Overview of Health Reform Activities in Minnesota Sanne Magnan, M.D., Ph.D. Minnesota Commissioner of Health SCI Annual Meeting August 5, 2010 1

Minnesota’s Vision GOALS – the “Triple Aim” Improve population health Improve the consumer/patient experience Improve affordability RESULT A better state of health 2

Rising Health Care Costs in Minnesota In Minnesota we spent nearly $31 billion in health care in 2006 and $32 billion in 2007. Projections released by MDH show that, if left unchecked, that amount could rise to $78.5 billion in 2018. Total health care spending in Minnesota up nearly 70% between 2000 and 2007 Incentives are misaligned today. Health care providers are not paid to prevent expensive complications of chronic disease. Some providers that have chosen to invest in chronic care management on their own have lost money by keeping people out of the hospital. Rising health care costs in the state are unsustainable. Our health care system creates poor value and has misaligned incentives. The way we pay for health care services leads to distortions in the types of health care that gets delivered. Source: Minnesota Department of Health, Health Economics Program 3

If State Health Care Costs Continue Their Current Trend, State Spending On Other Services Can’t Grow General Fund Spending Outlook, presentation to the Budget Trends Commission, August 2008, Dybdal, Reitan and Broat 4 4

Quality is Improving, but Uneven Minnesota Optimal Diabetes Care Measure Quality is uneven. Only one in six people with diabetes in Minnesota gets what the medical community considers to be optimal care. Even the best clinics have room for improvement. Health care quality is low relative to the amount spent, and unevenly distributed across the population. Rising health care costs in the state are unsustainable. Our health care system creates poor value and has misaligned incentives. Private insurance continues to erode, and the number of uninsured is rising. The way we pay for health care services leads to distortions in the types of health care that gets delivered. Source: Minnesota Community Measurement 5

The Challenge in Health Care “We spend too much for what we get.” T. Marmor, J. Oberlander and J. White writing in Annals of Internal Medicine (April 7, 2009) In other words, we have a poor value equation: the quality for the dollars spent.

Minnesota’s History of Collaboration and Innovation Health Reform law was passed by Minnesota Legislature and signed into law by Governor Pawlenty in May 2008 Outgrowth of years of work in Minnesota by policymakers and health care organizations Groundwork for the law began in 2007, with legislative and governor’s task forces that made recommendations to: Improve population health Better coordinate care for those with chronic and complex health conditions Make advances in coverage Improve transparency Lower administrative cost Better involve the patient and individual Reform how we pay for health care 7

Minnesota’s 2008 Health Reform Law: Building Blocks Lays a foundation for redesign of care and payment. Moving upstream: SHIP (Statewide Health Improvement Program) Care redesign and payment reform: health care homes, baskets of care Market transparency: provider peer grouping, quality reporting 8

Supporting Activities E-health Interoperable health records by 2015 Meeting health information exchange requirements Administrative simplification Electronic transactions using a standard format and content Consumer engagement Cost and quality of health care

www.health.state.mn.us/healthreform 10