LDI Research Seminar with Art Kellermann, MD, MPH 11_28_12

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  • Developed 439 standards for evaluating care for:30 chronic and acute health problemsPreventive careTalked to people randomly selected from 12 metropolitan areasWith and without insurance, healthy and illAcross the socioeconomic spectrumReviewed all of their medical records for a two year period
  • EMTALA’s impact is clearly apparent in this figure.The top bar portrays the fraction of U.S. doctors who practice emergency medicine (red), primary care (blue), or all other specialties (purple). The second bar portrays the percentage of acute care visits each group of doctors handles in a given year. The third bar depicts acute care visits by Medicaid or SCHIP beneficiaries, and the fourth bar depicts acute care visits by the uninsured.The last 2 bars reveal that ER physicians – not more than 4% of America’s MDs – manage more acute care visits by Medicaid, SCHIP and the uninsured than all other doctors combined.
  • What Business Are We In? The Emergence of Healthas the Business of Health CareDavid A. Asch, M.D., M.B.A., and Kevin G. Volpp, M.D., Ph.D.
  • LDI Research Seminar with Art Kellermann, MD, MPH 11_28_12

    1. 1. Flattening the Trajectory ofHealth Care Spending:Lessons from RAND ResearchArt Kellermann, MD, MPH, FACEPPaul O’Neill-Alcoa Chair in Policy AnalysisRAND Corporation
    2. 2. Larry S. Lewin 1938-2012• Founded The Lewin Group• One of our nation’s most influential thinkers about health services for 40+ years• Elected to the IOM in 1984, he was awarded the IOM’s Yarmolinsky Medal for distinguished service in 2004 2 05/2010 A9750-2 04/2012
    3. 3. “Donna” (1952-1987)• 35 y.o. mother of three• Rushed to the Med ER via EMS after collapsing• Comatose, severely hypertensive with extensor posturing• CT revealed…. 3 05/2010 A9750-3 04/2012
    4. 4. We’re number one! 4 05/2010 A9750-4 04/2012
    5. 5. International Comparison of Spending on Health, 1980–2009 Average spending on health Total expenditures on health per capita ($US PPP) as percent of GDP8000 18 US NOR 167000 SWZ NETH 146000 CAN DEN 125000 GER FR 104000 SWE UK 8 AUS US3000 NETH NZ 6 FR GER DEN2000 4 CAN SWZ NZ1000 SWE 2 UK NOR AUS 0 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 5 05/2010 A9750-5 04/2012 Source: OECD Health Data 2011 (June 2011).
    6. 6. Average Health Insurance Premiums and Worker Contributions for Family Coverage, 1999-2008 $12,680 119% Increase $9,325 $5,791 117% $4,247 Increase $3,354 $1,543 1998 2008 Employer contribution Worker contribution NOTE: The average worker contribution and the average employer contribution do not add to the average total premium due to rounding. SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2008. 6 05/2010 A9750-6 04/2012
    7. 7. Most Americans Don’t Realize How Much They Pay for Health Care… 7 05/2010 A9750-7 04/2012
    8. 8. • National statistics on the cost of health care are hard to place in the context of everyday life• We analyzed what a decade of health care cost growth did to the finances of a median-income family of 4 that was fortunate enough to have employer-sponsored health insurance 8 05/2010 A9750-8 04/2012
    9. 9. Families “See” Their Premium Payments and Out-of-pocket Spending… 1999 $85 Family insurance premium $135 Out-of-pocket spending 9 05/2010 A9750-9 04/2012
    10. 10. They Don’t See their Employer’s Shareof Their Premiums or the Share of their Taxes Spent on Health Care 1999 $85 Family insurance premium $135 Out-of-pocket spending $240 Employer insurance premium $345 Taxes to health care A9750-10 10 05/2010 04/2012
    11. 11. Between 1999 and 2009, Visible and Invisible Health Spending Grew Dramatically 2009 $195 1999 $85 Family insurance premium $235 $135 Out-of-pocket spending $240 Employer insurance $550 premium $345 Taxes to health care $440 Deficit spending $390 A9750-11 11 05/2010 04/2012
    12. 12. As a Result, Families Had Little Left Over A9750-12 12 05/2010 04/2012
    13. 13. It Didn’t Have to Be This Way $95 2009: Actual net gain in $295 5 family income Deficit spending 2009: Health care spending included $335 grows at GDP + 1% 2009: Health care spending $545 grows with inflation($ 400) ($ 200) $0 $200 $400 $600 A9750-13 13 05/2010 04/2012
    14. 14. If healthcare cost growth had trackedgeneral inflation over the decade, this familywould have had nearly $5,400 more to spend on other priorities in 2009 alone. A9750-14 14 05/2010 04/2012
    15. 15. What else might a family have done with this money? • Made two extra mortgage payments• Enrolled for a year of full-time community college classes • Paid for four-and-a-half months of child care for a 4-year-old• Paid down 18% of their credit card debt A9750-15 15 05/2010 04/2012
    16. 16. What Did The Extra Spending Buy?Compared to 10 years earlier, Americans got:• 10% more MD office and same-day hospital visits• The same number of overnight hospital stays• 84% more MRI scans per 1,000 people; CT use (and the associated doses of radiation) doubled• An increase in adult life expectancy of one year—less than half the avg. gain achieved by other OECD countries during the same time perioidSOURCE: ―The State of Health Care Quality 2003: Industry Trends and Analysis,‖NCQA. November 2003. A9750-16 16 05/2010 04/2012
    17. 17. Are We Getting Our Money’s Worth? A9750-17 17 05/2010 04/2012
    18. 18. In 2003, RAND Measured the Quality of Health Care in 12 Communities • SEATTLE LANSING • • BOSTON SYRACUSE • CLEVELAND • • • NEWARK INDIANAPOLIS LITTLE ORANGE ROCK COUNTY • PHOENIX • GREENVILLE • • • MIAMI SOURCE: McGlynn et al., "The Quality of Health Care Delivered to Adults in the United States,‖ New England Journal of Medicine. 2003;348(26). A9750-18 18 05/2010 04/2012
    19. 19. It Found that American AdultsGet Recommended Care About 55% of the Time Care that meets quality standards SOURCE: McGlynn et al., NEJM (2003). A9750-19 19 05/2010 04/2012
    20. 20. You Aren’t Safe Anywhere… Boston Overall Greenville PreventiveIndianapolis Acute Chronic Little Rock Newark Orange Co Syracuse 30 40 50 60 70 80 90 100 % of recommended care received A9750-20 20 05/2010 04/2012
    21. 21. But We’re Still #1, Right? A9750-21 21 05/2010 04/2012
    22. 22. Deaths from Treatable ConditionsDeaths per 100,000 population: 2006-2007* 100 80 60 40 20 0 SOURCE: Nolte and C.M. McKee, ―Variations in Amenable Mortality—Trends in 16 High-Income Nations,‖ Health Affairs, published on line Sept 12, 2011. A9750-22 22 05/2010 04/2012
    23. 23. Between 1999 and 2008, the Rate ofUninsured, Nonelderly Adults Rose from 17% to 20% 1999–2000 2005–2006 NH ME WA VT NH ME ND WA VT MT MN MT ND OR MN WI NY MA ID SD OR NY MA MI RI WI WY ID SD RI PA CT MI IA NJ WY CT PA NJ NE OH IA IN DE NE OH NV IN DE IL WV MD NV UT CO VA IL MD DC UT WV VA CA KS MO KY CO DC CA KS MO KY NC TN NC OK SC TN AZ NM AR OK AR SC MS AL GA AZ NM MS AL GA TX LA TX LA FL FL AK AK HI 23% or more HI 19%–22.9% 14%–18.9% Less than 14%SOURCES: Commonwealth Fund State Scorecard on Health System Performance, 2007.Updated data: Two-year averages 1999–2000, updated with 2007 CPS correction, and 2005–2006from the Census Bureau’s March 2000, 2001 and 2006, 2007 Current Population Surveys. A9750-23 23 05/2010 04/2012
    24. 24. Where Do Americans Get Treatment When They Get Sick? ER Docs Primary care MDs Specialists Active physicians (597,430) All acute care visits (273 million)Acute care visits by Medicaid and SCHIP pts. (39 million) Acute care visits by the uninsured (24 million) 0% 20% 40% 60% 80% 100% SOURCE: Pitts, Carrier, Rich and Kellermann. Health Affairs, Sept 2010 A9750-24 24 05/2010 04/2012
    25. 25. SOURCE: Kellermann, AL. Waiting Room Medicine: Has It Really Come to This?Annals of Emergency Medicine. 2010;56(5):468-471. A9750-25 25 05/2010 04/2012
    26. 26. Is more medicalcare the answer? A9750-26 26 05/2010 04/2012
    27. 27. Our nation wastes $750 billion per year onunnecessary or inefficient services, excessiveadministrative costs, high prices, medicalfraud, and missed opportunities for prevention.SOURCE: Institute of Medicine. Best Care at Lower Cost: The Path to ContinuouslyLearning Health Care in America. Washington, DC: National Academies Press, 2012. A9750-27 27 05/2010 04/2012
    28. 28. A System Without Brakes • Patients – “If its expensive, it must be better” – “My doctor knows best” • Doctors – “The more I do, the more I make” – “The less I do, the more risks I take” • Hospitals – “Fill every bed” (with an elective admission) – “Perform as many procedures as possible” • Vendors – “Newer products = higher prices” – “We can always make them pay” A9750-28 28 05/2010 04/2012
    29. 29. No One Is Dealing with theUnderlying Problem – Rising Costs A9750-29 29 05/2010 04/2012
    30. 30. There are 4 basic ways to reduce costs* Two are bad ideas. 1. Provide the same care, but pay less for it 2. Bluntly ration care via government decree* Orszag P, “How Health Care Can Save or Sink America: The Case for Reformand Fiscal Sustainability,” Foreign Affairs, Vol. 90, No. 4, 2011, pp. 42–57. A9750-30 30 05/2010 04/2012
    31. 31. The 3rd approach is to make patients more cost-conscious*3. ―Consumer directed‖ health plans seek to engage patients as partners in their care by giving them more ―skin in the game‖* Orszag P, “How Health Care Can Save or Sink America: The Case for Reformand Fiscal Sustainability,” Foreign Affairs, Vol. 90, No. 4, 2011, pp. 42–57. A9750-31 31 05/2010 04/2012
    32. 32. CDHPs are controversial• Supporters assert that: – Financial incentives cause patients to make prudent health care choices – Patients will take greater responsibility for their care and seek information “Consumer-directed coverage involves empowerment, it involves patients taking greater responsibility and being more informed and participating in their health care decision-making” Devon Herrick, National Center for Policy Analysis, a Dallas- based think tank
    33. 33. • Detractors assert that: – CDHPs shift spending to patients without reducing overall costs – Information on quality and price are seldom available – Patients may forgo needed care, leading to health crises and higher costs downstream "Consumer-driven health care is badly named, because its certainly not driven by consumers. Its really just shifting the cost of health care onto the backs of patients.“ Jonathan Oberlander, University of North Carolina
    34. 34. Recently, RAND Conducted the First Comprehensive Study of HDHPs• 60 large employers, half offered CDHPs• Variety of benefit designs• Employees & dependents followed for 5 years, millions of covered lives• Compared cost growth in first year for families who joined an HDHP to that for similar families who did not• Funded by RWJF and California Healthcare Foundations
    35. 35. CDHPs cut spending, especially those with a deductibles > $1,000/person Plans with Plans with All deductibles deductible deductible >= $500 All deductibles >= $500 Deductibles $500-999 Deductibles >=$1,000 $500-999 >= $1,000 0%-5%-10%-15%-20%-25%
    36. 36. There Is Some Evidence that CDHP Participants Behave Like Consumers Sources of 21% cost reductionEarly cost reductionsstemmed from Cost perpatients initiating episode 7.5% Number offewer episodes of reduction episodescare and spending 13.5%less per episode reduction
    37. 37. CDHP Patients Used Fewer Services Per Episode of Care name drugs brand name drugs Fewer specialist Deductibles $500-999 Fewer Deductibles >=$1,000 visits hospitalizations 0% -5%-10%-15%-20%-25%
    38. 38. However, They Also Reduced Their Use of High-Value Preventive Care Cervical Glucose level Lipid profile Glucose cancer Mammo- Colorectal level screening grams screen 0 -1 Average %reduction in -2 preventivecare: HDHP -3 versus -2.9 -3.2 traditional -4 -4 -3.9 plans -5 -4.8 -6 The reductions occurred despite 100% coverage for preventive services
    39. 39. How cost and quality info is presentedmay matter as much as the info itself A9750-39 39 05/2010 04/2012
    40. 40. There’s a limit to what consumers can achieve • While the well-insured are largely shielded from the consequences of their decisions, the uninsured and under-insured have little bargaining power • The bulk of health care spending is generated by patients who are too sick, scared or confused to shop around for a better deal Concentration of Total Annual Medicare Expenditures Among Beneficiaries, 2001* * Source: CBO, based on 2001 data from CMS A9750-40 40 05/2010 04/2012
    41. 41. That’s why the 4th approach – convincing providers to focus on value – is also important*4. Providers drive the bulk of health care spending through their purchasing decisions and the fees they charge. Therefore, they must be part of the solution to spending growth* Orszag P, “How Health Care Can Save or Sink America: The Case for Reformand Fiscal Sustainability,” Foreign Affairs, Vol. 90, No. 4, 2011, pp. 42–57. A9750-41 41 05/2010 04/2012
    42. 42. RAND is analyzing various wayspayers are attempting to motivate providers • Public reporting of prices and quality: Providers (esp. hospitals) influenced more than consumers. Price data may have perverse effects • P4P: To date, effects on quality modest and mixed • Bundled payments & ACOs: Conceptually promising, but operationally challenging • Medical Homes: Too early to tell; RAND and others are currently evaluating demonstrations A9750-42 42 05/2010 04/2012
    43. 43. New technologies havea huge impact on health care spending A9750-43 43 05/2010 04/2012
    44. 44. Population health isn’t getting the attention it deserves A9750-44 44 05/2010 04/2012
    45. 45. Foster efficient and accountable providers • Pay for value rather than volume • Encourage providers to apply the best available evidence to eliminate wasteful and inappropriate care • Enhance patient safety • Strengthen primary care A9750-46 46 05/2010 04/2012
    46. 46. Engage and Empower Consumers• Embrace cost-sharing to reduce spending, but carefully implement it to avoid unintended consequences• Consumers not only need to be engaged, they must be adequately informed• Focus on how cost and quality info is provided as well as what is provided A9750-47 47 05/2010 04/2012
    47. 47. Promote Population Health• Although 70% of premature deaths have social or environmental causes, < 5% of health spending is devoted to population health• Even modest reductions in the level and/or rate of obesity could generate large downstream savings• Communities, workplaces and families are important sites for promoting health A9750-48 48 05/2010 04/2012
    48. 48. Facilitate High-Value Innovation• Can existing incentives be altered to encourage innovators to develop drugs, biologics, devices and techniques that reduce rather than increase costs? States can be valuable labs for innovation• Can federal R&D spending be managed more efficiently and effectively than it currently is?• Will HIT evolve to achieve its promise?• Will states serve as laboratories for innovation? A9750-49 49 05/2010 04/2012
    49. 49. A9750-50 50 05/2010 04/2012
    50. 50. A functional healthcare market • Patients – “It’s my money. I’ll use it wisely” – “I’m in charge – it’s my health • Physicians – “The better I do, the more I make” – “The safer I am, the less risks I take” • Hospitals – “Safety sells” – “Greater efficiency = higher earnings” • Technology Developers – “Greater value = bigger profits” A9750-51 51 05/2010 04/2012
    51. 51. A9750-52 52 05/2010 04/2012

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