© 2005 Med-Vantage, Inc. All rights reserved. Proprietary and confidential. May not be reproduced...

© 2005 Med-Vantage, Inc. All rights reserved. Proprietary and confidential. May not be reproduced without permission

Beau CarterSenior Health Policy and Strategy Consultant

Med-Vantage

Sustainable Funding ModelsSustainable Funding Modelsfor RHIOsfor RHIOs

Get Connected Knowledge ForumGet Connected Knowledge ForumJune 28, 2005June 28, 2005

Med Vantage, Inc Med Vantage, Inc ®

Company Overview Company Overview

Founded 2001, San Francisco corporate office Domain expertise: P4P, Consumer Scorecards, EBM Metrics

& Deployment, ROI evaluation, Risk Adjustment First-to-market application, patent pending

QualScore - Physician Quality & Cost Decision Support Tool

Medical Cost Estimator – Treatment Cost and Provider Search Tool

EBMScore – EBM Measure Construction, ROI & Reporting Tool

Largest consumer quality scorecard deployment underway for CDH/PPO/HMO (Arkansas BCBS)

11 health plan clients (pay-for-performance clients) 200 EBM Measures, 18 specialties (road tested, defensible) National ETG and KPI benchmark data set (50M members)


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EBM Research & Evaluation

PhysicianScorecard

Clinical Informatics

Pay fo

r Per

form

ance

(P4P

)

Evidence-Based Physician Scorecard Solutions

Evidence-Based Physician Scorecard Solutions

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IOM Call to Action IOM Call to Action

“If we want safer, higher-quality care, we will need to have redesigned systems of care, including the use of information technology to support clinical and administrative processes.”

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“I think the projects that seem to be making the biggest progress are really focusing on the real nuts and bolts of how they get interoperability to occur. …They are also looking at business models and financial alignment.”

Quoted in Jim Molpus “David Brailer's Year of Living Attentively” for HealthLeaders News, May 10, 2005

A First-Year Assessment of RHIOsFrom David Brailer, MD

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2003 2004

n = 28 n = 50

IT - Fastest Growing P4P DomainIT - Fastest Growing P4P Domain

Category % Total n % Total n

Clinical (HEDIS) 89% 25 94% 47

Clinical (non-HEDIS) 46% 13 32% 16

Patient satisfaction 79% 22 56% 28

Efficiency/utilization 57% 16 46% 23

Administrative/market share 54% 15 40% 20

Information technology 39% 11 54% 27

Patient safety 29% 8 12% 6

Other 32% 9 22% 11

2004 National P4P SurveyP4P Measure Domains


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IT Incentive Models for PhysiciansIT Incentive Models for Physicians

Clinical Information Systems Model

Level 1 – Connectivity, electronic claims submission, eligibility verification

HIP, MVP/Taconic IPA, IBC

Level 2 - Health Plan Based Patient Registry, Care Alerts

Priority Health Plan (MI), Horizon BCBS (NJ), BCBS Excellus (Rochester)

Level 3– Electronic Prescribing IncentiveBCBS-MA, Anthem, MVP/Taconic, Bridges to Excellence (BTE), BCBST

Level 3 – Basic Patient Registry Use in MD Office, Adoption of EMR

Harvard Pilgrim, BTE, Anthem, BCBS-MA, IHA, Fallon, BCBS-MI, Dean Health Plan, BCBS-MISS, MVP/Taconic IPA, CareFirst, BCBST

Level 4 - Electronic Patient Registries, Systems for Rx/Tests, EMR, Health Plan Connectivity (lab, chart results, Rx)

Non-P4P: BCBS-AL, Group Health Cooperative, Kaiser

Source: Bridges to Excellence.© 2005 Med-Vantage Inc. All Rights Reserved. www.medvantageinc.com

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“If interoperability is not solidified and built into EMRs, a generation of investment will be lost, as will an opportunity for fundamental improvement in care delivery?”

David Brailer, MD February 17, 2005 speech to HIMSS

But remember, the magic is in not bi-lateral connectivity – it’s in community exchange

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PurchasersPayers RHIO

Hospitals &

Physicians

Gain Sharing

Enrollment Fee

Community Pool

Participation Fee

RHIO - Aligning Health Resources with Community Goals

Savings

©2004 Jeff Rose, HealthAlliant. All Rights Reserved

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Financial Barriers to Physician Participation Financial Barriers to Physician Participation

• $30,000 - $50,000 -- Client / Server

• $1,000 per physician per month - ASP model

• Practice productivity loss

• Financial ROI favors the payers over providers

SOLUTION: Sustainable model built on core funding for the exchange plus financial incentives for physician practice participation

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PharmaciesPharmaciesHospitalsHospitals ReferenceReference

LaboratoriesLaboratories

TRANSLATORTRANSLATOR

CLINICAL CLINICAL DATA DATA

REPOSITORYREPOSITORY

E-E-ResultsResults

E RxE Rx

MedAllies Portal

EMR 1EMR 1

EMR 2EMR 2

MASTER PATIENT INDEX

PAYORSPAYORS

PAY-4-PERFORMANCE

PMSPMS

PHYSICIANSPHYSICIANS

PATIENTSPATIENTS

Physician Physician PracticePractice

Source: A. John Blair III, MD, Taconic IPA

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THINC Health Information ExchangeTHINC Health Information Exchange

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Incentives for Physician IT Adoption Incentives for Physician IT Adoption

“Financial incentives of the approximate range of $3 to $6 per patient visit or $0.50 to $1.00 per member per month appear to be a sufficient starting point to encourage wide-spread adoption of basic EMR technologies by small, ambulatory primary care practices.”

Work Group on Financial, Legal, and Organizational Stability

Connecting for Health…A Public-Private Collaborative

June 23, 2004

© 2005 Med-Vantage Inc. All Rights Reserved. www.medvantageinc.com

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Hudson Valley THINC – Flow of ITAdoption Incentive $Hudson Valley THINC – Flow of ITAdoption Incentive $

MD MD MD MD MD MD

BTEEmployer A

Self-FundedEmployer B

Health Plan C

Health Plan D

CertificationOf

Performance$$

$

$

Health Plan ASO

$

Federal/StateGovernment ?

$

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The Case for Payer Participation in a Collaborative RHIO Incentive ModelThe Case for Payer Participation in a Collaborative RHIO Incentive Model

• In most markets, no one payer has enough market share to drive change alone

• A small investment can produce a large return

• The broader the participation, the fewer “free riders”

• Most “e” benefits accrue to the payer

• Some payers could fund physician incentives with Rx savings


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. . . and an ROI in EMR Adoption. . . and an ROI in EMR Adoption

Decreased Billing Errors

Increased Billing Capture

Radiology Savings

Lab SavingsDrug Savings

Adverse Drug Events Prevention

Transcription Savings

Chart Pull Savings

EMR Benefits

Source: Partners Health Care experience based on 2500 patients and providers. “Cost and Benefit Analysis for electronic medical records in primary care.” The American Journal of Medicine 2003;114:397-403

15%

14%

13%

5%5%

15%

29%

4%

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Physician P4P Model: From 100% IT to 100% Outcomes

Phase IYears 1-2

Phase IIYears 3-4

Phase IIIYear 5 on

Key Type of P4P P4I(Pay for Infrastructure)

P4U(Pay for Use)

P4O(Pay for Outcomes)

Desired Behavior Establish & use patient registriesAdopt & use eRx system

Adopt & use full EMR Perform at EBM best practice levels

Key Performance Indicators

Use of registriesUse of eRx with decision support

Use of full EMRClinical metrics – screening/levels

Clinical metrics - HbA1c, LDL levels;

smoking cessation; obesity, hypertension management

Weighting IT ( pat. reg. & eRx) – 70%Generic Rx – 30%

IT (EMR) – 50%Clinical – 50%

(screening/levels)

Clinical – 100%Levels + performance based

on chart data

Data Sources Self-report - registryeRx system reports

Clinical – admin data

EMR system reportsClinical – admin & lab data

Admin. & lab data, plus patient data from EMR

Incentive Formula Yes-No: registryTwo tiers for eRx % use

Two tiers for EMR useTwo tiers for clinical

Two tiers for clinicalYes-No: smoking, obesity

management

Incentive Pay-out Up to 10% bonuspmpm or visit add-on

Up to 10% bonus pmpm or visit add-on

Up to 10% bonuspmpm or visit add-on

© 2005 Med-Vantage, Inc. All Rights Reserved. May not be reproduced without permission.

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And When the Choices Look Like This …And When the Choices Look Like This …

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For More Information…For More Information…

Beau CarterSenior Health Policy & Strategy Consultant

Med-Vantage, Inc.1 California Street, Suite 2800

San Francisco, CA 94111(415) 765-7103

www.medvantageinc.com

2003 - 2004 National P4P Study – now available50 + page White Paper – call 415-765-7106

Executive Summary – on the web site

© 2005 Med-Vantage, Inc. All rights reserved. Proprietary and confidential. May not be reproduced...

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