U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

78–177 2013

PROGRAMS THAT REWARD PHYSICIANS WHO 

DELIVER HIGH QUALITY AND EFFICIENT CARE 

HEARING 

BEFORE THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

FEBRUARY 7, 2012

SERIAL 112–HL07 

Printed for the use of the Committee on Ways and Means 

( 

ii 

COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON HEALTH

WALLY HERGER, California, Chairman 

SAM JOHNSON, Texas 

PAUL RYAN, Wisconsin 

DEVIN NUNES, California 

DAVID G. REICHERT, Washington 

PETER J. ROSKAM, Illinois 

JIM GERLACH, Pennsylvania 

TOM PRICE, Georgia 

VERN BUCHANAN, Florida 

FORTNEY PETE STARK, California 

MIKE THOMPSON, California 

RON KIND, Wisconsin 

EARL BLUMENAUER, Oregon 

BILL PASCRELL, JR., New Jersey 

JENNIFER SAFAVIAN, Staff Director 

JANICE MAYS, Minority Chief Cousel 

iii 

C O N T E N T S 

Page 

Advisory of February 7, 2012 announcing the hearing ........................................ 2 

WITNESSES 

Lewis G. Sandy, MD, Senior Vice President, Clinical Advancement, 

UnitedHealth Group ............................................................................................ 6 

David Share, MD, MPH, Vice President, Value Partnerships, Blue Cross 

Blue Shield Michigan (BCBSM) .......................................................................... 21 

Jack Lewin, MD, Chief Executive Officer, American College of Cardiology ....... 38 

John L. Bender, MD, President & CEO, Miramont Family Medicine ................ 67 

Len Nichols, Director, Center for Health Policy Research and Ethics ................ 77 

(1) 

PROGRAMS THAT REWARD PHYSICIANS WHO 

DELIVER HIGH QUALITY AND EFFICIENT 

CARE 

TUESDAY, FEBRUARY 7, 2012 

U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, Washington, DC. 

The subcommittee met, pursuant to notice, at 10:01 a.m., in 

Room 1100, Longworth House Office Building, the Honorable Wally 

Herger [chairman of the subcommittee] presiding. 

[The advisory of the hearing follows:] 

2 

ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON HEALTH 

FOR IMMEDIATE RELEASE CONTACT: (202) 225–1721 

February 7, 2012 

112–HL07 

Chairman Herger 

Announces Hearing on Programs that Reward 

Physicians Who Deliver High Quality and Efficient Care 

House Ways and Means Health Subcommittee Chairman Wally Herger (R-CA) 

today announced that the Subcommittee on Health will hold a hearing to explore 

how private sector payers are rewarding physicians who deliver high quality and 

efficient care. With this hearing, the Subcommittee will continue to examine potential ways to reform Medicare’s physician payment system. The Subcommittee will 

hear from witnesses who have developed, supported, and participated in quality and 

efficiency measurement programs. The hearing will take place on Tuesday, 

February 7, 2012, in 1100 Longworth House Office Building, beginning at 

10:00 A.M. 

In view of the limited time available to hear from witnesses, oral testimony at 

this hearing will be from invited witnesses only. However, any individual or organization not scheduled for an oral appearance may submit a written statement for 

consideration by the Committee and for inclusion in the printed record of the hearing. A list of witnesses will follow. 

BACKGROUND: 

Medicare currently reimburses nearly every physician on a fee-for-service (FFS) 

basis. While the physician fee schedule generally takes into account the work, time, 

and effort associated with each service, it does not account for the quality and efficiency of the care provided. Furthermore, the mechanism used to annually update 

the fee schedule—the Sustainable Growth Rate (SGR) formula—limits spending 

growth to growth in the economy but does not recognize value or quality. There is 

broad acknowledgement of the shortcomings of the current payment system, including the disruptive role of the SGR, and the growing importance of incentivizing patient-centered, high-quality, and outcomes-oriented care. 

In consultation with physicians, many private payers have developed programs to 

measure and reward the quality and efficiency of care provided. Some of these programs also recognize practice transformation activities. Preliminary results from 

these programs have shown reductions in unnecessary emergency room visits, surgical complications, and repeated procedures. Some physician organizations are also 

very active both in collecting data to enhance performance and in developing programs that recognize physician excellence. These organizations have encouraged 

widespread dissemination of clinical evidence, improved patient outcomes, and reduced unwarranted variations in care. Such physician-driven programs and activities may offer valuable lessons for reforming the Medicare physician payment system. 

In announcing the hearing, Chairman Herger stated, ‘‘As we continue to seek 

a long-term solution to the Medicare physician payment system, this hearing will enable the Subcommittee to learn more about how programs developed by physicians and private payers are successfully rewarding quality 

and efficiency in care delivery while reducing complications and wasteful 

spending. The experience of those at the forefront of these innovative efVerDate Mar 15 2010 19:55 Feb 26, 2013 Jkt 078177 PO 00000 Frm 00006 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\78177.XXX 78177
3 

forts will help the Subcommittee as it considers how to better reimburse 

physician services in Medicare.’’ 

FOCUS OF THE HEARING: 

The hearing will focus on innovative quality and efficiency recognition and reward 

programs developed by physicians and private payers. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

http://waysandmeans.house.gov, select ‘‘Hearings.’’ Select the hearing for which you 

would like to submit, and click on the link entitled, ‘‘Click here to provide a submission for the record.’’ Once you have followed the online instructions, submit all requested information. ATTACH your submission as a Word document, in compliance 

with the formatting requirements listed below, by the close of business on Tuesday, February 21, 2012. Finally, please note that due to the change in House mail 

policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call 

(202) 225–1721 or (202) 225–3625. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing 

record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, 

but we reserve the right to format it according to our guidelines. Any submission 

provided to the Committee by a witness, any supplementary materials submitted for 

the printed record, and any written comments in response to a request for written 

comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will 

be maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses 

and submitters are advised that the Committee relies on electronic submissions for 

printing the official hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted 

for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in 

the Committee files for review and use by the Committee. 

3. All submissions must include a list of all clients, persons and/or organizations 

on whose behalf the witness appears. A supplemental sheet must accompany each 

submission listing the name, company, address, telephone, and fax numbers of each 

witness. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202-225-1721 or 202-226- 

3411 TTD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http 

The subcommittee met, pursuant to notice, at 10:01 a.m., in Room 1100, Longworth House Office Building, Hon. Wally Herger [chairman of the subcommittee] 

presiding. 

f 

4 

Chairman HERGER. The Subcommittee will come to order. 

We are meeting today to hear from individuals to have experience to share that will inform us as we continue our effort to reform Medicare payments to physicians. At our last hearing on this 

topic, we heard about different payment model options and efforts 

to test them in the private sector. 

This second hearing focuses on more incremental, private sectordriven approaches to reforming patients. We will hear shortly from 

private payers, a physician organization, and a practicing physician 

who are engaged in efforts that reward physicians who provide 

high-quality and efficient care to patients. A common theme will be 

how all of these key stakeholders are collaborating in private sector 

efforts to improve care while lowering the cost of providing it. 

All but one of our witnesses, even those representing health 

plans, are physicians who are leading efforts to achieve this shared 

goal. I fully expect you will find their stories compelling. Our Democrat colleagues have called an economist who talk about the need 

for collaboration but with the view that government, not those providing the care, should lead the way. 

Our end goal in all of this remains addressing the Sustainable 

Growth Rate formula through comprehensive physician payment 

reform done in a fiscally responsible manner. This past December, 

the House passed a bill that would have provided a two-year reprieve from SGR cuts. This would have provided the longest period 

of stability for Medicare physician payments in nearly a decade. 

It is worth noting that the last time that physicians knew what 

their payment updates would be for 24 months was when a Republican-led Congress enacted the Medicare Modernization Act in 

2003. It would have also provided time to determine a payment reform policy that constitutes a true solution—it is important to remember that merely averting cuts is not a fix. 

The House bill would have facilitated the collection of information to assist in determining a sound policy prescription for paying 

physicians moving forward. The bill directed studies by the nonpartisan Medicare Payment Advisory Commission and the Government Accountability Office. It prompted this and other congressional committees with Medicare jurisdiction to consult with physician organizations. The focus of this information collection effort is, 

not coincidentally, the topic of today’s hearing, how to reward physicians for providing quality, efficient care to beneficiaries. 

Unfortunately, the Democrat-controlled Senate continued its 

habit of providing patches a couple months at a time, which led us 

to our current situation, one that again sees us too close to an 

unsustainable physician payment cut. While I am concerned about 

my Northern California constituents and the other beneficiaries 

and physicians throughout the country, I trust that the Conference 

Committee will address this issue in a more responsible manner. 

In the meantime, this Committee is focusing on what it can do 

now to bring a permanent resolution to the SGR program. I am 

confident the experience that our witnesses will share today will 

assist us greatly as we continue down this path. 

Before I recognize Ranking Member Stark for the purpose of an 

opening statement, I ask unanimous consent that all Members’ 

5 

written statements be included in the record. Without objection, so 

ordered. 

I will now recognize Ranking Member Stark for five minutes for 

the purpose of his opening statement. 

Mr. STARK. Thank you, Mr. Chairman, for holding this hearing 

today to try and explore how the private sector payers are rewarding physicians who deliver high-quality and efficient care. This continues discussions we began, I guess, last May to review innovative 

delivery and payment system reform efforts. 

I agree with you, Mr. Chairman, that it is important to hear 

from the private sector. But I also would note that we are only 

three weeks away from a 27 percent cut in Medicare physician payments. We keep avoiding the topic of Sustainable Growth Rate formulas in favor of the easier conversations about delivery system reforms, around which we have much stronger agreement. If we don’t 

fix Medicare’s physician payment formula, we are going to lose the 

ability to collaborate with the private sector because the physicians 

will abandon Medicare. 

We all share the blame here. I would like to blame it all on the 

Republicans, but I can’t. We are more than a decade away into the 

debacle known as SGR reform. We have known this hasn’t worked 

for many years, but neither side has been able or willing to come 

together to enact a permanent solution. And the biggest reason is 

the cost. 

The way the formula was designed, we would have over $300 billion to correct the formula. We have an opportunity. Members on 

both sides of the aisle and the capital are agreeing to—more members are agreeing to the idea of using the war spending, overseas 

contingency operations, it is called, as a financing mechanism to 

pay off the SGR program. 

Without objection, I would like to make part of the record a letter 

signed by most of America’s physician professional societies in support of this. 

**Information Not Provided** 

Chairman HERGER. Without objection. 

Mr. STARK. Thank you, Mr. Chairman. 

I am encouraged by this conversation and I am curious to hear 

from our witnesses today. And I think most of them will agree that 

SGR reform is the number one issue facing physicians. We have got 

to get this issue behind us, and then we will be able better to devote our attention to implementing reforms, as discussed at today’s 

hearing. 

I would like to note also that to look at purely private sector efforts is not exactly the answer. Mr. Nichols, I think, will highlight 

the synergy between government initiatives to change payments to 

promote quality efficiency in their private sector counterparts. 

Though many of my more conservative colleagues are loath to 

hear this, the new health reform law is promoting public-private 

initiatives to incentivize high-quality, efficient care. Examples like 

the Challenge grants through the new Center for Medicare and 

Medicaid Innovation, accountable care organizations, bundled payment initiates, are all public-private partnerships, and they are 

moving ahead. 

6 

Their impact goes beyond Medicare, and we are testing models 

we want to spread across payers. So I am excited about the synergy 

that we are seeing between the private sector and government, and 

I look forward to hearing from today’s witnesses and hope we can 

discover new opportunities for collaboration. 

Thanks very much. 

Chairman HERGER. Thank you. 

Today we are joined by five witnesses, who are in the order they 

will testify: Dr. Lewis Sandy, who is the senior vice president of 

Clinical Advancement at UnitedHealth Group; Dr. David Share, 

who is vice president of Value Partnerships at Blue Cross Blue 

Shield in Michigan; Dr. Jack Lewin, who is the chief executive officer of the American College of Cardiology; Dr. John Bender, who 

is the president and CEO of the Miramont Family Medicine in Fort 

Collins, Colorado; and Mr. Len Nichols, who is a professor of 

Health Policy at George Mason University and the director of the 

Center for Health Policy Research and Ethics. 

You will each have five minutes to present your oral testimony. 

Your entire written statement will be made a part of the record. 

Dr. Sandy, you are now recognized for 5 minutes. 

STATEMENT OF LEWIS G. SANDY, M.D., SENIOR VICE PRESIDENT, CLINICAL ADVANCEMENT, UNITEDHEALTH GROUP, 

MINNETONKA, MINNESOTA 

Dr. SANDY. Thank you, Mr. Chairman. Mr. Chairman, Ranking 

Member, and Members of the Committee, my name is Dr. Lewis 

Sandy, and I am senior vice president for Clinical Advancement at 

UnitedHealth Group, a diversified health and well-being company 

based in Minnetonka, Minnesota. Our mission is to help people live 

healthier lives. 

I would like to highlight some of our innovative programs in 

transparent physician performance assessment, practice transformation through payment and delivery reform, and the importance of aligned incentives, all of which help the millions of Americans we serve. I thank you for the opportunity to testify this morning. 

Private sector innovations can be applied to the modernization of 

public programs such as Medicare. Medicare need not start from 

scratch nor go it alone. By working with and learning from private 

sector innovations, public programs can more rapidly be modernized to meet the needs of those they serve. 

For example, we are implementing a large-scale transparent performance assessment program that provides feedback to both physicians and to consumers, the UnitedHealth Premium Designation 

Program. Anyone inside health care knows there are differences in 

quality. Just ask a doctor or a nurse. But how are doctors to know 

how their practices compare? How are patients to know? And how 

can more information help both? 

The premium program uses the extensive data we have from 

claims and other administrative data sources and analyzes care 

patterns using sophisticated analytics. We evaluate physician performance on quality and efficient across 21 different areas, including primary care and specialties such as cardiology and orthopedics. Quality is measured first, and only those physicians who 

7 

meet or exceed quality benchmarks are then evaluated for cost efficiency. 

The measures we use are based on national standards, and incorporate feedback and guidance from specialty societies and practicing physicians. We display the results in summary form on our 

consumer websites to inform their health care decisions, and we 

provide physicians we detailed information to support their quality 

improvement. 

This program includes now nearly 250,000 physicians in 41 

states, and through this program we know that quality and efficiency variations are significant and that they matter. Cardiologists, for example, who earn our quality designation have 55 percent fewer redo procedures and 55 percent lower complication rates 

for stent placement procedures. Orthopedic surgeons who earn a 

quality designation have 46 percent fewer redo procedures and a 62 

percent lower complication rate for knee arthroscopy. And the overall incremental savings between a premium-designated quality and 

efficient physician and a non-designated physician is 14 percent. 

This program demonstrates that large-scale, transparent performance assessment can be done today, and that the information 

helps physicians and patients. But we have also learned that information alone will not achieve transformation and higher levels of 

system performance. 

Thus we have also launched practice transformation programs 

and payment and delivery reforms, working again in collaboration 

with physicians and hospitals, that combine support for delivery 

system improvement with aligned incentives. 

We currently are piloting patient-centered medical home programs in 13 states, and we are developing 8 to 12 accountable care 

organization projects this year across diverse communities that 

help care providers modernize the way they deliver care. 

These are promising payment and delivery reforms, but even 

these are not enough. Another key component is consumer empowerment and activity, coupled with aligned incentives. For example, we developed an incentive-based diabetes health plan to help 

patients with diabetes stay healthy and adhere to their physician’s 

recommended care plan. 

Many lessons from our experiences can be applied to public programs. 

First, expert physician and specialist society collaboration is critical in developing appropriate measures for quality, efficiency, patient safety, and other dimensions of performance, and these measures in the measurement program must be fully transparent. 

Second, this information must be presented in actionable format 

and with aligned incentives. Information alone, while helpful, is 

unlikely to move the needle. 

Third, financial incentives must be significant and must come 

from savings achieved from ongoing improvements in delivery system efficiency. 

Fourth, new models of care, new roles in information technology 

support, are needed for true transformation. For example, embedded nurse care managers in our patient-centered medical home programs provide vital support for care transitions, patient education, 

and coordination. 

8 

And fifth, programs such as value-based benefit designs can help 

people become more activated and involved in their own care. 

In conclusion, stakeholders must work together to develop an integrated, comprehensive approach to transform care delivery. 

Thank you for the opportunity to share our experience with the 

committee. I look forward to your questions and comments. 

[The prepared statement of Dr. Sandy follows:] 

9 


Insert here 78177.001

Committee on Ways and Means 

Subcommittee on Health 

Testimony of Lewis G. Sandy, MD 

Senior Vice President for Clinical Advancement 

UnitedHealth Group 

February 7, 2012 

Mr. Chairman and Members of the Committee: 

My name is Dr. Lewis Sandy and 1 am Senior Vice President for 

Clinical Advancement at UnitedHealth Group, a diversified health and wellbeing company based in Minnetonka, Milmesota. Our mission is to help 

people live healthier lives, and the goal of all of our innovative work in 

transparent performance assessment and payment and delivery reform is to 

improve the quality of care for the millions of Americans we serve. 

We have learned four key lessons in advancing quality and costeffectiveness in care delivery over the years -lessons that can benefit public 

sector health care programs as welL 
10 


Insert here 78177.002

• First, physicians benefit from meaningful feedback on their clinical 

performance to support their continuous professional development 

and their innate desire to provide the best care possible to their 

patients; 

• Second, patients benefit from actionable information on delivery 

system performance, as well as coaching and other support services to 

help them make informed decisions; 

• Third, meaningful improvement in quality and efficiency of care 

requires practice transformation through new models of care, built and 

supported by new tools and capabilities, such as health information 

technology; 

• Fourth, this transformation requires alignment of incentives for 

quality and cost-effectiveness across the delivery system, including 

incentives for both patients and doctors, all supported through new 

benefit designs. 

2 
11 


Insert here 78177.003

Let me provide a few examples of the innovative programs we have 

deployed at UnitedHealth Group, at scale, to advance this agenda, and the 

lessons we have learned in implementing them. The first example is large 

scale transparent perfonnance assessment and feedback that provides clear 

and actionable inronnation about the quality and cost-effectiveness of 

individual physicians. groups of physicians and hospitals, to assist people in 

making personally appropriate decisions. 

A landmark study published in 2003 in the New England Journal of 

Medicine noted that people receive evidence-based clinical services just ove; 

half the time ', and the Agency for Hcalthcare Research and Quality's 

(AHRQ) 2010 National Quality Report shows, at best, modest improvemen~ 

in quality of care si nce thcn2

• Physicians know there are differences in 

quality-an October 2011 Optum Institutel Harris Interactive survey showed 

that 64% of physicians say "there are significant differences in the quality of 

care provided by doctors" in their local area.; And yet physicians, 

extraordinarily busy and dedicated to their patients, often do not have a 

sense of how their patterns of practice relate to evidence-based standards of 

' N Engl J Mro "2001; 348:2635·264S 

I hup;lIV.ww.wq.IOvlqual'nhqrIO/l(ey.lllm 

, hllp ;lli nslitwe.oprum comlresearch fl:aturrd-public.ationsf'U5tainlblc-h~alt,",-fI·manifnw-for

unprovemenll....fmtdialOpnunlnstiMc'Plip _ Elc-mcnulArticlQll l· 

27J76%l00prurn%20Manif~~LO •. pd.r 

J 
12 


Insert here 78177.004

performance measures that have been reviewed and endorsed by the 

National Quality Forum and the National Committee for Quality Assurance, 

as well as performance measures developed in collaboration with medical 

specialty societies and reviewed by committees of practicing physicians. 

This Premium Designation Program evaluates physician performance on 

quality and efficiency across 21 different areas - including primary care and 

specialties such as cardiology and orthopedics. 

The Premi urn Designation Program analyzes the performance of 

physicians against both quality and efficiency benchmarks. Quality is 

measured first, and only those physicians who meet or exceed quality 

benchmarks are then evaluated for cost-efficiency. Quality is assessed using 

more than 300 national standards and metrics developed by physician 

specialty societies. Efficiency is measured using more than 230 measures 

and benchmarks that are risk-adjusted and tailored to each physician's 

specialty and geographic area to account for differences in average costs. 

On both dimensions, performance is measured relative to other physicians.5 

, For more information. see: https:!!www.unitedhealthcareonline.com/ccmcontentiProviderlIfUHC/envs/ Assets/ProviderStatic Fi les/ProviderStaticFi lesP df/Prem i um%20 Meth odo logy/V nitedH ealth __ Premi um _ 

Detailed _Methodology .pdf 

5 
13 


Insert here 78177.005

performance measures that have been reviewed and endorsed by the 

National Quality Forum and the National Committee for Quality Assurance, 

as well as performance measures developed in collaboration with medical 

specialty societies and reviewed by committees of practicing physicians. 

This Premium Designation Program evaluates physician performance on 

quality and efficiency across 21 different areas - including primary care and 

specialties such as cardiology and orthopedics. 

The Premium Designation Program analyzes the performance of 

physicians against both quality and efficiency benchmarks. Quality is 

measured first, and only those physicians who meet or exceed quality 

benchmarks are then evaluated for cost-efficiency. Quality is assessed using 

more than 300 national standards and metrics developed by physician 

specialty societies. Efficiency is measured using more than 230 measures 

and benchmarks that are risk-adjusted and tailored to each physician's 

specialty and geographic area to account for differences in average costs. 

On both dimensions, performance is measured relative to other physicians.s 

5 For more information, see: https:l/www.unitedhealthcareonline.com/ccmcontentiProviderII/UHe/enUS! Assets!ProviderStaticFi les!Provi derStaticF iles Pdf'Premi um%20 Methodo logy,U n itedHealth _Premium _ 

Detailed _ Methodology.pdf 

5 
14 


Insert here 78177.006

results in our r.. ... r ... ~","'n .. directories "star" 

one star for and another for ettlcH;mc~y 

receive both summarized information as wen as access ov1' .. a .. ~ .. oli~T detailed 

down 

used consumer 

individual level in a We 

groups and outside .. """,..."' ..... C> usable 

format for consumers. We created an online l"Ar1,Artlncr and tool 

for r .... ''''''''~'O?'''' to them understand their A .... ""',,"'h ..... ,.+.~><, 

and been well T'""/"'",,nlAr! 

feedback from nh'''C1f'''>1''tC and medical societies. 

Vie have discovered and enlCl~~nc:y variations are 

""""""~1""'<:>1"'t" and matter. While the vary we 

make it a to share the overall with each "v"'''''''''UI._Y as 

well as here are a few illustrative facts: 

OT"""" ...... rn:C'TC' who earn a have 55% fewer redo 

nn)ceaure~ and 55% lower rates 

pn)C€:Qures than who did not receive 

6 
15 


Insert here 78177.007

• Orthopedic surgeons who earn a quality designation have 46% fewer 

redo procedures and a 62% lower complication rate for knee 

arthroscopy surgeries than other orthopedic surgeons who did not 

receive the quality designation. 

• For all 21 physician specialties evaluated in the UnitedHealth 

Premium program, the incremental savings between a Premium 

designated (Quality and Cost Efficient) physician and non-designated 

physician is 14%. 

This program demonstrates that large scale transparent performance 

assessment can be done today, and that the information is used by physicians 

and patients to improve both the quality of clinical care delivery and the 

choice of personally appropriate care by consumers. But this alone will not 

achieve trans formative changes towards higher levels of system 

performance. Performance assessment, while a valuable tool for improving 

care quality, is not sufficient on its own. Performance assessment must be 

incorporated into an aligned reimbursement system that provides rewards 

and incentives for demonstrating true value in care delivery. 

7 
16 


Insert here 78177.008

Thus, we have launched practice transformation programs and 

payment and delivery reforms, working again in collaboration with 

physicians and hospitals, to combine support for delivery system 

improvement with aligned incentives. We currently are piloting Patient 

Centered Medical Home programs in 13 states. Additionally, our goal this 

year is to have 8 to 12 Accountable Care Organization projects across 

diverse communities that will help providers modernize the way they deliver 

care. These practice models are combined with new payment models that 

reinforce both the desired direction of practice transformation and are tied 

closely to achievement of actual, meaningful improvements in quality and 

efficiency. These include population-based measures of cost-efficiency and 

direct measures of appropriate key health services utilization6• 

These are significant, and promising, payment and delivery reforms. 

But even these are not enough. Another key component is consumer 

empowerment and activation. As I mentioned earlier, it is important to 

provide people with information that helps them understand the strengths 

and weaknesses of physicians and hospitals, so they might make more 

informed, personally appropriate care choices. And, just as with physicians, 

6 Key measures for our new payment programs include a core set of HEDIS measures for quality. quality and efticiency measures 

such a'i hospital readmission rates. hospital~acquired lIltCction rates. ER-to-Inpatient admission ratios, physician generic prescribing 

rates, use of in-nelviOrk laboratories and specialists. and total cost of care. \\here statistIcally feaSible. 

8 
17 


Insert here 78177.009

we have learned that it is important to augment that information with 

incentive-based health benefit products that further encourage people to use 

the information, and that can provide lower cost health care for those who 

successfully do so. The end result: Better quality and more affordable care. 

To that end, we have deployed incentives in programs such as our 

Diabetes Health Plan to help patients with chronic conditions stay healthy 

and adhere to their physician's recommended care plan. Through such 

initiatives, physician incentives for improvement and practice transformation 

are aligned and reinforced by consumer-focused incentives. 

Many lessons from our experiences can be applied to public 

programs. 

• First, we have learned that meaningful differences in quality and 

efficiency of care can be measured, and that they matter. Just as 

important is how we develop the measures and measurement program. 

For example, ongoing expert physician and specialty society 

collaboration is critical in developing appropriate measures for 

quality, efficiency, patient safety, and other dimensions of 

9 
18 


Insert here 78177.010

performance. And these measures and the measurement program 

must be fully transparent. 

• Second, this information is only useful if it is presented in an 

actionable format with aligned incentives. Information alone, while 

helpful, is unlikely to "move the needle." 

• Third, financial incentives must be significant, not marginal. Yet, they 

cannot increase the overall costs of care. They must come from the 

savings achieved from ongoing improvements in delivery system 

efficiency. 

• Fourth, financial incentives, even significant ones, cannot lead to true 

transformation without support for new models of care, new roles 

such as care transformation coaches, and information technology 

support. For example, we have learned the importance of embedded 

nurse care managers in patient-centered medical homes, who provide 

vital support for care transitions, patient education, and coordination 

among care providers. 

10 
19 


Insert here 78177.011

• Fifth, the "supply side" interventions described above can be 

accelerated by deploying "demand side" programs such as valuebased benefit designs, consumer navigation and information 

resources, and programs to help people become more activated and 

involved in their own care. 

We have learned that individual transparency or payment programs, 

important as they are as building blocks, are inadequate on their own to 

significantly improving quality and efficiency in our health care system. 

Instead, stakeholders must work together to implement an integrated, 

comprehensive performance measurement program, innovative payment 

reforms that incorporate quality and cost-efficiency measures along with 

material financial incentives, transformation of the care delivery process, 

patient-focused transparency programs, and value-based insurance designs, 

so that patients are financially rewarded for making decisions that reflect 

higher quality and cost outcomes. 

Programs like the ones I've outlined, developed and deployed in the 

private sector, with continuous refinement and ongoing collaboration with 

physicians and other stakeholders, can be applied to public programs such as 

11 
20 

f 


Insert here 78177.012

Medicare. Innovations in the private sector can be fielded, tested, and 

refined though rapid cycles of improvement and ongoing collaboration with 

physicians, thus informing the design and deployment of public sector 

innovations. Medicare need not start from scratch, nor go it alone. By 

working with, and learning from, private sector innovations, public 

programs can more rapidly be modernized to meet the needs of those they 

serve. 

Thank you for the opportunity to share our experiences and 

perspectives with the Committee, and I look forward to your questions. 

12 
21 

Chairman HERGER. Thank you. 

Dr. Share, you are now recognized. 

STATEMENT OF DAVID SHARE, M.D., MPH, VICE PRESIDENT, 

VALUE PARTNERSHIPS, BLUE CROSS BLUE SHIELD MICHIGAN (BCBSM), DETROIT, MICHIGAN 

Dr. SHARE. Thank you, Chairman Herger, Congressman Stark, 

and Members of the Subcommittee for inviting me to participate in 

your discussion about private payers’ efforts to improve provider 

performance. 

I am Dr. David Share, vice president of Value Partnerships at 

Blue Cross Blue Shield of Michigan, which is a nonprofit insurer 

with 4.3 million members. It is one of the 38 Blue Cross Blue 

Shield plans covering nearly 100 million people in every county and 

zip code in the country. 

Decades of private payer and government efforts have fallen 

short of ensuring that people have ready access to affordable, effective, high-quality care. In 2004, BCBSM wiped the slate clean and 

began a dialogue with physician leaders aimed at creating a common vision of a high-performing health system and an incentive 

program to help realize it. 

A key learning was that imposing solutions on providers is an extrinsic motivation, with providers putting half of their creative energy into doing an end run around new expectations and resisting 

meaningful change. In contrast, harnessing intrinsic motivation 

and professionalism inspires physicians to devote the full measure 

of their creative energy to transforming the systems they use and 

the results they achieve. 

In 2004, the Physician Group Incentive Program, or PGIP, arose 

out of these discussions based on communities of caregivers with 

shared responsibility for an identified population of patients, with 

the aim of enhancing community well-being and, in doing so, relying on shared information systems, shared care processes, and 

shared responsibility for outcomes at a population level, all guided 

by the patient-centered medical home model. 

Other requirements for success including physicians forming organizations with effective leadership, administrative and technical 

support, tools to help in reengineering systems of care, and having 

both latitude and autonomy. Nearly 15,000 physicians in PGIP 

serve 2 million Blue members and 5 million Michigan residents. 

The participants include about 6,000 primary care physicians in 

over 90 physician organizations comprised of over 4,000 physician 

practices, and only two of these are integrated delivery systems, 

with the vast majority being one to four physician practices, most 

of those being in private practice. There are 780 patient-centered 

medical home-designated practices, with another 3,000 actively 

working to achieve that status. 

In response to an organized system of care program aimed at 

aligning and integrating primary care physicians, specialists, and 

facilities, 40 nascent organized systems of care have been established. In contrast, the 700 pages of the ACO regulations have inspired three prospective Michigan pioneer ACO applicants. 

A culture of cooperation has emerged. At quarterly meetings, 350 

physician organization leaders discuss best practices and common 

22 

challenges; and between meetings, regional learning collaboratives 

delve more deeply. These collaborative relationships and physician’s leadership role have generated palpable enthusiasm and a 

full sense of ownership of the program and its goals across the 

state. 

We have transformed fee-for-service payment into a fee-for-value 

approach, with all fee increases for primary care and specialty physicians now dependent on system transformation and population 

performance. I want to emphasize: Payment is a tool, not a solution. Without full engagement of physicians, a focus on community, 

and an explicit vision and purpose, any payment method will fall 

short and can be misused. 

Fee for service isn’t the problem, and global payment isn’t necessarily the solution. We have established an annual incentive pool 

of $110 million, which rewards physician organizations for modernizing systems of care and optimizing performance. There are over 

30 distinct initiatives available to these physician organizations, 

which keeps them constantly modernizing at the edges of their individual current capabilities. The more ambitious they are, the 

more resources are made available to them. 

Physicians in the patient-centered medical home-designated can 

earn up to a 20 percent increase in office visit fees, focusing on relationship-based care, not procedures. Physicians also can receive 

additional fee-for-service payments for chronic illness care management services. And starting in 2012, hospitals’ payment will be tiebarred to population-level performance, effectively aligning their 

incentives with those of physicians. 

Early results are compelling, with a 22 percent lower rate of admission for potentially avoidable conditions, 10 percent lower ER 

use, 8 percent lower radiology use, and overall, a 2.2 percent total 

cost trend or increase for the Blue PPO products. 

The physician group incentive program, with its focus on partnership, system transformation, population management, and feefor-service payment, has moved Michigan from procedure-based 

care to relationship-based care and from volume to value. 

I appreciate your interest and attention, and look forward to the 

discussion. Thank you. 

[The prepared statement of Dr. Share follows:] 

23 


Insert here 78177.013

***THIS TESTIMONY IS EMBARGOED UNTIL 10:00 

AM, TUESDAY FEBRUARY 7, 2012*** 

FROM PARTISANSHIP TO PARTNERSHIP: THE PAYOR-PROVIDER 

PARTNERSHIP PATH TO PRACTICE TRANSFORMATION 

David Share, MD, MPH 

Blue Cross Blue Shield of Michigan 

Testimony submitted to the House Ways and Means Committee, Health 

Subcommittee, February, 2012 

"These new regulations will fundamentally change the way we get around them. " 

-The New Yorker March 9, 2009, by ~.G,Y(!y 

Blue Cross Blue Shield of Michigan's Physician Group Incentive Program: Building 

a Shared Vision of a High Performing Health System 

Thank you Chairman Herger, Congressman Stark and members of the Subcommittee on 

Health for inviting me to participate in a discussion about how private payers are 

rewarding physicians who deliver high quality, efficient care. I am Dr. David Share, Vice 

President of Value Partnerships at Blue Cross Blue Shield of Michigan. BCBSM is a 

non-profit health plan providing healthcare benefits to 4.3 million people in Michigan. It 

is one of 38 Blue Cross Blue Shield Plans covering nearly 100 million people, in every 

county and zip code in the US. 

I appreciate the opportunity to share our experience at BCBSM partnering with the 

provider community to transform the health care system and to assure that care is of high 

quality, accessible and affordable. 

Decades of government and commercial payor efforts, including cost containment, 

utilization management, disease management and managed care -- all of which initially 

appeared to hold great promise -- have fallen short of ensuring that people have ready 

access to affordable, effective, high quality care. 

Blue Cross Blue Shield of Michigan postulates that the problem is not that physicians are 

inherently incapable of creating effective organizations and substantially improving valUe 

in health care, but that the relationship between payors/purchasers and providers is 

characterized by control and competition. Providers' creative efforts are, in large part, 

directed at obviating controls and maintaining the status quo to the extent possible. The 

quote, above, from the cartoon by P.C. Vey, captures the essence of this longstanding 

dynamic in the health care community. 
24 


Insert here 78177.014

In addition, payers' and purchasers' efforts to influence provider behavior have focused 

on managing the behavior of individual providers in the context of a highly fragmented 

system of care rather than being focused on catalyzing the development of systems 

designed to yield optimal value from the hard work of providers and their patients. 

In 2004, Blue Cross Blue Shield of Michigan embarked on a mission to redirect the 

nature and tenor of its relationship with providers. The goal was to establish an active 

partnership, predicated on harnessing the full measure of physicians' creative efforts and 

forging a common vision of an optimal future state of health care in Michigan. In 

conversations with state health care leaders at the Michigan State Medical Society, 

Physician Organizations, and other healthcare organizations, Blue Cross Blue Shield of 

Michigan's approach was not to tell providers what to do, but to ask what we could do 

together. 

As a result of extensive discussion over the course of twelve months, a vision emerged: 

Lack of system-ness is the root cause of poor cost and quality performance and an 

explicit focus on system development and transformation is needed to achieve 

good results for individual patients and at a population level 

Achieving substantive and sustainable system transformation depends on 

physicians collectively owning the responsibility to change the systems in 

which they practice. 

The locus of control of such change efforts should be in the hands of natural 

communities of caregivers who have shared responsibility for caring for a 

population of patients (through cross-coverage, referral relationships, and shared 

responsibility in a variety of clinical contexts, including office, emergency 

department, inpatient, and long term care settings) 

To create highly functioning systems which reliably produce high quality, 

efficient care, physicians need to create "Physician Organizations" with 

sufficient leadership, structure and technical expertise to support the 

development of shared iuformation systems and shared processes of care. 

Physician Organizations are legal entities with physician leadership, and 

administrative and technical infrastructure, comprised of groups of physicians in a 

geographic area which can accept money on behalf of their members and use it to 

support transforming the structure and processes of the systems they use and to 

measure and reward physicians for improving and optimizing cost and quality 

performance. Physicians themselves determine who constitutes the community of 

providers in a Physician Organization. Independent physicians can retain their 

identities as private practices when they join a Physician Organization. 

Exhorting individual physicians to improve the quality and efficiency of 

their practice is unlikely to succeed. One provider, acting independently, simply 

doesn't have enough time in the day to provide all of the preventive, acute care 

and chronic illness management services patients need without the support of a 

multi-disciplinary team (Landon 2003; Moore 2003; Sandy 2003; Yarnell 2003). 

2 
25 


Insert here 78177.015

Performance should be measured at the Physician Organization level. 

Measuring performance at the individual physician level is fraught with 

methodological limitations (e.g., low "n", non-random distribution of patients, 

variability in case mix which can't be fully accounted for by current adjustment 

methods). Measuring at a population level focuses on system performance, 

encourages system accountability and supports system improvement. Measuring 

at the individual practice and individual physician level is essential for focusing 

providers' attention on opportunities to improve processes and outcomes of care. 

But, given the methodological limitations which constrain the accuracy of results, 

ideally it is best to hold a community of caregivers responsible for aggregate 

performance at a population level and leave the management of individual cases, 

and individual performance, to the community of providers in the Physician 

Organization. Importantly, this reduces the incentive for Physician Organizations 

to cherry-pick doctors and for doctors to cherry-pick patients. 

Launch of the Physician Group Incentive Program 

Based on these tenets, and the concepts of the Chronic Care Model, Blue Cross Blue 

Shield of Michigan launched an incremental yet ambitious approach to health care 

reimbursement reform: the Physician Group Incentive Program. The Physician Group 

Incentive Program, known as "PGIP", has the goal of catalyzing health system 

transformation in partnership with Physician Organizations across the state of Michigan. 

Including Physician Organization leaders as active partners has been vital to the success 

ofPGIP, helping harness the full measure of physicians' creative energy in the hard work 

of system transformation. PGIP began by offering incentive payments to communities of 

physicians to organize into Physician Organizations where they didn't exist, or to redirect 

existing Physician Organizations toward the challenge of system reform. Physicians were 

encouraged to create and join Physician Organizations based on their own assessment of 

factors such as cross-coverage and referral patterns, hospital affiliation and geography. 

From the outset, there has been an explicit expectation that physicians in these Physician 

Organizations will develop and use shared information systems and processes of care, 

and that they will collectively be accountable for aggregate, population level quality and 

efficiency outcomes. 

Measuring at the Physician Organization level keeps the focus on catalyzing system 

improvement rather than on individual physician performance on a narrow set of 

performance measures in pay for performance programs. By catalyzing system 

transformation, providers can develop systems which support them in reliably delivering 

high quality, efficient care. This is something that a community of physicians' practices 

can do more successfully by aggregating resources than can an individual practice. 

An important benefit of measuring at the population level is that individual providers 

who choose to serve patients with particularly complex conditions, or who are especially 

burdened by socioeconomic challenges, will not be discouraged from doing so because of 
26 


Insert here 78177.016

a concern that measurement to judge and reimburse is focused on their individual 

performance. 

Blue Cross Blue Shield of Michigan provides relevant, aggregate data to support 

Physician Organization accountability. Data are also provided to the Physician 

Organization to support its own efforts to assess and improve performance at the practice 

and individual physician level. This leaves the responsibility to monitor and improve the 

performance of doctors' practices and of individual physicians up to their peers, with the 

group being collectively responsible to the payer for the net result on cost and quality 

measures at a population level. 

Incentive payments take into account both absolute performance and rate of 

improvement, and are paid to the Physician Organization. The incentive pool is funded 

through a percentage of all professional payments (beginning with 0.5% and now at 

4.2%, creating a total annual pool of $11 OM); all of the money is paid out in the year in 

which it is accrued. 

At its inception, in January, 2005, PGIP consisted of 10 Physician Organizations and 

about 3,000 physicians. Initially, specialist participation was limited to those involved in 

chronic condition management, care transitions, and high cost diseases (e.g., 

cardiologists, oncologists, pulmonologists, and endocrinologists). In 2011, PGIP was 

opened to all specialists. As oflate 2011, PGIP had increased in size to 40 Physician 

Organizations (representing 92 sub-Physician Organizations) and 14,776 physicians, 

including 5,631 primary care physicians (about 67% of those actively practicing in the 

state) and 9,145 specialists (about 44% of those in the state). Physician Organization size 

ranges from 25 physicians to 1,600. There are two integrated delivery systems in PGIP; 

the vast majority of PGIP physicians are in small practices (consisting of one to four 

physicians), with most of those being in private practice. Approximately 2 million 

members are attributed to these physicians through analysis of health care claims, and 

these practices care for approximately 5 million Michigan residents. 

A key principle of PGIP is that all new systems and processes of care should be designed 

as "all-patient" system improvements, not health plan-focused changes. This is to 

maximize impact on community wellbeing and ensure that overall cost and quality 

performance improvements are deep and durable. 

Most of the 92 sub-Physician Organizations in PGIP started out as independent practice 

associations focused on contracting with health plans on behalf of individual physicians 

or small groups of physicians, with some attention paid to helping physicians succeed at 

earning incentive payments from insurers for good scores on selected quality and cost 

measures. Physician Organizations vary widely in how they are organized and in their 

level of sophistication regarding information systems and care management capabilities. 

An explicit PGIP goal is to help Physician Organizations evolve from loose federations 

of physicians in independent practice associations to highly functioning inter-dependent 

groups of physicians capable of affiliating with specialists and facility-based provider 

4 
27 


Insert here 78177.017

organizations to create what we call Organized Systems of Care, to collectively manage 

their shared population of patients. 

PGIP performance measurement initially focused on efficient use of health care resources 

(generic drug dispensing rate) and on chronic disease management (evidence-based care 

rates, based on HEDlS quality measures). The program has expanded to include a variety 

of "Initiatives" focused on multiple performance measures, developed in collaboration 

with provider partners, including, for example: 

ambulatory care sensitive condition admission rates 

emergency department use rates for primary care sensitive conditions 

high technology and low technology imaging rates 

cost and quality of cardiac care 

identification and management of chronic kidney disease patients 

re-hospitalization rates 

A list ofPGIP Initiatives follows: 

Individual Care Core clinical Ensure that patients with chronic conditions 

Management - PCMH processes receive organized, planned care that 

empowers patients to take greater 

responsibility for their health. 

Coordination of Care - Core clinical Coordinate patient care across the health 

PCMH processes system, through active collaboration and 

communication between providers, caregivers 

and patients. 

Individual Care Core clinical Ensure that patients with chronic conditions 

Management - PCMH processes receive organized, planned care that 

empowers patients to take greater 

responsibility for their health. 

Environmental Cancer Core clinical Identify patients with exposure to 

processes environmental toxins, correctly diagnose 

related illnesses, and treat or refer for 

treatment patients with conditions associated 

with exposure to these toxins. 

Evidence Based Care to Core clinical Implement effective systems of care designed 

Reduce Gaps in Care processes to support outreach to populations of patients 

with identified primary and secondary 

prevention needs, and chronic illness 

management needs. 

Extended Access - Core clinical Ensure that all patients have comprehensive 

PCMH processes and timely access to health care services that 

are patient-centered, culturally sensitive, and 

delivered in the least intensive and most 

appropriate setting based on patient needs. 

Performance Reporting - Core clinical Implement performance-reporting technology 

PCMH processes that will allow physicians to receive feedback 

on their performance. 

Lean Clinical Redesign for Core clinical A professional Collaborative Quality Initiative* 

PCMH processes to support and facilitate PGIP physician 
28 


Insert here 78177.018

organizations to use lean thinking principles 

when developing strategies to implement 

components of the patient-centered medical 

home model. 

Preventive Services - Core clinical Create a process of actively counseling, 

PCMH processes screening and educating patients on preventive 

care. 

Patient-Provider Core clinical Expand physician, health care team and 

Partnership - PCMH processes patient awareness of and commitment to the 

patient-centered medical home model, and 

strengthen the bond between patients and their 

care-giving teams. 

Linkage to Community Core clinical Connect patients with community resources 

Services - PCMH processes through a process of active coordination 

between the health system, community service 

agencies, family, caregivers and the patient. 

Self-Management Support Core clinical Offer support to patients as they learn to 

-PCMH processes assume responsibility for daily management of 

their chronic conditions. 

Specialist Referral Process Core clinical Seamlessly coordinate the process of referring 

-PCMH processes patients from primary care to specialty care, 

with both providers receiving timely access to 

the information they need to provide optimal 

care to the patient. 

Test Tracking - PCMH Core clinical Implement a standardized, reliable system to 

processes ensure that patients receive appropriate tests, 

and that test results are communicated in a 

timely manner. Additionally, ensure that every 

step in the test-tracking process is properly 

documented. 

Transitions of Care Core clinical Develop processes of care at discharge (from 

processes inpatient to outpatient care) to improve and 

systematize the discharge process. 

Accelerating the Adoption Clinical Improve the safety, quality and costand Use of Electronic information effectiveness of the prescription process 

Prescribing technology through widespread adoption and increased 

use of electronic prescribing and clinical 

decision support tools. 

Patient Web Portal - Clinical Support optimal management of patients by 

PCMH information using a web portal for electronic 

technology communication among patients and physicians, 

and provide greater access to medical 

information and technical tools. 

Patient Registry - PCMH Clinical Establish a comprehensive patient registry that 

information can be used to optimally manage a population 

technology of patients. 

Radiology Management Service-focused Moderate the increase in diagnostic imaging 

costs by reducing inappropriate use of 

diagnostic radiology procedures. 

Emergency Department Service-focused Use relevant data to reduce primary care 

Utilization sensitive emergency department use. 

Increase the Use of Service-focused Reduce pharmacy drug costs by increasing the 

Generic Drugs use of generic and over-the-counter drugs. 

6 
29 


Insert here 78177.019

Michigan Anticoagulation Service-focused A professional CQI to improve the quality of 

Quality Improvement care for patients receiving maintenance 

(MAQI2) anticoagulation under the guidance of 

anticoagulation services. 

Inpatient Utilization Service-focused Patients will have access to timely and 

effective primary care with an emphasis on 

disease-state management, which can ward off 

disease progression, reduce preventable 

complications, and avoid unnecessary 

hospitalizations and emergency department 

visits. 

Encouraging evidence- Condition- An opportunity for Ob-Gyn physicians to use 

based utilization of labor focused available data and improved care processes, 

induction as well as existing quality improvement efforts, 

to encourage evidence-based utilization of 

labor induction. 

Michigan Oncology Clinical Condition- Establish and define evidence-based oncology 

Treatment Pathways focused treatment pathways for lung, breast and colon 

cancer, via a partnership between Blue Cross, 

the Michigan oncology community and 

P4Healthcare. 

Oncology/ASCO Quality Condition- Promote high-quality, cost-effective care for 

Oncology Practice focused cancer patients, facilitated by participation in 

Initiative the American Society of Clinical Oncology's 

Quality Oncology Practice Initiative Health Plan 

Program. 

Encouraging evidence- Condition- An opportunity for Ob-Gyn physicians to use 

based utilization of focused available data and improved care processes, 

hysterectomy as well as existing quality improvement efforts, 

to encourage evidence-based utilization of 

hysterectomy. 

Cardiac Care Condition- Reduce the use of unnecessary cardiac 

focused diagnostic procedures, limit the associated cost 

trend, and enhance the quality of ambulatory 

cardiac care. 

Chronic Kidney Disease - Condition- Improve PCP identification and management of 

PCP Management focused individuals with Chronic Kidney Disease, while 

strengthening the PCP-specialist relationship. 

Encouraging evidence- Condition- An opportunity for Ob-Gyn physicians to use 

based utilization of labor focused available data and improved care processes, 

induction as well as existing quality improvement efforts, 

to encourage evidence-based utilization of 

labor induction. 

Physician Organizations can choose which Initiatives to engage in based on their current 

interests and capacities. This allows us to devote resources to supporting infrastructure 

building at the edges of the Physician Organizations' current capabilities and to reward 

improvement as well as net achievement. In this way we are using reimbursement to 

catalyze system transformation, moving physicians toward the creation of Organized 

Systems of Care. This incentive strategy motivates Physician Organizations to take on the 

most ambitious system transformation agenda possible rather than to do the least 

necessary as they have done in response to highly prescriptive and narrowly focused pay 

7 
30 


Insert here 78177.020

for performance programs. The more PGIP Initiatives in which they participate, the more 

PCMH capabilities which they implement and the more they improve population level 

results, the more incentive payments they receive. 

Physician Organizations have full latitude regarding how to spend the incentive money, 

but it is clear that success in PGIP is dependent in the long run on building effective 

systems and infrastructure, and on collectively taking responsibility for quality and 

efficiency at the population level, not on buying loyalty of physicians by paying bonuses 

directly to them. 

Building Patient-Centered Medical Homes 

As the concept ofmodemizing health care systems broadened to include well patients in 

addition to those who have chronic illness management and secondary prevention needs, 

the Chronic Care Model evolved into the Advanced Medical Home model and finally 

into the Patient Centered Medical Home (PCMH) Model. In 2007, in the wake ofthe 

growing interest in the Patient Centered Medical Home model, and in response to PGIP 

provider requests for more direction and structure, Blue Cross Blue Shield of Michigan 

collaborated with providers to develop a set of 12 PCMH Initiatives. Each Initiative 

focuses on a PCMH "domain of function", such as performance reporting or extended 

access, and provides incentive payments for the incremental implementation of PCMH 

infrastructure and care processes. Rather than trying to find (non-)existing full-fledged 

PCMH practices, pay them for care management on a per member per month basis, and 

hope to be able to prove the value ofthe model, the PGIP approach recognizes that 

achieving a fully transformed health care system informed and guided by the PCMH 

model will take years of "relentless incrementalism." Systems of care, including PCMHbased medical practices, have to be built before we can expect to see dramatic 

improvement in cost and quality performance at the practice and population levels. 

Recognizing this, approximately half of the incentive pool is allocated to support 

implementation ofPCMH infrastructure and care processes. 

In partnership with the provider community we have explicitly articulated 128 core 

capabilities within the 12 domains ofthe PCMH model. By tracking the development of 

these granular medical home capabilities in over 3,000 practices over time we have 

observed that very few have implemented more than 100 of these capabilities, and in the 

most advanced PCMH-based practices the average number of capabilities fully in place 

in 20 II was 88 (compared to an average of 56 capabilities in those practices which were 

nominated for recognition as PCMH-based practices but have not yet achieved it). 

Practices which begin to implement PCMH capabilities quickly realize improvements in 

their level of engagement with patients and in their performance. But in the vast majority 

of practices the full potential ofthe PCMH model is yet to be fully realized, which is why 

we are committed to continued investment in supporting practice transformation at the 

same time as we reward population level performance on cost and quality measures. 

8 
31 


Insert here 78177.021

In July 2009, with PGIP practices having made rapid strides in implementing PCMH 

capabilities, the PGIP PCMH Designation Program was initiated to provide additional 

financial support to those practices that have made the most progress in incorporating 

PCMH capabilities into routine practice and achieved acceptable results on quality and 

efficiency measures. Information about the PCMH designated physicians, who receive a 

10% increase in their Evaluation and Management office visit fees, is disseminated to 

BCBSM members. By focusing payment increases on office visit services, we are 

intentionally directing an increasing proportion of physician payment toward 

relationship-based care and away from procedure-based care. Funding for the fee 

increases comes through the claims payment system, not from the PGIP incentive pool. 

The number ofPCMH-designated practices has grown from 300 in 2009 to 780 in 2011, 

and the number of physicians in those practices has increased from 1300 to over 2500, as 

more Physician Organizations and their physician members have responded to incentives 

to transform systems of care. 

Of the 780 PCMH Designated practices in PGIP, approximately 480 are participating in 

the CMS Advanced Medical Home demonstration project, called the Michigan Primary 

Care Transformation project in Michigan. These PCMH-based Michigan practices 

represent over half of all practices participating in the program in the 8 states accepted 

into the program. We expect this partnership between CMS, the State of Michigan, 

Physician Organizations and BCBSM to measurably increase the impact ofPCMH-based 

practice on the cost and quality of care in Michigan. 

Incremental Reimbursement Reform 

Without having to eliminate the fee for service payment system, at great cost, against 

substantial inertia, and at the risk of losing access to granular data from claims regarding 

patients' conditions and services received, we are using PGIP as a mechanism for 

incremental reimbursement reform, redirecting a meaningful proportion of overall 

payment to physicians, and considerable physician effort, toward practice transformation 

and population level performance and away from volume-based practice. This approach, 

which can be thought of as Fee for Value-based payment (FFV), is practically and 

politically feasible: it does not require massive investment in claims systems overhaul or 

radical restructuring of health care benefits, and has the potential to contribute 

meaningfully to the viability of PCMH-based primary care practice and to practice 

transformation across the health care system. We recognize the negative aspects of the 

fee for service system, but don't want to wait for its downfall before we begin to 

transform how we pay. 

In addition to the 10% increase in office visit fees for PCMH-designated practices, those 

designated practices that are members of Physician Organizations delivering optimally 

efficient care at a population level (based on per member per month cost and cost trend 

data) receive another 10% increase in their office visit fees, for a total increase of 20%. 

9 
32 


Insert here 78177.022

We also reimburse PGIP participating practices for in-person or telephonic care 

management, care coordination, and self-management training/support provided by 

ancillary providers, including nurses, social workers, respiratory therapists and 

nutritionists who have received care management training through PGIP-approved 

programs. Physicians themselves do not typically have the time, or the skills, to provide 

care management services on their own, and, absent this payment, most practices could 

not afford to provide these essential PCMH team-based services. 

Taken together, the incentive dollars, the care management payments and the PCMH 

Designation program provide substantial support for physicians who are devoted to 

transforming their practices and optimizing population level outcomes. This mixedmethod reimbursement strategy also has the advantage of allowing us to retain access to 

granular detail about patients' diagnoses and service provision, which is necessary to 

evaluate performance (including detail about resource inputs), and to help assure that 

quality of care isn't short-changed. We intend to devote proportionately more 

reimbursement to communities of caregivers that offer high-value, system-based care and 

less to individual physicians on a service-specific basis. The net result we anticipate is 

that providers who come together to transform and modernize their own practices and the 

systems in which they work and integrate their systems and care processes with others in 

their community of caregivers will thrive, while those who don't, choosing to rely only 

on base fees without earning substantial incentive payments, will see their practices 

wither. 

Beginning in February of2012, starting with cardiologists, BCBSM will begin increasing 

office visit fees for specialists who are part of communities of caregivers which achieve 

benchmark performance on cost and quality measures at a population level. To be eligible 

for such fee increases, the specialists will have to be nominated by Physician 

Organizations whose attributed members represent at least 20% of the specialists' 

practice. This nomination will depend on the Physician Organization attesting to the 

active engagement of the specialist in system transformation efforts and in enhancing the 

coordination and management of care in concert with the primary care community. 

Eligibility for fee increases will depend on improvement in and optimization of cost and 

quality performance in the population of patients attributed to the primary care physicians 

with whom the specialists collaborate. In this way, incentives for specialists, and the 

future viability of specialists' practices, will be fully aligned with the incentives of 

primary care physicians and dependent on delivering high value at a population level. As 

with primary care physicians, this movement from Fee for Service to Fee for Value 

reimbursement serves as an incentive for specialists to move from a focus on volumebased practice toward a focus on collaborating with their primary care peers to achieve 

high value at a population level. 

Practice Transformation Assistance 

To accelerate the pace of change, Blue Cross Blue Shield of Michigan convenes about 

350 PGIP Physician Organization leaders from across Michigan four times a year to 

10 
33 


Insert here 78177.023

exchange infonnation, collaborate on developing innovative solutions, and share best 

practices. Between these meetings, the Physician Organization community actively uses 

regional and statewide collaboratives to optimize mutualleaming and accelerate 

dissemination of best practices. 

Blue Cross Blue Shield of Michigan also supports specific projects aimed at fostering 

practice transformation. One example is a Lean Thinking Clinic-Reengineering 

Collaborative Quality Initiative, involving Physician Organizations across Michigan in a 

structured approach to office practice transformation which includes embedding Lean 

Thinking-trained change management facilitators into Physician Organizations. This 

approach has proven essential to enabling physicians' practices to implement new 

systems, re-organize practice teams and modernize care processes guided by the PCMH 

model, while still caring for their patients, which is a daunting challenge. 

The Role of Hospitals 

Beginning in 2012, hospital contracts, at the time of renewal, will be modernized to 

include very modest inflation increases to base payment, plus a component in support of 

building Organized Systems of Care infrastructure (clinically integrated infonnation 

systems and care management processes) closely aligned with the systems of care being 

developed by the Physician Organizations whose physicians use their facilities. In 

addition, any substantial increase in payment rate, and in the long run the hope of 

achieving a positive margin, will depend on delivering high value (meaning moderation 

of the use of hospital services) at a population level, with the population measures based 

on the same population for which the primary care and specialist physicians are 

responsible. Special attention will be paid to performance on emergency department use 

rates, ambulatory care sensitive condition admission rates, readmission rates, 

discretionary procedure use rates and overall population payment trends. This will 

effectively align hospital incentives with those of physicians. 

Organized Systems of Care 

In 2011, PGIP launched two Organized Systems of Care Initiatives focused on catalyzing 

the development of clinically integrated infonnation systems and perfonnance 

measurement at a population level across all settings of care. These will be followed by 

additional Organized Systems of Care Initiatives in 2012 focused on clinically integrated 

care processes (care management, care coordination and systematized transitions of care) 

and on measuring and assuring optimal patient experience of care. To be eligible for 

participation in these Initiatives, communities of physician and facility providers must 

commit to actively partnering to deliver efficient, effective care to their population of 

patients. We are using the same incremental approach we've used for our PCMH 

program, beginning with initiatives that will support nascent OSCs in building shared 

information systems and care processes and working toward robust expectations 

regarding population level performance. 

11 
34 


Insert here 78177.024

Relying on integrated information systems and care processes, wherever and whenever a 

patient seeks care across the continuum of care settings, providers will have access to the 

same, accurate clinical information in real time, helping to avoid redundancy in service 

provision and to assure safe, reliable and timely care. 

There is no expectation that OSCs need to have common ownership. Affiliation 

agreements between independent entities (e.g., hospitals, physician organizations, other 

facilities) are all that is required to begin developing an Organized System of Care. 

To date, 40 Physician Organizations have initiated 33 nascent OSCs in response to the 

Organized Systems of Care program. In contrast, 3 Physician Organizations and/or 

hospitals in Michigan have expressed intent to apply for the CMS Pioneer ACO program. 

Progress to Date 

The rapid growth of the PGIP program and the rising interest in the PCMH Initiatives and 

Designation Program are a testament both to the engagement of providers across the state 

in this experimental partnership, and to the recognition that health care, and primary care 

in particular, is in a period of crisis. 

The Commonwealth Fund is supporting a comprehensive evaluation ofPGIP led by 

Christy Harris Lemak, PhD at the University Of Michigan School Of Public Health. The 

quantitative portion of this evaluation is not finished, but the qualitative portion, based on 

stakeholder interviews across Michigan, is in draft form. The following is an excerpt of 

her findings from stakeholder interviews: 

"We describe respondent perspectives on the role ofPGIP in Michigan's health 

care economy and its perceived impact on health care costs and quality .... The vast 

majority of respondents were generally positive in their remarks about PGIP. 

Nearly every stakeholder, Physician Organization leader, practicing physicians 

and even other payers (BCBSM competitors) expressed the view that PGIP is a 

very successful program that is working to improve primary care and health 

outcomes in the State of Michigan. 

Many respondents were proud of their specific, individual involvement in the 

program, even describing how they felt as if they were part of the program's 

development and success. With very few exceptions, respondents gave credit to 

BCBSM for its leadership to develop and implement PGIP and its role in the 

creation and support of a vibrant community of practice that now exists in many 

regions of the State. The best evidence of this community of practice can be 

observed in the quarterly PGIP meetings, where hundreds of primary care 

physicians, physician organization leaders, purchasers, and others come together 

to share best practices and work on solving the practice challenges. 

12 
35 


Insert here 78177.025

Most importantly, however, the vast majority of physicians we interviewed were 

energetic and motivated to improve their practice, to fully embrace patient 

centered medical home concepts, and to improve the health of their patientsrespondents specifically tied many (though not all) of these changes to their 

active participation in PGIP." 

Interview responses yielded numerous quotes such as these: 

"PGIP is the driving force for health care quality change in Michigan. " 

"Offices in the community help each other; we have group meetings. I used to [feel like I 

was competing with them] but not anymore. We're all moving in the same direction and 

we're helping each other get there" 

"PGIP has challenged us to develop a broad population-focused model for clinical 

improvement for our patients." 

"PGIP has added value by helping to be the ignition piece. We had a culture of quality 

that pre-dated PGIP but PGIP did come in to push and cajole us to push that quality 

focus across the whole patient population." 

With its intentional focus on harnessing physicians' intrinsic motivation, and recognizing 

the importance of fostering autonomy as an essential ingredient in inspiring full 

engagement in system change and outcome improvement efforts, BCBSM has 

encouraged a culture of collaboration among Physician Organizations, and between them 

and BCBSM. This is evidenced in the quarterly PGIP meetings, in regional clinic process 

re-engineering collaboratives, and in community-wide workgroups focused on challenges 

faced in common, such as registry implementation, data management and performance 

measurement. A unique effort known as the Care Management Resource Center emerged 

from collaborative discussions about the need for a central source of expertise and 

guidance for Physician Organizations engaged in implementing structured care 

management systems. PGIP serves as fertile ground for the development of such 

community-wide efforts which accelerate the pace of change, and elevate physicians' 

aspirations while providing practical support for realizing them. The sense of ownership 

and excitement among the PGIP participants is palpable and contagious. 

Over 85% ofPGIP providers are actively engaged in implementing PCMH capabilities, 

and significant progress has been made in transforming practices. For example, among 

PCMH-designated practices, over 95% now provide patients with 24 hour phone access 

to a clinical decision-maker, conduct medication review and management for all chronic 

condition patients, and have established a patient registry that incorporates evidencebased care guidelines. 

As measured by available efficiency and quality metrics, this practice transformation 

work is leading to improved results: evidence-based care rates (quality measures) and 

generic drug dispensing rates are increasing at a faster rate for PGIP providers than for 

13 
36 


Insert here 78177.026

non-PGIP providers, and the performance ofPCMH-designated practices (selected in 

part based on quality and use performance) compared to non-designated primary care 

practices has grown stronger over time, even as we've expanded the program, including 

thousands of additional physicians. According to an analysis of 20 10 BCBSM 

administrative claims data, adult members who received care from 2011 PCMH 

designees had 11.4% lower emergency department visits rates for primary care sensitive 

conditions (7.0% for 2010 designees), and 7.5% lower high tech radiology rates (6.3% 

for 2010 designees). PMCH designated practices also had 22% lower discharge rates for 

ambulatory care sensitive conditions, which was not a metric used in the selection 

process. (Table 1). 

Table 1: 2010 Performance Statistics' for PCMH Designated Practices Compared to PGIP Primary 

Care non-Designated Practices -Adults 

PCMH Designees Compared to 

Metric PGIP non-PCMH Practices 

Jan-Dec 2010 

Adults (18-64) 

Primary care 

sensitive emergency 

department visits 

(per 1,000)* 

Ambulatory care 

sensitive inpatient 

discharges 

(per 1,000) 

High tech radiology 

services 

(per 1,000)* 

High tech radiology 

standard cost 

PMPM' 

Low tech radiology 

services 

(per 1,000)' 

Low tech radiology 

standard cost 

PMPM' 

2010 2011 

Designees" 

(n=502) 

-7.0% 

-11.1% 

-6.3% 

-3.0% 

-5.9% 

-5.9% 

Designees 

(n=774) 

-11.4% 

-22.0% 

-7.5% 

-4.9% 

-4.8% 

-5.0% 

*Adjustcd for age, gender, and risk score. Statistics based on members attributed to Primary Care Practitioners. 

**Data source for the 2010 Designees: 201001 P 

*Mctric used in selecting PCMH designees 

For the twelve months ending in the third quarter of2011, the overall cost trend for 

BCBSM PPO and Traditional business was 2.2%. This compares to an average of 4.3% 

for other Blue Plans nationally and to a similar rate of increase in cost for government 

programs. During this time period the professional cost trend (for physician payments) 

was 1.4%, with, remarkably, a negative 0.9% trend in the third quarter. 

14 
37 

f 


Insert here 78177.027

Conclusion 

Like all important human endeavors, practice transformation is difficult, exhausting 

work. The underlying sense of urgency has only strengthened, however, as providers 

have taken ownership of these challenges as full, collaborative partners in PGIP and have 

begun to experience the fruits of their efforts: the beneficial impact on their patients of 

improved care management, group visits, increased access -- and on their practices from 

greater teamwork, increased efficiency, and a shared mission. 

PGIP represents the kind of regional collaboration and experimentation which we hope 

Medicare delivery and payment reform will encourage, not hinder, given how little we 

know at this time about "what works" in regard to creating systems of care and payment 

mechanisms which yield optimal value. 

Regional and local experimentation in system and performance transformation, and in 

incentivizing this work, will be essential in identifying and understanding best practices 

in payment reform. It is likely that in different communities, with different cultures and 

resources, the specific answers will vary, as do the circumstances which drive 

performance. 

Through the PGIP payer-provider partnership, we are transforming the role of the payer 

from controller to catalyst, the role of the provider from responder to change agent, and 

the role of the patient from recipient to active partner. Imbued with energy and purpose, 

the PGIP approach represents incremental reform with dramatic impact. 

References 

Landon, B. R., J; Blumenthal, D (2003). "Changes in career satisfaction among primary 

care and specialist physicians, 1997-2001." 19JJm~ofthe Americal M"cii«aLAssQgatiQI! 

289: 442-449. 

Moore, G. S., J (2003). "Primary care medicine in crisis: toward reconstruction and 

renewal." Annals ofinternal Medicine 138: 244-247. 

Sandy, L. S. S. (2003). "Primary care in a new era; disillusion and dissolution? ." Ann 

Intern Med 138: 252-267. 

Yarnell, K. P., K; Ostbye, T; Krause, K; Michener, 1. (2003). "Primary care: is there 

enough time for prevention?" American Journal of Public Health 4: 635-641. 

Lemak, CH; Cohen, G; Erb, N. 2011. From Partisanship to Partnership: Evaluating the 

Physician Group Incentive Program Phase 11 Report of Qualitative Research Findings 

(Draft 1, 1I31112). Project Funding provided by the Commonwealth Fund. 

1'; 
38 

Chairman HERGER. Thank you. 

Dr. Lewin is recognized. 

STATEMENT OF JACK LEWIN, M.D., CHIEF EXECUTIVE OFFICER, AMERICAN COLLEGE OF CARDIOLOGY, WASHINGTON, 

D.C. 

Dr. LEWIN. Thank you, Chairman Herger and Ranking Member 

Stark and—— 

Chairman HERGER. If you can hit your mike button, please. 

Dr. LEWIN. Oh, yes. Thank you. There we go. Thank you, Chairman Herger, Ranking Member Stark, and committee members. I 

am Dr. Jack Lewin, representing the American College of Cardiology, 40,000 cardiologists, advanced practice nurses, pharmacists, 

and other clinicians. 

Our purpose is to transform cardiovascular care and improve 

heart health, and we are doing that. In the last 10 years we have 

had a 30 percent reduction in morbidity and mortality across cardiovascular care in the United States. And the science in the pipeline is amazing. We are soon going to be replacing aortic valves 

without cracking the chest. We have got stem cell programs coming, miracle drugs in the pipeline. But the costs are out of control. 

For 30 years, with the American Heart Association, the ACC has 

been developing guidelines and performance measures to bring better science to the point of care. Recently we have developed appropriate use criteria, new tools for diagnostic imaging, and for procedures that actually improve quality and lower cost at the same 

time. 

This isn’t cookbook medicine. Clinical judgment is still important. But getting science to the point of care more effectively improves quality and improves care for patients, and lowers costs. 

That is what is important. And physicians need to lead these processes. 

Now, how does it work? Well, the clinical tools we have developed that actually bring science to the point of care include the national cardiovascular data registries. These are six hospital registries and one called Pinnacle, which is an outpatient register. Together, we have 20 million patient records, and we are providing 

outcomes results to hospitals and doctors all across America in cardiovascular care. And it is making a difference. 

We have also developed a tool called FOCUS, which helps at the 

point of care—and it can be a mobile app—that helps choose the 

right image among a bewildering array of new technologies in 

these regards that can get the right test the first time and save significant dollars. 

So going forward, we need payment reforms, with incentives, 

linked to these kinds of tools to make the kind of changes needed. 

In the testimony, you will see that in Wisconsin, we have a program called Safe Care, applying all these tools across a large number of medical groups and hospitals to really achieve some of these 

results. A similar program is going to happen in Florida under Safe 

Care. 

We have got a clinical decision support system using the FOCUS 

tool to improve the appropriateness of imaging that is now across 

the entire State of Delaware. Very exciting. And the Cardiovascular 

39 

Performance Improvement Program, where we work with some of 

the insurance partners here like United, Blue Cross Blue Shield of 

Michigan, and others, actually rewards doctors for better outcomes 

and better performance. So we are moving in the right direction. 

Is there any evidence that this can work, that these kinds of 

things actually reduce cost and improve quality? Let me tell you 

about the Door to Balloon Program. This is a program to speed up 

the treatment of heart attack, ‘‘Door’’ being the door to the emergency room, ‘‘Balloon’’ being angioplasty and stents to relieve the 

obstructed coronary artery in a serious kind of heart attack called 

a STEMI. 

Using an educational program and our data in the United States, 

we have taken the time it took to treat a heart attack, averaging 

over two hours, down to what science tells us is necessary, under 

90 minutes, or even better, under 60 minutes. Now, three years 

later, using this Door to Balloon Program, more than 90 percent of 

U.S. hospitals are under 90 minutes and half are under 60 minutes. 

Here is the point. We have reduced the length of stay from five 

to three days, on average. We have reduced the cost by 30 percent. 

This is over 4- to $5 billion a year. This is important. 

So we have even talked about a big idea of actually putting a 

challenge out to hospitals and cardiologists across the country to 

say, if you can reduce Medicare costs by 10 percent over 10 years— 

by the way, that would be about $300 billion—why don’t we split 

the difference between the hospitals, doctors, and Medicare so that 

people can build these systems and make this happen. Imagine 

that kind of a win/win/win for patients and for doctors. 

The conclusion for me would be to say that providing physicians 

and other health care providers with data on their performance 

and tools to improve their performance is going to improve quality 

and lower costs. To do this, to get it done, Medicare and private 

payers have got to encourage new incentives through the development of widespread use of clinical data registries that allow tracking and improvement of care systemically, along with payment reforms and incentives. Put those two together and we are going to 

see costs go down, quality go up. And we have got examples of it 

today. 

Thanks for the opportunity to speak about several of these exciting improvement collaborations underway in cardiology, and we 

look forward to working with you to help solve America’s problems 

in health care costs at the same time we improve patient care quality. Thank you. 

[The prepared statement of Dr. Lewin follows:] 

40 


Insert here 78177.028

***THIS TESTIMONY IS EMBARGOED UNTIL 10:00 AM TUESDAY, 

FEBRUARY 7,2012*** 

Testimony of 

Jack Lewin, MD 

CEO, American College of Cardiology 

Presented to the 

UNITED STATES HOUSE OF REPRESENTATIVES 

COMMITTEE ON WAYS AND MEANS 

HEAL TH SUBCOMMITTEE 

Hearing on 

Programs that Reward Physicians Who Deliver High Quality and Efficient Care 

February 7, 2012 
41 


Insert here 78177.029

Chairman Herger, Ranking Member Stark and members of the Subcommittee, thank you for holding this 

hearing today and for the opportunity to discuss initiatives that reward physicians who deliver high quality and 

efficient care. 

I am the CEO of the American College of Cardiology (ACC), a professional medical society and teaching 

institution made up of 40,000 cardiovascular professionals from around the world - including over 90 percent 

of practicing cardiologists in the United States and a growing number of cardiovascular-focused registered 

nurses, clinical nurse specialists, nurse practitioners, physician assistants and clinical pharmacists. 

Introduction 

The United States (US) has benefited from stunning technological and therapeutic advances in health care in the 

past two decades, while at the same time Medicare and Medicaid costs are rising at an alarming rate. This is 

especially true for heart disease which has experienced a growth in health care costs and at the same time 

brought about a 30 percent reduction in mortality related to cardiovascular disease during the past decade. 

According to the CDC's Million Hearts Campaign, cardiovascular disease is the leading cause of death in the 

United States and cost more than $444 billion in health care expenditures and lost productivity in 20 I 0 aloneand these costs are expected to rise given the aging of the population. 

Cardiovascular medicine is responsible for managing the biggest source of morbidity, mortality, and cost in the 

current environment. The ACe possesses the best worldwide source of clinical data and scientifically validated 

clinical tools for care improvement. The College strongly believes we have an opportunity in cardiovascular 

disease to demonstrate a systematic, evidence and data driven approach to improving care that can 

simultaneously reduce unnecessary admissions, readmissions, complications, testing, and ineffective spending. 

The Power of Data 

The College has learned through years of experience that efforts to improve quality and efficiency must be 

grounded in the use of the best scientific evidence available, the collection of robust clinical data, measurement, 

and feedback on perfonnance. Physicians must believe the data and trust it in order to act on it. The more 

confidence physicians can have in the underlying data, the more they will respond appropriately to the 

incentives. Rewarding physicians for providing the right care and using an appropriate amount of resources is 

essential to solving the long-term Medicare spending crisis. Clinical data registries should playa central role in 

this. Physicians and hospitals need to see how their own clinical outcomes data compares with their peers to 

systematically improve performance. 

The National Cardiovascular Data Registry 

Clinical data registries capture clinical infonnation that is evidence based, derived from clinical guidelines, 

performance measures and appropriate use criteria in order to accurately measure patient outcomes and clinical 

practice. The ACC began development of the National Cardiovascular Data Registry (NCDR®) partnering with 

other medical specialty organizations in 1998 with a fervent determination to monitor and improve existing and 

new cardiovascular care technologies. Today, NCDR® is the most comprehensive, outcomes-based quality 

improvement program in the US encompassing six hospital-based registries and one outpatient physician officebased registry representing over 20 million patient records, 216 clinical abstracts and 70 published manuscripts. 

NCDR® is operational in over 2500 US hospitals, and the NCDR® PINNACLE Registry® is in over 1000 

physician offices across the US. The College has for nearly three decades translated ever-evolving science into 

guidelines, performance measures, and recently appropriate use criteria. The NCDR registries measure the 

extent to which those scientific tools are actually applied across the nation, as well as measuring actual 

outcomes in cardiovascular care. 

The NCDR® is uniquely positioned to help medical professionals - including cardiovascular and primary care 

professionals - and participating facilities identify and close gaps in quality of care; reduce wasteful and 

inefficient care variations; and implement effective, continuous quality improvement processes. The attached 

slides provide more information on the registries. 
42 


Insert here 78177.030

The ACC NCDR collaborates with numerous payers. Well Point, Inc, United Healthcare Services, and Blue 

Cross Blue Shield of Michigan (by virtue of BMC2) formally require participation in NCDR as part of 

reimbursement or recognition programs. In addition, the Blue Cross Blue Shield Association includes NCDR 

participation as part of their national Blue Distinction Centers for Cardiac Care Program. Many states, including 

California, Florida, Maryland, Michigan, Missouri, Washington, West Virginia, arc aligning regional 

monitoring efforts with NCDR. Health systems such as Hospital Corporation of America (HCA) and Kaiser 

Foundation Hospitals (of Kaiser Permanente) leverage NCDR to support QI efforts within their networks, as 

does the Veterans Administration. And, NCDR contains more NQF-endorsed performance measures than any 

other registry model---and NCDR data actually speeds the ability of the College and NQF to propose and 

formulate new measures as science progresses. 

Two regional programs that have been receiving national recognition in publishing results for their use of data 

and "moving the dial" in improving care rely on the NCDR CathPCI Registry as their measurement tool for 

interventional procedures. These programs are the Northern New England Cardiovascular Disease Study Group 

and the Blue Cross Blue Shield of Michigan Cardiovascular Consortium (BMC2). Recently, The Leapfrog 

Group identified the NCDR CathPCI Registry as their preferred data source for PCI outcome reporting in their 

voluntary Hospital Survey aimed at encouraging health providers to publicly report their quality and outcomes 

so that consumers and purchasing organizations can make informed health care choices. This testimony also 

provides other examples of ACC collaborations on registry use to benefit the health care system. 

While ACC is further along in the use of registries, other medical specialties have since developed clinical data 

registries or are now in the process of doing so. The ACC stands ready to assist other medical specialties with 

registry development. 

Decision Support Tools 

The ACC has developed appropriate use criteria (AUC) that define when and how often physicians should 

perform a given procedure or test in the context of scientific evidence, the health care environment, the patient's 

profile and the physician'S judgment. The College has created point of order tools through which physicians can 

access the AUCs during a patient encounter with minimal workflow disruption. 

Blue Cross Blue Shield of Delaware (BCBSD) is supporting use of the ACC's FOCUS: Cardiovascular Imaging 

Strategies tool by Delaware cardiologists to make more informed decisions about the appropriate use of certain 

diagnostic imaging tests this year. BCBSD will pay for cardiologists in the state to use the online tool, which 

allows for consistent application of AUCs to determine when and which cardiovascular imaging tests are 

needed. Other payers are also interested in the program. The program provides feedback reports on the patterns 

of appropriate use to physician practices and health plans. FOCUS participants then use the reports to complete 

action plans and share best practices. 

A voluntary community of 50 sites using FOCUS saw a 50 percent decrease in inappropriate use of medical 

imaging over a 12 month time period. FOCUS not only improves patient care---it will greatly reduce 

unnecessary spending. 

The Cardiology Practice Improvement Pathway (CPIP) 

Payers approached the ACC to ask how to identify high quality cardiologists, leading to the College establish a 

program to recognize practices- the Cardiology Practice Improvement Pathway (CPIP). The College created a 

health plan advisory group and included them in program development to identify must-haves, nice to haves 

and deal breakers. The ACC sought their reaction and guidance at regular intervals. 

CPIP provides an unbiased, transparent, comprehensive, self-reported, all-payer assessment of a practice's 

perfonnance against national benchmarks to better and more consistently understand how we practice as a 

profession allowing us to demonstrate and quantify value while implementing practice improvements that 
43 


Insert here 78177.031

facilitate efficient \vorkflO\vs and drive effective patient care. CPIP is approved through the American Board of 

Internal Medicine's (ABIM) Approved Quality Improvement (AQI) Pathway and eligible for points towards the 

Self-Evaluation of Practice Perfonnance requirement of Maintenance of Certification (MOC). 

Practices can choose to have their baseline performance data sent to Bridges to Excellence (BTE) to apply for 

the Cardiology Practice Recognition (CPR), recognition awarded to practices that achieve quality thresholds 

established jointly by BTE and ACe. Numerous health plans arc starting to provide incentives to practices that 

meet BTE CPR. For example, in 2012, practices in the BCBS Texas network who achieve CPR arc eligible for 

financial rev.lards. In addition, in 2011, practices taking care of patients in the Pennsylvania Employee Benefit 

Trust Fund who achieved CPR were eligible for financial rewards. Also, recognized practices were eligible for 

Quality Designation in Aetna Aexcel, Anthem Blue Precision, and United Premium Designation programs in 

20 II. This standardized approach to assessing and recognizing quality in CY practice could go beyond 

incentives for achieving recognition; it could serve to facilitate performance-based contracting and proof of 

quality for integrated systems and bundled payments. 

Putting the Data to Work 

The Door to Balloon Initiative 

D2B: An Alliance for QualityTM is a great example of how data collection and feedback can improve quality 

and outcomes. The Door to Balloon, or D2B, initiative challenged cardiovascular specialists to meet the 

national guidelines developed by the ACC and the American Heart Association (AHA) that state that hospitals 

treating heart attack patients with emergency percutaneous coronary intervention (PCI) should reliably achieve 

a door-to-balloon time of 90 minutes or less. "Door-to-balloon time" means the time it takes to diagnose a heart 

attack and restore blood flow to the heart by placing a stent in a blood vessel. Studies demonstrate strong 

associations between time to primary PCI and in-hospital mortality risk; however, accomplishing this level of 

performance was an organizational challenge. In 2006, the ACC partnered with many other organizations to 

address the challenge by sharing the key evidence-based strategies and supporting tools needed to reduce D2B 

times nationally. The program was incredibly successful, v.lith widely published studies showing that D2B times 

dropped to under 90 minutes in over 90 percent of US hospitals, v.lith many now having D2B times under one 

hour. This has reduced the average US length of stay for heart attack from five to three days, reducing average 

costs by 30 percent! This initiative significantly improved patient outcomes and 100vered costs nationwide. The 

attached August 2011 Circulation article provides more detail on the success of 028. 

The Hospital to Home Initiative 

Preventable hospital readmissions have been identified as a major source of avoidable health care spending as 

\vell as evidence of shortcomings in quality of care. The Hospital to Home (H2H) initiative, led by the ACC and 

the Institute for Healthcare Improvement, is a national quality improvement campaign to reduce cardiovascularrelated hospital readmissions and improve the transition from inpatient to outpatient status for individuals 

hospitalized v.lith cardiovascular disease. H2H is challenging practitioners to better understand and tackle 

readmission problems by trying specific tools and improvement strategies through the H2H Challenge Projects. 

In 2011 and 2012, H2H is offering tool kits, instructional \vebinars, and surveys to capture and share 

experiences v.lith others. 

Shared Decision Making 

We know that health care decisions are not black and white. ACC believes engaging patients in decision making 

is crucial to achieving the best outcome for a patient, as determined by the clinical situation and the patient's 

preferences and values. More emphasis must be placed on shared decision making, the process by \vhich a 

health care provider communicates to the patient personalized information about the options, outcomes, 

probabilities, and scientific uncertainties of available treatment options and the patient communicates his or her 
44 


Insert here 78177.032

values and the relative importance he or she places on benefits and harms. Through CardioSmart.org, ACC is 

providing content and tools to achieve this goal. 

Moving Forward 

The ACC has recently engaged on a project to combine all of these tools into a focused project to address 

documentcd clinical quality, resourcc use and cost variation in thc treatmcnt of stable ischemic heart diseasc 

(SIHD) called SMARTCare. In Wisconsin, the project has been driven by the American College of Cardiology 

Foundation (ACCF) State Chapter in collaboration with integrated health care systems, statewide, multistakeholdcr collaborative groups, including business coalitions, measurcment and data collaborative groups, and 

a payment reform partnership. The parallel effort in Florida has been led by the ACCF State Chapter in 

collaboration with 6 provider organizations across the state. 

SMARTCare will reduce complications, procedures not meeting current appropriate use standards, and episode 

cost; achieve high levels of patient engagement; improve quality of life; and increase the number of patients at 

risk reduction goals. The project will accomplish these changes by impacting three key decision points: 

1) appropriateness of noninvasive cardiac imaging; 2) treatment decision between medical therapy, stenting, 

and bypass surgery; and 3) optimizing medication and lifestyle interventions. Combining these tools will 

provide customized patient benefit and risk infonnation based on evidence and registry data in real time. 

Information provided in these tools and registries will then be used to assess patterns of care. Feedback about 

impact on overall clinical care and cost will be made available through an interactive dashboard and analysis 

tool. Ongoing tracking using NCDR and PINNACLE registries will allow sites to modify use of their tools 

over time to enhance impact. The information also will be used to support an episode of care shared 

savings/bundled payment model and quality incentive payments. 

The ACC has seen the incredible excitement that has arisen from the participation of so many healthcare 

stakeholders in this project and we believe such efforts can be expanded throughout the nation. In addition to 

the aforementioned initiatives, ACe is developing plans to launch a national demonstration project with 

Medicare and private insurers in 2013 to systematically reduce projected cardiovascular spending ovcr the next 

10 years by at least 10 percent. If fully deployed with proposed new payment reform incentives for hospitals 

and physicians, this ambitious project could save over $300 billion in the next decade in Medicare alone, while 

further reducing morbidity and mortality. 

Conclusion 

Providing physicians and other healtheare providers with data on their performance and tools to improve their 

performance will result in improved quality and efficiency and lower costs. To establish the infrastructure and 

data necessary, Medicare and private payers should encourage, through incentives, the development and 

widespread use of clinical data registries that allow the tracking and improvement of healthcare quality in 

concert with payment programs that cneourage higher quality. The pathway to reducing the rate of growth of 

US health care spending and its alarming contribution to the national deficit will require that we align payment 

incentives with improved data-driven outcomes---the task requires improving care rather than cutting care. 

Physician leadership, working together with other clinicians, hospitals, insurers, and Medicare, will be 

necessary to effect these needed improvements in our health care system. Thank you for the opportunity to 

speak today about several of the exciting quality improvement collaborations underway in cardiology and what 

lessons can be applied to improve quality and lower cost across the health care system. 
45 


Insert here 78177.033

What is National Cardiovascular Data Registry? 

• Most comprehensive, outcomes-based quality improvement program in the 

U.S. 

• The premiere source of clinical outcomes data 

• Encompasses both hospital-based registries and a practice-based program. 

• Trusted, patient-centered resource 

• Helps participating facilities: 

• Identify and close gaps in quality of care 

• Reduce wasteful and inefficient care variations 

• Implement effective, continuous quality improvement processes 
46 


Insert here 78177.034

How many hospitals participate in NCDR? 

Nearly all EP Labs and 70% of Cath Labs submit data to NCDR 

Implantable cardioverter 

defibrillators 

Acute coronary syndrome 

Carotid artery 

revascularization 

Congenital heart disease 

Coronary artery disease, 

heart failure, atrial 

fibrillation, hypertension 

Cath Lab 1500 

EP Lab 1600 600,000 

Emergency 700 300,000 

Cath Lab 

170 15,000 Surgical 

Cath Labs wi 50 7000 Congenital Service 

800 Outpatient physicians 3,000,000 

Total 2,500 Hospitals and Nearly 20 

Million Patient Records! 
47 


Insert here 78177.035

NCDR - a generation of quality care 

PINNACLE Registry'" 

ACTION Registry~GWTG'M 

CathPCI Registry 

Registry 

CARE Registry 

Registry'" 

STS/ACC TVT Registry 

1ft/ping Cilrtiiol'tlscllltlr f>ro/t'.Hi{)}lrt/J 

rranl. AclvanCf. lira!' 
48 


Insert here 78177.036

NCDR registries bring together medical experts 

V

,. American 

Heart 

Association. 

("'"~The50cietyforCardiDVaS(Ular '\/ AnglOgraphyanlilntI>rvC'ntions 

SCAI 

G SOCl[]YOf 

(HEll r,,~ 

(''"''"ItS 

.I<.MFR1CAN ACArH,\WOF (() So(it"ty for NEUROLOGY Va.snllar \'1cdkinc 

... 

CongTes.s .of 

~ Neurologlcal 

Surgeons 

Ileipillg C(rrc/i(llJ(HCIl/ftr Prr~({'sji()Il"I:, 

{Mm. Ariz!(wce. lInd 

® ~ COLl.EGbl 

AMUUCA:-< 

c"' C,\RDIOI O(;V 

FOUNDATIOI\: 

Am .. :l'Ic.l1'I 

A,~lCl,ltl~'n 0\ 

N~'lIr,)klg\C,ll 

Sllr~l"')I1~ 
49 


Insert here 78177.037

~NCDR(") 

~ National Cardiovascular Data Registry 

That was then ... 

Launched 1997 

1 registry 

This is now ... 

More than 2,500 hospitals and 

1,000 practices 

Health plans and government 

regulator adoption 

Industry uses for market 

research clinical research, 

and to s";pport best practice 

treatments 

Focused on quality FDA uses NCDR data for post 

patient care market assessment I/f'/plllg Ctlrdi0/ 1tl.\C/I!ttl" Profl'.\.\iO/Itr/1 

tl'lll"ll.I1(/I'IlIlCC. lind 

This is our future ... 

Patient centric 

International collaboration 

Platform for clinical trials 

and CER 

More post market 

assessment studies 

Implement physician 

reports to support MOC and 

MOL 

EHR Integration 
50 


Insert here 78177.038

The PINNACLE Registry 

• First office-based QI program in U.S. 

• Data collection system 

• Assessments and continuous feedback 

• Clinical decision support tools 

• Opportunity for recognition as 'high quality' 

• EHR interoperable module or web-based 

• Data extraction by "system integrator" 

• Is being used in India! 

IIt!pilig Cilrriw/'d.lmltlr I'rl!f/'ss/(Ji/tll, 

Imm./lr/,'tlIl(I'.lfnd 
51 


Insert here 78177.039

PINNACLE and Data Collection 

Data collection example: 

CAD performance 

BP measurement 

Symptom and activity 

assessment 

Smoking assessment 

Anti-platelet therapy 

Lipid profile 

Use of lipid therapy 

P-blocker post-MI 

ACE/ARB in EF4 and 

OM4 

Screening for diabetes 

I klpill/( C(ndio/1ilsm!,lr jJn:ff'_'.liollil!s 

/C{lnI.Aril'I{Ucc.llml. 

Insurers 

Practice daily operation 
52 


Insert here 78177.040

Antiplatelet prescription after MI 

Percent of eligible patients seen at member practices 

20 

2008 

30 

2008 

85 

40 

2008 

90 

10 

2009 
53 


Insert here 78177.041

LDL Rx performance keeps climbing, even as new practices come online 

PINN-35 Drug Therapy for Lowering LDL-Cholesterol 

100.00% 60 

9900% 

97.20% 97.50% 50 9800% 

97.00% 

95.90% 40 

96.00% 95.40% 

9500% 30 

9400% 

20 9300% 

92.00% 10 

91.00% 

9000% 

022010 032010 042010 012011 

- # Practices with sufficient data -% Patients prescribed lipid-lowering therapy 
54 


Insert here 78177.042

A job well done across all practices 

100% 

90% 

"0 

. " 80% 

e 

11 70% 

~i :5:§ 60% "," 1::5! 0;: ::::J 

50% "'" 

,,<I; ~~ 40% 'aU 

=u 

"0<1; 30% .co "- 0;: Q,) 

~ ~ 20% 

Co 

~ 10% 

~ 0% c. 

"if' 

PINN-35 Drug Therapy for Lowering LDL-Cholesterol 

022010 

Iidpillg Ctllriw/'tI.1( 1I1'11" IJrr:/t".'SiO/f(//' 

I.nlrll.Arll'tTlICI'. lind. 

Q32010 042010 

PINN-35 

Year Ending in Quarter Listed 

012011 
55 


Insert here 78177.043

~ c: 

G> 

:;::; 

'" Q. 

G> 

:c 

:~ 

i 

E 

~ :::l 

I/) 

'" G> 

.s 

Encouraging Early Indicators 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Quarterly Comparision - Total over All Paper Form Practices 

I_August-09 D November-091 

- - f--

- - f-- - - f--

- - f-- - f-- - - - - r- - - r- - f-- - - - - r- - - r- - f-- - - - - r1 - r- -

11 - - -

] r-

.LJ 

PINNACLE metric 

JJ.Ll. 
56 


Insert here 78177.044

Variation Opportunities in Cardiology: 

Imaging in FOCUS: CV Imaging Strategies: 

New ACC product for health plans focuses on appropriate patient 

selection through: 

• physician-developed Appropriate Use Criteria 

• point of order clinical decision support 

• benchmarking to target education and quality improvement 

Ildpillg CmiiOl'II.lut/llr Pndi'.IJio!/(t/s 

[Ctlm.Arll'llllu.lhill. 

~FOCUS Cardiovascular 

Imaging Strategies 
57 


Insert here 78177.045

FOCUS: 

• Collaborative learning model 

• Rolling admissions 

• Grassroots centered and open across medical 

specialty 

• Performance Improvement Modules (PIMs)/Online 

Data Collection to track AUC 

• Contribute lessons learned 

• Preparing for laboratory accreditation 

• MOC Part IV 

/Ielpillg CndirJl'i/(CII!tII' Pmi'Sj·j()}/ills 

rCtlm, ,ldmncl'. / [('(d. 
58 


Insert here 78177.046

FOCUS: 

- Implement tool at point of order 

- Provide feedback on patterns to ordering 

physicians 

- Focus on common inappropriate; provide 

education and reminder cards 

- Local peer to peer discussions 

in inappropriate ordering by 

practices equals within one year 

flr/pillg CmJiOl'II.\(I//tlr jJ)"(d('.r;ili/!{r/, 

1.1'1/1"/1. Ari,11Illcc.llml. 
59 


Insert here 78177.047

\Q:2 

AQ:J 

1 balt21zhe~ei/zhe·ei/zhe03411/zhe9B27~11z 1 xppws 1 5-1 1 7/21/11 110:45 1 4/Color Figure(s): Fl-2 1 Art: 044107 1 Input-em 1 

Embargoed for 4 PM ET,'3 PM CT, Monday, Aug, 22, 2011 

Improvements in Door-to-Balloon Time in the United States, 

2005 to 2010 

Harlan M, Krumholz, MD, SM: Jeph Herrin, PhD: Lauren E, Miller, MS: Elizabeth E, Drye, MD, SM: 

Shari M, Ling, MD; Lein F. Han, PhD; Michael TRapp, MD, JD; Elizabeth H, Bradley, PhD; 

Brahmajee K. Nallamothu, MD, MPH; Wato N .,a, MO, PhD; 

Dale W, Bratzler, DO, MPH: Jeptha p, Curtis, MD 

Backgrmmd-Regiqry qudies have suggested improvement<; in door-to-halloon times. hut a national assessment of the 

trends in door-to-balloon ti1Tle~ is lacking. Moreover, we do not know whether improvements in door-to-balloon times 

VYere ~hared equally among and ho~pital group~. 

MetllOd5 and Result5-Thi<; includes all patients reported by hospital~ to the Centers for Medicare & Medicaid 

Services for inclusion in the time to percutancou~ coronary intervention acute myocardial infarction-8 inpatient measure 

from January L 20D5, through September 3D, 201D. For each calendar we sUl11mari7ed the characteri<;tic~ of 

patient~ reported for the measure, including the number and percentage each group, the median time to primary 

percutaneous coronary intervention, and the percentage with time to primary percLltaneous coronary intervention within 

75 minutes and within 90 minutes. Door-to-baUoon lime declined from a Illedian of 96 minutes in the year ending 

December 31. 2005, to a median of 64 minutes in the 3 quarter.~ ending September 30. 20 I D. There were co,,'e'r'o",ong 

increases in the percentage of patients who had time<; <90 minutes (4.+.2Ck to 9IA9'r) and <75 minutes to 

70A-'/c). Thc dccline~ in median times were greate::.t among group::. that had the highe~t median timcs during the first 

period: patienh >75 years of age (median decline, 38 minutes). women (35 minute~). and blac)...:., (.+2 minutes). 

Conclusion-National progress has been achieved in the treatment of patients with ST-segment-elcvation myocardial 

infarction who undergo primary percutaneom coronary intervention. (Circulation. 2011;124:00·00.) 

Key Words: balloon dilation. myocardial infarction. percutaneous coronary intervention. reperfusion 

a~ po~~iblc and ~hould not exceed 90 minute~.''<' In 

2002, only a third of patient~ received primary PCI within 90 

minu(C~, and a third underwent the procedure >2 hour~ ufter 

at thc The~c lacklu~ter time~ led to a 

2005. the Ccnter~ for Medithe 

and 

orguniLational factor~ that werc .qrongly 

~horter D2R time~.x II In No\ember 2(l06. the American 

College of Cardiology (ACC). \.\ith national partner~. 

launched the D2B Alliance. a national 

D2B tllne~ by advocatlllg the adoption 

had been ~hovyn to reduce delay ~ ba~ed on a ~tudy by 

the National Heart. Lung. and Blood In~titute.12In May 2007. 

the American Heart As~ociation (AHA) launched Mi~~ion: 

Llfdmc. another nailonal 11l1lHlti\e to lmpro\c ~y~tcm~ oj 

care for patients with ST-~egillent-elevation myocardial 

infarction. I , 

Clinical Perspective on p ••• 

Although ~tLldlc~ havc reportcd improvC1l1Cnh 111 D2B 

time~ during thi.~ period of national focu~ on imprll\ lI1g thc 

AQ:7 .lnLl thc DI\]'oIllil 01 

GlIc,t editor fOl thi, artlcie \\a, \yiliwJll S. Weintrallb.MD 

The onlioe-unl) nata Supplement i~ ~H~ilable ,lith thi.~ article ~t http://o.:irc.ahajuurnHI.~.urglloukup/;,uppl/doi:IU.1161/CIRClJLATlO'l"AHA. 

III.044107/-/DCI. 

('OITL'\[londencc to Harlall M Krumhol/. MD. SM. Yalc l'llI\C"lty School of ~kdlClI1~. I ("hutch St. Sk 2()O. Nc\\ H.l\CIl. ("T 06':;10 E-mail 

hdllanl..lumhol/(y'yalccdu 

If) 2()11 ~nlCrl<:,11l Henrt A"OCl(lliOIl. Ille 

CirCll/alirm i~ alltilable at http://l'irc.ahajournal~.org 1)01: 1U.116I/CIRClJLATlO'l"AHA.11 U)441U7 

<zjs;Original Article> • <zjss;4,24> <zdoi;10.1161{CIRCULATIONAHA.111.044107> 
60 


Insert here 78177.048

I balt2/zhe-ei/zhe-ei/zhe0341lIzhe9827-1I z I xppws I S-I I 7/21/11 110:45 I 4/Golor Figure(s): FI-2 I Art: 044107 Iinpul-em I 

Circulatio1l August 30, 2011 

timelines~ of primary pel. 1.t.I~ the<;e report<;, which as<;e~sed 

performance through the first quarter of 2008, were derived 

from hospitab participating in registries that repre~cnt a 

selected sample of the nation's hospitals. There ha~ been no 

national a~<;e~~ment of the tremb in D2B times, nor uo we 

know whether improvements in D2B time<; were ~hareu 

equally among patient and ho<;pital group<;. 

Accordingly. we evaluated data submitted to CMS a'> part 

of its initiative to report indicators of quality for patients with 

an acute myocardial infarction. The latest publi~hed report 

from the CMS data incluueu uata lip until the <;econu quarter 

of 2004Y' We sought to uetermine how performance on thi<; 

measure had changed from 2005 through 2010. with a focu<; 

on D2B times and the percent of patients \vho were treated in 

<90 minutes and in <75 minutes. We also evaluated the 

trend~ among ho~pitab defined by their bed ~i7e, geographic 

region, ()wner~hip, urban or rural location, and volume of 

patients with PCI that they reporteu for this mea~ure. Thi<; 

<;tudy represents the mo<;t contemporary. comprehen<;ive, 

nationally representative inve<;tigution of the changes in D2B 

times in the United State~. 

Methods 

Patient Population 

ThIS 

foe 

inclu~ion amJ 

and reporting criteria are 

of the ~tudy, there were ~ome in the mea"ure 

exclu"ion criteria: the major change oeellrreu in when 

patient~ were allowed to be excludeu if there \va~ it nonclinieal 

lea~on for the (acute infarction-X exclusions; 

~ee the onllIle-only To lllerea~e the likellhood 

that we v,ere primary PCJ, we 

Patient Variables 

For eaeh patient included in the mea<;ure. there i:o. informatIOn about 

agt:. sex, and racwl/ethnic group (v,hitt:. b!ad_. otJ1CI. unl...ll()wn). 

Hospital Variables 

regIOn. owner<,hip 

(rural or urban). 

~ubmi1ted by tht: hmpltal. For wc 

ho~pitals that reported at least 20 paticnh we 

of data. Information abollt ho~pital~ wa~ taken 

Re<,ource Sy~tem ... natIOnal lllallltalllecl 

hy and the Quality Improvement 

Analysis 

and publication; informcd eon~ent was not rcqUlrcd. 

Results 

During the 6-year period, the number of putients was fairly 

constant, ranging between 48 977 and 53 682 (Table I), with Tl.AQ:4 

42 ISO reported during the 3 quarter~ of 20 I O. The number of 

hospitab that reported at least 25 patienh increa~ed <;Iightly 

from 896 to 973. with 7M reporting 25 patients for the first 

J quarters of 2010 (Table 2). T2 

Patient Door-to-Balloon Times 

Median D2B times declined 32 minute~ over the 6-year 

period from a median of 96 minutes in the year ending 

December 31, 2005. to a median of 64 minutes in the year 

ending September 30. 20 I 0 (Table I). The declilles in median 

times were greatest among groups that had the highest 

median times during the first period: patients> 75 years of 

age (median decline, 38 minutes). \vomen (35 minute<;), and 

black<.; (42 minute<;). There were corresponding increa<.;e~ in 

the percentage of patient~ who had D2B times of <90 

minutes (44.2Q· to 91.4Q) and <75 minute~ (27.Yif to 

70.4(/('; Figure~ I and 2). FI-2 

Hospital Median Door-to-Balloon Times 

Hospital median D2B times declined over the 6-year 

period from a median of 97 minutes in 2005 to a mediun of 

64 minute<; in 2010 (Table 2). The decline<; were greatest 

among group<.; of ho<;pital<.; that had the longe<;t times in the 

fir~t year: ho<;pitab with 2::500 beds (meuiHn ho~pital time 

declined 34 minutes), for-profit ho~pitab (declined JR 

minute~). and ho~pital~ in the Ea~t South Central and Mid 

Atlantic CensLls regions (40- anu 35-rninute declines. 

respectively). There was a corresponding increase in the 

hospital average percent of patient D2B times <90 minutes (from 44?(' to 9Ylr) and <75 minutes (from 27Yc to 

7!?r). The re<;ult'j from 2010 were 'jimilar if we re'ilricted 

the required number of ca<;e~ to 20. 

Discussion The study demon<.;trate~ the national progre~~ in the treatment of patients with ST-~egment-e1evation myocardial 

infarction who undergo primary PCI. Median patient D2B 

time~ decrea~ed <;uDstantially from 96 to 64 minute~, a 

drop of 32 minute~. over the 6 year~ ending in mid-2010. 
61 


Insert here 78177.049

I balt2/zhe-ei/zhe-ei/zhe03411/zhe9827-11z I xppws I S=l I 7121/11 110:45 14/Golor Figureis): Fl-2 I Art: 044107 Iinpul-em I 

Krumholz et al Trends in D2B Time, 2005-2010 3 

Table 1. Median Time to Percutaneous Coronary Intervention and Percent Treated Within 90 and 75 Minutes for Patients Reported 

to Centers for Medicare & Medicaid Services From January 1, 2005, to September 30, 2010, by Patient Characteristics 

Total 

Age, Y 

18-35 

36-45 

46-55 

56-65 

66-75 

d6 

Sex 

Female 

Male 

Unknown 

Race 

Black 

Other 

Unknown 

White 

Total 

Age, Y 

18-35 

36-45 

46-55 

56-65 

66-75 

2'::76 

Sex 

Female 

Male 

Unknown 

Race 

Black 

other 

Unknown 

White 

Total 

Age, y 

18-35 

36-45 

46-55 

56-65 

66-75 

:::=:76 

n(%) 

48977 (100) 

684(1.4) 

5133 (10.5) 

12686(25.9) 

13576(27.7) 

9205 (18.8) 

7693 (15.7) 

14039(28.7) 

34935(71.3) 

3 (0.0) 

3543 (7.2) 

2430(5.0) 

3292 (6.7) 

39712 (81.1) 

n(%) 

51298(100) 

690(13) 

5197(10.1) 

13965(27.2) 

14762(28.8) 

9179(179) 

7505(14.6) 

14099(27.5) 

37196(72.5) 

3(0.0) 

3875(7.6) 

1257(2.5) 

3089(6.0) 

43077 (84.0) 

n(%) 

53682 (100) 

717(1.3) 

5103 (9.5) 

14546(27.1) 

15648 (29.1) 

9727 (18.1) 

7941 (14.8) 

Median (lOR) 

96 (73-126) 

99 (77-131) 

93 (72-121) 

93 (71-120) 

94 (72-122) 

98 (74-130) 

105 (79-139) 

102 (77-135) 

94 (72-122) 

63 (24-94) 

111 (83-148) 

103 (77-136) 

91 (67-121) 

95(73-124) 

2005 

2007 

Median (lOR) 

76 (59-93) 

81 (64-107) 

75 (58-92) 

74 (58-90) 

75 (58-91) 

77 (60-96) 

80 (62-101) 

79 (62-99) 

74 (58-91) 

84 (36-87) 

82(65-106) 

78 (60-97) 

74 (57-91) 

75 (58-93) 

2009 

<90 min, % 

44.2 

40.9 

47.0 

47.3 

46.2 

42.3 

360 

38.6 

46.4 

66.7 

31.4 

38.5 

49.4 

45.2 

<90 min, % 

72.6 

64.6 

73.5 

75.6 

74.4 

70.5 

66.3 

68.1 

74.3 

100.0 

63.5 

69.3 

74.8 

73.4 

Median (lOR) <90 min, % 

67 (52-81) 

70 (56-87) 

67 (52-81) 

66 (51-80) 

66 (51-80) 

68 (52-82) 

70 (55-85) 

87.9 

79.9 

89.3 

896 

88.9 

86.6 

84.1 

<75 min, % 

27.3 

23.5 

28.5 

29.5 

28.8 

26.2 

21.8 

23.3 

28.9 

66.7 

18.2 

23.4 

33.0 

27.9 

<75 min, % 

49.8 

40.0 

51.0 

52.4 

51.6 

47.7 

43.9 

44.8 

51.7 

33.3 

39.8 

48.1 

52.2 

50.6 

<75 min, % 

65.8 

57.7 

66.5 

68.2 

68.1 

63.9 

59.1 

n(%) 

52028(100) 

763(15) 

5346 (10.3) 

13864(26.6) 

14803 (28.5) 

9372 (18 0) 

7880(15.1) 

14611 (28.1) 

37410 (71.9) 

7(0.0) 

3819 (7.3) 

1184(23) 

3133 (6.0) 

43892(844) 

n(%) 

53032(100) 

737 (14) 

5292(10.0) 

14140 (26.7) 

15517(29.3) 

9490 (179) 

7856 (14.8) 

14456(27.3) 

38574 (727) 

2(0.0) 

4137(7.8) 

1338(2.5) 

3166(6.0) 

44391 (837) 

n(%) 

42150 (100) 

592(1.4) 

3821 (91) 

10991 (26.1) 

12639 (30.0) 

7794 (18.5) 

6313 (150) 

Median (lOR) 

86(67-113) 

92(73-125) 

85(66-110) 

84 (65-108) 

85(65-110) 

88(67-116) 

93 (72-123) 

91 (71-120) 

85 (65-110) 

70(55-102) 

97(75-130) 

90(67-121) 

84 (63-111) 

86(66-111) 

Median (lOR) 

71 (55-86) 

73 (57-89) 

70 (56-85) 

69 (54-84) 

69 (54-85) 

71 (55-87) 

74 (58-89) 

73 (58-88) 

70 (54-85) 

52 (45-58) 

76 (61-90) 

72 (57-86) 

69 (53-84) 

70 (55-85) 

2006 

2008 

2010* 

Median (lOR) 

64 (50-78) 

69 (53-84) 

64 (51-78) 

63 (49-77) 

63 (49-77) 

65 (50-79) 

67 (53-82) 

<90 min, % 

55.2 

48.6 

56.6 

58.8 

57.2 

53.2 

47.2 

49.5 

57.4 

71.4 

44.3 

50.8 

58.4 

56.1 

<90 min, % 

82.0 

76.8 

82.8 

84.1 

83.4 

80.2 

77.5 

78.4 

83.3 

100.0 

75.5 

80.6 

83.3 

82.5 

<90 min, % 

91.4 

855 

91.1 

92.5 

921 

91.2 

888 

<75 min, % 

35.7 

29.0 

365 

38.5 

37.3 

34.8 

28.8 

30.3 

37.8 

571 

25.9 

35.3 

39.7 

36.2 

<75 min, % 

58.7 

53.9 

59.4 

61.3 

60.4 

57.3 

52.5 

54.1 

60.4 

100.0 

49.1 

56.4 

61.2 

59.5 

<75 min, % 

70.4 

63.2 

71.1 

72.5 

72.0 

69.7 

64.7 

(Continued) 
62 


Insert here 78177.050

I balt2/zhe-ei/zhe-ei/zhe03411/zhe9827-11z I xppws I S-1 17121/11 110:45 14/Golor Figure(s): FI-21 Art: 044107 Iinpul-em I 

4 Circulation August 30, 2011 

Table 1. Continued 

2005 2006 

n (%) Median (lOR) <90 min, % <75 min, % n(%) Median (lOR) <90 min, % <75 min, % 

Sex 

Female 14586 (27.2) 69 (55-84) 84,8 61.3 11531(27.4) 67 (52-81) 89,1 66.3 

Male 39094 (72.8) 66 (51-80) 89.0 67.4 30618 (72.6) 63 (49-77) 92,2 71.9 

Unknown 2(0.0) 75 (58-91) 50.0 500 1(0.0) 55 (55-55) 100.0 100.0 

Race 

Black 4153 (7.7) 71 (56-86) 824 57.5 3203(7.6) 69 (55-83) 86.6 61.7 

Other 1440 (2.7) 68 (53-82) 874 636 1169(2.8) 65 (52-79) 91.4 69.9 

Unknown 3209 (6.0) 66 (51-81) 88.0 67.0 2530(6.0) 65 (51-79) 90.9 70.8 

White 44880 (83.6) 66 (52-81) 88,4 66.5 35248 (83.6) 64 (50-78) 91.8 71.2 

lOR indicates Interquartlle range 

*For 2010, only the first 3 quarters (discharges from January through September) were available at the time of analysIs, 

representing a > 3OC'k relative decline. This improvement, 

experienced across the country and across different types 

of hospitals, represents a remarkable elevation in practice 

that wa~ achieved over a relatively short period of time and 

in the ab"cncc of financial incentive. The accomplishment 

is truly a tribute to interventional cardiologi:-.ts, emergency 

medicine phy'>ician'>, nurses, technologists, and other team 

members nationwide who were dedicated to improving 

02B times. 

The perspective on 02B times changed dramatically 

over thi,~ period. The 2004 ST-<;egment-elevation myocardial infarction guidelines recommended that patienh he 

treated with primary PCI within 90±30 minutes. ls The 

caveat of the additional 30 minutes was included as a 

compromi:-.e in response to controversy about whether it 

wa,> po~sible for ho<,pitaJ:.. to routinely treat patient'> with 

ST -segment-elevation myocardial infarction within 90 

minute:-.. The puhlication of the 2004 guideline:-. was 

followed by a shift toward the 90-minute standard. Nallamothu and colleagues I published a study ba:-.ed on trials 

of the relationship between 02B time and the advantage of 

primary PCl over fibrinolytic therapy. They found that if 

primary PCI was delayed> 1 hour beyond the time that 

fibrinolytic therapy could be provided, the advantage was 

10:-'1. Thus, if fibrinolytic therapy was recommended to be 

given within 30 minutes. then the provision of primary PCI 

within 90 minute:-. ""a:-. :-.upported by evidence from the 

trials. In the guideline update puhlished in 2007, the 

additional 30 minutes was removed, altering the recommendation for 02B time to <90 minutes.(J The CMS 

measure, which initially reported the percent of patients 

treated 1.1.lithin 120 minute,>. wa>; wb>;cquently reduced to 

90 minutes in 2006 to align the performance measure with 

the new guideline recommendation. 17 

The improvement in 02B time:-. that we observed cannot 

be definitively attributed to any single action; many 

activities likely contributed. During this period, multiple 

national efforts focused attention on timeliness of 02B and 

supported quality improvement. Published articles that 

revealed gap:-. in care and indicated strategie:-. that were 

associated with faster times contrihuted to clinical changes 

in performance. A study sponsored by the National Institutes of Health used a mixed-methods approach to examine 

exceptional performers and then test hypotheses that derived from their experience. 7- lo. l \J The CMS developed 

contracts with Quality Improvement Organizations that 

contributed to the increasing focu:-. on improving various 

aspects of acute myocardial infarction care, including 02B 

time:-.. Hospital group:-. and con:-.ortia focLlsed on improving 

02B times. The performance of the nation's hospItals in 

treating patients with ST-segment-elevation myocardial 

infarction wa<; further highlighted by the relea:-,e of the 

publicly reported 02B time mea:-.ures by CMS, and the 

02B Alliance and Mission: Lifeline. national campaigns 

by the ACC and the AHA, enlisted clinicians and ho>;pitals 

in a broad-based effort to reduce delays.I~.1 \ 

Improvement in 02B times demon'>trates how emerging 

science on improving care can he rapidly integrated into 

practice. The ACC campaign was launched :-.imuitalleou:-.ly 

with the puhlication of an article in the New England 

Journal (~l Medicille that de:-.cribed :-.trategies a:-.:-.ociated 

\',lith faster times.') The ACC campaign promoted the 

adoption of such strategies. which were :-.hown to be 

underu<,ed nationally. Recent reports demonstrated the 

marked integration of these strategies into practice that 

occurred during the period of the campaign. l ..!- Moreover, a 

recent qualitative study showed that the crcdibility of the 

campaign wa:-. related to the strength of the science and the 

clarity of the recommendations.~o 

Despite the recent gains, additional opportunities i'or improvement in 02B time" remain. The most outstanding 

institutions are now regularly achieving exceptional times of 

=60 minute>; through >;tratcgie<; including coordination with 

Emergency Medical Service:-. and the collection and dissemination of a prehospitai ECG.~1-2"\ Thi:-. level of performance 

may become the new standard. 

Another opportunity for improvement is related to the 

care of transfer patients. Prior studies have shown that 

many patienb who are transferred from a ho~pital without 

PCI capability to a PCI-capahle institution experience long 

delays in treatment. 2..!-.1;; To addre:-.:-. this concern, eMS is 

collecting a measure, with potential to he puhlicly re-
63 


Insert here 78177.051

I ball2/zhe-ei/zhe-ei/zhe03411/zhe9827-11z I xppws I S=1 17/21/11 I 10:45 14/Color Figure(s): FI-21 Art: 0441071 Input-em I 

Krumholz et al Trends in D2B Time, 2005-2010 5 

Table 2. Acute Myocardiallnfarction-8: Median Hospital Door-Io-Balloon Time and Mean Hospital Percent <90 and <75 Minutes 

by Hospital Characteristics 

Total 

Bed size, 11 

<300 

300-499 

>500 

Census region 

EastNorthCelltral 

East South Celltral 

Middle AtlantiC 

Moulltalll 

New England 

Pacific 

South Atlantic 

West North Celltral 

West South Central 

US territories 

Ownership 

Government 

For profit 

Nonprofit 

Location 

Rural 

Urban 

Unknown 

Reportedcases,n 

25-35 

36-50 

>50 

Total 

Bed Size, 11 

<300 

300-499 

2500 

Census region 

EastNorthCelltral 

East South Central 

Middle Atlantic 

Mountalll 

New England 

PaCific 

South Atlantic 

West North Central 

West South Central 

USterritones 

n (%) 

896(100.0) 

282(31.5) 

327(36.5) 

287(32.0) 

161(18,0) 

66(74) 

104(11.6) 

76(85) 

31(35) 

121(13.5) 

145(16.2) 

78(87) 

113(126) 

1(01) 

119(13.3) 

127(14.2) 

650(72.5) 

61(68) 

834(93.1) 

1(0.1) 

266(29.7) 

276(30.8) 

354(39.5) 

n (%) 

936 (100.0) 

310(331) 

358(38.2) 

268(28.6) 

164(17,5) 

71(76) 

112(120) 

80(85) 

41(4.4) 

121(12.9) 

159(170) 

75(8.0) 

113(12,1) 

0(0.0) 

Median (lOR) 

g7(a7-10S} 

94(84-105) 

97(88-108) 

98(87-111) 

95(85-106) 

104 (92-114) 

102 (88-112) 

93(82-107) 

96 (82-101) 

95(83-107) 

99 (91-109) 

90(79-99) 

99(92-112) 

166(166-166) 

98 (86-l09) 

100(91-113} 

96(85-107) 

93 (83-104) 

97 (87-109) 

68(68-68) 

101 (88-116) 

95(87-106) 

96 (84-106) 

Median (lOR) 

75(69-83) 

75(69-84) 

76 (69-83) 

75(67-83) 

75(68-82) 

79(72-84) 

77(71-84) 

75(68-86) 

71 (64-79) 

73(67-80) 

76(71-84) 

70(62-76) 

78 (72-88) 

NA 

2005 

2007 

Mean (lOR) 

<gO min, % 

44(31-56) 

46(33-58) 

43(30-53) 

43(29-56) 

46(33-58) 

40(29-50) 

40(27-53) 

45(31-59) 

47(36-58) 

45(30-58) 

41(31--49) 

53 (40-£8) 

40(27-49) 

5(5-5) 

43(32-57) 

39(27-50) 

45(31-57) 

47(35--61) 

43(31-56) 

72 (72-72) 

40(27-53) 

44(32-55) 

46(33-58) 

<75 mm, % 

27 (15-35) 

29 (17-38) 

26 (15-32) 

27 (14-35) 

28 (17-35) 

25 (12-32) 

24 (14-33) 

29 (13-41) 

30 (19-40) 

29 (15-40) 

25 (15-32) 

34 (19-45) 

24 (14-31) 

5 (5-5) 

27 (16-37) 

23 (13-31) 

28 (15-36) 

30 (18-39) 

27 (15-35) 

57 (57-57) 

25 (13-33) 

28 (16-35) 

28 (16-39) 

Mean (lOR) 

<90 mill, % <75 min, % 

73(63-85) 

73(62-86) 

73(64-85) 

73 (63-85) 

73(65-85) 

71 (64-81) 

71 (59-83) 

72 (59-87) 

78(66-86) 

75(68-85) 

73 (63-86) 

82(75-92) 

68(56-84) 

NA 

50 (36-63) 

49 (36-63) 

49 (37-62) 

50 (38-63) 

51 (38-64) 

46 (33-57) 

47 (36-58) 

48 (33-62) 

56 (42-63) 

52(40-66) 

49 (36-61) 

60 (48-72) 

44 (30-56) 

NA 

n (%) 

934 (100.0) 

306(328) 

354(37.9) 

274(29.3) 

169(18,1) 

66(7.1) 

114(122) 

81 (87) 

36 (3.9) 

119(12,7) 

152(163) 

79 (85) 

118(126) 

0(0.0) 

113(121) 

134(143) 

687(73,6) 

64(6.9) 

869(93.0) 

1(0.1) 

285(305) 

306(32.8) 

343(367) 

n(%) 

956(100.0) 

329(34.4) 

357(37.3) 

270(28.2) 

175(18.3) 

66(6.9) 

121(12.7) 

85(89) 

39(4.1) 

130(13.6) 

166 (17.4) 

70(7.3) 

104(10.9) 

0(0.0) 

Median (lOR) 

87 (77-98) 

85 (76-97) 

88 (79-99) 

87 (77-99) 

85 (76-95) 

89 (82-99) 

90 (81-100) 

86 (76-101) 

83 (77-93) 

85 (76-99) 

89 (79-100) 

79 (70-88) 

91 (81-104) 

NA 

86 (76-96) 

91 (80-102) 

86 (77-97) 

83 (76-95) 

87 (77-98) 

63 (63-63) 

91 (80-106) 

88 (79-97) 

83 (76-93) 

Median (lOR) 

71 (64-77) 

71 (65-79) 

71 (64-76) 

70 (64-76) 

71 (64-77) 

71 (66-76) 

72(66-76) 

74 (66-80) 

66 (62-74) 

71 (64-75) 

71 (64-77) 

65(59-71) 

73 (66-80) 

NA 

2006 

2008 

Mean (lOR) 

<...::90 min, % 

55 (41-69) 

57 (42-72) 

53 (41-67) 

54 (39-68) 

58 (43-72) 

51 (39-62) 

52 (39-66) 

54 (39-71) 

59 (47-71) 

55 (42-70) 

53 (40-66) 

65 (53-79) 

49(33-65) 

NA 

55 (44-71) 

50 (36-65) 

56(41-69) 

58 (46-70) 

54(40-69) 

74 (74-74) 

50 (33-66) 

54 (41-67) 

60 (47-73) 

<75 min, % 

35 (21-47) 

37 (22-50) 

33(21-45) 

36(22--48) 

37 (24-49) 

33(23--41) 

33(21--42) 

35 (17-51) 

39(27--49) 

35(19-49) 

33(21--44) 

44(25-58) 

30(16-43) 

NA 

36(22-49) 

31(17--43) 

36(22-48) 

40(30-50) 

35(21--47) 

64(64-64) 

31(17--43) 

34(21-45) 

40(27-50) 

Mean (lOR) 

<90 min, % <75 min, % 

82(75-92) 

81 (73-92) 

83 (76-93) 

82 (76-92) 

82 (75-93) 

83 (78-93) 

81 (73-90) 

80(71-90) 

84(79-94) 

84(78-92) 

83 (76-92) 

88(84-94) 

79(71-90) 

NA 

59 (48-71) 

57 (44-71) 

59 (48-71) 

60 (49-71) 

59 (47-72) 

58 (49--69) 

57 (50--67) 

54 (43-67) 

63(56-74) 

60 (51-73) 

59 (47-70) 

69(60-81) 

55(42-66) 

NA 

(Continued) 
64 


Insert here 78177.052

1 balt2/zhe-ei/zhe-ei/zhe03411/zhe9827-11z 1 xppws 1 S=1 1 7121/11 110:45 1 4/C.I.r Figure(s): FI-2 1 Art: 044107 Iinpul-em 1 

6 Circulation August 30, 2011 

Table 2. Continued 

2005 2006 

Mean (lOR) Mean (lOR) 

Ownership 

Government 

For profit 

Nonprofit 

Location 

Rural 

Urban 

Unknown 

ReportedcaseS,n 

25-35 

36-50 

>50 

n (%) 

119(12.7) 

129(13.8) 

688(73.5) 

74(7.9) 

862(92.1) 

0(0.0) 

295(31.5) 

331(35.4) 

310(33.1) 

Median (lOR) 

77 (69-86) 

76 (70-86) 

75 (69-82) 

75 (71-82) 

75 (69-84) 

NA 

77 (70-87) 

77 (69-85) 

73 (67-79) 

<gamin, % 

70 (61-84) 

72 (58-85) 

74 (64-86) 

73 (64-83) 

73(63-85) 

NA 

70 (59-85) 

72 (62-85) 

77 (68-86) 

2009 

<75 min, % 

47(33-61) 

47(32-61) 

51 (38-63) 

49 (38-61) 

50(36-63) 

NA 

46 (31-60) 

49(36-62) 

54 (43-65) 

n(%} 

125(13.1) 

139(14.5) 

692 (72.4) 

75(78) 

881(92.2) 

0(00) 

299(31.3) 

323(33.8) 

334(34.9) 

Median (lOR) 

71 (64-77) 

71 (65-79) 

70(64-76) 

69(65-73) 

71 (64-77) 

NA 

73(65-79) 

71 (65-77) 

68(63-74) 

<gamin, % 

81 (73-93) 

83(77-93) 

82(76-92) 

82(76-92) 

82(75-92) 

NA 

80 (72-92) 

82(74-92) 

85 (80-93) 

2010* 

<75 min, % 

59(45-73) 

58 (44-70) 

59 (49-71) 

61 (52-75) 

59(47-71) 

NA 

55(43-68) 

58 (48-70) 

62(52-73) 

Mean (lOR) Mean (lOR) 

Tolal 

8ed Size, n 

<300 

3DG-499 

>500 

Census regml 

East North Central 

East South Central 

Middle Atlantic 

Mountain 

New England 

PaCific 

South Atlantic 

West North Central 

West South Central 

US territories 

Ownership 

Government 

Forproilt 

Nonprofit 

Location 

Rural 

Urban 

Unknown 

Reportedcases,n 

25-35 

36-50 

>50 

n(%} 

973(1000) 

347(35.7) 

357 (36.7) 

269 (27.6) 

169 (H.4) 

63(65) 

127(13.1} 

85(87) 

37(38) 

131 (13.5) 

175 (18.0) 

75(7.7) 

110(11.3} 

1(01) 

136(14.0) 

138 (14 2) 

699(71.8) 

83(85) 

890 (91.5) 

0(00) 

300(30.8) 

355(36.5) 

318(32.7) 

lOR indicates interquartile range. 

Median (lOR) 

67 (61-73) 

67 (62-72) 

67 (61-73) 

66(61-72) 

68 (62-72) 

68 (62-72) 

69(64-75) 

69(64-74) 

62 (58-71) 

66(62-72) 

66(60-72) 

63 (58-69) 

68 (63-74) 

102 (102-102) 

68 (62-74) 

65 (61-72) 

67 (61-73) 

66(60-70) 

67 (61-73) 

NA 

69(64-75) 

67 (62-73) 

65 (59-70) 

<90 min, % 

88 (84-96) 

88 (84-96) 

88 (84-96) 

88 (83-95) 

89 (85-96) 

88 (84-96) 

86 (80-92) 

87 (83-95) 

90 (87-96) 

88 (83-95) 

88 (85-97) 

92 (88-97) 

87 (81-96) 

38 (38-38) 

86 (80-94) 

91 (87-98) 

88 (84-95) 

86 (81-96) 

88 (84-96) 

NA 

87 (81-96) 

88 (84-96) 

89 (85-96) 

<:.75 min, % 

66 (56-76) 

65(57-76) 

66 (56-76) 

66(56-77) 

67(57-76) 

65(54-77) 

61 (52-71) 

62(55-71) 

71 (62-81) 

67 (58-76) 

67 (57-78) 

73 (63-84) 

63 (54-74) 

H{17-H) 

64 (54-76) 

67 (58-78) 

66 (56-76) 

67 (60-78) 

66 (56-76) 

NA 

63(52-73) 

65(55-76) 

69 (61-79) 

n{%) 

764(100.0) 

250(32.7) 

289 (37.8) 

225(29.5) 

137(17.9) 

52 (6.8) 

96(12.6) 

63(8.2) 

27(3.5) 

100(13.1) 

152(19.9) 

54(7.1) 

83(10.9) 

0(0.0) 

101(13.2) 

109(14.3) 

554(72.5) 

57(7.5) 

707 (92.5) 

0(00) 

358(46.9) 

244(31.9) 

162{21.2) 

Median (lOR) 

64(58-70) 

64(59-70) 

65(59-70) 

64(58-69) 

65(58-70) 

64(58-68) 

67(61-72) 

63(57-70) 

62(58-66) 

64(59-69) 

63(58-68) 

60(55-65) 

66(61-73) 

NA 

65(59-70) 

62(58-69) 

65(58-70) 

63(58-69) 

64(58-70) 

NA 

65(59-72) 

64(59-69) 

61 (55-67) 

<90 min, % 

92 (89-98) 

92 (89-98) 

92(89-98) 

92 (88-98) 

92 (89-97) 

94(91-98) 

90(86-95) 

92 (89-97) 

93 (89-97) 

93 (89-99) 

92 (88-99) 

93 (89-100) 

92 (88-100) 

NA 

91 (86-97) 

95(94-100) 

92 (88-98) 

92 (88-97) 

92 (89-98) 

NA 

92 (88-1 DO} 

92 (88-98) 

94(91-98) 

<75 min, % 

71 (63-82) 

71 (63-81) 

71 (63-81) 

72(63-82) 

72(64-84) 

74 (68-81) 

67 (60-76) 

71 (62-82) 

72 (65-79) 

72(64-81) 

73(64-82) 

76 (68-84) 

68(59-80) 

NA 

71 (62-82) 

75(67-85) 

71 (63-81) 

73(64-84) 

71 (63-81) 

NA 

70 (60-81) 

71 (64-80) 

76 (68-85) 

*For 2010, only the first 3 quarters (discharges from January through September) were available at the time of analysis 

ported. that asses'>cs the time required to transfer sueh 

patienb. 17 More important. current research shows that 

these times can he reduced through greater coordination 

between hospitals. 2b. 27 

A limitation of this assessment is the evolution of the 

measure over the study period. with modifications related 

primarily to the exclusion criteria. The mm,t notable 

change occurred in 2006 and allowed ho'>pital'> to exclude 
65 


Insert here 78177.053

I balt2/zhe-ei/zhe-ei/zhe034111zhe9827-11z I xppws I S-l I 7121111 I 10:45 I 4/Color Figure(s): Fl-21 Art: 044107 I Input-em I 

Figure 1. Trend in percentage of patients with door-to-balloon 

>\Q (, (D2B) time <90 minutes over 6 years. 

palienb on the basis of the judgment that a D2B lime >90 

minutes was the result of a delay incurred by patient 

preference or clinical condition. Subsequent changes included minor alteratiom in the code~ or slight exransions 

in the exclusion criteria. However. the dramatic decline in 

D2B time\ that wa\ ob~erved over the ~lUdy period is 

unlikely to have resulted from change" in Ihc mca~ure. 

Moreover. the greale~1 decline occurred hetween 2006 and 

2007. a period correspondlllg to the illltiation of national 

campaigm to improve D2B times. Flllally. our results are 

aligned with th()~e of registries that documented trend~ in 

D2B times and applied consiqent criteria over time. 

Conclusions 

We document remarkable improvement in D2B times from 

2005 through 2010. The imrrovement demonstrate" the 

re~u1t~ that can be produced by collaboration among healthcare profe.~~ional~, ho~pjtal~, federal re~carch ageneie~, and 

national organiLation:-. intere:-.tcd in patient care toward the 

achicvement of a ~harcd goal. The focus on improving Ihe 

"dlY in which care i~ delivered-improving the ~y~tem\-has 

yielded more timely care for ratien'" and serves a.\ a temrlate 

Figure 2. Trend in percentage of patients with door-to-balloon 

(D2B) time <75 minutes over 6 years. 

Krumholz et al Trends in D2B Time, 2005-2010 

for similar contemrorary and future effor'" in area\ such as 

readmission. 

Acknowledgments We thank Dr Allen Ma froIll the Oklahoma Poumlation for Medical 

Quallty for hi:-. conti ibution:-. III thi, articlc AQ:5 

Sources of Funding Thi, \vork wn, conducted under a federal contract ""ith 

the Center~ for Medicare & Medicaid ((\1S). contract 

HHSM-5()()-2()()~-()()()25!' ta~k order T()()OI The content ot thi~ 

doe~ not necc~:-.anly rdlect thc \ IC\\~ or [JoIICle:-. of the 

of Health and Human Ser\'ice~. nor doc:-. mentloIl oj 

Uni\c[,ity) from the NatlOnalllelll1. Lung. amJ i3lood In'lIlutc. 

Disclosures Dr Krurnholl report, that he chair, a C,\nil,lC ,cientific ad\i\ory 

honrd for llnitedHealth The other allthor~ lerort no conlllct~ 

References I N .. dlal1101hll ilK. Amman E\L B .. \l~' ER. Plimal} pl'rnILlI1~OlI' corOI1,lI)' 

ArnNrong i'W. Bal~' D-C Gr~cn LA Hnln-

'y .. H11,1I11 LK. llo~hll1 ... n JS. Krumholl [[\-1. LH11d' GA. MU[[dn}, CJ. 

I'c .. nk DL. ':Iloall MA. SlllItll SC Jr. Alllle DT. Ku,llnel fG. Orn"to Jr. 

AI1l~lic .. lI1 AC.ltkm} oj 

Rt" I~\\ Nl'\' E\ lilcll(~ anil 

til" :V!anagenwllI (II Pall<'llI\ 
66 

f 


Insert here 78177.054
67 

Chairman HERGER. Thank you. 

Dr. Bender is recognized for five minutes. 

STATEMENT OF JOHN L. BENDER, M.D., PRESIDENT AND CEO, 

MIRAMONT FAMILY MEDICINE, FORT COLLINS, COLORADO 

Dr. BENDER. Thank you, Chairman Herger and distinguished 

Members of the Subcommittee on Health. I am Dr. John Bender. 

I am a family physician in Fort Collins, Colorado, and I am CEO 

of Miramont Family Medicine, which is a network of patient-centered medical homes. 

Now, in 2002, my wife Therese and I moved back to Larimer 

County, where we were from, and we purchased one of the oldest 

practices in Fort Collins, Colorado. They had been there for over 

40 years, and were basically doing things the same as they had in 

the 1970s. They left me one computer and one employee. That was 

10 years ago. 

Today we have over 50 employees, 14 providers, including 8 physicians; we have over 80 computers and a centralized data center, 

serving four different parts of our state. And we have about 27,000 

patients. 

Now, during this same period of time in Larimer County, 34 primary care physicians closed their doors or stopped providing primary care services. Eight of these were actual bankruptcies. And 

yet at the same time, we saw a doubling in the number of emergency room beds and an increase by the number of emergency room 

physicians by 50 percent, suggesting that if patients didn’t have a 

patient-centered medical home like myself, they were going to the 

emergency room at a later stage of their illness for a higher cost, 

increasing health care premiums for everyone across the state. 

Now, how is it that Miramont was able to double in size, grow 

at 34 percent per year to the size that we achieved, in this economy 

while other family physicians were saying, I give up, and walking 

away? Well, part of it was, in 2007, we made the conscious decision 

that we were no longer going to just focus on volume. 

We were going to make sure that we had a high-quality product 

that was safe and efficient, and believed that if we built the best 

product in the marketplace, that consumers would vote with their 

feet and we would be able to maintain our solvency—because, after 

all, I didn’t want to be the 35th practice to close or the ninth physician to bankrupt. 

So we pursued NCQA patient-centered medical home recognition. 

That is the National Committee of Quality Assurance. We achieved 

level 3, which is the highest level of patient-centered medical home. 

It basically meant that we, after a six-month audit period, were 

able to show improvements in our work flow and the way we retooled things so that we could deliver team-approached care. 

We also had, for example, a patient portal, where patients could 

go online, look up their labs, see their clinic record. They could 

send me a HIPAA-compliant email, or they could schedule appointments. And we also conducted care coordination through the transitions of care, as people went from hospitals to nursing homes, et 

cetera. 

Our next big break came in 2008 with the multi-payer patientcentered medical home pilot. This was the brainchild of Dr. Paul 

68 

Grundy and others at IBM, who had compelled the top payers in 

the United States, WellPoint, UnitedHealth Group, CIGNA, Aetna, 

and Humana, to test the patient-centered medical home model. It 

was based on some of the beliefs and work that Dr. Barbara 

Starfield had published 10 years earlier, suggesting that if we put 

an emphasis on primary care, we could bend the health cost curve. 

So 17 pilots were selected. Miramont was one of them. It was 

convened under a group called the Health TeamWorks, and it was 

basically an alliance of payers, including insurers, employers, and 

physicians. We agreed on the quality metrics that we were going 

to track to show improvement on, and we also agreed on a threetiered payment system based on fee-for-service, per-member-permonth fees, and pay for performance. 

Now, fee-for-service was included, and I will tell you why. There 

was an understanding that volumes in primary care were actually 

too low, and if we were going to pull people out of emergency rooms 

and urgent care and other high-cost centers, we would have to 

incentivize primary care physicians in order to help them to build 

the capacity to see the increased volumes. 

Per-member-per-month fees ensured that I was able to provide 

what was other non-revenue-generating activity such as having a 

diabetic nurse educator in-house, or a psychologist, and doing care 

coordination. 

Then finally, pay-for-performance bonuses made certain that we 

just didn’t report our metrics to a centralized data registry, but we 

were actually working to try to reach certain target goals to help 

improve our delivery of evidence-based medicine. 

The results are in, and they are fabulous. UnitedHealth Group 

has told us that Miramont reduced hospital readmission rates by 

83 percent compared with our peers. A year ago, the State Medicaid program joined the pilot, and they said that we have an ER 

utilization rate that is a negative 219 percent—negative 219 percent—compared with our peers. 

So I call on the Subcommittee on Health of the Ways and Means 

Committee of the House of Representatives to compel the Department of Health and Human Services to immediately deploy the patient-centered medical home payment standard nationally in order 

to conserve the strength of the primary care workforce, in order to 

increase the quality of health care delivered to entitlement beneficiaries, and to also reverse the escalating costs that are burdening 

the American taxpayer by using a payment method, a payment 

standard, that has been proven and is now being adopted in the 

private sector. 

Thank you. 

[The prepared statement of Dr. Bender follows:] 

69 


Insert here 78177.055

FORTCOLLlNS 

John L. Bendel~ MD 

Juan Rodriguez, DO 

Linda Burnham, MD 

Terri ElfJner, PA·C 

Kara DiTullio, PA-C 

Julie Deters, FNP 

4674 Snow Mesa Dr. Ste 140 

Ft Colllns, CO 80528 

970.182.0213 Office 

970.482.9646 Fax 

Kelly Lowther, MD 

Doug DeYoung, DO 

Kara Bradley, PA,e 

Vickie Silva.,>, PA,e 

1014 Centre Avc 

970.482.3253 Fax 

WELLINGTON 

Bryan Reichert, MD 

Ann Wuerslin, MD 

Amber Herrick, PA-C 

7950S!xthSt. 

Welhngton, CO 80519 

970.568.4800 Office 

970.568.4196 Fax 

PARKf:R 

JOines J. Meyer, MD 

Terri EI/fner, PA,e 

12543 N. Hwy 83 Ste 228 

Parker. CO 80134 

303.8(}S.5S28 Office 

303.8DS.SS29 Fax 

www.miramont.us 

February 6, 2012 

Written Statement to the Health Subcommittee of the 

House of Representatives Ways and Means Committee, 

as requested by subcommittee Chairman Wally Herger 

Thank you, Chairman Herger, Congressman Stark, and Members of the 

Subcommittee for this invitation to testify on programs that reward 

physicians who deliver high quality and efficient care. 

Section 1. Background on John L Bender, Miramont Family Medicine, 

and NCQA 

I, John L. Bender, M.D., FAAFP am a board-certified family medicine 

physician, a Fellow of the American Academy of Family Physicians, and the 

senior partner at Miramont Family Medicine based in Fort Collins, Colorado. 

Miramont Family Medicine www.miramont.usis a network of four 

Patient Centered Medical Homes in northern Colorado delivering full 

spectrum primary care services in suburban and rural communities. Since 

2002, Miramont has grown from one physician, one employee, and one 

computer in one location to 14 providers, 50 employees, 4 locations and 

over 80 computer workstations networked through an integrated data 

center, serving over 27,000 patients. 

In 2008 Miramont received NCQA level III recognition for its Patient 

Centered Medical Home model and in 2010 won a national HiMSS Nicholas 

E. Davies Award of Excellence for outstanding achievement in the 

implementation and value from health information technology. In 2011, The 

Colorado Academy of Family Physicians Foundation named Miramont the 

Patient Centered Medical Home of the Year. 

The National Committee for Quality Assurance is a private, 501(c)(3) notfor-profit organization dedicated to improving health care quality founded 

in 1990. The process for achieving NCQA level III required Miramont to 

devote significant time and capital investment in 2008, including the 

extensive documentation of having met 9 separate Standards each broken 

down into numerous separate Elements graded on a point system with a 

100 total possible points. The Standards for being an NCQA recognized 

Patient Centered Medical Home at the time included such domains as patient 

tracking and database registry functionality, care management, patient selfmanagement support, electronic prescribing, test tracking, and performance 

reporting of various evidence-based health care metrics (see attachment 1). 
70 


Insert here 78177.056

Section 2. Background on the Multi-Payer Patient Centered Medical 

Home Pilot study. 

Interest by the private sector in the Patient Centered Medical Home delivery 

model began to grow at the beginning of the decade. As early as 2000, Dr 

Paul Grundy, IBM Corporation's Global Director for IBM Healthcare 

Transformation, recognized that the ongoing costs of health care for IBM's 

employees, including the legacy costs to its retirees, were the key driver to 

labor cost differentials between IBM's less competitive work force in the 

United States and its workforce abroad. Dr Grundy became a champion of 

the Patient Centered Medical Home at that time, and my information that 

follows is from personal conversations with him and attendance at speeches 

he gave. He realized that the cost of health care delivery to IBM's US 

workforce was close to $8,000 per person per year, nearly double what IBM 

was incurring in health care costs for developing nations and other nations 

abroad where it employed labor. At the same time, the World Health 

Organization was releasing data suggesting that the United States was only 

37th in the world for important health care outcomes such as neonatal 

mortality and longevity. Dr Grundy used the health care purchasing power 

of IBM to compel a group of five large national commercial health insurers, 

(WellPoint/ Anthem/Blue Cross Blue Shield, United Health Group, Humana, 

Cigna, and Aetna) to agree to test the Patient Centered Medical Home model 

in two statewide pilots. Dr Grundy believed that the profound erosion of the 

primary care workforce in America was the key driver to escalating costs 

confounded by poorer quality. He was also influenced by the work of 

Barbara Starfield, MD, MPH, Distinguished Professor at John Hopkins 

University Schools of Public Health and Medicine, whose landmarks 

studies demonstrated the cost containment abilities of properly designed 

primary care delivery systems. 

The commercial health insurers agreed to participate in short term multipayer pilots in two states, Colorado and Ohio (chosen as IBM has larger 

concentrations of employees here). Colorado's pilot launched first, 

convened under the title of The Colorado Multi-Payer 

Patient Centered Medical Home Pilot project. The convening 

organization, the Colorado Clinical Guidelines Collaborative (now known as 

HealthTeamWorks www.healthteamworks.org), functioned as an alliance 

of employers, primary care physicians and commercial payers. The 

Collaborative reached an accord for incentives and payment structuring 

early on, and then followed the formula recommended by Dr Grundy, that is 

the three-legged model of Fee for Service (FFS), Per Member Per Month Fees 

(PM PM) and Pay for Performance (P4P). 

Fee For Service was retained in deference to the understanding that 

volumes in primary care were lacking, and volumes incentives were needed 

to keep consumers out of high cost centers such as Emergency Departments 

by motivating Patient Centered Medical Homes to develop capacity to see 

these patients. Per Member Per Month fees were necessary to pay for the 

infrastructure needed in the Patient Centered Medical Home to deliver what 

is otherwise non-revenue generating activity, such as information 

technology (IT) enhancements like online patient portals that allow 
71 


Insert here 78177.057

consumers to access their own health information outside the physician's 

office, and care coordinators who could work deficiency lists and 

individually coordinate care with patients to get them to goal without a 

physician visit. Pay For Performance (P4P) payments were made to 

incentivize the PCMH to not only track and report metrics to a centralized 

registry, but to ensure motivation to improve quality over time. The selfreported data was chosen over historical claims data, which is fraught with 

error, yet prior to the pilot was the standard for commercial payers to rate 

physicians nationally. The payers agreed to let the PCMH pilots collect and 

report their own data, and over time the pilots learned workflow redesign 

that produced steady improvement in practice metrics. The metrics were 

tabulated monthly, then reported back to the practice alongside the other 

pilot practices, giving the PCMH feedback not only about their own progress, 

but peer comparison data. Higher performers were then allowed to share 

success strategies through a number of forums including quarterly 

collaboratives, where the payers, employers and PCMH representatives 

could meet face to face for a day or two to exchange information, and also 

bimonthly telephone conference calls. Finally, HealthTeamWorks used 

grant funding to provide onsite coaches who would meet weekly with staff 

onsite at the PCMH clinic to teach and develop workflow redesign strategies. 

These included implementing Toyota Production Model and POSA (plan, do, 

study, act) type innovations as used in other industries. The shared 

activities between PCMH competitors were always conducted in accordance 

with Federal Trade Commission anti-trust rules, meaning there was no price 

fixing, etc. among suppliers, but rather only academic exchanges focused on 

quality rather than profits. Even the exact amounts paid as PM PM and P4P 

were kept confidential between the various PCMH pilots, and all contracts 

were awarded by individual Taxpayer Identification Number (TIN) by the 

commercial payers. There was never collective negotiating of rates by the 

physicians. 

Over time, the pilots were able to demonstrate improvements in safety and 

efficiency as well as improved patient outcomes for various metrics, 

especially chronic disease management such as diabetes and heart/stroke 

patients. But what really made the Colorado pilot a success was its ability to 

demonstrate significant cost controls during the same two year period. This 

data, released privately by the payers to the pilots, now appears to have 

influenced the commercial payers in the way Dr Grundy and Dr Starfield 

envisioned. First, was the announcement that the payers would agree to 

extend the Colorado pilot rather than terminate it April 2012, as originally 

constructed. Second, was the national announcement by Well Point, as 

reported in the Wall Street Journal, Friday January 27"', 2012, that "it will 

offer primary-care doctors a fee increase of around 10%, with the possibility 

of additional payments that could boost what they get for treating the 

patients it covers by as much as 50%". Aetna also committed in the same 

article to roll out payments later this year to primary care physicians who 

become certified as Patient Centered Medical Homes, botb payers evidently 

influenced by the results ofthe Colorado pilot (attachment 2). 

Section 3. Miramont Family Medicine - A case study of Workflow 

Redesign and Practice transformation in the Patient Centered Medical 

Home mode!. 
72 


Insert here 78177.058

In 2002, Teresa and john Bender returned to Larimer County Colorado and 

purchased one of the oldest Family Medicine practices in Fort Collins. The 

selling sole proprietor, HG Carlson MD and his wife jean, had run the 

practice much as they had since the 1970's. They had one additional 

employee who served as medical assistant, had several thousand paper 

charts hut fewer and fewer active patients, and a single 386 IBM computer 

used only for billing purposes. john and Teresa found themselves offering a 

poor product in the health care marketplace. Problems included test results 

with slow turnaround times, high labor costs with much non-revenue 

generating activity and waste, no open appointments with little ability to 

respond to elasticity in demand, no clinical data management, barely any 

financial data management, high variability in patient experiences from day 

to day, illegible documentation, and a growing inability to compete with 

retail clinics, urgent care, emergency departments, etc. 

Over the next 10 years, 34 primary care physicians would abandon 

providing primary care services in Larimer County, 8 of these being actual 

bankruptcies. During this same time the number of Emergency Department 

beds in Larimer County would double, and the number of Emergency Room 

physicians increased by 50%. Further economic pressures in the last two 

years would compel 169 physicians to abandon private practice and become 

part of a brand new hospital medical group, created by the local hospital 

system as their ACO health care delivery strategy that would rely on 

employed physicians, not independent physician groups. 

Yet over the last 10 years, Miramont was able to grow at a rate of 30-34% 

per year, doubling in size every two years, to four locations in three separate 

communities with expanded hours including evenings and weekends, labor 

expansions to fourteen providers (8 physicians, 5 physician assistants, 1 

nurse practitioner), fifty total employees, electronic charting, an online 

Patient Portal, NCQA III PCMH recognition, over 80 company computers 

operating in a terminal service environment with a centralized data center 

and 27,000 patients. Because Miramont produced growth while at the same 

time improving quality, efficiency and outcomes, the Healthcare 

Information and Management Systems Society (HiMSS) bestowed on 

Miramont a Nicholas E. Davies Award of Excellence for outstanding 

achievement in the implementation and value from health information 

technology in 2010. 

The obvious question is how did Miramont achieve a rate of growth to be 

named the fourth fastest growing company in Northern Colorado in 2008 

and 2010, while in the same economy virtually no other primary care 

physician group saw growth in Larimer County other than the hospital 

owned enterprises? 

Miramont started with a leadership and a courage proposition. The 

leadership proposition was that the physician partners would focus their 

energies on new models of health care delivery, positioning themselves in 

the local economy as the choice that offered the most convenience and the 

highest value in the marketplace. Second, Miramont would function as a 

true business, not to "profiteer" off of our patients, but in recognizing that if 

we became the 35th office to shutter our doors or the 9th primary care 

physician to bankrupt in Larimer County, that we would not be able to truly 

meet our most important duty to our patients, which is the value of a long 
73 


Insert here 78177.059

term sustainable relationship with a family physician they trust. To do so, 

took courage, because it meant taking on risk and, taking on debt in the form 

of capital leases to build an expensive IT infrastructure from scratch while 

still initially operating in a cottage industry nearing the end of its product 

life cycle. At the time, there were no guarantees of Meaningful Use dollars, as 

the HITEC Act was not yet even signed. 

In 2007 as I gave my inaugural speech as the incoming President of the 

Colorado Academy of Family Physicians, I compared the scenario to the 

restaurant business. At the Stanley Hotel in Estes Park, I told a group of 150 

physicians, that like Paul Grundy who had likened the product he was 

buying as "garbage" that we in family medicine were analogous to a 

restaurant with "bad food". "What are you doing differently today in 2007 

than was being done in your office in 19707" I then asked them to imagine 

that if we were in the restaurant business, that we could not just raise the 

prices on our bad food to generate the investment capital to purchase new 

cooking equipment or to recruit a fancy Chef from out of state. 

Miramont decided it would take money to make money and that the process 

starts with investing. We pledged that we would make Miramont safer, 

more efficient, and up to date and we would ensure our own profitability at 

all times in order that we could be there for our patients for many years to 

come. We would eliminate as much as possible non-revenue generating 

activity up until a time that the PCMH model would pay for us to do so. We 

would find ways to provide needed services in our house, in the free market 

health care system that we are given. We would find the best Electronic 

Health Record (EHR) and attain NCQA recognition for a Patient Centered 

Medical Home. We would build the best product we could in the 

marketplace such that consumers would choose us regardless of payer 

source. We would build systems of care that could survive and be profitable 

regardless of the uncertainty of new health care reform regulations at the 

state and national level, regardless of SGR threats, because those were not 

things we could control anyway. 

In order to bring about workflow redesign, Miramont pursued multiple 

quality improvement resources. The first was to apply for and be accepted 

into the Colorado Multi-Payer Pilot project. Many more physiCian practices 

applied to the Colorado Clinical Guidelines Collaborative than there were 

seats available, but because Miramont had started on the NCQA journey one 

year earlier, we found ourselves properly positioned to be selected. In May 

of 2008 we achieved 96 of 100 possible NCQA recognition points and were 

awarded the highest level of PCMH recognition, level III, by NCQA. We 

adapted the full tenants of the Patient Centered Medical Home model, 

including team based approach to care, pre-visit planning (team huddles), 

registry reporting and review, and after-visit care coordination and test 

tracking. The work flow redesign was not easy. Some staff were not 

comfortable with computers, and resigned or were terminated after failing 

in house training programs. PhysiCians who did not adopt the new 

workflows had to be encouraged or later financially curtailed if metrics 

failed to improve, or if new workflows were not adopted. Customer 

satisfaction waned at times, as the new workflows oftentimes came with 

learning curves that initially interfered with wait times. Customers also 

would at times simply resent the change, especially if they were long term 

patients. Over time the culture change has led to proper expectation from 
74 


Insert here 78177.060

staff and patients about what digital medical records mean, and how best to 

use the technology to achieve goals. More and more customers and staff are 

now enamored with the progress that has become Miramont, rather than be 

wearied by the constant change. 

Section 4. Miramont Family Medicine - two years of metrics prove 

better patient outcomes and the ability to deflect the health care cost 

curve down. 

Attachment 3 is a sample of the monthly reports that Miramont creates and 

reports to HealthTeamWorks. There are 364 diabetic patients cared for as 

Miramont patients as of December 2011, only some of whom were seen in 

clinic or the hospital that month. In the third table, one can see that 

Miramont initially was only able to prove that a little over 40% of its 

diabetic patients had a current A1C laboratory test on file. Over time the 

metric improved to the target threshold of over 85%. Improving the metric 

required Miramont to manage population health, which in paper records 

was nearly impossible. By leveraging the ability to produce and monitor 

metrics over time, Miramont developed innovative strategies of its own such 

as adding in-house A1C testing, as well as adapting innovative 

recommendations from the consensus of other physicians participating in 

the PCMH pilot, like having standing orders whereby the medical assistant 

could order the Ai C test under physician license as a part of an "order set" if 

a computer alert notified the medical assistant at check in that the patient 

was overdue for testing. 

Workflow redesign also led Miramont to deploy a medical assistant checklist 

[Attachment 4). The checklist is color coded, so that if one of the items in 

red is missed, it can lead to an adverse patient outcome such as 

hospitalization or death. Blue coloring indicates that skipping the step will 

lead to inefficiencies later in the day. Green color coding indicates that 

recording the step is necessary for meeting quality standards that are paid 

for under the PCMH pilot program. The checklist was developed over a 

period of a couple of years. If a potentially avoidable poor patient outcome 

occurred, such as hospitalization or death, a workgroup would discuss the 

issue, and the checklist would then be revised to include additional or 

modified steps to help prevent a recurrence, much like an airline pilot would 

revise a checklist based on feedback from the National Transportation Safety 

Board. 

Global cost reduction data was provided back to the PCMH pilots from the 

commercial payers in a manner previously unknown to the individual 

physicians. Although the "claims data silo" enabled some primary care 

physicians to know whether they cost a payer more, claims data did not 

disclose global patient care costs, nor could it tell if the extra medical losses 

a payer incurred by a specific PCMH translated to positive return on 

investment [ROl) for the global costs of care, especially in the form of 

decreased hospital or speCialist utilization. The new global reports allowed 

for such analysis. 

Attachment 5 is an example of a pilot composite report. By sharing data 

between groups, individual physicians and practices could be motivated 

more fully to improve weak metrics and sustain strong ones. Initially groups 

were hesitant to share data, citing concerns of how it might be portrayed or 
75 


Insert here 78177.061

even published. Other concerns included Federal Trade Commission 

violations for pooling and sharing data that might be perceived as collusion. 

Over time these fears were overcome, and the reality of having actual grades 

that the PCMH could review themselves and act upon translated into real 

improvements in quality for health care delivery at the local level. 

Global costs for 523 Medicaid patients attributed to Miramont from Sept 

2010 to Aug 2011 were provided to Miramont by the Colorado State 

Medicaid program. In Attachment 6, the total Global costs for the 523 

beneficiaries was $6,084,478 or $11,633 per person, which is higher than 

the national average for all citizens, but less than the average for Medicaid 

beneficiaries. Note that ER utilization for Miramont patients was 178 total 

visits for the cohort, which is roughly 340 visits per 1,000 Medicaid 

beneficiaries. In comparison this is 219% below the state average for 

Medicaid (figure provided by Treo Analytics). 

Attachment 7 demonstrates that the average Clinical Risk Grouping (CRG) 

for Miramont is around 1.4, meaning that despite the fact that Miramont 

patients are sicker than average, they cost the system less, and have better 

outcomes. In other words, Miramont's bctter numbers are not merely from 

having healthier patients, in fact Miramont appears to attract and retain 

sicker patients, but Miramont is able to create more health value for this 

same group over time compared with their peers. 

Additional data from United Health Group shown privately to Miramont 

revealed that for the United Health Care beneficiaries attributed to 

Miramont, Miramont provided an 83% reduction in hospital readmission 

rates. Although relative data such as this was provided from time to time 

by the commercial payers to the pilots, it was generally done so as a slide 

presentation or some other method to prevent the data from being recorded 

or externally reported, in part out of the neccssity of the commercial health 

insurer to maintain trade secret status. In general, the data showed 

Miramont that it decreased Emergency Room and Urgent Care utilization, 

reduced readmission rates, reduced global costs of care, and improved 

metrics over time. Individual commercial insurers would need to be 

contacted separately to provide this testimony to tbe subcommittee. 

Section 5 - Rural Health Care sustainability - scalability 

In 2008, a regional hospital system lost over $500,000 in one year 

maintaining a small clinic in the rural community of Wellington Colorado. 

The clinic was closed without almost any notice, and attempts to garner 

support for a replacement clinic from other multibillion dollar hospital 

health care systems in the region failed. No plans were forthcoming for state 

or Federal deployment of a community health center of Federally Qualified 

Health Center (FQHC). Within 48 hours of the clinics closing, however, 

Miramont was able as a small private sector enterprise to open a clinic just 

blocks from the old facility. Utilizing the workflow changes it was 

developing in the pilot, and scaling the technology of its centralized data 

center, within the first year the clinic was profitable, and by the end of year 

two construction was completed on a Small Business Administration (SBA) 

financed building complete with in-house laboratory, X-ray and drive 

through pharmacy. Patient centered services included a visiting 

Psychologist, Physical Therapist and Audiologist, as well as the addition of a 
76 

f 


Insert here 78177.062

visiting Pediatrician and Obstetrician-Gynecologist. The clinic serves nearly 

40% of the community's residents, and represents the only medical services 

within a 40 minute round trip drive to the community. Like all Miramont 

locations, it serves new Medicare and new Medicaid patients, and 

participates in the reporting of metrics to the PCMH Multi-payer Pilot 

Program. Miramont Wellington has one full time physician, and two 

physician assistants. 

Section 6- Summary 

In summary, the process of NCQA recognition and workflow redesign 

coaching made it possible for Miramont to develop the foundation necessary 

to improve safety, efficiency, patient outcomes and profitability in the 

ambulatory care environment. Other benefits of workflow process 

improvement included a successful Meaningful Use implementation strategy 

and recognition by the Office of the National Coordinator and HiMSS. 

Improved clinical quality flowed from measuring population health at the 

primary care level, and by reporting these metrics to commercial and 

government payers via a central registry. This created a business case for 

continuous quality improvement in the ambulatory care environment 

that only worked by virtue of being coupled with Patient Centered 

Medical Home payment reforms such as Per Member Per Month fees 

and Pay for Performance bonuses, as well as adequate Fee For Service 

payment to Primary Care, Cost reductions more than offset the 

increased payments to the individual PCMHs, and private sector health 

insurance now publically recognizes the value of contracting with 

PCMHs for health care delivery. Return on investment (ROI) appears to 

be immediate, within 1 to 2 years, and the workflow changes 

demonstrated in the pilot are scalable to urban, suburban and rural 

areas, with practice transformation consistently possible in under 2 

years. 

I call on the Health Subcommittee of the Ways and Means Committee of the 

United States House of Representatives to compel the Department of Health 

and Human Services to deploy the Patient Centered Medical Home payment 

model at the national level immediately in the broad interest of conserving 

our primary care workforce, improving the quality of health care for 

entitlement program beneficiaries, and reversing the burden of rising health 

care cost expenditures on the American taxpayer with a system that is 

proven and is already being adapted in the private sector. 

Respectfully Submitted, 

/(1 .~ ~-;-MJ _J [/! \ .. / ' 

John L Bender, M.D., FAAFP 

Diplomat, American Board of Family Medicine 

President and CEO, Miramont Family Medicine 

Secretary-Treasurer, Physician's Quality Network, Inc. 

Board and Past President, Colorado Academy of Family Physicians 

Board, Colorado Medical Society 

Board and Past President, Larimer County Medical Society 

Past President, Northern Colorado IPA 
77 

Chairman HERGER. Thank you. 

Mr. Nichols is recognized for five minutes. 

STATEMENT OF LEN M. NICHOLS, DIRECTOR, CENTER FOR 

HEALTH POLICY RESEARCH AND ETHICS, FAIRFAX, VIRGINIA 

Mr. NICHOLS. Thank you, Chairman Herger. Thank you, Ranking Member Stark, and other Members of the Committee and subcommittee. I am honored to offer my thoughts on incentive realignment today. 

My name is Len Nichols. I am a health economist. I direct the 

Center for Health Policy Research and Ethics at George Mason 

University. I am also the editor-in-chief of a new online journal, the 

Community on Payment Innovation, jointly sponsored by the ACC 

and the American Journal of Managed Care, which, by the way, 

has already published a report by colleagues of Dr. Share on his 

innovative PGIP program. I am on the board of the NCQA, which 

devised the patient-centered medical home criteria Dr. Bender just 

spoke about. And I was recently selected as the innovation advisor 

to CMS. 

But I do want to make crystal clear at the outset my written testimony and spoken views are mine and mine alone. I do not speak 

for any organization, public or private, nor for any other person, 

living or dead. 

Let me start with some good news. Health care stakeholders 

around the country get it, and they are responding to the incentive 

realignment signals now embedded in the Affordable Care Act. 

They are devising private initiatives, some of which you have just 

heard about; but even more importantly, they are devising publicprivate partnerships that are our best hope for improving health, 

improving care, and lowering costs for all of us over time. 

It seems to me we face two broad alternative pathways to 

achieve our goals. One path entails severely reducing coverage, eligibility, and prices paid in public programs, or even eliminating 

them altogether. In other words, we could cut our way to fiscal balance, and in so doing, reduce access to care for millions of Americans. I fear this pathway would likely fail, for the ensuing cost 

shift to the private sector would drive up premiums and cost us yet 

more high-wage jobs in a never-ending cycle of decline. 

Alternatively, we could align incentives so thoroughly that we actually link the self-interest of clinicians with our common interest 

in cost growth reduction and quality improvement while covering 

all Americans. This is by far the most humane way to our shared 

objective. Quite simply, we need value-based payment systems 

where value has three dimensions: clinical quality, patient experience, and efficiency. 

I will emphasize three points. Number one: While fee-for-service 

is part of the problem, in the real world fee-for-service is also ubiquitous and therefore it cannot be jettisoned overnight. We must develop transition business models to enable clinician groups to move 

from fee-for-service alone to more sustainable incentive structures 

without going bankrupt. 

Point number two: The ACA has signaled to the country that 

business as usual is over, and business as usual is over because we 

can’t afford it. Every one of the initiatives you have heard about 

78 

today and that Karen Ignagni of AHIP reported on a fascinating 

conference in October, referenced in my written statement. Patientcentered medical homes, bundling, accountable care organizations, 

or organized systems of care in Dr. Share’s terminology, all have 

a conceptual counterpart in the ACA. 

The growing private sector interest in care innovation emerging 

from the CMMI is the proof that ideas and efforts in the public and 

private sector are converging, which is extremely good news because every single clinician I have ever met, and I am old enough 

to have met quite a few, wants one set of incentives, one set of 

quality metrics from payers, one set of patient acuity adjusters, 

rather than the Byzantine plethora they labor under today. 

Number three: Neither private nor public sector payers can do 

this by themselves. Private payers sometimes need public payers to 

help with local provider market power, and as Dr. Sandy said, public payers can benefit from adopting the supple nuance with which 

private payers tailor incentives for different marketplaces. 

I will close with three observations that I think are relevant. As 

an editor-in-chief focused on payment innovation, I have learned 

that many practicing physicians are skeptical of new payment models that don’t have quality or patient acuity components. 

Second, as an informal advisor to three different applications to 

the recent Innovation Challenge grant initiative from CMMI, I saw 

the immense value of having a vision of a community health system. In each case, leadership originated in a different place—a consumer-oriented health system agency in one case, a local nonprofit 

health plan with a history of collaboration in another, a forwardthinking single specialty group armed with data and a commitment 

to quality. 

But in each case, local employers, hospitals, plans, and of course, 

other clinicians and community voices we recruited, in two cases 

including the state Medicaid program, until by the end only Medicare had not yet joined these promising local incentive arrangements that are squarely aimed at a sustainable version of the 

three-part aim. The point of the applications and this initiative is 

to entice Medicare to join the party that the private sector devises, 

and others like it. 

Finally, as a participant in CMMI’s new Innovation Advisors program, I recently spent two and a half days in a hotel near Baltimore with 72 of my new best friends. CMMI hopes to deepen our 

skills in innovation and quality improvement while we bring them 

new ideas from the real world outside the Beltway. But the best 

part of this was in seeing the energy and talent from across the 

country that is now committed to achieving the three-part aim in 

a wide array of institutions and settings. 

I would suggest to you that the Innovation Advisors program is 

proof that there is now broad recognition that top-down payment 

and delivery changes will not work, that frontline clinicians and 

managers and nurses and plans and patients all have to work out 

the details that will work for them where they live and work, and 

that we all need all the tools we can muster, from the public sector, 

the private sector, the recent reform law, and the God we worship 

in our own ways, to get this done in time for our health care system and our country. 

79 

Thank you very much. 

[The prepared statement of Mr. Nichols follows:] 

80 


Insert here 78177.063

***THIS TESTIMONY IS EMBARGOED UNTIL 10:00 AM, 

TUESDAY FEBRUARY 7,2012*** 

Programs that Reward Physicians 

that Deliver High Quality and Efficient Care 

Statement of 

Len M. Nichols, Ph.D. 

Professor of Health Policy and Director, 

Center for Health Policy Research and Ethics 

College of Health and Human Services 

George Mason University 

Fairfax, VA 22030 

d rlisON 

UNIVERSITY 

For the Health Subcommittee of 

The Committee on Ways and Means 

February 7, 2012 

Washington, DC 
81 


Insert here 78177.064

Programs that Reward Physicians that Deliver High Quality and Efficient Care 

Len M. Nichols, Ph.D. 

February 7,2012 

Chairman Herger, ranking Member Stark, other distinguished members of the Committee and 

Sub-Committee, it is an honor and a privilege to join this panel today and offer my thoughts as 

you consider different types of incentive realignments within our health care delivery system. 

My name is Len M. Nichols. I am a health economist, Professor of Health Policy, and Director 

of the Center for Health Policy Research and Ethics in the College of Health and Human 

Services at George Mason University in Fairfax, Virginia. My other affiliations relevant to the 

subject oftoday's hearing include: Editor-in-Chief of the online Payment Innovation 

Community, a project jointly sponsored by the American College of Cardiology and the 

American Journal of Managed Carel; Board member of the National Committee on Quality 

Assurance,2 Academy Health,) and the Arkansas Center for Health Improvement;4 member of the 

National Committee on Vital Health Statistics;5 and recently I was selected, along with 72 other 

health professionals from around the country (out of 920 applicants), to be an Innovation 

Advisor to the Center for Medicare and Medicaid Innovation. 6 I do want to make crystal clear at 

the outset, however, my written testimony and spoken views are mine and mine alone and that I 

do not speak for any organization, public or private, nor for any other person, living or dead. 

I am certain there is no need to belabor my first point on this subject for this Committee: we 

simply must lower health care cost growth to ensure continued access to high quality care for all 

Americans, including the currently insured and the (hopefully) soon-to-be insured. And while 

the sense of urgency is great in any student of our health care system or our economy, I want to 

tell you why I am more optimistic today about our chances than at any time in the past 20 years: 

health care stakeholders around the country are responding to the incentive realignment signals 

in the Patient Protection and Affordable Care Act (ACA) and stepping up to the plate to device 

lhttp://paymentinl1ovations.cardiosource.org 

'http://www.ncqa.org 

'http://www.academyheallh.org 

.http://www.achi.net/index.asp 

'http://www.ncvhs.hhs.gov 

)http://innovations.cms.gov/innovation-advisors-program 
82 


Insert here 78177.065

private sector initiatives, some of which you just heard about, and public-private partnerships 

that together are our best hope for improving health, improving care, and lowering cost over 

time. 

Despite our serious budget realities, it is important to not panic, to take stock of initiatives that 

are working well and to spread them, to improve on those that need some work, and to take note 

of our successes, including the recent slowdown in Medicare spending growth to only 2.5% per 

beneficiary from 2009-20 I 0. 7 

Now the contemporaneous slowdown in the private health spending (out of pocket plus private 

health insurance benefit payments) growth to 2.2% in 2010,8 is most likely due to the twin 

effects of the Great Recession, for millions of newly uninsured cut back on needed services as 

they lost COBRA coverage, either because they could no longer afford it any longer or because 

their time limits were reached, and of higher cost-sharing requirements relative to reduced family 

incomes (overall out-of-pocket spending grew only 1.8%).9 This last effect would also explain 

why insurers like Aetna 10 saw large profit increases from way less than anticipated use by the 

still insured. But the same "coverage loss/higher-cost sharing" rationale cannot explain the 

Medicare cost growth reduction. 

A number of interpretations have been offered, and it is certainly too early for definitive 

judgments, but the one I find most compelling is that the Patient Protection and Affordable Care 

Act (ACA) savings provisions, specifically the reductions in overpayment to Medicare 

Advantage plans and the reductions in automatic increases to the market basket update factor for 

hospitals, are working as well or better than the Congressional Budget Office (CBO) expected 

when it scored them in 2010. This is good news in general, and sets us up for even more success 

as the payment reform pilots and demos coming out of CMMI and the private sector alike work 

to transform care and improve patient health and quality even as they lower total cost of care, at 

least off baseline, for all Americans. I I 

7Martin, Anne B., et al. "Growth in US Health Spending Remained Low in 2010; Health Share of Gross Domestic 

Product Was Unchanged hom 2009," Health Affairs 31 No. I (2012):208-219 

g Computed from data in Martin et ai, Ibid. 

9 Martin et al. 

10 http://www.foxbusiness.com/i nd ustri es/2012/02/01/ aetn a-profit ·gets-boost -fro m·low-cla i m-costs/ 

" http ://www.innovation.cms.gov(documents(pdf(CMMlreport 508.pdf 

2 
83 


Insert here 78177.066

The urgency of sustaining lower health care cost growth in the face of our demographic 

challenges is widely accepted, and we are going to need every arrow in the quiver, public sector, 

private sector, and preferably turbo-charged partnerships among the two. It seems to me we face 

two broad alternative pathways or "doors" to accomplishing this political, economic and 

budgetary imperative. 

One path entails severely reducing coverage, eligibility and prices paid in public programs 12 or 

even eliminating the programs altogether. IJ Presumably this path would also eventually include 

logically related reductions in the generosity of benefits in the private sector and/or eliminating 

our current almost $400B tax expenditure 14 from shielding employer and employee premium 

contributions from federal taxation. In other words, we could cut our way to fiscal balance, and 

in so doing reduce access to care for millions of Americans. I fear this pathway would also 

likely fail to preserve the high value added private sector jobs we need to retain in this country, 

since hospitals would have no choice but to cost-shift to the private sector, to make up for the 

public sector underpayment and the growing uninsured population. This would raise private 

insurance premiums to even more unsustainable levels. In others words, this pathway would 

likely not even succeed in its narrow goal of balancing public health care budgets, for revenue 

from a weakening economy would continue to fall. 

The alternative pathway is to realign health and health care delivery incentives so thoroughly that 

we link the self-interest of clinicians, hospitals and all patients with the social interest in cost 

growth reduction while covering all Americans. Now I admit to a possible conflict of interest 

here, since incentive realignment across 1/6th of our economy virtually guarantees full 

employment for health economists and others of our ilk, but I will also state unequivocally and 

as forcefully as I can, "door number two" is by far the more humane pathway to our shared 

objective. 

To realign incentives with appropriate speed and efficiency, we need new value-based payment 

systems to be adopted by public and private payers alike. Value, by the way, is increasingly 

taking on three dimensions: clinical quality, patient experience, and efficiency (or overall 

12 http://ebo.gov /ftpdoes/121xx/doe12128/04-0S-Ryan_Letter.pdf 

13 Volaek, Jason M. http://abenews.go.eomlblogs/polities/20llI12/ron-paul-attaeked-for-views-on-health-eare 

14 http://www. eb ri .org/pdf/ pu blieati on s/faets/FS-209_ M a rlO _Ben s-Rev-Loss. pdf 

3 
84 


Insert here 78177.067

resource use). This value construct is also consistent with the new three part aim of CMS and 

CMMI: better health, better care, and lower cost. 

The very good news is there is truly a tremendous amount of ferment across the country on 

incentive realignment, for most health system stakeholders have come to recognize its 

importance as the preferred and only real alternative to draconian cuts in access and equity that 

would result from door # I above. You've heard about some of that interesting work today from 

my fellow panelists. 

I want to emphasize three points in the remainder of this testimony. 

Number I: While there is a (thankfully) growing recognition that our historical over-reliance on 

fee-for-service (FFS) payment mechanisms is part of the problem and sometimes creates strong 

disincentives to improving health and efficiency-enhancing delivery system redesign, FFS 

payment is also ubiquitous and therefore it cannot be jettisoned wholesale overnight. Indeed, 

one of the most important tasks for economists, CFOs, practice managers, and clinicians 

themselves is to develop new business models that will align the self-interest of providers with 

the social interest in lower cost, better care, and better health. Some new payment models are 

taking shape and being tested, as you have no doubt heard before and I will describe below, but 

they are still a long way from being granular and flexible enough to work in the many different 

contexts of the US health delivery system. And more than likely, we will decide to keep some 

version of FFS for many and perhaps all providers for at least some patients. Therefore, there is 

an even more urgent task of developing "transition" business models to enable clinician groups 

and hospitals to move from FFS alone to better and more sustainable incentive structures and 

overall quality and efficiency performance without going bankrupt in the bargain. This is a task 

I and others are now focused on like a laser beam. So stay tuned. 

Number 2: The ACA has had a number of salient effects already, in addition to slowing 

Medicare spending growth. It has signaled to the country that the US Congress has gotten the 

main point about our health care system; business as usual is over because we cannot afford it, 

even though we are not now serving all our citizens as well as we should. The Ryan budget, 

since it included all of the Medicare savings provisions of the ACA, as well as the ensuing and 

ongoing deficit reduction debate, also contributed to the signal being received throughout our 

4 
85 


Insert here 78177.068

health care delivery system, but 1 would argue that the ACA is the major reason behind the 

private sector incentive realignment efforts that are encouraging us all. 

The proof 1 offer today of the ACA's central role comes from two sources: one, a recent summit 

conference that America's Health Insurance Plans sponsored on shared accountability, and the 

other, the growing interest in care innovation initiatives emerging from the CMMI. 

In October of Karen Ignangi and colleagues reported the results of a survey of AHIP members 

that was completed in late summer 2011. 15 At that time there were already 151 patient centered 

medical home partnerships between physician practices and private health plans, 30 

"Accountable care model" arrangements, 16 bundled payment/episode or care partnerships, and 

3 full patient-acuity-adjusted global caps, wherein the provider groups bear full or partial 

financial risk for the care of a defined population and for a specific amount of time. 16 The very 

organization of her presentation shows how the private sector is mirroring and sprinting ahead 

with the types of payment reform that CMMI is encouraging pursuant to the ACA: accountable 

care organizations, primary care transformation, and bundled payment arrangements 

emphasizing Medicare enrollees. } 

The reason I am excited by this dovetailing in model development and payment innovation is 

that every clinician and clinician manager 1 have ever met, and 1 am old enough and have given 

enough hospital association and medical society keynote addresses to have met quite a few over 

the years, every single one always expressed a strong preference for one set of incentives from 

payers, one set of quality metrics, one set of patient acuity adjusters and feedback loops, etc., 

rather than the byzantine plethora they labor under today. Indeed, without new incentives in 

place for a majority of patients in a given practice or hospital, it is highly unlikely that care 

delivery will change from the current focus on volume and uncoordinated care. 

And while the ACA may be responsible for the type and scope of interest in payment and 

delivery reform models being tried now in the 49 states which AHIP reported on, similarly the 

15 http://www.ahipcoverage.com/2011/10/20/ materi a I 5-fro m-a h i p%E2 %80%99s-su m m it -0 n-sha redaccountability/ 

16 AHIP updates these counts regularly, for they continue to expand. For more on AHIP's work in this area, see: 

Higgins, Aparna et ai, "Early Lessons from Accountable Care Models in the Private Sector: Partnerships Between 

Health Plans and Providers," Health Affairs 30, NO.9 (2011):1718-27; and "Transforming Care Delivery," AHIP Issue 

Brief January 2012. 

5 
86 


Insert here 78177.069

spread of these initiatives within the private sector is surely also driving more plans and provider 

groups to consider the public-private partnerships that CMMI is trying to create around the 

Comprehensive Primary Care Initiative,17 the Multi-Payer Advanced Primary Care Practice 

Demonstration, IS and through both Pioneer and Advanced Payment ACOS.1 9 When providers 

see the federal government, state government programs, and private payers all focused like a 

laser beam on reducing costs while better measuring and improving care quality, patient 

experiences and outcomes, old barrier attitudes like "this fad will go away with the next 

election," fade quickly, and suddenly it seems like a very good idea to invest in learning new 

care coordination techniques and business models. 

It is fair to say that many were disappointed with the initial shared savings ACO proposed rule,20 

but since then interest in CMMI pilots has been increasing, from 32 full speed Pioneer ACOs to 

8 states coordinating large multi-payer collaborations to transform physician practices into 

patient centered medical homes, 5-7 sets of private plans providing incentives to transform 

primary care with 75 physician practices each within defined local markets and the as yet 

unreported but expected (and rumored throughout delivery system circles) very high interest in 

both the 4 bundled payment models about to be tested and the open ended innovation challenge 

grants which were just submitted IO days ag021 Based on what I'm hearing from applicants to 

that grant opportunity from around the country, interest is very high in this unique opportunity to 

tell CMMIICMS what new payment and care delivery arrangements make sense to particulars set 

of providers, plans, and employers who are indeed willing to pursue the three part aim (better 

health, better care, lower cost) on the ground in the real world. This is not your father's "one 

size fits all" Medicare demo from decades past. 

Number 3: Neither public nor private sector payers can remake sustainable incentive structures 

by themselves. While it has not gotten enough policy attention yet, there is growing awareness 

17 http://innovation.cms.gov/initiatives/cpci 

18 https://www.cms.gov/DemoProjectsEvaIRpts/MD/ltemDetail.asp?ltemID=CMS1230016 

19 http://i n n ovat ions. ems. gov Ii n itl ati vesta colp io nee r; and http://i n n ovat io ns.c ms. gov Ii n Iti ativesl a col a dv a n cepayment/ 

20 http://www .com mo n wea Ithlu n d .org/N ews letters/Wa sh i ngton -H ea Ith-Po I i cy-i n-Revi ew /2011/May /May-9-

2011/Model-ACO-Health-Centers-Skeptical.aspx 

21 These initiatives are all described and the counts of participants if underway as of yet are contained in the 

document referenced in footnote 11. 

6 
87 


Insert here 78177.070

that a serious problem private insurers face in many markets is local provider market power. 22 

The best hope for effective incentive realignment in those markets is far more supple privatepublic payer cooperation, for only Medicare has enough market share to engage some providers 

in balanced negotiation and only federal antitrust authorities can create appropriately monitored 

safe harbors to negotiate community-wide incentive arrangements that will achieve the three part 

aim for all. 

At the same time, public sector programs can benefit from increasing their own flexibility to 

match and support inherently more flexible private sector arrangements. The ACA included long 

overdue provisions that will finally enable states and communities to acquire and use certain 

Medicare data alongside what state Medicaid programs, state employee programs, and local 

private plans may be willing to provide to support common approaches to target delivery and 

payment reform efforts to the highest value local uses. In addition, discretionary authority that 

would enable Medicare to piggyback on locally agreed upon private sector incentive 

arrangements that pursue the three part aim for all patients, providers, and payers would be a 

very good tool to add to the CMS toolbox. The creativity and focus coming out of and into 

recent CMMI initiatives, especially the Pioneer ACOs, the CPCI and the Innovation Challenge 

grants, which are more open ended, provider led and individually tailored than many previous 

opportunities, are likely to reveal a number of different incentive realignment strategies that may 

make perfect sense in different parts of the country but not everywhere. As are the private sector 

initiatives like the ones recently highlighted by AHIP. It would be wise to enable Medicare and 

the private sector to spread these kinds of innovations in similar if not identical ways, so that 

more and more clinicians face similar incentives to achieve the three part aim for all patients. 

I will close with lessons learned in three of my recent roles. Each has given me a bird's eye view 

of some of this innovative ferment that spans public and private sectors and that may be useful 

for you to consider ways to improve the Medicare program while benefitting all Americans. 

22 Nichols, Len M. "Making Health Markets Work Better With Targeted Doses of Competition, 

Regulation, and Collaboration," st. Louis University Journal of Health Law and Policy 5(7):7-26; Paul B. 

Ginsburg, http://hschange.org/CONTENT/1162/1162.pdf; Nichols et ai, "Are Market Forces Strong 

Enough to Deliver Efficient Health Care Systems? Confidence is Waning," Health Affairs March/April 

2004. Competition in the Healthcare Marketplace: Hearing Before the Subcomm. on 

Consumer Prot., Product Safety, and Ins. a/the Comm. on Commerce, Science, and Tramp., 

Illth Congo 85-99 (2009) (statement by Len M. Nichols). 

7 
88 


Insert here 78177.071

First, as Editor in Chief of the new online Community on Payment Innovation,23 I have learned 

that good patient registry data can drive awareness and behavior to higher value diagnostic and 

therapeutic choices by patients and clinicians together. And given the general tumult in the 

health care system, there is considerable interest in new arrangements among and for physicians, 

ranging from employment by hospitals rather than private practice to direct physician contracting 

with employer and by-passing health plans altogether. I have also learned, however, that many 

physicians are simply not aware of key details of the current incentive structures they are paid by 

today, and therefore it is not surprising they are having a hard time analyzing proposed new 

models. They have no frame of reference or trusted method of comparison of how they would 

fare under different scenarios. Therefore much useful teaching, awareness building, and model 

development must precede wholesale incentive realignment in our country. 

Second, as an informal and upaid advisor to three different communities' applications to the 

CMMI Innovation Challenge grant initiative, I saw the immense value of having a vision ofa 

true community health system shape the partners that were ultimately recruited to join the 

efforts. In each case, leadership originated in a different place; a health system agency with a 

consumer-oriented focus in one case, a local non-profit health plan with a history of 

collaboration in another, and a forward thinking single specialty group armed with data and 

commitment in a third. But in each separate case, local employers, hospitals, plans, and of 

course other clinicians and community voices were recruited (and in two cases, the state 

Medicaid program), until by the end only Medicare has not yet joined promising local incentive 

arrangements that are squarely aimed at a sustainable version of the three part aim. The point of 

the applications and this initiative is to entice Medicare to join the party and others like it. 

Third, as a participant in CMMI's new Innovation Advisors Program (lAP), I recently spent 2.5 

days in a hotel near Baltimore with 72 of my new best friends. CMMI hopes to deepen our 

skills in innovation and quality improvement while we bring them new ideas from around the 

country. Innovation theory and tools are useful and interesting, but the best parts of the meeting 

were when we talked with each other, sometimes structured sometimes now, about challenges 

and promising ways to overcome them in different settings and for different types of patients. 

The very best part was in seeing the energy and talent that is now committed to achieving the 

23 See the link in footnote 6. 

8 
89 

f 


Insert here 78177.072
90 

Chairman HERGER. Thank you. 

Dr. Sandy, I understand that your company’s network includes 

approximately 650,000 physicians, a number nearly equal to the 

number of doctors who participate in Medicare. As your quality and 

efficiency program touches many of these physicians, and considering that other private payers have similar programs, would you 

say that a good number of Medicare participating physicians have 

exposure to a program such as yours? 

Dr. SANDY. Well, thank you, Mr. Chairman. We do have close 

to 650,000 physicians and other health care professionals, including 

nurses, chiropractors, mental health workers, and so on in our 

broad network across the country. The premium program that I 

mentioned in my testimony encompasses, at current scale and 

scope, close to 250,000 physicians across 21 different specialty 

areas of medicine. 

So given that scope, I don’t know the exact answer, but I would 

venture to say that the vast majority of those physicians, aside 

from those that don’t typically take care of Medicare patients such 

as pediatricians, have had exposure to our program and probably 

similar programs by others in the private sector, and those physicians also take care of Medicare beneficiaries. 

Chairman HERGER. Thank you. 

Dr. Share, the number of Michigan physicians participating in 

your program is very impressive, and that they group together in 

the physician organization is an interesting feature. As someone 

who represents a very rural district in Northern California, I know 

it has always been a difficult challenge to develop integrated delivery systems in rural areas. Can you describe the level of physician 

participation in the rural or more remote parts of Michigan as well 

as the size of organizations in those areas? 

Dr. SHARE. Certainly. The incentive program that we have is intentionally designed to be inclusive of both sophisticated, vertically 

integrated delivery systems and small one- and two-physician practices, and also to get all of them, regardless of their size and structure, to come together collectively to share responsibility for a population in common. 

So there are physician organizations in nearly every county in 

the state, and there are many, many rural physicians who are involved in these physician organizations. Some of them, interestingly, have come together under an umbrella organization run by 

the state medical society that provides comprehensive administrative and technical structure to support the smaller practices who 

join in confederations of private practices, one? and two-person doctor offices, so that they don’t have to create the analytic infrastructure and the information systems all by themselves. 

This has empowered them to be full partners in this program, 

equally engaged, equally exciting. There are individual physicians 

in one-person offices who have stunning stories to tell about how 

they have transformed their practice, including way up in the 

upper reaches, far reaches of the Upper Peninsula. 

So I think this program has touched nearly every community and 

every type of practice, including rural practices, absolutely. 

Chairman HERGER. Thank you. That is exciting. 

91 

Dr. Bender, your story of transformation is remarkable. You note 

that your practice made these investments without regard to 

health care overhaul and without regard to SGR because these 

were things you couldn’t control. You also note that it would take 

other small practices two years or less to complete such transformation. 

What advice would you offer to other physicians who struggle to 

make major practice changes, given the constant pressure placed 

on them by the reimbursement system? 

Dr. BENDER. Well, thank you, Chairman Herger. They need two 

things, leadership and courage. Leadership means, to get involved 

in a patient-centered medical home, they have to tell their staff, 

hey, we are going to do this. They have to believe in it. The group 

has to eat, sleep, and drink the model. 

This requires delegation. I couldn’t have done this without the 

superior HR structure that we have at Miramont, with excellent 

employees who are committed to this process. Because it is brain 

damage. It is very difficult to go through change. People hate 

change, but they love progress, and to get to the point where we 

are excited about what is new at Miramont as opposed to, my goodness, we are doing thing differently. 

The other part, courage: Physicians are scared. They don’t know 

what is going to happen with the health care overhaul. They are 

worried about regulations, malpractice, et cetera, et cetera, SGR 

threats. And really what I tell them is, the opposite of careless is 

not always—or, I am sorry, the opposite of cautious is not always 

careless, but sometimes the opposite of cautious is courage. 

Are they choosing not to do it just because they think that it is 

going to be careless? Or are they choosing not to do it because they 

are afraid? 

Chairman HERGER. Thank you. 

Mr. Stark is recognized. 

Mr. STARK. Thank you, Mr. Chairman. I thank the witnesses for 

participating with us today. 

Mr. Nichols, you talked about why public and private payers 

must work together to align incentives. So while this hearing has 

been informative, it seems to me that the focus just on private sector initiatives misses a larger picture. Could you talk some more 

about the need to combine the public and private sectors to see if 

we can get those stars in alignment? 

Mr. NICHOLS. Be glad to, Congressman Stark. Basically, the 

simple reason they have to cooperate is because most clinicians 

treat all kinds of patients. And it turns out in lots of specialty cases 

and in some locales, a majority of a clinician’s patients might be 

public, so they are the biggest market share. They are typically the 

biggest market share for hospitals, and they are often also so for 

specialists, including cardiology, I might point out. 

So if you don’t get the sectors aligned, if you don’t get the incentives aligned, clinicians are going to be both confused and, as Dr. 

Bender might say, unhappy about it. And so the best way to transform patient care is to get them aligned. 

That does not mean they all have to pay the exact same level. 

I certainly believe in the private enterprise system. I certainly believe in competition. But I also think it makes sense for the cliniVerDate Mar 15 2010 20:07 Feb 27, 2013 Jkt 078177 PO 00000 Frm 00095 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\78177.XXX 78177
92 

cians to face the very same set of incentives, the very same set of 

feedback loops, the very same set of metrics. 

The very idea that United would have one set of metrics and 

Aetna a different one and CIGNA a third and Medicare a fourth 

and Medicaid and yada yada yada—by the end of the day, what is 

the clinician going to do? What they think is best independent of 

what they are being paid by. 

So the smartest thing to do is to get the incentives aligned. Now, 

there are lots of reasons that is difficult to do, but there are about 

300 million reasons it is a good idea to do as soon as possible. 

Mr. STARK. Thank you. Also, it is my understanding that we are 

probably the only industrialized nation that does not use a comparative effectiveness measure. And I hasten to point out that all 

the comparative effectiveness programs, whether they are for pharmaceuticals or medical procedures, don’t include cost. And of 

course, there is this—for some reason; I think it is mostly political 

fodder, but people are suggesting that using comparative effectiveness would lead to rationing. 

I wondered, both Dr. Sandy and Dr. Share, what is your reaction 

to that? Comparative effectiveness, if you had that available to you 

across the board—some professions or segments, thoracic surgeons, 

for instance, have done their own. For about five or seven years, 

they have collected data on every procedure that every member of 

the club or college, whatever you call it, has provided to a patient, 

and the outcome, and they have tracked the patients. But that is 

a small group in the firmament of medical providers. 

What do you think about the rationing issue? 

Dr. SANDY. Well, thank you, Congressman Stark. The comment 

I would say around comparative effectiveness research is, it is absolutely essential that there be investments in understanding of 

the differences in clinical effectiveness between different treatments so that physicians can have the best science and information 

to help inform the choices in their care, and that patients then can 

have that information as well so that they can make their informed 

choices. 

I think what I really would underscore and echo and support is 

the phrase that Dr. Lewin laid out. He used the term bringing 

science to the point of care, and I would strongly support that. And 

I think organizations such as the American College of Cardiology, 

the Society for Thoracic Surgery that you mentioned, these medical 

specialty societies are really at the forefront of doing that. 

One of the things that in my opinion would be helpful is that 

these societies are at the forefront, but there are other societies 

that would like to move in this direction to develop detailed clinical 

registry information, to help inform the physicians that are part of 

that specialty area to collect that information. That has been a 

challenge. 

It is gratifying—there is a fledgling effort, by the way, called the 

NQRN, the National Quality Registry Network, a multi-stakeholder coalition, to advance this frontier. And we think that would 

be a very important development to support. 

Mr. STARK. If I may just have another second, Mr. Chairman, 

wouldn’t the requirement for keeping electronic records, which now 

93 

everybody is supposed to do, help toward building this comparative 

effectiveness study? 

Dr. SANDY. Well, again, one of the things that your question 

points out is the issue of the challenges of administrative simplification and the fact that many physicians do not have electronic 

health records. While electronic health records sometimes aren’t 

architected to collect detailed information, it is an important start 

to help promote that kind of data collection for the purposes that 

I have outlined. 

Mr. STARK. Thank you. 

Dr. SHARE. Mr. Chairman, could I just add a brief note in response to Mr. Stark’s question? 

Chairman HERGER. Very quickly. 

Dr. SHARE. Yes. So we have actually embarked on a very ambitious approach to empowering the provider community, in the spirit of our partnership approach, with the workings of comparative 

effectiveness research, putting them into the hands of the provider 

community. 

We have 17 distinct hospital-based, multi-institutional, data registry-driven, collaborative quality improvement programs that have 

dramatically decreased the rate of mortality and morbidity, and 

saved money while doing so. And we are now in the process of linking claims data to the quality data across the state to empower 

CFOs, CEOs, and physician leaders to use that integrated data set 

to improve value in hospital care. 

Mr. STARK. Thank you. 

Chairman HERGER. Mr. Johnson is recognized for five minutes. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Dr. Share, it is interesting to learn the improvements you are 

making in Michigan. Do you ever talk to Blue Cross in Dallas? 

Dr. SHARE. Do we talk to Blue Cross in Dallas? We talk to the 

Health Care Service Corporation, which I believe is a nonprofit. It 

is a Blue licensee, so it is a Blue plan. And it is multi-state. It is 

in Texas, Illinois, and I am not sure where else. 

We have talked to them a good bit about this collaborative quality improvement approach using comparative effectiveness research 

in daily practice across an entire state, and they are beginning to 

adopt that model. We haven’t talked to them about our physician 

group incentive program yet. 

Mr. JOHNSON. So the Blues aren’t united across the country? 

Dr. SHARE. The Blues are united across the country in terms of 

having really rich relationships at the local and regional level with 

the provider community, and each developing payment transformation and practice transformation approaches that fit the 

needs and the circumstances of those communities. And we share 

experience and knowledge about what works across the Blue association. 

We are now actually working towards developing a set of tiered 

incentive programs, tiered in the sense of benefits being—the outof-pocket costs for members being lower if you are using a medical 

home doctor, for example, to try and bring our approaches into 

more alignment while still respecting local circumstances. 

Mr. JOHNSON. And what are your ideas? Do you all have some 

innovations that you are trying to share with Medicare? 

94 

Dr. SHARE. We are actually partnering with Medicare in the 

context of the advanced medical home demonstration project. And 

in keeping with Mr. Nichols’ comments, we have aligned incentives 

where we have 480 of our patient-centered medical home-designated practices involved in an incentive program that includes 

Medicare and Medicaid funding as well as Blue Cross funding. 

It has actually significantly enhanced the focus on a common set 

of quality measures, a common set of efficiency measures, and a 

common approach to care management across all of these 480 practices. So working with CMS in this way, bringing them into our regional innovative approach, has amplified what we are able to do. 

As an example, though, of how sometimes CMS has a bit of a 

hard time fully embracing and trusting a local or regional effort, 

one of our approaches is to provide the incentive payments to the 

physician organization, as I mentioned, for their collective success 

at achieving value for a population of patients. The physician organization can then invest the money in better care management systems, information systems, et cetera. CMS has required that its incentive money must be paid 80 percent to the individual medical 

home practices. That makes it harder for them to band together 

and create common systems with aggregated resources. 

So tremendous opportunities to partner with CMS. More opportunity, I think, to do so in ways that aren’t constraining, that free 

the local community to do its best. 

Mr. JOHNSON. Yes. But what I am hearing you saying is CMS 

isn’t listening to you. 

Dr. SHARE. No, they listen. They are an active partner, and 

they are trying to think through the best way to do it also. And 

as a partner, they naturally have an instinct to say, well, we really 

think it will be best if we tested an incentive models, where the 

doctors get reimbursement or an incentive payment made directly 

to them. So that is important to us. We didn’t come to yes on exactly how approach that. 

Mr. JOHNSON. Thank you. 

Dr. Lewin, you know, as we explore new systems for Medicare 

physician payment, in your experience what are some of the key 

points we need to keep in mind? And what does Congress need to 

do to apply these programs to Medicare? 

Dr. LEWIN. Well, the faster Congress really moves forward with 

payment incentives, I think we will see progress. We know that we 

have to be able to measure our way to success, so we do need registries. And registries work with electronic health records. 

So you have the electronic health record; a registry tracks a 

whole set of conditions and gives feedback to the hospitals and the 

doctors in terms of how they are doing so that they can begin to 

compete with themselves and with their peers on producing better 

and better results. Ultimately that is going to get reported back to 

consumers so that people will be able to choose where they get 

their health care based on improved outcomes. 

The extent to which Medicare can move more swiftly to payment 

reforms, I think we would see progress there. I love the CMMI 

grant program, but we will probably take three years or four years 

before we can see the results of those programs and apply them. 

Meanwhile, our deficit keeps increasing as a nation. 

95 

I would hope that we would begin to do some national demonstration projects coming right up in 2013 that would split the difference of savings between Medicare and the hospital and physician partners. So if we end up ferreting out unnecessary stents and 

unnecessary defibrillators, or choosing the right image and reducing the cost of imaging, and reducing the number of admissions 

and readmissions to hospitals by improving the treatment of heart 

failure—that is going to reduce the income to the hospitals. Right? 

Because they won’t have as many admissions. They won’t have as 

many procedures and images. 

So to help offset that, splitting the savings between Medicare and 

the provider community of doctors and hospitals is a way you could 

get people to move much faster. But we would need to require that 

while they are doing that, they are measuring how much progress 

they are making in a way that is effective and scientifically valid, 

and report that back so that we can see what we are doing. 

Chairman HERGER. The gentleman’s time has expired. 

Mr. JOHNSON. Thank you, sir. 

Chairman HERGER. Mr. Thompson from California is recognized 

for five minutes. 

Mr. THOMPSON. Thank you, Mr. Chairman, and thank you for 

holding the hearing. 

I would like to just piggyback on something that the chairman 

and the ranking member both spoke on, and that is the importance 

of fixing the SGR program. I have got to tell you, in my district 

that is what I hear about most—from the medical profession, from 

patients, people on Medicare. 

They have long forgotten all the manufactured crisis that was 

sent out on the talking points for the health care reform stuff. They 

want to make sure that they are going to get paid for the medical 

services that they provide, and Medicare patients want to make 

sure they are going to have a doctor to go to. And it stops right 

about there. 

I have not had one Medicare person stop me on the street and 

say, hey, I think electronic records are good, bad, or otherwise; the 

Affordable Care Act is doing this, that, or the other thing. But the 

SGR is critically important, and I don’t think it is enough to say 

if the Senate Democrats didn’t do this or the House Republicans 

didn’t do that. We have dropped the ball on this thing. 

I think Mr. Stark nailed it when he said that it is the cost, $300 

billion to fix this thing. Well, the bad news is if we wait another 

five years, it is over $600 billion. And I applaud my colleague and 

ranking member for raising a proposal as to how it can be paid for. 

We need to come together as Members of Congress, party stripe 

notwithstanding, and figure out how we come up with the dollars 

to fix this because right now—Mr. Nichols talked about the importance of partnerships. This is not a partnership. It is not happening. The Congress is not doing its fair share. If you use the 

breakfast analogy, we are bringing the eggs. And that is just not 

good enough, and I think we need to move quickly on that. 

Mr. Nichols, on the Affordable Care Act, this has in fact moved 

towards—some of these programs have moved towards payment reforms. And I think that is an important part of this bill on the part 

of a lot of us, and so I am glad to see this happening. 

96 

Can you talk about how the ACA reforms are moving private sector providers to develop and explore new forms of health care delivery that encourage efficient delivery and quality care? 

Mr. NICHOLS. I would be glad to, Congressman Thompson, and 

let me start with the program which I think is the most comprehensive, and that is the Comprehensive Primary Care Initiative, 

which you may know was actually offered to health plans so that 

they would indeed apply for the grant. 

Then, once selected, what they are looking for is five to seven 

markets around the country where they have a sufficient market 

share to really reach a large number of practices. And they will go 

back and jointly recruit physician practices to join the program, to 

join the party, and to devise payment arrangements that will work 

for those local communities. 

As every member of this panel has said to you, America is a big 

old diverse country. The idea that we can make one set of rules 

apply everywhere is just a little bit, well, last century. So here we 

are, and what is great about CPCI is indeed you are getting the 

plans and the government to work together to find a way to get to 

exactly what Dr. Share was talking about, what makes it work in 

Michigan versus Virginia versus California. That is among the 

more interesting ones. 

But I also want to emphasize the most recent innovation challenge grant, which basically was an open-ended invitation to provider groups, plans, people around the country. And while CMMI 

has not released the final numbers that have come in on applications because the grants have not been made, I know, from the people that I know who applied, very large numbers of people were 

very interested in this program—I mean thousands around the 

country. And we know this because when you apply, you get an 

email back that says, you are the 400-whatever. 

So over 6,000 people exhibited letters of interest. Over 2,000, we 

think, actually submitted proposals. That tells you something about 

the scale of people around the country who are hungry to do exactly what Dr. Bender talked about, and that is, how do you make 

incentives work where we are? And they are trying to tell the government, this is the best way to work for us. I can think of no better way to encourage the kind of partnership we all agree on. 

Mr. THOMPSON. Thank you. 

Dr. Share, one of the programs, the multi-payer advanced primary care initiative—and I think Blue Cross Blue Shield in Michigan is part of that—do you agree with CMS that CMS can be a catalyst in increased innovation in a health care system? And does 

this participation in this program lend to that? 

Dr. SHARE. Yes, I do agree. As it happens, in Michigan—and by 

the way, I mentioned earlier, we have 480 medical home practices 

in the demonstration project, which represent over half of the medical home practices in the eight states in the demo nationally—we 

actually had our physician group incentive program several years 

before in place, so we had a structure. We had engagement. We 

had made tremendous strides in developing medical homes and improving performance. 

So in our context, CMS came in and actively partnered with us, 

piggybacking on the work, building on the foundation we had laid. 

97 

In other communities, they are beginning. They are starting with 

10 medical home practices, with intention to grow that number. 

And the influx of support and focused attention and commonality 

of measurement approach by CMS has really jump-started their effort, has amplified their interest and their ability. 

So I think in different communities it will play out differently. 

But there is no question the answer is yes. 

Mr. THOMPSON. Thank you. 

Chairman HERGER. The gentleman’s time is expired. 

Mr. Kind is recognized for five minutes. 

Mr. KIND. Thank you, Mr. Chairman, and thank you for holding 

this very important hearing. Again, we have an excellent panel and 

your testimony here today is very appreciate and quite inspirational. 

I mean, what I have heard you in your testimony, reading 

through your written submission as well, it is hard to find any inconsistency in what is happening in the private world versus what 

reforms are being advocated in the Affordable Care Act. And Dr. 

Nichols, I couldn’t agree with you more. There has to be a convergence or harmony in delivery system and essentially payment reform between both the private and the public spheres or it is not 

going to work very well. 

I am proud that I hail from a state, Wisconsin, that seems to be 

out ahead of the cost curve. And Dr. Lewin, I am going to go to 

you shortly here to talk about the Smart Care project that you 

have submitted to CMMI for an update on that. 

But you look at certain models of care that are proving very effective, from the Mayo system to Gundersen, to Marshfield, to Aurora, to Dean, to Theta Care—highly integrated, coordinated, patient-focused, which provide models of where we need to drive the 

health care delivery system, and hopefully, ultimately—and I think 

this is going to be the verdict on any type of health care reform 

in this country—the payment reform that is desperately needed. 

We have got direct control over Medicare, and I would love to see 

fee-for-service die as quickly as possible so we can get to a valueor quality-based reimbursement system, which sounds to me what 

you guys are all working on right now with the type of initiatives 

and the type of projects and demonstrations that you are involved 

in. 

Dr. Lewin mentioned the Smart Care project in Wisconsin. You 

are teaming up with the Mayo System of La Crosse, my hometown, 

but also UW Health Systems in Aurora in the state. Could you explain a little bit more what the goal is, how it is going to assist 

physicians, how it is going to lead to better quality outcomes for 

the patients, and how you see that working? 

Dr. Lewin. Great. Well, it really is a physician-mediated approach, and it uses really all the tools that we have developed in 

cardiovascular medicine to achieve a result of better outcomes, better patient care at a lower cost. 

So a good example will be the use of the Pinnacle registry in the 

outpatient setting to better and more consistently manage high 

blood pressure, dyslipidemia—you know, cholesterol and so forth— 

anticoagulation, and heart failure, to reduce the number of heart 

attack admissions, strokes, and heart failure admissions. 

98 

Now, this is billions of dollars nationally, billions and billions. 

And in Wisconsin, it is going to be a lot of money. And even with 

the integration that you have got there, there is still a lot of 

progress that we know can be made. 

In addition to that, we are going to be applying the FOCUS tool 

on the inpatient side as well to choose the right image. There is 

a bewildering array of images now. There are dozen kinds of echo 

tests, a dozen kinds of nuclear tests, CT, MR, positron emission, 

and the science just keeps growing faster and faster. 

How do you choose the right test for the right patient? Or does 

the patient even need the test? Well, staying up with that science 

is awfully difficult. So using the FOCUS tool helps you, with six 

clicks at the point of care, make sure that either you are ordering 

a test or you don’t need to order a test, figuring it out right away, 

far better than a radiology benefit manager approach, where you 

are calling a number and asking for permission. 

They are going to apply that across Wisconsin; also going to 

apply appropriate use with shared decision-making to help prepare 

patients who have coronary artery disease, determine whether in 

their future which pathway they are likely to go down—medical 

therapy, angioplasty and stents, or bypass surgery. 

Now, a lot of times people end up in the cath lab on the table, 

partly sedated, where they are going to make a decision about 

whether they need a stent or not. That is not when you want to 

ask that question. You need the shared decision-making early on. 

You need to explain to the patient what the options are, what the 

complications might be of procedures, and then, if the anatomy finally says it is a grey zone, you would have prepared the patient 

who would have said, I would rather go the stent in that circumstance, or I would rather take the medical therapy. 

That needs to be done early. And if we do that early, a lot of people will move toward less intense care. They would try the medicine, or they would try the stent rather than the surgery. 

So I think applying all these tools across the board and then 

using the registries, both inpatient and outpatient, to give the hospitals, the medical groups, feedback on their performance—— 

Mr. KIND. I love your phrase, bring science to the point of care. 

Dr. Lewin. Yes. 

Mr. KIND. Another way of saying it is, let’s find out what works 

and what doesn’t and drive that information into the hands of our 

providers and patients through share decision-making. So I don’t 

know why there is all this angst and concern about comparative effectiveness research. That seems to be the whole point of driving 

science into the point of care and into the hands who need it the 

most. 

Dr. Lewin. Yes. 

Mr. KIND. And Dr. Sandy, this sounds very consistent, what 

UnitedHealth has been doing with imaging services and trying to 

use clinical studies and support tools for physicians in order to deal 

with it. We may not have time this round to get your response, but 

I would like to follow up a little bit more on what UnitedHealth 

has done in that area, too. 

Thank you, Mr. Chairman. 

Chairman HERGER. Thank you. 

99 

Mr. Reichert from Washington is recognized for five minutes. 

Mr. REICHERT. Thank you, Mr. Chairman. Thank all of you for 

the hard work that you are doing in this field. I know it is not an 

easy answer, as we have been struggling with this as a nation for 

many, many years. 

We have some doctors on the Ways and Means Committee, as 

you know. Most of us are not doctors, so we are wading through 

the information that you have all given us. But I want to focus on 

coordinated care as it relates to chronic care and how that plays 

into the doctor reimbursement issue. 

We all agree that everyone’s goal here is quality care, efficient 

care, access, and reduced cost. You have all talked about cooperation, the culture of cooperation, collecting data, information, and 

facts. You have talked about health IT and clinical data registry. 

Well, even in our own government system, the VA we know has 

a great health IT system, but the Department of Defense, pretty 

much nothing. So how do they even—they can’t even communicate. 

How do we expect them to reach outside into the private sector? 

And it gets more complicated, I know. 

So all of this is tied together. It needs to be, I agree with all of 

you, a physician-driven, patient-driven solution to all this. And you 

are all making progress. But there are a couple of things that bother me. 

I think, first of all, I liked Mr. Nichols’ comment about we need 

to have Medicare join the party that the private sector is throwing. 

I think that is a good point. And this leads me to my two questions, 

and I will ask them together. 

So we know that the average 75-year-old suffers pretty much 

from three chronic health conditions out of five chronic diseases 

that most of you have been dealing with—heart disease, cancer, 

stroke, COPD, and diabetes. In your opinion, does the original feefor-service model in Medicare work going forward? I am going to 

guess I know what the answer is on that. And how do we work together to build this coordinated care for these seniors who are trying to live with and manage these three chronic diseases? 

The second question, and more specific, is to the issue of a group 

that I met with not too long ago, and it is regarding the illness of 

lymphedema, sometimes brought on by cancer treatment, sometimes as a birth illness. Lymphedema is covered by some insurance 

companies. The treatments are sometimes long and drawn out, and 

you probably all know some of the side effects when the treatment 

is not given. And some of the compression garments, for example, 

are covered by some insurance companies but not covered by Medicare. 

How do you bring this together? These folks, if they are not 

treated correctly, they end up with these compression garments 

prematurely. It doesn’t do the job. They need to have massage therapy. They need to have some followup. How do you tie in Medicare 

with the chronic diseases that I have talked to and follow up with 

those folks that are dealing with chronic illnesses? Because eventually, this lymphedema issue can result in infections and even 

death, as you know. 

Anyone who wishes to address the question. Dr. Share? 

100 

Dr. SHARE. So you had two questions, the first being that I 

think it is essential to align the incentives of the physicians so that 

a meaningful proportion of their reimbursement becomes dependent upon them doing the right thing, not just with an individual 

patient but at the population level; also, dependent with patients 

with common chronic or multiple chronic illnesses, which are challenging to address. 

It is not as if we can simply successfully address that within the 

context of one physician’s office because primary care doctors and 

specialists and doctors in hospitals tend to wind up seeing these 

same patients at different points in time. So we really need an organized system of care, the language we are using, where there are 

clinically integrated systems and also sophisticated, organized care 

management approaches that help providers across settings manage a group of patients. And it needs to be patient-centric. 

So while the work of the cardiologist is really seminal and important, patients with cardiac illness don’t just get treated by cardiologists. So you have to have a system where the primary care folks 

have the same data and the same scientific evidence at the point 

of care. So that is one answer. 

The second question that you asked had to do with the frustration that patients and families experience when difficult medical 

illnesses have different types of coverage depending upon the insurer they have. And especially if you are switching insurers over 

time, the same person with the same problem may not have access 

to the same services. 

So I would just say there that the key is to define or really 

breathe life into the notion of medical necessity because most insurers say medically necessary care is covered, but then we don’t 

have enough evidence to always define what is medically necessary. 

So that is where I think comparative effectiveness research 

comes in because it can help to really rigorously define answers to 

those key questions. 

Mr. REICHERT. Thank you. 

Chairman HERGER. The gentleman’s time is expired. 

Mr. Blumenauer is recognized for five minutes. 

Mr. BLUMENAUER. Thank you very much, Mr. Chairman. 

Dr. Lewin, I want to go back to where you left off with my colleague, Congressman Kind. Your testimony spoke to shared decision-making, the reference here to giving everybody more choices 

and having conversations where they will be the most productive 

and useful. 

I would say, parenthetically, I have legislation based on what we 

had previously with the Ways and Means Committee; despite a little kerfuffle, it actually was unanimously supported by Members of 

the Committee and one of the few areas of broad agreement, that 

we need to strengthen not just the information for patients, but the 

guarantees that their wishes would be respected. 

You made a reference there that I think is important. Some people think of this as just end of life. But patients more frequently 

are subjected—the patient and the patient’s family are subjected to 

very challenging circumstances, often when they are not perhaps in 

the frame of mind that is clear. They may be clouded with pain or 

medication, anxiety, and quick decision. 

101 

I wondered if you could just elaborate on this notion of shared 

decision-making, how you envision it moving forward, and things 

that the Federal Government might be able to do either within the 

ambit of the legislation that is standing or changes that we should 

make. 

Dr. LEWIN. Thank you, Congressman Blumenauer. It is an incredibly good question. 

We feel like, with cardiologists and physicians in general, we 

have these guidelines and performance measures to help us guide 

the science. We still use clinical judgment. If patients had guidelines, I think what they would have is they would know—we would 

give them some ability to understand what questions they should 

be asking their clinician when they come in. 

So we have developed, at Cardiology, figuring we need the patients as partners in care with us if we are going to reduce costs, 

something called CardioSmart. It is a website, but it is interactive. 

It has mobile applications. It allows patients, when they come in 

to either their primary care doctor or their cardiologist, to know 

enough about their condition to ask the right questions, and to be 

able to ask whether, am I really a better candidate for medicines, 

or should I be thinking about angioplasty and stents, or do I need 

a defibrillator? 

Those kinds of questions are not things patients are typically 

challenged to think about ahead of time. So we would like the patient to come in with the questions they need to ask and work with 

their doctor, and then truly participate in deciding how that care 

is going to go in the future, whether they really need this test or 

whether they really need this procedure or how, in fact—whether 

they need a generic medicine or the most expensive medicine on 

the market. 

Those kinds of decisions, if we could get those to be shared, I 

think patients would engage in a positive way to reduce costs and 

improve outcomes. So we think that this is a critical part of the 

overall picture of improving quality and lowering costs. 

Mr. BLUMENAUER. Thank you very much. I appreciate that, 

Doctor, and I am hopeful that this is something that we can have 

a broader conversation. I will give to you a piece of legislation that 

we are working on, but would welcome an opportunity for further 

feedback. 

Mr. Chairman, I will just say, you recall that we were all concerned—when we were debating health care reform, we all were 

concerned to make sure that patients had the information, that 

they could make decisions, and those decisions would be respected. 

You will recall we had some actually touching testimony from 

committee members. I think of Geoff Davis from Kentucky, who 

talked about a problem that he had with his mother at a late stage. 

And I would like to see if this might be an area that the committee 

could review. 

I will share with each of you legislation to try and—we call it 

Personalize Your Health Care, to make sure that we do everything 

we can, whether it is Medicare or other mechanisms, that physicians are encouraged and maybe even paid to have a conversation 

like this. 

102 

One of the problems that a number of people here have talked 

about is that physicians are usually paid when they do something 

to somebody. But to sit down and talk to them, to empower them 

and to learn, that is off the—that is kind of either a different code 

or it doesn’t happen. 

Mr. Chairman, I would look forward with you and the subcommittee that maybe we could have a little conversation about 

this before our work is done. 

Chairman HERGER. I think the point is well made. I look forward to working with the gentleman and the committee on this 

very important issue. 

The gentleman from Washington, Mr. McDermott, is recognized. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. 

Willie Sutton was once asked, ‘‘Why do you rob banks?’’ And he 

said, ‘‘Well, that is where the money is.’’ And it seems to me that 

what I am listening to you talk and reading all of this is that 

chronic illness is where the money is spent. 

Playing off of what Mr. Blumenauer just said, several years ago, 

Sandy Levin and I put an amendment into the Medicare legislation 

requiring that everybody who applies be given a set of final directives that they can fill out so that they can decide a little bit about 

what will happen to them in the future. We went back a year later 

to find out how many had actually done so, and less than 20 percent had filled them out. 

One of the questions I have is, the issue of how an is going to 

ever control costs if we don’t get the patient involved early on 

thinking about what the final process is. When you get to 65, the 

wheels are starting to fall off, so at that point at least you know 

that you have an end in sight. When you are 30, it is very hard 

to get anybody to think about this stuff at all. 

But I am interested, Mr. Nichols or Dr. Nichols. You have been 

at the Boeing Clinic and you have been at the Virginia Mason experience, in my state I know about, and we have heard about your 

experience with some other places. 

How do they deal with this whole question—and maybe, Dr. 

Lewin, you want to join in on this—how do you deal with the question of getting patients to think about this before they are in the 

cath lab, sedated, and then you ask them, do you want a stent? I 

mean, how are they doing this to make it work? 

Mr. NICHOLS. Well, I can tell you, Congressman, there are a 

couple of really fascinating examples around the world, actually. 

One class of things is getting people engaged in assessing their own 

health. I know of a program in South Africa where an insurance 

company actually pays people to do the health risk assessment. So 

you get rewarded for doing it. 

But then when you do it, you have to go take it to your primary 

care doc, and you work with that physician about what is right for 

you. And, you know, I have a pretty bad family history in heart, 

and my secretary does not, and she is a whole lot younger, so we 

have very different pathways. But the clinician will work out with 

us what is the best pathway for you to be healthy. That is the key, 

sir. How do you want to manage your trajectory in life? 

It turns out this program gets people incentivized. They start 

doing the things. They basically give them what you and I would 

103 

call green stamps, rewards for doing the right stuff along the way. 

This program, they are filling up three airplanes a day with people 

taking vacations on the green stamps they have earned. They are 

spending 2 percent of the premium on the promotion. They are saving 5 percent off trend three years in a row. 

So it has to do with incentivizing the patient to begin to engage 

in managing their own health with a clinician. It has to do with 

hooking them up with a real live doc you know and trust and takes 

care of you, who lays out a pathway for you, and then you get 

incentivized. 

Now, at the end of one’s lifespan, one might think about having 

that conversation in lots of different ways. But you probably know 

of Mt. Sinai in New York, Diane Meier, the person who invented 

the—I think it is called the Center for Advancement of Palliative 

Care. 

What she has is a team that basically—and I know you are a 

physician—teaches clinicians how to talk to families because, as 

you know, sir, we don’t teach them that all that well in medical 

school. And most clinicians think about, what I am supposed to do 

is save, protect, keep them alive. In fact, what families and patients often want nearer the end are, what are my options? What 

are my choices? What is going to happen to me? What is it going 

to be like? What do I really have to choose among? 

That is where those conversations teaching the clinicians how to 

talk to families and the patients can often have a heck of a lot of 

what I would call effective shared decision-making down the road, 

where people tend to take the least invasive option because they 

want to spend as much quality time with their families as they 

can. 

I will turn it to Jack. 

Dr. LEWIN. I think that there are some people with heart failure, for example. We are trying to pull together videos to help people look on that CardioSmart site at somebody who is in the same 

circumstance that they are in and hear about their story over the 

next six months. 

For many people, the end stage, a class 4, New York Heart Association class 4 heart failure, the patient needs to know that they 

are limited to end stage here, and they can become comfortable and 

start doing things to make themselves feel better and be with their 

families rather than heading to the intensive care unit for multiple 

procedures. 

There is also another little element of this we shouldn’t forget, 

and that is the medical malpractice piece. It is back to the patient 

laying in the cath lab. The physician is really worried there, if the 

patient hasn’t clearly understood that they would rather go medical 

therapy if they could. They are very worried about not doing the 

procedure because they don’t know whether the patient is going to 

take the meds. 

So I think that there are a bunch of elements there. But we can 

do so much better at helping people make their own better decisions and working with them. 

Mr. MCDERMOTT. Is there any evidence—Mr. Chairman, may 

I ask one question to follow that? 

104 

Chairman HERGER. Maybe to be followed up in writing. Time 

is expired. 

Mr. MCDERMOTT. Okay. I want to ask you about how you get 

physicians to get patients to sit and talk about it. 

Chairman HERGER. I thank the gentleman. 

Now the gentleman from Florida, Mr. Buchanan, is recognized 

for five minutes. 

Mr. BUCHANAN. Thank you, Mr. Chairman. And I also want to 

thank our witnesses for taking the time today. 

In Florida, like my district, I have 180,000 seniors 65 and older. 

And I am very concerned about the quality of care our seniors are 

getting. In terms of the way doctors are being reimbursed, I hear 

it every single day, many of them that practice for 20 years—they 

are afraid to leave their practice because there might not be someone else to take their practice. There is not the enthusiasm. 

They said every year it gets more uncertain in terms of the payment plan or how they get reimbursed. It is a very big issue. I 

know our cardiologists in one of our big practices in our area just 

lost 30 percent. That came out of nowhere for them. 

So I guess, Dr. Lewin, why don’t you give us your thoughts on 

what is happening with the reimbursement or the unpredictable 

pay that doctors are getting reimbursed all over the country, but 

especially in Florida, where you have heavy, heavy Medicare patients. 

Dr. LEWIN. Well, as you probably know, Congressman 

Buchanan, Medicare changed the payments for diagnostic services 

in the private practice setting for cardiologists in 2010, and they 

reduced by about 30 percent the modern day stethoscope tools of 

the cardiologist in the office, which are stress testing and nuclear 

testing and other ways that we use to diagnose patients. 

The result of that was we had almost a wildebeest migration of 

cardiologists moving from private practices to hospital employment. 

And in fact, five years ago when I first came to the American College of Cardiology, 70 percent of the cardiologists were in private 

practice, 30 percent were in academic or hospital practice. 

Today it has completely flipped. We now have 70 percent in hospital-based practice or employment and 30 percent in private practice, and those remaining 30 percent are struggling because—and 

it is difficult because we pay the hospital outpatient portion of that 

at a much higher rate than the private practice. And the patient, 

obviously, pays a higher copay. 

So what has happened to cardiology practices, really, is the economics—and it is largely Medicare economics—have forced them to 

move toward hospital employment. 

Mr. BUCHANAN. That is what I hear every day. 

Dr. Bender, let me ask you, I am just talking with a lot of doctors 

that we have in our area. But I don’t know how—as a business person myself for 30 years, I don’t know how people make decisions 

in terms of capital improvements however we have got one large 

firm looking at trying to add facilities or in terms of hiring. I got 

here in 2007 and there has been probably five or six times where 

we have had to adjust or deal with the SGR doc fix. 

As someone that has built a successful practice, and obviously 

you are also running a business, how does that affect you in terms 

105 

of looking to the future, in terms of providing service to patients 

and everything? 

Dr. BENDER. Thank you, Congressman Buchanan. So I do not 

have a part-time patient-centered medical home, as you can imagine. We offer services regardless of payer source. So right now, 

maybe the good news is Medicare is getting my patient-centered 

medical home for free because WellPoint, UnitedHealth Care, and 

the other groups that are funding it through the pilot are basically 

paying for it. 

Whether that is sustainable long-term, probably not, particularly 

since I am 40 percent Medicare. SGR threats are—— 

Mr. BUCHANAN. In our case in Florida, we are 80, 90 percent 

Medicare for a lot of these doctors. 

Dr. BENDER. Yes. So it would be much more difficult to have 

a patient-centered medical home pilot. And so, for example, four 

years ago, when SGR did not get repealed on time and my Medicare patients were delayed for like 30 days, I called my bank and 

I took a $70,000 signature loan, and that is how I covered my payroll. 

Now, since that time we have had the derivative markets and 

the Wall Street excesses, and the banking regulations have 

changed. I can’t call my banker now and ask for a $70,000 signature loan. If SGR is not repealed, we would be bankrupt. 

Mr. BUCHANAN. Thank you, Mr. Chairman. 

Chairman HERGER. Thank you. 

Dr. Bender, you state that your practice is providing better quality to patients with diabetes and other common conditions. How big 

a role did embracing the concept of being measured on key accepted quality measures play in facilitating the quality improvements? 

Dr. BENDER. Thank you, Chairman Herger. It is huge. When I 

was in paper, I had no idea how many diabetics I had, much less 

how many of them were at goal. Now I get a report every month 

that basically tells me now just how my individual practice is doing 

but how I compare to others in my region. 

So, for example, if we are at 80 percent for a certain metric, that 

might be good, but it is in a vacuum. Once I learn that the others 

in the state are at 95 percent, then I realize, wow, I need to work 

on it. Or maybe everyone else is at 40 percent and I am the 

thought leader. And then they are calling me, and we discuss in 

a way that is FTC-proof. You know, there is no price fixing; it is 

academic and collegial. But we all work together to improve our 

quality in the pilot. 

Chairman HERGER. Thank you. 

Dr. Lewin, did you have something to add to that? 

Dr. LEWIN. Well, I just want to say that it is measure to manage. You have got to give doctors and hospitals continuous feedback 

on outcomes and performance, and when you do, we just have it 

built into us. We want to improve. 

So making that part of what we do in the future as part of our 

whole system is going to make the whole difference in moving us 

toward higher-quality care. And if you put payment incentives with 

it, then you double the incentive and the progress. 

Chairman HERGER. Thank you. 

Mr. STARK. Mr. Chairman. 

106 

Chairman HERGER. Yes? 

Mr. STARK. Just a moment for a—— 

Chairman HERGER. Yes. 

Mr. STARK. I just wanted to ask Dr. Bender if he knows what 

tomorrow is. 

Dr. BENDER. Other than Wednesday, I am uncertain. 

[Laughter.] 

Mr. STARK. Uh-oh. Lewin, you are not doing your job. Do you 

know what tomorrow is? Tomorrow is National Heart Day, and my 

10-year-old is going to school in fifth grade to jump rope for Heart 

Day. Get with it, you guys. You have got to get your PR machine 

going here. 

Dr. LEWIN. We have got the whole month, sir. 

Mr. STARK. If you don’t know that tomorrow is—— 

Dr. LEWIN. It is National Heart Month and National Heart 

Week. 

Mr. STARK. I expect you all to jump rope. 

Thank you, Mr. Chairman. 

Chairman HERGER. You are welcome. 

Mr. STARK. Thank the witnesses for excellent—— 

Chairman HERGER. Everyone in this room will know what tomorrow is now, so I thank you. 

I want to thank each of our witnesses for your testimony today. 

Your private sector experience with rewarding physicians for quality efficiency is of keen interest as we seek to reform Medicare physician payments. The fact that the different stakeholders are working together, in many cases, on this endeavor gives me increasing 

hope that Medicare can learn from these efforts so we can find a 

long-term solution that has been so elusive. 

I appreciate the physician leadership exemplified by our witnesses because we need the physician community to be active participants in our reform effort. Together we must find a better way. 

The stakes are high. The current rate of growth in Medicare spending is unsustainable. And the congressional habit of short-term 

fixes is creating a great deal of uncertainty for physicians and 

beneficiaries. 

Further, the program will go bankrupt if changes are not made. 

This is our reality. While I, along with many on the Republican 

side, believe we ultimately need to bring competition and market 

forces into the Medicare program in order to reduce costs, we will 

also continue to move forward on finding the best way to eliminate 

the SGR and replace it with responsible reform. 

Any member wishing to submit a question for the record will 

have 14 days to do so. If any questions are submitted, I ask the 

witnesses to respond in a timely manner. 

With that, the subcommittee is adjourned. 

[Whereupon, at 11:33 a.m., the subcommittee was adjourned.] 

107 

Public Submissions For The Record 

American College of Gastroenterology 


Insert here 78177.075

February 21, 2012 

The Honorable Wally Herger 

Chairman, Health Subcommittee 

House Committee on Ways & Means 

The U.S. House of Representatives 

Washington, DC 20515 

Dear Chairman Herger, 

The American College of Gastroenterology (ACG) and the American Society for Gastrointestinal 

Endoscopy (ASGE) appreciate the opportunity to submit for the record comments on the recently held 

hearing entitled "Programs that Reward Physicians who Deliver High Quality and Efficient Care" 

(February 7, 2012). Our societies appreciate the Committee holding this important hearing as Congress 

hopefully transitions away from a Medicare reimbursement model based upon the sustainable growth rate 

(SG R) formula to a reimbursement system that accurately pays providers and also rewards providers 

based on the quality of care they provide patients. 

The GI Quality Improvement Consortium, or GIQuIC, is an educational and scientific organization led by 

the ACG and ASGE that help gastroenterologists improve quality of care and could also be used to 

further this objective. 

The growth in physician specialty societies establishing data registries will allow for more successful 

ways to achieve the goal of demonstrating quality of care. As noted above, one such data collection and 

quality of care initiative is GIQuIC. GIQulC is a clinical registry and collaborative effort by our societies 

that allows gastrointestinal specialists to collect and submit quality measures to a data repository, 

including measures endorsed by the National Quality Forum (NQF), the American Medical Association 

(AMA) Physician Consortium for Performance Improvement (PCPI), and adopted by the AQA alliance. 

These providers receive outcome data on the procedures they provide which, in turn, they can use to 

improve patient care delivery. Feedback reports are provided on a group practice level or at the 

individual physician level, per the choice of the participants. GIQulC allows gastrointestinal specialists 

to submit data that is specific to our specialty and provides them with the means to receive comparative 

outcome data based on other participants reporting the same measures. GIQulC already includes more 

than 40,000 cases in just its first year of operation. It is worth noting that GI physicians participating in 

GIQulC are doing so at their own expense in an effort to deliver the best possible care, and we believe 

that Congress should encourage the development and growth of these registries through its policies in 

reforming the Medicare reimbursement system. 

ACG and ASGE welcome the opportunity to work with the Committee in developing a Medicare 

payment system that rewards physicians for providing high quality health care to Medicare beneficiaries 
108 

f 


Insert here 78177.076
109 

American Society of Clinical Oncology 


Insert here 78177.077

Written Testimony of Allen S. Lichter, MD 

on behalf of 

The American Society of Clinical Oncology 

before the 

Health Subcommittee 

of the 

Ways and Means Committee 

February 7, 2012 

1 
110 


Insert here 78177.078

Thank you for the opportunity to submit written testimony for consideration by the House Ways and 

Means Health Subcommittee on programs that reward physicians for delivering high quality and 

efficient care. My name is Allen Lichter. I am Chief Executive Officer of the American Society of Clinical 

Oncology (ASCO) headquartered in Alexandria, Virginia. As a clinician and leader of the professional 

organization for physicians who treat people with cancer, I am submitting comments about Medicare 

payment reform in the context of cancer care and the critical link between such efforts and robust 

quality assessment systems. ASCO and our members have been active over the past decade in 

developing, supporting and participating in a robust quality assessment program that promotes high 

quality, high value cancer care. 

If current trends continue, the nation will face ongoing, unsustainable increases in the costs of cancer 

care. There will be an estimated 2.3 million new cancer cases each year in the United States by 2030, 

and the National Cancer Institute has projected the population of cancer survivors-numbering 13.8 

million in 2010-will grow to over 18 million by 2020. The care needs of cancer patients and survivors 

will likely exceed the capacity of the oncology workforce, which is projected to experience a nearly 30% 

shortfall in the supply of oncologists by 2020. All health care payers will confront the consequences of 

increasing cancer prevalence and costs, but as the dominant payer for elderly Americans with cancer 

diagnoses, Medicare faces perhaps the greatest challenge. Over half of all new cases of cancer are 

diagnosed in individuals who are 65 years or older. 

Payers obviously are not the only group concerned about the cost of cancer care. Our patients, even 

those with insurance, are faced with burdensome out-of-pocket expenses. A national survey of cancer 

patients and family members showed that, among those with insurance, 25% reported that they 

2 
111 


Insert here 78177.079

consumed all or most of their savings dealing with cancer, and 33% reported a problem paying cancer 

bills. A majority of oncologists report concerns regarding patients' out-of-pocket spending. In the face 

of projected increases, the financial burden placed on cancer patients and their families is unacceptable 

and unsustainable. 

The increasingly challenging economic environment-and a flawed payment system-have also strained 

the nation's network of community based oncology practices, where the majority of cancer care occurs. 

Over 200 practices have either closed their doors or reduced service because they are unable to absorb 

the escalating cost of providing services in the context of a payment system that inadvertently penalizes 

those who invest in providing high quality, cost-effective care. The administrative burdens placed on 

these practices by the health system are growing exponentially, although typically these burdens do not 

result in meaningful enhancements in patient care or efficiency. Community based oncology practices 

provide critical access points where vulnerable cancer patients can obtain the care they need, and at the 

same time, community based oncology practices are extremely cost-effective in the delivery of this care. 

Over the past four decades, we have built an outpatient delivery system for cancer that is the envy of 

the world, and now as a nation, we need to act quickly to ensure that we do not lose this valuable 

resource. 

In light of these challenges, ASCO and the oncology community have been working over the past decade 

to gather scientific evidence and develop strategies for improving the quality, value and efficiency of 

cancer care. In the remainder of these comments, I would like to describe the insights we have gained 

in working to address these important issues. 

3 
112 


Insert here 78177.080

We have learned that significant improvements in cancer care delivery can be achieved by building upon 

the strengths of our existing delivery system, which relies on care provided in both the communitybased physician office setting and the hospital-based outpatient setting. Policy changes that provide 

meaningful support for the provision of high quality, comprehensive care in these outpatient settings 

can bring immediate positive impacts on clinical outcomes and quality of life for cancer patients. 

In taking systemic steps to improve cancer care, both patients and payers can benefit from significant 

efficiencies. In the area of cancer care, ASCO and our members are working with private payers and 

other stakeholders to pioneer approaches for treating cancer patients in the outpatient setting that 

avoid unnecessary emergency department visits, reduce unscheduled hospitalizations, smooth variation 

in care and place greater emphasis on selecting the most cost-effective drug therapies. Early results 

from these initial pilots-which marry practice efficiency and a strong emphasis on quality monitoring 

and assessment-have demonstrated significant potential for both savings and enhanced patient 

experiences. 

To achieve the national goals of better health, enhanced quality of care, and lower costs within the 

uniquely complex context of patients with cancer, it is imperative that we implement a robust quality 

assessment system. Under virtually every type of payment reform designed to reward efficiencies in 

health care, it is critically important to provide safeguards that assure efforts to lower health care costs 

do not jeopardize access to high quality, high value care for elderly Americans with cancer. A strong, 

cancer-focused quality assessment program is vital to achieving this protection and must playa pivotal 

role in any payment reforms of the health care delivery system for cancer care. 

4 
113 


Insert here 78177.081

Since 1999, efforts to enhance quality improvement have become central to ASCO's work; most notabl~ 

in the development and expansion of the Quality Oncology Practice Initiative (QOPI). This effort, 

designed to facilitate quality measurement and continuous improvement, is the only comprehensive, 

national database for oncology care in ambulatory settings, where the vast majority of cancer services 

are provided. Begun in 2002 by ASCO as a pilot project, QOPI became available to all ASCO member 

medical oncologists and their practices in 2006 as a free member benefit. Over the past decade, QOPI 

has grown from a pilot to a national initiative with over 700 registered practices submitting data on 

more than 25,000 patient records every six months. ASCO has developed, tested, and implemented 

more than 100 cancer-specific quality measures through the program. The process is designed to be 

nimble, allowing for rapid integration of quality measures based on new scientific guideline 

recommendations, 10M reports and other sources. 

ASCO's experience with QOPI has revealed that, even in the absence of incentives beyond the 

opportunity to improve care, a significant number of medical oncologists are able and willing to devote 

time and resources to participate in a system that is designed to create meaningful improvements in th 

quality of cancer care. Participating practices report that QOPI has caused them to re-examine their 

work flow and policies, improve safety measures and focus on areas that demonstrate an opportunity 

for improvement. For example, when compared to newly enrolled practices, those completing multiplE 

cycles of QOPI data collection demonstrated meaningful improvements in performance on measures 

involving pain management, which is one of the primary drivers for unplanned emergency department 

visits. 

A growing number of private health plans have recognized the power of programs like QOPI. In 2007, 

Blue Cross Blue Shield of Michigan began a program to subsidize practice participation in QOPI. Other 

5 
114 


Insert here 78177.082

plans have included special recognition in provider directories for QOPI practices and still others have 

offered other forms of recognition for QOPI participation, including increased economic rewards and 

relief from certain administrative requirements such as preauthorization. 

ASCO's dedication to QOPI continues, as does the program's expansion. Additional disease modules and 

measures are in development. Tests of data reporting from electronic health records systems are 

underway. And most importantly, our members and their practices continue to sign on. 

Quality measurement and improvement can only work to improve value if it is meaningful and relevant 

to providers in their efforts to provide the highest level of care to their patients-and does not simply 

represent one more administrative burden. Over the past few years, ASCO has reached out to national 

payers and to Medicare to urge adoption of programs and measures already developed by experts in 

relevant diseases. ASCO is increasingly concerned about the proliferation of disconnected programs 

arising from multiple payers-each with their own requirements and conditions. Not only is this unlikely 

to improve quality, it has a strong chance of harming it. Organizations like ASCO have invested in 

development of programs that have strong physician support-because they are part of building itwhile at the same time providing the most challenging quality assessment program for oncology 

practitioners. Meaningful quality measurement in cancer requires a comprehensive set of clinicallymeaningful and evidence-based measures. We understand that CMS has invested in PQRS; however, 

the complexity and rapidly evolving science around more than 100 diseases that comprise cancer 

require measurement that goes beyond that can be achieved through PQRS alone. We need a system 

that: 

Captures the full patient experience, from diagnosis and treatment to survivorship; 

6 
115 


Insert here 78177.083

Provides rapid insight into patient outcomes, including treatment response, side effects, patient 

compliance, and safety signals; and 

Supports patient and physician decision making about treatment choices across all stages of the 

disease. 

QOPI provides a uniquely strong foundation-but ASCO recognizes our members and the oncology 

community will benefit from an initiative with even greater sophistication. In 2011, the ASCO board 

directed that immediate work begin on construction of a cutting-edge rapid learning system for 

oncology. The rapid learning health care concept is promoted as the ultimate goal in the Federal Health 

IT Strategic Plan, and is described as an "environment where a vast array of health care data can be 

appropriately aggregated and analyzed, turning data into knowledge that can be put to immediate use. 

A learning health system can shorten the gap between the creation of new knowledge and its 

widespread adoption in health care from the often-quoted 17 years to 17 months, or even 17 weeks." 

Based on recommendations from an expert workshop convened by the Institute of Medicine, ASCO is 

leading the development of a system in which data routinely generated through care of cancer patients 

and cancer research feeds into a central databank or coordinated databases, triggering continuous 

innovation. This rapid learning system will be useful in preventing many quality issues from occurring 

with real time decision support, and will automate increasingly sophisticated quality reporting. Equally 

important, the same infrastructure will facilitate real-world studies of treatment effectiveness in patient 

populations that are common but rarely represented in clinical trials (e.g., the elderly and patients with 

multiple comorbidities); it will allow for early adverse event identification, support many types of 

scientific research, and support studies of quality and health care disparities. 

7 
116 


Insert here 78177.084

The potential power of an oncology RLS can be illustrated with the example of erythropoietin 

stimulating agents (ESAs). Based on studies demonstrating reduced need for blood transfusion in 

chemotherapy patients, the first of these agents was approved for oncology use in 1993. ESAs 

subsequently became a commonly used component of cancer supportive care during active treatment. 

Beginning in 2004, emerging safety concerns led to product label warnings. In 2007, additional studies 

suggesting negative effects on survival and disease progression caused the FDA and CMS to issue further 

product label warnings and to restrict coverage. 

However, if we had access to data from an RLS at the time, with real-time capture of millions of clinical 

data points and patient outcomes, it is reasonable to conclude that we could have identified these 

safety signals by 2004, perhaps even earlier. If the use of ESAs from 2004 -2007 had been at levels seen 

between 2008 and 2011, the quality of health care provided to our patients would have been improved, 

and eMS could have saved more than $3 billion (assuming a conservative estimate of 6,000 practicing 

oncologists prescribing ESAs during these years). 

Oncology is a logical and ripe area for the initial development and testing of an RLS because of the 

prevalence, seriousness, and costliness of cancer; the long tradition and integration of clinical oncology 

research; and the proliferation of investigational therapies. Consistent patient engagement in cancer, 

the acknowledged need for patient-centered care, and existing well-studied patient reported outcomes 

also position oncology to adopt such a care model. Importantly, transformation of oncology practices to 

fully integrate health information technology capabilities through a learning network can inform novel 

payment models that could provide incentives to enhance patient outcomes and reduce costs. 

Achieving a rapid learning system will be at the top of ASCO's priorities for the foreseeable future. 

8 
117 


Insert here 78177.085

So, what are the next steps that we recommend? 

ASCO has joined the rest of the medical community in calling for repeal and reform of Medicare's 

Sustainable Growth Rate (SGR) payment formula, which has not been able to properly consider 

treatment advances, promote quality or control costs. This payment system is at odds with the triple 

aim and the concept of value-based purchasing. ASCO recommends repealing and replacing the SGR 

with a value-based payment system, recognizing there must be a multi-year transition guided by a series 

of pilots that point to successful, scalable models. 

Leverage the tremendous investment already made by leading specialty societies in registries, quality 

monitoring and measure development. In particular, in the area of cancer, build upon the emerging 

rapid learning system infrastructure and initiatives that ASCO is pursuing. We urge Congress and CMS to 

take steps that foster the development of a rapid learning system for cancer in a manner that is 

consistent with the Federal Health IT Strategy and the creation of care delivery systems that are readymade for innovations. Taking advantage of lessons learned from proven and emerging programs, CMS 

should work with leading specialty societies to launch and test value-focused demonstration projects. In 

the area of oncology, ASCO is prepared to build on the work we have done in this area to improve the 

patient experience, not just for Medicare, but for ali our patients. 

Provide for fair and adequate payment levels for delivering oncology services that correlate with 

enhanced care and patient outcomes, including the provision of comprehensive outpatient services and 

treatment planning, which improve patient outcomes, reduce complications and promote the selection 

of efficient therapies. 

9 
118 

f 


Insert here 78177.086
119 

Center for Fiscal Equity 


Insert here 78177.087

Comments for the Record 

U.S. House of Representatives 

Committee on Ways and Means 

The President's Fiscal Year 2013 Budget Proposals 

Department of Health and Human Services 

Tuesday, February 28, 2012,1:00 PM 

By Michael G. Bindner 

Center for Fiscal Equity 

Chairman Camp Ranking Member Levin, thank you for the opportunity to submit these 

comments for the record to the House Ways and Means Committee. The beginning of the 

budget debate for a new year brings with it the opportunity to rethink proposals. The Center for 

Fiscal Equity is using this opportunity to change our proposed fix for Social Security and Health 

Care. As always, our proposals are in the context of our basic proposals for tax and budget 

reform, which are as follows: 

• A Value Added Tax (VAT) to fund domestic military spending and domestic 

discretionary spending with a rate between 10% and 13%, which makes sure very 

American pays something. 

Personal income surtaxes on joint and widowed filers with net annual incomes of 

$100,000 and single filers earning $50,000 per year. 

Employee contributions to Old Age and Survivors Insurance (OASI) with a lower income 

cap, which allows for lower payment levels to wealthier retirees without making bend 

points more progressive. 

• A VAT-like Net Business Receipts Tax (NBRT), which is essentially a subtraction VAT 

with additional tax expenditures for family support, health care and the private delivery 

of governmental services, to fund entitlement spending and replace income tax filing for 

most people (including people who file without paying), the corporate income tax, 

business tax filing through individual income taxes and the employer contribution to 

OASI, all payroll taxes for hospital insurance, disability insurance, unemployment 

insurance and survivors under age 60. 

Discretionary activities of the Department of Health and Human Services would be funded by 

the VAT. While some of our VAT proposals call for regional breakdowns of taxing and 

spending, they do not for this department. While some activities, such as the Centers for Disease 

Control, exist outside the Washington, DC metro area, even these are site specific rather than 

spread out on a nation-wide basis to serve the public at large. While some government activities 

benefit from national and regional distribution, health research will not. 
120 


Insert here 78177.088

The one reform that might eventually be considered in this area is to more explicitly link 

government funded research with ownership of the results, so that the Department might fund 

some of their operations with license agrcements for some of the rcsulting rescarch, enabling an 

expanded research agenda without demanding a higher budget allocation. 

Of course, regionalization is possible if the Uniformed Public Health Service is put into the role 

of seeing more patients, particularly elderly patients and lower income patients who are less than 

well served by cost containment strategies limiting doctor fees. Medicaid is notoriously bad 

because so few doctors accept these patients due to the lower compensation levels, although we 

are encouraged the health care reform is attempting to reduce that trend. Medicare will head 

down that road shortly if something is not done about the Doc Fix. It may become inevitable 

that we expand the UPHS in order to treat patients who may no longer be able to find any other 

medical care. If that were to happen, such care could be organized regionally and funded with 

regionally based taxes, such as a V A T. 

The othcr possiblc area of cost savings has to do with care, now providcd for free, on thc NIH 

campus. While patients without insurance should be able to continue to receive free care, 

patients with insurancc likely could bc rcquircd to makc somc type of payment for carc and 

hospitalization, thus allowing an expansion of care, greater assistance to patients who still face 

financial hardship in association with their illncsses and a rcstoration of somc care that has becn 

discontinued due to budget cuts to NIH. 

The bulk of our comments have to do with health and retirement security. 

One of the most oft-cited reforms for dealing with the long term deficit in Social Security is 

increasing the income cap to cover more income while increasing bend points in the calculation 

of benefits, the taxability of Social Security benefits or even means testing all benefits, in order 

to actually increase revenue rather than simply making the program more generous to higher 

income earners. Lowering the income cap on employee contributions, while eliminating it from 

employer contributions and crediting the employer contribution equally removes the need for any 

kind of bend points at all, while the increased floor for filing the income surtax effectively 

removes this income from taxation. Means testing all payments is not advisable given the 

movement of retirement income to defined contribution programs, which may collapse with the 

stock market - making some basic benefit essential to everyone. 

Moving the majority of Old Age and Survivors Tax collection to a consumption tax, such as the 

NBRT, effectively expands the tax base to collect both wage and non-wage income while 

removing the cap from that income. This allows for a lower tax rate than would otherwise be 

possible while also increasing the basic benefit so that Medicare Part B and Part 0 premiums 

may also be increased without decreasing the income to beneficiaries. Increasing these 

premiums essentially solves their long term financial problems while allowing repeal of the 

Doc Fix. 

If personal accounts are added to the system, a higher rate could be collected, however recent 

economic history shows that such investments are better made in insured employer voting stock 

rather than in unaccountable index funds, which give the Wall Street Quants too much power 

over the economy while further insulating ownership from management. Too much separation 

gives CEOs a free hand to divert income from shareholders to their own compensation through 

cronyism in compensation committees, as well as giving them an incentive to cut labor costs 

more than the economy can sustain for consumption in order to realize even greater bonuses. 
121 


Insert here 78177.089

Employee-ownership ends the incentive to enact job-killing tax cuts on dividends and capital 

gains, which leads to an unsustainable demand for credit and money supply growth and 

eventually to economic collapse similar to the one most recently experienced. 

The NBRT base is similar to a Value Added Tax (VAT), but not identical. Unlike a VAT, an 

NBRT would not be visible on receipts and should not be zero rated at the border - nor should it 

be applied to imports. While both collect from consumers, the unit of analysis for the NBRT 

should be the business rather than the transaction. As such, its application should be universalcovering both public companies who currently file business income taxes and private companies 

who currently file their business expenses on individual returns. 

A key provision of our proposal is consolidation of existing child and household benefits, 

including the Mortgage Interest and Property Tax Deductions, into a single refundable Child Tax 

Credit of at least $500 per month, per child, payable with wages and credited against the NBRT 

rather than individual taxes. Assistance at this level, especially if matched by state governments 

may very well trigger another baby boom, especially since adding children will add the 

additional income now added by buying a bigger house. Such a baby boom is the only real long 

term solution to the demographic problems facing Social Security, Medicare and Medicaid, 

which are more demographic than fiscal. Fixing that problem in the right way definitely adds 

value to tax reform. 

The NBRT should fund services to families, including education at all levels, mental health care, 

disability benefits, Temporary Aid to Needy Families, Supplemental Nutrition Assistance, 

Medicare and Medicaid. Such a shift would radically reduce the budget needs ofHHS, while 

improving services to vulnerable populations. 

The NBRT could also be used to shift governmental spending from public agencies to private 

providers without any involvement by the government - especially if the several states adopted 

an identical tax structure. Either employers as donors or workers as recipients could designate 

that revenues that would otherwise be collected for public schools would instead fund the public 

or private school of their choice. Private mental health providers could be preferred on the same 

basis over public mental health institutions. This is a feature that is impossible with the FairTax 

or a VAT alone. 

To extract cost savings under the NBRT, allow companies to offer services privately to both 

employees and retirees in exchange for a substantial tax benefit, provided that services are at 

least as generous as the current programs. Employers who fund catastrophic care would get an 

even higher benefit, with the proviso that any care so provided be superior to the care available 

through Medicaid. Making employers responsible for most costs and for all cost savings allows 

them to use some market power to get lower rates, but not so much that the free market is 

destroyed. Increasing Part B and Part D premiums also makes it more likely that an employerbased system will be supported by retirees. 
122 


Insert here 78177.090

Enacting the NBRT is probably the most promising way to decrease health care costs from their 

current upward spiral- as employers who would be financially responsible for this care through 

taxes would have a real incentive to limit spending in a way that individual taxpayers simply do 

not have the means or incentive to exercise. While not all employers would participate, those 

who do would dramatically alter the market. In addition, a kind of beneficiary exchange could be 

established so that participating employers might trade credits for the funding offorrner 

employees who retired elsewhere, so that no one must pay unduly for the medical costs of 

workers who spent the majority of their careers in the service of other employers. 

Conceivably, NBRT offsets could exceed revenue. In this case, employers would receive a VAT 

credit. 

The Center calculates an NBRT rate of 27% before offsets for the Child Tax Credit and Health 

Insurance Exclusion, or 33% after the exclusions are included. This is a "balanced budget" rate. 

It could be set lower if the spending categories funded receive a supplement from income taxes. 

These calculations are, of course, subject to change based on better models. 

Thank you for the opportunity to address the committee. We are, of course, available for direct 

testimony or to answer questions by members and staff. 
123 

f 


Insert here 78177.091
124 

Gundersen Lutheran Health System 


Insert here 78177.092

['ebruar" 7, 2012 

Gundersen Lutneran," 

The Honorable Wally Herger, Chair 

House of Representatives 

\Xlays and 1Ieans Committee, Subcommittee on Health 

1102 Longworth House Oft1ce Building 

Washington D.C. 20515 

Re: Hearing on innovative quality and efficiency healthcare programs 

Dear Chairman Herger and members of the Ways and Means Subcommittee on Health: 

I write to ,·ou on behalf of Gundersen Lutheran to share with you one of our many innovative 

approaches to providing healthcare to our patients that incentive qualit\" and eft1dency of healthcare. 

I want to thank you for calling this important hearing on approaches to improving the health of our 

nation's population and incentivizing providers to deliver high quality healthcare. 

Gundersen Lutheran is an integrated tertiary teaching health system headquartered in La Crosse, 

\'Visconsin. Our locations cover Wisconsin, Minnesota, and Iowa along the rural stretches of the 

1Iississippi River. \'VTc serve over one million patient visits per year and operate a tertiary care 

hospital, critical access hospitals, dozens of clinics, air and ground ambulance, a health plan and 

medical education program. Gundersen Lutheran is a Thomson Reuters Top 100 hospital and top 

scorer in many HcalthGradcs clinical areas. 

Gundersen Lutheran is a strong supporter of reforming the current 1'ledicare fee-for-service 

payment model to incent efficiency and quality of care. In promoting health care delivery to reward 

l}a/ue, the current reimhursement system needs to move away from rewarding volumes of carc. In 

essence, health providers should be incentivized to keep patients healthy, driving down the cost of 

health care while improving outcomes. 

Approximately 5% of the United States population accounts for half of healthcare costs. [t is 

important to improving the health of our nation that our efforts to reform the delivery system focus 

on chronically ill populations. At Gundersen Lutheran, we developed a Care Coordination program 

that guides patients through the healthcare process with complex medical, social and financial needs. 

Our program has demonstrated to improve the quality of care and lowers health care costs by 

helping patients manage their disease and stay as healthy as possible. A major stud\" of Care 

Coordination programs published in the ['ebruar)" 2009 issue of jA,VIA found a model that blended 

an emphasis on patient education along \vith a close working relationship with both physicians and 

hospitals achieved health care savings. That is exactly the model we have implemented here at 

Gundersen T ,utheran-a model that the current fee-for-service reimbursement s\'stem does not 

incentivizc. 

At Gundersen J ,utheran, we chose to enroll the sickest 1 'X, to 2% of our patients \\·ho met the Care 

Coordination program criteria. These patients arc some of our highest utilization patients. After 

using the Care Coordination program, patients have been shown to: 

Reduce their healthcare costs by approximately 518,000 per patient over 24 months. 

External Affair., Ikpartment 1900 South AH'IlUl', l'laiistop: COl-OIl. La Cro.,se. \\ 154601 

Email: Extl'rnaIAffairs:" gundluth.org Phonl': 608-775-1 -100 Fa"\: 608-775-6225 
125 

f 


Insert here 78177.093

Use the healthcare system more appropriately, with fewer and shorter hospital stays and 

more preventive carc. 

Receive the assistance they need to better manage their disease as their care coordinator 

helps them understand their illness, physician instructions, medications, etc. 

In sum, on behalf of Gundersen Lutheran, we continue to support efforts to reform the current 

1fedicare reimbursement system to move to value. Our care coordination program is an innovati\Te 

approach to reducing healthcare costs while ensuring the optimal level of service utilization. \'Ve 

thank you for calling this hearing and look forward to continue working with the House \'Vays and 

Means Committee on developing innovative approaches to delivering healthcare. 

Please feel free to contact me with any questions. 

Michael D. Richards 

Executive Director of External Affairs 

Gundersen Health System 

External Affairs Department 1900 South A'CllllC, t\1ailstop: COt-Ot 1, La Crosse. \\'15-1-601 

Email: ExtcrnaIAffairs((1 gundluth.org Phone: 608-775-1400 Fax: 608-775-6225 
126 

Integrated Healthcare Association 


Insert here 78177.094

February 10,2012 

Chainnan Wally Herger, Subcommittee on Health 

United States House Committee on Ways and Means 

I 102 Longworth House Office Building 

Washington D.C. 20515 

Dear Chairman Herger and Members of the Committee, 

My name is Tom Williams, and I am the President and CEO of the Integrated Healthcare 

Association (IHA) in Oakland, California (the required contact information is included at the end 

of this letter). IHA is a non-profit California-wide multi-stakeholder leadership group that 

promotes quality improvement, accountability and affordability of health care. Our activities 

include convening all healthcare parties for cross-sector collaboration on health care topics, 

administering regional and statewide programs, and serving as an incubator for pilot programs 

and projects. 

Thank you for this opportunity to provide input on rewarding quality and efficiency in care 

delivery for Medicare providers. These comments are informed by IHA's ten-year administration 

of the California Pay for Perfonnance (P4P) Program, the largest non-government P4P program 

in the United States. This program spans the state of California, covering 200 physician 

organizations representing about 30,000 physicians providing care to 10 million commercially 

insured patients in eight participating health plans. 

Measuring and rewarding provider perfonnance is a pivotal component of the solution to the 

dual problems of high cost and low quality that plague healthcare in America today. IHA's 

experience shows that quality and cost measurement can be done in a way that engenders 

physician buy-in to the process and investment in improvement; a 2009 evaluation of the 

program by researchers from RAND and the University of California, Berkeley found that 

participating organizations increased their organizational focus on, and support for, quality 

improvement, and increased both physician-level feedback and accountability for quality and the 

speed of adoption of health infonnation technology. 

Our experience over the past ten years offers key lessons concerning standardized quality 

metrics; the importance of a balanced, comprehensive measure set; creating incentives large 

enough to drive physician behavior; and rewarding both high performance and perfonnance 

improvement. These are outlined below in an effort to help Committee members consider how to 

best design reimbursement strategies that will reward quality and efficiency by Medicare 

providers. 
127 


Insert here 78177.095

Standardized Quality Metrics 

Many healthcare providers across the country are already subject to performance measurement 

and incentives by one or more of their payers. Measurement is a costly undertaking for 

providers, who must invest in data collection and reporting mechanisms in order to do well. 

Although measuring the performance ofthe healthcare system is important in understanding the 

quality of care delivered, too much measurement distracts from the ultimate goal of measurement 

- performance improvement. 

Using pre-existing, national standardized quality metrics that align with current measurement 

and reporting programs (or planned programs that will be implemented in Medicare under the 

Affordable Care Act) can help to alleviate the burden of measurement and reporting on 

providers, and allow them to focus on improving the quality of care delivered. 

Aligning quality metrics with existing Medicare programs, such as the Medicare Shared Savings 

and Pioneer ACO Programs, would have the added advantage of allowing for comparability 

between Medicare providers in different programs, thus helping to inform future decisions on 

payment and delivery system reform. 

A Robust, Comprehensive Measure Set 

Healthcare quality and efficiency are multi-faceted concepts that encompass following evidencebased processes of care, monitoring under-use and over-use of resources, structural measures of 

provider capacity (e.g. Meaningful Use measures), how patients perceive the quality of care 

delivered, and ameliorating patient outcomes. Any measurement initiative should include 

measures in all of these domains in order to give providers, purchasers (in this case Medicare), 

and consumers a meaningful picture of the overall quality of care delivered. 

The California P4P Program's own measure set includes 85 measures in all of these categories, 

as seen in the accompanying table. These measures were introduced gradually over the life of the 

program - when measurement began in 2003, the measure set was comprised of only 25 

measures. Introducing measures over time gives providers a chance to become comfortable with 

measurement and the process of improvement. 

Table: California P4P Measure Set Expansion, 2003-2011 

Measurement Domain 2003 2005 2007 2009 2011 

Clinical- Preventive 8 10 12 14 18 

Clinical - Chronic 3 9 10 12 17 

Clinical- Acute 0 I I 4 4 

Patient Experience 6 7 7 9 9 

Meaningful Use of HIT 8 10 19 21 20 

Efficiency/Resource Use 0 0 0 16 17 

Total 25 37 49 76 85 

The California P4P Program began measuring efficiency and resource use in 2009 with a set of 

sixteen appropriate resource use measures that focus on overuse and underuse of key healthcare 

resources (e.g. hospitalization, readmissions, and generic drug use). In 20 II, a new measure of 

Total Cost of Care was introduced that captures the total cost of care - including all covered 
128 


Insert here 78177.096

professional, pharmacy, and ancillary care - delivered to all patients enrolled in a physician 

organization on a per-member basis. Program stakeholders, including the physician groups 

subject to measurement, have embraced these measures as vital to understanding the overall 

quality of care delivered. 

Although measuring efficiency and costs is key to first understanding, and then lowering, the 

costs of health care in this country, cost and resource use measurement is a relatively new frontier 

in American healthcare, as witnessed by the fact that the National Quality Forum has only 

recently endorsed resource use and cost measures. Looking at these measures is a good place for 

Medicare to begin when deciding upon what resource use measures to employ in any payment 

reform initiative. 

Creating Incentives Large Enough to Drive Physician Behavior Changes 

In order for incentive programs to drive changes in physician behavior, they must comprise a 

meaningful percentage of total compensation, generally thought to be around 10%. When the 

California P4P Program began in 2001, one of its overarching goals was "breakthrough" 

improvements in California's quality performance. To date, this goal has not been reached in part 

because performance incentives have made up a relatively small portion -less than 2% - of total 

physician compensation. 

Saving money and improving quality in the Medicare program will require CMS to implement 

incentives that are large enough to drive changes in provider behavior. Any reform must also be 

monitored to ensure that the potential negative impacts of performance-based pay (e.g. patient 

exclusion and "teaching to the test," or focusing on what is measured to the exclusion of other, 

equally important aspects of care) are minimized. 

Rewarding Both High Performance and Performance Improvement 

Along with the size of incentives available, how those incentives are structured is also important 

in driving behavior. Certain payment methodologies are better-suited to driving improved quality 

across providers, regardless of initial performance, than others. Payments that reward high 

performance and performance improvement, rather than rewarding based on relative rank, are the 

most effective at encouraging improvement across the board. 

The California P4P Steering Committee has adopted a recommendation that all participating 

health plans adhere to a standard payment methodology based on CMS' Value Based Purchasing 

methodology, which scores the performance of each physician organization in two ways: 

first, based on level of attainment, and second, based on the amount of improvement. The 

higher score is then used to determine payment amount. 

Bringing it All Together: Key Lessons 

Our experience over the past ten years offers four key lessons that Committee members must 

keep in mind when considering how to reward quality and efficiency by Medicare providers: 

I. Use pre-existing, standardized quality metrics that align with already-existing 

performance measurement and reporting programs; 
129 

f 


Insert here 78177.097
130 

Pacific Business Group on Health 


Insert here 78177.098

PP,CiHC BUSiNESS 

(,ROUP ON HEALfH 

Statement for the Record 

U.S. House of Representatives Ways and Means Committee 

Subcommittee on Health 

Hearing on Programs that Reward Physicians for High Quality and Efficient Care 

February 21, 2012 

Dear Chairman Herger, Congressman Stark, and Distinguished Members of the Subcommittee on Health: 

The Pacific Business Group on Health (PBGHj is one of the nation's leading non-profit business coalitions 

focused on health care. PBGH works on many fronts to improve the quality and affordability of health 

care, often in close partnership with health insurance plans, physician groups, hospital systems, and 

consumer organizations. We leverage the power of our 50 large purchaser members representing a 

wide range of industries who spend 12 billion dollars annually to provide health care coverage to more 

than 3 million employees, retirees and dependents. 

Private sector and state purchasers have been atthe forefront of innovative efforts to reward quality 

and efficiency in care delivery while reducing complications and wasteful spending. Performance 

transparency and performance-based payment are critical to addressing affordability and improving 

health outcomes. The collective experience of private purchasers not only offers important lessons to 

inform Medicare strategies, it provides hope for what can seem an insurmountable task. 

Employers wish to recognize and pay providers favorably for achieving high quality care and efficient use 

of resources. The critical challenge to implementing such pay-for-value programs is our continuing 

difficulty in measuring performance along these dimensions of great social and policy importance. 

Employers wish to pay more to providers who help patients achieve good health outcomes, maintain 

positive health status and functioning, and make clinical decisions consistent with the best medical 

evidence. They wish to reward providers who collaborate with other health professionals and facilities, 

and with caregivers in the community, to manage an entire episode of illness more efficiently. Yet today 

there is a dearth of measures in these critical domains. As a result, our lessons learned continue to 

focus on the poor availability of key data and resulting measures. The following are lessons we have 

learned: 

Use a parsimonious set of measures that 1) matters to patients, 2) reinforces other programs, and 

3} evolves as better measures become available. Employing a set of high-value measures drives 

attention to areas of high impact, gives consistent "signals}} to physicians on where to focus, and 

reduces confusion from the cacophony of measures. 

Identify the ideal dashboard of measures and chart a course for reaching the destination. Existing 

measures do not cover all the areas that are important to patients and purchasers. A road map on 
131 


Insert here 78177.099

PBGH Comments for Health Subcommittee 

Hearing on Programs that Reward Physicians Who Deliver High Quality and Efficient Care 

February 21, 2012 

Page 2 of 7 

how to fill in the gaps in measures is important to evolving the field of performance measurement 

and so we can collectively make judicious use of resources. 

Payment reform will not reach its full potential if it continues to be based on a system that is 

inherently flawed. We know it will take time to move away from the current RBRVS system. Thus, 

making improvements to fee-for-service payment to physicians while also implementing new 

payment systems is imperative to the affordability and sustainability of health care. 

Align select program activities (e.g., goals, measurement, and payment) across programs, both 

public and private sector. Alignment creates synergies across programs, reduces the amount of 

effort physicians expend on data collection, and ensures that we are all "rowing in the same 

direction.1! 

Focus on individual physicians, where variation in performance is most evident, and not just 

higher levels of aggregation, whenever feasible. Programs generate the greatest improvements if 

it promotes individual accountability, in concert with shared accountability. Individual 

accountability reinforces professional motivation for quality improvement, provides information for 

patients to use in choosing physicians, and identifies improvement areas that are masked by higher 

levels of aggregation. As we see with the Sustainable Growth Rate and other initiatives, incentives 

applied at the group level can be less effective. 

Below, we provide information on programs implemented by PBGH and its members from which these 

lessons are drawn. 

Ambulatory Intensive Care Unit 

The Ambulatory Intensive Care Unit (AICU) is a primary care-led, high intensity care management model 

for the high risk population. The design was funded by a grant from the California HealthCare 

Foundation (CHCF) to develop an innovative model of delivering care as a strategy for reducing costs 

while maintaining or improving quality. The designs and financial projections underwent a peer review 

panel of subject matter experts and leaders of traditional and more innovative practices. 

The Boeing Company implemented a pilot of this model, which they called the Intensive Outpatient Care 

Program (IOCP), in Seattle. Key features of the model included: 

The program focused on high risk patients, i.e., the 5-20% who incur the highest costs. 

Each site created a new ambulatory intensivist practice. 

Practices were staffed by a physician, a nurse "health coach", and other support. 

The sites implemented shared care plans, increased access, and proactively managed care. 

Copays for the initial intake visit were waived; there were no other benefit changes. 

Sites were paid a case rate per member per month (pmpm) to cover non-traditional 

services; otherwise, the sites continued to be paid based on traditional fee-for-service 

contracts. 

The sites received a portion of the savings in total medical expenses. 
132 


Insert here 78177.100

PBGH Comments for Health Subcommittee 

Hearing on Programs that Reward Physicians Who Deliver High Quality and Efficient Care 

February 21, 2012 

Page 3 of 7 

Over a two-year pilot, Boeing achieved improved outcomes, lower costs, and increased patient access to 

care. The table on the next page summarizes the results. (Milstein & Kothari, 2009)1.2 

Boeing loep pilot, ran from January 2007 through July 2009. 

Measure compared to baseline 

Health care costs of pilot participants versus control group - 20.0%' 

Hospital admissions - 28% 

Improvement in mental functioning of pilot partiCipants + 16.1%t 

Participants feeling that care was "received as soon as needed" + 17.60;t 

Average number of patient-reported workdays missed, 6 months -56.5%., 

Following the success of the Boeing pilot, PBGH worked with CalPERS and Pacific Gas and Electric 

Company (PG&E) to replicate the model in rural Northern California with the Humboldt del Norte 

Foundation Medical Group. This program targets the top 20 percent of patients in terms of relative 

health risk. Leveraging the infrastructure of the medical group to serve a self-funded PPO population, 

care managers work closely with beneficiaries to coordinate care, design a self-care plan and connect 

the members to needed resources. In addition to the regular fee-for-service payments, the purchasers 

pay a monthly case management fee, and agreed to a distribution of shared savings among the 

purchaser, medical group, and Anthem Blue Cross. This pilot is being expanded in St. Louis, MO and 

Southern California. 

Other PBGH members are experimenting with models for accountable care organizations (ACO). For 

example, CalPERS implemented an ACO-like pilot with Hill Physicians Medical Group, Dignity Health 

(formerly Catholic Healthcare West) and Blue Shield of California that introduced a shared savings model 

for improving care coordination and quality for 42,000 HMO beneficiaries in the greater Sacramento 

1 Milstein, A and Kothari P, Health Affairs, October 20th, 2009. Accessed at ~Jt2~L!De_~Jtb9ffa!.r.:s:grgLQIQ_gaJ~0~{1_QaQ/C!C~: 

bjg~_ ~r -=-\o'9J\:! ~5~L~~ 1"!l~~_~J~L~~l!f~Q!~j· 

2 This model was also highlighted in Atul Gawande's recent "Hot Spotters" article in the New Yorker, and documented on the 

Agency for Healthcare Research and Quality (AHRQ) Health Care Innovations Exchange. 

b.!!QJL~~J!1nOv~.!19_ns.ah~gQvjcon_~_Qt.~~g=2941. Additionally, Steve Jacobson, MD and Jennifer Wilson-Norton of The 

Everett Clinic presented on "Connecting Providers and Managing High Risk Beneficiaries" at the CMS ACO Accelerated 

Development learning Session on September 16, 2011, https:/ jacoregister.rti.orgjdocx/dspJnks,cfm?doc=Module 38. 

Connecting Providers Managing High Risk.pdf 
133 


Insert here 78177.101

PBGH Comments for Health Subcommittee 

Hearing on Programs that Reward Physicians Who Deliver High Quality and Efficient Care 

February 21, 2012 

Page 4 of 7 

area. Early results showed a $15.5 million cost reduction annually due to a 17% reduction in patient readmissions and shorter lengths of stay.' Five months later, those results were updated to reflect $20 

million cost reduction over the two years of the program, largely due to a 22% reduction in hospital 

readmissions4,5. 

Reference and Value Pricing 

Reference pricing establishes a standard price for a drug, procedure, service or bundle of services, and 

generally requires that health plan members pay any allowed charges beyond the cap. In a Value Pricing 

arrangement, quality is considered in addition to the standard price. The goals of these programs are 

to: 

Encourage providers to offer lower prices. 

Encourage member engagement while preserving choice. 

Decrease the substantial price variation per unit. 

Increase value in health care. 

Safeway Inc. and CalPERS have introduced reference pricing benefit designs that establish a fixed benefit 

coverage level for select services to incent selection of high-value providers and identify those providers 

who are price outliers relative to community averages. Examples of reference-priced services include 

colonoscopy, cataract surgery, hip and knee joint replacement, arthroscopy surgery, advanced imaging, 

and routine diagnostic laboratory procedures. For example, Anthem Blue Cross and CalPERS have 

established a threshold-reference price-of $30,000 for a standard inpatient hip/knee replacement 

procedure. (Note: prices vary from $15,000 to $110,000 in their commercial PPO population). The 

program to date has resulted in a 6.8% increase in volume at designated facilities, average facility paid 

amount per procedure was lowered by 26.5%, and some facilities are negotiating reduced costs to 

accommodate the program. 

California. Physician~erform_anLe .Initiative 

The California Physician Performance Initiative (CPPI), launched in 2006, is a multi-stakeholder initiative 

to measure and report on the performance of individual physicians throughout California using 

3 CalPERS Press Release. (2011, April 12). Press Release: April 12, 2011. Retrieved February 21, 2012, from www.calpers.ca.gov: 

http://www.calpers.ca.gov/index.jsp?bc=/about/press/pr-2011/april/integrated-health.xml 

4 CalPERS Agenda Item 4. (2011, October 18). Agenda Item 4 Memo to the Members of the Health Benefits Committee. 

Retrieved February 21, 2012, from www.calpers.ca.gov: http://www.calpers.ca.gov/eip-docs/about/board-calagenda/ agendas/hbc/20111O/item-4.pdf 

s Blue Shield of California Press Release. (2011, September 16). HHS Secretary Kathleen Sebeliu5 Reviews Key Pilot Program Tied 

to Health Care Reform Goals. Retrieved February 21, 2012, from www.blueshieldca.com: 

https://www.blueshieJdca.com/bsca/about-blue-shield/newsroom/sebelius-reviews-aco-pilot-programs.sp 
134 


Insert here 78177.102

PBGH Comments for Hea!th Subcommittee 

Hearing on Programs that Reward Physicians Who De!iver High Quality and Efficient Care 

February 21, 2012 

PageSof7 

information from a mUlti-payer claims database. This work is being conducted by the California 

Cooperative Healthcare Reporting Initiative (CCHRI), a statewide collaborative of physician 

organizations, health plans, purchasers and consumers that work collectively to help consumers and 

purchasers make informed health care decisions. CPPI's goal is to improve patient care and its 

affordability by: 

Reporting results to physicians to help them gauge how well care for their patients meets 

national standards of care. 

Applying the performance results in ways that help consumers and purchasers get better value 

when choosing and using health care; and 

Adopting performance measures and reporting methods using the best available science. 

CPPI clinical quality results were mailed to more than 13,000 California physicians in July 2009. CPPI's 

physician-specific results are derived from the medical claims data aggregated across California's three 

largest commercial PPO health plans (Anthem Blue Cross, Blue Shield of California and United 

Healthcare) and the Anthem Blue Cross and Blue Shield of California commercial HMO health plans. 

Upon mailing the CPPI Performance Reports to physicians, each physician was asked to review and, as 

needed, correct their demographic record or quality scores. Any corrections provided by the deadline 

were applied to correct the quality results before the information was provided to health plans. CPPI 

assessed physician performance using clinical quality measures that are evidence-based, nationally 

standardized and endorsed by major standard-setting bodies (Le., the National Quality Forum, or 

"NQF"). The measures address preventive care and chronic condition management and were approved 

by the CPPI Physician Advisory Group. 

Blue Shield of California has launched its physician quality recognition program based on CPPI results. A 

set of physicians, who have sufficient patient samples to be reliably scored, was designated as higher 

quality performing physicians for select preventive screening and chronic care measures. Blue Shield 

members can view this new information in the plan's online physician directory. 

Working with the California Orthopedic Association and the California HealthCare Foundation, PBGH 

launched the California Joint Replacement Registry (CJRR), a Level 3 clinical registry. The goals of the 

registry are to: (a) collect and report scientifically valid data on the results of hip and knee replacements 

performed in California, including device safety and effectiveness, post-operative complication and 

revision rates, and patient-reported assessments; and (b) promote the use of performance information 

regarding hip and knee replacements to guide physician and patient decisions and support programs for 

provider recognition and reward, and thereby encourage quality and cost improvements through 

marketplace mechanisms. The registry is specifically designed to: 

Compile reports assessing the outcomes associated with different devices and surgical 

techniques. 

Create confidential benchmarking reports for physicians and hospitals on their performance and 

comparisons to statewide averages. 

Establish a registry-facilitated process for reporting Physician Quality Reporting System (PQRS) 

measures to CMS for receipt of bonus payments. 

Transmit safety alerts on devices with short-term results that provoke concern. 

Shape a measurement and reporting system for orthopedic procedures. 
135 


Insert here 78177.103

PBGH Comments for Health Subcommittee 

Hearing on Programs that Reward Physicians Who Deliver High Quality and Efficient Care 

February 21, 2012 

Page 6 of7 

Provide patients with useful information about outcomes after surgery to help them make 

decisions about their care. 

In August 2011, the CJRR concluded a three month pilot phase. Three sites, representing 12 surgeons, 

who perform 5 percent of the hip and knee replacements in California annually, participated in the pilot 

phase and continue to contribute data to the registry. During 2012, the CJRR will refine its operations 

and expand to include six additional hospital sites, accounting for 10-15 percent of the hip and knee 

replacements in California annually. Future strategies also include engagement of health plans to 

reward providers that participate in sharing their information and engage in quality improvement 

efforts. 

Catalyst for Payment Reform 

Catalyst for Payment Reform (CPR) is an independent, non-profit corporation working on behalf of large 

employers to catalyze improvements to how we pay for health care in the U.s. to signal powerful 

expectations for better and higher-value care. CPR was conceived in January 2009 and several of PBGH 

members are actively participating. CPR is guided by a multi-stakeholder Leadership Committee of 

influential experts and decision makers in health care. Key strategies and activities being implemented 

by CPR include: 

Demanding payments be designed to cut waste or reflect performance 

o Track progress with a National Scorecard on payment reform 

o Improve current payment methods (e.g. FFS) while pushing for new forms of 

payment 

o Achieve 20% value-oriented payment by 2020 

Leveraging purchasers and creating alignment 

o Encourage use of standard health plan RFI questions and a model contract to open a 

dialogue with plans about payment reform priorities 

o Alignment with CMS 

Implementing Innovations 

o Encourage price transparency 

o Implement reference or value pricing 

o Change maternity care payment to align with clinical evidence 

To conclude, we concur that the Medicare fee-for-service system is financially unsustainable and that 

the "pay-it-forward" suspension of the Sustainable Growth Rate (SGR) places mounting pressure on the 

federal budget. Efforts have been made to use value-based payment but it has not been nearly 

sufficient. Although there are innovative initiatives in physician payments, it is still much more 

prevalent for physicians to be paid the same irrespective of their quality and efficiency. The federal 

government must act as a prudent purchaser and support information every American needs to get 

better care as a public good. 

As you consider options to revise Medicare's physician payment system, it is important to recognize that· 

any changes will impact costs and quality in the private sector. Private purchasers are looking to 

Medicare to be their partner - to work in parallel and take major steps forward together. Thank you for 

the opportunity to provide comments. If you have any questions or need additional information, please 
136 

f 


Insert here 78177.104
137 

The Alliance of Specialty Medicine 


Insert here 78177.105

Sound Policy. Quality Care, 

Statement for the Record 

of the 

Alliance of Specialty Medicine 

before the 

Ways and Means Subcommittee on Health 

U.S. House of Representatives 

on the topic 

"Programs That Reward Physicians Who Deliver 

High Quality and Efficient Care" 

American Academy of Facial Plastic and Reconstructive Surgery· American Association of Neurological Surgeons 

American Gastroenterological Association· American Society of Cataract & Refractive Surgery 

American Society of Echocardiography • American Society of Plastic Surgeons· American Urological Association 

Coalition of State Rheumatology Organizations· Congress of Neurological Surgeons 

Heart Rhythm Society· National Association of Spine Specialists· Society for Cardiovascular Angiography and Interventions 
138 


Insert here 78177.106

The Alliance of Specialty Medicine (Alliance), a coalition of 12 national medical specialty societies 

representing approximately 100,000 physicians and surgeons, would like to thank the Committee on 

Ways and Means, Subcommittee on Health for the opportunity to submit testimony for its February 7, 

2012, hearing on "Programs That Reward Physicians Who Deliver High Quality and Efficient Care." 

The Alliance is dedicated to advocacy for the development of sound federal health care policy that 

fosters patient access to the highest quality specialty care. To that end, the Alliance appreciates the 

Subcommittee's consideration of innovative approaches to recognizing and rewarding physician 

quality and efficiency in its search for a long-term solution to the Medicare physician payment system. 

Many of these medical specialty societies have a physician-driven national quality improvement 

initiative based on national registries with clinically-relevant performance measures developed from 

evidence-based guidelines. While more work remains, these physician-driven initiatives provide a 

unified approach to benchmark specialty practices and provide relevant feedback to physicians on 

how their performance compares with the national standard. Nevertheless, the Alliance remains 

deeply concerned that many payer-led quality improvement efforts are misaligned with physiciandriven quality initiatives, lack sufficient flexibility to accommodate different specialties and care 

settings, rely on measures that are inadequately risk adjusted and not necessarily linked to better 

patient outcomes, and divert significant resources away from direct patient care. 

As you already know, unless Congress acts, the flawed SGR formula will continue to slash physician 

payments by more than 40 percent over the next decade, despite the fact that Medicare 

reimbursement rates are already well below market rates. Deep cuts jeopardize the viability of many 

physicians' businesses and imperil Medicare beneficiaries' access to specialty care. The Alliance 

supports replacing Medicare's SGR formula with a stable mechanism for updating Medicare fees that 

adheres to the following principles: 

Ensures that all physicians receive adequate reimbursement. Physician shortages are 

looming in many specialties, not just primary care, and any payment differentials will further 

exacerbate significant shortages of specialty physicians. 

Recognizes reasonable inflationary medical costs such as the Medicare Economic Index 

(MEl). 

Allows Medicare beneficiaries access to the physician of their choice. Patients and 

physicians should be able to freely contract for Medicare covered services without having to 

lose their Medicare benefits. 

Maintains a fee-for-service option. As other payment systems are explored for both 

Medicare and the private sector, it is important that both public and private payers maintain a 

fee-for-service option, as this may work best for some physicians and their patients, especially 

those with serious illness or in underserved areas where provider choice is already limited. 

The key is not eliminating fee-for-service, but rather identifying where this option makes the 

most sense. 

Provides an appropriate timetable and required investment for reforms. New payment 

systems, including those targeting quality and efficiency, need appropriate time for proper 

implementation, as well as investment in key infrastructure. 

Aims to improve quality and efficiency through flexible strategies that are evidence-based, 

meaningful and appropriate for a range of patient populations and care settings, feasible, and 

non-punitive. 

Given the emphasis of this hearing, the sections below will focus on those elements critical to 

ensuring successful implementation of efforts to improve physician quality and efficiency. 

Measurement Development and Selection 

Many measures widely used in public and private payer recognition programs are of questionable 

value and are not necessarily valid indicators of quality or value. For example, a study recently 

Page 2 of10 
139 


Insert here 78177.107

published in the Archives of Internal Medicine' linked higher patient satisfaction scores with greater 

health care costs and increased risk of mortality, suggesting a tenuous link between patient 

satisfaction and healthcare quality and outcomes. Using data from more than 50,000 patients, the 

study found that those who reported the most satisfaction with their care had a 26 percent higher 

mortality risk, after adjusting for health status, sociodemographics, insurance status, and other 

factors. Those patients also had higher overall healthcare expenditures, higher drug expenditures and 

higher inpatient admissions. Despite the growing reliance on satisfaction scores as a tool for 

evaluating physician performance, efforts to satisfy patients may have downsides that lead to 

unnecessary care and risks without the benefits. 

To ensure that measures are meaningful to consumers and reflect a variety of clinical encounters, 

quality improvement programs should employ a combination of measures, including 1) process-ofcare measures for which evidence shows that better performance leads to better outcomes, 2) 

measures that evaluate outcomes directly, and 3) structural measures that encourage the use of 

technology and other infrastructure to improve quality and efficiency. This multi-pronged approach 

helps minimize the pitfalls of relying solely on process-of-care measures, which are not always 

relevant to all specialties and can encourage gaming, or solely on outcomes measures, which may be 

difficult to achieve and beyond the control of physicians. The Alliance recommends that a physiciandriven, unified approach to quality improvement is the best approach to determine the combination of 

measures that will reduce variation in care and provide clinically-relevant feedback to physicians. 

The Alliance asks that both the public and private sector give careful consideration to the 

development of cost of care measures-- an undeveloped area of measure development that is in its 

infancy. Payers continue to struggle with how to accurately define and measure appropriate resource 

utilization in health care and very few trustworthy mechanisms currently exist. In fact, the RAND 

Corporation recently issued a series of studies that questioned the reliability of cost profiling.' 3 One 

study found that physician ratings based on cost of care can be incorrect up to two-thirds of the time 

for some physician specialties while misclassifying one-fourth of all physicians under the best-case 

scenario used by most health insurers. The authors ultimately concluded that "current methods of 

physician cost profiling are not ready for prime time" and that "current cost profiling approaches need 

to be improved, or new approaches need to be developed." The Alliance recommends that physician 

performance not be linked to cost of care measures until further study and refinement occur. 

Measures that evaluate spending must be evidence-based and must be primarily aimed at improving 

the quality of patient care, rather than achieving monetary savings. The practice of medicine cannot 

be judged on cost alone, especially since improvements in care often require the expenditure of 

resources and may lead to increased spending. A 2009 study, for example, underscored how difficult 

it can be to predict when additional treatments - and, thus, spending - will benefit a particular patient 

and suggested that there are instances in health care when more spending can actually save Iives4 

The Alliance also recommends that payers carefully consider the limitations of using procedure 

volume as an indicator of quality or efficiency, especially for complex, heterogeneous aspects of 

specialty care.' 6 7 Since high volume is not always associated with superior outcomes, this 

I Fenton, J., ct a1. The Cost of Satisfaction. Arch Intern Mcd. Published online Fcbntary 13, 2012, at http://archinte.ama-

~ssn.org/cgl/contcntlabstract/archinlcrnmcc!.20 11.1662\1 1 

- Adams, J .. ct al. PhYSician Cost Profiling - Rcliabillty and Risk ofMisclassification. N Cngl J Mcd 2010; 362:1014-21. 

; Mchrotra, A .. et al. The Effect of Different Attribution Rules on Individual Physician Cost Pralilcs. Ann Intern Med. 2010; 152:649-

654. 

·1 Ong, M., cl al. Looking Looking Back: A!.scssing Variations in Hospital Resource Usc and Outcomes for Elderly Patients 

with Heart [<ailure. CirculatIOn: and Outcomes. Pubhshed online October 13,2009 at 

Quality of care and the volume-outcome relationship---- what's next for surgery? Surgery 2002; 131; 16-8. 

K. Reliability of provider volume and outcome associations for hcalthcarc policy. Mcd Care 2003;41 :1111-7. 

7 Heros RC: Editorial: Case volume and outcome. J Neurosurg 99: 945-946, 2003. 

Page 3 of 10 
140 


Insert here 78177.108

information should only be used in confidential feedback reports to physicians and not in reports 

released to the public. 

While measures should be developed through a consensus process that includes all relevant 

stakeholders, physician involvement in the development and testing of measures is critical and the 

only way to ensure measures are valid and clinically appropriate. Process and outcomes measures 

should be based on the highest levels of evidence available, but should also take into account 

importance and feasibility to collect and report data. Overall, the Alliance recommends that measures 

should be clinically-relevant to improve patient care, and not simply adhered to for the sake of 

reporting or to comply with a poorly developed quality initiative. 

Measures should be carefully developed to take into account differences in patient health and patient 

compliance with treatment. The importance of risk adjustment cannot be overstated, especially when 

payment is tied directly to physician performance. [f the measurement specification is not accurately 

adjusted, physicians who provide compassionate treatment to more complicated or riskier patients--

such as those with multiple chronic conditions-- will suffer the unintended consequence of performing 

below the national standard and may try to avoid such patients in need, creating serious access to 

care issues. Risk adjustment is equally important for measures of cost as it is for measures of quality. 

The Center for Studying Health System Change recently studied regional spending variation using 

autoworkers' health claims and found that the biggest contributor to higher regional spending was 

patient case mix.' Poorer health status of patients contributed the most to spending, not unnecessary 

utilization of services or higher prices charged by physicians. Given the continued paucity of 

trustworthy tools, the Alliance recommends that public and private payers devote additional resources 

to the development of improved risk adjustment and attribution methodologies. 

Participation in all quality improvement programs must be voluntary, and physicians should have the 

opportunity to select measures relevant to their patients and practice. Even physician-driven quality 

programs recognize that the local capacity to implement quality into the practice will be incremental in 

order to assure unintended disruption in patient care. Furthermore, sponsors of quality improvement 

programs should work collaborative[y to align and harmonize measures, which wil[ promote 

consistency and limit the overall cost and burden of collecting data from physicians. 

Flexibility In Quality Improvement Approaches 

There is currently [ittle empirical evidence supporting the superiority of one quality improvement 

strategy over the other. In most cases, the optimal model will depend on the clinical context. We also 

have learned from Medicare's Physician Qua[ity Reporting System (PQRS) and other public and 

private initiatives that one size does not fit all when measuring quality. For example, what may be a 

useful indicator of quality of care for a primary care physician may reveal little about the quality of care 

provided by a specialist. The long-term potential of public and private payer initiatives to close quality 

gaps and achieve better value lies in the ability to accommodate multiple aligned quality improvement 

strategies rather than any singular approach. 

Much of Medicare's current physician quality improvement efforts focus on strategies that are 

primarily targeted toward primary care and chronic disease management. Many of these efforts rely 

on a long list of evidence-based process-of-care measures to evaluate physician quality. While these 

process measures can be readily acted upon and may be important in some clinical settings, they are 

not necessarily consistent with clinical outcomes and say very little about the quality of specialty care. 

[n fact, various studies have shown that incentivizing the reporting of process measures often only 

~ White, C Health StaLus and Hospital Pricc~ Key to Regional Variation in Private Health Care Spending. Center for Studying Health 

System Change. 2012. 

Page 4 of 10 
141 


Insert here 78177.109

produces improvements in documentation rather than a change in the quality of health care delivered 

to patients.' 10 11 

To ensure that quality improvement initiatives are actionable and meaningful for a range of patients 

and physicians, the Alliance recommends that public and private payers must offer flexibility in terms 

of measures and reporting options. 

Recognizing the Value of Clinical Data Registries 

Claims data is an inaccurate surrogate for determining the quality of care. Medicare's current 

physician quality improvement efforts also rely heavily on claims data. While claims data are easy to 

collect, the claims system was developed for billing purposes only and not for quality measurement. 

There is no nationally accredited certification that assures that layman professionals are qualified and 

adequately trained to collect accurate claims data for purposes of reporting quality data. As a result, 

claims data are limited in clinical scope and rife with inaccuracies and attribution errors. These errors 

can result from limitations of the claims system itself, from inappropriate/incomplete coding, and even 

from health plan reimbursement policies. For example, capitated payments make it difficult to identify 

when visits actually occurred and what services were delivered, bundled services do not allow for the 

identification of separate services, and "carved-out" services often hide data necessary for quality 

measurement. 

The Alliance believes that observational data submitted to a registry is more clinically relevant and 

more accurate than the current claims reporting system. Although clinical trial data offers the 

strongest evidence-base, it is extremely expensive, lengthy to conduct, and vulnerable to other 

challenges such as maintaining clinical equipoise. Therefore, the Alliance strongly encourages public 

and private payers to recognize the value of observational data by aligning their quality programs to 

incentivize physician use of registries (i.e., to off-set the on-going costs to implement and maintain a 

registry). Registries are a well-recognized quality improvement tool to collect and provide feedback to 

physicians on their performance relative to a national standard. They are designed to identify, monitor, 

and compare differences in processes and outcomes within and among communities. When a 

difference is established, a registry can undertake subsequent analyses to identify factors that mayor 

may not be associated with that difference. Since registries are ongoing, physicians have the tools to 

monitor changing practice patterns and the impact of those patterns on patient outcomes. Registries 

also allow for more accurate attribution and the capturing of more detailed data than claims-based 

systems, including patient-reported outcomes. The information provided by registries helps to guide 

physician treatment decisions and has been known to change practice in a beneficial manner. 

Several of member organizations of the Alliance have developed or are participating in specialty 

specific clinical registries. Examples of these registries include: 

NCDR® CARE Registry® (The Society for Cardiovascular Angiography and Interventions, the 

American Association of Neurological Surgeons, and the Congress of Neurological Surgeons 

with the American College of Cardiology): For carotid artery revascularization and 

endarterectomy procedures. This registry provides: (1) A "best practices showcase" for all 

disciplines involved in treating carotid artery disease - cardiology, neurology, radiology, 

vascular surgery, neurosurgery, and interventional neuroradiology; (2) benchmarked decisiontj Rosk! J, Jcddeloh R. An L, Lando H, Hannan P, Hall C, ct aL The impact offinancial Incentives and a patient registry on preventive 

care quality: increaSIng provider adherence to evidence-based smokIng cessation practice guidelines. Prcv Med. 2003;36:291-9. [PMID: 

12634020]. 

lIJ Fairbrother G, Hanson KL, Friedman S. Butts Gc. The impact of physician bonuses. enhanced fees. aod feedback on childhood 

immunization coverage rates. Am J Puolie Health. 1999;R9:171-S. [P.\1lD: 9949744]. 

II Fairbrother G, Siegel MJ, Friedman S, Kory PD. Butts Gc. Impact of financial inccnti\·cs on documented immunization rates in the 

inner city: results of a randomized controlled triaL Ambul Pcdiatr. 2001; 1 :206-12. lPMID: 11888402]. 

Page 5 of 10 
142 


Insert here 78177.110

making data to answer critical questions on quality assurance related to high-risk new 

technologies; and (3) independent neurological assessment, including NIH Stroke Scale 

scores before, immediately after, and at 30 days post-procedure, to support treatment choices. 

NCDR® CathPCI Registry® (The Society for Cardiovascular Angiography and Interventions 

with the American College of Cardiology): For diagnostic cardiac catherizations and 

percutaneous coronary interventions. The CathPCI Registry offers: (1) risk-adjusted 

benchmark reports containing practice patterns, demographics, and outcomes of diagnostic 

procedures and therapies showing the facility, comparable facilities, and the national 

comparison group data; and (2) an unique view of guidelines in practice, PCI records tracking 

pharmaceutical and device safety, plus research findings from peer-reviewed journal articles 

and abstracts. 

NCDR® IQD RegistryTM(Heart Rhythm Society with the American College of Cardiology): For 

implantable cardioverter defibrillators and leads. The ICD Registry is able to: capture atrial, 

ventricular, defibrillator, and left-heart lead data at time of implant, revision, replacement, or 

surgical abandonment; monitor and report pediatric ICD implantation data to expand the 

knowledge base for an important patient population with unique needs at implantation; 

ICD/CRT-D generators for primary and secondary prevention and update key quality indicators 

and align its data set more closely with current guidelines. 

NCDR® IMPACT Registry'" (The Society for Cardiovascular Angiography and Interventions 

with the American College of Cardiology): Assesses the prevalence, demographics, 

management and outcomes of pediatric and adult patients with congenital heart disease who 

are undergoing diagnostic catheterizations and catheter-based interventions. 

Ophthalmic Patient Outcomes Database (The American Society of Cataract and Refractive 

Surgery with the American Academy of Ophthalmology): A CMS-certified registry that allows 

providers to submit data to CMS' Physician Quality Reporting System (PQRS). This registry 

also includes benchmark reporting capabilities allowing physicians to compare their practices 

with their peers. 

Digestive Health Outcomes Registry TM (American Gastroenterological Association): Aims to 

improve patient health outcomes and cost effectiveness of digestive care using scientifically 

valid methods to collect, analyze and report clinically relevant data, empowering the healthcare community to optimize quality of care. The AGA Registry is a CMS-certified registry, 

enabling practices to submit data for PQRS. It also captures and provides feedback to 

gastroenterology practices regarding the quality of their colorectal cancer prevention care, as 

well as the care of patients with inflammatory bowel disease and hepatitis C. Quality can be 

assessed at the clinician level, across all practice settings. The overall goal is to optimize the 

care and outcomes of digestive health conditions by: implementing evidence-based guideline 

recommendations in clinical practice; assuring that the right things are done for the right 

patient at the right time in a safe manner; and support efforts to improve digestive healthcare, 

quality, and safety through novel quality improvement strategies. In the summer of 2012, the 

AGA will launch the Digestive Health Recognition Program (DHRP), which will enable 

clinicians to be recognized by the AGA and/or rewarded by health plans for meeting quality 

thresholds. 

NeuroPoint Alliance (NPA) (The American Association of Neurological Surgeons/Congress of 

Neurological Surgeons): An effort to coordinate a variety of national projects involving the 

acquisition, analysis and reporting of clinical data from neurosurgical practice, using a webbased data submission and management platform. The NPA aims to satisfy practice data 

collection requirements for board certification and Maintenance of Certification (MOC), 

establish risk-adjusted national benchmarks for both the cost and quality of common 

neurosurgical procedures, allow practice groups and hospitals to analyze their individual 

morbidity and clinical outcomes in real-time, generate both quality and efficiency data to 

support claims made to public and private payers, and demonstrate the comparative 

effectiveness of neurosurgical procedures. The National Neurosurgery Quality and Outcomes 

Database (N2QOD), which launched last year, is a targeted effort to collect site-specific, riskPage 6 of 10 
143 


Insert here 78177.111

adjusted quality data related to spine surgery, including patient-reported outcomes. The 

N2QOD will analyze practice variations and utilization in an effort to demonstrate the value of 

neurosurgical care. 

To ensure these registries can reach their fullest potential, the Alliance encourages both the public 

and private sector to support programs that incentivize continuous and prospective participation in a 

clinical data registry and the use of collected data to improve care processes. While national specialty 

societies or other stakeholders would be responsible for the development, validation, and 

management of registries, CMS and other private payers could set minimum requirements for 

registries to qualify for incentive payments. A registry may need to demonstrate it employs a valid risk 

adjustment methodology; may need to collect data on specific outcomes such as complications and 

recovery time; may be subject to sample size requirements; or may be required to use standardized 

clinical definitions to ensure uniformity with other registries. Furthermore, payers could require 

physicians to demonstrate what actions were taken to target gaps in care identified by the registry. 

The Alliance is confident that up-front investment through incentives to offset the cost of registry 

participation will have a positive impact on reducing morbidity, mortality, and the costs associated with 

complications, as well as the potential for decreased volume and efficiency over time as physicians 

reflect on collected data, refine care processes that lead to better outcomes, and more clearly define 

indications for various procedures. 

Various private payers have approached specialty societies with interest in incentivizing the use of 

registries. Some, such as the Blue Cross Blue Shield Blue Distinction Program, already recognize 

registry reporting as one of various factors that defines a center of excellence. This illustrates private 

payer confidence in the value of continuous clinical data collection as a driver of rapid learning about 

both quality and efficiency. It also stands as a testament to their understanding that alternative, more 

targeted strategies are necessary to better effect improvements in specialty quality. 

Public Reporting of Physician Data 

While public reporting may stimulate more rapid improvement among those being measured and may 

make patients more informed decision-makers, it also carries risks. If data are released prematurely 

or in a format that is not accurate, it can increase a physician's exposure to medical liability, lead to 

perverse incentives such as gaming or other actions to avoid high-risk patients, and deter physicians 

from partaking in quality improvement activities in general. Furthermore, if data are not adjusted 

properly and not presented in a format that is meaningful and comprehendible to a range of 

audiences, it may create confusion among patients and unfairly harm the reputation of a physician. 

Medicare's first public effort to identify hospitals with patient safety problems recently pinpointed many 

prestigious teaching institutions around the nation, raising concerns that the measures are skewed in 

a way that exaggerates problems at hospitals that treat lots of complicated cases or very sick 

patients. 12 Hospital performance on these patient safety measures is already being reported to the 

public and Medicare payments to hospitals will be tied to the measures starting in 2013, despite the 

fact that the National Quality Forum (NQF) recommended against using the measures for payment 

due to concerns about the reliability of the data sources. Critics claim the measures are not properly 

risk-adjusted and based on Medicare claims data, which do not properly distinguish between various 

levels of illness and health problems among patients. Others say the measures were never intended 

to compare hospitals, but were developed to help hospitals internally flag events that needed 

attention. Either way, the public reporting of inaccurate information may confuse the public and divert 

patients from experienced centers of care. 

12 Ruu, J. Experts Question Medicare's Efrort To Rate HospiLa!s' Patic11l Safety Records. Kaiser Health News. february 13.2012. 

Page 7 of 10 
144 


Insert here 78177.112

It is imperative that public and private payers adhere to the following principles if reporting physician 

quality and cost data to the public: 

Physicians should be provided with confidential, user-friendly interim feedback reports so that 

they can understand their progress, better target areas of improvement, and fiag any 

discrepancies between their records and that of the measurer; 

The Alliance cannot overstate the importance of appropriately risk-adjusting data and ensuring 

that it is accurately attributed to those directly involved in the care of the patient prior to it being 

released to the public; 

Data must be presented in a way that is both meaningful and understandable to physicians 

and the public. Public reports should include clear discussions of context, the measures and 

methodologies used (e.g., how were episodes defined, how were patients identified, why were 

certain units of analysis used), data limitations, and guidance on how to use the data when 

seeking medical care (e.g., talk with your physician). Medicare's Nursing Home Compare 

website currently includes valuable information for consumers on how to use the comparative 

reports, including telling consumers that information on the web it not a substitute for visiting a 

nursing home in person; 

Physicians should be offered a formal and timely process to review, question, or appeal 

performance and other data (e.g., demographic, volume, resource use) that they believe to be 

inaccurate before it is publicly reported or linked to reimbursement. Results determined to be 

inaccurate after the reconsideration process should be corrected. As an example, data posted 

on Medicare's Hospital Compare website are externally validated and hospitals are given an 

opportunity to review their own data prior to reporting; and 

Physicians should have an opportunity to explain to the public, alongside the reported data, 

why they may have chosen not to participate in or failed to meet the requirements of a 

program. Public reports should positively recognize, not punish or shame, physicians who 

attempted to participate, but were unable to do so for a variety of reasonable obstacles. 

Physicians also should be recognized for a range of quality initiatives, including those 

sponsored by CMS, private health plans, employers, individual specialty societies and their 

local institutions or practices. A "one-size-fits-all" approach to quality improvement is simply 

not sustainable. 

Incentives 

Incentive payments for achieving the goals of improved quality and efficiency should be provided in 

addition to annual positive increases in the Medicare physician payment update that accurately reflect 

increases in medical practice costs. Only fair, meaningful, and positive incentive structures will 

encourage positive change. Incentives must be large enough to change behavior and aligned to 

processes of care that are actionable by a physician. 

As discussed earlier, public and private payers should continue to broaden the scope of quality 

improvement activities that qualify a physician for an incentive payment. Incentives should be offered 

for a range of efforts, such as reporting to a clinical data registry, maintaining medical board 

certification, using e-prescribing technology, and reporting on a designated set of process/outcome 

measures. Rather than making each of these activities mandatory, physicians should be able to 

choose to participate in those programs that are most relevant to their practice. A graduated incentive 

structure could be used to recognize the additional time and resources required to participate in more 

complex quality improvement activities. 

Physicians must also receive incentive payments on a timely basis. Payments should be made as 

close as possible to the time that the service is rendered, without a substantial time lag in determining 

the amount of payment due to a physician. A physician practice, like any other enterprise, must 

operate on a business plan based on predictable and reliable financial fundamentals. This is nearly 

Page 8 of 10 
145 


Insert here 78177.113

impossible if a substantial amount of a practice's revenue stream is unknown and delayed for months 

or even years. 

Payers should also explore a mix of incentive structures, such as rewarding physicians who achieve 

significant improvements in their absolute performance (i.e., overall improvement), as well as those 

who achieve high performance (i.e., achievement of a minimum threshold). Studies have shown that 

those with the [ow est baseline performance may improve the most, yet garner the smallest amount of 

performance pay if only threshold performance targets are used,13 14 highlighting the need to consider 

a mix of incentives. Payments should not be based on relative performance or arbitrary assignment 

of physicians to a percentile. These structures would only be fair in a perfect world where all 

physicians and patients were exactly alike. Since it is impossible to adjust for all patient case-mix and 

other confounding factors and difficult for individual physicians to gauge their performance relative to 

others throughout the year, these structures should be avoided. 

Redundancies in Qua[ity Programs 

Each medical specialty society is dedicated to improving the quality and overall efficiency of the care 

of their patients. However, we are highly concerned about inconsistencies in requirements for various 

quality-re[ated reporting programs-- including Medicare's E[ectronic Prescribing (eRx) Program, 

E[ectronic Hea[th Records (EHR) Program, and Physician Qua[ity Reporting System (PQRS). The 

inconsistent and duplicative reporting requirements of these and other public and private payer 

programs create confusion among physicians and their patients and are incongruous with the goals of 

improving the quality, efficiency, and coordination of care. [n 2011, the Government Accountability 

Office (GAO) issued a report15 calling on CMS to address these inconsistencies. Considering the 

hard economic times and the fact that physicians already face the threat of substantial cuts through 

the SGR, it is simply unreasonable and unfair to expect physicians to be able to provide high quality, 

patient-focused care while also having to contend with these cumbersome reporting requirements. As 

noted throughout our comments, requirements imposed in the name of advancing quality should be 

reasonable, should not distract from care delivery, and should be relevant to a[[ affected 

professionals. We urge Congress to work to better align the various, overlapping quality incentive 

programs in order to minimize confusion and prevent the imposition of unjustified financial and 

administrative burdens on physician practices. 

While each of our societies is taking steps to improve quality measurement tools and encourage 

participation in such programs, physicians will need time to acclimate to these new programs and to 

modify clinica[ and administrative processes to accommodate these new care models. Public and 

private payers should not rush physicians into new delivery system models until they have been fully 

tested among a range of specialties and patient populations and until an appropriate infrastructure 

exists to support consistent and long-term application of these new models. Careful implementation 

includes ensuring patients can maintain access to current care options as new payment and delivery 

models are being tested. 

13 Rosenthal MS. Frank RG, Li Z, Epstein AM. Early experience \'L lth p8y-for-pcrlonnancc: from concept to practice. JAMA. 

2005<)94-1788-93 

1-1- P~)~~at N, Rice T, Tat-Scale M, Bolan G, l\ihalani J. A~sociatlOn hct\\ccn physician compensation methods and delivery of guidelincconcordant STU care: is there a link? Am J Manag Care. 2005; 11 :426-32. 

15 U.S. Government Accountability Of1icc. Electronic Prescribing: eMS Should Address Inconsistencies in Its T\\o IncentiH~ 

Programs That Encourage the Use of I lealth Information Technology. Published online February 2011 at 

http://ww~v.gao.gov/ncw.ltcms/dII159.pdf 

Page 9 of 10 
146 

Æ 


Insert here 78177.114