Your SlideShare is downloading. ×
Connected Health, Policy and Payments - David Gruber, Alvarez & Marsal - WLSA Convergence Summit 2014
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Connected Health, Policy and Payments - David Gruber, Alvarez & Marsal - WLSA Convergence Summit 2014

83
views

Published on

Published in: Healthcare

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
83
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
4
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. SUSTAINABILITY OF THE FEE-FOR- SERVICE MODEL (OR NOT) David Gruber MD, MBA May 16, 2014
  • 2. U.S. HEALTHCARE IS INEFFICIENT AND INEFFECTIVE Cost ($B) Unnecessary services $210 Inefficiently delivered services 130 Excess administrative costs 190 Prices that are too high 105 Missed prevention opportunities 55 Fraud 75 Total $765 Source: The Healthcare Imperative: Lowering Costs and Improving Outcomes, 2010 Table S-1. Adopted by National Academy of Sciences from IOM Workshop Summary. • Misaligned financial incentives • System focus on acute intervention rather than the continuum of care • Inadequate, if any consumer (patient) and caregiver engagement • Limited price (oligopolistic) competition
  • 3. LIMITATIONS OF FEE FOR SERVICE REIMBURSEMENT – Focus on volume not value – Fosters fragmentation not collaboration on the full continuum of care – Hospital-centricity driving physician acquisitions (i.e., not site-neutral) – Procedural bias of the Resource Based Relative Value Scale – Cognitive services devalued – Administrative complexity and waste – Subject to industry lobbying
  • 4. FEE-FOR-SERVICE DOES NOT REWARD PREVENTION 118 125 133 141 149 157 164 171 100 120 140 160 180 1995 2000 2005 2010 2015 2020 2025 2030 Number of People With Chronic Conditions (in millions) 84% 16% Chronic conditions No chronic conditions Healthcare Spending by Patients With Chronic Conditions Sources: Medical Expenditure Panel Survey, 2006; Wu, Shin-Yi and Green, Anthony. Projection of Chronic Illness Prevalence and Cost Inflation. RAND Corporation, October 2000. 10.0% 10.1% 11.2% 12.6% 13.5% 16.5% 19.2% 22.3% 33.3% 0% 10% 20% 30% 40% Chronic respiratory infections Asthma Eye disorders Diabetes mellitus Diseases of the heart Non-traumatic joint disorders Other upper respiratory disease Disorders of lipid metabolism Hypertension Percentage of People With Specific Chronic Conditions 22.3% 11.8% 7.1% 3.9% 4.8% 0% 5% 10% 15% 20% 25% 1 2 3 4 5+ Number of Chronic Conditions % of People with Multiple Chronic Conditions
  • 5. FEE-FOR-SERVICE DOES NOT REWARD CONSUMER (PATIENT) ENGAGEMENT 30% 40% 15% 5% 10% Genetic predisposition Behavioral patterns Social circumstances Environmental factors Health Proportional Contribution to Premature Death Source: Schroeder. We Can Do Better. NEJM 2007;357:1221-1228, Figure 1 adapted from McGinnis, et al. The Case for More Active Health Policy Attention to Health Promotion. Health Affairs 2002; 21:78-93; and CDC, National Health and Nutrition Examination Surveys (NHANES) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 1960 1970 1980 1990 2000 2010 Obesity Smoking % Adult Population
  • 6. FEE FOR SERVICE DOES NOT RESULT IN VALUE CREATION Low value Limited ROI Minimal quality standard High value HighCost Low Quality Low High
  • 7. EMERGING TECHNOLOGY MUST ASSUME A RISK-BASED ECOSYSTEM Telemedicine Internet/Mobile ApplicationsAdvanced Analytics Remote Monitoring
  • 8. © Copyright 2013. Alvarez & Marsal Holdings, LLC. All rights reserved. ALVAREZ & MARSAL®, ® and A&M® are trademarks of Alvarez & Marsal Holdings, LLC.