HC Reform in Minnesota: A Good Start

The Commonwealth Fund in conjunction with the National Academy for State Health Policy just published a report (http://www.commonwealthfund.org/Content/Publications/Fund-Reports/2010/Mar/Reforming-Health-Care-Delivery-Through-Payment-Change-and-Transparency-Minnesotas-Innovations.aspx) on the status of health care reform efforts in Minnesota. Minnesota has long been known as a leader in health care so it is of particular interest to see where things stand there.

The report focuses on the status of the implementation of legislation passed in 2008 which contained a number of specific elements with significant potential to achieve overall health care cost savings. In addition to establishing and funding a statewide health improvement program, enhancements related to coverage for low-income uninsured people, and steps to increase consumer engagement in all aspects of the system, the law included various provisions to collect and report data to achieve price and quality transparency, and as well as provisions to support care redesign and payment reform; these two sets of initiatives are the focus of the report.

Key legislative provisions to support the collection and reporting of data are:

• Development of a standardized statewide set of quality-of-care measures;
• Collection and use of all-payer encounter data and contracted prices, building on administrative simplification requirements passed in 2007 that call for all health care payers and providers to conduct eligibility, claims, and remittance transactions electronically, with the condition that all plans submit the detailed claims data to a common data aggregator; and
• Transparent ranking of providers based on a combination of risk-adjusted cost and quality (the "provider peer grouping" system, which was modified by legislation passed in 2009).

Key legislative provisions to support care redesign and payment reform are:

• Uniform definitions for at least seven “baskets of care” and standard quality measurements for those baskets;
• A single, statewide system of quality-based incentive payments to providers to be used by public and private payers; and
• Standards of certification for “health care homes” to coordinate care for people with complex or chronic conditions and additional care coordination payments to those homes meeting the standards, with re-certification standards based on process, outcomes, and quality measures as well as evaluation of cost impact.

So how is it going so far?

• Standardized set of quality measures for health care providers across the state have been developed and registration of medical groups in data portal and identification of populations are under way. On January 1, 2010, providers started submitting data on the measures; these will be publicly reported in July 2010.
  
• Uniform definitions for seven “baskets of care” were established by July 2009, with an eighth basket added later that year. Standard quality measures were established by December 2009. In January 2010, providers offering these baskets were able to establish their own prices for them, and quality information will be publicly available beginning July 2010.
• Incentive payment design was completed in July 2009, and by July of the following year, the payment system must be implemented for participants in the state employee health plan and enrollees in state public insurance programs.
• Standards and procedures for certification and re-certification for health care homes were adopted January 11, 2010.
• On July 1, 2009, collection of encounter data from health plans and third-party administrators began. Data will be disseminated to providers in June 2010. By January 2011, the state employee health plan, state public insurance programs, local units of government, and private health plans must use these tools to strengthen incentives for consumers to choose high-quality, low-cost providers.
  
• Incentive payment design was completed in July 2009, and by July of the following year, the payment system must be implemented for participants in the state employee health plan and enrollees in state public insurance programs.
  

I am particularly impressed that standardized definitions for quality were developed and that eight basket of care definitions were approved. The report notes that participation in these developments are voluntary for key players. But while there is still much work to be done, I think the efforts in Minnesota could serve as an example to other states and certainly deserve to be monitored.