MEDICARE POLICY AND HEALTH SYSTEM REFORM

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MEDICARE POLICYANDHEALTH SYSTEM REFORM

• SDSMA ANNUAL MEETING
• TOM DEAN MD
• OCTOBER 2,2009

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WHY ALL THE FUSS ABOUTHEALTH SYSTEM REFORM??

• THE US HEALTH CARE SYSTEM HAS SIGNIFICANT
  PROBLEMS IN 3 IMPORTANT AREAS
  
• COVERAGE
• COST
• QUALITY

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COVERAGE

• 30-50 MILLION PEOPLE WITHOUT HEALTH INSURANCE
• MANY MORE UNDERINSURED
• THE NUMBER OF THOSE WITHOUT INSURANCE IS STEADILY
  RISING

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QUALITY OF COVERAGE DECLINING INCREASING COSTS
PASSED TO PATIENTS

• PERCENT OF SINGLE POLICIES WITH A DEDUCTIBLE OF
  AT LEAST 1000

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COSTS

• The US spends more on health care than any other
  country in the world
  
• Costs are rising 2 to 3 times faster than
  inflation
  
• Rapidly rising costs are serious threat to the
  financial stability of Medicare (Part A Trust
  fund projected to become insolvent in 2017)
  
• Rising health care costs make US industry less
  competitive in a world market

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Health Insurance Premiums, Inflation, and
Workers Earnings, 1999-2008
Note Due to a change in methods, the cumulative
changes in the average family premium are
somewhat different from those reported in
previous versions of the Kaiser/HRET Survey of
Employer-Sponsored Health Benefits. See the
Survey Design and Methods Section for more
information, available at http//www.kff.org/insur
ance/7790/index.cfm. Source Kaiser/HRET Survey
of Employer-Sponsored Health Benefits, 2000-2008.
Bureau of Labor Statistics, Consumer Price
Index, U.S. City Average of Annual Inflation
(April to April), 2000-2008 Bureau of Labor
Statistics, Seasonally Adjusted Data from the
Current Employment Statistics Survey, 2000-2008
(April to April).
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Concentration of Health Spending 2004
Population Percentile Ranked by Health Care
Spending
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QUALITY

• IN SPITE OF SPENDING FAR MORE PER CAPITA ON
  HEALTH SERVICES THAN ANY OTHER COUNTRY OUR
  HEALTH OUTCOMES ARE NOT THE BEST

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INTERNATIONAL COMPARISONOFHEALTH CARE OUTCOMES
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QUALITYMORTALITY AMENABLE TO HEALTH CARE(DEATHS
PER 100,000 POPULATIONFROM CONDITIONS WHICH
RESPOND TO MEDICAL CARE)
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THESE ARE TRENDS THAT ARE NOT SUSTAINABLE

• NOT SUSTAINABLE FOR MEDICARE
• NOT SUSTAINABLE FOR US BUSINESS
• NOT SUSTAINABLE FOR ENROLLEES IN PRIVATE INSURANCE

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WE NEED HEALTH SYSTEM REFORM

• HEALTH INSURANCE REFORM
  
• DELIVERY SYSTEM REFORM

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FEE FOR SERVICE PAYMENTA MAJOR FACTOR IN COST
GROWTH

• ENCOURAGES VOLUME GROWTH WITHOUT ATTENTION TO
  VALUE
  
  
• VALIDATION OF CLAIMS IS MAJOR ADMINISTRATIVE COST
  
  
• ENCOURAGES DEVELOPMENT OF SILOS
  
• DISCOURAGES COLLABORATION AND COORDINATION OF
  CARE
  

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MedPAC STRATEGY

• USE THE MEDICARE PAYMENT SYSTEM TO RESTRUCTURE
  THE HEALTH CARE DELIVERY SYSTEM
• RESTRUCTURE PAYMENTS TO PROVIDE INCENTIVES FOR
  BETTER COORDINATION OF CARE AND MORE EFFICIENT
  USE OF RESOURCES
• PREMISE THE DELIVERY SYSTEM WILL
  FOLLOW THE PAYMENT SYSTEM
• 
  

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RECENT ISSUES MedPAC HAS ADDRESSED

• 1) HOSPITAL COSTS
• 2) BUNDLING
• 3) PHYSICIAN RESOURCE USE AND REPORTING
• 4) CONFLICTS OF INTEREST
• 5) COMPARATIVE EFFECTIVENESS
• 6) IMAGING USE
• 7) ACCOUNTABLE CARE ORGANIZATION
• 8) PROMOTION OF PRIMARY CARE
• 9) MEDICAL HOME
• 10) MEDICARE FINANCING OF MEDICAL
  EDUCATION/GME
• 11) MEDICARE ADVANTAGE

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READMISSIONS

• Jencks, S. et al looked at over 11 million recent
  medicare admissions
• 19.6 readmitted within 30 days
• 50 of those readmitted had no bill for a
  physician visit in the interval between admission
  and readmission
• Projected cost to medicare for unplanned
  readmissions was 17.4 billion
  (NEJM 360(14)1418 April 2, 2009)?

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PHYSICIAN RESOURCE USEMEASUREMENT AND REPORTING

• CMS PLANS TO MEASURE AND REPORT INDIVIDUAL
  PHYSICIAN RESOURCE USE AROUND EPISODES OF CARE
• REPORTING WOULD INITIALLY BE CONFIDENTIAL BUT
  WOULD GO PUBLIC 2-3 YEARS

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COMPARATIVE EFFECTIVENESS

• PHYSICIANS HAVE RAISED CONCERNS THAT COMPARATIVE
  EFFECTIVENESS STUDIES WILL LEAD TO RIGID
  GUIDELINES
  
• GUIDELINE DEVELOPMENT IS COMPLEX NO GUIDELINE
  APPLIES TO ALL SITUATIONS
  
• THERE WILL BE A PUSH TO DEVELOP MORE
  STANDARDIZATION OF CARE SOME FLEXIBILITY MUST
  BE BUILT IN
  
• WE NEED GOOD DATA AS TO WHAT WORKS BEFORE WE EVEN
  CONSIDER GUIDELINES

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ACCOUNTABLE CARE ORGANIZATION

• A STRUCTURE IN WHICH A HOSPITAL AND THE
  PHYSICIANS WHO RELATE TO IT ARE ACCOUNTABLE FOR
  THE COSTS AND HEALTH OUTCOMES FOR A DEFINED
  POPULATION
• KEY ELEMENTS OF THE DESIGN
• ELIGIBLE ORGANIZATION
• DEFINED GROUP OF MEDICARE BENEFICIARIES
• DEFINED SPENDING BENCHMARKS
• DEFINED PERFORMANCE MEASURES
• DISTIBUTION OF SHARED SAVINGS

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MEDICAL HOME

• A RESTRUCTURED PRIMARY CARE PRACTICE
• EMPHASIS ON
• COORDINATION OF CARE
• CONTINUING PATIENT-PHYSICIAN RELATIONSHIPS
• PREVENTION AND EARLY DISEASE DETECTION
• AGGRESSIVE MONITORING OF OUTCOMES/CONTINUOUS
  QUALITY IMPROVEMENT
• TEAM APPROACH TO CARE
• BEST SINGLE STRUCTURAL REFORM TO IMPROVE OVERALL
  VALUE

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CHANGE IS DIFFICULT

• We must bear in mind, then, that there is
  nothing more difficult and dangerous, or more
  doubtful of success, than an attempt to introduce
  a new order of things in any state.  For the
  innovator has for enemies all those who derived
  advantages from the old order of things, whilst
  those who expect to be benefited by the new
  institutions will be but lukewarm
  defenders. ......  Hence it is that, whenever
  the opponents of the new order of things have the
  opportunity to attack it, they will do it with
  the zeal of partisans, whilst the others defend
  it but feebly.
• Niccolò Machiavelli The Prince (1513)