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The Changing Environment
in Health Reform



                  John R Lumpkin MD MPH
                  SVP & Health Care Director
                  Robert Wood Johnson Foundation
Victory awaits him who has everything in order – luck people call it. Defeat is
certain for him who has neglected to take necessary precautions in time; this is
                                called bad luck


        Roald Amundsen, Norwegian polar explorer
 Why was health reform on the
  National agenda in 2009?
 The same reason why health reform is
  on today’s agenda:
iHT² Health IT Summit in New York 2012 - Opening Keynote "The Changing Health Environment in Health Reform"
Insurance Matters




 •   Medicaid expansion
     •   90,000 applied
     •   10,000 enrolled via lottery
 •   Outcomes
     •   Higher use of preventive services
     •   Better physical and mental health
     •   Less medical related debt
The system was/is broken:
       Insurance market concerns
       • Pre-existing conditions
       • Denial of coverage
       • Retroactive denial of coverage
       • Excessive rating gradients
       • Annual and lifetime limits
Basics of Health Reform


  Insurance Market reforms
  Insurance works best if the risk pool
   is large
  Allowances for the working poor
2014 Coverage Expansion


 • Protects consumers in the insurance market

 • Requires individuals to purchase insurance

 • Requires employers to purchase insurance

 • Creates health insurance exchanges

 • Provides subsidies

 • Expands Medicaid
Coverage Expansion Categories




       Medicaid               Premium
      Expansion               Subsidy
        138%                    400%
                                                            Medicaid
                                                            Subsidy

              $29,326                          $88,000
              Family                          Family of
              Of Four                           Four

  0         100         200       300       400       500

                    Federal Poverty Level
Supreme Court Decision
• Individual
  mandate
  constitutional

• Medicaid
  expansion
  constitutional,
  but now a state
  option
Supreme Court Decision
       Supreme Court decision

  Total Expansion = 32 Million



                                             Exchange
                 Medicaid                      15M
                  17M




Sources: Urban Institute analysis, HIPSM 2011.
The Future is already here, it is not
      very evenly distributed.


     William Gibson - 1993
Average Annual Contributions to Premiums for Family
                              Coverage, 1999-2011

                                                                                                                                              $15,073*
                                                                                                                                   $13,770*
                                                                                                                        $13,375*
                                                                                                             $12,680*
                                                                                                  $12,106*
                                                                                           $11,480*
                                                                               $10,880*

                                                                    $9,950*
                                                         $9,068*

                                              $8,003*

                                   $7,061*
                        $6,438*
             $5,791




* Estimate is statistically different from estimate for the previous year shown (p<.05).
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2011.
Cumulative Percent Change in National Health Expenditures, by
         Selected Sources of Funds, 2000-2010
                                                                                                                                          Medicare



                                                                                                                                           Medicaid




Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health
Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health Expenditures by type of service and source
of funds, CY 1960-2010; file nhe2010.zip).
Healthy Life Expectancy at Age
   60, 2007
         Developed by the World Health Organization, healthy life expectancy is based on
     life expectancy adjusted for time spent in poor health because of disease and/or injury
    Years
    30
                                                  Women                    Men

         22
              21 21 21 21 20
                              20 20 20 20 20 20 20 20 19 19 19
    20      18 18 18                                           19 19 19 19
                        18 18     18                                       18 18
                     17
                               16    17 18 17 16 17 17 17 18 17 17 17
                                                                      16 16 16
                                                                               15


    10




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Data: Provided by C. Mathers. Unpublished data set consistent with HALE estimates published in
World Health Statistics 2009 (Geneva: World Health Organization).
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.
Mortality Amenable to Health Care




Deaths Avoidable Through Health Care:Nolte & McKee – Health Affairs August 29, 2012
EXHIBIT 16
 Medical, Medication, and Lab Errors

     Percent of adults reported medical mistake, medication error, or lab error in past two years


   40

                                                                                                                            32
   30                                                                                                       28
                                                                                             26
                                                             22              23

   20                         18              19
              16


   10



     0
            NETH             FRA            GER              UK              NZ            CAN             AUS             US

Sicker adults met at least one of the following criteria: health is fair or poor; serious illness in past two years; or was hospitalized or
had major surgery in past two years. AUS=Australia; CAN=Canada; FRA=France; GER=Germany; NETH=Netherlands; NZ=New
Zealand; UK=United Kingdom; US=United States.
Data: 2008 Commonwealth Fund International Health Policy Survey.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.
Test Results or Records Not Available at Time of Appointment


    Percent of adults reported test results or records were not available at time of appointment
    in past two years
   30


                                                                                                                            23

   20                                                                                        18              18
                                              15              15              15
                               13

   10           9




     0
             NETH            GER             AUS             FRA             UK             CAN              NZ             US

Sicker adults met at least one of the following criteria: health is fair or poor; serious illness in past two years; or was hospitalized or
had major surgery in past two years. AUS=Australia; CAN=Canada; FRA=France; GER=Germany; NETH=Netherlands; NZ=New
Zealand; UK=United Kingdom; US=United States.
Data: 2008 Commonwealth Fund International Health Policy Survey.

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.
iHT² Health IT Summit in New York 2012 - Opening Keynote "The Changing Health Environment in Health Reform"
iHT² Health IT Summit in New York 2012 - Opening Keynote "The Changing Health Environment in Health Reform"
iHT² Health IT Summit in New York 2012 - Opening Keynote "The Changing Health Environment in Health Reform"
iHT² Health IT Summit in New York 2012 - Opening Keynote "The Changing Health Environment in Health Reform"
We have run out of money, it
   is time to start thinking.
        Ernest Rutherford (1871-1937)
               Nobel Laureate
Six Drivers of Excess Cost

    Six Drivers of Excess Cost
         Driver                             Examples                Excess cost

        Unnecessary services       Defensive medicine, overuse        $210 B

        Inefficient services           Mistakes, duplication          $130 B

        Excess administrative      Administrative inefficiencies
                                                                      $190 B
        costs                        by payers and providers
                                       Prices higher than
        Prices that are too high                                      $105 B
                                     competitive benchmarks
        Missed prevention             Missed screenings and
                                                                      $55 B
        opportunities                  condition monitoring

        Fraud                      Payer, provider, patient fraud     $75 B



Source: Institute of Medicine
Better Care at Lower Cost
September, 2012
Key Trends in Response


  Transparency
  Payment reform
  Clinical re-engineering
  Informatics
Key Trends in Response


  Transparency
  Payment reform
  Clinical re-engineering
  Informatics
Consumer Reports
Community Highlight: Minnesota
iHT² Health IT Summit in New York 2012 - Opening Keynote "The Changing Health Environment in Health Reform"
iHT² Health IT Summit in New York 2012 - Opening Keynote "The Changing Health Environment in Health Reform"
Key Trends in Response


  Transparency
  Payment reform
  Clinical re-engineering
  Informatics
Payment Reform

  Shared Savings
  Bundled Payment
  Capitation
  Accountable Care Organizations (ACO)
Payment Reform

  Shared Savings
Payment Reform

  Shared Savings
  Bundled Payment
 • Episode of acute care or procedure
 • Treatment of chronic condition over time
iHT² Health IT Summit in New York 2012 - Opening Keynote "The Changing Health Environment in Health Reform"
Payment Reform

  Shared Savings
  Bundled Payment
  Capitation
 • Upside benefit
 • Downside risk
Payment Reform

  Shared Savings
  Bundled Payment
  Capitation
  Accountable Care Organizations (ACO)
Accountable Care Organizations

 Ability to provide care and manage patients
  across the continuum of care
 Capability to prospectively plan budgets and
  resource needs
 Sufficient size to support comprehensive, valid,
  and reliable performance measurement
•    33 measures
     •   Patient experience
     •   Care coordination/safety
     •   Preventive health
     •   At-risk populations
Key Trends in Response


  Transparency
  Payment reform
  Clinical re-engineering
  Informatics
Clinical Re-Engineering
• Improved care coordination and communication
• Improved access – physician extenders – email – phone call etc.
• Prevention and early diagnosis
• ED and Immediate Care Center visits
• Increase generic medication utilization
• Hospital re-admissions and multiple ED visits
• Improved management of complex patients
    •   Care Coordination
    •   High Resource Utilizers
Key Trends in Response


  Transparency
  Payment reform
  Clinical re-engineering
  Informatics
Complexity
Increasing amounts of information
Current practice depends upon the clinical
    decision-making capacity and reliability of
autonomous individual practitioners, for classes
of problems that routinely exceeds the bounds of
            unaided human cognition

                Daniel R. Masys, M.D.
               2001 IOM Annual Meeting
Complexity
 Clinical Complexity

• Physicians in private practice interact with as many as 229 other
  physicians in 117 different practices just for their Medicare patient
  population

• ICU clinicians have 180 activities per patient per day

• Chronic disease: a 79 year old patient with osteoporosis,
  osteoarthritis, type 2 diabetes, hypertension, and chronic
  obstructive pulmonary disease: 19 medications per day
The Vision
 New Tools

• Computing Power

• Connectivity

• Improvements in organizational capabilities

• Collaboration between teams of clinicians and with
  patients
iHT² Health IT Summit in New York 2012 - Opening Keynote "The Changing Health Environment in Health Reform"
The Future

  Big data
   • Predictive Modeling
       • Next infectious disease hot spot in hospital?
       • How will utilization change with Medicaid expansion in ACA?
       • How to predict patient demand to minimize use of contract nurses?
  Liberated data
  Patient generated data
  Advanced sensors
Archimedes
The Future

  Big data
   • Predictive Modeling
       • Next infectious disease hot spot in hospital?
       • How will utilization change with Medicaid expansion in ACA?
       • How to predict patient demand to minimize use of contract nurses?
   • Hot spotting
  Liberated data
  Patient generated data
  Advanced sensors
49
iHT² Health IT Summit in New York 2012 - Opening Keynote "The Changing Health Environment in Health Reform"
iHT² Health IT Summit in New York 2012 - Opening Keynote "The Changing Health Environment in Health Reform"
Pills with chips embedded track medication use
Change is the law of life. And those who look
only to the past or present are certain to miss the
future.



   - John F. Kennedy
September 21, 2012   54
Key findings

   Health IT can improve patient safety in some areas such as
    medication safety; however, there are significant gaps in the
    literature regarding how health IT impacts patient safety
    overall

   Safer implementation and use begins with viewing health IT
    as part of a larger sociotechnical system

   All stakeholders need to work together to improve patient
    safety




                                                                Slide 55 of 23
Current state of health IT

   Literature has shown that health IT may lead to safer care
    and/or introduce new safety risks

   Magnitude of harm and impact of health IT on patient safety
    is not well known because:
         – Heterogeneous nature of health IT products
         – Diverse impact on different clinical environments and
            workflow
         – Legal barriers and vendor contracts
         – Inadequate and limited evidence in the literature




                                                                 Slide 56 of 23
Recommendations: Summary

Current market forces are not adequately addressing the
potential risks associated with use of health IT.

All stakeholders must coordinate efforts to identify and
understand patient safety risks associated with health IT by:

   Facilitating the free flow of information

   Creating a reporting and investigating system for health IT–
    related deaths, serious injuries, or unsafe conditions

   Researching and developing standards and criteria for safe
    design, implementation, and use of health IT



                                                                Slide 57 of 23
Deadly Overuse
Disease X
Severe case mortality 50%  100 cases – 50 die
Treatment Y      50% to 25%  100 cases – 25 die
     Fatality rate 10%      100 cases – 35 die
New test
10% are severe               100 cases – 5 die
With Treatment               100 cases – 12 die
Deadly Overuse
Disease X
Severe case mortality 50%  100 cases – 50 die
Treatment y      50% to 25%  100 cases – 25 die
Fatality rate 10%              100 cases – 35 die
New test
10% are severe                 100 cases – 5 die
With Treatment                 100 cases – 12 die
  Standard diagnosis with treatment 30% reduction
  Enhanced diagnosis with treatment 140% increase

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iHT² Health IT Summit in New York 2012 - Opening Keynote "The Changing Health Environment in Health Reform"

  • 1. The Changing Environment in Health Reform John R Lumpkin MD MPH SVP & Health Care Director Robert Wood Johnson Foundation
  • 2. Victory awaits him who has everything in order – luck people call it. Defeat is certain for him who has neglected to take necessary precautions in time; this is called bad luck Roald Amundsen, Norwegian polar explorer
  • 3.  Why was health reform on the National agenda in 2009?  The same reason why health reform is on today’s agenda:
  • 5. Insurance Matters • Medicaid expansion • 90,000 applied • 10,000 enrolled via lottery • Outcomes • Higher use of preventive services • Better physical and mental health • Less medical related debt
  • 6. The system was/is broken:  Insurance market concerns • Pre-existing conditions • Denial of coverage • Retroactive denial of coverage • Excessive rating gradients • Annual and lifetime limits
  • 7. Basics of Health Reform  Insurance Market reforms  Insurance works best if the risk pool is large  Allowances for the working poor
  • 8. 2014 Coverage Expansion • Protects consumers in the insurance market • Requires individuals to purchase insurance • Requires employers to purchase insurance • Creates health insurance exchanges • Provides subsidies • Expands Medicaid
  • 9. Coverage Expansion Categories Medicaid Premium Expansion Subsidy 138% 400% Medicaid Subsidy $29,326 $88,000 Family Family of Of Four Four 0 100 200 300 400 500 Federal Poverty Level
  • 10. Supreme Court Decision • Individual mandate constitutional • Medicaid expansion constitutional, but now a state option
  • 11. Supreme Court Decision Supreme Court decision Total Expansion = 32 Million Exchange Medicaid 15M 17M Sources: Urban Institute analysis, HIPSM 2011.
  • 12. The Future is already here, it is not very evenly distributed. William Gibson - 1993
  • 13. Average Annual Contributions to Premiums for Family Coverage, 1999-2011 $15,073* $13,770* $13,375* $12,680* $12,106* $11,480* $10,880* $9,950* $9,068* $8,003* $7,061* $6,438* $5,791 * Estimate is statistically different from estimate for the previous year shown (p<.05). Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2011.
  • 14. Cumulative Percent Change in National Health Expenditures, by Selected Sources of Funds, 2000-2010 Medicare Medicaid Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health Expenditures by type of service and source of funds, CY 1960-2010; file nhe2010.zip).
  • 15. Healthy Life Expectancy at Age 60, 2007 Developed by the World Health Organization, healthy life expectancy is based on life expectancy adjusted for time spent in poor health because of disease and/or injury Years 30 Women Men 22 21 21 21 21 20 20 20 20 20 20 20 20 20 19 19 19 20 18 18 18 19 19 19 19 18 18 18 18 18 17 16 17 18 17 16 17 17 17 18 17 17 17 16 16 16 15 10 0 ria es ly n m ay l s lia k m ce n d y ic d da nd e en d nd ga nd ar an ai ec an an pa an Ita iu do bl st at ra an rw na la ed Sp rtu nm la la pu lg m re nl el Ja St Au al st Ire ng er Fr No Sw Ca er Ic er Be Fi G Po Ze Au De Re d it z Ki th G ite w Sw Ne d h Un Ne ec ite Cz Un Data: Provided by C. Mathers. Unpublished data set consistent with HALE estimates published in World Health Statistics 2009 (Geneva: World Health Organization). Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.
  • 16. Mortality Amenable to Health Care Deaths Avoidable Through Health Care:Nolte & McKee – Health Affairs August 29, 2012
  • 17. EXHIBIT 16 Medical, Medication, and Lab Errors Percent of adults reported medical mistake, medication error, or lab error in past two years 40 32 30 28 26 22 23 20 18 19 16 10 0 NETH FRA GER UK NZ CAN AUS US Sicker adults met at least one of the following criteria: health is fair or poor; serious illness in past two years; or was hospitalized or had major surgery in past two years. AUS=Australia; CAN=Canada; FRA=France; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States. Data: 2008 Commonwealth Fund International Health Policy Survey. Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.
  • 18. Test Results or Records Not Available at Time of Appointment Percent of adults reported test results or records were not available at time of appointment in past two years 30 23 20 18 18 15 15 15 13 10 9 0 NETH GER AUS FRA UK CAN NZ US Sicker adults met at least one of the following criteria: health is fair or poor; serious illness in past two years; or was hospitalized or had major surgery in past two years. AUS=Australia; CAN=Canada; FRA=France; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States. Data: 2008 Commonwealth Fund International Health Policy Survey. Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.
  • 23. We have run out of money, it is time to start thinking. Ernest Rutherford (1871-1937) Nobel Laureate
  • 24. Six Drivers of Excess Cost Six Drivers of Excess Cost Driver Examples Excess cost Unnecessary services Defensive medicine, overuse $210 B Inefficient services Mistakes, duplication $130 B Excess administrative Administrative inefficiencies $190 B costs by payers and providers Prices higher than Prices that are too high $105 B competitive benchmarks Missed prevention Missed screenings and $55 B opportunities condition monitoring Fraud Payer, provider, patient fraud $75 B Source: Institute of Medicine Better Care at Lower Cost September, 2012
  • 25. Key Trends in Response  Transparency  Payment reform  Clinical re-engineering  Informatics
  • 26. Key Trends in Response  Transparency  Payment reform  Clinical re-engineering  Informatics
  • 31. Key Trends in Response  Transparency  Payment reform  Clinical re-engineering  Informatics
  • 32. Payment Reform  Shared Savings  Bundled Payment  Capitation  Accountable Care Organizations (ACO)
  • 33. Payment Reform  Shared Savings
  • 34. Payment Reform  Shared Savings  Bundled Payment • Episode of acute care or procedure • Treatment of chronic condition over time
  • 36. Payment Reform  Shared Savings  Bundled Payment  Capitation • Upside benefit • Downside risk
  • 37. Payment Reform  Shared Savings  Bundled Payment  Capitation  Accountable Care Organizations (ACO)
  • 38. Accountable Care Organizations  Ability to provide care and manage patients across the continuum of care  Capability to prospectively plan budgets and resource needs  Sufficient size to support comprehensive, valid, and reliable performance measurement • 33 measures • Patient experience • Care coordination/safety • Preventive health • At-risk populations
  • 39. Key Trends in Response  Transparency  Payment reform  Clinical re-engineering  Informatics
  • 40. Clinical Re-Engineering • Improved care coordination and communication • Improved access – physician extenders – email – phone call etc. • Prevention and early diagnosis • ED and Immediate Care Center visits • Increase generic medication utilization • Hospital re-admissions and multiple ED visits • Improved management of complex patients • Care Coordination • High Resource Utilizers
  • 41. Key Trends in Response  Transparency  Payment reform  Clinical re-engineering  Informatics
  • 43. Current practice depends upon the clinical decision-making capacity and reliability of autonomous individual practitioners, for classes of problems that routinely exceeds the bounds of unaided human cognition Daniel R. Masys, M.D. 2001 IOM Annual Meeting
  • 44. Complexity Clinical Complexity • Physicians in private practice interact with as many as 229 other physicians in 117 different practices just for their Medicare patient population • ICU clinicians have 180 activities per patient per day • Chronic disease: a 79 year old patient with osteoporosis, osteoarthritis, type 2 diabetes, hypertension, and chronic obstructive pulmonary disease: 19 medications per day
  • 45. The Vision New Tools • Computing Power • Connectivity • Improvements in organizational capabilities • Collaboration between teams of clinicians and with patients
  • 47. The Future  Big data • Predictive Modeling • Next infectious disease hot spot in hospital? • How will utilization change with Medicaid expansion in ACA? • How to predict patient demand to minimize use of contract nurses?  Liberated data  Patient generated data  Advanced sensors
  • 49. The Future  Big data • Predictive Modeling • Next infectious disease hot spot in hospital? • How will utilization change with Medicaid expansion in ACA? • How to predict patient demand to minimize use of contract nurses? • Hot spotting  Liberated data  Patient generated data  Advanced sensors
  • 50. 49
  • 53. Pills with chips embedded track medication use
  • 54. Change is the law of life. And those who look only to the past or present are certain to miss the future. - John F. Kennedy
  • 56. Key findings  Health IT can improve patient safety in some areas such as medication safety; however, there are significant gaps in the literature regarding how health IT impacts patient safety overall  Safer implementation and use begins with viewing health IT as part of a larger sociotechnical system  All stakeholders need to work together to improve patient safety Slide 55 of 23
  • 57. Current state of health IT  Literature has shown that health IT may lead to safer care and/or introduce new safety risks  Magnitude of harm and impact of health IT on patient safety is not well known because: – Heterogeneous nature of health IT products – Diverse impact on different clinical environments and workflow – Legal barriers and vendor contracts – Inadequate and limited evidence in the literature Slide 56 of 23
  • 58. Recommendations: Summary Current market forces are not adequately addressing the potential risks associated with use of health IT. All stakeholders must coordinate efforts to identify and understand patient safety risks associated with health IT by:  Facilitating the free flow of information  Creating a reporting and investigating system for health IT– related deaths, serious injuries, or unsafe conditions  Researching and developing standards and criteria for safe design, implementation, and use of health IT Slide 57 of 23
  • 59. Deadly Overuse Disease X Severe case mortality 50%  100 cases – 50 die Treatment Y 50% to 25%  100 cases – 25 die  Fatality rate 10%  100 cases – 35 die New test 10% are severe  100 cases – 5 die With Treatment  100 cases – 12 die
  • 60. Deadly Overuse Disease X Severe case mortality 50%  100 cases – 50 die Treatment y 50% to 25%  100 cases – 25 die Fatality rate 10%  100 cases – 35 die New test 10% are severe  100 cases – 5 die With Treatment  100 cases – 12 die Standard diagnosis with treatment 30% reduction Enhanced diagnosis with treatment 140% increase

Editor's Notes

  1. TEMPLATE FOR POSSIBLE SLIDE
  2. The architects of ACO describe them as needing to have three characteristicsThe ability to provide, and manage with patients, the continuum of care across different institutional settings, including at least ambulatory and inpatient hospital care and possibly post acute care;The capability of prospectively planning budgets and resource needs; andSufficient size to support comprehensive, valid, and reliable performance measurement. ? The new law authorizes Medicare to contract with Accountable Care Organizations—or ACOs—in order to find ways to deliver high-quality care while, according to the Congressional Budget Office, saving an estimated $5 billion in spending in the first eight years. ACOs don’t exist yet but they are envisioned to be a network of physicians and providers who are incented work together to deliver high quality, high value care. By providing financial incentives to coordinate care and measure performance against scientifically based outcomes, there is every reason to believe that the cost curve could be bent. 8 Health Affairs, Accountable Care Organizations, July 27, 2010.Devers, K., Berenson, R. “Can Accountable Care Organizations Improve the Value of Health Care by Solving the Cost and Quality Quandry?” http://www.rwjf.org/files/research/acobrieffinal.pdf p. 2