Health Care Reform:How we got here and where we need go

BIAOH Annual Conference

November 2, 2010

Jerry Friedman, JD

Advisor for Health Policy

Director External Relations & Advocacy

True or false?

• Government takeover of health care• Ends of Life:

– Abortion on demand– Death Panels

• Illegal immigrants will get free coverage• Care will be rationed

“Everyone has the right to their own opinion, but not the right to their own facts.”

- Senator Daniel Patrick Moynihan

The Simple Facts on our Health Care “Situation”

• We have no health care “system”• The current situation is unaffordable for individuals &

unsustainable for our nation• The definition of “vulnerable” reaches the middle class• Health care is business: the business of medicine, and

the business of insurance• Negatively impacts our competiveness in a global

economy, innovation & individual prosperity

Total Healthcare Expenditures (in billions)

Obesity Trends* Among U.S. AdultsBRFSS, 1985

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14%

Obesity Trends* Among U.S. AdultsBRFSS, 1986

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14%

Obesity Trends* Among U.S. AdultsBRFSS, 1987

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14%

Obesity Trends* Among U.S. AdultsBRFSS, 1988

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14%

Obesity Trends* Among U.S. AdultsBRFSS, 1989

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14%

Obesity Trends* Among U.S. AdultsBRFSS, 1990

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14%

Obesity Trends* Among U.S. AdultsBRFSS, 1991

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19%

Obesity Trends* Among U.S. AdultsBRFSS, 1992

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19%

Obesity Trends* Among U.S. AdultsBRFSS, 1993

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19%

Obesity Trends* Among U.S. AdultsBRFSS, 1994

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19%

Obesity Trends* Among U.S. AdultsBRFSS, 1995

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19%

Obesity Trends* Among U.S. AdultsBRFSS, 1996

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19%

Obesity Trends* Among U.S. AdultsBRFSS, 1997

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19% ≥20%

Obesity Trends* Among U.S. AdultsBRFSS, 1998

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19% ≥20%

Obesity Trends* Among U.S. AdultsBRFSS, 1999

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19% ≥20%

Obesity Trends* Among U.S. AdultsBRFSS, 2000

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19% ≥20%

Obesity Trends* Among U.S. AdultsBRFSS, 2001

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

Obesity Trends* Among U.S. AdultsBRFSS, 2002

No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

Obesity Trends* Among U.S. AdultsBRFSS, 2003

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

Obesity Trends* Among U.S. AdultsBRFSS, 2004

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

Obesity Trends* Among U.S. AdultsBRFSS, 2005

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

Obesity Trends* Among U.S. AdultsBRFSS, 2006

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

Obesity Trends* Among U.S. AdultsBRFSS, 2007

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

Obesity Trends* Among U.S. AdultsBRFSS, 2008

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

Obesity Trends* Among U.S. AdultsBRFSS, 2009

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

How does our spending align with influences of health status?

Source: Centers for Disease Control and Prevention, University of California at San Francisco, Institute for the Future

Access to Care

Environment

Genetics

Lifestyle &Behavior

Access to Care

Other

Health Behaviors

What influences our health status

Where our nation spends its health care dollars (~$2 Trillion)

10%

20%

20%

50%

88%

8%

4%

How do we shift more resources

to address health behaviors?

How did we get here?

• YOYO or WITT• Several major policy decisions rather than

one, unified health care policy. – Employer-based coverage– Government-sponsored coverage– Emergency Medical Treatment &

Active Labor Act (EMTALA)

The President’s Health Care Reform Principles

• Guarantee Choice• Make Health Coverage Affordable• Protect Families Financial Health • Invest in Prevention and Wellness• Provide Portability of Coverage • Aim for Universality• Improve Patient Safety and Quality Care • Maintain Long-Term Fiscal Sustainability

Desired Outcomes • More and better access• Sick care and Health care • Evidence based medicine• Reduce fragmentation • Caring and curing• Effective use of workforce• Flatten the cost curve

How does the legislation do this?

• Coverage expansion & reform• Payment reform • Delivery system transformation

How does the legislation do this?

• Coverage – Individual coverage mandate– Medicaid expansion

• 138% of poverty level

– Subsidies for low income individuals• To 400% of poverty level

– Credits/subsidies for business– Penalties for non compliance

*Insurance coverage for population < 65 years

Employer-sponsored Medicaid/SCHIP Uninsured Non-group/Other Exchanges

32 million gain coverage,

split between Medicaid/SCHIPand Exchanges

Coverage

• Health Insurance Exchanges– Essential benefits + buy-up– Bronze, Silver, Gold, Platinum

• Federal multi-state plans (FEHBP-like)• Consumer Operated & Oriented Plans

Coverage

• Insurance market reforms• Guaranteed issue/ prohibit rescissions• Premium rate restrictions• Eliminates annual & lifetime limit • Expands family coverage to age 26

Coverage Reforms

• Essential Benefits– Preventive Services, 100% covered– Care planning & coordination

• Chronic Illness care– Recognition of added need– Includes mental health

How does the legislation do this?

• Coverage expansion & reform• Payment reform • Delivery system transformation

Payment Reform

• Flatten the Cost Curve• Reduce the growth in hospital payments• Eliminate subsidies for uncompensated care• Reduce or eliminate certain payments

– Preventable Readmissions– Hospital Acquired Conditions

• Pay for Performance

Why hospitals ?

When Willie Sutton was asked why he robbed banks, he is said to have responded:

“ Because that’s where the money is.”

Physicians

• Medicare – 10% bonus payment – primary care – General surgeons – Health professional shortage areas

• Medicaid – Pay primary care at Medicare rates– 100% federally funded 2013 -2014

Independent Payment Advisory Board

• Slow the growth of Medicare• Submit proposals to for reducing Medicare

costs. 1st report 2014• Automatically implemented unless Congress

acts to block• Prohibited from recommending:

– Rationing; – Increasing revenue;– Changing benefits or eligibility; or – Beneficiary cost sharing

How does the legislation do this?

• Coverage expansion & reform• Payment reform • Delivery system transformation

Health Reform: Ramp Up

• Insurance Market Reforms

• M & M Payment Reforms

• Comparative Effectiveness

• 2010

2011• State Health

Insurance Exchanges

• Payment reform- primary care, geographic variation,

• CMS Centers for Innovation

2012• Accountable

health organizations

• Continued payment reform

2013• Tax

increases/ reforms

• Payment reform

2014• Individual &

employer mandates & subsidies

• Health insurance exchanges & Medicaid expansions

• Extension of insurance reforms to all policies

Paym

ent

Care Delivery

Population/Global

Payment

Individual/ Fee For Service

Encounter Lifetime

Making the Transition

Episodes

SharedSavings

XTodayMarket RelevanceGlobal Adoption

Transition

Foster Innovation and Disruptive

Models

Achieved by Q1 2012

Volume

Value

Tension Between Populations and Individuals

Focus on Individual• Tertiary Care• Acute Care• Cost unawareness• Unlimited expectations

of patient for care• Individual physician• Professional

management• Market competition• Inequity in distribution

Focus on Populations• Primary Care• Preventive/Chronic care• Cost awareness• Affordable care for

society overall• Health care team• Corporate management• Government regulation• Fair distribution of

services

Adapted from: O’Neill and Seifer, Academic Medicine, 1995.

Change is good.

You go first.

Delivery system transformation

– Deinstitutionalization• Community capacity• Primary Care/Nurse managed clinics • Federally Qualified Health Centers

– Continuity of Care• Patient centered medical homes• Episodes of Care/Bundled payments• Care coordination

Patient Centered Outcomes Research Instituteaka Comparative Effectiveness Research

• How do we get the best value for our health care dollar• What works and what doesn’t?• What works better? • NIH & AHRQ

– ad hoc Expert Advisory Panels– GAO Methodology Committee

Center for Medicaid & Medicare Innovation

• Test innovative health care delivery & payment models

• Operational by 1/1/2011• Funded: $ 10 billion over 10 years

Demonstration Projects

• Medicare bundled payments– Voluntary, starting 2013 -2016– Incentives for care coordination– Single payment for IP, OP, physician & post

acute care for 10 chronic & acute conditions.• Continuing care hospital demonstration

– IRF, LTCH & SNF under hospital control.

Demonstration projects • Accountable Care Organizations – 2012

– Share in cost savings– Manage & coordinate Part A & B– At least 5,000 Medicare beneficiaries – Primary care & specialty networks– Evidence based medicine– Care coordination – Quality & cost reporting

“Skate to where the puck is going to be, not to where it has been.”

– Wayne Gretsky

Leaps of faith

• Coverage does not guarantee access• Evidence-based medicine• Value not Volume• Patient Centered Care• Population Health• Readiness and ability to transform

Personalized Health Care

• P4 Medicine–Predictive–Preventive–Personalized –Participatory

5 stages of grief

• Denial• Anger• Bargaining• Depression

• Acceptance

“No you can’t”

Just vote NO !

Litigate, baby, litigate

Let the voters decide

Not so much

ResourcesAAMC – www.aamc.org/reform/start.htm

Kaiser Family Foundation www.kff.org

Ropes and Gray www.ropesandgray.com

Commonwealth Fund www.cmwf.org

FamiliesUSA www.familiesusa.org/health-reform-central/

US Health & Human Services-Center for Medicaid & Medicare Services www.hhs/cms/gov

Library of Congress www.THOMAS.loc.gov

Patient Protection & Affordable Care Act -HR 3590/P.L.111-148

Health Care and Education Reconciliation Act-HR 4872/P.L.111-152

“ Americans can be counted on to do the right thing . . .

after they have tried everything else.”

-Sir Winston Churchill

Questions ?