Disruptive Innovation & Disruptive Innovation & Healthcare Reform: What's Healthcare Reform: What's
Ahead?Ahead?
Paul H. Keckley, Ph.D., Paul H. Keckley, Ph.D., Executive Director for the Deloitte Center for Executive Director for the Deloitte Center for
Health SolutionsHealth Solutions
2009 Medical Professional 2009 Medical Professional Liability SymposiumLiability Symposium
Chicago, Illinois ~ March 24 & 25, 2009
U.S. Health System ReformU.S. Health System Reform
Paul H. Keckley, Ph.D.
Executive Director
Deloitte Center for Health Solutions
Budget Director Pick Budget Director Pick Sounds AlarmSounds Alarm
(Orszag Confirmation Jan. 13, 2009)(Orszag Confirmation Jan. 13, 2009)
• “The principal cause of the nation’s long term budget problems is rising health costs”.
The public view: “The The public view: “The system is confusing…”system is confusing…”
• Only 3 in 10 consumers feel they know how the U.S. health care system works. How Well Do You Think You Understand
How the U.S. Health Care System Works?
3%4%
9%10%
17%
14%
17%16%
7%
4%
1 2 3 4 5 6 7 8 9 10
Not at all Completely
27%
Source: 2009 Survey of US Health Consumers
The public view: “The The public view: “The system isn’t working very system isn’t working very
well…”well…”• 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.
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
The American Recovery The American Recovery and Reinvestment Plan: and Reinvestment Plan:
$787 billion$787 billionGoal Direct Investments ($144.8B) Indirect Investments ($159.3B)
IncreaseAccess
$87B Medicaid$27B COBRA (6.5M)$32.3B SCHIP expansion (4M)*
Reduce Costs
ImproveQuality
$1.1B Comparative Effectiveness$10.2B Biomedical research$19 B Health Care IT$1.0B Prevention & wellness
$3B National Science Foundation$.8B Nat’l Oceanic & Atmospheric Assoc.$19.9B Food Stamp increase$4.1B child care services
ImproveInfrastructure
$1.2B VA facilities $7.2B broadband access$38.7B energy & electricity$2.8B Homeland Security$3.1B Indian facilities$2.3B DOD facilities$19.4B clean environment$27.5B highway$20.5B public transportation
Long term: health reform Long term: health reform in two stagesin two stages
Stage One: 2009-2011
Stimulus Package Inclusions
•Focus will be expansion of benefits to newly unemployed, executive orders that extend coverage (SCHIP 2/2/09) and jobs related programs•In additon, certain programs that buoy states against expected increases in Medicaid enrollment•A few campaign promises: EX. HCIT
Stage Two: 2010-2016
Systemic Reforms—Long Term
•Insurance market reforms•Individual mandate + employer pay or play + FEHP2•Comparative effectiveness•Episode based payments•Medical Home•Expansion of role: FDA, CDC•Medicare eligibility•Federalization of Medicaid
Message to Congress Message to Congress February 24, 2009February 24, 2009
• Energy, education and health care: focus of systemic reforms
• Two consistent themes: Reduce costs Expand coverage
FY10 Reserve Fund FY10 Reserve Fund Proposal $634 BProposal $634 B
• FY 10 Budget Preview - February 26, 2009: $634B 10 year health care investment to fund coverage for uninsured & underinsured Funding from…•$318B tax increases (mortgage deduction decrease, Medicare premium increases for wealthy enrollees, $250K HH tax cuts eliminated 2011)•$177B from Med Part D Competitive Bidding•$139B lower payments including $24B Hospital Bundled Payments -- ($17B) and Substandard care ($8B)
Key PlayersKey Players
CHUCK GRASSLEY:
Senior Senator from Iowa
TED KENNEDY:Senior Senator from
Massachusetts
MAX BAUCUS:Senior Senator from Montana
ARLEN SPECTER:
Senior Senator from
Pennsylvania
HENRY WAXMAN: Member of the U.S.
House of Representatives from
California's 30th district
PETE STARK:Member of the U.S.
House of Representatives from
California's 13th district
MIKE ROSS: Member of the U.S.
House of Representatives
from Arkansas's 4th district
ROY BLUNT:Member of the U.S.
House of Representatives from Missouri's 7th District
Key PlayersKey Players
KATHLEEN SEBELIUS: United States Secretary of
Health and Human Services – Nominee
NANCY-ANN MIN DEPARLE: Director of the White House
Office on Health Reform
Long term reforms focus in Long term reforms focus in four areasfour areas
ConsumerismConsumerismFocus: CDHPs,
Transparency, PHRs, Incentives, Value
Comparative Effectiveness/ Evidence Comparative Effectiveness/ Evidence – based Medicine– based Medicine
Focus: (1) Personalized medicine, (2) comparative effectiveness; episode based payments to acute
organizations
2
Health Care Information TechnologyHealth Care Information TechnologyFocus: (1) e-prescribing, ( (2) care coordination (3)
administrative cost reduction 1
3
4
Decreased errors Decreased care gaps Reduced malpractice
premiums Improved efficiency
3 – 7 NMEs per year Center for comparative
effectiveness Knowledge management Prepare for tort reform
New medical homes Reimbursement realignment Primary care workforce MD led clinical care coordination
Coordination of careCoordination of care
Focus: Primary Care 2.0 Model (The New “Medical Home”)
Respond to transparency & PC 2.0– Connected care– Rx reimportation– Medical tourism
PHR (Shared Decision Making) Incentives
– Experience rating & differential premiums– Healthy behavior rewards
Complementary/Alternative Medicine
6 year implementation
1:8 to 1 ROI
Savings: $530B (NPV)
Balance: cost andquality
Contact InformationContact Information
For more information, please contact:Paul H. Keckley, Ph.D., Executive [email protected]
For more information on the Center's view of health care in the new administration, please visit: www.deloitte.com/us/healthcarereform
And visit our website to subscribe to our content:http://www.deloitte.com/CenterforHealthSolutions/subscribe
Center for Health Solutions