IT is with great interest that this author, Chief Executive Officer at Sharp Community Medical Group (SCMG), looks at the intersection of potentially preventable events (PPEs), evolving payment reform, and payment incentives that focus on value and outcomes in health care such as under the MACRA legislation. It is the effective alignment of these incentives to the actual value of services delivered that can truly impact the affordability and quality of health care in America.
For many years, SCMG has been driven by and focused on measuring quality and performance, as well as outcomes and affordability for the population that we serve. Since 1989, the organization has accepted global capitation for large populations in both the commercial and Medicare Advantage markets. Physician-specific report cards for primary care physicians were implemented in 2002; SCMG was one of the first organizations in California to do so. These include process metrics such as blood pressure checks, hemoglobin A1c monitoring, and high-risk medication monitoring and compliance. The report cards also include, what have generally been seen as, outcome measures such as glucose (hemoglobin A1c) and blood pressure control. Physicians are also monitored for specified population health measures such as appropriate breast cancer and cervical cancer screening. In addition, we monitor, measure, and financially incentivize physicians for readmissions, emergency department utilization, high-cost diagnostic imaging, and specialty referrals and costs, as well as patient experience, or satisfaction, with their physicians and the private practices in which they are seen.
Currently SCMG accepts global payments, or capitation, for more than 110 000 commercial members and more than 23 000 Medicare Advantage patients. The medical group accepts risk for professional capitation, and our hospital partners accept full capitation for all institutional services. Our financial alignment of incentives, both professional and institutional, then creates the organizational focus of delivering appropriate health care services (the right amount of care), avoiding unnecessary care (and in this context preventable events), creating an excellent patient experience, and promoting affordability to the community.
With this as background, SCMG continues to struggle with the impact of measurements and our current set of metrics, and their relationship to overall performance and outcomes or true value to the health care delivery system. We are continually modifying, refining, and refocusing efforts on measurement to best align physician behaviors to achieve our goal of value. In the early days of value-based performance, the focus was on process measurements that were directional and uncovered gaps in care and erroneous assumptions that we were providing consistent and comprehensive preventive and chronic care services. As the group advanced, metrics also advanced to analyze what we termed "outcomes" such as tight control of glucose levels or stellar blood pressure control in patients. There became a better feeling that patients were receiving good care for their chronic conditions. However, despite the advances, we are still not able to truly say that these measures have a broad and sweeping impact on the overall health of the population or made a significant contribution to affordability.
Potentially preventable events, which include preventable complications of care, readmission to hospitals, unnecessary hospital admissions and emergency department use, and the inappropriate use of outpatient procedures and diagnostic testing, have remained a very important effort and from this author's viewpoint perhaps should be the focus of care management and coordination efforts. We have seen a number of health plan payers develop metrics and specifications that define, in their own way, a set of PPEs. These tend to be payer specific, and there has been no industry standard for PPEs and their definition. Most commonly, we see definitions regarding preventable emergency department use and hospital admissions or readmissions. We see less and less consistency around complications of care, outpatient procedures, and diagnostic testing.
A major investment and effort of SCMG includes case management programs and care coordination activities. A significant portion of resources go toward managing what is defined as the top 1% or 5% of a population that contributes to 30% to 50% of costs. We believe this is the right focus but many times struggle with the outcome of our efforts. Are we receiving a solid return on investment from care coordination activities and how do we measure that result?
Again, PPEs may be the focus and perhaps the only focus that we address as an organizational dashboard of success. If care management activities and care coordination are appropriate, shouldn't the number of PPEs decline as an organization? And if that were the case, would not the quality of care improve for the population and the cost of care decline as well? The measurement, interventions, and tracking of the 5 types of quality-related, potentially avoidable outcomes may be the best report card to elevate the medical group board and drive strategic direction and quality programs.
In general, this author has been very supportive of PPEs and the possibilities they present to demonstrate value and outcomes. Certainly a standardized approach and definition of the avoidable services that is recognized nationally might begin to better compare the results and outcomes of highly successful and effective organizations and where best practice might be shared. It is also obvious that in creating these national standards, the determination of the relative outcomes of performance must be risk adjusted to take into account the severity of illness of patient populations.
And, finally, with all that has been said, one cannot completely throw the baby out with the bath water so to speak. The PPEs may serve as the final word or ultimate measure of success and value to an organization or ultimately be a national standard. In any process improvement effort, the steps of getting to an outcome still require the breakdown of care processes and outcome measurements. One cannot simply work toward fewer hospital admissions or emergency department visits without addressing the processes of care and creating the care coordination activities that result in these outcomes. An organization must measure, along the way, what it has implemented to arrive at this endpoint. Organizationally, we will continue to measure appropriate blood glucose control in general and prior to surgical procedures. We will be assured that patients are using and getting their asthma medications and that our populations are receiving appropriate cancer screening to prevent hospitalizations and high-cost diagnostic procedures later in the course of their care. These will be measured and will serve as true indicators that health care is moving in the right direction.
Future regulatory and rules clarification under the MACRA legislation may provide an opportunity to better measure values and appropriately align incentives. The expectation is that these efforts will replace the existing patchwork of process and outcome measures that make our work more difficult. Further refinement and adoption of PPEs may provide a common path and a common solution.