care? And did that also improve? That's one question. And then sort of along those lines, were there any provider's surveys that you conducted, including downstream subcontractors who may have been impacted by the change in the payment structure — folks like pharmacy, durable medical equipment specialist, hospital contracts? So, the first is about enrollee satisfaction with care, and then the second one is about downstream subcontractors.

Dana Safran: Absolutely. The enrollee care experience is a very, very important part of the measure set. We use a version of the Clinician and Group-Consumer Assessment of Healthcare Providers and Systems (CG-CAHPS) tool on the ambulatory side. On the hospital side we use HCAHPS. And not all measures – we – I think on hospital CAHPS there are four that are very clinically relevant and for which most respondents do screen in. So, we have enough data to measure with– good reliability.

On the ambulatory side, for those not familiar with CG-CAHPS, that's a tool that is measuring patient's experiences with their primary care physician and that physician's practice. And there are four ambulatory adult patient experience measures and four ambulatory pediatric patient experience measures, so eight in total. So, they carry quite a lot of weight actually in the overall measure set.

And I think, you know, I didn't say this explicitly before. The quality measure set plays a very important role as a backstop against any impulse that providers would have to provide too little care or (same time) care in a budgeted model. Patient experience measures are really important to that because that's one of the ways that we would know if patients were really starting to experience something in the care setting that was looking unfavorable.

What we've seen is quite significant improvement in patient experience. And if we had the data that would allow us to look at the subgroup that has chronic illnesses, our suspicion is that we would see their scores kind of off the charts because these are the patients who, you know — what we hear from them anecdotally — feel like they've landed in a concierge practice because suddenly, you know, the doctor's office is reaching out to them in between visits to find out how they're doing, how they're managing with their medicine, with their, the other lifestyle changes that they need to make to keep their condition under good control.

So, what patients are experiencing is care that is more integrated and really, in a sincere way, more patient-centered because you can't be responsible for clinical outcomes and not be patient-centered. You actually have to understand that patient in the real world outside of your office setting.

We don't do any kind of formal surveys of ancillary providers. We do surveys of our primary care providers and those actually have improved pretty significantly, too, because almost every AQC group, if not every AQC group, is using a significant share of the incentive dollars that they're paid to reward primary care practices building infrastructure and to reward primary care clinicians because so much of the success and the model relies on primary care.

How to Find More Tools and Resources [Slide 36]

Nancy Wilson: Thank you so much. One quick question because we're running out of time is around what was the payment frequency to the physician for the incentives?

Dana Safran: So, again, we're paying the organization. How the organization pays the frontline clinicians is really their own call. We do a once a year settlement with the organization on the quality payout and the shared savings. But they're getting data all through the year to tell them how they're doing and very actionable data to tell them how they can continue making improvements. But, the actual checks that comes and rewards them for performance happens once a year.

Nancy Wilson: We still have questions to go and I want to promise people that we will collect those and we will attempt to get answers for you. We will – I'm not sure we told Dana and Gerry that. But we like to capture all the questions and actually work with the presenters to come up with answers. So, for those of you who didn't have their questions answered, stay tuned, we'll get answers to those and post them on our website.

Gerry Shea: Nancy, that's great. I was going to suggest something like that. I've noticed a lot of very interesting questions; good questions that are coming in on the chat lines. So I'd be happy to spend some time over the next few days, you know, chipping in with information I can offer.

Questions and Answers [Slide 37 - skipped]

Questions and Answers [Slide 38 - skipped]

Thanks for attending today's event. [Slide 39]

Nancy Wilson: That's terrific. Because, yes, some of these last questions are pretty complicated. I mean, you know, infrastructure change, et cetera. I mean there's room – for clinical – for improvement in clinics. But we will work on those with our presenters. And thank you to Gerry and to Dana for really interesting, thought-provoking presentations as we all head into this world of paying for value and quality. So, thank you, everyone.

With that, I think we'll adjourn. I like to stay prompt, so.

Dana Safran: Thanks. Bye bye.

Gerry Shea: Thank you, Nancy.

Nancy Wilson: Thank you, everyone.

Operator: This concludes today's conference call. You may now disconnect.

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