A Journey Together: New Maryland Healthcare Landscape   Carroll and Frederick Counties Forum Maryland Health Services Cost Review Commission February 2015

Health Reform is much more than the Exchanges March 23, 2010 Health Reform is much more than the Exchanges November 1, 2013

The Context: Health Care System Challenges Fragmentation and variation High costs Health care disparities Workforce shortages Coverage & Access Aging and sicker population

More Challenges Ahead Changes in Demographics and Expenditures Federal Budget & Health Care Spending More Entitlements, Fewer Contributors Age 65 plus 2010 40 million 2020 55 million 2030 72 million

Higher Cost Without Better Outcomes US spending growth outpaces other developed countries and spending is a higher portion of GDP * PPP=Purchasing Power Parity. Data: OECD Health Data 2011 (database), Version 6/2011. Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.

14% of Medicare Beneficiaries have 6 or more chronic conditions—1/2 of cost

National Average

National Average State Average

New Paradigm Improve the health of the population; Enhance the patient experience of care; Reduce the per capita cost of care.

In Response, a New Culture for Patient Care is Emerging Year 1 Shift to consumer-centric model Improve care transitions Payment reform Year 2 Modernize services to match new model Partner across hospitals, physicians, and other providers and communities to develop new consumer centered approaches Year 3 Improve care coordination and improve chronic care Work with people to keep them healthier, financially and clinically Engage communities 11

Implications All this means: Payment moves away from fee-for service The more you do the more you get paid

Implications All this means: CHANGE IS HERE – CHANGE IS EVERYWHERE Payment moves away from fee-for service The more you do the more you get paid The better you do the better you get paid Providers assume more responsibility for outcomes Need for integration and collaboration CHANGE IS HERE – CHANGE IS EVERYWHERE

Maryland Hospitals are Paid Differently Maryland has set hospital rates since the mid-1970s Health Services Cost Review Commission Independent 7 member Commission Public utility model Provides oversight and regulation of hospitals Maryland hospitals are waived from Federal Medicare payment methods (the Medicare waiver) All payers participate Unique in the country

Value of the All Payer System Helped hold down costs relative to elsewhere Funds access to care Transparency Leader in linking quality and payment Local access to regulators john

New Federal Agreement 5 year demonstration with Medicare (CMS) Effective 1/1/14 Focus on holding down costs More rewards for improving outcomes Encourages better team work among whole health care system

Implications for Patients and their Families Quality, safety and satisfaction scores can account for a significant and growing amount of revenue Requires hospitals to become more patient and family centered Expect greater care coordination Improved transitions of care between settings e.g., clear instructions for patients on discharge Expect more outreach from providers Particularly true for those with chronic illnesses Movement of care to the most appropriate setting Right care, right time, right place, right price

Concluding Thoughts New waiver is a call to action Creates a path for change Less disruptive than elsewhere Proactive not reactive Value is the new gold standard Quality Appropriate hospital care New Partnerships Cost efficiency Population health focus

Questions?