The Nuts and Bolts of Arkansas
Health Care:Crafting a New
SystemJoseph W. Thompson, MD, MPHArkansas Surgeon GeneralDirector, AR Center for Health Improvement
Healthcare Financing in Transition • 1928 Penicillin discovered • 1944 first patient treated• 1941 WWII Wage controls / Employers’ response• 1957 Hill Burton Act stimulates hospitals• 1965 Medicare / Medicaid established• 1973 Federal HMO Act• 1990s Employer / Medicaid HMO expansions• 1997 State Children’s Health Insurance Program• 2003 Medicare Modernization Act• 2011 Patient Protection and Affordable Care Act
2000 2004 2006 2008 2010$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$4,582 $5,969 $6,745
$8,135 $7,849
$1,773
$2,414 $3,183
$3,085 $3,967
EmployeeCompany
28%
32%
72%
73%
$8,383
$9,928
$11,220
* National average27% employee and 73% company
29% 66%*
27%34%*
71%68%
$6,355
$11,816
Changing Cost Allocations for Arkansas Families’ Annual Insurance Premiums
Source: AHRQ, Medical Expenditure Panel Survey (2000-2010 Tables of private-sector data by firm size and state (Table II.D.1) and II.D.2). Available at www.meps.ahrq.gov/mepsweb/data_stats/quick_tables_search.jsp?component=2&subcomponent=2.
U.S. Census Bureau. 2010 health insurance coverage status for counties and states: Interactive tables. Small Area Health Insurance Estimates Web site. http://www.census.gov/did/www/sahie/data/interactive/. Published 2012. Accessed January 2, 2013.
Arkansas Uninsured By County (19-64 years of age)
Percent: 20.0 - 22.422.5 - 24.925.0 - 29.930.0 - 34.9 35.0+
MedicaidARKids First A
ARKids First BMedicaid
for Pregnant Women
Medicare
Currently Uninsured:~550,000
Private Insurance
Medicaid Disability*
Medicaid—Extremely low-income parents*
Current Health Insurance Distribution
New Health Insurance Distribution
Medicaid—Extremely low-income parents*
MedicaidARKids First A
ARKids First B
Medicare
Private Insurance
Sliding Scale Subsidiesfor Private Insurance through the Exchange
(~150,000-200,000 newly insured)
Medicaid Expansion(~250,000 newly insured)
Medicaid Disability*
Private Insurance/Medicaid
Overall State Vision
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Population-based care delivery•Medical Homes•Health Homes
Objective
Care delivery strategies
Enablinginitiatives
•Improving the health of the population•Enhancing the patient experience of care•Reducing or controlling the cost of care
Health information technology adoption
Payment innovation
Health care workforce development
Consumer engagement and personal responsibility
Episode-based care delivery•Acute conditions, defined procedures
Expanded coverage for health care services
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Arkansas Health System Improvement Agency Organizational StructureState Leadership
State LeadershipImplementation& Coordination
Implementation
WorkgroupParticipation
Steering Group: DHS, ADH, BCBS,
QualChoice, United, ACHI
AID (Exchange)DHS (Mcd eligibility &
expansion) EBD
UAMSADH & ACHI
Higher Ed (2- & 4 yr)
AFMCUAMS
DISMedicaid
GovernorMike Beebe
Payment & Quality ImprovementMr. John Selig
Insurance Exchange
CommissionerJay Bradford
WorkforceChancellor Dan Rahn& Dr. Paul Halverson
Health Information Technology
Mr. Ray Scott
Governor’s Policy Staff & Dr. Joe Thompson
ACHI
Goals of Workforce Strategic Planning
Support the implementation of and transition to team-based care that is patient-centered, coordinated, evidence-based, and efficient
Enhance and increase the use of health information technology (HIT)
Increase the supply of and improve the equitable distribution of primary care providers
Adopt new financing, payment, and reimbursement policies and mechanisms
Health Information Technology
Over 3,000 primary care providers and hospitals committed to EHRs adoption and have received
nearly $140M(through Feb 2013)
State Health Alliance for Records Exchange (SHARE) Currently more than 2,300 secure message users from about 271 health care locations in Arkansas
U.S. Department of Commerce Broadband Technology Opportunities Program ($128M)
Goals
Reward high quality care and outcomes
Ensure clinical effectiveness
Promote early intervention and coordination to reduce complications and associated costs
Encourage referral to higher-value downstream providers
Preliminary working draft; subject to change
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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
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Populations serve require care in three domains
Acute andpost-acute
care
Prevention,screening,
chronic care
Supportivecare
Patient populations(examples)
Care/payment models
• Healthy, at-risk• Chronic, e.g.,
‒ CHF‒ Diabetes
Patient-centered medical homes
• Acute medical, e.g.,‒ CHF‒ Pneumonia
• Acute procedural, e.g.,‒ Hip replacement
Focused episodes
• Developmental disabilities
• Long-term care• Behavioral health
(mental illness / substance abuse)
Health homes
Patient Centered Medical Homes
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Why primary care and PCMH?
Most medical costs occur outside of the office of a primary care physician (PCP) , but PCPs can guide many decisions that impact those broader costs, improving cost efficiency and care quality
PCP Patients & families
Specialists
Community supports Hospitals, ERs
Ancillaries (e.g., outpatient imaging, labs)
Preliminary working draft; subject to change
Medical Home: Comprehensive Primary Care Initiative 69 primary care practices
Receiving FFS + enhanced payments Improving patient experience: care
coordination, access, communication Practices responsible for ALL patients Quality, cost and transformation
milestones will be evaluated
PMPM began October ‘12 Medicare $8-40; risk-adjusted Medicaid +$3 kids; +$7 adults Private ~$5
Must meet targets Quality, performance, transformation
Shared savings model year 2-4 Expansion in Summer 2013
http://innovations.cms.gov/initiatives/Comprehensive-Primary-Care-Initiative/index.html
Preliminary working draft; subject to change
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Spending Breakdown for CHF 30-day Episodes with and without a Readmission
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Number of Episodes
Index Readmits PAC OPD Physician Other
$5,936
$0
$2,510
$288 $337 $368
Index Readmits PAC OPD Physician Other
$6,305
$10,569
$3,975
$379$1,453 $832
% Total Costs 63% 0% 27% 3% 4% 4%
% Total Costs 27% 45% 17% 2% 6% 4%
24%
76%
N=4,992 CHF episodes
Source: Medicare FFS claims data, 2010
Avg Total Episode Cost = $23,511
Avg Total Episode Cost = $9,440
Readmit
s
No readmits
Episode Strategies for Care
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PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE
2012: episode-based payment was launched or 5 episodes, statewide
Most relevantpayor types
•Medicare•Commercial*•Medicaid*
Key sources of value
Readmission and post-acute stays, cost of implant
Hip and kneereplacement
Acute/post-acuteheart failure
Pregnancy and delivery
Upper respiratory infections
•Medicaid*•Commercial*
Eliminating unnecessary inductions, C-sections, and extended length of stay in the hospital
•Medicare•Commercial*•Medicaid*
Encouraging hospitals to extend reach beyond point of discharge
•Medicaid*•Commercial
Eliminating inappropriate use of antibiotics and radiology
Accountableprovider
Orthopedicsurgeon
Deliveringphysician
Hospital
Diagnosingphysician
ADHD•Medicaid*•Commercial
Matching care to guidelines for pharmacotherapy vs. counseling
Treatingphysician orpsychologist
* Implemented or in process; others to followSOURCE: Arkansas Payment Improvement Initiative
2013: Wave 2 Episodes launch
▪ Wave 2a (April 2013)▪ Tonsillectomy▪ Cholecystectomy▪ Colonoscopy▪ Oppositional Defiant Disorder (ODD)
▪ Wave 2b to follow (Fall 2013)▪ PCI & CABG▪ COPD exacerbation/Asthma exacerbation▪ Neonatal Care ▪ ODD / ADHD
Preliminary working draft; subject to change
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APII scope and pace of rollout
2012
2013
2014
• 5 episodes, statewide, affecting 5-10% of spend for Medicaid, BCBS
• 69 medical homes for ~10% of Arkansans: MCaid, MCare, BCBS
• Reports and risk affecting >2,000 hospitals, physicians, other professionals
• Multi-payor portal for providers to enter dataand receive reports
• 15-20 episodes, >20% of spend
• Pediatric medical homes• Reports and payment
to >5,000 providers• Multi-payor care model
for care coordination• EMR connectivity to multi-
payor provider portal
• 50+ episodes, >40% of spend
• All primary care medical homes, >80% of Arkansans
• Reports and payment affecting >80% of providers
• Health informationexchange
Financial goal: 10% reduction in spend by 2017, followed by sustained reduction in trend*
*Reflects goal publicly communicated by Arkansas Medicaid; similar success case for BCBS
Arkansas Health Benefits Exchange
• Arkansas with potential of 450,000 newly covered lives
• Pursuing Federal-state partnership model• Opportunity to strengthen competitive market• Majority of expansion in rural underserved
areas• Plans offered by private insurance
companies
New Health Insurance Distribution
Medicaid—Extremely low-income parents*
MedicaidARKids First A
ARKids First B
Medicare
Private Insurance
Sliding Scale Subsidiesfor Private Insurance through the Exchange
(~150,000-200,000 newly insured)
Medicaid Expansion(~250,000 newly insured)
Medicaid Disability*
Private Insurance/Medicaid
Progress on Private Insurance Exchange• Exchange determines basic benefit package,
plan participation, consumer support• Arkansas implementing state-federal
partnership model• Major reforms for health insurance market• Upcoming steps:
– Finalization of basic benefit package– Private plans submit bids (late Spring)– Outreach and education (Summer)– Enrollment (October 2013)– Coverage (1/1/2014)
Arkansas’s Private Option• Utilize health insurance exchange to purchase
insurance coverage for those <138% FPL• Qualified high-silver policies offered to all• Federal funding via Affordable Care Act starting
January, 2014• Essential health benefit plan with private
provider payment rates• Medically frail, dual eligible and children on
Medicaid excluded• Some existing Medicaid beneficiaries
transitioned
Arkansas’s Private Option• Plan doubles the size of the state exchange; shrinks share of
Medicaid • Less disruption in services for people who would move between
Medicaid and private insurance because of change in income• Reduce size of Medicaid program by transitioning pregnant
women, medically needy, ARHealthNetworks, and others to Exchange while still ensuring coverage
• Entice more insurance companies to participate in Exchange• Boost state revenues above original estimate with more federal
dollars flowing into state’s health care system• Eliminates employer exposure to $25-38M per year in penalties
How does expansion help the state?• One-time opportunity to strive for complete
coverage and “catch-up” to richer states through healthcare coverage
• Address unmet healthcare needs of citizens• Fiscally advantageous
– 100% federally funded with opt-out provision– Takes over for existing state patchwork coverage– Relieves state from financing uncompensated care– Assists county and municipal governments– Estimated $1B in new funding stimulates economy
RAND Report: The Economic Impact of the ACA on Arkansas• Unbiased, external assessment• Model of full implementation of ACA
– subsidies toward the purchase of private insurance through the health insurance exchange
– Medicaid expansion• Results
– 400,000 newly insured Arkansans– 2,300 Lives saved annually– Net increase on state GDP of $550 million annually– 6,200 jobs created
www.ACHI.net