Evidence Based Medicine and Value Based Purchasing

Healthcare Operations Management
2008 Health Administration Press. All rights reserved.

1
Chapter 3
Evidence-Based Medicine and
Pay for Performance

3
The Challenge of Medical Progress
Medical progress
Laboratory experiments
Clinical trials
Translation to clinical practice
However, translation to practice is poorly
executed
Structural, motivational, economic barriers
Resultwidespread variation in practice and
inconsistent quality
4
Evidence-Based Medicine (EBM)

The cure to wide variation in clinical practice: the
consistent application of EBM
Major tool: the clinical guideline (also known as a
protocol)
Institute of Medicine definition: systematically
developed statements to assist practitioner and
patient decisions about appropriate health care for
specific clinical circumstances
National Guideline Clearinghouse
4,000 guidelines
http://www.guideline.gov
5
Resistance to Evidence-Based
Medicine
Disagreement on the science underlying a
guideline
Challenge to professional autonomy
cookbook medicine
Lack of variation in treatment approaches
decreases natural discoveries
6
Custom and Standard Care
All clinical care is a mix of custom and
standardized care processes
High-quality organizations
Master the art of custom care
Optimize the science and consistent delivery
of standard care
7
Custom
Custom and Standard Health Care
Separate and Select
Standard
Sorting
Re-sorting
Examples:
Laser eye surgery
Minute clinic

Patients self-select
Source: Bohmer, Richard. 2005.
Medicines Service Challenge:
Blending Custom and Standard
Care. Healthcare Management
Review Oct.Dec.
8
Custom
Separate and Accommodate
Standard
Sorting
Re-sorting
Example: Duke Cardiology Clinic
Patients sorted by protocol
Nurse practitioners provide
standard care
Cardiologists provide custom
care
Every fourth visit, standard
patients are evaluated by the
nurse practitioner and
physician

9
Custom
Modularize
Standard
Sorting
Re-sorting
Example: Andrews AFB Clinic
Physician serves as
architectcare designer
Physician performs evaluation
and creates plan
Standard care provided by
other organizations and
departments
Hypertension modules: weight
control, diet, drug therapy,
stress modification,
surveillance
10
Custom
Integrated
Standard
Sorting
Re-sorting
Example: Intermountain Healthcare
Identified 62 standard
processes90 percent of
inpatients
Standard processes built into
emergency medical record
Physician encouraged to
override standard care as
needed
Overrides are recorded,
analyzed, and used to
improve standard process
11
Financial Implications of EBM
Savings in the system can be achieved by
consistent, high-quality ambulatory care, which
prevents unneeded hospital admissions
AHRQ has identified a set of ambulatory care
sensitive conditions, which are measured with
prevention quality indicators (PQIs)

12
Prevention Quality Indicators
1 Diabetes short-term complication admission rate
2 Perforated appendix admission rate
3 Diabetes long-term complication admission rate
4 Chronic obstructive pulmonary disease admission rate
5 Hypertension admission rate
6 Congestive heart failure admission rate
7 Low birth weight
8 Dehydration admission rate
9 Bacterial pneumonia admission rate
10 Urinary tract infection admission rate
11 Angina admission without procedure
12 Uncontrolled diabetes admission rate
13 Adult asthma admission rate
14 Rate of lower-extremity amputation among patients with diabetes
13
Strategies for Implementing EBM
Case management
Guidelines adopted by the group and available
in the chart
Feedback to physicians on the care they
deliver compared to guideline-recommended
care
Disease registries to track patients with chronic
conditions
14
Strategies for Spreading
the Use of EBM
Public reporting
Pay for performance
Tiered systems of care
15
Public Reporting
CMS reporting
Hospitals
Long-term care
Medical groups
Community-based systems
16
Issues in Public Reporting
Risk adjustment for sicker patients
Patient compliance
Measurement of individuals or clinics
Use by general public to make buying
decisions
17
Strategic Issues for the
Success of Public Reporting
1. Quality problems are real; quality can be
improved
2. Quality reporting is standardized
3. Information is relevant to consumers and easy
to understand
4. Dissemination is optimized
5. Quality improvement efforts by providers need
to be rewarded
18
Pay for PerformanceKey Issues
Goal: improved health outcomes and lowered
costs through use of EBM
How is pay for performance funded?
Another form of withholding
Savings on prevented inpatient care
Reward top performance or improvement?
Risk adjustment
Administrative and other system improvement
costs (electronic health record changes)
Focus on compliant patients only
Discourages care of complex patients

19
Pay for PerformanceExamples
Bridges to Excellence
Diabetes
Cardiac care
Integrated Healthcare Association
California
CMS Premier Hospital Demonstration
Project
20
Tiering
Buyer or health plan analyses
providers and assigns them to a tier
Tiering is based on cost, quality, or
both
Each tier has a differential price to
the patient
Monthly premium cost
Deductible and co-pays

21
Tiering Example:
Minnesota Advantage
Tier Individual Family
1 $30 $60
2 $100 $200
3 $280 $560
4 $500 $1,000
Minnesota Advantage Health Plan Annual
First-Dollar Deductible, 2006
22
Tiering Example:
Minnesota Advantage
Number of Primary Care Clinics in Each Payment Tier
for Minnesota Advantage, 2004 and 2006

0
100
200
300
400
500
600
Tier 1 Tier 2 Tier 3 Tier 4
2004

0
200
400
600
800
1000
1200
Tier 1 Tier 2 Tier 3 Tier 4
2006
23
Summary
The use of EBM is increasing
It has been demonstrated that EBM can
increase quality and decrease costs
Efforts to increase the use of EBM
include:
Public reporting
Pay for performance
Tiering

End of Chapter 3

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Healthcare Operations Management

2008 Health Administration Press. All rights reserved.

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