"The Impact of Healthcare Reform on Diabetes Care" - Patty Telgener, DiabetesMine Innovaiton Summit 2013


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Patty Telgener of Emerson Consultants gave a keynote talk on the impace of healthcare reform on diabetes care at the 2013 DiabetesMine Innovation Summit at Stanford School of Medicine Nov. 15.

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"The Impact of Healthcare Reform on Diabetes Care" - Patty Telgener, DiabetesMine Innovaiton Summit 2013

  1. 1. What Does Healthcare Reform Mean For Diabetes? Patty Telgener, RN, MBA VP of Reimbursement Emerson Consultants 1
  2. 2. Current Environment “Americans want three things from their healthcare system:  Immediate Access  Low out of pocket cost  High tech medicine “Latest and Greatest” While it’s easy to deliver two of the three, it may be impossible to have all three” The former Surgeon General, C Everett Koop 2
  3. 3. 3
  4. 4. Is Healthcare Reform Good or Bad? Depends on Who You Ask! Expanded market share • • • • 32 million potential new customers Removal of lifetime caps Coverage for pre-existing conditions Expanded coverage for preventive services 4
  5. 5. What Does Healthcare Reform Mean to Diabetes? People with diabetes will no longer be denied insurance or forced to pay higher premiums • Focus on prevention and wellness tools • Increase focus on Chronic Diseases • Uninsured people with diabetes will be able to access insurance through high risk pools specifically created to make insurance available until the provisions banning discrimination are fully in place in 2014 •
  6. 6. Healthcare Reform Already in Place Impacting Diabetes No pre-existing conditions exclusion for children  Prohibited from excluding children with diabetes from parents insurance No cancelling policies; prohibited from rescinding policies No lifetime limits on benefits Young adults can stay on parents plan up to age 26 Some preventive services will be free of copays and deductible Beneficiaries receiving a 50% discount on brand name drugs
  7. 7. Benefits Starting in 2014 Adults with diabetes can’t be denied coverage Premiums can’t be based on diabetes or other chronic disease All plans sold to individuals and small employers must provide “essential health benefits” Expanded Medicaid eligibility Copyright Emerson Consultants, Inc. February 12, 2009 7
  8. 8. Focus on Prevention of Diabetes Healthcare reform established the National Diabetes Prevention Program (NDPP)  Expand reach of community-based programs to prevent Type 2 Market Insurance Plans  New way for individuals, families and small businesses to shop for health insurance  Plans differentiated based on percentage the plan pays for covered benefits. Higher premiums, lower out of pocket Copyright Emerson Consultants, Inc. February 12, 2009 8
  9. 9. Change in Medicare Diabetes Supplies Competitive Bidding Beneficiaries with fee for service Medicare will have two options to purchase their diabetes testing supplies:  Beneficiaries can have their diabetic testing supplies delivered directly to their home by a national mail-order contract supplier (mail-order), or  Beneficiaries can pick up their supplies in person from any Medicare-enrolled supplier of diabetic testing supplies (non-mail-order) Medicare-approved amount for diabetic testing supplies will be the same regardless of where the supplies are furnished
  10. 10. Competitive Bidding Impact on Patients Before competitive bidding, Medicare beneficiaries paid an average of $15.58 a month for testing supplies Now, average out of pocket is $4.50 Insulin pumps expected to be part of Competitive Bidding starting January 2014 But most likely to have less options! Copyright Emerson Consultants, Inc. February 12, 2009 10
  11. 11. Change in Drug Coverage New law is closing the gap for out of pocket costs under Part D Donut hole is between $2,870 and $4,750  In 2013, pay 47.5% for brand name. Decrease to 25% by 2020, then eliminated Full price count toward out-of-pocket expense  For example, $100 is cost of drug, patient pays $47.50 but $100 counts toward donut hole Copyright Emerson Consultants, Inc. February 12, 2009 11
  12. 12. Free Preventive Care Type 2 screening Obesity screening and counseling Nutrition counseling Blood pressure screening Gestational diabetes screening  May not have copayment or deductible for preventive screening Copyright Emerson Consultants, Inc. February 12, 2009 12
  13. 13. Device and Pharma Initiatives Device and Pharma companies “Pay to Play”  Excise tax of 2.3% applicable to all device manufacturers regardless of size Pharma required to give significant discounts on brand names to Part D plans Increase Focus on Performance Measurements  Moving from “Carrot” to the “Stick” Approach Changes in payment methodologies  Moving away from fee-for-service (i.e. Accountable Care Organizations) 13
  14. 14. Paradigm Shift Away from “Build It and They Will Pay” Comparative Effectiveness Research  Payers (private and government) are raising the requirement for level of clinical evidence  No longer sufficient to show “superiority over placebo or standard therapy”, but may now be compared to competitive therapies Advance featured insulin pump compared to standard insulin pump (previously compared to multiple daily injections)  May see increase in registries tracking outcomes 14
  15. 15. Why Develop a New Medical Technology? 1. Physician had a great idea (presented on a napkin) 2. Engineers can build it 3. Marketing says they can package, brand, and create the need for it 4. Sales force says they need it and can sell it 5. Board expects it 6. Shareholders demand it 7. Competition does not have it 8. Patients want it (internet blogs told them so) 9. Regulatory says it is a 510(k) not PMA 10. Clinical says no study necessary, just sell it Copyright Emerson Consultants, Inc. 2012 15
  16. 16. Better Reasons      The technology will provide substantial clinical improvement over the current standard of care It will provide an economic advantage to the healthcare system Solves an unmet medical need – patients want it Improved clinical outcomes provides rationale for Medicare and payers to cover it Clinical and economic benefit to hospitals and physicians Copyright Emerson Consultants, Inc. 2012 16
  17. 17. We Pay You – We Pay You Not… 17
  18. 18. Moving Forward Healthcare Reform will continue to evolve…stay tuned! Opportunities for innovative products focusing on preventive services, showing reduction in hospital costs, emphasis on primary care Expect increased price pressure from physicians. hospitals and physicians Reimbursement must be factored into early product design and integrated with regulatory and market development Lack of reimbursement can limit market acceptance to innovative technologies despite clinical value 18
  19. 19. pattyt@emersonconsultants.com 303-526-7604 QUESTIONS? 19