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LOOKING AHEAD: Insights from the Reform Debate

LOOKING AHEAD: Insights from the Reform Debate






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    LOOKING AHEAD: Insights from the Reform Debate LOOKING AHEAD: Insights from the Reform Debate Presentation Transcript

    • LOOKING AHEAD: Insights from the Reform Debate Annual Meeting South Carolina Hospital Association February 11, 2010 James Bentley, Ph.D. Silver Spring, Maryland
    • Presentation Overview
      • Legislation Status
      • Reform Benefits
      • Strategic directions from the reform debate
        • Cost containment
        • Integration/coordination
        • Financial Risk
    • Health Reform Legislation
      • U.S. House--Passed 220-215
      • U.S. Senate--Passed 60-39
        • Now only 59 Democrats
      • Challenges to creating a final bill
        • Policy Issues --Political
          • Abortion House v. Senate
          • Public plan option Loss of Senate seat
          • Illegal immigrants
          • Tax revenues
    • Health Reform Benefits for Hospitals--1
      • Fewer Uninsured
        • Estimated reduction: 31-36 million fewer
          • From uninsured to Medicaid
          • From uninsured to private insurance
      • Simplified claims processes
      • Gainsharing demonstration projects extended
      • Medicare payment extenders
      • Repeal of the 45% Medicare “trigger”
    • Health Reform Benefits for Hospitals--2
      • Clearer Roadmap for hospital and health system strategic planning
        • Constrained Payment
        • Increased Clinical Coordination
        • Increased Financial Risk
    • Health Reform Benefits for Hospitals--3
      • Clearer Roadmap for Associations
        • Shape the state roles in insurance market and regulation
          • Exchange design and regulation
        • Shape Medicaid expansions
          • FMAP
          • DSH allotments
          • Payments to MDs and hospitals
        • Focus member services
            • Collaborations to identify next steps for members
            • Sharing lessons learned: to do and to avoid
    • Cost Containment
        • Slow the growth in spending while expanding coverage
      • Drivers
        • Public unhappiness with costs
        • Health care growing faster than GDP
        • Federal deficits growing
        • Higher costs mean higher subsidies
    • Cost Containment Examples in Legislation
      • Medicare’s annual updates reduced
      • DSH payments reduced
        • Payment follows person not program
      • Increased payment penalties
        • Hospital acquired conditions
        • “ Excessive” readmissions
      • Increased private insurance price competition (the non-enrollment role for the insurance exchange)
    • Cost Containment if Reform Shrinks, Stalls or Stops
        • Deficit reduction
          • Lower payments reduce deficit rather than increase coverage
        • Likely sources of proposals
          • MedPAC recommendations
          • Private Debt Reduction Task Force
            • Pete Domenici--former Senate budget chair
            • Alice Rivlin--former CBO and OMB director
          • Presidential Debt Reduction Task Force
    • Payment Implications
        • Lower hospital’s cost structure
          • Project multi-year trend lines
          • Stretch goal: Breakeven at Medicare’s price
        • Review charity care policies
          • From eligibility based on low income to uninsured
        • Create primary care alternatives to ED
          • Primary care networks
          • Federally qualified health centers
          • Urgent care option within the hospital
    • Integration/Coordination
        • Create a system that meets the IOM six aims for high quality care
          • Safe
          • Effective
          • Patient-centered
          • Timely
          • Efficient
          • Equitable
          • Develop integrated/coordinated care
    • Coordination Examples in Legislation
      • Readmission penalties as a first step
      • Payment incentive pilots:
        • Bundled payments for a whole episode
          • Based on an inpatient episode
        • Accountable care organizations (ACO)
          • Based on a population of patients
          • Ambulatory and inpatient care
    • Coordination Implication #1
      • Where should hospitals start?
        • Most patient care is ambulatory and acute which matches an ACO
        • Most expenses involve hospitalized patients and chronic conditions which matches bundled payments
    • Coordination Implication #2
      • “ Engineer” the whole case
        • Who are your clinical partners?
          • Referral networks
            • Assess existing relationship and components
            • Explore new relationships and components
        • Assess partners’ performance
          • Clinically
          • Resources used (financially)
        • Change operational mindset and language
          • From dischargers to TRANSFERS
          • From handoffs to HANDOVERS
    • Coordination Implication #3
      • Make evidence-based practice routine
        • Create the essential infrastructure
          • Selection process for protocols/guidelines
          • Updating process for protocols/guidelines
          • Routine communication of protocols/guidelines
        • Create a process for the “off-protocol case”
          • What documentation for atypical patient?
          • How to best share learning?
    • Coordination Implication #4
      • Options for managing coordination
        • Structural integration
          • Geisinger, Billings Clinic, Mary Imogene Bassett, Cleveland Clinic, Mayo
        • Partnerships of multi-specialty group practice and hospitals
        • Virtual integration
          • Components independent but shared information system
        • Pluralistic medical staff with multiple practice models
      • Key Question:
          • Which models perform as well as structural integration?
    • Managing Financial Risk
        • Shift risk and preserve financial viability
          • Insurance Risk: Incidence of illness
          • Production risk: Efficiency of care
        • Provide high quality care
          • Performance information will be public
        • Cover costs
        • Create capital (earn a margin)
    • Shifting Financial Risk Examples in Legislation
      • Payment increases below cost increases
        • Update reduced by productivity
      • DSH payment reductions
        • Revenue follows patient choice
      • Studies of variation in utilization and price
          • (The Dartmouth Atlas questions)
    • Shifting Financial Risk without Legislation
      • Increased uninsured
      • Constrained revenues
        • Increased public program enrollment
          • Medicare as a result of retiring baby boomers
          • Medicaid as the only policy lever to expand coverage
        • Balanced Budget Act #2?
        • Cost pressures on private insurers
    • Financial Risk Implications
      • Identify trusted partners
        • Everyone can’t maximize revenue
        • Who holds the trusted purse?
      • Share revenues (where legally permitted)
        • Good practices by A may reduce the financial stability of B: A subsidizes B
        • Will bundled payments and ACOs provide mechanisms for sharing revenues?
      • Key Question:
        • Do practitioners and providers need identical incentives or compatible incentives?
    • Some Common Ingredients for Coordination and Financial Risk
      • Increased physician leadership
      • Robust conflict resolution
        • Conflict: the “partner(s)” no one wants
          • Consistently off protocol
          • Uses “excessive” resources
        • Conflict: excess provider capacity
      • Candid communications to reduce stress
        • Internal to everyone in network: transparency
        • External to community: education
      • Questions and Discussion