vii
Contents
Preface .....................................................................................................xiii
Introduction ............................................................................................ xix
1  Integration and HMOs: How Did We Get is So Wrong? .............. 1
Reimbursement .......................................................................................3
Community‑Acquired Pneumonia Story from Intermountain
Health System in Salt Lake City, Utah ..........................................4
Coordination ..........................................................................................6
Performance ............................................................................................7
2  Performance Measurement: A Science with No Followers .............. 11
Furthering Measurement and Informed Purchasing ............................. 17
3  Reimbursement: From Fee for Service to Risk Adjusters ................ 21
Where Does the Money Come from for Public
Reimbursement of Medicare Claims? ..........................................23
Global Implications of Rising Costs: Why Raising Fees Is No
Longer an Option ........................................................................23
More than a Trend ................................................................................25
e Current Status of P4P ....................................................................25
How Much Reimbursement Does It Take to Change Behavior? ..29
Will Gain Sharing and P4P Together Represent Enough
Dollars to Shift the Behavior of Specialists? .................................30
Primary Care and the Medical Home? A Good
Organizational Model of Performance‑Based Contracting? ......... 31
4  Early Pay for Performance ............................................................... 33
Decile resholds .................................................................................36
Example: Year 1 Acute Myocardial Infarction Payment Scenario 36
Pay for Performance Has Created a New Industry .......................36
viii ◾  Contents
RHQDAPU = Reporting Hospital Quality Data for Annual
Payment Update ...................................................................................38
Public Recognition ......................................................................44
More than a Trend ................................................................................44
e Current Status of P4P ....................................................................46
5  Performance Language and Practice ............................................... 49
Where Health Care Delivery and Information Technology Intersect ....49
e Solution Is within Our Four Walls .................................................50
Can We Get Our Terminology Correct First? .......................................53
Short Term versus Long Term ...............................................................54
Efficiency .............................................................................................. 55
Maximum Output for a Fixed Budget ......................................... 55
Minimum Cost for a Fixed Output .............................................55
Effectiveness..........................................................................................58
Grades and Effectiveness .......................................................................58
Risk Adjusters and Comparative Effectiveness ...................................... 59
Organizational Issues of Planning and Control ....................................60
Quality Data .........................................................................................61
Outcomes Data .....................................................................................66
Evidence‑Based Outcomes Data ...........................................................67
Lean Engineering ..................................................................................68
Six Sigma ..............................................................................................69
Learning Organizations ........................................................................69
6  Reengineering.................................................................................. 73
Early Guidelines ...................................................................................73
Savings Estimates ..................................................................................76
Option 1: Member Incentives to Use Highest Quality Providers .76
Option Description ............................................................76
Basis of Savings Estimate ....................................................77
Option 2: Transitional Case Management Program ....................77
Option Description ............................................................77
Option 3: Gaps in Care Reduction Programs ..............................78
Option Description ............................................................78
Basis of Savings Estimate ....................................................78
Option 4: Integrated Medical Management ................................79
Option Description ............................................................79
Basis of Savings Estimate ....................................................79
Option 5: Medical Home Care Delivery Model and
Physician Incentives for Coordination .........................................79
Contents ◾  ix
Option Description ............................................................80
Basis of Savings Calculation ...............................................80
Option 6: Care Coordination ......................................................80
Option Description ............................................................81
Basis of Savings Calculation ...............................................81
Option 7: Specialist Data Sharing ................................................81
Option Description ............................................................82
Basis of Savings Calculation ...............................................82
Summary of Selected Savings Options ..................................................82
Incentivizing Member/Beneficiary Use of High‑Quality
Providers 2010–2019 Savings .......................................................83
Reducing Avoidable and Inappropriate Care ................................83
Incentivizing Physicians to Encourage High Quality Care ..........84
Applying Evidence‑Based Standards to Reimbursement Policies..84
Guidelines and Episodes of Care ...........................................................84
Grouping Bundles of Services ...............................................................85
Value‑Based Purchasing and Performance‑Based Contracting ..............87
CMS Goals for the VBP Program ...............................................88
Overview of Performance Assessment Model ...............................91
Setting Benchmarks and Attainment resholds ..................................92
Scoring Performance Based on Attainment .................................92
Basis of Incentive Payments .........................................................93
Small Numbers on Individual Performance Measures ..........................94
What the Regulations Are Saying about Pay for Performance ...............94
7  Challenges ......................................................................................101
e Pay‑for‑Performance Rumors and Issues....................................... 101
Defining Quality ....................................................................... 101
Process Points ............................................................................ 102
Structural Factors ......................................................................102
Patient Satisfaction .................................................................... 103
Evidence‑Based Quality Data .................................................... 103
Outliers .....................................................................................104
Identifying Optimal Target Incentives.......................................104
What Types of Performance Targets? .................................................. 105
Size of Financial Incentives ........................................................ 105
Cost Effectiveness ...............................................................................106
Commitment ...................................................................................... 107
e Vision ...........................................................................................107
Just Another Program .........................................................................108
Lean Engineering ................................................................................108
x ◾  Contents
International Classification of Diseases ............................................... 109
Web‑Based Processing ........................................................................ 109
Change Management ...........................................................................111
Comparative Effectiveness and Ethical Limitations ............................ 113
Lung Volume Reduction Surgery as a QALY Example.........................119
8  International Reform .................................................................... 123
Competition through Improved Performance .....................................124
e Netherlands ........................................................................ 125
Germany ....................................................................................126
Funding of IQWiG ...........................................................129
Principles and Values, Aims and Objectives ......................130
Current Status ..................................................................130
Turkey ....................................................................................... 131
Implementation ................................................................ 132
Measurement .................................................................... 132
Results ..............................................................................136
Performance Models of Care ............................................137
Costa Rica ................................................................................. 140
As the Population Grows Older ..........................................................142
9  Getting Started .............................................................................. 143
Introduction to Planning ....................................................................146
Environmental Scan ........................................................................... 149
Managed Care’s Involvement .............................................................. 150
Feasibility and First Steps.....................................................................151
What Are We Trying to Prove? ........................................................... 152
Legal Issues at Might Affect What You Are Trying to Do .............. 153
Tasks to Move toward an Integrated Care System ............................... 154
Feasibility Study for Nonaligned Hospitals and Physicians ..................155
Tasks and Resources ...................................................................155
Financial Steps .................................................................................... 163
Planning Steps ....................................................................................164
General Issues to Avoid .......................................................................164
Issues to Decide upon Early On ..........................................................164
No Guarantee at Any of ese Steps Will Produce a Result ...........164
10  e Future of Performance‑Based Medicine ................................. 165
Once We Have Baseline ...................................................................... 165
Operating Your Performance‑Based Strategy ......................................166
Episode Treatment Group ...................................................................166
Sharing Benchmarks and Eliminating Unhealthy Conflict ................. 171

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