Quality Improvement Strategies Impacting Value Based Purchasing

Several major initiatives evolved as a result of the Affordable Care Act and all will have a significant impact on quality and improving health care.  This newsletter will share information on the National Quality Strategy, the CMS Innovation Center and the Transforming Clinical Practices Initiative. 

The National Quality Strategy

Mandated by the Affordable Care Act, this strategy was developed through a collaborative and transparent process with input from a wide variety of stakeholders.  There are three overarching aims, six priorities that address the most common health concerns for Americans today and nine levers to assist stakeholders in aligning their functions to drive improvement.

The NQS provides a focus for addressing the abundance of clinical quality measures currently used in national programs.  This initiative has three broad aims:

• Better Care – improve the overall quality by making healthcare more patient-centered.
• Healthy People/Healthy Communities – improve the health of the population by supporting proven interventions that address behavioral, social and environmental determinants of health.
• Affordable Care – reduce the cost of quality healthcare.

Six priorities were developed to advance these aims:

• Making care safer by reducing harm caused by delivery of care.
• Ensuring that each person and family is engaged as partners in their care.
• Promoting effective communication and coordination of care.
• Promoting the most effective prevention and treatment practices for the leading causes of mortality.
• Working with communities to promote wide use of best practices to enable healthy living.
• Making quality care more affordable.

Improving health and health care quality can only occur if all sectors – individuals, family members, payers, providers, employers and communities make it their mission.  Members of the healthcare community can align to the National Quality Strategy by using the levers.  These levers represent core business functions, resources or actions that can be taken by the stakeholder to align with this improvement strategy.  These levers are:

• Measurement and Feedback
• Public Reporting
• Learning and Technical Assistance
• Certification, Accreditation, and Regulation
• Consumer Incentives and Benefit Designs
• Payment
• Health Information Technology
• Innovation and Diffusion
• Workforce Development

For more information check out the website www.ahrq.gov/workingforquality. This site shares examples of how the priorities have been put into action and offers a great toolkit to assist in your program development.

The CMS Innovation Center was created with the purpose of testing innovative payment and service delivery models to reduce expenditures.  This program has the following priorities:

• Testing new payment and service delivery models
• Evaluating test results and advancing best practices
• Engaging a broad range of stakeholders to develop additional models for testing

After a rigorous evaluation of the impact of a model, feedback is provided in order to foster continuous quality improvement.  The center leverages claim data to deliver actionable feedback to providers about their performance and encourages providers to use their own performance data to drive continual improvement in their outcomes.  Every service delivery or payment model developed by the Innovation Center includes a plan of action to ensure that lessons learned and best practices identified during the test can be widely disseminated, sharing the results on an ongoing basis in order to promote rapid learning.

A great website for additional information on this initiative is http://innovation.cms.gov/About/index.html.

The Transforming Clinical Practices Initiative was designed to assist clinicians in achieving large-scale health transformation and will impact practices over the next four years in sharing, adapting and further developing comprehensive quality improvement strategies. The goals are:

• Promoting broad payment and practice reform in primary care and specialty care
• Promoting care coordination between providers of services and suppliers
• Establishing community-based health teams to support chronic care management
• Promoting improved quality and reduced cost by developing a collaboration of institutions that support practice transformation.

The Department of Health and Human Services will invest $840 million over the next four years.  This will be a combination of incentives, tools and information to encourage doctors to team with their peers and others to move from volume-driven systems to value-based, patient centered, coordinated healthcare.

As you can readily see, all three of these initiatives have intertwining goals and priorities – all of which pursue the ultimate goal of improving healthcare.

Value Based Purchasing Newsletter Article Part II

                           Better Care.  Smarter Spending.  Healthier People.

Paying for Value – Not Volume!

Whether you are a patient, a provider, a health plan or a taxpayer it is in our common interest to build a healthcare delivery system that is better, smarter and healthier – a system that delivers better care; a system that spends healthcare dollars more wisely; and a system that makes our communities healthier!  We must develop and implement better ways as a country to deliver care, pay providers and distribute information.

Improving the quality and affordability of care for all Americans has always been a pillar of the Affordable Care Act, alongside expanding access to such care.  The ACA provides an opportunity to shape healthcare delivery, improve the quality of care provided and reduce overall growth of healthcare costs.  Value and care-coordination will now be rewarded, rather than volume and care duplication.  The Department of Health and Human Services has established and communicated the benchmarks and metrics that will be used for accountability and drive the attainment of goals for Value Based Purchasing.

There are actually four categories that currently outline this new structure for payments to providers:

1.     Category One – fee-for-service with NO link of payment to quality.

2.     Category Two – fee-for-service with a link of payment to quality.

3.     Category Three – alternative payment models built on fee-for-service architecture.

4.     Category Four – population-based payment.

Value-based purchasing includes payments made in categories 2 thru 4, with the goal of moving the majority of encounters to the population-based payment group.  The goal is to increase accountability for both quality and total cost of the care provided.  At the end of 2014, an estimated 20 percent of Medicare reimbursements had shifted to categories 3 and 4. 

The Department of Health and Human Services has set a goal that by the end of 2016, 30 percent of all Medicare payments will be in categories 3 and 4, and that goal increases to 50 percent by the end of 2018.  Part of this will be accomplished by utilization of alternative payments models such as the medical home, bundling payments and utilization of Accountable Care Organizations. Ultimately the goal is that by the end of 2018, 90 percent of Medicare fee-for-service payments will be in categories 2 thru 4.  In these alternative payment models, providers are accountable for the quality and cost of care for the people and populations they serve moving away from the old way of doing things which amounted to “the more you do, the more you get paid”.

Let’s expand a bit on one of the alternative models.  In the Patient Centered Medical Home model, instead of physicians working in silos, separately, care coordinators oversee all the care a patient is getting.  This means patients are more likely to get the right tests and medications rather than getting duplicated tests, procedures, etc.  These medical homes typically offer patients access to a physician or other clinicians 24/7, and some may offer extended office hours.

According to the Secretary of the Department of Health and Human Services in a statement earlier this year, she stated the progress made thus far has saved taxpayers more than $116 billion. This savings translates in the ability of organizations to reduce expenditures and reinvest those dollars in higher quality care for their employees – wellness programs, for example.

America’s healthcare system is poised to move into its next phase – a coordinated, cost-efficient and quality driven system that promotes and supports individuals and community health.

New drivers have been implemented to foster these changes and next month we will share information on The Center for Medicare and Medicaid Innovation, Transforming Clinical Practices Initiative and the National Quality Strategy. 

Value Based Purchasing

Why and how did this come about?  What are the goals?  What is to be accomplished?

These are often asked questions about Value Based Purchasing (VBP). The answers are often mired in jargon, making it difficult for most to truly look at the process from a strategic viewpoint.  The goal of this informational article is to provide concise answers to support the continued development of your organizational roadmap toward quality and safety.  This will be the first of several articles, each with the intent of providing you with further knowledge on this initiative.

The Why and How

Long before the Affordable Care Act (ACA), it was obvious that the current state of healthcare in the United States was more reactive than proactive, and the Prospective Payment System was not financially sustainable.  Prior to 2011, Medicare payments to providers were tied only to volume, rewarding providers based on how many tests they ran, how many patients they saw or how many procedures they did, regardless of whether or not the service(s) helped patients.

The hospital Value Based Purchasing program was an initiative of the Centers of Medicare and Medicaid Services (CMS) developed to reward acute care hospitals for the quality of care they provide to patients with Medicare.  This initiative impacts more than 3000 hospitals.  Value Based Purchasing is a program that hopes to assist providers transition from a fee-for-service model to one linked to quality rather than quantity.  Organizations are rewarded for striking a balance between high quality and lower costs.  The hope is that providers and organizations will be inspired to become not just thrifty, but innovative as well.

 Health and Human Services Secretary Sylvia Mathews Burwell indicated at the inception of VBP this was the first time in the history of the Medicare program that measurable goals and timelines were established with the impetus of paying providers based on quality rather than quantity.  Rewards are based on the quality of care, how closely best clinical practice is followed and what is done to enhance the patient’s experience during the hospital stay.

The Goal

The goal quite simply is to raise the bar on quality and the patient perception of care.  CMS wishes to reward value and care coordination, rather than volume and care duplication.  The expectation is that VBP will improve the manner in which providers are reimbursed – quality and value instead of quantity.

Another major goal is to strengthen care delivery by better integrating and coordinating care for patients, and to make information more readily available to the consumer and provider.  In doing so, this will improve the coordination and integration of healthcare, engage patients more into the decision-making process with a priority on prevention and wellness.

How is this to be Accomplished

Incentive payments are based on how well the organization performs on the measures in the four domains (discussed below), and how much they improve when compared to their performance baseline.  As more requirements are implemented and the goals elevated, it is readily evident that just sustaining is not sufficient.  Organizations must progressively get better and consistently improve results – continual improvement must be part of the organizational fabric.

Toby Cosgrove, M.D. was quoted in the Harvard Business Review for his description of VBP; “This is a breakthrough that will change the face of medicine.  The pay-for-performance model will lower health care costs, improve quality and outcomes and eventually affect every patient.  But the road ahead is difficult as many oppose the plan.  Healthcare is evolving from a proficiency-based art to a data-driven science.”

There are four domains used to measure performance.  Those domains are: Outcomes, Patient Experience (HCAHPS), Clinical Process of Care Measures (Core Measures), and Efficiency Measures.

The Studer Group reported the number of measures taken into account by Medicare when considering bonuses or penalties will increase from 20 to 26 this year.  There was a weight increase by 5% in the Outcome domain moving from 25% to 30%, a decrease in the Clinical Process domain from 40% to 20%, the Patient Experience domain remained steady at 30% and the Efficiency domain was added and weighted at 20%.

In the Patient Experience domain, there is continual pressure to perform better and the percent of threshold increased in all composites.  In the Clinical Process domain, almost all national benchmarks are at 100%, making it imperative to get these correct each time to receive optimal reimbursement.

Hopefully, this has provided you with concise information regarding Value Based Purchasing.  Next month ICH will share information on the Better Care - Smarter Spending - Healthier People initiative that is tied to VPB, and the impact VBP has had on healthcare delivery to date.

Elizabeth York