Putting It All Together and Driving Quality: GM’s Value-Based Purchasing Strategy
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Transcript of Putting It All Together and Driving Quality: GM’s Value-Based Purchasing Strategy
Putting It All Together and Driving Quality:GM’s Value-Based Purchasing Strategy
Tricia Marine BarrettManaged Care ConsultantGM Health Care Initiatives
MichPHA Fall Kick-off Ann Arbor, Michigan September 21, 2006
The Big Picture
General Motors is the largest private purchaser of health care in the United States
• 1.1 million employees, retirees & dependents• 30 percent in fully insured HMOs• Older population with more than three
retirees/surviving spouses for each active worker
• Total 2005 health care expenditure - $5.3 billion• ~$1.2 billion in HMOs
HMO Portfolio
• Over 120 Plans administered by ~35 carriers nationwide
GM U.S. Health Care Total Cash Expenditures
$5.3
$4.7
$5.2
$4.5
$4.2
$3.9
$3.5
$3.3$3.1
$3.0
$2.9
$3.9
$4.9
$5.9
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
$ Bill
ions
U.S. Health Care Trends In Double Digits
0%
5%
10%
15%
20% Avg Health Care
CPI
Per Watson Wyatt Worldwide
Growing Utilization and Increasing Prices Driving Health Care Inflation To Unsustainable Levels
13.5%
3.3%
Responsible Healthcare Purchasing
“The current cost crisis is inextricably linked to quality and the perverse payment structures that discourage quality while driving up costs.”
(IOM Crossing the Quality Chasm, chapter 8).
Purchaser
Health PlanHold
Accountable
Consumer
Expect to Meet Needs
•Provide Quality Leadership•Hold Delivery System Accountable for Value•Provide Delivery System With
- Information - Coordination- Support - Communication
•Selection and Contracting
Delivery System
Primary Care PhysicianHospital Pharmacy
Centers of Excellence
Specialty Physician
Diagnostic Services
Home Health Care
Other Therapeutic Services
Behavioral Health
Health Plan Role
Value Based Purchasing
QUALITY_______________________
COST= VALUE
General Motors Value Purchasing Strategy
GM’s 3-Pronged Strategy
• Health Plan Accountability• Annual quality assessment through eValue8 RFI,
NCQA accreditation and HEDIS/CAHPS scores (CARS Project)
• Motivate migration of enrollees to higher value health plans• Compare quality and cost of HMOs• 4 performance bands• Salaried monthly contribution is tied to HMO
performance • Requires significant communication with employees
• Aggressive Supplier Development• Best practice sharing among PlanseValue8 is an integral part of each
prong
Accountability: Coordinated Autos Reporting System (CARS)
• Partnership with Ford, GM, Delphi and the State of Michigan (DaimlerChrysler participated until 2006)
• Purchasers contract with NCQA to conduct the analysis
• NCQA uses CAHPS and HEDIS performance to assign 1-5 stars in four categories:• Getting Better/Living with Illness• Staying Healthy• Access and Service• Doctor Communication and Service
• Methodology consistent with NCQA/US News & World Report health plan report card
Accountability: National Business Coalition on Health eValue8 RFI
• Common RFI sets expectations and assesses performance of HMOs and PPOs• Plan Profile
• Health Information Technology
• Consumer Engagement
• Provider Measurement, Incentives and Rewards
• Primary Prevention and Health Promotion
• Chronic Disease Management
• Behavioral Health
• Pharmaceutical Management
Key Objectives of Common RFI
• Create and Implement Standardized Performance Expectations
• Reduce Redundancy by Consolidating Purchaser Requests
• Promote Health Plan Accountability & Transparency
• Recognition of the Importance of Health on Productivity and the Bottom Line
• Foster Market Reform
• Sustained Movement to Higher Value = Fn(Quality/Price)
Why GM uses the eValue8 RFI
The eValue8 RFI tool enables GM to:
•Measure health plan quality and monitor improvements
•Differentiate among health plans
•Support rate negotiations
•Inform and target supplier development activities
Motivate Migration: 2006 Salaried Flex Pricing Health Plan Scoring Table HMO
AHMO B
HMO C
HMO D
eValue8RFI Results
Raw ScoreFlex Score (25)
HEDIS / CAHPS (CARS evaluation)
Raw ScoreFlex Score (20)
NCQA Accreditation
Raw ScoreFlex Score (5)
National Rate Rankings
Relationships of rates to Local Indemnity
Total Cost Score (50)
Total Quality + Cost (100)
1295
221 25
211 24
77
1414
13 13
Commendable2
Total Quality Score (50)
Avg Benchmark
14 44 42
24
23
47
20
13
33
19
12
31
61 77 73
Strong GoodRating
Sample Employee Contribution
176 16
1313
Accredited1
30
22
14
36
66
$200 $100 $150 $180
Excellent5
Excellent5
Changes to Quality Score Methodology for 2007 Enrollment•Increased score for eValue8 from 25 to 30 points
•Relative performance evaluation completed for each eValue8 section rather than by total score
•Removed points dedicated to NCQA accreditation• Accreditation is required• 90% of GM HMOs have Excellent accreditation• Subtract points for HMOs with less than Excellent rating• Bring these points back when Quality Plus elements have
been fully integrated and new rating system developed
•Subtract 4 points from the CARS ‘stars’ (minimum score)
•Add 4 points for ‘Partnership” rating
10
15
20
25
30
35
40
45
50
10 15 20 25 30 35 40 45 50
2005 Top HMOs Cost/Quality Comparison
Lo
w C
os
tH
igh
Co
st
Low Quality High Quality
Based on Salaried Banding Study – 2005
B-Band C-Band + D-Band ▬ E- Band F-Band X G-Band ▲ ∎ ∗
Improve QualityH & S Members = 0
Improve CostH & S Members = 86,752
Well PerformingH & S Members = 101,318
Improve Quality & CostH & S Members = 24,689
$ 0 $100 $150 $180 $200
StrongHMO
Good HMO
Benchmark HMO
AverageHMO
Monthly Employee Contribution (Family)
HSA PPO
EMP PPO
$1252006
2005 $ 0 $45 $70-$85 $85 $110 $145 -$190
Motivate Migration: Salaried Health Care Monthly Contributions
Employees/ Retirees can compare Plan options on aggregate quality performance
MotivateMigration
Results of annual CARS analysis: Values represent the number of “Stars” earned
MotivateMigration
Employees/Retirees can also use the Asparity Plan Finder tool to compare performance on individual measures of interest to them.
MotivateMigration
MotivateMigration
Salaried HMO Migration% of HMO Members By Band
13% 12%
34%
19%
38%
25%
41%39%
31%
9%
22%
41%
18%
34%
13%11%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Benchmark Strong Good Average & below
1996 2000 2003 2006
Benchmark Strong Good Average
Total 5 16 23 36
Number Of Plans By Band - 2006
MigrationResults
Aggressive Supplier Development Using eValue8: Driving HMO Collaboration for Quality Improvement
•Quarterly Meetings with High Volume HMOs
•Monitor Work Plans in areas of poor performance
•Monthly Conference Calls (Accelerating Improvement in Managed Care)
• Accountability for Quality motivates improvement
• Premium adjustment and performance transparency effectively migrates members to higher performing health plans
• GM believes the way to reduce health care cost is to improve quality…and provide people with the information to make smart health care decisions
Summary
Parting Thoughts ...
“We’ve concluded that the quality of care cannot improve until physicians and hospitals [and health plans] nationwide are held accountable to common measures of performance.”
McGlynn and Brook, Rand Institute, “Full Disclosure: Time for the Naked Truth About Healthcare” RAND Review, Summer 2001