5/8/2013 1 Turbulence ahead! Fasten Your Seat Belts! What Physicians Can Expect from Health Reform Over the Next Five Years Bob Doherty SVP, Governmental Affairs and Public Policy, ACP Alaska Chapter May 17, 2013 Health reform: from here to there Here: tens of millions uninsured, uneven quality, rising costs, intrusions on patient- physician relationship There: near universal coverage--with better quality at a price we can afford? And fewer intrusions on patients and physicians? How smooth or rough will the journey be? How we would like it to be . . .
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5/8/2013
1
Turbulence ahead!
Fasten Your Seat Belts!
What Physicians Can Expect from Health Reform
Over the Next Five Years
Bob Doherty
SVP, Governmental Affairs and Public Policy, ACP
Alaska Chapter
May 17, 2013
Health reform: from here to there
Here: tens of millions uninsured, uneven
quality, rising costs, intrusions on patient-
physician relationship
There: near universal coverage--with better
quality at a price we can afford? And fewer
intrusions on patients and physicians?
How smooth or rough will the journey be?
How we would like it to be . . .
5/8/2013
2
What we expect it will be. . .
What we fear it will be . . .
What we fear it will be . . .
5/8/2013
3
Turbulence
Affordable Care Act
Entitlements
Budget and sequestration
Payment/delivery system reform
ACA: the political environment
1. No plausible scenario where the
ACA will be repealed, but the law
still doesn’t command broad
public support
2. State engagement/ resistance may
determine the law’s effectiveness
in expanding coverage
The role of the states
Medicaid: Accept/reject federal dollars
Exchanges: Set up own exchange, partner with
federal government, or turn it over to the feds
Benefits: Establish “benchmark” for plans to be
offered through state-exchanges or let feds
determine
Enrollment: help/encourage people to get
coverage thru Medicaid or exchanges, or do
nothing to help
5/8/2013
4
States Split on Participation in Medicaid Expansion
Source: “Where Each State Stands on Medicaid Expansion,” The Advisory Board Company, March 4, 2013.
WA
OR
ID
CA
NV
UT
AZ NM
CO
WY
MT ND
SD
NE
KS
OK
TX
AR
LA
MO
IA
MN
WI
IL
AK
IN OH
MI
PA
KY
TN
MS AL GA
FL
SC
NC
VA WV
NY
ME VT
NH MA RI
CT
NJ DE
MD DC
HI
Undecided/No Comment (6)
Participating (26)
Leaning toward participating (2)
Leaning toward not participating (3)
Will not participate (14)
Analysis
•The Supreme Court’s ruling on the Affordable Care Act allows states to opt out of the law’s Medicaid expansion,
leaving this decision with state governors and leaders
•Governors of states participating in Medicaid expansion cited support for increased coverage for residents as reason
for opting in; governors of non-participating states cited high cost of expansion as reason for opting out; governors of
undecided states weighing costs of expansion before opting in or out
5/9/13: Update: FL, MO
legislatures turned
down expansion
despite governor’s
support
Source: Kaiser Health Tracking Poll. 11
Expand Medicaid to cover more
low-income people
Keep Medicaid as it is today
Percentage Responding to Survey Question: As you may know, the health care law expands
Medicaid to provide health insurance to more low-income uninsured adults…The Supreme Court
ruled that states may choose whether or not to participate in this expansion. What do you think
your state should do?
* Respondents who answered “Don’t know/Refused” not shown.
Public Opinion on Medicaid Expansion*
(March 2013)
Most Support Medicaid Expansion; Split on Party Lines
Expanding Medicaid is a good $ deal for the states
5/8/2013
5
Sarah Kliff, Wonkblog, Washington Post, July 3, 2012 http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/03/why-hospitals-heart-the-medicaid-expansion-in-one-chart
Impact of Medicaid Expansion on Patients
Medicaid expansions were associated with a significant reduction in adjusted all-cause mortality (by 19.6 deaths
per 100,000 adults, for a relative reduction of 6.1%). Mortality reductions were greatest among older adults, nonwhites, and residents of poorer counties.
Sommers and Baicker, Mortality and Access to Care after State Medicaid Expansions, NEJM, July 25, 2012, http://www.nejm.org/doi/full/10.1056/NEJMsa1202099
Impact of Medicaid Expansion on Patients
• After two years:
– Protection from financial catastrophe
– Reductions in rates of depression
– Better access to preventive services
– But no improvement in other health outcomes
“This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.”
Backer, et al, The Oregon Experiment — Effects of Medicaid on Clinical Outcomes, NEJM, May 2, 2013 http://www.nejm.org/doi/pdf/10.1056/NEJMsa1212321
Source: Steuerle CE and Rennane S. "Social Security and Medicare Taxes and Benefits Over a Lifetime.” Washington, DC: The Urban Institute. June 2011.
Single, Average Wage Single, Average Wage One-Earner Couple, One-Earner Wage Couple, Average Wage
Two-Earner Couple, Two-Earner Couple, Average Wage
5/8/2013
9
But there is good news on health care
costs!
The last time health care costs went up this slowly
Was making hit records!
Good news on health care costs!
“Fourth consecutive year of record-low growth
compared to all previous years in the 50-plus
years of official health spending data.”
Health care prices had the smallest increase in 14
years, rising in December 2012, “by 1.7 percent
compared to December 2011, the lowest year-
over-year growth since February 1998.” Altarum Institute. Health Spending Growth Near 4 percent for Fourth Year Price Growth at 14-Year Low. 7 February 2013. Accessed at www.altarum.org/health-systems-research-news-releases/7Feb13-health-spending-growth-4-percent-price-14year-low
Good news on health care costs!
Medicare per capita costs went up by only a fraction of a
percent in 2012 (0.4 percent), much less than the rate of
growth in the economy (3.4 percent growth per capita). Over
the three year period from 2010-2012, Medicare spending per
beneficiary grew an average of 1.9 percent annually, or more
than 1 percentage point slower than the average annual
growth of 3.2 percent in per capita GDP (that is, at GDP-1.3).
Kronick R, Po R. Growth In Medicare Spending Per Beneficiary Continues To Hit Historic Lows. Office
of The Assistant Secretary for Planning and Evaluation, U.S. Department of Health & Human Services.
re-introduced, supported by ACP (no cuts for five years,
higher updates for E/M, transition to new models)
Medicine unified: 133 physician organizations,
including AMA and ACP, offer principles for reform,
commitment to new approaches
5/8/2013
11
Source: Congressional Research Service. 3
Key Terms
Sequestration Measures meant to reduce federal spending; primarily consists
of deficit reduction sequester, mandating automatic,
across-the-board spending cuts for federally funded programs
in order to meet national budget goals, and discretionary
caps, limiting future federal spending
Budget Control Act of 2011 (BCA) Mandated sequestration starting Jan. 2, 2013 if Congress
could not reduce deficit by $1.2T–$1.5T over a 10-year
period
American Taxpayer Relief Act
(ATRA) of 2012
Mandates modified sequestration starting March 1, 2013 if
Congress cannot negotiate a way to avoid it
The Federal Budget and Health Care
In 2013, Sequestration Delayed (Without Deficit Deal)
Source: U.S. House of Representatives Committee on the Budget Democrats, “Sequestration: An Update for 2013,” Jan. 17, 2013; Congressional Research Service, “The ‘Fiscal Cliff’
and the American Taxpayer Relief Act of 2012,” Jan. 4, 2013.
32
Jan. 17, 2013 BCA start date for
discretionary caps
March 1, 2013 ATRA delayed start date for deficit
reduction sequester
March 27, 2013 ATRA delayed start date for
discretionary caps
Impact on deficit reduction sequester: Two-month delay
prorates 2013 spending cuts by total of $24B
Impact on discretionary caps: ATRA lowers cap for 2013 by $4B and 2014
by $8B to offset cost of delay
Jan. 2, 2013 BCA start date for deficit
reduction sequester
American Taxpayer Relief Act (ATRA) Pushes Sequester to March
Most Believe Sequestration Will Have No Impact on Families
Source: Steven Thomma,“Poll: Sequester Has Not Hit Home,” McClatchy Newspapers, March 10, 2013.
What Kind of Impact Will Sequestration Have on You and Your Family?
Negativ
e
Impact
Positive
Impact
No Impact
Analysis
49% of registered voters believe federal spending cuts will have no effect on them or their families
5/8/2013
12
Sequester Cuts to Public Health Threat Response Programs
Source: The Washington Post 2013.
Analysis
• Most states will lose less than $1M in federal funding for public health threat response programs due to sequester
• D.C. will sustain the lowest cuts ($57,000); Delaware and Montana also face less than $100,000 in cuts
• The more populous states of California and Texas will suffer the highest cuts ($2.6M and $2.4M, respectively)
OH
WV VA
PA
NY
ME
NC
SC
GA
TN
KY
IN
MI
WI
MN
IL
LA TX
OK
ID
NV
OR
WA
CA
AZ NM
CO
WY
MT ND
SD
IA
UT
FL
AR
MO
MS AL
NE
KS
VT
NH
MA
RI CT
NJ
DE
MD
DC
AK
HI
Cuts to Public Health Threat
Response Programs
$0 - $0.5M
$0.5M -
$1M $1M -
$1.5M Above
$1.5M
Department of Justice, National Institutes of Health
to Incur Major Cuts due to Sequestration
Source: “Flight Delays, Furloughs and Military Cuts, Oh My!,” Matt Vasilogambros, National Journal, Feb. 21, 2013. 35
* List is non-exhaustive
Cuts to Key Government Programs and
Agencies*
(Cuts in Billions)
Note
Several mandatory spending programs are exempt from cuts, including Social Security, Medicaid, food stamps,
veteran’s benefits and the Children’s Health Insurance Program
“A nationwide program is needed to assure access to health care for all Americans, and we recommend that developing such a program be adopted as a policy goal for the nation. The College believes that health insurance coverage for all persons is needed to minimize financial barriers and assure access to appropriate health care services.”
Ginsburg, et al, American College of Physicians, Position Paper, Annals of Internal Medicine, May
Dorn, Uninsured and Dying Because of It: Updating the Institute of Medicine Analysis on the Impact of Uninsurance on Mortality, Urban Institute, 2008
Why does it matter? Because being uninsured is a matter of life and death
Age
U.S.
populatio
n
(millions)
Percent
uninsured
within
age
group
Total deaths
Uninsured
excess
deaths ).
:
2000
2001
2002
2003
2004
2005
2006
Total:
21,000
23,00
Year Number of deaths due to uninsurance
2000 20,000
2001 21,000
2002 23,000
2003 24,000
2004 24,000
2005 25,000
2006 27,000
Total 165,000 Dorn, Uninsured and Dying Because of It: Updating the Institute of Medicine Analysis on the Impact of Uninsurance on Mortality, Urban Institute, 2008