Measuring Efficiency

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M e a s u r i n g E ffi c i e n c y

HSCRC Performance Measurement Workgroup March 17, 2014Tom Valuck, MD, JD

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Framework for Measuring Efficiency

DefinitionPerspectivesLevels of accountability Types of efficiency measurementMethodological issuesPhasing2

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What Is Efficiency?

Patient-centered definitionRelationship between inputs and outputsEfficiency = quality / costsCan increase efficiency by increasing quality, decreasing costs, or both; but cheaper is not necessarily more efficientTo measure efficiency, need both the quality and cost components3

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Effi c i e n c y : T h e R e l a ti o n s h i p B e t w e e n C o s t a n d Q u a l i t y

Cost of Care

Qu

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y of

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e

We Are Here

We Need to Be Here

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What Is Efficiency?Value and affordability are subjective assessments of efficiencyDepends on perspective – cost to whom and the quality they receiveConsumer – sensitive to out-of-pocket costs; otherwise, want the best quality outcomePolicymaker, serving as purchaser and payer – want to maximize outcome per unit costHospital – operational efficiency, but need to consider appropriatenessExample: assessing the value and affordability of a CT scan after head trauma5

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Measuring EfficiencyLevels of accountability – cost and qualityServiceunit of servicefor a single patient provided by one entityEpisodebundle of servicesfor a single or multiple patientsprovided by one or more entitiesPopulationwide range of services for multiple individualsprovided by one or more entities 7

More pop

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based

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Measuring Efficiency

Cost/resource use componentTypes of measuresUtilization – counts of servicesCondition- or procedure-specific cost/resource useTotal cost/resource use – by individual or populationPrice implications – standardized vs. actual costsTime period – acute vs. chronic conditionsQuality componentMultiple dimensions8

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Measuring Efficiency

Linking measures of cost and qualitySide-by-side display – aggregate or condition-specificIndexingRoll-up score with weightingComposite measure

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More prec

ise relat

ionship

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Measuring EfficiencyMeasuring inefficiencyWaste – appropriateness, overuseSafety – harm, complicationsCare coordination – readmissions, duplicate testsPatient engagement – misalignment with preferencesPopulation health – missed prevention or patient education opportunitiesOperational – throughput, staffing, workforce injuries10

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Measures Related to EfficiencyCost/resource use examplesUtilization – counts of servicesCasemix-Adjusted Inpatient Hospital Average Length of Stay, for medical and surgical admissions (United Health Group)Intensive Care Unit Length of Stay, observed and risk-adjusted (Lee Institute)Condition- or procedure-specific cost/resource useEpisode Treatment Groups, e.g., hip/knee, pneumonia (Optum)CMS draft resource use measures Total cost/resource use – individual or populationPayment-Standardized Medicare Spending per Beneficiary (CMS)Total Cost of Care/Resource Use Population-Based PMPM Index (HealthPartners)

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Measures Related to Efficiency

Appropriateness/Overuse ExamplesAppropriate Head CT Imaging in Adults with Mild Traumatic Brain Injury (Partners HealthCare)Back Pain series, e.g., surgical timing, imaging (NCQA)Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac Low-Risk Surgery (CMS)Cardiac Stress Imaging: Routine Testing After Percutaneous Coronary Intervention (ACC)Cesarean Section, nulliparous women with term, singleton baby in a vertex position (TJC)Prostate Cancer: Avoidance of Overuse of Bone Scan for Staging Low Risk Prostate Cancer Patients (AMA-PCPI)12

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Measures Related to Efficiency

IndexNCQA Relative Resource Use (RRU)Total annual resource use for diabetes, asthma, COPD, cardiovascular conditions, hypertension, low back painIndexed observed/expected ratio (plan population)RRU index and quality index reported together

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Measures Related to Efficiency

Roll-up with weightingCMS (FY 2015) Clinical process of care – 20% Patient experience of care – 30% Outcome – 30%+ Efficiency – 20% Total Performance ScoreLeapfrog Hospital Recognition Program Quality score – 65%+ Resource use score – 35% Value score

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M e t h o d o l o g i c a l I s s u e s R e l a t e d t o Effi c i e n c y M e a s u r e m e n tSimilar to issues for other types of measuresLevels of analysisMeasurement periodExclusions and outliersRisk adjustmentComparison groups; stratificationBenchmarkingAttributionData sources and aggregationMeaningfulness and actionabilityAlignmentAdministrative complexity and cost15

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Phasing OptionsBegin by:Measuring:Cost – resourcesAppropriatenessReporting measures of cost and clinical quality outcomes side-by-sideProgress to measures of efficiency that roll-up cost and clinical quality or actually measure efficiency as a valid and reliable composite measure16

Increasing

soph

istication

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M o n i t o r O t h e r A c ti v i ti e s R e l a t e d t o Effi c i e n c y M e a s u r e m e n t

CMS program implementationHospital Value-Based PurchasingPhysician Value-Based Payment ModifierNQF initiativesEndorsementCost and resource useEpisode grouper evaluation criteriaLinking cost and clinical qualityMAP Affordability Family of MeasuresChoosing Wisely

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Thank You

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