NAPA Session: Health Care Reform in an Age of Fiscal Scarcity November 20, 2008

NAPA Session: Health Care Reform in an Age of Fiscal Scarcity NAPA Session: Health Care Reform in an Age of Fiscal Scarcity November 20, 2008November 20, 2008

Gary A. Christophersonwww.BuildingAHealthyAmerica.org www.viaFuture.org

BuildingA

Healthy America

Yes We Can (And Must)

Building A Healthy America• Yes,We Must.• Yes, We Have Options.• Yes, We Can.• Yes, Here’s How.• Yes, Let’s Build A Healthy

America.

Yes,We Must.

None of the key indicators – health status, accessibility, quality, affordability – are acceptable for a nation spending 1/6th (and growing) of its economy on health.• Accessibility – Over 40 million Americans are uninsured for health

care and millions more are underinsured. Most Americans are uninsured or underinsured for long term care.

• Quality – Health status and outcomes produced by the American health “system” are inadequate given the needs of the American people.

• Affordability – The unaffordability of health care is challenging America as a nation and Americans as individuals and families.

• Health Status - Among the six nations of Australia, Canada, Germany, New Zealand, the United Kingdom, and the United States, the U.S. ranks last in terms of achieving health outcomes.

Yes, We Have Options.

Solving the Un- and Underinsured Problem

Alterna-tives for Solving Un- and Under-insured Problem

Elements for Constructing Alternatives for Solving Un- and Underinsured Problem

Govern-ment Man-dates All Covered *

Govern-ment Pays for All **

Govern-ment Pays for Those Unable to Pay

Govern-ment Covers All w/ Govt In-surance

Govern-ment Con-tinues Medi-care for Medi-care Eligibles

Govern-ment Pro-vides Alterna-tive for Those Want-ing Govt plan

Private Insur-ance and/or Health Plans ***

Cover-age for "high value" bene-fits ****

Con-tain Cost ***** ******

Ensure Quali-ty *****

Ensure Access

Ensure "Virtual Health System" (EHR, PHR, stan-dards, ex-change) *****

1 X X   X X     X X X X X2 X X   X       X X X X X3 X X     X   X X X X X X4 X X     X X X X X X X X5 X X       X X X X X X X6 X X         X X X X X X7 X   X   X   X X X X X X8 X   X   X X X X X X X X9 X   X     X X X X X X X10 X   X       X X X X X X11   X   X X     X X X X X12   X   X       X X X X X13   X     X   X X X X X X14   X     X X X X X X X X15   X       X X X X X X X16   X         X X X X X X..                        

Solving The Un- and Underinsured Problem, Gary Christopherson 2004.

Yes, We Can.

National Health Expenditures With and Without GDP Adjustment

$1.60 $1.73 $1.85 $1.97 $2.11 $2.25 $2.39$2.56

$2.73$2.91

$3.10$3.31

$3.52$3.76

$4.01$4.28

$1.60 $1.73 $1.85 $1.97 $2.11 $2.25 $2.39$2.56 $2.68 $2.82 $2.95 $3.09 $3.23 $3.38

$3.53$3.69

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Year

NH

E (T

rilli

ons)

National Health Expenditures w/o Adjustment National Health Expenditures Adjusted to GDP Growth

2011 - $100+ B Savings

National Health Expenditures With and Without GDP Adjustment. Expenditures and Projections by Office of Actuary, Centers for Medicare & Medicaid Services, 2008. GDP Adjustment by Gary Christopherson, 2008.

Yes, Here’s How.

Over 50 supportive strategies for reducing costs and slowing down the rate of growth • Prevention:

• Call upon and lead Americans to healthier life styles.• Use evidence-based prevention to prevent preventable illness and injury, especially those that have

major long term consequences. • Make special efforts at those preventable illnesses and injuries that have the greatest negative impact

across America.• Use behavioral and other models that help people change to more healthy behaviors.

• Care Coordination and Management:• Coordinate and integrate care.• Support disease management programs for chronic illnesses.

• Quality:• Improve the quality of the care delivered – right care at the right time to the right person.• Move to more person-based approaches to health care that recognizes the uniqueness of the individual

and treats them accordingly as individual persons.• Substantially increase the proportion of care that is based on evidence or consensus and decrease the

proportion of care that is not.• Invest in better information about the effectiveness of alternative treatments.

• Disparities:• Tackle disparities unique to certain populations and with major negative consequences.

• Medication:• Improve the effectiveness, efficacy and safety of prescription drugs.• Increase use of generics.• Increase competition in drug markets, including the potential use of drug reimportation.• Lower drug benefit costs for Medicare Part D.

• Uncompensated Care:• Make health insurance universal to reduce spending on uncompensated care.

Over 50 supportive strategies for reducing costs and slowing down the rate of growth • Insurance:

• Give small business and self-insured more access to group plans and/or government plans with their lower costs.

• Provide reinsurance for catastrophic costs to lower the risk related part of insurance costs.• Increase insurance company competition.• Reduce insurance overhead and underwriting costs.• Beneficiary/Patient Incentives:• Beneficiaries/patients should be given incentives to choose to receive care from high-quality,

efficient, high-value providers and delivery systems.• More consumer cost-sharing only if it does not inhibit appropriate access, e.g. to needed preventive,

primary care, care coordination/management.• Regulation:

• Increase government regulation of providers but not over-regulation.• Increase government regulation of insurers but not over-regulation.

• Health Information Technology:• Use health information technology to reduce duplication of testing and care, provide decision support

at the time of care, to create a better partnership between provider and person/patient via personal health systems/records, to assess effectiveness of care within a provider site and with other providers locally, regionally and nationally, to lower billing errors and costs.

• Use health information technology to appropriately share health information among a person’s health providers.

• Have a system of national standards (data, exchange, EHR and PHR function) for health information technology

• Transparency:• Provide transparency on quality and cost of care.

Over 50 supportive strategies for reducing costs and slowing down the rate of growth • Payment:

• Slow down the rate of increase in prices to growth in GDP in all private and public sector plans.• Implement an “all-payer” system of payment for all payers, including self-pay, private insurance,

public insurance, e.g., Maryland has an all-payer system of establishing hospital payment rates.• Differential rates among payers (self, Medicare, Medicaid, private insurers) should be eliminated.• Fundamental provider payment reform with broader incentives to provide high-quality and efficient

care over time • Increase payment for primary care services relative to sub-specialty care and advanced imaging. • Tie payment and other incentives/disincentives to achieving excellence in care, e.g. pay for outcomes,

performance, efficiency, effectiveness, and safety.• Pay-for-performance should not create inappropriate incentives to treat the healthy and low cost and

to not treat the less healthy and higher cost.• Reduce waste and abuse for all payers.• Do not pay for avoidable medical errors and not allow the costs to be passed on to other payers,

including self-payers. • Eliminate payments resulting from avoidable infections and other complications that occur in the

hospital (“never events”)• Improve current payment system, e.g. by a blend of the modified fee-for-service and bundled per-

patient payment systems.• Pay physician practices a per-person/patient fee for serving as a patient-centered health/medical home

that partners with person/patient, coordinates care, meets standards and demonstrates better outcomes for patients

• Expand the units of service used for payment, often referred to as "expanding payment bundles."• Pay global fee for hospital acute-care episodes including the hospital admission and post-acute care,

inpatient physician services, and all inpatient or emergency care for 30 days after the hospital discharge

Over 50 supportive strategies for reducing costs and slowing down the rate of growth • Payment (Continued):

• Full population prepayment—a single payment for the full continuum of services for a given patient population and period of time—should be encouraged. Such payments should be adequately risk-adjusted to avoid adverse patient selection. If full population prepayment is not feasible, payers should encourage:

• Global case payments for acute hospitalizations. These payments also should be risk-adjusted to avoid adverse patient selection.

• Alternative payment structures for primary care. Primary care practices that provide comprehensive, coordinated, patient-centered care (e.g., certified medical homes) should be offered an alternative to fee-for-service payment. Use shared accountability for resource use

• Revise the resource-based relative value schedule (RBRVS) to increase payments for primary care• Pay for transitional care services, such as phone calls to high-risk patients following hospital discharge• Reduce physician fees for unusually high-priced, high-volume services• Reduce diagnosis-related group payments for unusually profitable hospital services, such as some

cardiac and orthopedic procedures.• Financial incentives/penalties for hospitals based on their 30-day readmission rates• Reimbursement for durable medical equipment should be based on competitive bidding with Medicare

paying a price based on the distribution of bids• Pay managed care plans, including Medicare Advantage plans, the right amount.• Link payment levels more closely to the costs of effective/efficient providers, not average providers. • The Sustainable Growth Rate formula underlying Medicare physician payment should be replaced with

a budget target for Medicare outlays per beneficiary across all Medicare services• Medicare should negotiate pharmaceutical prices • Medicare should achieve savings by adjusting payment updates in high-cost geographic areas

• .............

Yes, Let’s BuildA Healthy America

Legislation and Implementation

Budgeting

No Signifi-cant Cost Increase

Off-setting Revenue

Off-setting Cost Reduc-tions

Stimulus w/ Recover-ing

Stimulus w/o Recover-ing

Near-term Deficit

Long-term Deficit

Comprehensive plan. Pass all at once and implement ASAP.

Comprehensive plan. Pass all but phase in.

Comprehensive plan. Pass in phases.

Comprehensive plan. Pass initial step and then revisit each year/Congress.

No comprehensive plan. Pass initial step and then revisit each year/Congress.

Comprehensive Health Reform for American Health System That Is Accessible (Including Insurance), Is Affordable (For All Payers (Including Self–Payers and Taxpayers), Increases Quality, and Improves Health for All.

Gary A. Christopherson

To fit the budget environment and get the maximum effect in the shortest time, a comprehensive plan that a) we pass all at once and implement ASAP and b) treat as a stimulus that we recover the added cost within 5-10 years has substantial merit.

Endgame Strategy A high performance, American health and long term care system for all Americans that is self-perpetuating, affordable, accessible, “e” enabled, and producing high health quality, outcomes and status

Vision

Achieving Healthy

Americans &

A Healthy America

BackgroundMaterials

Institute of Medicine Six Aims & Person’s Perspective on Health

Personal Perspective on Health & LT Care Needs

Aims for Health & LT Care Performance/Quality

SafeEffec-tive

Person/ Patient-centered Timely Efficient

Equi-table

Staying healthy + + + + + +Getting better + + + + + +Living with illness or disability + + + + + +Coping with the end of life + + + + + +Gary A. Christopherson

Person-Centered Health Model

Virtual Health System(EHRs, PHS/Rs, Standards, Info Exchange)

Health Environment

Human Factors

Non-HealthcareHealth Support

Health Factors

Environment Factors

Health &Long Term Care

Provider Care Settings

eHealth Services

“Care in theCommunity”Settings

StatusGenes

HistoryExposures

Person(s)Self-careBehavior

MotivationAbility

SevereDisability

SevereChronic

Mild/ModChronic

FrequentAcute

InfrequentAcute

WellPers

ons

Time

Locations

Person-Centered Health

Coordination/Management

Gary A. Christopherson

Current H

ealth & LT C

are

Target Health &

LT Care

Optim

ized Outcom

es

High H

ealth/Functional Status

Changes in Provider Behavior

Changes in Health Inputs/Environment

Changes in Personal Behavior

Current H

ealth/Functional Status

BEM

BEM

BEM

Building High Performance, Virtual US Health System – Strategic Improvement & Behavior Model

Performance Improvement

Gary A. Christopherson

Target H

ealth & L

T C

are -A

ffordable, Accessible, “e” E

nabled, High Q

uality

Optim

ized Outcom

es

High H

ealth/Functional Status

Strategies to Improve Health & Function

Strategies for Achieving a Healthier America

Achieve High Care Coordination/ Management Performance

Achieve High Managed Care Performance

Achieve High Perfor-mance Care with:

• Clinic / Physician Office

• Hospital• ESRD• Home Health• Nursing Home

Achieve High Person-Centered Health Performance

Achieve Supportive Health Environment

All-payer Pay for Performance (P4P) (effective care & effective resource use (efficiency))

Aligned high performance measures for all payers and for all/across care settings

Strong performance/quality improvement for all payers and for all/across care settings

Supportive environment for high performance, quality, affordability, accessibility

Strong person-centered health w/ high personal choice & self care & strong partnership between person & their provider

All care settings reasonably accessible physically for everyone

Strong virtual health (info) system with EHRs, PHS/Rs, standards & interoperability/exchange

Strong person-centered care coordination/management

All needed care reasonably accessible financially for everyone

The most vulnerable persons provided all needed health & LTC support

Strongly apply “public health” model for everyone

Aligned strong core health benefits for all payers

Aligned strong core LTC benefits for all payers

Gary A. Christopherson