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Improving the Quality and Value of Health Care
Applying What Works Best
A Health Plan’s View
Steven Halpern, MD
CIGNA HealthCare
Friday, May 30, 2008
National Association of Insurance
Commissioners Summer Meeting
Health Innovations (B) Working Group
San Francisco, CA
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The Problems that Health Plans are Trying to
Solve and the Solutions They Provide
• Problem: Fragmentation and under-delivery of evidence-based care in the
health care system.
Solution:
–
Disease and case management programs
–
Gaps in care programs
• Problem: Wide variation in the performance (quality and total costs of care) of
providers and the lack of competition on value (quality and total costs).
Solution:
–
Consumer information on provider quality and costs
–
Benefit incentives to seek high quality, low cost providers
–
Pay for value
• Problem: Lack of individual incentives for health and wellness.
Solution:
–
Health risk appraisals and health coaching programs
–
Benefit designs that provide incentives for health lifestyles – e.g. Health risk
appraisal participation, disease management participation, smoking
cessation.
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Proactive vs. Reactive Approach Can Change Medical Cost Trend
“A system that waits for disease and illness to occur can never be optimally effective. The
logical strategy is to maintain people at the lowest or most appropriate level of health care use
possible.”
Dee Edington,Ph.D., Director, Health Management Resource Center, University of Michigan, as quoted in the Detroit News, April
2004.
High Risk
9,000
$
Medium Risk
8,000
Case
Management
7,000
6,000
5,000
Low Risk
15-20% of employees
drive 65-70% of costs,
but that segment of
employees is different
every year
Centers of
Excellence and
High Performing
Specialists
Opportunity to
mitigate cost exists
through earlier
intervention
4,000
3,000
Lifestyle Modification
Health Risk Assessments
Biometric Screenings
Wellness
Disease mgmt
2,000
1,000
0
Q
-12
Q
-10
Q
-8
Q
-6
Q
-4
Q
-2
Q
0
Q
+2
Q
+4
Q
+6
Q
+8
Q
+10
Q
+12
Disease Management Improving Outcomes and
Driving Significant Savings
• 7 – 12% improvement in clinical measures
• Behavioral screening identifies risk of depression in 37% of low
back patients and 5-6% of diabetics and cardiac patients.
• 90% patient satisfaction across all plans
• 11% of medical cost savings for disease managed conditions.
Admission
Rate
Reduction
Medical
Cost
Savings*
Asthma
9.0%
5.7%
Diabetes
8.0%
8.7%
Cardiac
15.9%
16.5%
Low Back
20.3%
17.3%
5.0%
10.0%
12.6%
11.0%
Condition
Pulmonary (COPD)
Total:
A 2004 study
published in
Health Affairs
validates Well
Aware diabetes
program quality
improvements
and cost savings.
* CIGNA BoB averages; actual customer experience will vary based on number of members with conditions and number of cases.
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What Provider Information is Available to
CIGNA Members Nationwide
• Hospitals - nationwide, for 29 most common admissions
–
quality based on JCAHO, Leapfrog, CMS measures and
risk-adjusted, all-payor, mortality and complication rates
–
Risk-adjusted total hospital costs per admission
• Physicians - nationwide, for 21 most common specialists
–
Quality based on NQF and/or AQA measures. Board
certification and NCQA physician recognition
–
Total episode cost – ETG groupers
• High tech radiology – nationwide, price transparency for CT,
MRI and PET scans
• Ambulatory procedures – nationwide, price transparency for
16 most common ambulatory care procedures
• Pharmacy – nationwide, price transparency for all CIGNA
pharmacy drugs – both employer’s cost and member’s cost
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What is Provider Competition on Value
(Quality and Total Cost of Care) Worth?
• Specialist physicians who are designated high
value (approximately top one-third) consistently
outperform average specialists
–
–
–
4-5% improvement in clinical quality indicators
29% reduction in re-admission rates
8-12% lower total medical costs
• Hospitals designated as high value (Centers of
Excellence), approximately top one third,
consistently outperform average hospitals.
– 30% fewer deaths
–
–
28% fewer complications
39% lower costs per admission
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Total Hip Replacement, 25 mile radius
from zip code 20005
Estimated
Average Facility Cost
Range
Estimated
Average Out Of
Pocket Cost Range
Virginia Hospital Center Arlington
Patient outcomes:
Cost efficiency:
$5,994 - $10,995
$4,199 - $4,700
Washington Adventist Hospital
Patient outcomes:
Cost efficiency:
$10,995 - $15,997
$4,700 - $5,200
George Washington University
Hospital
Patient outcomes:
Cost efficiency:
$17,199 - $23,269
$5,320 - $5,927
Washington Hospital Center
Patient outcomes:
Cost efficiency:
$5,994 - $10,995
$4,199 - $4,700
Hospital
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Use of Health Risk Appraisals to Identify Early Risk
Before Medical Claims and Health Coaching
Risk Reduction =
Improved Health, Improved Productivity, Lower Cost
After
53%
63%
30%
25%
17%
12%
+10%
Low Risk
-5%
Medium Risk
High Risk
Before
-5%
Productivity Impact: +3.1%
Absence Impact: -2.2 days per employee year
Projected Medical Cost Savings $229
per employee per year
Mills et al, American Journal of Health Promotion, September 2007 ; 22 : 45-53
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Results from Health Savings and Reimbursement Plans, Plus Disease
Management, Provider Transparency, and Health Coaching

Use of preventive care increased






First year visits increased
Second year visits remained higher than traditional
Use of Evidence Based Medicine was similar to traditional
plans
Increase in use of maintenance medications that support
chronic conditions
Total medical cost trends were lower for both first year and
second year CDHP members
Member out-of-pocket costs were similar


First year members similar out-of-pocket costs
Second year CDHP out-of-pocket costs reduced for both HRA
and HSA members
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Highlights 2005 vs. 2006 Findings: Health Reimbursement
Accounts and Health Savings Accounts
2005
2006
Preventive Care Visits
12% higher
12% higher
Evidence based medicine
(% Same or better)
96%
97%
First year medical savings
16%
12%
Member cost share
(Traditional vs. HRA/HSA)
19%/16%
13%/13%
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Barriers or Accelerators
• Barriers
– Legislation or regulation that stifle transparency and
disclosure of consumer health information
– Legislation or regulation that caps MLR (medical loss
ratio) that prevents health plans from performing added
value services
– Limitations to the ability to offer wellness incentives
• Accelerants
– Comparative effectiveness legislations
– Multi-stakeholder data aggregation and profiling efforts
– Health information exchange within HIPAA’s privacy and
security protections
– A pathway for generic biologics and specialty drugs
– Initiatives to encourage value-based purchasing within
public payors
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Discussion
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