would say is you manage the medicare patients to the way you manage the care first and you look for the chronic disease. >> mr. chairman, what mr. burrel is doing has credibility with it. one of the main features is that there is help divgiven to the primary care providers and nurses for the more costly patients which i think gives confidence that this is not an effort to deny care to people in order to reach the target. the question i would have for you, you mentioned that you want to make sure that quality is

maintained but there is a fear that bonused are based on dollar amounts so are we denying people care? how do you assure that the necessary care is given? >> we have five different ways that each physician in the panel is measured on. and we have one category that we call engagement and this is the degree to which the physician is actually engaged in the care to the chronic diseased patient. are they too busy, will they deal with the nurse? are they engaged? you cannot get an outcome in our design unless you have overall quality scores that indicate that you are providing quality services and engaged with

patients that need you the most. less than 10% of the patients consume 65% of the medical spent. they need attention and we ask the primary to do that. if there is evidence that they are not doing that, they are disqualified. it is meant to be a multiyear award. and the reward goes up as the consistency occurs. oh if mary smith has multiple issues, take care of her. the only way to win is improve her outcomes and less break down and track that. >> i would suggest there are two elements of quality and one is

retrospecti retrospective analysis. du i think an important issue t raise, those with chronic diseases, the information isn't coordinated. we have played a role to become a part of the delivery of care. to the extent that we can create support, the bad news is quite a bit of it, given the constraints all of that on the patient and replay that to what has been represented on the safest levels

of care. the information using some of the decision support into activities that can be pursued by a physician ends up being an important issue. and the role of the patient, for all the best intensions of doctors. we've done a lot to motivate and r provide incentives of patients. as we move to models for total medical spending, how do we assure that quality doesn't get sacrificed along the way. we are trying to pair those incentives with spend ing with known targets that represent a

continue yum of good to great care for every measure of targets from good to great. what we see these organizations doing is embracing those measure s doing to do well at these measures over their five year contract period moving to improve care for patients and because the measures include not just a clinical process, that is important but also measures of health outcomes, these practices have to eingauge their patients

in a new way. so these practices are innovating new ways to understand individual patients what their lifestyle is and what their constraints are and what we've seen in the first two years of their perform anance i that our data tells us is possible to achieve. at the same time that they are managing overall medical spending. >> i would like to add to those, our rewards programs, starting with they are all based on -- >> m eehedist measures.

>> star measures. >> and you have to achieve six out of nine. and they ininclude cclude cance screening and others and each of the programs will layer on other factors on top of that such as disexpense i disexpensing rae ining dispensi. the reward program works in all areas and this program we had two practices in south dakota that are going to receive $102,000 and we had four in montana with $492,000 receiving rewards for quality outcomes for their patients.

>> i want to bring up an issue that might be different. you mentioned humana uses different approaches and i want to ask about delivery of health care could you expand on what humana does and what you found to be successful? >> sure. recently we've partnered with a company called genc aare. they opened primary based centers in low income under served neighbors and this group will grow and we added a pod program and in areas where you

have a small patient panel and they want to adopt the reward programs, we have put a team together to go into the office and help them understand the disease management programs and the things that can be done to serve the rural population. >> you brought up the nurse practitioners. i touched on it for the first time. would there be super vision requirements and what response have you received? >> we've had no issue because they are coming in.

they have a team of folks that go with them if they need to. as we think about reform, it behooves the physician to have the support of a nurse practitioner.

for free that meets meaningful use criteria and can participate in the exchange of data. we think there were real possibilities and payment reform in order to bring the models to the other communities. >> don't we have a long ways to go in health id? >> i've asked an earlier panel rank on a scale of one to ten how well we are doing and they all said a two.

>> one concern i have is the notion of electronic medical records. they know about you. they have a paper record and the record may be advanced but probably doesn't help that much. you probably see multiple doctors. what i was doing for the patient and what others were doing in terms of tests that i didn't have access to. one of the things that we focused on is the need for health information exchange so that i can be provided with information about you. the other notion is the notion of support. how do you convert information about you into activities that will correct problems relative to our level of compliance as a

team relative to the literature that is safe and effective tow. >> wasn't there way to develop intentati incentiv incentives? >> there were two things. one was the use of the $44,000. greater incentive would be to reduce risk. to know whether or not you filled the prescription or whether or not you have a contrain dication. >> i go to a dock and he gives me a prescription. >> there are two ways. one is so that information is available and secondly when you fill a prescription through the pharmacy we can access the data

to know that you filled that prescription. one is that i ordered the drug and the degree to which you have complied. and one of the things that we have introduced and published is an experiment. we gave away drugs for free. the good news was that it helped and the bad news fewer than 50% of the patients took their drugs. >> i'll stop. but, i was talking to the head of denver health. and she was telling me, that problem was were you taking the m meds. and they said we are taking the meds. they found out they were not

taking the meds. but the point there is, there is some kind of coordination. >> i'm suggesting that our scale of technologies can be inp tro deu introduced for free. >> how do you handle pryivacy? >> under hippa, some issues apply. the most direct way is getting permission directly from the member. in relation to privacy -- go ahead. >> the same thing as to over prescription by other doctors. >> and one of the things that we can do is acertain that people are shopping. we can accumulate from a variety of records that a patient is

accessing drugs that can work to the department to that patient. that is the information that we can communicate back to the patie patient. this patient's propensity to drugs. >> we want to work towards repeat. and then what do we do then? it seems to me, the organization as you testified have moved well beyond where medicare fee for service today. what should we focus on? to improve payment on the fee for service payment. what can we do? >> we need and answer here. >> i'll take the first shot at

it. one of the problems with the sgr is that it deals with individual actors and clinicians but the targets are set based on a whole population of physicians across the country whose behavior has no real incentive to control anything. what you have heard in common across all five of these to organizations that have been willing to accept accountability for both total medical spending and outcomes of patient care, one of the most important things that you can do as you look to fix or replace sgr is to move

toward a model that doesn't move toward clinicians and set targets. but rather to have physicians identify who are the organizations that they work with and have those accept accountability for total spending and quality and outcomes and not every physician is ready for that kind of accountability today. we saw only 32 pioneers sign up. what do we do with the others? by sending a signal that is where we are going and taking the initial step of having clinicians identify who is the other set that they are going to share accountability with and starting with what we have done in our case outside of our model

is for our fee schedule we have had for four years running 0% payment increases. and the only way to easternrn additional revenues -- this is where you are going but the initial steps are defining who it is that you are going to start accountability with. moving toward accountability and total medical expense. >> as long as we are dealing with the community at the granular level we can't get to where we need to get to. we would encourage you to develop policies that would foster groups coming together large and small with the metrics

that we have talked about so that they have a reason to go there. we have an emphasis on primary care. if we had a instead is more of a medical rescue system, which is why it's dom fwhainate high-tech specialists. the truth is if you want to manage a chronic care population, you need a robust care community, and it's going away. in california, the primary care community is withering and dying on the vine while hospital edifices are being built with billions of dollars. we've got to fundamentally address that issue, or we will not be able to get to where we need to get to. >> i would like to reinforce that. >> i would too. i agree. we organized as i said small performance teams of primaries, over half of which were in solo practice or practices of less than three.

not sophisticated practices. by giving them a total expected cost of care to beat and some structure, they actually pay attention to the quality. and most importantly, they pay attention to who are the chronic patients that run up, the 10% of the patients who run up two-thirds of the cost whom. are these patients and what do they need? and we have assigned nurses to them to follow them into the community. where do you break down? at home. where do you get depressed? at home. where do you fail to comply with your meds? at home. and a lot of times the primary doesn't have direct evidence of that. so we support them by providing home assessments of what is happening to these patients at home. medications are critical. a lot of these patients are on ten or more medications. nobody ever reviews the full picture. not only do they not comply, they have too many. and they have drugs that interact or make them unstable. so we try to get the primaries

in small performance teams to understand who among their panel of patients are at highest risk. who among them have chronic disease, and are you paying attention to them out of sight of your office. and we try to give them help in that regard with nursing support in the community and in the home. and if mary smith is the chronic patient, breaks down, the doctor is informed immediately. if she is admitted, the doctor is informed immediately. and it all builds on primary care, and then provides strong financial rewards to them. not increase their fees. we haven't increased their fees. we have increased the rewards to them if they get a better outcome for their population. >> not being educated at all on people using dietary supplements as well. for instance, it's my understanding if you're on, say, crestor, that it would be very wise to take coq-10 to make up for some of the deficits that occur from crestor.

>> yes. >> and this is -- this is an area that really is not very well defined. right now. >> it is not. >> would you agree with me? >> i totally agree on that. >> a lot of people don't know that. they take crestor and realize they may be putting themselves in -- i don't mean to pick on crestor, but i use that as the one. they may be putting themselves in some sort of jeopardy if they don't balance it with, say, coq-10 which is a dietary supplement. >> 21% of our medical spent is for prescription drugs. 24% of our medical spend is for in-patient hospital. so the drug part of the equation is dramatically increasing. a lot of primaries do not know what drugs their patients are on. and if you ask the patient, they can't reliably tell you. so what we do is create a drug profile of the patient, all the medications they're on. sometimes you're on two generics and one brand at the same time and you don't realize it because the names are different.

a drug was prescribed by a specialist. and another you went to the hospital. the primary didn't even know you were on all these drugs. so one of these things we provide is a view of the total drug profile of the patient. do you realize this is what your patient is on? a lot of times they don't. and then they start to act and say i didn't realize that. i will try to revise that. and then we'll educate the patient better that stabilizes them more. and then you prevent the cycle of breakdown, admission and readmission and the er visit. and that's where so much of the cost in the system is. i know it's true in this region. >> and senator, at the risk of being disagreeable, but this after all is our kitchen table, right? >> sure, you can be disagreeable. >> i think we need to spend a lot more time on appreciating -- >> all families don't always agree. >> there we go. just be careful. >> i'm going to be very careful. >> thank you. >> we just love -- >> the warning. i've already change mid remark in my mind. i think people are accessing

alternative therapies. we're supporting a lot of alternative therapies and ways of supporting patients. but bear in mind that we do need to adhere to rigorous evidence-based clinical trials. >> sure. >> just as an example of something that i think everybody accepted, vitamin d and calcium to prevent osteoporosis is recent literature. just this week suggested that a normal diet in the absence of supplements is probably more than adequate. so we need to be careful about what we in fact suggest and prescribe. particularly as we become more sophisticated with these decision support tools. we need to make -- ensure that we're quite rigorous. on the sgr point, i just want to suggest that the real issue that we're grappling with is quality and total cost. and perhaps what we really need to do is understand that that's really the issue here. and we can back into issues like sgr. but considering sgr in isolation isn't going to get us to the

greater issue, which is actually transforming and reengineering and providing the right incentives for a new health care delivery system. we'll just be doing the same thing over and over again if we don't address that. >> i'd like to add to that just around the -- if you're -- a couple of suggestions. make sure you vary your programs to allow for practice variations. whatever you do for fee or service, make sure you have different programs. and developing a hybrid program that maybe begins with fee for service, so you're not having to change too much out the gate. and transition to payments based on outcomes i think is going to be a couple of quick hits for you, i think. >> mr. chairman, i want to come become to the point that was discussed earlier with regard to electronic medical records. i mean, in some ways, mr. reisman, you said that's not the most important issue to focus on. i agree with that. but mr. burrell, you were just talking about all the issues with regard to patients who have

medications that perhaps are conflicting with what they need. and all that information is out there in the universe somewhere, which could be captured if everybody, if he we had some sort of system. i agree with what senator hatch said about privacy. i think that's an important issue. but it just strikes me so many of these things of duplication and meller roars could be eliminated if we had a system where people's information, medical information was available, sort of irrespective where they access the health care system. and it strikes me because i was at the hearing the chairman referenced where we asked the panel about where we were on a scale of 1 to 10, and maybe that's not a good way to measure it. but everybody said in that 2 to 3 range. and the issue i think is these standards of interoperability which we don't seem to have come up with a solution for yet. but it just strikes me that everybody talks about this issue in anecdotal form about what it

does to add costs in the health care system. and it just seems like so much of this could be fixed. and i don't know again how we achieve that. i know that there was discussed a lot, has been discussed a lot in the past. but i'm very unsatisfied, i guess, with any of the answers i've received from anybody we've talked to about subject and the progress we're making towards that. but that's one issue. the question i had with regard to -- i think it was dr. safran, you had talked about the -- oh, the program that you have, alternative quality contracts. and there was last year in july the "new england journal of medicine" had published an article that reviewed the year one of that program. and it found that health spending decreases were largely associated with changes in referral patterns rather than with reduced -- i'm wondering one, if you agree with that

assessment. and if you do, what can we be doing to put downward pressure on utilization, because to me that's really the issue. >> very important issue. and yes, i do agree with those findings. that in year one of these five-year contracts, what most organizations reach for as the most easily achievable savings is savings that they can get through move-in care to less expensive care settings. and they're doing that i would say in very smart ways that don't disrupt clinical relationships. partly because they have accountability for patient experience as well. and so they're doing things like moving care related to lab tests or imaging or basic procedures where there aren't established clinical relationships and where the patient is really happy to go wherever their clinician tells them as long as it's convenient. so there were significant savings to be realized by that and many groups reached for those savings in year one. the harder job is to change