Harold D. Miller Provides His Perspective on Health Reform

Harold D. Miller was the featured speaker atAF4Q – South Central PA’s Physician Clinician Learning Network dinner meeting on April 20.Mr. Miller is the President and CEO of the Network for Regional Healthcare Improvement and Executive Director of the Center for Healthcare Quality and Payment Reform. 

Harold Miller's presentation: Making Health Reform Work  How local leadership can control costs and improve quality

Below is a summary of Miller’s message.

Overall Message:
Communities can’t wait on the federal government for health care reform. Instead, it’s up to the states and regional collaboratives, like AF4Q – South Central PA, to take the lead. The change must occur locally, where the health care is delivered.

Supporting Points:
Accountable Care Organizations
· Reducing costs without rationing can be done; start by producing Accountable Care Organizations (ACO). 

· Accountable Care Organizations are responsible for keeping patients well, helping patients (with preventable conditions) from going to the hospital, and finding ways to reduce the complications, infections and readmissions if patients end up in the hospital. 

· Primary care practices (not health plans) are at the core of Accountable Care. They need the support, as well as new and improved skills and tools to deliver this type of care. These skills and tools include: 
   · timely information about patients and the services patients are getting; 
   · resources for patient education; 
   · method for targeting high-risk patients; 
   · relationships with specialists and other providers; 
   · teamwork among the practices; 
   · data analysis to measure performance; and 
   · the capability to reach out to the patient, instead of waiting for the patient to come to the provider.
 
· Communities must have data to move towards Accountable Care Organizations. This is a large barrier faced by communities. 
· Having data, such ashow often patients are hospitalized, or the high rates of complications will determine what’s achievable for the practice and community at large. Analyzing the data will help physicians find opportunities for costs savings and quality improvement.

Payment Systems
Two examples of payment systems to reward value within episodes are:
· Episode-Based Payment is a single price payment that accounts for all of the services needed by a patient for an entire episode of care – from all pre-admitted care, inpatient care to all complications after care. There are no other payments for the patient. Episodes are different, so it must be defined by looking at the length of time that’s covered and the range of providers/services included. It reduces the incentive to overuse unnecessary services within the episode, and gives providers the flexibility to determine which services should be delivered – rather than being controlled by fee codes and amounts.
 
· To avoid episodes,communities are using Comprehensive Care Payment.  It is a payment system based on the patients’ conditions, and rewards physicians for keeping patients healthy and out of the hospital. It also helps avoid unnecessary services within an episode of care. A single price is paid for all of the health care services needed by a specific group for a fixed period of time. The option is viewed as the most flexible system because it allows providers to decide what services should be delivered and the resources to execute them.
 
· In addition to having the right payment method, a good price is also needed. Offer a limited warranty, which gives financial incentive to improve quality. The warranty would need to have a higher payment rate than the non-warrantied, but the higher price would be offset by fewer complications, readmissions, etc.

· Example: assume the cost of a procedure is $10,000; an added cost of infection is $20,000; and the rate of infections is 5%. Therefore, the average total cost is $11,000. The price charged is $11,000, so there is no change in net revenue. However, if the rate of infection decreases to 4%, and the cost for procedures ($10,000) remains the same, the average total cost is $10,800 – creating a $200 net revenue. 


Cost of Procedure

Cost of Infection

Rate of Infection

Average Total Cost

Net Revenue

$10,000

$20,000

5%

$11,000

$0

$10,000

$20,000

4%

$11,000

$200


As this cycle continues, the quality improves, costs are lower, and providers are more profitable.
Example of Payment System
· An example of how a state is transitioning to more accountable payment systems is through a partnership with the payer. Many patients are going to the emergency room because an appointment with the primary physician is not available.In this example, the practice partnered with the payer, so when the number of emergency room visits and hospitalizations were reduced by more than the target amount, the payer shared a percentage of the net savings with the practice. The practice may have to add a nurse practitioner in order to accomplish this, which is an expense. However, the upfront money is increasing revenue for the practice later and providing patients with quality care.

Collaborative Effort
· Each community needs to determine the outcomes and measures together – not by individual payers.
 
· The four things that must be done regardless of the path chosen are: collect the data, provide educational materials for patients to get them engaged, offer technical assistance for providers, and get the stakeholders around one table.
 
· Aligning Forces for Quality – South Central PA is a regional health improvement collaborative that’s uniquely poised to be the leading force in bringing this type of health care reform to Adams and York Counties.
 
Question& Answer with Audience:
Q: What about Nursing Home Facilities? There are no incentives right now for them. How do we manage these patients without putting a burden on the Nursing Homes who don’t have the ability to make some of these changes?
A: There are other communities putting more resources in the Nursing Homes, so there are people in the Home to help – instead of sending patients to the hospital. It’s similar to hiring a nurse practitioner within a primary care practice.

Q: How do we pull everyone in, including businesses and health plans?
A: The data must be available to support the reasoning behind it. The data ensures the community is looking at the right things and saving costs.

Q: Where should Adams & York Counties start? Mr. Miller asked the audience for their ideas on where to start.
A: Develop a collaborative to create guidelines regarding the number of tests given to patients, and set a budget for the cost of tests.
A: Physicians should get together to determine guidelines for medications given.
A: Save dollars in the end, by going to patients’ homes instead of sending patients to hospitals. Use data to pick a targeted group to start.
A: Allow nurses to ask patients more questions to relieve more time for physicians in other areas.
 
For more information on Mr. Miller or his views on health care reform, visit http://www.chqpr.org/.

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