1. Leadership State of the Alliance

2. Healthcare Reform Update June, 2010

3. Today’s presentation: Patient Protection and Affordable Care Act (PPACA)
Implications for our members
10 years of change
Huge and mounting financial pressures
Massive regulatory requirement
Implications for our work together: can we succeed?
Comparative effectiveness and transparency
Device tax
Competition v. price controls

5. Payment cuts to hospitals: $157B
Hospital Payment Cuts in Public Law No: Patient Protection and Affordable Care Act
CBO/JTC Estimate,
CMS Actuary Estimate (in billions)
Total Cuts for Hospitals: ~$156.6 billion

6. Realities for hospitals

7. Health reform’s hidden agenda
Total Federal Spending for Medicare and Medicaid Under Assumptions
About the Health Cost Growth Differential
Percent of GDP
1966
1972
1978
1984
1990
1996
2002
2008
2014
2020
2026
2032
2038
2044
2050 5 10 15 20 25
Actual
Projection
2.5 Percentage Points
1 Percentage Point
Zero
Differential of:
Tax rates 2050:
10% %
25% %
35% %
Tax Rates (pictures on the right of the graph): The Congressional Budget Office found that if federal income tax rates are adjusted to allow the government to continue its current level of activity and balance its budget:
The lowest marginal income tax rate of 10 percent would have to rise to 26 percent.
The 25 percent marginal tax rate would increase to 66 percent.
The current highest marginal tax rate (35 percent) would rise to 92 percent!

8. Transparency & evidenced-base care Healthcare reform provisions
Disclosure of industry payments to physicians and teaching hospitals (beginning 2013)
Creation of Patient-Centered Outcomes Research Institute (comparative effectiveness research)
National priorities for quality measurement development
Transparency
Disclosure of standard hospital charges
Requires each hospital operating within the U.S., for each year, to establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital's standard charges for items and services provided by the hospital, including for Medicare diagnosis related groups (DRGs).
Sunshine on industry payments to physicians (beginning 2013)
Beginning March 31, 2013, drug, device, biologics or medical supply manufacturers are required to publicly report all payments of value to physicians and teaching hospitals (exception for a transfer of value under $10, unless the aggregate amount transferred during the calendar year exceeds $100)
Requires manufacturers or group purchasing organizations to disclose ownership or investment interest (other than a publicly traded security and mutual fund) held by a physician
Prohibition on Medicare participation by physician-owned hospitals (grandfathered to December 31, 2010)
Failure to report holds civil monetary penalties of not less than $1,000 and not more than $10,000 for each violation.
Prohibits physician-owned hospitals that do not have a provider agreement prior to December 31, 2010, from participating in Medicare. Hospitals that have a provider agreement prior to December 31, 2010 may continue to participate in Medicare subject to certain reporting requirements relating to conflict of interest, bona fide investments, and patient safety issues, and expansion limitations.
Hospitals information relating to physician ownership and investment will be available to the public. The Secretary shall establish policies and procedures to ensure compliance with these provisions. This may include unannounced site reviews of hospitals.
Not later than May 1, 2012, HHS will conduct audits to determine if hospitals are in violation of these provisions.  
Allows high Medicaid facilities to apply for an exception from the prohibition. High Medicaid facilities are defined as hospitals that, for the most recent 3 years for which data is available, treat the highest percentage of Medicaid patients in their county (and are not a sole community hospital).
Imposes new standards for the tax exemption of nonprofit hospitals (Effective for taxable years beginning after the Act’s enactment except with the respect to the community health needs assessment, which will apply 2 years after the Act’s enactment). 
Requires that a hospital complete a community needs assessment once every three years
Requires hospitals to adopt and publicize a financial assistance policy
Limits the amount that can be charged by a charitable hospital for emergency or medically necessary to individuals eligible for assistance to the amount generally billed for such care
Prohibits a hospital from taking extraordinary collection actions if the hospital has not made reasonable efforts to notify patients of its financial assistance policy
Imposes an excise tax of $50,000 on a hospital organization that fails to meet the requirements for any taxable year. 
Directs the Secretary of the Treasury to review at least once every 3 years the community benefit activities of each hospital
Focus on evidenced-based care
Creation of Patient-Centered Outcomes Research Institute (comparative effectiveness research)
Establishes a private, non-profit corporation to assist providers, payers, and policy makers in making informed health decisions
National priorities for quality measurement development
Authorizes $75 million over 5 years for the development of quality measures at AHRQ and CMS. Quality measures developed under this section will be consistent with the National Strategy
HHS must identify, not less than triennially, gaps where no quality measures exist, or where existing measures need improvement consistent with the National Strategy and priorities and develop measures that would fill identified gaps by contracting with a qualified consensus-based entity
Requires the Secretary to develop and update (not less than every 3 years) provider-level outcome measures for hospitals and physicians.
Funding for measurement development entity
Provides $20 million to support the endorsement and use of endorsed measures by the HHS Secretary for use in Medicare, reporting performance information to the public, and in health care programs
HHS establishes a pre-rulemaking process to obtain input from the consensus-based entity and multi-stakeholder group on the selection of quality and efficiency measures
By no later than December 1 each year, starting in 2011, HHS will make public a list of measures being considered for selection with respect to Medicare reporting and payment systems. By no later than February 1, the consensus-based entity must give HHS recommendations regarding the proposed measures. The entity would convene the stakeholder group to consult on the recommendations.
Availability of Medicare Data for Performance Measurement
Effective January 1, 2012, authorizes the release and use of standardized extracts of Medicare Parts A, B and D claims data to qualified entities to measure the performance of providers and suppliers. Requires the Secretary to take necessary actions to protect beneficiaries’ identity
Requires qualified entities to pay a fee equal to the cost of making the data available, which would be deposited

9. Today’s presentation: Patient Protection and Affordable Care Act (PPACA)
Implications for our members
10 years of change
Huge and mounting financial pressures
Massive regulatory requirements
Implications for our work together: can we succeed?
Comparative effectiveness and transparency
Device tax
Competition v. price controls
Can we succeed?
Our mutual goal: create a truly competitive, transparent and functional market

10. Reform Readiness: Innovative strategies
Widen the competitive pricing advantage
Refine sourcing strategies to meet members’ evolving needs
Integrate clinical benchmarking data/value analysis
Expand offerings specific to non-acute settings (ACO)

11. Panelists Susan DeVore, President & CEO
Mike Alkire, President, Premier Purchasing Partners
Blair Childs, Sr. VP, Public Affairs
John Biggers, Group VP, Sourcing and Contracts
Bryant Mangum, VP, Pharmacy Services
Joan Ralph, VP, Continuum of Care Services
Andy Brailo, VP, Strategic Accounts
Emcee: Dave Edwards, VP, Business Development &
Supplier Relations