This document discusses health services research and its goals of determining what works best, for whom, under what circumstances, and at what cost. It outlines Arkansas' efforts to improve its health system, including establishing a governance structure and setting objectives around improving population health, patient experience, and controlling costs. It also presents data on variation in costs between providers for different medical conditions/procedures, showing opportunities for improving value through care standardization.

1. Health Services Research:
Helps Us Get Our Money’s Worth
 What works?
 For whom?
 Under what circumstances?
 At what cost?

2. Research-Driven Solutions for
Innovative State Policy
Joseph W. Thompson, MD, MPH
Surgeon General, State of Arkansas September 27, 2012

3. Health Care’s Iron Triangle
Quality
Cost Access

4. Arkansas Health System Improvement
Agency Organizational Structure
Governor
State Leadership Mike Beebe
State Leadership Governor’s Policy Staff
Implementation & Dr. Joe Thompson
& Coordination ACHI
Workforce
Insurance
Chancellor Payment & Quality Health Information
Exchange
Implementation Dan Rahn Improvement Technology
Commissioner
& Dr. Paul Mr. John Selig Mr. Ray Scott
Jay Bradford
Halverson
UAMS Steering Group: AFMC AID (Exchange)
Workgroup ADH & ACHI DHS, ADH, BCBS, UAMS DHS (Mcd
Participation Higher Ed QualChoice, DIS eligibility &
(2- & 4 yr) United, ACHI Medicaid expansion) EBD
4

5. National and Arkansas Childhood Obesity Trends
23 Arkansas Assessments
Percent Obese
22
25 Grades 8 & 10
Grades K, 2, 4, 6
21 AR grades 8 & 10
AR grades K, 2, 4, 6
20 20
2004 2005 2006 2007 2008 2009 2010
Percent Obese
15
10
US 12–19 yr
US 6–11 yr
5
0
1963-65 1971-74 1988-94 01-02 05-06
1966-70 1976-80 99-00 03-04 07-08
NHANES data sources: Ogden et al. Prevalence of Obesity Among Children and Adolescents: United States,
Trends 19631965 Through 20072008. NCHS Health E-Stat, June 2010. Available at
http://www.cdc.gov/nchs/data/hestat/obesity_child_07_08/obesity_child_07_08.htm. Accessed 04/18/11.
Arkansas data source: Arkansas Center for Health Improvement, Little Rock, AR, September 2010.

6. Preliminary working draft; subject to change
Our vision to improve care for Arkansas is a comprehensive, patient-
centered delivery system…
For ▪ Improve the health of the population
patients ▪ Enhance the patient experience of care
Objectives ▪ Enable patients to take an active role in their care
For ▪ Reward providers for high quality, efficient care
providers ▪ Reduce or control the cost of care
Population-based care Episode-based care
How care is
delivered
▪ Medical homes ▪ Acute, procedures or
▪ Health homes defined conditions
▪ Results-based payment and reporting
Four aspects ▪ Health care workforce development
of broader
program ▪ Health information technology (HIT) adoption
▪ Expanded access for health care services
6

7. Preliminary working draft; subject to change
Payers recognize the value of working together to improve our system, with
close involvement from other stakeholders…
Coordinated multi-payer leadership…
▪ Creates consistent incentives and standardized
reporting rules and tools
▪ Enables change in practice patterns as program
applies to many patients
▪ Generates enough scale to justify investments in
new infrastructure and operational models
▪ Helps motivate patients to play a larger role in
their health and health care
1 Center for Medicare and Medicaid Services 7

8. Spending Breakdown for CHF 30-day Episodes
with and without a Readmission
N=4,992 CHF $10,569
episodes Avg Total Episode Cost = $23,511
$6,305
$3,975
24%
$1,453 $832
$379
Index Readmits PAC OPD Physician Other
% Total
27% 45% 17% 2% 6% 4%
Costs
76%
$5,936
Avg Total Episode Cost = $9,440
$2,510
Number of $0 $288 $337 $368
Episodes Index Readmits PAC OPD Physician Other
% Total
63% 0% 27% 3% 4% 4%
Costs
8
Source: Medicare FFS claims data, 2010

9. Preliminary working draft; subject to change
Case for change: variation in costs by episode are substantial even after
adjusting for risk
Total average cost per episode post-risk adjustment by Principal Accountable Provider, 2008-2010
Simple upper respiratory infection1 Pregnancy2
$120 Total episodes ~30,000
Total episodes ~80,000 $5,000 Median cost $3,608
100 Median cost $57 10% percentile $3,208
10% percentile $44 90% percentile $4,071
80 90% percentile $76 4,000
60
3,000
40
2,500
20 500
0 0
ADHD3 Total hip replacement
$12,000
$20,000 Total episodes 140
10,000 Median cost $7,953
Total episodes ~20,000 10% percentile $5,867
8,000 Median cost $1,641 15,000
90% percentile $12,814
10% percentile $1,073
6,000 90% percentile $7,046 10,000
4,000
5,000
2,000
0 0
1 Episode costs for children less than 10 risk-adjusted by a historically-derived multiplier.
2 Individual episode costs risk-adjusted for clinical drivers of severity based upon historically-derived multipliers.
3 Eligible defined as ADHD without comorbidities between ages 6 and 17.
SOURCE: Arkansas Medicaid claims data; Team analysis 9
9

10. Preliminary working draft; subject to change
Wave 1 episodes Principle Accountable Provider
Total Hip/ Knee ▪ Surgical procedure plus all
replacement related claims from 30 days  Orthopedic surgeon
prior to procedure to 90 days
after
▪ Pregnancy-related claims for
Perinatal mother from 40 weeks before
(non-NICU1) to 60 days after delivery  Delivering provider
▪ Excludes neonatal care
▪ 21-day window beginning with
Ambulatory URI
initial consultation  First provider to diagnose
▪ Excludes inpatient costs and patient in-person
surgical procedures
Acute/post-
▪ Hospital admission
 Admitting hospital
acute heart
failure ▪ Care within 30 days of discharge
 Depends care pathway
▪ 12-month episode • Physician
ADHD ▪ Includes all ADHD services + • Licensed clinical
pharmacy costs (with exception of psychologist, and/or
initial assessment)
• RSPMI provider
10.5

11. Preliminary working draft; subject to change
What’s next
Examples
Hip/ knee • Stents
replacements • Pacemakers
Perinatal • Include NICU
• Urinary tract infections
Ambulatory URI
• Ear infections
Acute / post-acute • Pneumonia
CHF • Myocardial infarction
ADHD • Depression
Developmental • Long-term care
disabilities • Severe and persistent mental
illness