Rough Waters Ahead: Navigating Health Reform, the Future of Health Care and Telemedicine's Expanding Role


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Presentation by John F. Duval, MBA, Chief Executive Officer, MCV Hospitals, VCU Health System

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  • Let me be clear up front. We needed health care reform in this country. No question about it. Where I work and throughout the field in Virginia, we have been working hard to improve quality, make care safer, and reduce costs. Really, we’ve been trying to increase value in health care while also increasing community health.And the new health care reform law has promise in these areas. But will promise clash with reality?
  • Lots of reasons for this:Underestimated the level of demand for the proposed new benefits, perhaps due to insufficient data or a lack of experience administering those sort of benefits. On Medicare specifically, estimators could not have been expected to factor in future program expansions. And then, of course, the political process is sometimes brought to bear as well.
  • The Congressional Budget Office, a non-partisan scorekeeper responsible for estimating the cost of legislation, took their best shot at estimating what might happen with health care reform as it passed. Of course, they are bound by the same limitations described in the last two slides. What does that tell us about the odds that their estimates of the largest piece of social legislation in at least a generation, a controversial bill that stoked the flames of political passion throughout the belief spectrum, will prove to be accurate?
  • According to the U.S. Senate Joint Economic Commission, “experts’” history in accurately estimating the cost of health care programs is ridiculously bad. This table shows:The program establishedThe year the estimate was done (basically near program inception)The original estimated annual cost by a certain dateThe actual cost at that date. Medicare Part A is the hospital insurance portion of Medicare, which is the national insurance program for the elderly and disabled.ESRD is the kidney disease portion of Medicare.Medicaid DSH is for providers that treat a disproportionate share of the Medicaid population, to help motivate them to continue treating these patients despite payments that fail to cover the cost of care.As you can see, occasionally we have been off by half, and sometimes by factors of 10 or even 17. We appear to be pretty consistent in our ability to underestimate the cost of new health care programs.
  • Time will demonstrate the outcome of the experts’ cost estimates and health care reform’s impact on the economy and actual care in the US, but history and current economic trends give us plenty of reasons to be concerned.The health care reform law presents numerous other potential disconnects from reality, too. I want to take a few moments to highlight several of them.
  • It reminds me of an old Peanuts cartoon where, upon hearing that in life you win some and lose some, Charlie Brown responded, “That would be nice.”
  • Daunting demographics of an aging patient population and graying workforce created projected provider shortages BEFORE health care reform. Despite some nominal efforts in health care reform to address these problems, 32 million newly-covered patients exacerbate that situation. Adding more patients to an already inadequate workforce may not add up to improved access to care
  • There are not enough physicians now. Geriatricians, who specialize in patients age 75 and up, make an interesting example since baby boomers have just begun turning 65. The Institute of Medicine estimates we will need 36,000 of them by 2030, nearly six times the number we have today. It is a daunting task to educate so many new providers. But lower payments to these specialists lead medical students to select higher paying, procedure-oriented specialties.
  • Although the supply of nurses has fluctuated with changes in the economy (weaker financials forcing some nurses to delay retirement or to reenter the workforce), demand continues to grow. With health care reform’s focus on care coordination, who will guide patients in their needed care?Health care reform significantly expanded coverage. That’s not enough. Simply having an insurance card does not equal access to care. Having providers located somewhat nearby who are available to see you in a timely fashion are critical components of that equation.If we are ever going to come close to meeting patient demand, we need to be thinking about other policy changes to ensure that all providers are able to practice to the top of their training levels to meet patient needs and that payment policies incentivize the right mix of providers.
  • Of course, the supporting cast for patient care goes far beyond doctors and nurses. What role will these other providers play in caring for patients? Will there be enough of them, and will they be able to supplement the traditional physician and nursing roles in other ways? And our needs for behind-the-scenes players, like the people who complete the administrative processes and make sure the equipment and technology are working, will continue to grow as well.
  • Access to providers represents an even broader disconnect between health care reform and reality.
  • Another disconnect includes all of the question marks remaining in this large, complex law.
  • Health care reform is a huge, complex, politically controversial law. And much of the detail wasn’t even fleshed out. Who knows how many times the phrase, “The Secretary shall…” appears in the law? (Slide animation will phase in 1045 after you hit the advance button).Those are areas, of course, where Congress deferred the details to the administrative agency. Add to that the following phrases, which also appear many times: “the Secretary may…;” “the Secretary determines…;” and “the Secretary has the authority to….”With so much administrative latitude and details “To Be Determined,” in many areas it is not clear how health care reform will interact with reality. A recent example, the proposed regulations for one particular new payment and delivery model called Accountable Care Organizations, are more than 400 pages long and highly complex. That’s only one variation on what will be numerous types of payment and delivery reform. Will every proposed implementation piece be as cumbersome? Will such regulation promote or hinder innovation and improvement?
  • There is a significant amount about health care reform that we still don’t know.
  • So we’ve talked about some critical disconnects where the health care reform law missed the reality boat:Cost estimates may be offEntitlement growth could impact the economy in ways that necessitate changesEmployers may behave differently than assumedThere may be inadequate providers to care for patients and reform did not do enough to incentivize more providersAnd there is much we do not know about what implementation will bring.
  • So as I said in the beginning of this presentation – we needed health care reform. And even without the law, the health care field has been working to improve itself.In Virginia, we were already very low cost relative to our sister states, with relatively high quality. And we have been very focused on improving quality and safety of care. I could give you an entire presentation on our efforts to reduce infections one might incur while in the hospital. You’ve seen a great deal of technological advancements that improve efficiency. Greater transparency related to quality of care and efforts to be more transparent on pricing, despite our convoluted health financing system. We are doing much more to coordinate care and keep people healthy. We are encouraging active lifestyles and different provider types are doing more to work together for the good of the patient. But we still have more to do, and key questions revolve around how the mandates, incentives, and barriers included in the health care reform law will interact with the efforts that were already underway and the realities that currently exist.
  • Robin Foster, MD
  • Rough Waters Ahead: Navigating Health Reform, the Future of Health Care and Telemedicine's Expanding Role

    1. 1. Rough Waters Ahead: Navigating Health Reform, the Future of Health Care, and Telemedicine’s Expanding Role John F. Duval Virginia Commonwealth University Health System March 18, 2013
    2. 2. Agenda • Quick overview of the Affordable Care Act • What’s popular, what’s controversial • The promise and key disconnects – Costs – Workforce adequacy – The States: Medicaid Expansion and Insurance Exchanges • Stay tuned – – – – What we don’t know Critical disconnects What is happening in spite of reform Telemedicine’s expanding role 1
    3. 3. What is good about the health care delivery system?
    4. 4. John’s List • • • • • • • • • • Robust medical community, well represented by specialties Strong & dedicated allied health workforce Best education system in the world across all disciplines Cutting edge technologies & pharmaceuticals Strong research basis Social safety net Modern physical plant Improving transparency & accountability Improving quality & safety Major economic engine, frequently largest employer 3
    5. 5. What is not good about the health care delivery system?
    6. 6. John’s List • • • • • • • • • • Current costs and growth rate are economically not sustainable ≈ 50 million uninsured Racial / economic / geographic disparities in access to care Unnecessary variations in amount / quality of care provided and some care is not evidence based Quality and safety accountability improving, but still too opaque Economic incentives between provider and insurer communities not aligned Regulatory structure / licensure laws result in inefficient use of workforce Sickness as opposed to wellness focused High administrative overhead is wasteful Education costs of healthcare workforce are borne by providers and government payors 5
    7. 7. Patient Protection and Affordable Care Act (PPACA): Signed into Law March 23, 2010 • Most comprehensive change in healthcare finance since 1964 Medicare & Medicaid legislation • Reforms the actuarial financing model for health services in the United States • Improves access to care for most citizens and reduces the number of uninsured • Reins in unpopular insurance industry practices • Increases quality and safety of health care • Improves transparency of health and insurance information • Creates Health Insurance Exchanges in each state • Provides option for Medicaid Expansion in each state • And much, much more 6
    8. 8. PPACA: What is Popular? • Extends insurance coverage to 32 million people • Allows parents to cover children up to the age of 26 under their private insurance plans • Eliminates lifetime dollar limits on benefits imposed by most medical plans • Prevents medical plans from denying insurance and benefits based on preexisting conditions • Limits the amount insurers spend on administrative costs versus medical costs (Medical Loss Ratio) • Provides more transparency with publically reported metrics related to quality, safety, and patient outcomes 7
    9. 9. PPACA: What is Controversial? • Mandates individuals have health insurance by 2014 or pay a penalty • Expands Medicaid coverage to residents with incomes up to 133% of the federal poverty level (FPL) – Federal government will cover all costs for this group starting in 2014 and will phase down to 90% by 2020 • Role of the States – Health Insurance Exchanges – Medicaid Expansion • Requires some employers with 50+ employees who do not offer health insurance to pay a penalty • Significantly reduces Medicaid and Medicare Disproportionate Share Hospital (DSH) allocations • New taxes on Individuals, health insurance sector, and manufacturers of pharmaceuticals and medical devices 8
    10. 10. PPACA: What the Law Doesn’t Cover • PPACA does not adequately address important issues facing the health delivery system including: – Impending physician and nursing shortages – Rapidly escalating costs and their cause within our hospitals and health systems – Large variations in medical practice observed across the nation – Financing of graduate medical education / other workforce issues – Foreign national population – Costs of those who opt out 9
    11. 11. Program Costs
    12. 12. Murphy’s Law of health care legislation: “If it can cost more than the highest available official estimate, it probably will.” Senate Joint Economic Commission 12
    13. 13. Will They Be Right? • Coverage expansions cost $938 billion over 10 years • Federal deficit reduced by $124 billion over 10 years Source: Kaiser Family Foundation, 2011 13
    14. 14. A Lesson from History… Program (Estimate Year) Original estimate Actual cost Medicare Part A (1965) $9b/1990 $67b/1990 All of Medicare (1967) $12b/1990 $110b/1990 ESRD program (1972) $100m/1974 $229m/1974 Medicaid DSH (1987) Mcare Home Care (1988) < $1b/1992 $17b/1992 $4b/1993 $10b/1993 Source: Senate Joint Economic Committee, 7/31/09 14
    15. 15. Workforce
    16. 16. Health Care Labor Force • Projected shortages BEFORE health care reform • Reform makes some efforts to begin addressing shortages BUT • The law covers 32 million new patients nationally and approximately 1 million in Virginia • That may not add up… 18
    17. 17. Will There Be Enough Doctors? • Pockets of physician shortages now • 40% of practicing physicians ≥ age 55 • In Virginia, a recent survey showed one-third were ≥ age 55 and 10% ≥ age 65 • How many more will we need? – E.g., currently 6,830 geriatricians nationally • That is only 1 for every 1,900 seniors ≥ age 75 • IOM indicates 36,000 needed by 2030 Sources: Alliance for Health Reform, 2011; Virginia DHP, 2009; Institute of Medicine, 2008 19
    18. 18. What About Other Health Professionals? • 33% of nursing workforce ≥ age 50 – More than half of these plan to retire within 10 years • Will an improved economy reduce supply? • Nursing shortage projected to grow to 260,000 RNs by 2025 Source: Alliance for Health Reform, 2011 20
    19. 19. What other health professionals may be needed? • • • • • • • • • Case Managers/Social Workers Physical/occupational therapists Pharmacists Medical technologists Clinical psychologists Dieticians Rehabilitation counselors Medical coders Health information technicians 21
    20. 20. The States: Medicaid Expansion and Insurance Exchanges
    21. 21. What States are Participating in Medicaid Expansion? 24
    22. 22. State Action Toward Creating Health Insurance Exchanges 25
    23. 23. Policy Issues for State Medicaid Expansion Opt In • Long-term cost • Long-term support (Workforce, etc.) • Long-term benefits of reduced uninsured population Opt Out • • • • Cost of larger uninsured population Federal leverage – What sticks still remain? Lost dollars to state Tax exportation 26
    24. 24. Stay Tuned • • • • What we don’t know Critical disconnects What is happening in spite of reform Telemedicine’s expanding role 27
    25. 25. What About What We Don’t Know?
    26. 26. The Secretary Shall… Source: Congressional Quarterly Weekly, 4/5/10
    27. 27. He Wasn’t Discussing Reform, But… “There are things we know that we know. There are known unknowns. That is to say there are things that we now know we don't know. But there are also unknown unknowns. There are things we do not know we don't know.” D. Rumsfeld 30
    28. 28. Critical Disconnects • • • • • • • • Cost estimates? Economic impact Access to providers Graduate medical / other education Implementation unknowns Payment alignment with delivery goals Tort reform Medicaid/Medicare requirements / provider cuts / Disproportionate Share Hospital payments • Undocumented foreign nationals • Personal responsibility • And more… 31
    29. 29. Ongoing efforts, even before (in spite of) reform • • • • • • • Quality improvement Increased safety Greater efficiency More transparency Coordinated care Healthier populations Integrated providers 32
    30. 30. Where does telemedicine fit in? 33
    31. 31. How can we use telemedicine to address critical disconnects? • Combating the rising cost of care – Reduces emergency transport costs from rural communities to urban areas – Decreases ED admissions and readmissions through remote telemonitoring • Providing high-quality care – Decreases mortality and length of stay with Tele-ICU coverage – Initiates more timely treatment with ED-ED consults via telemedicine • Meeting care demands – Provides rural and underserved communities expanded access to specialists and subspecialists • Overcoming provider shortages – Expands reach of providers who prefer to live in larger cities by giving them remote access to rural patients – Creates additional capacity for traveling physicians by removing barriers of time and distance • Achieving patient satisfaction – Improves patient satisfaction by providing care in a timely fashion – Keeps care local – only the most serious cases should be packed and shipped to tertiary centers Source: Telemedicine: An Essential Technology for Reformed Healthcare (Computer Sciences Corporation, 2011) 34
    32. 32. The Potential of Telemedicine • Emergency Medical Services – TeleECG on ambulances transmitted to cardiologists via smartphones or other devices – Immediate treatment started in transit before patient hits ED • Telesurgery using robot surgical systems – MD Anderson received a $1M contribution from AT&T to seed its venture into remote surgical care for cancer patients – If successful, surgical cases would occur in rural and underserved Texas communities rather than Houston 35
    33. 33. VCUHS Telemedicine Strategic Plan Mission Statement & Vision Mission Statement: VCUHS Telemedicine supports the mission of the Health System by offering confidential, timely and cost-effective medical services to patients; removing distance barriers throughout the Commonwealth of Virginia; providing superior, compassionate and innovative patient care. Vision: Integrate Telemedicine as a part of VCUHS’ strategy to respond to Affordable Care Act mandates and grow its relationships with community and regional providers, hospitals and community health centers. 36
    34. 34. Goals of VCUHS Telemedicine Program • Develop and grow relationships with all correctional facilities in order to provide access and decreases costs • Utilize telemedicine in under-served and rural areas to reduce health care disparities • Leverage the clinical, educational and outreach efforts of our Centers of Excellence to provide specialty expertise across the Commonwealth • Develop innovative models of care using telemedicine that keep care local and provide care for complex patients in their homes 37
    35. 35. VCUHS Telemedicine 18 years experience 30,000 encounters 38
    36. 36. VCUHS Telemedicine: Prior to 2010 Correctional Facilities Served Updated 1/1/2014 39
    37. 37. VCUHS Telemedicine Expands to Meet Needs of Outlying Communities: Post-2010 Correctional: Before 2010 Community Based: Growth since 2010 Pending Contracts/Negotiations Updated 1/1/2014 40
    38. 38. VCUHS Telemedicine provides increased access to specialists in South Hill, Virginia • VCUHS utilizes telemedicine to expand access to patients at Community Memorial Healthcenter: • Clinical Telepsychiatry Services – Inpatient and Long Term Care • ICU Intensivist support • Virginia Tobacco Commission Grant expands Patient Access • Two new wireless telemedicine units and MCU bridge • Multidisciplinary tumor conferences, clinical research and Telemed consults • Massey Cancer Center case conference review and provider collaboration – Southern Virginia 41
    39. 39. VCUHS is working with several outlying community providers to launch ED-ED Pediatric Telemedicine Goal: Improve access and quality by providing telemedicine consults to pediatric patients admitted to Virginia community hospital Emergency Departments Objectives: – Provide physician based pediatric critical care in terms of stabilization and intervention for children in need of transfer to CHoR – Provide visual report for nursing hand-off – Physician based screening for pediatric “puzzlers” (i.e., skin rash, lab finding, etc.) – Assist with ER disposition plan for subspecialty inpatient/outpatient follow-up care – Expand telemedicine collaboration to other specialties and services – Develop a successful ED to ED model for state-wide roll out at other referring hospitals 42
    40. 40. Independence at Home Demonstration • In 2012, Virginia Commonwealth University applied for a consortium site to demonstrate the value of the Independence at Home clinical model – Partnered with MedStar Washington Hospital Center and the University of Pennsylvania – Based on VCU House Calls program that has provided in-home primary care for more than 5,000 home-bound patients over the past 25 years • Tests a payment incentive and service delivery model that utilizes physician and nurse practitioner directed home-based primary care teams • The Consortium will utilize remote diagnostics and telemonitoring as part of the IAH program – – – – – Pulse oximetry I-STAT devices iCard IPhone EKGs EKG harnesses for laptops In-home telemedicine 43
    41. 41. Telemedicine’s Expanding Role • Many challenges are coming our way: – – – – Health reform implementation Provider shortages, especially in rural and under-served areas Aging of the Baby Boomers Addition of previously uninsured population • New strategies/models for providing access and quality care are essential • Telemedicine is a maturing tool that will help stretch our workforce and ensure all patients have access to needed care – Offers opportunity to redeploy and reengineer workforce in ways that were previously not attainable – Holds promise for dramatically improving access and reducing health inequities in rural and economically distressed areas • It’s not a cure-all, but will help us as we figure out how to avoid this…. 44