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Health Care Reform:
Minnesota and the Nation
Julie Sonier
Director, Health Economics Program
Minnesota Department of Healt...
Objectives
How are health reforms in Minnesota
similar to and different from national
efforts?
Describe Minnesota’s rece...
Minnesota starts from a reasonably good
place
Insurance coverage:
– Among the nation’s lowest uninsurance rates
• Strong ...
Minnesota starts from a reasonably good
place
Consistently ranked as one of the
healthiest states
History of collaborati...
The Context for Health Reform Discussions
in Minnesota
In spite of our relatively good starting
point:
– Rising health ca...
Total health care spending in Minnesota up
nearly 70% between 2000 and 2007
$19.2
$21.0
$23.1
$25.8 $26.9
$28.7
$30.7
$32....
Health insurance cost growth far exceeds
growth in incomes and wages
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001...
Historical Perspective: Health Care
Spending Growth is Not a New Problem
Average annual growth in U.S. health care spendin...
U.S. Health Care Spending as a Share of
Gross Domestic Product
5.2%
7.2%
9.1%
12.3%
13.8%
16.2%
18.2%
20.3%
0%
5%
10%
15%
...
Misaligned Incentives: Higher Payment for
Lower Quality
Minnesota Diabetes Care:
Improving but only 1 in 7 receive optimal care
Source: MN Community Measurement Health Care Quali...
Sources of Insurance Coverage in
Minnesota, 2001 and 2007
62.5%*68.0%
5.1%
4.8%
25.2%*21.1%
7.2%*6.1%
0%
10%
20%
30%
40%
5...
Minnesota Uninsurance Rates by Income
15.2%
13.6%
7.2%
3.6%
2.0%
6.1%
20.0%
9.3%
4.8%
7.7%
12.6%
4.1%
2.2%
2.0%
14.1%
12.6...
Minnesota Uninsurance Rates by Age
4.2%
14.5%
10.4%
5.9%
2.8%
6.1%
7.0%
4.6%
13.2%
0.3%
6.6%
19.0%
6.6%
4.1%
7.2%
0.6%
4.9...
Minnesota Uninsurance Rates by Race and
Ethnicity
5.0%
17.0%
6.1%
22.0%
10.1%
31.0%
23.8%
7.8%
18.7%
7.7%
14.0%
6.2% 7.2%
...
Trends in Overweight/Obesity in Minnesota
0%
10%
20%
30%
40%
50%
60%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
200...
Obesity Trends* Among U.S. Adults
BRFSS, 1990
No Data <10% 10%–14%
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
Obesity Trends* Among U.S. Adults
BRFSS, 1994
No Data <10% 10%–14% 15%–19%
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” per...
Obesity Trends* Among U.S. Adults
BRFSS, 1998
No Data <10% 10%–14% 15%–19% ≥20
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4”...
Obesity Trends* Among U.S. Adults
BRFSS, 2004
No Data <10% 10%–14% 15%–19% 20%–24% ≥25%
(*BMI ≥30, or ~ 30 lbs overweight ...
Impact of Rising Obesity on Health Care
Costs
 Increasing prevalence
 Widening gap between health care spending for
obes...
Public and Private Cost Pressures
Cost of private coverage rising faster than
incomes, inflation
– Likely a contributing ...
Approaches to Health Reform
Massachusetts approach: address
coverage first, cost later
Minnesota: expanded coverage too,...
2007-2008 Minnesota Health Reform Plans
Health Care Transformation Task Force
(Governor appointed)
– Charge from legislat...
Overview of Health Reform Bill Key
Elements
Public health improvement
Health care coverage/affordability
Chronic care m...
Public Health Improvement
Invests in community-based efforts to
reduce rates of obesity and tobacco
use
Builds on curren...
Health Care Coverage and Affordability
Expanded eligibility for MinnesotaCare for
adults without children to 250% of the
...
Payment Reform: Why Is It Needed?
Current system: based on individual services
– Few incentives for prevention, care
coor...
Payment Reform: Chronic Care
Management
Promotes use of “health care homes”
to coordinate care for people with
complex/ch...
Other Payment Reforms and Price/Quality
Transparency
Establish a set of common quality measures
and incentive payments fo...
Administrative Simplification
Health care providers must have
electronic health records by 2015, and
they must be interop...
Concluding Thoughts
Expanding coverage:
– Relatively easy to explain why this is important
– Given political will (and mo...
Contact Information:
Julie Sonier
julie.sonier@state.mn.us
(651) 201-3561
Health Reform Website:
www.health.state.mn.us/he...
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Health Care Reform: Minnesota and the Nation

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  • Transcript of "Health Care Reform: Minnesota and the Nation"

    1. 1. Health Care Reform: Minnesota and the Nation Julie Sonier Director, Health Economics Program Minnesota Department of Health September 22, 2009
    2. 2. Objectives How are health reforms in Minnesota similar to and different from national efforts? Describe Minnesota’s recent reform activities and goals
    3. 3. Minnesota starts from a reasonably good place Insurance coverage: – Among the nation’s lowest uninsurance rates • Strong employer base – MinnesotaCare subsidized insurance program (since 1992, pre-SCHIP) • Subsidized coverage for parents and kids to 275% FPG • Single adults and childless couples to 250% FPG (effective July 2009)
    4. 4. Minnesota starts from a reasonably good place Consistently ranked as one of the healthiest states History of collaboration and innovation to improve health care – Largely non-profit environment – Collaboration around best practices, quality measurement
    5. 5. The Context for Health Reform Discussions in Minnesota In spite of our relatively good starting point: – Rising health care costs in the state are unsustainable – Our health care system has misaligned incentives • Large variations in quality – inversely related to cost • We pay for volume, not value – Private insurance has eroded, and the number of uninsured has increased – Unhealthy behaviors have created high and rising costs of preventable disease Similar problems exist at the national level
    6. 6. Total health care spending in Minnesota up nearly 70% between 2000 and 2007 $19.2 $21.0 $23.1 $25.8 $26.9 $28.7 $30.7 $32.5 $0 $5 $10 $15 $20 $25 $30 $35 2000 2001 2002 2003 2004 2005 2006 2007 Billions Source: Minnesota Department of Health, Health Economics Program
    7. 7. Health insurance cost growth far exceeds growth in incomes and wages 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2000 2001 2002 2003 2004 2005 2006 2007 Cumulativepercentchange Health care cost MN Economy Per capita income Inflation Wages Note: Health care cost is MN privately insured spending on health care services per person, and does not include enrollee out of pocket spending for deductibles, copayments/coinsurance, and services not covered by insurance.. Sources: Minnesota Department of Health, Health Economics Program; U.S. Department of Commerce, Bureau of Economic Analysis; U.S. Bureau of Labor Statistics, Minnesota Department of Employment and Economic Development
    8. 8. Historical Perspective: Health Care Spending Growth is Not a New Problem Average annual growth in U.S. health care spending, adjusted for inflation 7.6% 5.6% 6.4% 4.4% 4.7% 5.8% 3.3% 2.3% 3.3%3.2%3.2% 4.2% 0% 1% 2% 3% 4% 5% 6% 7% 8% 1960-1970 1970-1980 1980-1990 1990-2000 2000-2007 1960-2007 Health care GDP
    9. 9. U.S. Health Care Spending as a Share of Gross Domestic Product 5.2% 7.2% 9.1% 12.3% 13.8% 16.2% 18.2% 20.3% 0% 5% 10% 15% 20% 25% 1960 1970 1980 1990 2000 2007 2013* 2018* *Projected. Source: Centers for Medicare and Medicaid Services. Historical spending estimates as of January 2009; projections as of February 2009.
    10. 10. Misaligned Incentives: Higher Payment for Lower Quality
    11. 11. Minnesota Diabetes Care: Improving but only 1 in 7 receive optimal care Source: MN Community Measurement Health Care Quality Report Percent of diabetics receiving optimal diabetes care 4% 6% 10% 14% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2004 2005 2006 2007
    12. 12. Sources of Insurance Coverage in Minnesota, 2001 and 2007 62.5%*68.0% 5.1% 4.8% 25.2%*21.1% 7.2%*6.1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2001 2007 Group Individual Public Uninsured Source: Minnesota Health Access Surveys, 2001 and 2007
    13. 13. Minnesota Uninsurance Rates by Income 15.2% 13.6% 7.2% 3.6% 2.0% 6.1% 20.0% 9.3% 4.8% 7.7% 12.6% 4.1% 2.2% 2.0% 14.1% 12.6% 7.2% 17.9% 0% 5% 10% 15% 20% 25% <100% 101 to 200% 201 to 300% 301 to 400% >400% All incomes Income as % of Federal Poverty Guidelines 2001 2004 2007 Source: Minnesota Health Access Surveys, 2001 to 2007
    14. 14. Minnesota Uninsurance Rates by Age 4.2% 14.5% 10.4% 5.9% 2.8% 6.1% 7.0% 4.6% 13.2% 0.3% 6.6% 19.0% 6.6% 4.1% 7.2% 0.6% 4.9% 7.7% 4.3% 7.3% 19.8% 0.1% 11.5% 4.8% 0% 5% 10% 15% 20% 25% 0 to 5 6 to 17 18 to 24 25 to 34 35 to 54 55 to 64 65+ All ages 2001 2004 2007 Source: Minnesota Health Access Surveys, 2001 to 2007
    15. 15. Minnesota Uninsurance Rates by Race and Ethnicity 5.0% 17.0% 6.1% 22.0% 10.1% 31.0% 23.8% 7.8% 18.7% 7.7% 14.0% 6.2% 7.2% 19.0% 6.3% 16.0% 14.7% 6.4% 0% 5% 10% 15% 20% 25% 30% 35% White Black American Indian Asian Hispanic/Latino All 2001 2004 2007 Source: Minnesota Health Access Surveys, 2001 to 2007
    16. 16. Trends in Overweight/Obesity in Minnesota 0% 10% 20% 30% 40% 50% 60% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Normal Weight Overweight Obese Source: Behavioral Risk Factor Surveillance Survey
    17. 17. Obesity Trends* Among U.S. Adults BRFSS, 1990 No Data <10% 10%–14% (*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
    18. 18. Obesity Trends* Among U.S. Adults BRFSS, 1994 No Data <10% 10%–14% 15%–19% (*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
    19. 19. Obesity Trends* Among U.S. Adults BRFSS, 1998 No Data <10% 10%–14% 15%–19% ≥20 (*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
    20. 20. Obesity Trends* Among U.S. Adults BRFSS, 2004 No Data <10% 10%–14% 15%–19% 20%–24% ≥25% (*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
    21. 21. Impact of Rising Obesity on Health Care Costs  Increasing prevalence  Widening gap between health care spending for obese vs normal weight population  One national study found that obesity-related health spending accounted for 27% of inflation-adjusted per capita health spending increases from 1987 to 2001 – 41% of the rise in heart disease spending – 38% of the rise in diabetes-related spending Source: Thorpe et al., “The Impact of Obesity on Rising Medical Spending,” Health Affairs, October 2004.
    22. 22. Public and Private Cost Pressures Cost of private coverage rising faster than incomes, inflation – Likely a contributing factor to recent erosion in private insurance coverage Public programs face dual sources of cost pressure: – Rising enrollment – Rising cost per person So, in addition to cost and access problems, we have a sustainability problem Which problem to address first?
    23. 23. Approaches to Health Reform Massachusetts approach: address coverage first, cost later Minnesota: expanded coverage too, but greater focus on reforms that improve quality/cost to ensure sustainability National debate: mostly focusing on coverage
    24. 24. 2007-2008 Minnesota Health Reform Plans Health Care Transformation Task Force (Governor appointed) – Charge from legislature included reducing health care expenditures by 20% Health Care Access Commission (Legislative) Both reports included recommendations for comprehensive reform, with much common ground
    25. 25. Overview of Health Reform Bill Key Elements Public health improvement Health care coverage/affordability Chronic care management Payment reform and price/quality transparency Administrative efficiency Health care cost measurement
    26. 26. Public Health Improvement Invests in community-based efforts to reduce rates of obesity and tobacco use Builds on current CDC-funded pilots Total of $47 million in grants to communities
    27. 27. Health Care Coverage and Affordability Expanded eligibility for MinnesotaCare for adults without children to 250% of the poverty level – Outreach efforts, streamlined enrollment Tax credits for uninsured to purchase private coverage Employers with more than 10 employees required to establish “section 125” plans if they don’t offer health insurance coverage to employees
    28. 28. Payment Reform: Why Is It Needed? Current system: based on individual services – Few incentives for prevention, care coordination/management, quality improvement, innovation, or value – Few consumer incentives to choose provider based on quality or cost – Limited information on price and quality of care – Provider incentives to invest in profitable services and to avoid unprofitable services
    29. 29. Payment Reform: Chronic Care Management Promotes use of “health care homes” to coordinate care for people with complex/chronic conditions MDH and DHS to develop standards of certification for health care homes Care coordination payments to health care homes – Public and private purchasers, beginning July 2010
    30. 30. Other Payment Reforms and Price/Quality Transparency Establish a set of common quality measures and incentive payments for quality “Peer grouping” of providers on relative cost, quality, and resource use – Public and private purchasers will use this tool to strengthen member incentives to use high-quality, low-cost providers Promotes transparency and innovation by establishing bundled pricing for 7 commonly defined “baskets of care”
    31. 31. Administrative Simplification Health care providers must have electronic health records by 2015, and they must be interoperable Electronic prescribing by 2011 Study of ways to reducing claims adjudication costs for health plans and providers
    32. 32. Concluding Thoughts Expanding coverage: – Relatively easy to explain why this is important – Given political will (and money), path is fairly straightforward Quality/cost/value: – Much more complex – difficult to engage policymakers and the public – No magic answers to the problem, but some promising ideas All of these issues must be addressed to make the system more equitable and sustainable
    33. 33. Contact Information: Julie Sonier julie.sonier@state.mn.us (651) 201-3561 Health Reform Website: www.health.state.mn.us/healthreform
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