MinnesotaValue Based Purchasing

Susan McDonaldHealth Care Purchasing Coordinator Minnesota Department of Human ServicesDirector Governor’s Health Cabinet

P.O. Box 64998St. Paul, MN 55164-0998

Background:Governor’s Health Cabinet

State government working as a team:

5 agencies regulating or purchasing health care

Purchases health care for 800,000 Minnesotans, 20% of population

Engaged in array of private-public alliances and partnerships to create a value driven health care market.

Mission Statement:Take on the state’s health care costs issues by using its buying power to make substantive changes to Minnesota’s health care market.

Minnesota Model to Value Driven Health Care

Value vs. Volume Volume = Number of office visits, procedures,

hospital admissions x price

Value = Access + Service + Outcome

Price / Time

Transparency of price and quality Electronic information exchange Improving health status of Minnesotans

Engage consumers- Engage consumers- Engage consumers

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Minnesota Advantage Plan

Tiered health benefits plan for state employees Clinic systems placed into 1 of 4 cost level

Based on risk adjusted costs and collective bargaining

Risk adjustment -- apples to apples comparisons If a higher cost level provider is selected, the user

pays more at the point of service Higher copays, deductible, coinsurance

Quality information provided via links to MN Community Measurement website

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Advantage’s key featuresInformation and incentives:

Employees and families to choose high quality, high value providers

Providers to deliver greater value, or lose market share

Use health care wisely and protect/improve health

Saved $30M+ in first year!

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Administration Self-funded program Multiple health plan administrators are used to:

Negotiate provider contracts and manage network Perform core functions such as claims adjudication

Monthly Cost Premium is the same for all provider groups and

administrators When members elect a more expensive cost level,

they pay greater cost sharing each time they receive services

Advantage – How it Works

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Recognition Received

“Innovations” Award by the Council of State Government - 2004

Premium Trends 2006 – 0% - Lost $20M to premium holiday 2007 – 9.9% 2008 – 6.7% - Lost $16M to HRA 2009 – 3.5% 2010 – 0% 2011 – 6.7% - Lost $8M to HRA

Partnering with the Private Sector

“Smart Buy” Alliance Minnesota Smart Buy Alliance was created

to: Define the reason for the gap between cost

and quality Focus purchaser efforts to common market signal No more cost shifting between buyers; rather use buying

power to effect change across entire market

Use common principles and goals in buying health care Require or reward “best in class” certification Adopt uniform measures of quality and results Require the latest information technology Empower consumers with easy access to information

Minnesota’s Health Care Environment

One of the lowest # of uninsured in nation – 7.2%

Healthiest state in nation 4 of last 5 years Most state-wide tools in marketplace Most use of health savings accounts – 9.2% Most purchase of LTC insurance – 10% (over 50 years) More integrated systems (hospitals & clinics) More primary care physicians / citizen More employer sponsored insurance Not for profit HMO’s Collaborative history

Tools Needed to Get Us Where

We Are Today [minnesotahealthinfo.org]

ICSI Institute for Clinical Systems Improvement – private sector developed standards and practice guidelines

Measurement and reporting of quality and price information

Reporting

Measurement of health plan performance

Common standards of payment

Peer grouping of providers + centers of excellence

As market driver

Convenience and employer clinics, alternate care, navigators

MN Community Measurement

Adverse Event

eValue8

QCare / P4P

Tiered plans

Health Savings Accounts

Disruptive providers

Connecting the Consumer to the Tools!

Electronic Information Exchange Minnesota HIT Goals

E-prescribing for all providers, plans, pharmacies by 2011

Uniform administrative transaction required by 2009 Interoperable electronic health records by 2015 Governor Pawlenty initiative to provide personal health

portfolios for all state employees by 2009, all Minnesotans by 2011

Minnesota HIT Environment

Minnesota Health Information Exchange Vision is to link providers to exchange clinical

information in a secure and efficient way Includes private partners and DHS as an

investor Launched in fall 2008 with Rx history Discussions with technology partners to

connect the consumer and physician

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The Minnesota e-Health Initiative

A public-private collaboration established in 2004

Legislatively chartered

Coordinates and recommends statewide policy on e-health

Develops and acts on statewide e-health priorities

Reflects the health community’s strong commitment to act in a coordinated, systematic and focused way

“Vision: … accelerate the adoption and effective use of Health Information Technology to improve healthcare quality, increase patient safety, reduce healthcare costs, and enable individuals and communities to make the best possible health decisions.”

Source: e-Health Initiative Report to the MN Legislature, January 2004

The Value Equation Value = Access + Service + Outcome

Price / Time

Health IT Interoperability Clinical exchange –MnHIE Patient control/owned health information- life long

personal health records

The Tipping Point:Giving consumers the information necessary for creating a health life!

Connecting:Family Health HistoryFamily Health Management and SupportMedical Providers FitnessHealth Monitoring DevicesFinancial ManagementSocial NetworkingSearch for InformationHealth BenefitsHealth Assessment Biometric ScreeningDisease ManagementAnd much more….