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Transparency has become even more important in the past year as we begin the health care reform discussion. There is not a signature event in Nashville to bring quality, marketing, transparency, and technology together. The Naked Hospital event will take the user experience from high level strategy through national and state legislative issues through practical hands on tools to walk away with. The event will focus on how and why health systems and hospitals should focus on quality reporting as well as financial reporting. At the end of the day, all of this puts additional strains on the information systems and resources deployed by most health systems and hospitals. How will they cope? What is the next step?
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Breakfast Sponsor
Briefing:
Health System Reform: Update
Paul Keckley, Ph.D., Executive DirectorDeloitte Center for Health Solutions
Washington, DC
Nashville, TNAugust 6, 2009
Center for Health Solutions Research2008• Pay for Quality• Consumer-Directed Health Plans: Update • Medicaid Medical Management• The Medical Home• Medical Tourism• Price Transparency in Health Care• Retail Medicine• Preparing for ICD-10• Retail Pharmacy and Disease
Management• Connected Care: Technology Enabled
Care at Home• 2008 Survey of Health Care Consumers• Best Practices in Greening in Health Care
Organizations
2009• Monday Health Reform Memo (weekly – ongoing)• ROI for Personalized Therapeutics (1/09)• Health Care and Public Policy: What Do Americans
Really Want (1/09)• Reducing Costs While Improving Care in the U.S. Health
System: The Health Reform Pyramid (1/09)• 2009 Survey of U.S. Health Care Consumers (3/09)• Comparative Effectiveness (5/09)• Academic Medicine: Sustainability (6/09)• Episode Based Payments (Summer 2009)• The Long Term Care Market in Medicaid: Ticking Time
Bomb (Summer 2009)• Wellness and Healthy Living: New Business Models and
Opportunities (Summer 2009)• Retail Medicine: Update (Summer 2009)• Medical Tourism: Update (Summer 2009)• The Medical Home: Update (Summer 2009)
1
Current context for health reform
• The U.S. economy is weak—recession began 12/07― Unemployment at 9.4%: highest since 1939― Banking industry solvency: 19 major banks stress tested― TARP program underway: results unknown, $140 billion yet to deploy• Containing health costs—key element in economic recovery― Fastest growing expense in households, companies and government― Only industry with employment increase since 12/07 downturn• The new administration—“change…yes we can”― Health care, energy, education priorities• Access to health insurance—campaign 2008 focus, but costs now a
major theme
Copyright © 2009 Deloitte Development LLC. All rights reserved. 2
Health costs increased from 5.9 to 16.2% of GDP from 1960 to 2007: Fastest growing expenditure in federal budget
2008-2018 Forecast:• US economy: +4.1% CAGR• Health costs: +6.2% CAGR• Government spending for
health care (Medicare and Medicaid): +7.2%
• Private sector spending for health care: +5.3%
• 25% of entire federal budget
Copyright © 2009 Deloitte Development LLC. All rights reserved. 3
Annual health care expenditures in the United States have gone from $27.5 billion in 1960 to $2.24 trillion in 2007 and are projected to reach $4.35 trillion by 2018. Source: Department of Health and Human Services, Center for Medicare and Medicaid Services, the National Health Expenditures Accounts (NHEA)
Since December 2007, 6 million overall jobs have been lost; however, health care jobs have increased 190,000
Copyright © 2009 Deloitte Development LLC. All rights reserved. 4 Source: Labor Department
Consumer inclined toward reform: “The system isn’t working very well…”
How Would You Grade the Overall Performance of the U.S. Health Care System?
2%
18%
43%
25%
13%
A B C D F
Excellent Failing
38%
20%
Source: 2009 Survey of US Health Consumers
Only 1 in 5 consumers give the U.S. health care system an above-average report card grade; those grading the system “F” outnumber those giving it an “A” by 6 to 1.
5
Consumers believe system is wasteful
•52% of Americans feel that at least half of health costs are wasted.
What Percentage of All U.S. Health Care Dollars Spent Are Wasted?
4%2%
6%
15%13%
10%
22%
8% 9%
6% 5%2%
0% 1-9% 10-19%
20-29%
30-39%
40-49%
50-59%
60-69%
70-79%
80-89%
90-99%
100%
52%
Source: 2009 Survey of U.S. Health Consumers
Copyright © 2009 Deloitte Development LLC. All rights reserved. 6
Not a system…a federation of interests that’s fragmented, costly
Copyright © 2009 Deloitte Development LLC. All rights reserved. 7
Innovators
Administrators/Watchdogs
Service Providers
Physicians
HCIT
Pharma
Device
HospitalsOutpatientFacilities
Insurers
Regulators
Long TermCare
BioTech
Professional Societies/Special Interests
Accrediting Agencies
DiseaseManagement
Employers
CAM
Media
AcademicMedicine
Consumers
Allied HealthProfessionals
Disruptors
White House puts priority on health reform above energy, education: Reduce costs, cover everyone• February 24, 2009 to Joint
Session of Congress: Reform energy, education and health care. Pass bill in 2009.
• May 11, 2009 to Major Trade organizations: Cut CAGR to 4.7%, reduce costs by $2 trillion (2008 – 2018)
• June 3, 2009: Everything on the table—mandates, employer tax exclusion, employer mandate, public plan, et al. Bill this summer.
Copyright © 2009 Deloitte Development LLC. All rights reserved. 8
Funding–follow the money• January 23: President Obama signs SCHIP expansion legislation, increasing eligibility
to 4,000,000 children and pregnant women; $32.3B funded through increase of 62 cent federal tax on each pack of cigarettes
• February 17: President Obama signs $787B stimulus package (America’s Recovery and Reconstruction Act) that includes $145B for health care
• February 26: President announces “down payment on health reform”—a $634B 10-year fund to pay for long-term health reforms; cuts to pharmaceutical companies and Medicare Advantage plans plus increased taxes for those earning more than $250,000
• March 11: Congress approves $410B appropriation to operate government through September 2009, including modest increases in a few areas of health care—primary care, NIH, National Service Corps
• April 29: Passage of FY10 budget; targeted investments in health reforms (FDA, bundled payments); 8% overall growth in federal spending for Medicaid and Medicare but effective rate increase of 0.1%; insurance reform
Copyright © 2009 Deloitte Development LLC. All rights reserved. 9
Presidential news conference on July 22, 2009:“health insurance reform”
1 Health reform is necessary to reduce escalating costs of the system that threaten economic recovery. The result of inaction is economic collapse: employers will drop employee benefits coverage or shift financial burdens to employees who cannot afford premiums. The “status quo” is not an option.
2 Reform of the system must be deficit neutral: added costs for covering “47 million lacking insurance” (there are actually 45.7 million) and changes to the delivery system must be offset by savings or new revenues. The White House believes a combination of two-thirds from savings and one-third from taxes on high income households is the appropriate funding mechanism.
3 The President supports a public plan option available to uninsured and under-insured individuals and small businesses. Repeating an oft-used phrase, the President supports the public plan option to “keep the plans honest” and provide competition to commercial plans. NOTE: A positive earnings report from “a major plan” released today was referenced as evidence plans benefit at the expense of patients by denying coverage or refusing to pay for needed care.
4 Agreement among legislators is a “work in progress”: there is agreement that individual mandates, a comparative effectiveness program, health insurance exchanges, fraud reduction, health information technology utilization and integrated delivery systems are key elements. Pressed about partisan issues and defections among moderate Democrats due to the costs of the plan, the President defaulted to the legislative process: messy, necessary, and soon to result in a reform bill. The forthcoming work in the Senate Finance Committee is a key part of the process.
5 Key industry stakeholders support the need for reform: in his remarks and responses to reporters’ questions, three references to AARP and two each to AMA, ANA and PhRMA were used to suggest the White House has industry support.
6 To deflect criticism of government intrusion in coverage decisions and payment calculations for providers, the White House supports the development of an independent board to make recommendations. Congress would have 30 days to prevent implementation based on a vote. It would make determinations about advisable diagnostic and therapeutics based on evidence and costs. It would also set payment rates for providers based on its assessment of comparative effectiveness and value. NOTE: Sen. Jay Rockefeller proposed MedPAC as the independent entity; OMB Director had previously proposed a new entity, IMAC (Independent Medicare Advisory Commission).
7 The President anticipates signing a bill in 2009 but did not state his determination of a bill by the August recess.
10
Key players: Congressional Committee leadership
CHUCK GRASSLEY: Senior Senator from
Iowa
TED KENNEDY:Senior Senator from
Massachusetts
MAX BAUCUS:Senior Senator from
Montana
HENRY WAXMAN: Member of the U.S. House of
Representatives from California's 30th district
Senate Finance Committee
Senate Health Education, Labor
and Pensions
House Ways and Means Committee
House Energy and Commerce Committee
House Education and Labor GEORGE MILLER:
Member of the U.S. House of Representatives from
California's 7th district
CHARLES RANGEL:Member of the U.S. House of
Representatives from New York’s 15th district
11
Key players: Two offices of health reform
Kathleen Sebelius: United States Secretary of Health and Human Services
Nancy-Ann DeParle: Director of the White House Office
on Health Reform
Copyright © 2009 Deloitte Development LLC. All rights reserved. 12
Some major proposals have emerged: more to come“Healthy American
Act”June 26, 2007
“Call to Action”Nov. 14, 2008
“American HealthChoices Act”June 8, 2009
“America’s AffordableHealth Choices Act”
July 14, 2009 Sponsors Sen. Ron Wyden (D-OR)
Sen. Bob Bennett (R-UT)Sen. Max Baucus (D-MT) Sen. Ted Kennedy (D-MA) Rep. Henry Waxman (D-CA)
Rep. George Miller (D-CA)Rep. Charles Rangel (D-NY)
Primary Focus
Shift responsibility to consumers (tax code, transparency,Performance-based payments)
Increased access (up to 400% of FPL) offset by comparative effectiveness, insurance market reforms, tax code changes
• Subsidized public plan to insure poor and ineligible up to 500% of FPL
• Restructure insurance industry: connector model, consumer choice, standard benefits
• Provider payments up to 110% of FPL
• Expand Medicaid to 133% of FPL
• Public plan to expand access to 97% of population and compete with private plans
• Insurance market reforms: eliminates pre-existing condition, risk-profiling based on other than age, geography and size of family; insurance exchange model for employers under 10 FTES
Key Features
• Eliminate employer tax exclusion
• Subsidize premiums up to 400% of Federal Poverty Level (FPL)
• Insurance market reforms
• National Health Insurance Exchange• Expanded Medicaid Eligibility• Pay or play mandate for employers• Cut Medicare premiums• Transparency: quality, costs,
outcomes• Increase primary care access
• Reform tax code• Focus on prevention• Comparative Effectiveness Institute
• Subsidize small business, individual health insurance
• Comparative effectiveness• Individual mandate• Employer pay or play mandate• Revision of tax code• Expand human services programs• Voluntary participation by
providers
• Insurance connector• Suspend SGR payment model• Increased PCP payments• Creates Health Benefits Advisory
Board• Eliminates MMA donut hole• Individual mandate (2.5% penalty)
with subsidies up to 400% of FPL• Employer mandate 2018 (2-8%
penalty)
Cost Funded thru receipt of $200 billion/year by elimination of employer tax deduction
• NA • $1.1 T• Increased taxes• Reduced Medicare payments
• $1.0T• Increased taxes• Reduced payments
Copyright © 2009 Deloitte Development LLC. All rights reserved. 13
The most delicate issues will be:
Copyright © 2009 Deloitte Development LLC. All rights reserved.
Individual mandates: Should the government require coverage (and subsidize those under who can’t afford)?
Employer mandates: Should the government require employers to “pay or play” or alternately takeaway the tax benefit and give tax credits to individuals?
Preventive health: How should the government control expenditures while shifting focus to preventive and chronic health? How should primary health services and personal responsibility be strengthened?
Provider payments/Medicare leverage:
How should $$$ be redirected to reward outcomes not volume, and adherence to evidence-based practice? How will incentives change? How aggressive will government be in controlling provider, device, plan and therapeutics’ income?
Privacy and security of health information:
How will identity be protected? How will data be stored? Who will have access?
Public plan and insurance market reform:
What is the government’s role in coverage for the uninsured and underinsured? Should the government compete with commercial plans by creating a large public plan?
Evidence-based medicine and comparative effectiveness:
Will the government influence physician decision-making? Control access to therapeutics and interventions? Stifle innovation and R&D?
Funding health reform:
Major options: (1) increase taxes for high income households, (2) reduce Medicare & Medicaid payments, (3) reduce payments in supply chain and pharma, (4) eliminate tax exclusion for employers, (5) reduce demand from inappropriate variation
14
Key stakeholders engaged in cost containment
• Reduce spending to 4.7% ($2 trillion reduction over 10 years)
• Administrative simplification, coordination of care, utilization management key initial focus
(excerpt from publicly available document)
15
It will take 6 years implement major reforms
Savings can be more than $2 trillion if implementation is accelerated via payment reform, IT adoption
Net result: reduce CAGRto 4.5%
The reform bill will likely include four strategies to reduce cost to fund improved quality and increased access for uninsured
ConsumerismFocus: CDHPs,
transparency, PHRs, incentives, value
Comparative Effectiveness/Evidence – based Medicine
Focus: (1) Personalized medicine, (2) comparative effectiveness; episode based payments to
acute organizations
2
Health Care Information TechnologyFocus: (1) e-prescribing, (2) care coordination
(3) administrative cost reduction 1
3
4
Coordination of careFocus: Primary Care 2.0 Model
(the new “Medical Home”)
Copyright © 2009 Deloitte Development LLC. All rights reserved. 16
The impact of major reforms will vary by sectorMajor
ReformsProviders Health
PlansBiotech &Pharma
Medical Device
Employers
Comparative Effectiveness
Episode-based Payments
Employer Pay or Play Mandate
Importation ofPrescription Drugs
IndividualMandates
InsuranceExchange
Primary Care Expansion (Medical Home)
Public Plan
Tax Credit from Employers to Individuals
Modest Moderate impact Significant impact
Copyright © 2009 Deloitte Development LLC. All rights reserved. 17
Paying for health reform: proposed sources of fundingArea Sponsors/Source 10 Yr Savings
Forecast (Bil)
1-5% tax increases for individual income above $250,000 & household income above $380,000
White House (2/26/09)Kennedy bill (6/7/09)House Tri Committee (7/15/09)
$318-$550
Reduction of Medicare Advantage Plan Premium Payments White House (2/26/09)MedPAC (6/15/09)
177
Reduced payments to pharmaceutical companies via Medicare, Medicaid rebates White House (2/26/09) 139
Increased safety, avoidable errors in hospitals as never events, avoidable re-admissions achieved
White House (2/26/09)AHA (7/9/09)
24-27
Elimination of employer tax exclusion Blue Dog House Members 247-518
Administrative simplification (standardization of insurance industry transactions, insurance exchange)
AHIP (6/1/09) 700
Care coordination: community health team models to focus on slowed progression of chronic disease
Coalition (6/1/09) 250-540
Utilization of Care: application of evidence-based practice to reduce inappropriate variation; in tandem with episode based payments, performance-based payments
AMA, AHA (6/1/09) 150-180
Reduction of payments to hospitals and doctors for improved efficiency, coordination of care, cost reductions to scheduled Medicare payments
White House (6/13/09) 313
Taxation of health benefits above Blue Cross 2013 premiums for individuals ($6,200) and families ($15,700)
Senate Finance proposal (6/19/09) 419
50% discount for drugs by enrollees in donut hole of Med Prescription Drug Discount program
PhRMA (6/19/09) 50
Value added tax @ 5% Council of Economic Advisors 285
18
Contact information•For more information, please contact:
•Paul H. Keckley, Ph.D., Executive Director, Deloitte Center for Health [email protected] 202-220-2150
•For more information on the Center's view of health care in the new administration, please visit: www.deloitte.com/us/healthreform
•And visit our website to subscribe to our content:www.deloitte.com/CenterforHealthSolutions/subscribe
Copyright © 2009 Deloitte Development LLC. All rights reserved.
US Congressman
Marsha Blackburn7th District of Tennessee
BREAK SPONSOR
TRACK SPONSOR
A Panel Discussion - August 6, 2009
Looking under the covers - Measuring
Quality/Value
John R Morrowwww.HospitalValueIndex.com
A Panel Discussion - August 6, 2009
Agenda
• John R. Morrow – The Ratings Guy• Justin Lansing – Credence Healthcare• Eddie Pearson – Healthstream• Miriam Paramore -- Emdeon
A Panel Discussion - August 6, 2009
What is Value?Why Transparency?
• Transparency is a form of openness, a medium of communication and a measure for accountability; opposite of privacy.– Banking - R. Levine, policy of transparency improved efficiency– Corporate – Sarbanes-Oxley Act – confidence in capital markets– Management – PCAOB –oversight, independence, disclosures– Media – FOIA provides access– Politics – ethics, law, policy, economics, media, social new media– Research – Peer review, double blinded clinical trial– Sports – World Anti Doping Agency
A Panel Discussion - August 6, 2009
Transparency in Health Care
• Before HCFA realized it was a purchaser of health care we relied on FOIA for:– Financial, and Operating Reports– Clinical experience• Outcomes• Mortality• Complications
– Research
A Panel Discussion - August 6, 2009
Transparency in Hospitals
• After CMS realized spending, utilization outcomes and experience were all different:– Ratings outpaced CMS w/Web & social media – Industry shamed by IOM findings– Quality differentiation made markets– Info systems and industry standards drive new insights– Greater disclosures by CMS forces accountability– Value based purchasing to determine reimbursement
• Better management embraces disclosure & accountability
A Panel Discussion - August 6, 2009
What We Can Now See
• Core Process Measures• Patient Safety Indicators• HCAHPS – Patient Experience• Financial reporting• Clinical reporting – RAMI, RACI, • Post discharge mortality & readmissions• Population utilization
A Panel Discussion - August 6, 2009
What We Want to See and Do
• Institutional – more of the same…faster.• Purchaser/Employer Sponsored – what’s
under the shell, what’s it all mean• Consumer/Patient/Person – – How about the real price?– My personal records and data?– Everything that John and the
panel can show me…Why Not?
A Panel Discussion - August 6, 2009
How?
• Defining Value by provider engages the patient/provider relationship– For routine care, services are a commodity where quality is
not always a factor,– For complicated cases, experience with better outcomes
becomes a factor,– All require disclosure and transparency so the patient can
apply their own value judgment and participate in their own decision making about utilization,
– Value incorporates all known aspects of outcomes with a published fair price.
A Panel Discussion - August 6, 2009
Value is what Value does
• Outcomes– Mortality & Complication rates– Patient Safety Indicator rates– Readmission rates– Efficiency rates– Satisfaction & Experience Rates– Post-discharge functional status SF-36– Affordability
A Panel Discussion - August 6, 2009
Value like Transparency
• Creates efficiencies, removes barriers• Improves communication – EMR/PHR• Differentiates to the community Form990• Integrates the patient into the care process• Builds the foundation of the medical home• Shares the responsibility and accountability• Increases compliance; realigns priorities
A Panel Discussion - August 6, 2009
Your Panel
• Justin Lanning – Credence Healthcare
• Eddie Pearson – HealthStream
• Miriam Paramore – Emdeon
• John Morrow – www.HospitalValueIndex.com
45
August 6, 2009
TRANSPARENCY IN HEALTHCARE MIRIAM PARAMORE, SVP STRATEGY & GOVERNMENT AFFAIRS
46
Emdeon: A Leader inToday’s National Health Information Network
46
Providers
HealthcareInformation
PBM Services ePrescribing
RCM & PaymentDistribution
Payers
Patients
Pharmacies
350,000
55,000
1,200
155 million
5 billion
Emdeon – We make healthcare efficient.
efficient healthcare
Emdeon – We make healthcare efficient. 47
48
Healthcare Reform Is Demanding Price Transparency (Senate HELP Bill)
49
Healthcare Reform Is Demanding Price Transparency (House Tri-Committee Bill)
50Emdeon – We make healthcare efficient.
What is Transparency Hard?
Price
1. Healthcare is not retail – there is no price at the point of service
2. What a hospital charges is not the “price”
3. What an insurance company pays is the “price”
4. But the consumer can’t buy at that “price”
Quality
1. Data is not digital
2. Lack of standards means even digital data is meaningless
3. There is no good clinical information exchange
4. Consumer-friendly communication of medical terms is difficult
51
HIMSS Price and Quality Reporting White Paper (coming very soon)
• HIMSS Financial Systems Steering Committee
• 6 Public-Private Collaborations
• 7 State & Local Initiatives
• 5 Value Driven Healthcare Initiatives
• 3 Business Coalitions
• Total = 21 separate initiatives
52
efficient healthcare
Funding Healthcare Reform
Emdeon – We make healthcare efficient.
53
Where Does the Money Go?
85% 15%
Cost of Care = $2 T Admin Costs = $360 B
Total U.S. Healthcare Spend = $2.4 Trillion
54
“Gang of 6” Letter to President Obama
54Emdeon – We make healthcare efficient.
55
“Gang of 6” Recommendations
1. Utilization of care
2. Cost of doing business
3. Administrative simplification: Streamlining the claims processing system will allow clinicians and other personnel to spend less time and fewer resources on paperwork, lowering costs for everyone.
4. Chronic care
55Emdeon – We make healthcare efficient.
5656
U.S. Healthcare Efficiency Index™Launched December 2008
57
U.S. Healthcare Efficiency Index™Advisory Council (partial list)
57Emdeon – We make healthcare efficient.
58
Funding Healthcare Reform – The Duh Factor
• June 13, 2009 – President Obama announces $313 billion in cuts to Medicare/Medicaid providers
• Peter Orzag: Cuts will save Medicare patients money “as much as $43 billion in reduced premiums for prescription drug coverage over the next 10 years.”
$43 billion over 10 years through Medicare/Medicaid cuts
vs.
$150 billion over 5 years through HIT Emdeon – We make healthcare efficient.
what would u dow/ $150 B?
ushealthcareindex.com
Discussion
TRACK SPONSOR
Panel Discussion: PHR, EHR or EMR – A real solution or just Alphabet soup?
• Moderator: Daniel Fell, Partner NDP• Panelist:– Steve Starkey, COO/CIO, HMS–Mikell van der Laan, Manager of
Architecture, CHS
Discussion
Lunch Sponsor