Presenter: Tom Simmer M.D.
Chief Medical Officer
Blue Cross Blue Shield of Michigan
Taming the Healthcare Beast:
A Plan for Michigan
March 31, 2009
Federal Reserve Bank
2
Overview• A few facts about health status, healthcare costs, and personal
income in Michigan.
• The Goal: Improve the competitive position of the state of Michigan for business while supporting access to needed medical services.
• Provider Partnership Programs improve healthcare delivery through population based, collaborative initiatives, often connected with performance-based payment.
• A quick look at results.
3
Michigan Personal Income Falling Relative to U.S.
0.85
0.9
0.95
1
1.05
1.1
1.15
1.2
1.25
Source: Department of Treasury calculations from Bureau of Economic Analysis data
Michigan per Capita Income as a Percent of U.S. Per Capita Income
89%93%
122%
4
Source: “Michigan’s Health Care Safety Net: In Jeopardy,” A MHA Special Report
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Older, fatter, smokier, sicker
2007 Data Michigan
U.S.
Average
% Change of U.S. Average
Median age in years 37.5 36.6 2.5
Obesity prevalence among adults 28.2% 26.3% 7.2
Diabetes prevalence among adults
8.8% 8.1% 8.6
Smoking prevalence among adults
21.1% 19.7% 7.1
2008 Michigan Health Plan Costs*
State: $8,812
Regional: $7,557
National: $7,327
State: $6,152
Regional: $4,904
National: $4,117
State: $2,660
Regional: $2,653
National: $3,210
Average Annual Cost to Employer Per Employee
Employer Share Employee Share
2008 health plan costs according to the annual United Benefit Advisors Health Plan Survey. The survey included 18,019 employers nationally, 5,283 in a four-state region and 828 in Michigan. United Benefits Advisors is a national alliance of independent insurance agencies that includes The Campbell Group in Grand Rapids, BenePro Inc. in Royal Oak, Pappas Financial in Farmington Hills, Saginaw Bay Underwriters in Saginaw and Employee Benefits Agency in Marquette.
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Why haven’t we succeeded in healthcare?
• Lack of Population focus – fee for service / third party payment system drives increased delivery of services.
• Cottage industry: Physician practices lack capacity to build information infrastructure and implement lean processes that are key to improving performance.
• Health plan, rather than delivery system, focus introduces process variation and re-work, not clinical process improvement.
• Weak primary care foundation misses opportunities for care coordination and lower cost approaches.
• BCBSM programs are unique in rewarding population-based improvements in care, strengthening primary care, investing in infrastructure through large physician organizations, and reducing variation through lean process improvement across the delivery systems and across payers.
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BCBSM MembersBCBSM Members
Effective ProvidersEffective Providers
Car
eR
elat
ions
hip
Basics -Precertification-Utilization Review
Michigan
BCBSM Clinical Programs
Support
Wellness & Care Management
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Physicians Hospitals
HospitalIncentive Program
(in ParticipatingHospital
Agreement)
Current Partnering for Value Programs
CQIs: CollaborativeQuality Initiatives
BMC2: BCBSM Cardiovascular ConsortiumAngioplasty Collaborative Quality Initiative
Michigan SurgicalQuality Collaborative
Michigan Bariatric SurgeryCollaborative
Etc.
Michigan Society of Thoracic SurgeonsCardiac Surgery
Collaborative Quality Initiative
PGIP:Physician Group
Incentive Program
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Iron
Gogebic
Ontonagon
Houghton
Baraga
Dickinson
Men
omin
ee
MarquetteAlger
Schoolcraft
Delta
LuceChippewa
Mackinac
BerrienCass Hillsdale
BranchSt. Joseph
Monroe
Lenawee
Van Buren CalhounWashtenaw
JacksonKalamazoo
Livingston
InghamEaton
BarryAllegan
Oakland
Montcalm
Ottawa KentIonia
Oceana
Muskegon
Mecosta
New
aygo
OsceolaLakeMason
Gratiot
Clinton
LapeerGenesee
Shiawassee
Sanilac
Huron
Arenac
Bay
SaginawTuscola
Clare
Isabella
Midland
OgemawIosco
Gladwin
WexfordMissaukee
Roscommon
Benzie
Manistee
Leelanau
GrandTraverse
Kalkaska
CrawfordOscoda
Alcona
PresqueIsleCheboygan
Emmet
Antrim
Charlevoix
Montmorency
Otsego Alpena
Keweenaw
Washtenaw County: Huron Valley Physicians
Association (245), Integrated Health Associates (109), U-M Health System Faculty
Group Practice (387)
Oakland County: Medical Network One (303), Oakland Physician Network Services (144),
Oakland Southfield Physicians (204), Oncology Physician Resource (64), Quality Partners of
MI (34), St. John Medical Group (223), United Physicians (560)
Kalamazoo County: Bronson Medical Group (50) and ProMed
Healthcare (83)
Genesee County: Genesys Integrated Group Physicians(87), Hurley PHO (116),
McLaren Medical Management (95)
Kent County: Advantage Health Physicians (146), Michigan Medical, PC (MMPC) (90), Regional Delivery Network of West MI (136), West Michigan Physicians Network (227)
Calhoun County: Integrated Health Partners (69)
Macomb County: DMC Primary Care Physicians (115), St. John HealthPartners (417)Muskegon County:
Hackley PHO (79)
Ingham County: Consortium of Independent Physician Associations
(1,230), MSU Health Team (104), Sparrow Family Medical Services (45)
St. Clair County: Mercy~ Physician Community PHO (38), Physician Healthcare Network (26)
Saginaw County: Primary Healthcare Partners (57)
Marquette County: Upper Peninsula Health Plan (176)PGIP Participants (June 2008)PGIP Participants (June 2008)• 35 groups35 groups• 6,471 physicians 6,471 physicians • 1,700,0001,700,000 membersmembers
Ottawa County: Principal Health PHO (35)
Jackson County: Jackson Physician Alliance (70)
Wayne
Macomb
Wayne County: Henry Ford Medical Group (328), Olympia Medical Services (127), UOP, LLC (252)
St. Clair
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ValuePartnerships: Leveraging Provider Relationships and Market Share to transform healthcare delivery.
CurrentState
Next-Generation PPO• Stronger role for primary care (medical home, not gatekeeper)• Strong link between performance
and payment
Partnering for Value
Incremental Savings and Improvement
Short-TermValue
Foundation for Future
Preparations
• Build effective physician organizations.
• Care commitment to a defined population
• Facilitated practice improvement and technology dissemination.
• Substantial improvement in healthcare delivery
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Programs to Improve Hospital Care: MHA Keystone: Hospital-Associated Infection (HAI)
The Challenge:• 5-10% of hospital inpatients develop infections each year,
resulting in 90,000 deaths nationally• $5 billion to $6 billion in national health care costs
The Response:• Launched in 2007 to eliminate Hospital Associated Infections • Hand hygiene compliance nearly 80% (U.S. average is 40%)• Eliminating nonessential catheters• 112 participating hospitals in MHA Keystone: HAI
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Keystone Results in Michigan
• Lives Saved – 1,729*
• Patient Days Saved – in excess of 127,000*
• Dollars Saved – 0ver $246 Million*
• Culture of Safety improved 28%
• Teamwork improved 15%
* Based on the Johns Hopkins Opportunity Calculator
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Improving Cardiac Interventions – Participating Centers – 2009
15
Comparison of Outcomes for 2002-2008*
0
5
10
15
20
Death KidneyFailure
Transfusion VascularComplications
All CABG Revasc
2002
2008
18%
40%
22%
1.5%
25% 26%
Percen
t
16
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Improving Performance to the Population: Evidence Based Care Measures
2008 Measures (scored in 2008)• Diabetes
– Comprehensive Diabetes Care - HbA1c Testing– Comprehensive Diabetes Care - LDL-C Screening– Comprehensive Diabetes Care - Monitoring
Nephropathy– Lipid Lowering Drug Rate– Statin Therapy for Persons with Diabetes– ACE/ARB Use with Comorbidity CHF– ACE/ARB Use with Comorbidity Nephropathy– ACE/ARB Use with Comorbidity Hypertension
• Asthma– Use of Appropriate Medications for People with
Asthma – Combined• Congestive Heart Failure (CHF)
– LDL-C Screening– Beta Blocker Prescription over Last 12 Months– Rate of ACE/ARB
• Coronary Artery Disease (CAD)– Beta Blocker Treatment After a Heart Attack– Cholesterol Management for Patients with
Cardiovascular Conditions - Screening– Lipid Lowering Drug Rate– Statin Use
• Additional Measures– Appropriate Treatment for Children with an Upper
Respiratory Infection– Avoidance of Antibiotic Treatment in Adults with
Acute Bronchitis
New Measures for 2008 (scored in 2009)• Adult Prevention
– Breast Cancer Screening – Cervical Cancer Screening
• Child/Adolescent Prevention/Treatment– Adolescent Well Care Visit– Adolescent Immunization Status – Combo
2– Childhood Immunization Status – Combo 3– Well Child Visits in First 15 Months of Life– Well Child Visits in 3, 4, 5, 6 Years of Life
• Chronic Obstructive Pulmonary Disease (COPD)– Use of Spirometry in Assessment and
Diagnosis • Congestive Heart Failure (CHF)
– ACE/ARB Continuation/Persistence• Coronary Artery Disease (CAD)
– Persistence of Beta Blocker Treatment After AMI
• Low Back Pain– Imaging Studies for Low Back Pain
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EBCR Performance Trend
PGIP Improvement in Evidence Based Care Measures: PGIP Overall EBCR Score by Measurement Period
68%
71%
69%
72%
75%
76%
60%
65%
70%
75%
80%
2006 2Q06-1Q07 3Q06-2Q07 4Q06-3Q07 2007 2Q07-1Q08
Measurement Period
Ov
era
ll E
BC
R S
co
re
ABC Benchmark
78%
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1Q 2008 EBCR Performance1Q 2008 Overall EBCR Score by Physician Organization
83%83%
81%80%
79%79%79%79%78%
77%77%77%77%77%77%76%76%76%76%76%75%75%75%75%74%74%74%
73%73%73%73%
70%
76%
60%
65%
70%
75%
80%
85%
Overa
ll E
BC
R S
co
re (
Ori
gin
al 18 M
easu
res)
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Increasing Generic UsePGIP Generic Dispensing Rate Improvement
49%50%
51%52%
53%
55%56%
57%
59%
61%
64% 64%
48%49% 49%
50%51%
52%
54%54%
55%56%
59%60%
30%
35%
40%
45%
50%
55%
60%
65%
3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08
Quarter
Gen
eri
c D
isp
en
sin
g R
ate
PGIP
Control
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Overall PMPM PGIP vs. Control by Year
$95.40
$85.89
$96.20 $97.81
$76.73$77.77$80.43
$90.56
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
2005 2006 2007 2008
PM
PM Control
PGIP
PMPM by Year
Initial PMPM Difference=
$4.84
Final Difference=$21.08
Savings=$16.24 PMPM
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Improving Primary Care Performance
• Performance assessment is based on attributed population rates.– PC-MH practice characteristics, based on national
criteria– Performance on Quality metrics – “Evidence-Based
Care Report”– Resource management
• Generic dispensing rate
• High tech imaging
• Low tech imaging
• Rate of use of ER for non-emergent care
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Building the Primary Care Foundation: Patient Centered Medical Home
PCPPCP
PCP
PCP
PCPPCP
PCP
PCP
PCPPCP
PCP
PCP
PCP
PCP
PCPPCP
PCPPCP
PCPPCP
PCP
PCP
PCPPCP
PCP
PCP PCP
PCP
PCP PCPPCP
PCP
PCP
PCP
PCPPCP
PCP
PCP
PCP
PCP
PC-MH
PC-MH
PC-MHPGIP Phys Org A
PGIP Phys Org B
PGIP Phys Org C“ControlGroup”
PC-MHNominee
PC-MHNominee
PC-MHNominee
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Summary• Michigan has unfavorable health status and medical costs
compared to regional and national benchmarks.• BCBSM is working to make Michigan a more competitive state
to attract business and job growth, while improving medical care.
• Health Plan-based Wellness and Care Management programs are cost-effective and act as a safety net for failure of the primary clinical process, but they do not change healthcare delivery and do not significantly affect health benefit costs.
• Population-based collaborative programs improve key clinical processes and achieve substantial savings.
• PCP’s are actively transforming their practices by implementing the Patient-Centered Medical Home model, creating a lower cost model of care.
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