Washington State’s Efforts to Transform Health Care

Academy Health/State Coverage Initiatives

Annual Meeting

August 5, 2010

Richard K. Onizuka, PhD

Health Policy Director

Governor Gregoire’s strategy : Improve quality in health care

Governor Gregoire’s five point plan to improve health care (2005)

– Emphasize evidence based health care

– Create more transparency in the health care system

– Promote prevention, healthy lifestyles, and healthy choices

– Better managed chronic care

– Make better use of information technology

Blue Ribbon Commission (2006)– Goals set for 2012

– Four strategies

– 16 recommendations

– Health reform legislation, 2007 (5930)

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HCA and State Health Reform Efforts

Cabinet level agency purchasing health care for over 400,000 Washingtonians

Over 330,000 public employees and retirees – State, higher ed, some K-12, some local governments– Self insured PPOs and fully insured Plans/MCOs

About 70,000 low income in Basic Health Program (BHP)– Until budget reduction in 2009, program enrollment around 100,000– Now over 100,000 on wait list– Entirely state funded, waiver request for early expansion

Key implementation of cross-agency health reform efforts– Health Technology Assessment (HTA)– Prescription Drug Program (PDP)– PDA/SDM and AIM– Health Information Technology and Health Information Exchange– Health Insurance Partnership– Medical homes/payment reform pilot

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The State Budget, Health Care, and National Health Reform

Projected shortfall for 2011-2013 is $3 billion Total health care spending now about 1/3 of state budget, was

about 1/5 in 2005 Waiver request to sustain BHP, Medical Care Services

programs Executive order to consolidate Medicaid, public employees

health purchasing, eventually all state health purchasing, under HCA

Executive implementation of NHR, Joint Legislative Select Committee on Health Reform Implementation

– Low income expansion

– Health insurance exchange

– Health care workforce

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How a Large Purchaser Can Impact the Market Must change the delivery system to impact cost and quality

– Driving change through purchasing

Must target manageable changes for the long haul (lesson learned from 1993)

Governor targeted key initiatives early and stuck with them– Five point plan, BRC

Focus has endured despite a bad economy and political pressure

This focus has helped other employers, health plans and provider groups to think differently

Working together with private sector– Puget Sound Health Alliance

– Multi-payer medical homes payment reform pilot

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1

10

100

1,000

10,000

100,000

1,000,000

Health Care Quality Defects Occur at Alarming Rates

U.S Airline flight fatalities/U.S. Industry Best of Class

Airline baggage handling

Breast cancerScreening (WA)

Detection &treatment ofdepression

Adverse drugevents

Hospital acquired infections

Hospitalized patientsinjured through negligence

1(69%)

2(31%)

3(7%)

4(.6%)

5(.002%)

6(.00003%)

Overall Health Care Quality in U.S.

(Rand Study 2003)

IRS Phone-in Tax Advice

U.S. birth defects

Recommendedwell-child visits (WA)

Treatment ofBronchitis (WA)

NBA Free-throws

Sources: modified from C. Buck, GE; Dr. Sam Nussbaum, WellPoint; Premera 2004 Quality Score Card; March of Dimes

level (% Defects)

Def

ects

per

mil

lio

n

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Evidence Based Health Care

Cutting edge programs that have become part of our offerings:

– Health Technology Assessment (HTA) State pays for procedures and medicine that show evidence of efficacy, cost-

effectiveness, and safety

– Prescription Drug Program (PDP) Preferred drug list used by PEBB, Medicaid, and workers compensation programs

– Drug Purchasing Consortium Pools state purchasing power for any Washingtonian

– Patient decision aid pilot (PDA) Focus on high-variation, preference-sensitive areas that involve multiple options and

tradeoffs, e.g. cardiac disease; breast & prostate cancer

– Advanced imaging management (AIM) Using evidence based guidelines, identify highest cost/utilization advanced diagnostic

imaging services for state programs

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Why Health Technology?

Part of an overall strategy

Medical technology is a primary driver of cost– The development and diffusion of medical technology are primary

factors in explaining the persistent difference between health spending and overall economic growth.

– Some health experts arguing that new medical technology may account for about one-half or more of real long-term spending growth.  Kaiser Family Foundation, March 2007: How Changes in Medical Technology Affect Health Care Costs 

Medical Technology has quality gaps– Medical technology diffusing without evidence of improving quality

Highly correlated with misues, overutilization, underutilization. Cathy Schoen, Karen Davis, Sabrina K.H. How, and Stephen C. Schoenbaum, “U.S. Health System

Performance: A National Scorecard,” Health Affairs, Web Exclusive (September 20, 2006): w459

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1. HCA Administrator Selects TechnologyNominate, Review, Public Input, Prioritize

2. Vendor Produce Technology Assessment ReportKey Questions and Work Plan, Draft, Comments, Finalize

3. Clinical Committee makes Coverage DeterminationReview report, Public hearing

4. Agencies Implement DecisionImplements within current process unless statutory conflict

Meet Quarterly

2-8 Months

Semi-annual

HTA Program Elements

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Technologies selected– 17 technologies selected since 2007

3 first year; 5 second year; 8 third year

Analysis completed– Over 6,000 articles/trials reviewed– 15 comprehensive technology assessment reports

Coverage Decisions– 9 public meetings and 13 decisions, where reliable evidence:

7 show benefit and support coverage for certain situations 5 do not yet show benefit and are not covered 1 shown unsafe or ineffective

– Estimated $27 million cost avoided

– Projected Utilization impact: 3 increased; 3 same; 7 decrease

HTA Outcomes

HTA Outcomes

Utilization

Topic Date Safe EffectiveCost-

EffectiveHealth Benefit Coverage

Impact (annual figure)

Upright MRI May-07 Equal Insufficient Less N/A No $2,990,000

Ped Bariatric Surgery <18 Aug-07 Insufficient More Insufficient No No $0Yes/

ConditionsLumbar Fusion Nov-07 Less Equal/More Less Yes Yes/

Conditions $5,240,639

Discography Feb-08 Insufficient Insufficient Insufficient No No $324,000

Virtual Colonoscopy (CTC) Feb-08 Equal Equal/More Less No No $11,100,000

Intrathecal Pump for chronic noncancer painFeb-08 Insufficient Insufficient Equal No No $691,326

Arthroscopic Knee Surgery Aug-08 Less Equal Less No No $400,000

Artificial Disc Replacement Nov-08 Equal Equal/More Insufficient YesYes/

Conditions0*

Computed Tomographic Angiography (cardiac)

Nov-08 Equal Equal Equal/More YesYes/

Conditions$5,063,928

Cardiac Stents May-09 Equal Equal/More Less YesYes/

Conditions$966,760

$27,366,138

*Insufficient current data to calculate conservative estimate.

Less $589,485

Health Technology Assessment ProgramEvidence Decision

More Insufficient YesPed Bariatric Surgery 18-21 Aug-07

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ConsumerReports.org 10 overused tests and treatments November 2007

1 BACK SURGERY. … surgery, which can cost $20,000 plus physician's fees …..

2 HEARTBURN SURGERY. operation, costs $14,600 or more

3 PROSTATE TREATMENTS. . over treated with surgery that costs $17,000, or by radiation therapy for $20,700

4 IMPLANTED DEFIBRILLATORS. … cost some $90,000 over a lifetime.

5 CORONARY STENTS. Billions are spent each year….

6 CESAREAN SECTIONS. ..cost almost $7,000, about 55 percent more than natural delivery...

7 WHOLE-BODY SCREENS. CT scans, which can cost $1,000 … no proven benefits for healthy people. A few CT scans a year can increase your lifetime risk of cancer.

8 HIGH-TECH ANGIOGRAPHY. Using a CT …costs an average of $450...standard angiography is sometimes still needed.

9 HIGH-TECH MAMMOGRAPHY. Using software to flag suspicious breast X-rays would add $550 million a year to national costs if used for all mammograms. But a 2007 study found that this technique failed to improve the cancer-detection rate significantly, yet resulted in more needless biopsies.

10 VIRTUAL COLONOSCOPY. …Though less costly than a standard colonoscopy, the virtual test isn't cost-effective because any suspicious finding requires retesting with the real thing.

Copyright © http://www.consumerreports.org/cro/health-fitness/index.htm 2000-2006 Consumers Union of U.S., Inc.

Prescription Drug Program

State preferred drug list Evidenced based review of drug classes, efficacy and

effectiveness Reviewed by Pharmacy and Therapeutics committee (P&T), at

least ten independent clinicians Recommendations to self funded plan, Medicaid FFS, workers

comp

Drug purchasing consortium WA and OR collaboration on publicly purchased PBM contracts Available to all residents, no fee Average savings per prescription – 40% or $20 Average percentage of generics – 88%

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Other Evidence Based Health Care Programs

Patient Decision Aids/Shared Decision Making (PDA/SDM)

– 2007 BRC legislation directed HCA to establish pilots Did not provide any state funding Provided “safe harbor” for clinicians

– HCA convened community collaborative to seek funding

– Two pilots funded by FIMDM Group Health: live January, 2009, results pending UW: live January, 2010

Advanced Imaging Management

– 2009 legislation directing HCA to convene workgroup July, 2009 report on guidelines for direct state purchased health

care January, 2011 report for use with other purchased health care

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Change is a Journey

• Lessons learned• Be transparent

• Engage the provider community

• Find common values

• Make consistent coverage decisions

• Make bias free zones

• Challenges• Resource intensive

• Collaborations involve time and tradeoffs

• Cultural change - new decision model (not persuasion, expert opinion, advocacy or political clout)

• Often identifies information gaps

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Thank you!

Additional resources: HTA: http://www.hta.hca.wa.gov/ PDP: http://www.rx.wa.gov/ Discount Card: http://www.rx.wa.gov/discountcard.html AIM: http://www.hta.hca.wa.gov/aim.html PDA/SDM:

http://www.informedmedicaldecisions.org/washington_state_legislation.html

Joint Select Committee: http://www.leg.wa.gov/jointcommittees/HRI/Pages/default.aspx

Governor Gregoire: http://www.governor.wa.gov/priorities/healthcare/reform.asp

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