1 Open Classroom Series Fall 2013: Policy for a Healthy America Every Wednesday, 6pm – 8pm September 4 through December 4 West Village F, Room 20 Northeastern University School of Public Policy and Urban Affairs

This Week (September 11, 2013) School of Public Policy & Urban Affairs | Northeastern University John McDonough Professor of the Practice of Public Health and Director of the Center for Public Health Leadership, Harvard School of Public Health; former Senior Advisor for National Health Reform to the US Senate Committee on Health, Education, Labor, and Pensions John Auerbach Distinguished Professor of Practice and Director of the Institute on Urban Health Research, Northeastern University; former Commissioner of Public Health for the Commonwealth of Massachusetts “Promises and Pitfalls of ‘Obamacare’”

John E McDonough, DPH, MPA Harvard School of Public Health September, 2013 The Affordable Care Act (ACA): Essential Structure and Implementation Progress Programs in Leadership Development

I.Affordable and Available Coverage– private insurance II.Medicaid and CHIP – lower-income public coverage III.Delivery System Reform and Medicare IV.Prevention, Wellness, and Public Health V.Workforce Initiatives VI.Fraud, Abuse, Transparency and more VII.Pathway for Biological Similars VIII.CLASS – Community Living Assistance Services & Supports IX.Revenue Measures X.Manager’s Amendments I.Plus Health Care & Education Reconciliation Act (HCERA) Ten Titles: the ACA’s Architecture

I: Affordable and Available Coverage – Immediate Reforms in 2010 and 2011 – Coverage for young adults <26; Lifetime/annual limits banned; Medical Loss Ratios; Medicare Part D donut hole closing By themselves, the most substantive private health insurance reforms ever in the U.S. – Coming on 1/1/2014 – the Three-Legged Stool Insurance Market Reform – Guaranteed Issue/No pre-ex Individual Mandate/Responsibility Premium & Cost Sharing Subsidies – State Insurance Exchanges – Employer Responsibility – As of 1/1/2014, fundamental reform Title I (Private Health Insurance)

State Exchanges/Marketplaces Federal: 26; Partnership: 7; State Run: 18

Title II: Medicaid II: Medicaid & CHIP – New national eligibility floor of 138% FPL for all citizens with no access to other coverage – Because of 2012 US Supreme Court decision on the ACA, expansion is optional for states – Federal Financing at 100% for Trends down no lower than 90% by 2019 Average state match in traditional Medicaid is 56% – Uniform eligibility and enrollment standards – Immigrants: All legal immigrants eligible for Exchange coverage/subsidies No eligibility for undocumented immigrants

Coverage under Titles I and II: Effective January 1, %+ FPL – Eligible for Exchange without subsidies ($89K, family of 4) % FPL – Eligible for Exchange with subsidies ($31K, family of 4) 0-138% FPL – Eligible for Medicaid (less than $31K, family of 4) – in states that choose to participate – In non-participating states, individuals % fpl can join Exchanges

State Medicaid Expansion Decisions

III: Medicare and Delivery System Reform – Delivery System Reforms National Quality Strategy, Medical Homes, Accountable Care Organizations, Readmissions & Hospital Infections Penalties, Value Based Insurance, Independent Payment Advisory Board and more – Changes to Lower Medicare Spending IV: Prevention and Wellness – Prevention and Wellness Commission and Strategy – Prevention & Wellness $15B Trust – Coverage of A & B Clinical Preventive Services without cost sharing – Calorie Labeling in Chain Restaurants Titles III (Medicare) and IV (Prevention)

Delivery System Reform: ACOs and more Medical Homes: 50 ACOs: 27 (252) Bundled/Episode Payments: 23 Comprehensive Or Global Payments: 5

V. Health Care Workforce – National Workforce Commission and National Plan – Primary Care Expansions – $$$ for Federally-Qualified Community Health Centers (FQHCs) & National Health Service Corps VI. Transparency and Program Integrity – Physician Payment Sunshine Act – Medicare & Medicaid Fraud & Abuse – Elder Justice Act – Nursing Home Transparency – Patient Centered Outcomes Research Institute (PCORI) Titles V (Workforce) and VI (Grab-bag)

ACA TitleCovered (#M) $ Spent ($B)$ Raised /Saved ($B) 1. Private Sector Coverage16$509$ Medicaid/CHIP16$458.8$ Medicare/Delivery Reform$54$ Prevention/Public Health$18$.8 5. Workforce$ M&M Fraud & Abuse$2.8$7 7. Biologic Similars--$7 8. CLASS--$ Revenues--$437.8 Others (Interactions etc)14.8$92.8 The ACA’s Financial Impacts ( )

What Has Changed in ACA Since 2010? Title I, subsidy recipients more at risk for repayment when income increases Title I, $6B funding for co-ops cut to $2B Title I, employee “free choice” vouchers eliminated Title II, Medicaid expansion, made state option Title IV, $5B (of $15) cut from Prevention Trust Fund Title V, Community Health Centers $3B (of $11) cut Title VIII, CLASS Act, repealed Title IX, corporate tax reporting section repealed ($22B revenue loss)

Summary Judgments & Looks Ahead ACA has survived its three “near death experiences” – the worst threats are over January is key date when the major insurance expansions take hold – then no turning back By 2020, most/all states will be part of the Medicaid expansion (remember 1965) Reform of the delivery system will only get stronger and deeper – global phenomenon By 2015, Congress will begin the normal work of oversight and reform of the ACA

InnovationACA Section 10 Year Savings High Premium “Cadillac” Excise Tax9001$32B Independent Payment Advisory Board3403$15.1B Administrative Simplification1104$11.6B Preventable Hospital Readmissions3025$7.1B Pathway for BiosimilarsT. VII$7.0B Fraud and Abuse PreventionT. VI$7.0B Shared Savings/Accountable Care Organizations3022$4.9B Hospital Acquired Infections3008$1.4B Center for Medicare & Medicaid Innovation3021$1.3B Physician Quality Reporting3002$100M Patient Centered Outcomes Research Institute6301-2($2.2B) Key ACA Spending-Scorable Innovations

National Pilot on Payment Bundling (3023) Hospital Value-Based Purchasing (3001) National Quality Improvement Strategy (3011) Interagency Working Group on Quality (3012) Reduce Drug Waste in LTC facilities (3310) Medicaid adult quality measures (2701) Medicaid “health homes” for chronically ill (2703) CMS Coordinated Health Care Office (2602) Other Non-Score ACA Quality Innovations

CBO’s health care numbers often don’t add up Three major health reform laws since 1975 – 1983 – creation of PPS/DRG system – 1997 – passage of Balanced Budget Act – 2003 – Medicare Modernization Act and Part D In each case, CBO off by a lot In each case, in the same direction: – Underestimating savings/revenues, overestimating costs CBO relies heavily on published RCT research Better than the alternative – may be good news Understanding CBO Scoring

Title IV: National Prevention Strategy National Prevention Strategy/Council: Strategic Directions – Healthy and Safe Community Environments: Create, sustain, and recognize communities that promote health and wellness through prevention. Healthy and Safe Community Environments: – Clinical and Community Preventive Services: Ensure that prevention-focused health care and community prevention efforts are available, integrated, and mutually reinforcing. Clinical and Community Preventive Services: – Empowered People: Support people in making healthy choices. Empowered People: – Elimination of Health Disparities: Eliminate disparities, improve quality of life for all Americans. Elimination of Health Disparities:

Bill Text and Section-by-Section Summary – Healthcare.gov Congressional Budget Office: cbo.gov Obama Administration Site: healthcare.gov Commonwealth Fund: cmwf.org Kaiser Family Foundation: kff.org Health Reform GPS: healthreformgps.org Politico’s PULSE: Some Essential Resources

23 Open Classroom Series Fall 2013: Policy for a Healthy America Every Wednesday, 6pm – 8pm September 4 through December 4 West Village F, Room 20 Northeastern University School of Public Policy and Urban Affairs

Health Care Reform The Massachusetts Experience John Auerbach Institute for Urban Health Research and Practice

Thanks to MDPH Division of Health Care Finance and Policy/CHIA Blue Cross/Blue Shield Foundation Urban Institute

Why here? - PRE-REFORM FACTORS FACILITATED MASS. HEALTH REFORM Low rate of un-insured (6% vs. 15%) Employer-offered health insurance Medicaid eligibility Need for reform - fed waiver expiring Right combination of factors –Less political polarization –History of attempts to address (thank you, Gov. Dukakis) –Support from key insurers & providers –Strong consumer movement 27

Key Elements of Reform Plan – Shared responsibility INSURERS: Reformed non-group/small-group markets to lower price & offer choices for individual purchasers. INDIVIDUALS: Required adults who can obtain affordable health insurance to do so. EMPLOYERS: Required employers of 11+ employees to contribute to coverage for employees or pay assessment. GOVERNMENT: –Subsidized insurance to low income adults and children (free for adults to 150%/kids to 300%) 28

29 Exchange Created: The Connector with Insurance Exchanges functions Commonwealth Care is an Exclusive Distribution Channel for subsidy- eligible adults (< 300% fpl) Commonwealth Choice is an Alternative Distribution Channel for unsubsidized non-group & small-group insurance* *(non-subsidized insurance must meet certain coverage and cost standards. Eight insurers offered plans within the state’s approved benefit designs (bronze, silver, and gold).

30 Vol. Plan Employers Non-Group Commonwealth Choice: 33,000 people Connects Mass residents and businesses to insurance Commonwealth Care: 175,000 people Connects low-income residents to subsidized plans Small-Group

31 WHAT HAPPENED? Access, health, cost, public opinion

32 Access – B+

Within months - MASSACHUSETTS HAD THE LOWEST RATE OF UNINSURANCE IN THE COUNTRY 33 PERCENT UNINSURED, ALL AGES U.S. AVERAGE NOTE: The Massachusetts specific results are from a state-funded survey — the Massachusetts Health Insurance Survey (MHIS). Using a different methodology, researchers at the Urban Institute estimated that 507,000 Massachusetts residents were uninsured in 2005, or approximately 8.1 percent of the total population. Starting in 2008, the MHIS sampling methodology and survey questionnaire were enhanced. These changes may affect comparability of the 2008 and later results to prior years. The national comparison presented here utilizes a different survey methodology, the Current Population Survey, which is known to undercount Medicaid enrollment in some states. SOURCES : Urban Institute, Health Insurance Coverage and the Uninsured in Massachusetts: An Update Based on 2005 Current Population Survey Data In Massachusetts, 2007; Massachusetts Division of Health Care Finance and Policy, Massachusetts Health Insurance Survey 2000, 2002, 2004, 2006, 2007, 2008, 2009, 2010; U.S. Census Bureau, Current Population Survey MASS.

UNMET NEED FOR CARE FOR ANY REASON HAS DECREASED SINCE REFORM 34 SOURCE: Urban Institute, Massachusetts Health Reform Survey, PERCENT OF NON-ELDERLY ADULTS REPORTING AN UNMET NEED FOR CARE FOR ANY REASON, BY SELECTED POPULATIONS Fall 2006 Fall 2009 All adults Fall 2006 Fall 2009 Lower-income adults (<300% FPL) Fall 2006 Fall 2009 Middle- income adults ( % FPL) Fall 2006 Fall 2009 Adults with a chronic condition Fall 2006 Fall 2009 Adults of minority race/ethnicit y

MORE MASSACHUSETTS ADULTS HAVE A USUAL SOURCE OF CARE 35 SOURCE: Urban Institute, Massachusetts Health Reform Survey, PERCENT OF NON-ELDERLY ADULTS REPORTING A USUAL SOURCE OF CARE, SELECTED POPULATIONS Fall 2006 Fall 2009 All adults Fall 2006 Fall 2009 Lower-income adults (<300% FPL) Fall 2006 Fall 2009 Middle- income adults ( % FPL) Fall 2006 Fall 2009 Adults with a chronic condition Fall 2006 Fall 2009 Adults of minority race/ethnicity

Massachusetts Division of Health Care Finance and Policy NON-ELDERLY ADULTS WITH A DOCTOR VISIT IN PAST 12 MONTHS BY INSURANCE STATUS Compared with the insured adults, uninsured non-elderly adults were much less likely to have had a doctor visit in the past 12 months. The 2009 estimates are not significantly different from the estimates for Note: In some cases, what appear to be relatively large differences in estimates between 2008 and 2009 are not statistically significant. This arises because estimates based on small subgroups of the overall population have larger variances, making point estimates less precise. Source: Urban Institute tabulations on the 2008 and 2009 Massachusetts HIS

FEWER MASSACHUSETTS ADULTS HAVE SIGNIFICANT OUT-OF-POCKET HEALTH EXPENSES 37 NOTE: “Out-of-pocket” health care costs includes deductibles, co-insurance, co-payments, but excludes the cost of premiums. SOURCE: Urban Institute, Massachusetts Health Reform Survey, PERCENT OF NON-ELDERLY ADULT POPULATION WITH FAMILY INCOME LESS THAN 500% FPL WHO SPENT 5 OR 10 PERCENT OF INCOME ON OUT-OF-POCKET HEALTH CARE COSTS Fall 2006Fall 2010 Out-of-pocket expenses at 5% or more of family income Fall 2006Fall 2010 Out-of-pocket expenses at 10% or more of family income

PERCENTAGE OF ADULTS WITHOUT HEALTH INSURANCE, BY RACE/ETHNICITY (NON-ELDERLY) 38 All percentages are age-adjusted to standard population (U.S. 2000) Chart shows two-year moving averages Data Source: MA Behavioral Risk Factor Surveillance System (BRFSS)

RACIAL/ETHNIC DISPARITIES IN ACCESS TO AND USE OF CARE HAVE DECREASED IN MASSACHUSETTS SINCE REFORM 39 SOURCE: Urban Institute, Massachusetts Health Reform Survey, White, non-Hispanic adults Adults of minority race/ethnicity Fall 2006 PERCENT OF POPULATION WITH A USUAL SOURCE OF CARE PERCENT OF POPULATION WITH ANY DOCTOR VISIT IN PRIOR YEAR White, non-Hispanic adults Adults of minority race/ethnicity Fall 2009 White, non-Hispanic adults Adults of minority race/ethnicity Fall 2006 White, non-Hispanic adults Adults of minority race/ethnicity Fall 2009

BUT SOME STILL UNINSURED 2%=120,000 –Male –Hispanic –Non-citizen –Low-income –Not working or working part-time Total Uninsured White, Non- Hispanic Other Race, Non- HispanicHispanic 120,000 PERCENT UNINSURED, 2010, BY RACE/ETHNICITY

42 Health – B

Massachusetts Division of Health Care Finance and Policy NON-ELDERLY ADULTS WITH A PREVENTIVE CARE VISIT IN PAST 12 MO. BY INSURANCE STATUS Compared with the insured adults, uninsured non-elderly adults were much less likely to have had a preventive care visit in the past 12 months. The 2009 estimates are not significantly different from the estimates for 2008.

PREVENTIVE CARE AND USE OF OTHER MEDICAL SERVICES HAVE INCREASED AMONG MASSACHUSETTS ADULTS SINCE REFORM 44 SOURCE: Urban Institute, Massachusetts Health Reform Survey, PERCENT OF NON-ELDERLY ADULTS REPORTING USE IN PRIOR YEAR, BY TYPE OF SERVICE Fall 2006 Fall 2009 Any doctor visit Fall 2006 Fall 2009 Preventive care visit Fall 2006 Fall 2009 Dental care visit Fall 2006 Fall 2009 Prescription drug use

IMPROVED SCREENING AND VACCINE RATES

6-Month Annual Rolling Average, Model Estimates Massachusetts Department of Public Health Smoking prevalence among the uninsured changed very little after July 2006, but the MassHealth population saw a sharp and significant decrease from 38% pre-benefit to 28% just 2.5 years later. This decrease began the month the MassHealth benefit was implemented. Source: MA BRFSS, Health care reform implemented DRAMATIC DECREASE IN SMOKING of MassHealth enrollees

The number of people with diabetes who received recommended preventative care (eye exam, foot exam, flu shot and twice annual A1c check) has increased by 7.6 percentage points in the period following health care reform implementation. Source: MA BRFSS, Four measures: Annual Eye Exam, Annual Foot Exam for Numbness, Flu Shot, and Twice yearly A1c check Massachusetts Department of Public Health *Statistically significant increase (p<.05) BUT WITH HCR: INCREASED PREVENTIVE CARE AMONG PEOPLE WITH DIABETES

ELEVATED FOCUS ON QUALITY 48 Focus on quality improvement – reduction of health care infections & injuries Emphasis on primary care medical homes as model Structuring payment incentives to ensure high level quality

49 Cost – C+ (but with a recent A for effort)

50 LONG-TIME COST ISSUES Per capita health spending 15% higher than the nat’l average Highest individual market premiums in the country

EXPENSES STILL GROWING 51

ATTENTION TO COST SHOWS PROMISE Most state PC MDs in global payment Cost savings in insurer-hospital contracts Div. of Insurance –lower premiums More limited cost insurance packages Bottom line: MA ranking of family premiums cost improves from #1 to #9 52

CHAPTER 224 CHANGES THE RULES-PASSED IN 2012 New agencies to monitor/enforce the benchmark for cost growth Adoption of alternative payment methodologies Increased price transparency Expansion of the PC workforce Medical malpractice reform 53

CHAPTER 224: PROMOTES PREVENTION Creates $60 million Trust –Goal: Link prevention & care to improve health Strengthens workplace wellness –Tax incentives and assistance

HEALTH REFORM FINANCING Biggest expenses –Commonwealth Care -subsidies to low income –MassHealth expansion Biggest savings –Safety Net Fund –Supplement to Safety Net hospitals Bottom line - Additional state spending for HCR = 1.4% of the state’s budget (Mass. Taxpayers Foundation) 55

56 Public support – B+

WHAT HAS BEEN THE EXPERIENCE WITH THE INDIVIDUAL MANDATE IN MASSACHUSETTS? 99 percent of the public complies Most uninsured exempt from mandate Only 1% of tax filers assessed penalty 57 SOURCE: Massachusetts Health Connector and Department of Revenue; Data on the Individual Mandate Tax Year 2009, November 2011.

PUBLIC SUPPORT FOR MASSACHUSETTS HEALTH REFORM HAS REMAINED HIGH 58 SOURCE: Urban Institute, Massachusetts Health Reform Survey, PERCENT OF NON-ELDERLY ADULTS INDICATING SUPPORT FOR MASSACHUSETTS HEALTH REFORM LAW Two out of three adults support Massachusetts health reform. Support for reform has been relatively stable throughout reform implementation. Fall 2006Fall 2010

SUMMARY MASS. HEALTH CARE REFORM Access: Success in achieving goals percent/99+ children (still gaps) Cost: Promise in tackling high and growing costs (time will tell) Health: Strong indicators or improvement (more study needed) Support: Consistently strong- 2 out of 3 supporting reform Impact: Basis for much in ACA Unresolved: cost control outcome, quality of care, closing access gap 60

School of Public Policy & Urban Affairs | Northeastern University John McDonough Professor of the Practice of Public Health and Director of the Center for Public Health Leadership, Harvard School of Public Health; former Senior Advisor for National Health Reform to the US Senate Committee on Health, Education, Labor, and Pensions John Auerbach Distinguished Professor of Practice and Director of the Institute on Urban Health Research, Northeastern University; former Commissioner of Public Health for the Commonwealth of Massachusetts Open Classroom Series Fall 2013: Policy for a Healthy America September 11, “Promises and Pitfalls of ‘Obamacare’” Any Questions?

Next Week (September 18, 2013) School of Public Policy & Urban Affairs | Northeastern University Mr. Thomas Menino Mayor of Boston “Reflections on a Career: The Health Care Achievements of Mayor Thomas Menino” Dr. JudyAnn Bigby former Secretary of Health and Human Services for the Commonwealth of Massachusetts Mr. Matt Fishman Vice President of Community Health, Partners Health Care Dr. Azzie Young President and CEO of the Mattapan Community Health Center

63 Open Classroom Series Fall 2013: Policy for a Healthy America Every Wednesday, 6pm – 8pm September 4 through December 4 West Village F, Room 20 Northeastern University School of Public Policy and Urban Affairs