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Public Sector Healthcare Roundtable

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Presentation on theme: "Public Sector Healthcare Roundtable"— Presentation transcript:

1 Public Sector Healthcare Roundtable
Thursday November 8th, 2018 State health policy and Public Purchasers Presented by Trish riley Executive director National academy for state health policy Acknowledge and thank

2 The Facts Healthcare in the US – 18% GDP One of every three new jobs, US spends two times what other wealthy countries spend

3 Price and intensity have been the primary drivers of U. S
Price and intensity have been the primary drivers of U.S. spending growth Source: Factors Associated With Increases in US Health Care Spending, JAMA. 2017;318(17): doi: /jama

4 Health care consolidation trends
1,629 hospital mergers from 90% of hospital markets are highly concentrated Of the 1629 hospital mergers, 778 of these were between Source on hospital mergers: Martin Gaynor Feb 2018 testimony, AHA ( ), Kaufman Hall ( ). Source on 90% figure: Fulton Source: DM Cutler, F Scott Morton, Hospitals, Market Share, and Consolidation, JAMA. 2013;310(18):

5 Health care consolidation trends
% of markets that are highly concentrated: 65% of specialty physician markets 57% of insurer markets 39% of primary care markets Source: Fulton, BD. Health Care Market Concentration Trends in the United States: Evidence and Policy Responses. Health Affairs. 2017;36(9):

6 Hospital Consolidation  Higher Prices
Hospital consolidation leads to significantly higher prices in concentrated markets. Estimated price increases: 20-40% Author/Year Result Dafny (2009) Merging hospitals had 40% higher prices than non-merging Haas-Wilson, Garmon (2011) Post-merger, Evanston NW hospital had 20% higher prices than controls Tenn (2011) Summit/Sutter prices increased 28% - 44% compared to controls Source: Gaynor M, Town R, The impact of hospital consolidation – update, Robert Wood Johnson Foundation, The Synthesis Project, ISSN (June 2012).

7 Prices for inpatient hospital stays have grown faster for private insurance than for Medicare or Medicaid Average inflation-adjusted, standardized payment rates per inpatient hospital stay, by primary payer, Note: The average payment rates were computed as if each primary payer paid for all non-maternity adult stays in a given year. Payments were adjusted for inflation and standardized across payers in terms of patient’s age, sex, race/ethnicity, geography, household income as a percentage of the federal poverty level, conditions, charges, length-of-stay, and whether or not a surgical procedure was performed. They were not standardized for changes over time in the bundles of treatments and services provided during inpatient stays. Source: Thomas M. Selden analysis of AHRQ’s Medical Expenditure Panel Survey for the Kaiser Family Foundation. Update of earlier analysis, available here:

8 The Cost Shifting Challenge
Underpayment by Medicare & Medicaid Cost shift to other payers Community Benefit Would equalizing public & private payment rates reduce cost shift? One recent study* found hospitals receiving an unexpected 10% increase in Medicare payment rates… Added new technology Increased nursing staff Increased payroll by 1/3rd * Skinner J, Chandra A. Health Care Employment Growth and the Future of US Cost Containment. JAMA. 2018;319(18):1861–1862. doi: /jama

9 Drug spending has grown rapidly recently, but most of the health dollar is spent on hospitals and physicians Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group

10 Among Registered Voters:
Health care costs is the top health care issue voters want 2018 candidates to talk about While this year’s election is still a long way off, what health care issue do you most want to hear candidates talk about during their upcoming campaigns? (open-end) Among Registered Voters: NOTE: Only top six responses listed. SOURCE: Kaiser Family Foundation Health Tracking Poll (conducted February 15-20, 2018)

11 States as laboratories of innovation The power of public purchasers
What Can States Do? States as laboratories of innovation The power of public purchasers Theme in Governor races

12 State of the State – Health Cost Reduction Strategies
Payment and delivery system reforms Medicaid ACO’s / Integrated Delivery (VT all payer ACO) WA Technology Assessment Program. Global budgets/ Sustainable growth rate MA, VT, OR Ratesetting MD Market oversight DON/CON/COPA– MA, CT, ME, VA, TN Insurance review and oversight e.g. 23 States “Surprise Billing” laws Transparency – cost compare websites APCD’s WA, NH, ME

13 Cont.- State of the State – Health Cost Reduction Strategies
Reference pricing MT – hospital rates CA -“shoppable services” Consolidate state purchasing WA Health Care Authority Oregon Health Authority – Purchases for 1:3; Medicaid, public employees, educators; 3. 4% SGR TN – episode based payment across state employees, retirees, and Medicaid WI Dept. of Employee Trust Funds – allows local government and public universities opt in

14 How Are States Approaching Rx Costs?
2018 Session: 171 Bills 28 States Passed 45 New Laws: PBMs – 92 Bills (31 laws in 20 states e.g.: AR, AZ, FL, KS, KY, MO, SC, CA, CT etc. Transparency – 26 Bills (7 laws: OR, VT, ME, NH, CT, CA*, NV*) Importation – 9 Bills (1 law: VT; Utah – Proposal due to Legislature Oct 1) Price Gouging – 13 Bills (1 law: MD*) Rate Setting – 3 Bills: MD, NJ, MN Volume Purchasing – 4 Bills (*= enacted in 2017)

15 National Academy for State Health Policy
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