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Future trends in global healthcare

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  • Hi I’m (name), and I’m the (title). I oversee (blank) departments, and I’ve worked for UC San Diego for (blank) years. As a member of the UC San Diego Health System Senior Management Team, I’m delighted to welcome you to our community. We believe that each of you is here to make a difference – and we want you to know that we encourage teamwork in all that you do.
  • Consequences: Federal, state, local budgets overwhelmed National/Global competitiveness of businesses seriously eroded Individuals (practitioners, employers, consumers, patients) impacted at the local/personal level.
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    • 1. Future Trends in Global Healthcare Thomas McAfee, MD Dean of Clinical Affairs, Physician in Chief
    • 2. Agenda
      • Why global healthcare reform?
      • What changes can we expect to see?
      • What strategies should we take to be ready?
    • 3. Why healthcare reform?
    • 4. Costs Going Up…and Up…and Up… *Projected U.S. 1960s 2007 2016* Total Health Expenditures $27 billion $2.2 trillion $4.1 trillion Per Capita Spending $126 $7,421 $12,782 Percent of GDP 5% 16.2% 19.6%
    • 5. Costs Going Up…and Up…and Up…No plan to bend the curve!
    • 6. Higher costs, higher quality? Per capita spending Average Life Expectancy
    • 7. The Current Model is Not Sustainable!
      • Developed and developing countries spending higher and higher percentage of GDP on healthcare.
        • Governments cannot foot the bill
        • Employers and patients cannot pick up the slack
      • Changing demographics will increase healthcare costs!
      • The value of our current investments in healthcare are not clear.
    • 8. Re-newed focus on VALUE
      • Value = Cost/Outcomes
    • 9. What is driving costs to outpace inflation?
      • Healthcare system level
      • Healthcare delivery level: physician practice and hospitals
      • Patient level
    • 10. Cost Drivers at the Healthcare System Level
      • Drug and technology costs
        • Outpacing inflation
      • Administrative costs
        • System inefficiencies
        • Advertising
        • Health plan profits
      • Malpractice
      • Population disparities
        • Access
        • Uninsured
    • 11. Cost Drivers at the Hospital and Physician Level
      • Inappropriate utilization of services
        • Knowledge gap
        • Defensive medicine
        • Misaligned incentives
      • Capacity and access issues: delayed treatments
      • Poor coordination of transitions of care: re-admissions
      • End of life issues: failure to plan
      • Practice, workflow inefficiencies
    • 12. Cost Drivers at the Patient Level
      • Patient non-adherence
      • Patients don’t want to accept limitations
      • Patient demand for services is increasing often fueled by mis-aligned incentives
    • 13. What will healthcare reform look like?
    • 14. Reimbursement headed down!
      • Healthcare is in a financial bubble and headed for a deflationary cycle
      • Governments will be forced to drop reimbursement - private payers will ride the coat tails
      • Expect a 10% decrease in “real” dollars over the next decade.
    • 15. Not Only Will Reimbursements Drop, But:
      • Risk will shift from government and private payers to providers and patients.
      • Expect more bundled payments for episodes of care with risk for complications, outcomes, efficiency
    • 16. Transparency and Payment Differentials based on:
      • Clinical outcomes: complications, re-admissions, cost for episodes of care
      • Patient satisfaction
      • Access
    • 17. What should we do to get ready?
    • 18. Its Simple!!!
      • Drive down costs at every level
      • Measure and improve clinical outcomes
      • Measure and improve patient satisfaction
      • Protect Margin through product diversification
      • Larger scale not enough: need clinical integration to manage costs of care and risk.
    • 19. “ The Journey of 1,000Miles Begins with One Step”
      • University of Virginia reduced supply costs by $9.4 million
        • Standardizing surgical implants saved $2.4 million in hip and knee replacements, $4 million in spine
        • Rx switch from rocuronim to zemuron saved $130,000
        • Replacing disposable pillows with reusable netted $285,000/year
      • Mid-Atlantic AMC reduced FTEs by 260 by phasing out positions and using job reassignment bank
      • Jackson Memorial hired transplantation trained pharmacist to manage CMV immune globulin use…annual savings of $2 million
    • 20. Protect Margin through Product Diversification
      • Create capacity by reducing readmits and managing LOS
      • Fill unused capacity with “core” services, not commodity services
        • Centers of Excellence
        • Active management of access, cost and outcome
        • Transparency of outcome
    • 21. Systems, Not Networks,
      • What “true” healthcare systems do:
        • Act like a central nervous system
        • Standardize care processes efficiently
        • Service Line/Program rationalization across system
        • Integrate and align physicians and hospitals
        • Create alignment of incentives/compensation
        • Create sustainable scale/dilute fixed costs
        • Manage efficient episodes of care through multispecialty integration..
    • 22. Solutions at the Practice Level
      • Practice evidence-based medicine
        • Improve quality, outcomes, reduce errors
      • Make communication, patient education a priority
      • Incorporate palliative, hospice planning in the treatment continuum
      • Optimize office, work flow efficiency
      • Make Health Information Technology the backbone of your practice!
    • 23. Summary
      • Rate of healthcare cost rise is not sustainable, value proposition unclear
      • Payers, private and public will seek to bend the cost curve
        • Expect decrease in reimbursement
        • Expect transfer of risk to providers based on episodes of care and outcomes
      • To maintain margins and manage risk, expect:
        • Intense pressure for MD’s and Hospitals to drive down costs of production
        • Creation of integrated Health Systems to dilute fixed costs, rationalize services , and manage risk
        • Investment in health information will be critical