Blueprint for Health Care Cost Containment in Massachusetts Project Update

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Blueprint for Health Care Cost Containment in
MassachusettsProject Update

• Elizabeth A. McGlynn, Ph.D.
• Susan Ridgely, J.D.
• December 12, 2008

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The Context
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Project Goals

• Identify and describe a range of ideas for
  controlling rising health care costs
• Develop an evidence base about the magnitude of
  potential savings under different options
• Inform a broad, community-wide discussion about
  strategies

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Project Milestones

• Kickoff meeting
• Stakeholder meetings
• List of ideas
• Selected options
• EHS/QCC update
• Final report

• January 25, 2008
• February 12-13, 2008
• April 2008
• June 2008
• December 2008
• February 2009

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Two Basic Approaches to Reducing Spending

• Reduce volume

• Reduce prices

Price x Quantity
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And Two Strategies for Each...

• Reduce prices
• Market-based
• Substitution
• Regulatory
• Price setting

• Reduce volume
• Market-based
• Incentives
• Regulatory
• Supply constraints

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Narrowing the Targets
95 ideas
20 policy options
?
strategies
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Organized 20 Options Into A Policy Framework

• Eliminate waste in the health care system
• Reform payment systems
• Redesign health care delivery
• Engage consumers
• Change the medical liability environment

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1 Eliminate Waste

• Reduce administrative overhead
• Reinvigorate Determination of Need
• Accelerate adoption of health information
  technology
• Use comparative effectiveness to guide coverage
  and payment rules
• Reduce payments for serious reportable events,
  avoidable readmissions, and preventable
  complication
• Increase efficiency of spending on end-of-life
  care

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2 Reform Payment

• Institute all payer rate setting
• Utilize bundled payment strategies
• Increase use of pay-for-performance
• Regulate insurance premium rates
• Increase Medicaid reimbursement rates

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3 Redesign Delivery Systems

• Shift care from academic medical centers to
  community settings
• Promote growth of retail clinics
• Accelerate use of medical homes
• Enhance scope of practice for PAs NPs
• Focus on prevention
• Increase use of disease management

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4 Engage Consumers

• Restructure health insurance
• Incentivize healthy choices

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5 Change Medical Liability

• Reduce number and magnitude of claims by closing
  loopholes in non-economic damage caps

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What Are We Doing?

• Describe policy option(s) in greater detail
• How will the goal be accomplished?
• What specific approach(es) will be taken?
• Who has to do what?
• Review the literature for evidence of the effect
  of prior similar approaches
• Assess the likelihood that an option would reduce
  spending

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Competing Challenges in Examining Evidence
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What Were Working on Now

• Developing approaches to estimating the magnitude
  of likely impact of options
• Conducting the bounding analyses (best and
  worst case scenarios)
• Consulting with stakeholders
• Producing final report

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