NAC Rural June 2011

8/6/2019 NAC Rural June 2011

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National Advisory Committeeon Rural Health and Human Services

Dean G. SmithTr a v e r s e C i t y, M i c h i g a n

J u n e 1 5 t h , 2 0 11

The Affordable Care Act:

Value-Based Insurance Designand Value-Based Purchasing

Center for Value-BasedInsurance Design

University of MichiganSchool of Public Health



Acronyms

y ACA Patient Protection and Affordable Care Act (2010)

y DRA Deficit Reduction Act (2007)y IQR Inpatient Quality Reportingy VBID Value-Based Insurance Designy VBP Value-Based Purchasingy VPT Vampire Probability Test



ACA Strategy

y Extend health insurance to most U.S. citizens andlegal residents.

y Alter health insurance coverage from availableservices to valued services (VBID).

y Transform financing of the delivery system frompay-for-procedures to paying for quality (VBP).

y

Hope that innovations work to bring efficiencies,higher quality outcomes, and cost containment.



Value-Based Insurance Design

y ACA gives authority to the Departments to developguidelines to utilize value-based insurance designs.

y Value-based insurance designs include theprovision of information and incentives forconsumers that promote access to and use of higher value providers , treatments , and services .

F ederal Register /Vol. 75, No. 137 /July 19, 2010 /Rules andRegulations, page 41729Based on PP-ACA Section 2713 (c)



Value Based Purchasing

y The DRA required a plan to implement a VBPprogram for Medicare payments to hospitals.

y Payments will be funded for FY 2013 through areduction to base operating DRG payments foreach discharge of 1%.

F ederal Register /Vol. 76, No. 9 /January 13, 2011 /Proposed Rules



VBID and VBP

VBIDConsumer

co-pays

VBPInsurer

Payments

Demand Side Supply Side



Value-Based Insurance Design

y Most VBID work has involved use of high valuedservices (targeted co-pay reduction), not low valued services or selection of providers.

y Efficacy is from incentives, not informationy Tough choices have yet to be made to achieve cost

containment.

AM F endrick, DG Smith, ME Chernew. Applying Value-Based Insurance Design To Low-Value Health Services, Health Affairs 29, no. 11 (2010): 2017±2021.



Value Based Purchasing

y Specified conditions (from IQR): Acute Myocardial InfarctionHeart F ailure

PneumoniaSurgical Care Improvement Project (SCIP) SurgeriesHealthcare-Associated Infections

y Hospital Consumer Assessment of HealthcareProviders and Systems Survey

F ederal Register /Vol. 76, No. 9 /January 13, 2011 /Proposed Rules



VBID ± VBP Intersection

y Little overlap to date.y VBID ± Clearly high valued services (e.g. primary

prevention) are not hospital based. Acute Myocardial Infarction, Heart F ailure and Pneumoniaadmissions may represent prevention failures.

y VBP ± Targets are hospitalizations where choice may not be practical.

Even in urban environments, information and paymentdifferentials may not affect selection.



Rural Issues

y VBID can be applied anywhere.High value services encouraged, low value discouraged.Provider selection can only occur with choice.

y VBP can be applied anywhere. All providers can achieve certain thresholds of performance.

Ù H F ±1 ............ Discharge Instructions.Ù H F ±2 ............ Evaluation of LVS F unction.

Ù H F ±3 ............ ACEI or ARB for LVSD.Ù H F ±4 ............ Adult Smoking Cessation Advice/Counseling.



Rural Hospitals Can do Well

y ICUs in Michigan Sustain Zero Blood StreamInfections for Up to 2 Y ears

y Smaller hospitals sustained zero infections longer

than larger hospitals.

A Lipitz-Snyderman, et al. The Ability of Intensive Care Unitsto Maintain Zero Central Line-Associated BloodstreamInfections, Archives of Internal Medicine 171, no. 9 (May 9,2011) 856-858.



Questions & Comments

Documents

NAC Rural June 2011