Transforming Maryland’s Health Care & Engaging Communities

Charles County Forum on Maryland’s All Payer System Transformation

Carmela CoylePresident & CEO

Reform Objectives

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Opportunity for Maryland to be a NATIONAL LEADERin health care

CHANGEthe way we pay for and provide health care

BUILDon the great system we have and make it even better: • More affordable • Safer • A healthier Maryland

History

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• MARYLAND − only state where hospitals don’t decide how much to charge for care payment

• “All-Payer” system of hospital payment

• A 40-year agreement with Medicare

• Allows Maryland to “waive” Medicare payment rules, set rates hospitals charge

• Can keep as long as we meet waiver “test”o Growth in Medicare spending per

hospital stay less than the nation

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History

But 40-year-old waiver “test” was out of date

OLD NEW

Inpatient care All hospital care

Medicare only All payers

Cost of care per hospital stay

Cost of care per person overall

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Starts with Hospital Care

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• Work together to slow growth in spending for hospital care

• Continue Maryland’s unique way of setting hospital prices

• Change how hospitals are paid, to reward the right things – global budgets

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Lower Cost

Annual hospital SPENDING CAP − 3.58% per capita

Medicare SAVINGS TARGET − $330 million over 5 years

GROWTH in Maryland spendingper capita cannot exceed nation

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Safer

REDUCE READMISSIONS: patients who return to the hospital within 30 days of discharge

Maryland ranks poorly(almost last)– 49 of 51 states and D.C.

Bring Maryland readmission rates to NATIONALAVERAGE in 5 years

Better, SAFER care

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Safer

REDUCE INFECTIONS AND COMPLICATIONS: patients who get sicker while in the hospital

Maryland rates of infection HIGHER than nation

REDUCE infections andcomplicationsby 30% in5 years

Better, SAFER care

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New Incentives

Changes how hospitals are paid to reward the right things

•Success under the new rules requires– cost reduction– care for patients in the community– care in lower cost setting– reduce unnecessary care

• The key: population health management

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Population Health Management

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“Managing the health outcomes of a group of individuals”

•Central role of primary care•Patient activation, involvement and responsibility•Care coordination through wellness, disease and chronic care management

Population Health Management

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Changes How Hospitals and Think

•Do more to earn more Rewards for efficiency and quality•Care for an individual patient Care for an entire population•Acute care Ambulatory care Community care•Competition Collaboration•Hospital care Health care

Population Health Management

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Requires Different Role for Hospitals

•Supply proactive, preventive and chronic care to all•During and between encounters•Regular contact with patients•Support patient efforts to manage their health•Manage high risk patients to prevent from worsening

Population Health Management

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Environmentaland Social

Factors20%

Family History and Genetics

30%

Personal Behaviors 40%

Source: Determinants of Health and Their Contribution to Premature Death, JAMA 1993

Health is driven by multiple factors that are intricately linked – of which medical care is one component.

Medical Care

10%

Health is About More Than Clinical Care

Transforming Maryland’s Health Care & Engaging Communities

Charles County Forum on Maryland’s All Payer System Transformation

Carmela CoylePresident & CEO