Health Care Reform: How we got here and where we need go BIAOH Annual Conference November 2, 2010 Jerry Friedman, JD Advisor for Health Policy Director External Relations & Advocacy

True or false? Government takeover of health care Ends of Life: –Abortion on demand –Death Panels Illegal immigrants will get free coverage Care will be rationed

“Everyone has the right to their own opinion, but not the right to their own facts.” - Senator Daniel Patrick Moynihan

The Simple Facts on our Health Care “Situation” We have no health care “system” The current situation is unaffordable for individuals & unsustainable for our nation The definition of “vulnerable” reaches the middle class Health care is business: the business of medicine, and the business of insurance Negatively impacts our competiveness in a global economy, innovation & individual prosperity

Total Healthcare Expenditures (in billions)

Obesity Trends* Among U.S. Adults BRFSS, 1985 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14%

Obesity Trends* Among U.S. Adults BRFSS, 1986 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14%

Obesity Trends* Among U.S. Adults BRFSS, 1987 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14%

Obesity Trends* Among U.S. Adults BRFSS, 1988 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14%

Obesity Trends* Among U.S. Adults BRFSS, 1989 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14%

Obesity Trends* Among U.S. Adults BRFSS, 1990 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14%

Obesity Trends* Among U.S. Adults BRFSS, 1991 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19%

Obesity Trends* Among U.S. Adults BRFSS, 1992 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19%

Obesity Trends* Among U.S. Adults BRFSS, 1993 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19%

Obesity Trends* Among U.S. Adults BRFSS, 1994 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19%

Obesity Trends* Among U.S. Adults BRFSS, 1995 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19%

Obesity Trends* Among U.S. Adults BRFSS, 1996 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19%

Obesity Trends* Among U.S. Adults BRFSS, 1997 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19% ≥20%

Obesity Trends* Among U.S. Adults BRFSS, 1998 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19% ≥20%

Obesity Trends* Among U.S. Adults BRFSS, 1999 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19% ≥20%

Obesity Trends* Among U.S. Adults BRFSS, 2000 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19% ≥20%

Obesity Trends* Among U.S. Adults BRFSS, 2001 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) Obesity Trends* Among U.S. Adults BRFSS, 2002 No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

Obesity Trends* Among U.S. Adults BRFSS, 2003 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

Obesity Trends* Among U.S. Adults BRFSS, 2004 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

Obesity Trends* Among U.S. Adults BRFSS, 2005 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

Obesity Trends* Among U.S. Adults BRFSS, 2006 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

Obesity Trends* Among U.S. Adults BRFSS, 2007 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

Obesity Trends* Among U.S. Adults BRFSS, 2008 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

Obesity Trends* Among U.S. Adults BRFSS, 2009 (*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person) No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

How does our spending align with influences of health status? Source: Centers for Disease Control and Prevention, University of California at San Francisco, Institute for the Future Access to Care Environment Genetics Lifestyle & Behavior Access to Care Other Health Behaviors What influences our health status Where our nation spends its health care dollars (~$2 Trillion) 10% 20% 50% 88% 8% 4% How do we shift more resources to address health behaviors?

How did we get here? YOYO or WITT Several major policy decisions rather than one, unified health care policy. –Employer-based coverage –Government-sponsored coverage –Emergency Medical Treatment & Active Labor Act (EMTALA)

The President’s Health Care Reform Principles Guarantee Choice Make Health Coverage Affordable Protect Families Financial Health Invest in Prevention and Wellness Provide Portability of Coverage Aim for Universality Improve Patient Safety and Quality Care Maintain Long-Term Fiscal Sustainability

Desired Outcomes More and better access Sick care and Health care Evidence based medicine Reduce fragmentation Caring and curing Effective use of workforce Flatten the cost curve

How does the legislation do this? Coverage expansion & reform Payment reform Delivery system transformation

How does the legislation do this? Coverage –Individual coverage mandate –Medicaid expansion 138% of poverty level –Subsidies for low income individuals To 400% of poverty level –Credits/subsidies for business –Penalties for non compliance

*Insurance coverage for population < 65 years Employer-sponsoredMedicaid/SCHIPUninsuredNon-group/OtherExchanges 32 million gain coverage, split between Medicaid/SCHIP and Exchanges

Coverage Health Insurance Exchanges –Essential benefits + buy-up –Bronze, Silver, Gold, Platinum Federal multi-state plans (FEHBP-like) Consumer Operated & Oriented Plans

Coverage Insurance market reforms Guaranteed issue/ prohibit rescissions Premium rate restrictions Eliminates annual & lifetime limit Expands family coverage to age 26

Coverage Reforms Essential Benefits –Preventive Services, 100% covered –Care planning & coordination Chronic Illness care –Recognition of added need – Includes mental health

How does the legislation do this? Coverage expansion & reform Payment reform Delivery system transformation

Payment Reform Flatten the Cost Curve Reduce the growth in hospital payments Eliminate subsidies for uncompensated care Reduce or eliminate certain payments –Preventable Readmissions –Hospital Acquired Conditions Pay for Performance

Why hospitals ? When Willie Sutton was asked why he robbed banks, he is said to have responded: “ Because that’s where the money is.”

Physicians Medicare – 10% bonus payment –primary care –General surgeons –Health professional shortage areas Medicaid –Pay primary care at Medicare rates –100% federally funded

Independent Payment Advisory Board Slow the growth of Medicare Submit proposals to for reducing Medicare costs. 1 st report 2014 Automatically implemented unless Congress acts to block Prohibited from recommending: –Rationing; –Increasing revenue; –Changing benefits or eligibility; or –Beneficiary cost sharing

How does the legislation do this? Coverage expansion & reform Payment reform Delivery system transformation

Health Reform: Ramp Up Insurance Market Reforms M & M Payment Reforms Comparative Effectiveness State Health Insurance Exchanges Payment reform- primary care, geographic variation, CMS Centers for Innovation 2012 Accountable health organizations Continued payment reform 2013 Tax increases/ reforms Payment reform 2014 Individual & employer mandates & subsidies Health insurance exchanges & Medicaid expansions Extension of insurance reforms to all policies

Payment Care Delivery Population/ Global Payment Individual/ Fee For Servic e Encounter Lifetime Making the Transition Episodes Shared Savings Achieved by Q Volume Value

Tension Between Populations and Individuals Focus on Individual Tertiary Care Acute Care Cost unawareness Unlimited expectations of patient for care Individual physician Professional management Market competition Inequity in distribution Focus on Populations Primary Care Preventive/Chronic care Cost awareness Affordable care for society overall Health care team Corporate management Government regulation Fair distribution of services Adapted from: O’Neill and Seifer, Academic Medicine, 1995.

Change is good. You go first.

Delivery system transformation –Deinstitutionalization Community capacity Primary Care/Nurse managed clinics Federally Qualified Health Centers –Continuity of Care Patient centered medical homes Episodes of Care/Bundled payments Care coordination

Patient Centered Outcomes Research Institute aka Comparative Effectiveness Research How do we get the best value for our health care dollar What works and what doesn’t? What works better? NIH & AHRQ –ad hoc Expert Advisory Panels –GAO Methodology Committee

Center for Medicaid & Medicare Innovation Test innovative health care delivery & payment models Operational by 1/1/2011 Funded: $ 10 billion over 10 years

Demonstration Projects Medicare bundled payments –Voluntary, starting –Incentives for care coordination –Single payment for IP, OP, physician & post acute care for 10 chronic & acute conditions. Continuing care hospital demonstration –IRF, LTCH & SNF under hospital control.

Demonstration projects Accountable Care Organizations – 2012 –Share in cost savings –Manage & coordinate Part A & B –At least 5,000 Medicare beneficiaries –Primary care & specialty networks –Evidence based medicine –Care coordination –Quality & cost reporting

“ Skate to where the puck is going to be, not to where it has been.” – Wayne Gretsky

Leaps of faith Coverage does not guarantee access Evidence-based medicine Value not Volume Patient Centered Care Population Health Readiness and ability to transform

Personalized Health Care P4 Medicine –Predictive –Preventive –Personalized –Participatory

5 stages of grief Denial Anger Bargaining Depression Acceptance “ No you can’t” Just vote NO ! Litigate, baby, litigate Let the voters decide Not so much

Resources AAMC – Kaiser Family Foundation Ropes and Gray Commonwealth Fund FamiliesUSA US Health & Human Services-Center for Medicaid & Medicare Services Library of Congress Patient Protection & Affordable Care Act -HR 3590/P.L Health Care and Education Reconciliation Act-HR 4872/P.L

“ Americans can be counted on to do the right thing... after they have tried everything else.” -Sir Winston Churchill

Questions ?