Author Archives: 3M Clinical and Economic Research

Measuring the quality of life component in patient-centric care

Health status can be defined succinctly as, “the range of manifestation of disease in a given patient including symptoms, functional limitation, and quality of life, in which quality of life is the discrepancy between actual and desired function.” 1 Physicians spend their lives focused on the diagnosis of patient symptoms and, since clinical classification models are primarily structured for and by physicians, most models measuring variation in population health rely on reported diagnoses. Functional limitations, limitations in activities of daily living (ADLs) or instrumental activities of daily living (IADLs), are measured (either by the patient or the health professional) by a variety of tools utilizing a variety of scales.   Continue reading

MedPAC financing recommendations for rural hospitals should be extended to all

In the MedPAC October meeting, the commission returned to the seemingly intractable problem of equalizing access to health care for rural communities. Medicare payment offers three sources of support within the inpatient prospective payment system (IPPS) for rural hospitals—through designation as a Medicare-dependent hospital, a sole-community hospital or qualification for a low-volume adjustment. A fourth avenue of support is exempting a hospital from IPPS and allowing it operate as a Critical Access Hospital (CAH). Continue reading

Controlling the cost of pharmaceuticals through the EAPG payment system

In a recent blog we made the case for quantifying the net effect of drugs upon health expenditures so as to make more rational decisions. Providing information about costs and outcomes and then realigning incentives are important big picture approaches for handling new drugs covered by patent protection – an issue that is getting swept up in the brushfire of national political debate. Older drugs no longer covered by patent or exclusivity rights also provide plenty of challenges – ones that need better approaches than CMS’ Average Sales Price (ASP) plus fixed mark-up approach, which directly passes through the cost of utilization and provides more revenue for using higher cost drugs. Continue reading

Transparency of healthcare prices and quality of care: The caboose is at the station waiting…

…for the engine to pick up steam. In the past ten years, the train carrying healthcare pricing and quality information has been rolling but the caboose is still waiting at the station. Significant improvement is necessary before we can say with confidence that pricing and quality information is sufficiently transparent, accessible and provided in a timely manner. As importantly, ongoing concerns need to be addressed so that those using information provided will be able to interpret it in a meaningful way. It is clear that while most people have difficulty understanding and, more importantly, acting on the healthcare information that is currently available, the situation is getting better¹. Continue reading

It’s Time to Redefine an Achievable Triple Aim

This blog offers further commentary on the excellent conversation that Paul Levy began in his column, “The Triple Aimers have Missed the Mark.” In his blog, he provides a succinct definition of the Triple Aim as “improving the individual experience of care; improving the health of populations; and reducing the per capita costs of care for populations.” Continue reading

Incentives Empower Providers to Improve Care

For the last decade, we have been fortunate enough to work with many state Medicaid programs and commercial payers on reform efforts incorporating outcomes targets for health care providers. The outcomes targets we establish are collectively termed potentially preventable events (PPEs) and provide a direct link between the cost of adverse outcomes and provider payments. The big difference in using an outcome-based approach to incentivize healthcare improvements is that provider engagement requires a demonstrated improvement in the actual health of patients. Continue reading

Budget Neutral Payment for Pharmaceuticals – Tying Value to Outcomes

We believe there are two core principles that should be adhered to when implementing payment reform initiatives. First, that measurement of performance change should be directly quantifiable in dollars where possible; and second, that performance change should directly translate into improved patient outcomes. We adhere to these principles by encouraging payment incentives tied to potentially preventable events – rate-based outcomes performance measures with clearly quantifiable costs. Continue reading

Improving Outcomes by Focusing on Results: Readmissions, Complications and CMS

It’s been nearly a century since Dr. Ernest Codman championed an “end results system” to track and measure hospital outcomes to determine the effectiveness of treatment and improve patients’ lives. Within the last decade, outcome measurement has gained momentum as the health care industry seeks to improve quality of care/patient outcomes and reduce health spending through initiatives such as pay-for-performance or value-based purchasing. Continue reading

Refining the Definition of Health Service Units Will Help Control Prices and Gain Value

In recent years there has been a great deal of attention on the variation in service volume across providers and regions. Our suite of tools, collectively entitled Potentially Preventable Events (PPE), has led our research group to engage with a variety of stakeholders in their efforts to minimize volume variation. This variation typically results from inefficiencies, poor quality of care leading to the use of otherwise unnecessary services or the overuse of services resulting from practice pattern. Volume is a sensible target for cost reduction efforts and, when detailed as variation across peer providers or regions, is hard to justify. Price (transaction price) comparisons are more complex but, arguably, have greater bearing on total U.S. healthcare cost. At least this is what we are told each year by the policy folks at the Organisation for Economic Co-operation and Development (OECD). Continue reading

Designing Smarter Pay-for-Performance – Let’s Not Go down This Path

Aaron Mckethan, PhD, and Ashish K. Jha, MD, MPH, recently wrote an article for The Journal of the American Medical Association (JAMA) with an irresistible title: “Designing Smarter Pay-for-Performance Programs¹.” The key sentences of the perspective article are:

To the extent that higher-risk patients can be reliably identified prospectively, this information can inform the design of smarter, more targeted pay-for-performance programs. Specifically, a targeted pay-for-performance program would have, at its core, a prediction model that would identify patients who are at elevated risk of failing to meet a meaningful clinical goal or of having a bad outcome. Continue reading