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- 3. Briefing:Health System Reform:UpdatePaul Keckley, Ph.D., Executive DirectorDeloitte Center for Health SolutionsWashington, DCNashville, TNAugust 6, 2009
- 4. Center for HealthSolutions Research2009Monday Health Reform Memo (weekly – ongoing)
- 5. ROI for PersonalizedTherapeutics (1/09)
- 6. Health Care andPublic Policy: What Do Americans Really Want (1/09)
- 7. Reducing Costs WhileImproving Care in the U.S. Health System: The Health Reform Pyramid (1/09)
- 8. 2009 Survey ofU.S. Health Care Consumers (3/09)
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- 11. Episode Based Payments(Summer 2009)
- 12. The Long TermCare Market in Medicaid: Ticking Time Bomb (Summer 2009)
- 13. Wellness and HealthyLiving: New Business Models and Opportunities (Summer 2009)
- 14. Retail Medicine: Update(Summer 2009)
- 15. Medical Tourism: Update(Summer 2009)
- 16. The Medical Home:Update (Summer 2009)2008Pay for Quality
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- 21. Price Transparency inHealth Care
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- 24. Retail Pharmacy andDisease Management
- 25. Connected Care: TechnologyEnabled Care at Home
- 26. 2008 Survey ofHealth Care Consumers
- 27. Best Practices inGreening in Health Care Organizations1
- 28. Current context forhealth reformThe U.S. economy is weak—recession began 12/07
- 29. Unemployment at 9.4%:highest since 1939
- 30. Banking industry solvency:19 major banks stress tested
- 31. TARP program underway:results unknown, $140 billion yet to deploy
- 32. Containing health costs—keyelement in economic recovery
- 33. Fastest growing expensein households, companies and government
- 34. Only industry withemployment increase since 12/07 downturn
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- 36. Health care, energy,education priorities
- 37. Access to healthinsurance—campaign 2008 focus, but costs now a major theme2Copyright © 2009 Deloitte Development LLC. All rights reserved.
- 38. Health costs increasedfrom 5.9 to 16.2% of GDP from 1960 to 2007: Fastest growing expenditure in federal budget2008-2018 Forecast:US economy: +4.1% CAGR
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- 40. Government spending forhealth care (Medicare and Medicaid): +7.2%
- 41. Private sector spendingfor health care: +5.3%
- 42. 25% of entirefederal budgetAnnual 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)3Copyright © 2009 Deloitte Development LLC. All rights reserved.
- 43. Since December 2007,6 million overall jobs have been lost; however, health care jobs have increased 190,000Source: Labor Department4Copyright © 2009 Deloitte Development LLC. All rights reserved.
- 44. Consumer inclined towardreform: “The system isn’t working very 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. Source: 2009 Survey of US Health Consumers5
- 45. Consumers believe systemis wasteful52% of Americans feel that at least half of health costs are wasted. Source: 2009 Survey of U.S. Health Consumers6Copyright © 2009 Deloitte Development LLC. All rights reserved.
- 46. Not a system…afederation of interests that’s fragmented, costlyAdministrators/WatchdogsRegulatorsMediaProfessional Societies/Special InterestsInsurersInnovatorsAcademicMedicinePharmaBioTechAccrediting AgenciesEmployersHCITDeviceService ProvidersDisruptorsHospitalsOutpatientFacilitiesLong TermCareAllied HealthProfessionalsDiseaseManagementCAMPhysiciansConsumers7Copyright © 2009 Deloitte Development LLC. All rights reserved.
- 47. White House putspriority on health reform above energy, education: Reduce costs, cover everyoneFebruary 24, 2009 to Joint Session of Congress: Reform energy, education and health care. Pass bill in 2009.
- 48. May 11, 2009to Major Trade organizations: Cut CAGR to 4.7%, reduce costs by $2 trillion (2008 – 2018)
- 49. June 3, 2009:Everything on the table—mandates, employer tax exclusion, employer mandate, public plan, et al. Bill this summer.8Copyright © 2009 Deloitte Development LLC. All rights reserved.
- 50. Funding–follow the moneyJanuary23: 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
- 51. February 17: PresidentObama signs $787B stimulus package (America’s Recovery and Reconstruction Act) that includes $145B for health care
- 52. February 26: Presidentannounces “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
- 53. March 11: Congressapproves $410B appropriation to operate government through September 2009, including modest increases in a few areas of health care—primary care, NIH, National Service Corps
- 54. April 29: Passageof 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 reform9Copyright © 2009 Deloitte Development LLC. All rights reserved.
- 55. Presidential news conferenceon 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
- 56. Key players: CongressionalCommittee leadershipSenate Finance CommitteeSenate Health Education, Labor and PensionsCHUCK GRASSLEY:Senior Senator from IowaTED KENNEDY:Senior Senator from MassachusettsMAX BAUCUS:Senior Senator from MontanaHouse Ways and Means CommitteeHouse Energy and Commerce CommitteeHouse Education and LaborGEORGE MILLER:Member of the U.S. House of Representatives from California's 7th districtCHARLES RANGEL:Member of the U.S. House of Representatives from New York’s 15th districtHENRY WAXMAN: Member of the U.S. House of Representatives from California's 30th district11
- 57. Key players: Twooffices of health reformKathleen Sebelius:United States Secretary of Health and Human ServicesNancy-Ann DeParle:Director of the White House Office on Health Reform12Copyright © 2009 Deloitte Development LLC. All rights reserved.
- 58. Some major proposalshave emerged: more to come13Copyright © 2009 Deloitte Development LLC. All rights reserved.
- 59. The most delicateissues will be:14Copyright © 2009 Deloitte Development LLC. All rights reserved.
- 60. Key stakeholders engagedin cost containmentReduce spending to 4.7% ($2 trillion reduction over 10 years)
- 61. Administrative simplification, coordinationof care, utilization management key initial focus(excerpt from publicly available document)15
- 62. The reform billwill likely include four strategies to reduce cost to fund improved quality and increased access for uninsuredIt will take 6 years implement major reformsSavings can be more than $2 trillion if implementation is accelerated via payment reform, IT adoptionNet result: reduce CAGRto 4.5%4ConsumerismFocus: CDHPs, transparency, PHRs, incentives, valueCoordination of careFocus: Primary Care 2.0 Model (the new “Medical Home”)3Comparative Effectiveness/Evidence – based MedicineFocus: (1) Personalized medicine, (2) comparative effectiveness; episode based payments to acute organizations 2Health Care Information TechnologyFocus: (1) e-prescribing, (2) care coordination (3) administrative cost reduction 116Copyright © 2009 Deloitte Development LLC. All rights reserved.
- 63. The impact ofmajor reforms will vary by sectorModest Moderate impact Significant impact17Copyright © 2009 Deloitte Development LLC. All rights reserved.
- 64. Paying for healthreform: proposed sources of funding18
- 65. Contact informationFor moreinformation, please contact:Paul H. Keckley, Ph.D., Executive Director, Deloitte Center for Health [email protected] 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/subscribeCopyright © 2009 Deloitte Development LLC. All rights reserved.
- 66. US CongressmanMarsha Blackburn7thDistrict of Tennessee
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- 72. Looking under thecovers - Measuring Quality/ValueA Panel Discussion - August 6, 2009John R Morrowwww.HospitalValueIndex.com
- 73. A Panel Discussion- August 6, 2009AgendaJohn R. Morrow – The Ratings GuyJustin Lansing – Credence HealthcareEddie Pearson – HealthstreamMiriam Paramore -- Emdeon
- 74. A Panel Discussion- August 6, 2009What 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 efficiencyCorporate – Sarbanes-Oxley Act – confidence in capital marketsManagement – PCAOB –oversight, independence, disclosuresMedia – FOIA provides accessPolitics – ethics, law, policy, economics, media, social new mediaResearch – Peer review, double blinded clinical trialSports – World Anti Doping Agency
- 75. A Panel Discussion- August 6, 2009Transparency in Health CareBefore HCFA realized it was a purchaser of health care we relied on FOIA for:Financial, and Operating ReportsClinical experienceOutcomesMortalityComplicationsResearch
- 76. A Panel Discussion- August 6, 2009Transparency in HospitalsAfter CMS realized spending, utilization outcomes and experience were all different:Ratings outpaced CMS w/Web & social media Industry shamed by IOM findingsQuality differentiation made marketsInfo systems and industry standards drive new insightsGreater disclosures by CMS forces accountabilityValue based purchasing to determine reimbursementBetter management embraces disclosure & accountability
- 77. A Panel Discussion- August 6, 2009What We Can Now SeeCore Process MeasuresPatient Safety IndicatorsHCAHPS – Patient ExperienceFinancial reportingClinical reporting – RAMI, RACI, Post discharge mortality & readmissionsPopulation utilization
- 78. A Panel Discussion- August 6, 2009What We Want to See and DoInstitutional – more of the same…faster.Purchaser/Employer Sponsored – what’s under the shell, what’s it all meanConsumer/Patient/Person – How about the real price?My personal records and data?Everything that John and thepanel can show me…Why Not?
- 79. A Panel Discussion- August 6, 2009How?Defining Value by provider engages the patient/provider relationshipFor 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.
- 80. A Panel Discussion- August 6, 2009Value is what Value doesOutcomesMortality & Complication ratesPatient Safety Indicator ratesReadmission ratesEfficiency ratesSatisfaction & Experience RatesPost-discharge functional status SF-36Affordability
- 81. A Panel Discussion- August 6, 2009Value like TransparencyCreates efficiencies, removes barriersImproves communication – EMR/PHRDifferentiates to the community Form990Integrates the patient into the care processBuilds the foundation of the medical homeShares the responsibility and accountabilityIncreases compliance; realigns priorities
- 82. A Panel Discussion- August 6, 2009Your PanelJustin Lanning – Credence HealthcareEddie Pearson – HealthStreamMiriam Paramore – EmdeonJohn Morrow – www.HospitalValueIndex.com
- 88. August 6, 200945Transparencyin Healthcare Miriam Paramore, SVP Strategy & Government Affairs
- 89. Emdeon: ALeader inToday’s National Health Information Network155 millionPatients350,0001,2005 billionProvidersPayersRCM & PaymentDistributionHealthcareInformationPBM ServicesePrescribingPharmacies55,0004646Emdeon – We make healthcare efficient.
- 90. efficient healthcare47Emdeon –We make healthcare efficient.
- 91. Healthcare Reform IsDemanding Price Transparency (Senate HELP Bill)48
- 92. Healthcare Reform IsDemanding Price Transparency (House Tri-Committee Bill)49
- 93. What is TransparencyHard?50Emdeon – We make healthcare efficient.PriceHealthcare is not retail – there is no price at the point of serviceWhat a hospital charges is not the “price”What an insurance company pays is the “price”But the consumer can’t buy at that “price”QualityData is not digitalLack of standards means even digital data is meaninglessThere is no good clinical information exchangeConsumer-friendly communication of medical terms is difficult
- 94. HIMSS Price andQuality Reporting White Paper (coming very soon)51HIMSS Financial Systems Steering Committee6 Public-Private Collaborations7 State & Local Initiatives5 Value Driven Healthcare Initiatives3 Business CoalitionsTotal = 21 separate initiatives
- 95. efficient healthcareFunding HealthcareReform52Emdeon – We make healthcare efficient.
- 96. Where Does theMoney Go?85%15%Admin Costs = $360 BCost of Care = $2 TTotal U.S. Healthcare Spend = $2.4 Trillion53
- 97. “Gang of 6”Letter to President Obama5454Emdeon – We make healthcare efficient.
- 98. “Gang of 6”Recommendations55Utilization of careCost of doing businessAdministrative 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.Chronic care55Emdeon – We make healthcare efficient.
- 99. U.S. Healthcare EfficiencyIndex™Launched December 20085656
- 100. U.S. Healthcare EfficiencyIndex™Advisory Council (partial list)5757Emdeon – We make healthcare efficient.
- 101. Funding Healthcare Reform– The Duh FactorJune 13, 2009 – President Obama announces $313 billion in cuts to Medicare/Medicaid providers
- 102. 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 cutsvs.$150 billion over 5 years through HIT 58Emdeon – We make healthcare efficient.
- 103. what would udow/ $150 B?ushealthcareindex.com
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- 108. Panel Discussion: PHR,EHR or EMR – A real solution or just Alphabet soup?Moderator: Daniel Fell, Partner NDPPanelist:Steve Starkey, COO/CIO, HMSMikell van derLaan, Manager of Architecture, CHSPHR EHR EMR
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Editor's Notes
- #60 So I ask to consider – what would you do with an extra $30 billion dollars a year?There is a lot you could do – first and foremost help pay for the other things we need to do to address quality – and ensure greater focus on patient care.The first phase of the Index looked at industry data. Now we are gathering numbers in real time from payers, providers and clearinghouses to tell an even more accurate story – and document progress – and savings.I urge you to join our effort – get involved in the Index – and raising awareness of the opportunity to get immediate savings.And help us work together to overcome the few remaining barriers. Today we’re releasing a whitepaper – with the Center for Health Transformation – that looks at these opportunities – and provides a clear roadmap for collaboration.