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Future trends in global healthcare Presentation Transcript

  • 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