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+ Reform,
Health
System Transformation
And the

Implications
for Health, Hospitals and
Health Care Systems

By Susan Dentz...
+

This Presentation at a Glance


The United States face a number of health and health care challenges –
one reason for ...
+ First, a story….
+ Once upon a time, there was a
―country‖…
With an economy the size of France: $2.8
trillion…
With tens of millions of unh...
What would you do with
this country?


Send in the Marines?



Send in the International
Monetary Fund?



Send in Amne...
+ We know this country’s identity…

The
United
States
of
Health Care
Ripe for Change!
What The US Did In 2010…

…Enact the Affordable Care Act
+ A Heavy Lift?
+And about that country…
Our $2.8 trillion health system is
unequivocally a major economic engine…
But the system is prope...
The Triple Aim




Donald Berwick, MD
Former Administrator
Centers for Medicare
and Medicaid Services

Better health car...
+ Better Health
Fans line up outside Paula Deen’s The Lady and Sons restaurant,
Savannah, Georgia, June 2013
The State Of US Population Health
Key Drivers of Health Status

Obesity

Physical Inactivity

66% adults obese
or overweig...
+ Geographic Health Differences:
Your zip code matters more than your
genetic code
+ Health Factors and Outcomes


Health Factors:


Low birth weight, tobacco use, adult obesity, physical
inactivity, alc...
+ Missouri: Health Factors by County
+ Missouri: Health Outcomes
(Premature death; poor health)
+ Comparison, factors vs. outcomes
+ Institute of Medicine Study, January 2013


―For many years, Americans have been dying at younger
ages than people in a...
Difference: almost double
Difference: almost double
+ Rising Mortality, Declining Life Expectancy
For Many


Trends in male and female mortality rates from 1992–96 to
2002–0...
Change In Male Mortality Rates From 1992–96 To 2002–06 In US Counties.

Kindig D A , and Cheng E R Health Aff 2013;32:451-...
Change In Female Mortality Rates From 1992–96 To 2002–06 In US Counties.

Kindig D A , and Cheng E R Health Aff 2013;32:45...
+ What are we doing about these
challenges?


Good news: some efforts to tackle child obesity, for
example, seem to be wo...
Source: Centers for Disease Control and Prevention
Source: Centers for Disease Control and Prevention
+


Hospitals’ New Roles in Population Health
New requirements under ACA on tax-exempt hospitals and
health systems



T...
+

Example of Innovation
In Population Health


Austen BioInnovation
Institute, an ―accountable

care community‖ in Akron...
+ ―Hot-spotting:‖ The Camden Coalition of
Healthcare Providers
+ ―Hot-spotting‖ unhealthy communities


King County Public Health Director
David Fleming



―The solutions to health in...
+ The fundamental drivers of health


―Improving health outcomes across the United States will
require increased public a...
Social determinants of health
+


Income and Income Distribution



Education



Employment or unemployment; job securi...
+ The Social Determinants

―Ten Tips For Better Health‖

 1. Don’t be poor. If you can, stop. If you can’t, try not to be...
+ Issues for hospitals and health systems


How do you broaden your focus beyond your ―population of
patients‖ (panel) to...
+ One Model – for critical access hospitals,
e.g.?


Maryland’s Total Patient Revenue Program – population
based rate met...
+

Better Health Care
+ Bringing More Americans Under The Health
Insurance Security Blanket
Health Insurance Coverage in
the United States, 2010, and Changes Under
Affordable Care Act
Uninsured
16%

EmployerSponsor...
+ Marketplaces and Medicaid:
Across the States
+ Medicaid Expansion – Or Not
Republican Gov.
bypassed legislature
to embrace expansion

Premium assistance
model; Arkansa...
+ Who Will Be Left Out

Source:
New York Times,
Oct. 2, 2013
+ Who’s Hurt in States Not Moving Ahead
With Expansion?

Source:
Kaiser
Commission
On Medicaid
And The
Uninsured
The Federal Government Will Pay for the
Large Majority of the Medicaid Expansion

Federal
95.4%
$443.5 Billion

Total: $46...
+ Impact on health: Oregon Medicaid Study


After one year of Medicaid coverage, previously
uninsured adults in Oregon we...
+ Quality of Care and Care
Coordination Issues
+ Care Coordination/Avoidable hospital use


Advanced Illness/End of Life



Half of older Americans (51%) visited emerg...
+ High-Value Health Care Collaborative


Cleveland Clinic, Dartmouth-Hitchcock Medical Center, Denver
Health, Intermounta...
+ Variability, even among ―the best‖


Pooled data to examine differences in primary total knee
replacements (total US co...
+ Comparison among institutions
Metric

A

B

C

D

E

Total

Mean
LOS

3.6

4.2

3.9

3.3

3.2

3.2

Median
LOS

3

4

3
...
Care Moving Out of Hospitals:
―Hospital At Home‖


Presbyterian Health Services,
New Mexico, in partnership with
Johns Ho...
Telehealth/telemedicine


Project ECHO (Extension for
Community Healthcare Outcomes) in
New Mexico



Via technology, sp...
+ Virtual Visits: Verizon, Cisco, Others
+ Waste in Health Care:
The Savings Opportunity


Estimated to equal 21% to 34% of all US health spending
(estimated $558...
+

Focus on ―Lean‖


Example in Washington: Virginia Mason
+ Reengineering Primary Care at
Virginia Mason via Lean


Lean concept of jidoka - having the instructions and knowledge ...
+ Patient Engagement and Activation


Engagement = actions that people take for their health or health
care



Activatio...
+ Patient Activation Measure


Gauges the knowledge, skills and confidence essential to managing

one’s own health and he...
+ Patient Activation Measure


Patient activation and the ―3 M’s‖



It can be measured



It can be moved – patients’ ...
+

Lower Costs
―Health care costs are the pounding headache to which all
of us in medicine will awaken each day for the rest of our
lives...
Annual Growth Rates, Gross Domestic Product (GDP) And National Health Expenditures
(NHE), Calendar Years 1990–2022.

Cost
...
It’s the Prices, Stupid!
International Price Variation
Service
(US$)

Cost*
(US$; 25 and 95%tile)
Canada
US (4,001; 45,902...
Safeway Reference Pricing For
Colonoscopy (Limit = $1,250)
Range of Prices Paid by Safeway for Colonoscopy in Three
Market...
+ How we (mostly) pay for health care


Paying by ―piecework‖ –
known as ―fee for service‖
for outcomes



Paying for th...
+ Payment Innovation:
Improving Value And Affordability
Old Model

New Model

Reward unit cost

Reward health
outcomes and...
+ Performance-based Innovations under
CMS


Patient Centered Medical homes: e.g., all-payer national
pilot; federally qua...
+ Throwing It Up Against The Wall
To See What Sticks?
+ CMMI Innovations in Missouri
+ Medicare ACO’s
+ ACOs in Private Sector – e.g., Blue Shield of
California


Launched pilot ACO with Dignity Health (formerly Catholic
He...
+ Medical homes in Private Sector


Alabama Health Improvement Initiative Medical Home Pilot –
Blue Cross Blue Shield of ...
+ Performance-based Innovations under
CMS


Programs to reduce unnecessary readmissions



Partnership for Patients, Com...
+ Reducing Avoidable 30-Day Readmissions
+ Hospital inpatient utilization down
and projected to decline further

40 percent difference

Sources: Milliman, Kaiser S...
+

State Innovation Models under
Center for Medicare and Medicaid
Innovation

Examples:
• Arkansas: majority of population...
Overall Trends
+


Care moving out of hospital to ambulatory settings and
homes; inpatient utilization falling



Primar...
Hospital of the Future?
+
Narayana Hrudayalaya (NH)


Narayana Hrudayalaya – ―God’s
Compassionate Care‖ –
Bangalore, Indi...
Some Conclusions
+ About Health Reform
―I don’t believe there’s any problem in
this country, no matter how tough it
is, that Americans, when they roll up

their ...
―The Americans always do the right thing…after

they’ve exhausted all the other alternatives.‖

Sir Winston Churchill
―There has never been a better time to be
an innovator in health care.‖
--Don Berwick, former administrator, CMS
Military ...
―Those who say it can’t be done are usually interrupted
by others doing it.‖
--the late James Baldwin, American novelist, ...
“We always overestimate the change that will occur

in the next two years and underestimate the change
that will occur in ...
The Final Verdict on Building an American Health and
Health Care System?

―Somebody has to do something, and it’s just inc...
+

The End
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Health Reform Keynote Address

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Susan Dentzer: Analyst on Health, PBS NewsHour; Senior Policy Adviser, Robert Wood Johnson Foundation
MO Health Policy Summit 2013

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Transcript of "Health Reform Keynote Address"

  1. 1. + Reform, Health System Transformation And the Implications for Health, Hospitals and Health Care Systems By Susan Dentzer Senior Policy Adviser, Robert Wood Johnson Foundation University of Missouri Health Policy Summit October 25, 2013
  2. 2. + This Presentation at a Glance  The United States face a number of health and health care challenges – one reason for the Affordable Care Act  System transformation is being accelerated by the law but will extend far beyond it  Pursuit of the Triple Aim: Challenges in health, health care and health care costs  Key aspects of reform and transformation and the implications for hospitals and health systems   Coverage expansion, influx of chronically ill patients, and impact of not expanding Medicaid  Innovations in health care delivery, payment and technology   Focus on population and community health Patient activation and engagement Some conclusions
  3. 3. + First, a story….
  4. 4. + Once upon a time, there was a ―country‖… With an economy the size of France: $2.8 trillion… With tens of millions of unhealthy people – and life expectancy below that of 28 of the world’s richest countries… Where every day, a group of the natives ―experimented‖ on others by subjecting them to ―medical care,‖ about half of which has no evidence suggesting that it works… Where adverse events that occurred in the course of this ―care‖ were among the top ten causes of death annually… Where tens of millions didn’t get care they needed and tens of thousands died each year as a result… And partly because of the cost of the flawed care it does provide, the country was possibly going broke!
  5. 5. What would you do with this country?  Send in the Marines?  Send in the International Monetary Fund?  Send in Amnesty International?  Other? +
  6. 6. + We know this country’s identity… The United States of Health Care Ripe for Change!
  7. 7. What The US Did In 2010… …Enact the Affordable Care Act
  8. 8. + A Heavy Lift?
  9. 9. +And about that country… Our $2.8 trillion health system is unequivocally a major economic engine… But the system is propelled by the volume of services, not sufficiently by value The degree to which cost exceeds value is an opportunity cost – i.e., we might better spend the money some other way – for example, on education Expenditures on care not reflected in superior health outcomes For more fundamental reasons, Americans may be at a health disadvantage relative to others How much will more ―health care‖ solve this?
  10. 10. The Triple Aim   Donald Berwick, MD Former Administrator Centers for Medicare and Medicaid Services Better health care  Lower cost  + Better health Core principle now at heart of major U.S. payment and delivery system reform efforts
  11. 11. + Better Health
  12. 12. Fans line up outside Paula Deen’s The Lady and Sons restaurant, Savannah, Georgia, June 2013
  13. 13. The State Of US Population Health Key Drivers of Health Status Obesity Physical Inactivity 66% adults obese or overweight Contribution to Premature Death Genetic Predisposition Social Circumstances 28% inactive 15% 30% Smoking 23% smokers Environmental 5% Exposure 10% Stress 36% high stress Aging Health Care 22% > 55 years old 40% Behavioral Patterns Source: Schroeder S. N Engl J Med 2007;357:1221-1228
  14. 14. + Geographic Health Differences: Your zip code matters more than your genetic code
  15. 15. + Health Factors and Outcomes  Health Factors:  Low birth weight, tobacco use, adult obesity, physical inactivity, alcohol use, sexually transmitted infections, teen birth rate  Rates of uninsured, certain clinical care measures (e.g. preventable hospital stays, screening)  Social and economic factors such as high school graduation rates, employment and income, violent crime rate, fast food restaurants  Environmental quality (safe drinking water), access to recreational facilities  Health Outcomes: premature death; poor or fair health; poor mental health days
  16. 16. + Missouri: Health Factors by County
  17. 17. + Missouri: Health Outcomes (Premature death; poor health)
  18. 18. + Comparison, factors vs. outcomes
  19. 19. + Institute of Medicine Study, January 2013  ―For many years, Americans have been dying at younger ages than people in almost all other high-income countries.‖  ―Not only are their lives shorter, but Americans also have a longstanding pattern of poorer health that is strikingly consistent and pervasive over the life course – at birth, during childhood and adolescence, for young and middle-aged adults, and for older adults.‖
  20. 20. Difference: almost double
  21. 21. Difference: almost double
  22. 22. + Rising Mortality, Declining Life Expectancy For Many  Trends in male and female mortality rates from 1992–96 to 2002–06 in 3,140 US counties.  Female mortality rates increased in 42.8 percent of counties, while male mortality rates increased in only 3.4 percent.  Factors associated with areas that had lower mortality: higher education levels; low smoking rates  Source: DA Kindig, ER Cheng,‖Even As Mortality Fell In Most US Counties, Female Mortality Nonetheless Rose In 42.8 Percent Of Counties From 1992 To 2006.‖ Health Affairs, March 2013
  23. 23. Change In Male Mortality Rates From 1992–96 To 2002–06 In US Counties. Kindig D A , and Cheng E R Health Aff 2013;32:451-458 ©2013 by Project HOPE - The People-to-People Health Foundation, Inc.
  24. 24. Change In Female Mortality Rates From 1992–96 To 2002–06 In US Counties. Kindig D A , and Cheng E R Health Aff 2013;32:451-458 ©2013 by Project HOPE - The People-to-People Health Foundation, Inc.
  25. 25. + What are we doing about these challenges?  Good news: some efforts to tackle child obesity, for example, seem to be working  Centers for Disease Control and Prevention data show child obesity falling in 19 states, including Missouri
  26. 26. Source: Centers for Disease Control and Prevention
  27. 27. Source: Centers for Disease Control and Prevention
  28. 28. +  Hospitals’ New Roles in Population Health New requirements under ACA on tax-exempt hospitals and health systems  To retain 501(c)(3) [tax exempt] status, organization must conduct a ―community health needs assessment‖ at least every three years  Must adopt implementation strategy to meet the community health needs identified through the assessment  Penalty: $50,000 excise tax for each year that a tax-exempt hospital subject to these provisions fails to satisfy requirement
  29. 29. + Example of Innovation In Population Health  Austen BioInnovation Institute, an ―accountable care community‖ in Akron, OH  Nonprofit entity that  Conducted community-wide combines activities among assessment of health and health care three independent health assets and gaps care systems and two universities  Programs launched include costeffective diabetes prevention program; ½ of participants lost  Source: Population Health Implications of weight and cost of diabetes care fell the Affordable Care Act: Workshop Summary. Institute of Medicine, 2013. by 10 percent
  30. 30. + ―Hot-spotting:‖ The Camden Coalition of Healthcare Providers
  31. 31. + ―Hot-spotting‖ unhealthy communities  King County Public Health Director David Fleming  ―The solutions to health in this country lie beyond the walls of the clinic and in our communities.‖  Echoing Jeffrey Brenner and the Camden Coalition  What if hospitals and health systems ―hot spotted‖ – using similar techniques to identify the nation’s poorest and least healthy communities—and then teamed up with public health and local community development organizations to set them on a path to better health?
  32. 32. + The fundamental drivers of health  ―Improving health outcomes across the United States will require increased public and private investment in the social and environmental determinants of health—beyond an exclusive focus on access to care or individual health behavior.‖  Source: DA Kindig, ER Cheng,‖Even As Mortality Fell In Most US Counties, Female Mortality Nonetheless Rose In 42.8 Percent Of Counties From 1992 To 2006.‖ Health Affairs, March 2013
  33. 33. Social determinants of health +  Income and Income Distribution  Education  Employment or unemployment; job security; working conditions  Early Childhood Development  Food Insecurity  Housing  Social Exclusion; Social Safety Network  Access to Health Services; Disability  Gender, Race, Aboriginal (Native American/Indian) Status
  34. 34. + The Social Determinants ―Ten Tips For Better Health‖  1. Don’t be poor. If you can, stop. If you can’t, try not to be poor for long.  2. Don’t have poor parents.  3. Own a car.  4. Don’t work in a stressful, low-paid manual job.  5. Don’t live in damp, low-quality housing.  6. Be able to afford to go on a vacation and sunbathe.  7. Practice not losing your job and don’t become unemployed.  8. Make sure you have access to benefits, particularly if you are unemployed, retired, or sick or disabled.  9. Don’t live next to a busy major road or near a polluting factory.  10. Learn how to fill in the complex housing benefit/shelter application forms before you become homeless and destitute.  Source: Centre for Social Justice, Canada; Social Determinants Across the Lifespan, <http://www.socialjustice.org/subsites/conference/resources.
  35. 35. + Issues for hospitals and health systems  How do you broaden your focus beyond your ―population of patients‖ (panel) to the overall health of the community?  Which among these social and economic determinants should you focus on, how, and with whom?  How do you engage with the public health system?  How do you fund these activities or make the case for more public and private funding of them?  Is there a particular role in transforming community health for ―repurposed‖ critical access hospitals?
  36. 36. + One Model – for critical access hospitals, e.g.?  Maryland’s Total Patient Revenue Program – population based rate method  10 rural hospitals in state operating under guaranteed global budget  If revenue falls below budget hospitals can increase prices; if exceeds budget they must return surplus  Western Maryland Hospital, e.g.: FY 2013 operating profit of $15 million on $370 million in revenues; provides $ for population health focus, care transitions programs, etc.  Admissions down 15 percent; 30 day readmission rate now 9 percent
  37. 37. + Better Health Care
  38. 38. + Bringing More Americans Under The Health Insurance Security Blanket
  39. 39. Health Insurance Coverage in the United States, 2010, and Changes Under Affordable Care Act Uninsured 16% EmployerSponsored Insurance 49% Total = 305.2 million Approximately 20-30 million will remain Medicaid uninsured 17% Medicare 12% Private NonGroup 5% This group will also grow and purchase coverage through insurance exchanges * Medicaid also includes other public programs: CHIP, other state programs, military-related coverage. Numbers may not add to 100 due to rounding. SOURCE: KCMU/Urban Institute analysis of 2011 ASEC Supplement to the CPS.
  40. 40. + Marketplaces and Medicaid: Across the States
  41. 41. + Medicaid Expansion – Or Not Republican Gov. bypassed legislature to embrace expansion Premium assistance model; Arkansas approved by CMS; PA considering
  42. 42. + Who Will Be Left Out Source: New York Times, Oct. 2, 2013
  43. 43. + Who’s Hurt in States Not Moving Ahead With Expansion? Source: Kaiser Commission On Medicaid And The Uninsured
  44. 44. The Federal Government Will Pay for the Large Majority of the Medicaid Expansion Federal 95.4% $443.5 Billion Total: $464.7 billion over 2014-2019 Note: Adults less than 133% FPL under standard participation scenario. SOURCE: Analysis for KCMU by The Urban Institute, May 2010 State: 4.5% $21.1 Billion
  45. 45. + Impact on health: Oregon Medicaid Study  After one year of Medicaid coverage, previously uninsured adults in Oregon were 10 percent less likely to report having depression  25 percent more likely to report their health as good, very good, or excellent.  Also experienced lower financial strain because of lower out-of-pocket expenditures, lower debt on medical bills, and lower rates of refused medical treatment because of medical debt  Source: Sommers BD, Baicker K, Epstein AM,. N Engl J Med 2012;367:1025-34.
  46. 46. + Quality of Care and Care Coordination Issues
  47. 47. + Care Coordination/Avoidable hospital use  Advanced Illness/End of Life  Half of older Americans (51%) visited emergency department in last month of life; 77% of those seen in ED admitted to hospital  68% of admitted died in hospital  Americans’ broad preference is to die at home  Emergency department use in last month of life rare when enrolled in hospice one month before death  Source: Alexander K. Smith et al, ―Half of Older Americans Seen In Emergency Department In Last Month of Life; Most Admitted To Hospital, And Many Die There,‖ Health Affairs, June 2012
  48. 48. + High-Value Health Care Collaborative  Cleveland Clinic, Dartmouth-Hitchcock Medical Center, Denver Health, Intermountain, Mayo, and nearly 20 others  Identified nine high volume, high cost, high variation conditions to focus on:          total knee replacement diabetes congestive heart failure depression spine surgery labor and delivery asthma hip surgery bariatric surgery
  49. 49. + Variability, even among ―the best‖  Pooled data to examine differences in primary total knee replacements (total US costs in 2008 = $9 billion)  Found substantial variations in such metrics as hospital lengths-of-stay; longer operating times associated with higher complication rates  Used findings to alter care, including more coordinated management for complex patients  Source: Ivan M. Tomek et al, Health Affairs, June 2012 vol. 31 no. 6 1329 ff
  50. 50. + Comparison among institutions Metric A B C D E Total Mean LOS 3.6 4.2 3.9 3.3 3.2 3.2 Median LOS 3 4 3 3 3 3 By MD # of procedures (annual) 0-99 3.6 3.8 4.4 3.5 3.3 3.5 200+ -- -- 3.4 3.0 2.8 2.9 Surgery on Mon. 3.6 4.2 3.7 3.2 2.9 3.1 On Fri. 3.6 -- 4.3 3.4 3.0 3.3 31.2% difference, low to high 16% difference
  51. 51. Care Moving Out of Hospitals: ―Hospital At Home‖  Presbyterian Health Services, New Mexico, in partnership with Johns Hopkins  Identified patients who could be ―hospitalized‖ at home and deployed physicians and nurses to care for them  All results equal or better than in hospital  Variable costs per stay are $1000-$2000 lower = 19%  Patient satisfaction mean score = 90.7%  Source: Lesley Cryer et al, ―Cost For Hospital At Home PtientsWere 19 Percent Lower, With Equal Johnny Baker, then 49, COPD patient in ―Hospital At Home‖ program
  52. 52. Telehealth/telemedicine  Project ECHO (Extension for Community Healthcare Outcomes) in New Mexico  Via technology, specialists at University of New Mexico partner with primary care clinicians in underserved areas  Deliver complex specialty care to patients with hepatitis C, asthma, diabetes, pediatric obesity, chronic pain, substance use disorders, rheumatoid arthritis, cardiovascular conditions, and mental illness  Source: ―Partnering Urban Academic Medical Centers And Rural Primary Care Clinicians To Provide Complex Chronic Disease Care‖. Sanjeev Arora et al, Health Affairs, June 2011  18 states now have laws mandating payment for covered services using broadband telehealth technology
  53. 53. + Virtual Visits: Verizon, Cisco, Others
  54. 54. + Waste in Health Care: The Savings Opportunity  Estimated to equal 21% to 34% of all US health spending (estimated $558 billion to $910 billion annually) Source: Donald M. Berwick and Andrew D. Hackbarth, ―Reducing Waste in Health Care Spending,‖ , Journal of the American Medical Association, April 11, 2012.
  55. 55. + Focus on ―Lean‖  Example in Washington: Virginia Mason
  56. 56. + Reengineering Primary Care at Virginia Mason via Lean  Lean concept of jidoka - having the instructions and knowledge necessary to do one’s job right the first time  Result: new ―standard work‖ in appointment scheduling  When a patient requests appointment, patient services representative checks the computer to identify preventive tests patient is due for and schedules them right at the point of service  Lean concept of having each team member doing the right work for their skill level, also known as level loading or heijunka  Some tasks that physicians handled reassigned to others  Medical assistants practice to the top of certification, going through the problem list with the patient, reviewing medication lists, verifying allergies, reviewing test results and administering vaccines.  Source: http://www.virginiamasoninstitute.org/workfiles/Virginia-Mason-Institute-Case-StudyMistake-Proofing-Primary-Care.pdf
  57. 57. + Patient Engagement and Activation  Engagement = actions that people take for their health or health care  Activation = understanding own role in care process and having knowledge, skills and confidence to take it on  Increasingly understood as a distinguishable factor in achieving Triple Aim (better health, better care, lower costs)
  58. 58. + Patient Activation Measure  Gauges the knowledge, skills and confidence essential to managing one’s own health and healthcare  13-item questionnaire; patients rate selves on a scale  Statements include  “When all is said and done, I am the person who is responsible for managing my health condition.  “I am confident that I can take actions that will help prevent or minimize some symptoms or problems associated with my health condition.  “I know what each of my prescribed medications do.”  Measure segments consumers into one of four progressively higher activation levels  Source: Judith Hibbard et al, Health Affairs, Feb. 2013
  59. 59. + Patient Activation Measure  Patient activation and the ―3 M’s‖  It can be measured  It can be moved – patients’ low scores can be improved via engagement over time  It matters – the degree to which patients are activated predicts their factors such as their success in medication adherence, use of emergency department, and their likelihood of having avoidable readmissions
  60. 60. + Lower Costs
  61. 61. ―Health care costs are the pounding headache to which all of us in medicine will awaken each day for the rest of our lives.‖ --Thomas Lee, former network president, Partners Healthcare System
  62. 62. Annual Growth Rates, Gross Domestic Product (GDP) And National Health Expenditures (NHE), Calendar Years 1990–2022. Cost curve still not bent enough Cuckler G A et al. Health Aff doi:10.1377/hlthaff.2013.0721 ©2013 by Project HOPE - The People-to-People Health Foundation, Inc.
  63. 63. It’s the Prices, Stupid! International Price Variation Service (US$) Cost* (US$; 25 and 95%tile) Canada US (4,001; 45,902) Medical Tourism** (US$) Cost/Hosp. Stay 7,707 14,427 Angioplasty 12,581 New Zealand 29,055 US (18,266 – 60,448) US CA Bypass 67,583 Normal Delivery 1,336 2,997 France US (2,380 – 4,848) India Hip R. 4,308 MRI Imaging 874 1,009 Switzerland US (509-2590) US Hip R. *International Federation Health Plans 2010 Report India CA Bypass 4,525 38,017
  64. 64. Safeway Reference Pricing For Colonoscopy (Limit = $1,250) Range of Prices Paid by Safeway for Colonoscopy in Three Markets, plus Reference Price Limit Established in 2010 $6,000 $5,984 $5,000 $4,571 $4,000 $3,508 $3,000 MIN MAX $2,000 $848 $1,000 $1,386 $443 $Houston Source: Safeway Health San Francisco Portland, OR Safeway reference price set at $1,250
  65. 65. + How we (mostly) pay for health care  Paying by ―piecework‖ – known as ―fee for service‖ for outcomes  Paying for the ―package‖ – known as bundled payment, capitation etc. – and tying payment to quality outcomes
  66. 66. + Payment Innovation: Improving Value And Affordability Old Model New Model Reward unit cost Reward health outcomes and population health Inadequate focus on care efficiency and patient centeredness Lower cost while improving patient experience Payment for unproven services; limited alignment with quality Improve quality, safety and evidence
  67. 67. + Performance-based Innovations under CMS  Patient Centered Medical homes: e.g., all-payer national pilot; federally qualified health centers; ½ of states in Medicaid  Comprehensive Primary Care initiative  Accountable Care Organizations  State Demonstration Projects for Dual Eligibles  State Innovation Model Grants  Partnership for Patients/program to reduce avoidable readmissions
  68. 68. + Throwing It Up Against The Wall To See What Sticks?
  69. 69. + CMMI Innovations in Missouri
  70. 70. + Medicare ACO’s
  71. 71. + ACOs in Private Sector – e.g., Blue Shield of California  Launched pilot ACO with Dignity Health (formerly Catholic Health Care West) and Hill Physicians in January 2010 for 41,000 CalPERS employees and dependents  Global budget; shared upside and downside risk  Tactics included eliminating unnecessary care, such as excessive bariatric surgery; coordinating processes such as discharge planning; reducing variation in practices and resources; reducing pharmacy costs  2010-11 combined results: $37 million in savings to CalPERS; compounded annual growth rate for per member per month costs was ~ 3% vs. ~7% for everyone else
  72. 72. + Medical homes in Private Sector  Alabama Health Improvement Initiative Medical Home Pilot – Blue Cross Blue Shield of Alabama  Health plans in Maryland, Pennsylvania, Ohio, elsewhere reporting savings from medical homes  E.g., in Maryland, CareFirst reported 2.7% savings in health costs for its 1 million members in 2012  Group Health-University of Washington: TEAMcare program for people with depression and either diabetes, heart disease or both, saved as much as $594 per patient in outpatient costs after expenses of program
  73. 73. + Performance-based Innovations under CMS  Programs to reduce unnecessary readmissions  Partnership for Patients, Community-Based Care Transitions program (organizations paid an all-inclusive rate per eligible discharge based on cost of care transition services)  Medicare penalties: hospitals above certain ratios for 30-day readmissions in 3 conditions (heart attack, heart failure, pneumonia) begin to be penalized under Medicare in October 2012  Readmissions rates in Medicare dropped 1 percentage from an average of 19 percent during 2008-2011 to 17.8 percent in 2012, according to CMS  Declines largest in hospitals participating in Partnership for Patients.  Source: Economic Report of the President, 2013
  74. 74. + Reducing Avoidable 30-Day Readmissions
  75. 75. + Hospital inpatient utilization down and projected to decline further 40 percent difference Sources: Milliman, Kaiser State Health Facts, American Hospital Association
  76. 76. + State Innovation Models under Center for Medicare and Medicaid Innovation Examples: • Arkansas: majority of population in patient-centered medical homes • Minnesota: majority of population in ACO’s, including long-term services and supports • Oregon: ―Coordinated Care Organizations‖
  77. 77. Overall Trends +  Care moving out of hospital to ambulatory settings and homes; inpatient utilization falling  Primary care fees up; hospital reimbursement down  Emphasis on team-based care with ―task-shifting‖  Primary care physician panels becoming larger; 1 physician in a team handling10,000 patients considered goal in many systems  Population health approach dramatically increases emphasis on prevention and patient engagement
  78. 78. Hospital of the Future? + Narayana Hrudayalaya (NH)  Narayana Hrudayalaya – ―God’s Compassionate Care‖ – Bangalore, India-based health and hospital system/network  5,000 beds in India now; aims for 30,000 in next five years  Average cost of heart surgery is $2,000 and is aiming for $800  ―Our vision: Affordable Quality Healthcare for the Masses Worldwide‖  Partnering with Ascension Health Alliance on $2 billion tertiary care hospital in Cayman Islands Above: Chairman, Dr. Devi Shetty; NH hospital in Bangalore
  79. 79. Some Conclusions + About Health Reform
  80. 80. ―I don’t believe there’s any problem in this country, no matter how tough it is, that Americans, when they roll up their sleeves, can’t completely ignore.‖ The Late Comedian George Carlin
  81. 81. ―The Americans always do the right thing…after they’ve exhausted all the other alternatives.‖ Sir Winston Churchill
  82. 82. ―There has never been a better time to be an innovator in health care.‖ --Don Berwick, former administrator, CMS Military Health System conference January 2011
  83. 83. ―Those who say it can’t be done are usually interrupted by others doing it.‖ --the late James Baldwin, American novelist, essayist and playwright
  84. 84. “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.‖ --Bill Gates Jr.
  85. 85. The Final Verdict on Building an American Health and Health Care System? ―Somebody has to do something, and it’s just incredibly pathetic that it has to be us.‖ --the late Jerry Garcia of the Grateful Dead
  86. 86. + The End
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