National Press Foundation Why Pursue Health Reform One Providers View

1
National Press FoundationWhy Pursue Health
Reform One Providers View

• Robert K. SmoldtMayo Clinic
• November 14, 2007

2
Fundamental Issuesfrom a Providers Perspective

• Uninsured

3
Ian Morrison

• The U.S. is the only country where owning a
  gunis a right and getting health care is a
  privilege

Ian Morrison quote from Mayo Clinic/RANDHealth
Reform Forum, March 6, 2007
4
Fundamental Issuesfrom a Providers Perspective

• Uninsured
• Variable quality

5
Mortality Amenableto Health Care
Deaths before age 75that are potentially
preventable with timely and appropriatemedical
care
International variation, 1998
Source Commonwealth FundNational Scorecard on
U.S. HealthSystem Performance, 2006
6
Fundamental Issuesfrom a Providers Perspective

• Uninsured
• Variable quality
• Disintegrated,fragmented care

7
Why is coordinated,integrated care needed?

• Medicare patients with 4 chronic conditions are
  what of total cost?
• 68
• Yearly per person average
• 13 physicians
• 50 prescriptions

Sources WSJ, Feb 8, 2006 Archives of IM, Nov
11, 2002
8
Efficient Resource UseICU Days for Decedent in
Last Six Months

• change
• Region Number integrated avg
• Integrated systemsTemple, TX 1.8 Rochester,
  MN 2.5 Salt Lake City, UT 2.1
• Integrated avg 2.1 Base
• U.S. 3.3 57
• Miami 6.6 214
• LA 6.4 204
• Philadelphia 5.3 152
• Houston 4.3 105

Source Dartmouth Atlas of Health Care website,
Sep 26, 2007
9
Fundamental Issuesfrom a Providers Perspective

• Uninsured
• Variable quality
• Disintegrated,fragmented care
• High cost

10
Is U.S. only place where health care costs are
rising?
Health spending per person in real
terms,average annual increase 1970-2002
Source The Health of Nations, Economist, July
17, 2004
11
Variability in Efficiency

• Leapfrogs Honor Roll 39 U.S. teaching hospitals
  (based primarily on process measures)
• Dartmouth data on cost per Medicare enrollee in
  last 6 months of life
• Most efficient hospital 15,800
• Least efficient 45,600

Dartmouth Atlas, 2006(?)
12
A view that health spending does yield benefits

• NY Times, August 22, 2006Making Health Care
  the Enginethat Drives the Economy
• By 2030, predicts Robert Fogel, Nobel Laureate
  at the University of Chicago, about 25 of GDP
  will be spent in health care making it the
  driving force of the economy. Dr. Fogel is not
  alarmed. Americans can afford it. He
  explains,At the end of the 19th century, food,
  clothing and shelter accounted for 80 of the
  family budget. Today it is about a third.

13
A view that health spending does yield benefits

• NY Times, August 22, 2006Making Health Care
  the Enginethat Drives the Economy
• Says Robert E. Hall (Stanford) andCharles I.
  Jones (University of California, Berkley), We
  have to spend our money on something.So we get
  older and richer, which is more valuable a third
  car, yet another television, more clothingor an
  extra yearof your life?

14
Mayo Clinic Health Policy Center

• Goal
• Influence stakeholders to implement substantive
  health care reformbefore 2011 that will preserve
  quality and availability of health care for all
  patients

15
(No Transcript)
16
Top Issues from Symposium

• Health insurance for all Americans

• Improving effectiveness and efficiency

• Improving integration of care

• Pay for value

17
(No Transcript)
18
Individual Ownershipof Insurance for All

• Provide health insurance and access to basic
  health care for all Americans regardlessof
  their ability to pay
• Require individual ownership of insurance
• Provide sliding-scale subsidies for those in need
• Create a simple mechanism (FEHBP) to coordinate
  insurance offerings
• Appoint an independent health board to define
  essential health care services
• Allow people the option to buy more coverage

19
Are there models of this approach?
20
Effectiveness and Efficiency

• Increase quality and patient satisfaction.
• Decrease medical errors, costs and waste.
• Develop a common definition of value
• Measure and display outcomes, patient
  satisfaction scores and costs as a whole
• Create a trusted mechanism to synthesize
  scientific, clinical and medical information
• Reward consumers for choosing high-quality health
  plans and providers
• Hold all sectors accountable for reducingwaste
  and inefficiencies

21
Improving Integration

• Patient care services must be coordinated across
  people, functions, activities, sites and timeto
  increase value
• Center care around the needs of the patient
• Form coordinated systems to deliver effective and
  appropriate care to patients
• Develop incentives to encourage teamwork
• Increase support for health care delivery science
• Provide accurate information so patients can make
  informed decisions

22
Mayo/Dartmouth Forum

• Principles for Payment Reform
• Payment systems should be designed to provide
  patients with no less than the care they need and
  no more than fully informed, cost-conscious
  patients would want
• Pay providers based on value measurable
  outcomes, safety and service compared to the cost
  over time

23
Mayo/Dartmouth Forum

• Provider scores on the importance of continuing
  development of the payment approach

24
Dr. Len M. Nichols(New America Foundation)
testimony to U.S. Committee of the Budget, June
26, 2007

• The secret is not, however, to re-jigger 10,000
  prices in 3,000 counties so that we get them
  right once and for all (until medical knowledge
  or technology or input prices change again). The
  secret is tobundle ever-larger sets of services
  into one payment, which frees clinicians and
  providers to find the most efficient way to
  deliver health.

25
Hypothetical example of problem with line item
pricing emphasis

• MDTeam A
• 7,200
• 0.5
• 18,000
• 2,500
• 45.0 M

• MDTeam B
• 6,500
• 1.2
• 21,000
• 4,400
• 92.4 M

Coronary Angioplasty Fee ICU days Cost per
episode No. per 1 million population Cost per 1
million population
Cost of B as of A -10 17 105
26
Total Cost Price x Use Rate
27
Price Controls Graysons Maxim

• Add (price) controls and you will see new
  services appear. Expect unbundling of services
  with the price of individual units, when added
  together, totaling more than the original
  services.
• C. Jackson Grayson Jr. Chair, U.S. Price
  Commission (1971-1973)

Source Wall Street Journal, 29 Mar 1993
28
Annual Rates of Increase in Physician Fees and
Expenditures/Fee-for-Service Beneficiary
Fees SGR-relatedexpenditures/fee-for-serviceben
eficiary
Annual percent change
1997-2001
2001-2005
Source Letter to Medicare Payment Advisory
Commissionfrom Herb B. Kuhn, Director, Center
for Medicare Management, CMS 4/7/06as referenced
by Dr. Stuart Guterman, The Commonwealth Fund
29
Price Controls Graysons Maxim

• No matter how simply you begin, your controls
  will get more complex and voluminous.We started
  with3 ½ pagesof regulations and ended with
  1,534. In an effort to correct one inequity, you
  create another.
• C. Jackson Grayson Jr. Chair, U.S. Price
  Commission (1971-1973)

Source Wall Street Journal, 29 Mar 1993
30
Patient/Public Input Focus Groups

• Six sessions in Atlanta, Cincinnati,and Los
  Angeles with chronic disease patients
• Reviewed cornerstones of MCHPC recommendations
  without identifying them with Mayo Clinic
  Insurancefor all, coordinated care, value

31
Public Views Overall

• Cornerstones accepted when explainedbut are not
  self evident
• When changing delivery system,concerned about
  major shifts
• Recommend a phased approach trynew things, see
  if work, then put in play more broadly
• People are dissatisfied with U.S. health system,
  BUT are happy with their providers
• Change could make things worsefor them

32
YOUR VOICE, NEW VISION Program

• Nine city tour to collect letters and film and
  record woman/man on the street views
• Mayo organized, but other partners
• Partners
• American Hospital Association
• American Medical Group Association
• Kaiser Permanente

33
(No Transcript)
34
Mayo Clinic National Symposiumon Health Care
Reform
March 9-11, 2008Leesburg, VA

• Brief review of forum principles
• Review/analyze major health reform proposals from
  presidential candidates
• Identify/prioritize actions that different
  sectors can take to contribute to positive health
  care reform
• Begin creating an action plan for change