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CIVHC Participates in First-in-the-Nation Healthcare Cost Project Highlighting Variation Across Regions

Source: The Center for Improving Value in Health Care (CIVHC)
CIVHC Contact: Cari Frank, (303) 903-6007, cfrank@civhc.org
NRHI: Kathy Nichols, (207) 400-1828, knichols@nrhi.org

New data available to Colorado providers to improve care and lower costs

DENVER - JANUARY 19, 2017 — The Center for Improving Value in Health Care (CIVHC) participated in a first-ever national project identifying variation in health care spending and opportunities for improvement across six different regions. The project, led by Network for Regional Healthcare Improvement (NRHI), a national organization of local groups working to improve health care, analyzed spending patterns by commercial health insurance plans in Utah, Maryland, St. Louis, Minnesota, Oregon and Colorado.

“Until we understand the drivers of cost variation across Colorado and give providers and others actionable information on where they should focus improvement efforts, we aren’t going to be able to make widespread, lasting, positive changes in the health care system,” said Ana English, President and CEO for CIVHC. “Providing actionable data like this to practice groups moving towards new value-based payment models is critical to change the trajectory of rising costs in Colorado and across the nation. This information can serve as a catalyst to ultimately help drive down costs for everyone and reduce insurance premiums for Coloradans.”

Regional variation on medical spending has long been shown to exist in the Medicare market, but differences in the amount commercial insurers pay for care has been difficult to decipher, because multiple insurance plans participate in a single market.

CIVHC analyzed commercial claims data from the Colorado All Payer Claims Database (CO APCD) and determined that variation in spending and utilization of services based on patients attributed to provider practices was significant. The scatterplot below indicates that provider groups across the state have opportunities to examine their referral patterns and patient utilization of medical services to reduce observed variation across the state.
Price-Index-vs-Resource-Use-Comparison.PNG
 Through a number of recent initiatives, the Centers for Medicare & Medicaid Services (CMS) is signaling a shift away from traditional fee for service (FFS) payment and toward value-based purchasing. To assist in this transition, primary care physician groups will need to understand how their cost, efficiency and quality performance compares to that of their peers not only for Medicare, but for their entire population. These reports help practices better understand performance relative to their peers, an essential element in successfully navigating this transition.

Through this project, CIVHC provided reports to over 100 Colorado-based adult and pediatric primary care practices that include information on the total cost to treat patients annually and what portion of costs were driven by volume of services vs. prices. The information on price, utilization and total cost was broken down by inpatient, outpatient, professional and pharmacy services to give physician groups a better idea of the types of services driving their results. All results are risk adjusted based on the health status of attributed patients to addresses the concern that one physician practice may treat a “sicker” group of patients thereby allowing meaningful comparisons of utilization (Resource Use) and total costs.

For example, the practice summary information below shows a score of “1.46” under Outpatient Emergency Department (ED/ER), in the TCI (Total Cost Index) category, indicating that costs for patients with ED/ER visits are 46 percent higher than the statewide average in this category. The 1.47 PI (Price Index) value in the same row indicates that it is the prices charged for ED/ER visits, not the RUI (Resource Use Index) or frequency of visits that is driving ER/ED costs for this practice up compared to other physician groups.
Practice-A-Risk-Adjusted-Summary-Report.PNG
 As primary care providers are held more accountable for costs outside the walls of their practice, understanding patient utilization and the impact of referral patterns on total costs is imperative. 
For example, as demonstrated in the chart below, this practice’s patients are using more services and paying more for inpatient hospital surgeries relative to statewide averages. This suggests that the practice should evaluate where they are sending patients and look for opportunities to reduce costs in this category compared to their peers.

 CIVHC is meeting with individual practices to obtain feedback on the format and content of these reports and will continue to work with NRHI in the next phase of the program to expand application of the measures beyond commercial payers to Medicaid and Medicare.

“Identifying regional differences in health care costs is important because high costs are depleting family budgets. Entire communities pay the price as money that could go to schools, housing and other needs is instead eaten up by health care costs,” said Elizabeth Mitchell, president and CEO of NRHI. “This information will enable physicians and other members of the health care community to identify cost drivers, address them, and get better outcomes.”

National results are detailed in the full report From Claims to Clarity: Deriving Actionable Healthcare Cost Benchmarks from Aggregated Commercial Claims Data, developed with support from the Robert Wood Johnson Foundation.

To learn more about the reports and how they can be used, please view our Total Cost of Care Webinar, or visit our website.

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About CIVHC
CIVHC (civhc.org) is a nonprofit, nonpartisan organization that helps Colorado identify ways to pay for, deliver and select high value health care. Through the pioneering Colorado All Payer Claims Database, we offer the state’s most comprehensive health care cost, quality and utilization claims data. We unlock information and provide tools and insights that guide meaningful action to improve health, enhance quality and lower cost. Bringing together a broad spectrum of organizations and individuals to design and drive collective change, CIVHC is devoted to a single cause: advancing an exceptional health care system for Colorado. Follow CIVHC on Twitter at @CIVHC_News.
 
About NRHI
The Network for Regional Healthcare Improvement is a national organization representing over 35 regional multi-stakeholder groups working toward achieving the Triple Aim of better health, better care, and reduced cost through continuous improvement. NRHI and all of its members are non-profit organizations, separate from state government, working directly with physicians, employers, hospitals, health plans, and patients using data to improve healthcare. For more information about NRHI, visit www.nrhi.org. Follow NRHI on Twitter at @RegHealthImprov.

About Robert Wood Johnson Foundation
For more than 40 years the Robert Wood Johnson Foundation has worked to improve health and health care. We are working with others to build a national Culture of Health enabling everyone in America to live longer, healthier lives. For more information, visit http://www.rwjf.org/. Follow the Foundation on Twitter at https://twitter.com/RWJFor on Facebook at https://www.facebook.com/RobertWoodJohnsonFoundation/.
 

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