1. Quality/Cost Imperative

2. Healthcare 2015
ACA Implementation – Divided Congress – More Litigation – Federal Subsidies
Origination Clause – Continued Changes in the Law – More Litigation – Federal
Medicaid Expansion – Payment Reforms – Cost Containment – Coverage Expa
sion – Above $200 Billion in Healthcare Costs– Exchanges– Policy Implications
KL: Needs more balance, the smaller photos should be bigger
Full speed ahead on implementation, which will be daunting
Divided Congress = few/no significant changes
Likely more litigation
Contraception,
Federal exchange subsidies,
Origination clause,
Others?
Continual tweaking to the law
Major action (Medicaid expansion, payment reforms, exchanges, cost containment…) at the state level
Coverage expansion continues to be an area of change:
Delay in implementation?
Changes in subsidies, Medicaid expansion, etc…
Healthcare is even more central to Federal activity – more than $200 billion
Policy has enormous impact and ongoing regulatory and payment reforms

3. Financial imperative Unsustainable Healthcare Spending
Based on projections by Peter Orzag at the Office of Management and Budget (OMB), we are on an unsustainable path for healthcare spending.
Based on a study by the Congressional Budget Office, if we continue on this path tax rates will have to increase for the top bracket (around 35%) to 92% in 2050 in order to solely fund healthcare spending.
Source: CBO

4. Financial imperative 1%
KL: Redo this – take the text off the top. Recolor this too.
Here is another outlook.
As you can see, currently the revenues from taxes cover all non-discretionary spending. 1%
SOURCE: Data from the Government Accountability Office The Federal Government’s Long-Term Fiscal Outlook: January 2010 Update, alternative simulation using Congressional Budget Office assumptions. Compiled by PGPF.
NOTE: Baseline interest rate is assumed to be 5.0 percent.
© Peter G. Peterson Foundation

5. Future of Medicare
To further compound the issue. Enrollment in Medicare is going to boom. With the baby boomers coming into the system, CMS estimates it will receive on average 10,000 new beneficiaries a day.
Source: 2012 Annual Report of the Boards of Trustees for the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds

6. Digitization of health care

7. Operating from a source of truth
Disparate systems
Accurate data
Analyze, trend, insight
Affect change
Visual of optimal world, you have to get to one, drop of water visual

8. Data Challenges – How Many Ways Can You Say “3M”?
THREEM is my Favorite

9. Discovery with confidence
Identifying potential opportunities
Price parity
Contract compliance
Benchmarking
Validation
Engaging key stakeholders
Driving decisions
Visual uncover, discover, analyze THEN validation  affecting change, providing context, data to back it up = magnifying glass or better

10. Art of managing the middle game
Volume-based
Value-based
Cuts to Existing FFS System
Cuts to Medicare
30 Day readmissions penalty
Market basket reductions
Bad debt cuts
Nonpayment for anything preventable or unnecessary
Disrupt Existing System
Bundled payments
Innovation Center
Demonstrations
ACOs
KL: Volume and Value and the picture need to be bigger, everything else in the background
DL: Text from original slide:
Cuts to Existing FFS System
Market basket reductions
Bad debt cuts
Nonpayment for anything preventable or unnecessary
Disrupt Existing System
Bundled Payments
Innovation Center
Demonstrations
ACOs
Congress hedged its bets in crafting the reform legislation.
Created opportunity to experiment with models that would disrupt the existing system such a bundled payments across clinical conditions as well as ACOs that could be led by hospitals, payers, or providers.
But if these experiments are not sufficient to bend cost curve, then legislation has mechanisms to continue to cut payments in the existing system, including the creation of an Independent Payment Advisory Board.
This means our providers will have a foot in both camps. They are going to live in a fee for service world while they also try to innovate and reinvent the care delivery model.
DG from original slide:
Track 1
Cuts to Medicare FFS System
30 day readmissions penalty
Penalty = 5x readmissions payment
Value based purchasing
FY-15 - Efficiency measure: total spending 3 days prior/30 days post
Care coordination measures
Private Payors and Medicaid
Bundled payment: 2016?
Track 2
MSSP
Pioneer
Flexible design; retro & prospective attribution
State/Federal duals demo
State partnership; eased enrolling
Medical home demo; new CMMI Primary Care Initiative
Reducing readmissions from nursing homes demo
Bundled payment demos 10

11. Key questions to ask Right stuff, right price, right quantity,
Payment
Transparency
Resource Utilization
EBP
Leading Practices
Right stuff,
right price,
right quantity,
right place,
right way,
right time?
Can you operate on Medicare margins?
Are you tracking and reporting, by DRG?
Are your physicians and clinicians accustomed to making data driven decisions based on evidence based practice?
Do you have real time data and resources to understand how you map industry leading practice?
Payment Question
Transperency
Resource Utilization
Evidence Based Practice
Leading Practices
DG: Kathy – I need a little more to go on to add photos here. What are M/C margins? Are the questions correct?

12. How do you navigate the quality/cost maze?
Or I can use the graphic from the strategic initiatives deck – I like the coloring of this one better. Still looking for a better graphic. Also need a bit more info on what text should be added.

13. Carole Gilroy, RN, MSN, MBA
Contact us
Carole Gilroy, RN, MSN, MBA
VP, Service Lead Cost Management