NASI: Little Evidence Integrating Hospital and Physician Care Helps Promote Quality and Reduce Costs

The National Academy of Social Insurance, a nonprofit, nonpartisan organization made up of the nation's leading experts on social insurance, has released the results of a recent study of the performance of Integrated Delivery Networks (IDNs).

Conducted by a team led by Jeff Goldsmith, the premise of the analysis was that any examination of the role that hospitals play in health care cost growth is complicated by the fact that in most large markets, the significant hospitals are part of larger, multi-divisional health enterprises.

The report offers sobering information:

There is little evidence that integrating hospital and physician care has helped to promote quality or reduce costs. Indeed, there is growing evidence that hospital-physician integration has raised physician costs, hospital prices and per capita medical care spending. Similarly, hospital integration into health plan operations and capitated contracting was not associated either with clinical efficiency (e.g. shorter lengths of stay) or financial efficiency (e.g. lower charges per admission).

 From the provider perspective, the available evidence suggests that the more providers invest in IDN development, the lower their operating margins and return on capital. Diversification into more busi­nesses is associated with negative operating performance. This is consistent with the management literature, which shows that diversification increases a firm’s size and complexity, in turn increasing its cost of coordination, information processing, and governance/monitoring.

 Moreover, there are few or no scope economies within health plans, hospitals, or physician groups — let alone between these lines of business contained within IDNs. Provider-sponsored insurance plans face similar problems regardless of whether they were formed by hospitals or physician groups: poor capitalization, lack of actuarial and underwriting expertise, limited marketing capability both to employers and consumers, adverse selection risk, and an inability to reach minimum sufficient scale of enrollment.

Despite more than 30 years of public policy advocacy on behalf of IDN formation, there is scant evidence in the literature either of measurable societal benefits from IDNs or of any comparative advantage accruing to providers themselves from forming IDNs. We have similarly found no such evidence in our analysis of 15 IDNs. Serious data limitations hamper anyone attempting to evaluate IDN performance based on publicly disclosed information. IDN financial disclosures obscure the operating performance of their hospitals and physician groups.

There does not appear to be a relationship between hospital market concentration and IDN operat­ing profit. However, if the performance of the IDN’s flagship hospital is any indicator of overall sys­temic efficiency, the IDNs’ flagship hospital services appear to be more expensive, both on a cost-per-case and on a total-cost-of-care basis, than the services of its most significant in-market com­petitor. This runs counter to the theoretical claim of IDN operating efficiency. Further, the flagship facilities of IDNs operating health plans or having significant capitated revenues are more expensive per case (Medicare case-mix adjusted) than their in-market competitors.

Download a copy of the report, Integrated Delivery Networks: In Search of Benefits and Market Effects, here.

Low Number of Quality Measurements in ED Inhibit Quality Improvement

Too few emergency department quality measurements, and a shortage of quality data are holding back emergency departments from potential improvements in quality of care, according to an article in Health Affairs.

The authors suggest increasing the number of emergency department quality measurements on effectiveness and value of care, such as efficient resource use and diagnostic accuracy, can help increase emergency department care quality.

Bill Introduced to Shield Health Providers From Lawsuits on Quality Measures

Sens. Pat Toomey and Tom Carper have introduced a bill that’s designed to protect physicians and other providers from new legal liability under federal health care metrics. The lawmakers are concerned that physicians could get sued if they rank low on national quality measures such as the second stage of meaningful use, the Physician Quality Reporting System or the Hospital Readmission Reduction Program under the ACA or other federal law. They hope to include the legislation as an amendment to the Sustainable Growth Rate repeal bill in the Senate Finance Committee.

The Standard of Care Protecting Act would prohibit lawsuits based solely on the metrics, but it would allow the measures to be used as supporting evidence in other litigation. A Toomey aide said physicians and hospitals are concerned about their liability exposure without such protection. A similar bill has been introduced in the House by Reps. Phil Gingrey and Henry Cuellar, with bipartisan support from 14 other cosponsors. It was included in the House Energy and Commerce SGR bill.

New Study On Disconnect Between Cost and Quality Outcomes

Modern Healthcare has analyzed data for hospitals in 12 different cities and found that for a common cardiology procedure, the hospitals with the lowest costs sometimes had the best quality outcomes. While limited in scope, the analysis suggests there is no consistent relationship between hospitals spending more to perform a procedure and their achieving better patient outcomes. A hospital's internal costs for delivering a service matter because those costs typically are reflected in what the hospital charges private insurers and patients.

The disconnect Modern Healthcare found between cost and quality for one procedure in 12 markets suggests that the transparency movement, if it gains critical mass across the country, could put pressure on hospitals to become more cost-efficient and improve their outcomes. That pressure could be especially great on higher-cost facilities that can't demonstrate better quality. Otherwise, payers and patients may take their business elsewhere.

Opportunity to Participate on NQF Committees

Building on prior efforts that support consumer and purchaser decision-making in health care based on cost and quality, the National Quality Forum (NQF) is establishing new Standing Committees to review performance measures in high priority areas: cost and resource use measures, and measures of hospital admissions and readmissions. These projects will address issues that are critically important to consumers and purchasers. By injecting your coalition voice into the endorsement process and into oversight of the portfolio of measures in these topic areas, you can help ensure that the measures used for quality improvement and CMS reporting and payment programs are measures that matter to consumers and purchasers. 

Nominations for these Standing Committees are due on November 12, 2013 and additional information on each topical area is provided below and on the NQF website. Please note that if you are selected to serve on a Standing Committee, you will be expected to serve for a two- or three-year term, and participate in conference calls, web and in-person meetings, and offline measure reviews.

• Cost and Resource Use: Building on previous work this effort will continue to evaluate cost and resource use measures. Initially, this work will focus on cardiovascular and pulmonary conditions.

• All-Cause Admissions and Readmissions: This work will build on a number of previous NQF projects addressing readmissions related to specific conditions or settings, as well as a 2012 project examining all-cause readmission measures. This Committee is particularly important because the Medicare Hospital Readmissions Reduction Program, a pay-for-performance program that ties a financial penalty for hospitals to excess readmissions, is required to use NQF-endorsed measures of readmissions.

We hope you will seize this opportunity and join the Consumer-Purchaser Alliance in our efforts to drive health care quality and affordability for consumers and purchasers.

For support from the Consumer-Purchaser Alliance staff in learning more about these projects or submitting a nomination, please get in touch with us by phone or email:

• Stephanie Glier, Senior Policy Analyst, sglier@pbgh.org or 415-615-6341 
• Emma Kopleff, Senior Policy Advisor, ekopleff@nationalpartnership.org or 202-238-4875

New RWJF Resource on Hospital Quality Data

The Robert Wood Johnson Foundation has created a national directory designed to enable the public to access reliable hospital quality data through a centralized database. Consumers can search by state and browse reports. The purpose of creating the tool is to allow the public to have easy access to reliable information on quality of care in their communities. The database currently houses 182 state and local public reports and 26 national reports.

Hospital CEO Pay Not Tied to Quality Outcomes

A new study published in JAMA Internal Medicine finds that hospital CEOs' pay isn't linked to their hospital's benefit to the community. Nor is it linked to the quality of care the hospital provides. Instead, the CEOs tended to earn more at hospitals with high patient satisfaction ratings and advanced technology. They looked at CEO paychecks in 2009 alongside hospital size, quality and other data from 2008, figuring salaries and bonuses might be tied to the prior year's figures. The study included 1,877 CEOs from 2,681 private, non-profit hospitals across the country. The average executive earned about $596,000.

Executive paychecks at hospitals varied widely. The CEOs with salaries and bonuses in the lowest 10 percent earned $118,000 a year, on average. They mostly worked at small, non-teaching hospitals in rural areas. On the other end of the spectrum, executives in the highest 10 percent earned almost $1.7 million. They tended to head up large teaching hospitals in cities. CEOs at hospitals that had more beds and more advanced medical technology made more money than those at other hospitals, the researchers found.

And executives tended to earn more when more of their hospitals' patients reported being very satisfied with their care. However, the hospital's own bottom line, including how often its beds were occupied, was not linked to a CEO's pay. Neither were commonly used measures of a hospital's quality, such as mortality rates and readmissions.

Should "Value" Be the New Mantra in Health Care?

In a guest post on the Harvard Business Review blog, Commonwealth Fund president David Blumenthal and senior researcher Kristof Stremikis write that while "putting value at the forefront of health care reform may seem obvious and non-controversial," a number of challenges need to be met before we can "turn the promise of value measurement into the reality of better care at lower cost." What seems special about it is that, seemingly simple, it is actually complex and subtle. Under its umbrella, a wide range of interested parties can find the things they hold most dear, from improved patient outcomes to coordination of care to efficiency to patient-centeredness. And it is intuitively appealing. As Thomas Lee noted in the New England Journal of Medicine, "no one can oppose this goal and expect long-term success." The question, of course, is whether the term will help spur the fundamental changes that our health care sector so desperately needs. In this regard, a closer examination of the value concept confirms its appeal but also exposes the daunting challenges facing health system reformers.

NQF Announces Quality Measurement Priority Topics

Under contract with the Department of Health and Human Services (HHS), the National Quality Forum (NQF) will recommend priorities for performance measurement within five topic areas specified by HHS:

• Adult Immunization— identifying critical areas for performance measurement to optimize vaccination rates and outcomes across adult populations 
• Alzheimer’s Disease and Related Dementias—targeting a high-impact condition with complex medical and social implications that impact patients, their family members, and their caregivers 
• Care Coordination—focusing on team-based care and coordination between providers of primary care and community-based services in the context of the “health neighborhood” 
• Health Workforce—emphasizing the role of the workforce in prevention and care coordination, linkages between healthcare and community-based services, and workforce deployment 
• Person-Centered Care and Outcomes—considering measures that are most important to patients—particularly patient-reported outcomes—and how to advance them through health information technology 

Topic-specific committees will review the evidence base and existing measures to identify opportunities for using performance measurement to improve health and healthcare, and to reduce disparities, costs, and measurement burden. Nominations for the five committees that will make the recommendations are now being accepted; NQF encourages members to apply or to nominate colleagues. Members can also attend the committee meetings in-person or virtually, and can comment on draft recommendations.

Two New Studies on the High Costs of Unnecessary Care

Two new studies have put a price tag on health care services considered of little benefit to patients. In both reports, researchers raised questions about the role that health care providers play in delivering potentially unnecessary care.

One study examined the cost of care for patients who were taken by ambulance to the most sophisticated, well-equipped trauma centers despite injuries that required far less intensive care. The study looked at where nearly 300,000 patients in the Pacific Northwest, California, Utah, and Colorado received emergency medical care after calling 911. The analysis found that emergency responders delivered one out of three low-risk patients to the most intensive trauma centers, known by the designations level one and level two. The cost of care in level one trauma centers, per average episode, was about $5,600 more than treatment provided by non-trauma hospitals, the researchers wrote. Reducing the number of patients who were treated in level one or level two trauma center, but did not need such intense care, would save about $136.7 million a year across the study's locations.

A second study, published online by the Journal of the American Medical Association Internal Medicine, sought to estimate the cost of critical care that physicians consider “futile.” The cost for one health system totaled $2.6 million for three months, or an average of $4,000 a day. The study authors acknowledged that criteria for futile treatment—in this case, derived from descriptions by 13 doctors—are subjective and patients' families may not agree with them. For their purposes, researchers defined futile care in a half-dozen ways. One definition was care for which the burden was “grossly” greater than any benefit. It was the criterion most frequently cited by doctors who were surveyed for the study. Nonetheless, clinicians continued to provide care they considered futile, but they admitted they didn't know why.

New Study: New Medical Advances Often Not Better, and Sometimes Worse

A study published in the August issue of Mayo Clinic Proceedings reviewed each issue of The New England Journal of Medicine from 2001 through 2010 and found 363 studies examining an established clinical practice. In 146 of them, the currently used drug or procedure was found to be no better, or even worse, than the one previously used. More than 40 percent of established practices studied were found to be ineffective or harmful, 38 percent beneficial, and the remaining 22 percent unknown.

In some instances, doctors routinely refused to give beneficial therapies despite a lack of evidence that they were harmful. Vaccines were unnecessarily withheld from multiple sclerosis patients in the belief that they increased flare-ups; women with lupus were denied oral contraceptives for fear they increased the severity of the disease; and epidural anesthesia was delayed during childbirth on the theory it increased the rate of Caesarean sections. Yet good studies showed that none of these fears was justified.

This evidence has implications for designing employer-sponsored health benefits. Value-based insurance design techniques could be applied to these types of procedures or therapies to discourage their use. Employers should be looking for these types of studies and gain experience in understanding clinical evidence.

Many State-Run Health Insurance Exchanges Set to Exceed Requirements for Plan Choice, Quality Reporting

Consumers and small businesses in states that have opted to run their own health insurance exchanges will likely have a greater ability to make informed choices regarding their coverage as well as more information about plan quality than what current federal regulations require, a new Commonwealth Fund report finds. The report, by researchers from Georgetown University's Health Policy Institute, examines the key design decisions made by the 17 states that, along with the District of Columbia, chose to establish their own exchanges. Use the Commonwealth Fund's interactive map to explore how health insurance exchanges are shaping up across the U.S., or read a Health Affairs primer on the exchanges and what lies ahead.

Webinar on New NQF Resources

National Quality Forum (NQF) will be hosting a webinar next Friday, July 26th from 1:00 – 2:30 pm ET, on the launch of NQF’s Quality Positioning System Version 2.0 and the Field Guide to NQF Resources. The Quality Positioning System (QPS) is a web-based tool that is available to the public to help navigate NQF’s existing measures portfolio. Driven by feedback from users on version 1.0, this next iteration of the QPS includes several new features, such as capability to: 

• search for measures by their inclusion in Federal reporting and payment programs; 
• provide feedback at any time about the use and usefulness of measures; and 
• view measures that are no longer NQF-endorsed. 

In addition to the QPS, the webinar will also provide an overview of the Field Guide to NQF Resources.

If you would like to register, please click here. If you have any questions please contact Diane Stollenwerk at dstollenwerk@qualityforum.org.

New York Times Article on Reference Pricing

The New York Times has published a story on the efforts underway by employers to include reference pricing in plan designs.  The story, which has a generally favorable view on the concept, describes reference pricing and mentions a few examples of reference pricing programs in place, including CalPERS.  Both cost AND quality are discussed as important factors when designing and implementing reference pricing programs.

New RWJF/Urban Institute Study on Performance Measurement

To improve performance, health care leaders need to understand the strengths and weaknesses of performance measures, according to a Robert Wood Johnson Foundation-funded report from the Urban Institute, "Achieving the Potential of Health Care Performance Measures: Timely Analysis of Immediate Health Policy Issues."

The authors offer seven policy recommendations for reaching the full potential of performance measurement in health care:

1. Decisively move from measuring processes to outcomes.
2. Use quality measures strategically, adopting other quality improvement approaches where measures fall short.
3. Measure quality at the level of the organization, not the clinician.
4. Measure patient experience with care and patient-reported outcomes as ends in themselves.
5. Use measurement to promote the concept of the rapid-learning healthcare system.
6. Invest in the "basic science" of measurement development.
7. Task a single entity with defining standards for measuring and reporting quality and cost data, similar to the role the Securities and Exchange Commission serves for the reporting of corporate financial data, to improve the validity, comparability and transparency of publicly reported healthcare quality data.

Nominations for AHRQ Quality Indicators Workgroup

The Agency for Healthcare Research and Quality (AHRQ) is seeking nominations for both a time-limited workgroup and a standing workgroup to be convened by an AHRQ contractor. The workgroups shall be comprised of individuals with knowledge of the AHRQ Quality IndicatorsTM (QIs), their technical specifications, and associated methodological issues. The overarching goals of each group are to provide feedback to AHRQ regarding refinements to the QIs. The time-limited workgroup is more restricted to specific clinical or methodological issues, while the standing workgroup addresses broader issues related to the measurement cycle.

Because AHRQ did not get a set of candidates with anticipated breadth of diversity of experience as required in response to our notice published on January 28, 2013, AHRQ resubmits the same notice to give opportunity to those interested in this objective.

DATES: Please submit nominations on or before May 3, 2013. Self-nominations are welcome. Third-party nominations must indicate that the individual has been contacted and is willing to serve on the workgroup. Selected candidates will be contacted by AHRQ no later than May 17, 2013. Please include the workgroup of interest. Candidates may apply for both workgroups.

Study: Patient Satisfaction May Not Be A Good Indicator Of Surgical Quality

A new study in the current issue of JAMA Surgery finds little relationship between a hospital’s patient satisfaction scores and most quality ratings. The study, led by researchers at the Johns Hopkins University medical and public health schools, looked at patient satisfaction and surgical quality measures at 31 urban hospitals in 10 states. Patient satisfaction was determined by the results of standard Medicare surveys given to patients after they left the hospital. Quality was judged by how consistently surgeons and nurses followed recommended standards of care, such as giving antibiotics at the right time and taking precautionary steps to avert blood clots. The researchers also looked at how hospital employees evaluated safety attitudes at their hospital.

Previous studies of the relationship between patient views and the quality of care also have found that they are not necessarily correlated, but Medicare views them as useful. The patient assessments account for 30 percent of bonuses and penalties given to hospitals in the first year of Medicare’s “value-based purchasing” program, which was created by the Affordable Care Act.

Some of the surgical measures are also included in the calculations that make up the other 70 percent of the bonuses and penalties this year. Hospitals can gain or lose 1 percent of their regular Medicare payments under the quality program. All those individual scores are available to the public on Medicare’s Hospital Compare.

The researchers found that there was some relationship between how patients rated their experiences and whether hospital workers considered themselves part of a team approach to caring for patients and felt their work environment was not excessively stressful. There was no relationship between patient scores and hospital workers’ overall assessment of the hospital’s safety culture, which also included job satisfaction, working conditions and perception of management.

UnitedHealth Reports Success With Diabetes Management Program

According to Employee Benefit News, a two-year study from UnitedHealthcare shows its disease management program for diabetes can help people with the condition manage it more effectively, while also reducing related costs.

The study followed 620 people with diabetes for two years, examining their compliance with six key diabetes treatment and testing requirements, including regular primary care visits and screening tests for blood sugar, cholesterol, cancer, kidney function and eye disease. Key findings include:

• Twenty-one percent of participants in the diabetes management program saw a reduction in their health risk scores, which are used to measure expected health care costs for an individual or a population.
• Participants, on average, achieved compliance with 75% of the key requirements vs. 61% for those diabetics not enrolled in the plan.
• The compliance rate of plan participants increased 6% over two years.
• Health care costs grew at a 4% slower pace for the diabetes management program participants than for employees not participating in the program.

The program, available to self-insured employers, offers some diabetes supplies and diabetes-related prescription drugs at no charge, as well as no co-pays for related doctor visits, at an estimated savings of up to $500 a year for participants.

RWJF Event: Transitioning Away from Readmissions

The Robert Wood Johnson Foundation will convene a national conversation on Feb. 13th to highlight successful ways to improve care transitions and reduce avoidable hospital readmissions. The event is part of Care About Your Care, a national initiative to share promising ideas with patients and health care providers.

Nancy Snyderman, MD, chief medical editor for NBC News, will lead national experts and audience members in a discussion about bringing together patients, care providers, and community services to ensure better health care outcomes.

This live event, which will also be streamed online (at the website linked above), will feature:

· Risa Lavizzo-Mourey, MD - RWJF president & CEO
· Eric Coleman, MD - University of Colorado Anschutz Medical Campus
· Mary Naylor, PhD, RN - University of Pennsylvania School of Nursing
· Jonathan Blum, MA - Centers for Medicare and Medicaid Services

Representatives from care teams from across the nation who are working on innovative ways to improve care transitions

WHEN: Wednesday, Feb. 13, 2013 from 12:30–2:00 p.m. ET

Few Americans Switch Employer Health Plans for Better Quality, Lower Costs

About one in eight (12.8%) non-elderly Americans with employer coverage switched health plans in 2010—down from one in six (17.2%) in 2003, according to a new national study by the Center for Studying Health System Change (HSC). As was true in 2003, about 5 percent of people with employer coverage switched plans in 2010 because of a job change. However, the proportion of people younger than 65 with employer coverage changing plans for other reasons fell from 12 percent in 2003 to 7.5 percent in 2010—in both years the main reason for switching plans was a change in employer benefit offerings. Less than 2.5 percent of workers in 2010—about the same proportion as in 2003—initiated a change in plans to reduce their health insurance costs or to get a better quality plan, such as better benefits or a more desirable provider network. These findings suggest that consumer choice plays a relatively small role in health plan switching, with most changes resulting from job changes or changes in employers’ plan offerings. National health reform may create opportunities to increase plan choice among people with employer-sponsored coverage, particularly those in small firms, resulting in more frequent switching of health plans. However, a potential downside of more switching is less stable patient-provider relationships, such as in a medical home.