Oregon Health Care Reform "Letting Go of the Rope" Timothy L Keenen, MD Orthopedic Spine Surgeon Tualatin, OR AAOS Fall Meeting October 20, 2012 Philadelphia, PA

Fee for Service US Health Care Spending 18 % of GDP 25% by 2037 25% of Federal Spending 40% by 2037 Accountable Care Organization (ACO) Pay for Performance Global Payments Patient Centered Medical Homes (PCMH) Affordable Care Act (ACA) Bundled Payments Fee for Service

Medicaid Medicare Commercial

3,800,000 2,000,000 40% D 30% R 25/5 %

public employees / teachers 2012 3,800,000 600,000 Medicaid 300,000 public employees / teachers 25% state funding for health care 16 % budget Oregon Health Plan 1993 waiver from Bill Clinton 2,900,000 240,000 medicaid oregonians

(President of State Senate 1985-1993) John Kitzhaber, MD State Legislator 1978-1993 (President of State Senate 1985-1993) Governor 1995- 2003 Archimedes Movement 2006 Governor 2011-present

US health care assumes that the public sector and private employers will continue to fund the medical inflation rate faster than CPI and that this will continue to be funded without evidence of positive outcomes. Gov. John Kitzhaber

Three strategies 1. Decrease provider reimbursement 2. Decrease number of patients covered 3. Decrease patient benefits

The new rope we are grabbing onto….. Coordinated Care Organizaion CCO Local Flexibility Cost / Outcome Management “Outside” fee for service Global Payment Bundled Payment Pay for Performance “Outside” hospital and doctor office Flexibility Technology

2007 Oregon Health Fund Board (OHFB) 2009 Oregon Health Authority (OHA) Oregon Health Policy Board (OHPB)

State Health Insurance Exchange Oregon SB 99 (June 2011) State Health Insurance Exchange Market place for apples to apples comparisons for insurance Central elements to move from Medicaid into the private market

Coordinated Care Organizations : 3650 HB June 2011   Coordinated Care Organizations (CCO) A service integration, care coordination, focus on wellness, prevention and community based management of chronic conditions  medical care. Population health rather than simply the delivery of medical care Risk adjusted global budget that grows at a fixed rate Accountability for performance standards around access, around clinical outcomes, and around metrics for improving population health

SB 1580 February 2012 CCO adopted as a plan Senate 16-14 vote (16D 14R) House 53-7 vote  (30D  30R) CCO adopted as a plan Established application / certification process Tort Reform deferred to 2013

Differences Commonalities ACO Accountable Care Organization PCMH Patient Centered Medical Home CCO Coordinated Care Organization Commonalities Reduce incentive for providers to earn more by treating more Improve coordination / integration of care Focus on use of Information Technology Differences

$1.9 billion dollars from HHS over 5 years May 1, 2012 Federal Waiver Payment: $1.9 billion dollars from HHS over 5 years Federal requirement: 2% decrease in the Medicaid per member inflation rate trend by the end of the second year (down to 3.5%) Savings: $ 1.9 billion over 5 years $11 billion over 10 years

The grand bargain was they give us the flexibility, they give us $1 The grand bargain was they give us the flexibility, they give us $1.9 billion, we reduce the Medicaid cost trend by 2 percent points per member by the end of the second year and improve health outcomes. That’s the grand bargain.

Health Evidence Review Commission (HERC) Health Technology Assessment Subcommittee

SK: How will the administration measure what counts as higher quality care? How do you safeguard against providers skimping on care? JK: There are metrics we’re developing with [the Center for Medicare Services] about patient outcomes and population health metrics. So this is clearly unlike an old HMO, which could save costs by skimping on care.

What can I do? Reimbursement Fee for Service Global Payment Bundled Payment Contract ? Strategic Pathway ? RCT based Patient Registry based Treatment Outcome Measure? Pay for performance