1 HEALTH CARE REFORM – Insurance Changes and Implications for Providers Kenneth W. Kizer, MD, MPH Alaska State Hospital and Nursing Home Association Fairbanks, AK September 8, 2010

2 TO REVIEW…

3 HEALTH CARE IS ENTERING A PERIOD OF “CLASS 5 CHANGE”

WHAT’S CAUSING THE ‘RAPIDS’? 1.The need to control the growth of health care costs 2.The need to improve quality and safety 3.Not enough caregivers 4.The need for new facilities 5.Changing patient needs and expectations 6.Biomedical science advances 7.New technologies 8.The struggling economy 9.The health IT revolution 10.The health care reform law

5 THE FORCES DRIVING HEALTH CARE CHANGE ARE NOT CAUSED BY THE HEALTH CARE REFORM LEGISLATION. THE LEGISLATION IS MERELY THE WAY THAT ELECTED POLICY MAKERS HAVE CHOSEN TO ADDRESS THE PROBLEMS WITH HEALTH CARE WITHIN THE CONTEXT OF AMERICAN CULTURE.

6 What is the Health Care Reform Law?  The most far-reaching health care legislation since Medicare was enacted in 1965  Refers to 2 specific legislative acts The Patient Protection and Affordable Care Act of 2010 (PPACA) - PL , enacted March 23, 2010 The Health Care and Education Affordability Reconciliation Act of 2010 (HCERA) - PL , enacted March 30, 2010  The legislation seeks to: Expand access to health care by increasing insurance coverage and pay for the expansion Reform health insurance practices Improve the quality of care Control the rate of increase of health care expenditures  Changes are incrementally implemented, beginning in 2010 and extending well beyond 2014  Legislation that affects everyone involved with health care

7 Selected Statistics About the Health Care Reform Law  Expands health insurance coverage to 34 million persons  Guarantees that 94% of Americans will have health insurance of some type  Is projected to cost $938 B over the next 10 years  Is projected to extend solvency of the Medicare Trust Fund by 12 years (to 2029)  Is projected to cut the federal deficit by $143 B over the next decade  Medicaid will become larger than Medicare

8 Patient Protection and Affordable Care Act of 2010 I.Quality, Affordable Health Care For All Americans II.Role of Public Programs III.Improving the Quality and Efficiency of Health Care IV.Prevention of Chronic Disease and Improving Public Health V.Health Care Workforce VI.Transparency and Program Integrity VII.Improving Access to Innovative Medical Therapies VIII.Community Assistance Services and Supports IX.Revenue Provisions X.Strengthening Quality, Affordable Health Care For All Americans

9 IT’S A JOURNEY 1.PPACA is a major milestone in the transformation of American medicine, but the journey started long before this legislation was enacted 2.Hundreds of sets of implementing regulations have yet to be promulgated 3.There will be unplanned occurrences and unintended consequences of the legislation 4.Course corrections will need to be made 5.There will be more health care reform legislation

10 THE WAY WE THINK ABOUT HEALTH CARE HAS TO CHANGE 6.It’s about the quality, not quantity, of services provided 7.Payment will be increasingly based on value – and constrained 8.Historical levels of waste and inefficiency can no longer be tolerated 9.Performance improvement is an essential business strategy

“ALL HEALTH CARE IS LOCAL”

12 Session Objective 1. 1.To review how PPACA affects health insurance 2. 2.To consider some of the insurance reform-related implications for health care providers To explore the implications for Alaska.

13 PPACA Affects Health Insurers By 1.Prohibiting or restricting certain practices 2.Specifying and/or standardizing covered benefits or populations 3.Limiting amount of premiums spent on non- medical costs 4.Being more prescriptive about setting premiums 5.Limiting variation in premiums 6.Authorizing federal review of premium increases 7.Allowing multi-state insurance compacts 8.Requiring individuals to have health insurance

14 PPACA Affects Health Insurers By 9.Creating more insurer options (exchanges) 10.Providing incentives (tax credits) for employers to provide health insurance (and wellness programs) and disincentives (penalties) for not providing employee coverage 11.Increasing public reporting requirements 12.Designing-in quality of care improvement strategies

15 Panel….