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 ?