Health Policy Stakeholder Meeting

Response of the Leapfrog Group, www.leapfroggroup.org

Leah Binder, CEO
(202)292-6713, LBinder@leapfroggroup.org

The Leapfrog Group shares President-Elect Obama's belief that we cannot reform the health care
system without containing costs. Moreover, like the President-Elect, we believe that costs can be
contained in a manner that improves rather than detracts from the quality of care. Our
organization has been devoted to these goals since our formation in 2000. We have been
developing and testing models, primarily in the private sector, many of which have been
incorporated into public sector programs as well. We seek to partner with the new
Administration to help achieve our shared objectives in the short and long run, and offer to be a
resource for new ideas, approaches and innovations in the coming months and years.

Health policy priorities/goals in the short term

1) Legislation expanding access to care should require public reporting by participating
hospitals comparing them on meaningful measures of both efficiency and quality—and
then aligning payment incentives to performance. The Leapfrog Hospital Survey is the
only tool offering this kind of information currently. Its data covers all payors (including
CMS and Medicaid), and includes a dashboard of proven-meaningful efficiency data as well
as quality and patient safety information. Strong literature suggests that 1) hospitals that
perform on the Leapfrog survey are higher quality1, and 2) significant cost savings can be
achieved by meeting the standards in the survey, estimated most recently at over $12 billion a
year2.

2) Facilitate implementation of gainsharing and other payment approaches in order to

better align economic incentives between physicians and hospitals resulting in lower costs
and higher quality. Such alignment opens the door to incentive arrangements to reduce Hospital
Acquired Conditions, improve surgical patient flow, and reduce overuse of resources. There is
promising evidence of substantial cost savings possible through delivery system innovations.
Leapfrog is also undertaking a gainsharing demonstration program and has promising research on
the cost and quality implications of reducing hospital acquired conditions.

3) New federal investment in healthcare information technology should require meaningful

use of such systems and ongoing evaluation of their effectiveness. Newly funded systems
should demonstrate interoperability (including unique patient identifiers) and capacity to provide
meaningful quality data that can be used to improve performance. Implementation of new IT
systems should be competent, and according to Leapfrog’s data the challenge of this is so
significant Leapfrog is convening a consortium on the subject. Systems should also be
continually evaluated. The Leapfrog Hospital Survey includes the only tool hospitals can use to
annually evaluate the safety and effectiveness of CPOE systems; such evaluation tools should be
included in HIT legislation.

1
Jha AK, Orav EJ, Ridgway, AN, Zheng J, Epstein AM. Does the Leapfrog program help identify high
quality hospitals? Commission Journal on Quality and Patient Safety. Joint Commission Resources 2008
Jun;34(6):318-25.
2
Lwin AK,Shepard DS. Estimating Lives and Dollars Saved from Universal Adoption of the Leapfrog
Safety and Quality Standards: 2008 Update. Schneider Institutes for Health Policy, Heller School, Brandeis
University. Prepared for The Leapfrog Group, December 2008.
Health policy priorities/goals in the long term
Improve the value of health care to sustain America’s health care system, cut costs, and
improve patient safety and quality.

The mechanisms for achieving the goal (i.e., executive order, regulation, guidelines, policy
change or legislation)
Congressional amendment of the Civil Monetary Penalty Law would expedite implementation of
gainsharing programs. For other priorities variety of means are being pursued in partnership with
other purchasers and consumers. Goals are also being pursued at the local and state level,
working with hundreds of business coalitions and businesses across the U.S. to 1) measure cost-
effectiveness and quality, 2) compare hospitals on those metrics, and 3) use the data to drive
change.

Any budgetary or appropriations concerns or impact

Reducing costs needs to be a priority or the private sector contribution to healthcare will be
at risk, and that will dramatically increase costs to taxpayers. As President-Elect Obama has
outlined, cost reduction is achievable and critical. Leapfrog has reviewed the literature and
estimates savings of approximately $12.1 billion in one year if hospitals achieved three of
Leapfrog’s key standards. Leapfrog preliminary analysis in New York suggests savings on
average of $1 million per hospital achievable with the reduction in certain preventable hospital
acquired conditions. Other compelling research suggests delivery system reforms like changing
the way hospitals schedule OR time can demonstrate savings as high as 15%. Leapfrog, and the
private payers that founded and support us, have the impetus, experience and data to support the
kind of fundamental change necessary to control costs.

In addition, it is critical to impose accountability on HIT investment, to assure appropriate

implementation and evaluation of systems, and that they contribute to measurement and
accountability for quality and efficiency performance.

Any other HHS related issue

Accelerate the CMS move toward value-based purchasing. Leapfrog was pleased to work
alongside CMS in promoting value-based purchasing in the private sector and would like to see
the new administration continue and expand work in this area. We would like to see alignment
between the incentives structures used in the private sector with those used at CMS. Information
gathered through value-based purchasing should be made publicly available for use by purchasers
and consumers.

Improve usability and availability of CMS data, such as DRG weights and risk models, to
allow researchers and health care purchasers to do financial planning and modeling to reduce
costs. Leapfrog now wants to address quality, efficiency, and cost per episode of illness together
as targeted outcomes that follow from the consistent use of evidence-based protocols in hospital
settings. Purchasers have requested and hope to acquire CMS claims information to integrate in
our value-based purchasing efforts in the private sector.

Better integrate reporting of data in the private and public sectors: The CMS website does
not report data from Leapfrog or other publicly available information from the private sector,
unlike some states that use Leapfrog data on their website. Yet data missing from the CMS
website are some of the most critical factors known to influence safety and cost-effectiveness in a
hospital.

The Leapfrog Group, www.leapfroggroup.org

Support AHRQ’s efforts in quality and transparency. AHRQ has developed the H-CUP
database which is an extraordinary resource for analyzing opportunities for improvements in
quality and cost-effectiveness, although the database needs to identify individual hospitals in its
public reporting.

CDC needs to work collaboratively with CMS on issues related to hospital-acquired

infections. An OMB report in April 2008 suggested that there was little integration of policy
initiatives and that has hampered federal effectiveness in addressing this critical issue.

The Leapfrog Group, www.leapfroggroup.org