Provider Peer Grouping
Monthly Updates
August 22, 2011
Katie Burns
What is Provider Peer Grouping?
• A system for publicly comparing provider
performance on cost and quality
– …a uniform method of calculating providers' relative
cost of care, defined as a measure of health care
spending including resource use and unit prices, and
relative quality of care… (M.S.§62U.04, Subd. 2)
– a combined measure that incorporates both provider
risk-adjusted cost of care and quality of care…
(M.S.§62U.04, Subd. 3)
What Types of Provider Peer
Grouping Needs to be Developed?
1. Total Care
2. Care for Specific Conditions
The commissioner shall develop a peer grouping system
for providers based on a combined measure that
incorporates both provider risk-adjusted cost of care and
quality of care, and for specific conditions…
(M.S.§62U.04, Subd. 3)
Methodological Update:
Addressing “Outliers”
and Assessing Reliability
Defining and Managing Outliers
• Cost “outliers” refers to atypical situations
in which extremely high cost care is
provided for a particularly ill person
• Outliers must be addressed in some way
to avoid distorting a provider’s results
Assessing Reliability
• Reliability refers to the consistency of
results
• There are various levels of reliability and
we needed to determine what level of
reliability is appropriate for PPG
Consulting with Stakeholders
• Analysis was presented to the Reliability
Workgroup on two issues:
1) Options for treatment of “outlier” cases for
hospitals
2) Options for reliability thresholds for hospital
analysis
Issue # 1:
Options for Treating Outliers
• Options included truncating costs by:
– Truncating costs at $100,000
– Truncating costs at various percentiles
– Truncating costs by Medical Diagnostic
Categories
Treatment of Outliers
• MDH’s analytical contractor, Mathematica,
recommended generally truncating costs
at the 99th percentile
• The Reliability Workgroup supported this
approach
Implications of Outlier Treatment
• Costs above the truncation threshold are
excluded from the PPG analysis
• Recommended truncation thresholds
result in:
– 98% of all costs included for CAHs
– 96% of all costs included for PPS hospitals
Issue # 2:
Assessing Reliability
• Reliability is assessed along a continuum
between zero and one
• In general, reliability increases with greater
numbers
• Choosing a standard for reliability leads to
establishing a minimum number of cases
needed to achieve that reliability standard
Hospital Total Care
Reliability Threshold
• Based on input from the Reliability
Workgroup, we will use a high threshold
for reliability (0.8) for purposes of the
hospital total care analysis
Hospital Total Care
Reliability Threshold
• This means that a hospital must have a
sufficient number of patients to reach a
reliability threshold of 0.8 to be included in
PPG and for public reporting purposes
− 69 Critical Access Hospitals and 52 PPS
hospitals have sufficient minimum numbers of
patients
Hospital Total Care
Reliability Threshold
• We will report more information to
hospitals, provided the data meets a
reliability threshold of at least 0.4
Progress Update
Hospital Total Care
Report Distribution
• MDH was on track to release results in
August prior to the state government
shutdown
• Staff and contractors were prohibited from
working during the shutdown
• We now anticipate releasing results to
hospitals in late September
Communication to Hospitals
• MDH will distribute reports by email and by
traditional mail service
• We are developing and will test our
hospital contact distribution lists
approximately 2 weeks prior to report
distribution
Stakeholder Involvement
Stakeholder Involvement:
Rapid Response Team
• MDH convened this group to provide input on
critical issues
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Approach for specific condition analysis
Methodology for attributing patients to providers
Benchmarking and determination of peer groups
Risk adjustment
Design and weighting of individual quality measures
into composite quality score
Stakeholder Involvement:
Reliability Workgroup
• MDH convened first meeting of this group
in December 2010
– Explored characteristics of reliable data
– Discussed ways of assessing reliability
• Reliability Workgroup provided helpful
feedback on hospital analysis and will be
asked for similar input on clinic analysis
For more information, see
www.health.state.mn.us/
healthreform/peer/index.html
Next call
Monday, September 12, 2011
7:30 am