Controlling Health Care Spending Growth While Maintaining or Improving the Quality of Care - PowerPoint PPT Presentation

Loading...

PPT – Controlling Health Care Spending Growth While Maintaining or Improving the Quality of Care PowerPoint presentation | free to download - id: 58d50b-ZGI1N



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Controlling Health Care Spending Growth While Maintaining or Improving the Quality of Care

Description:

Title: Technology Diffusion and Managed Care Author: School of Public Health Last modified by: Mike Created Date: 7/31/1996 9:20:12 AM Document presentation format – PowerPoint PPT presentation

Number of Views:323
Avg rating:3.0/5.0
Slides: 36
Provided by: SchoolofP49
Learn more at: http://www.scbch.org
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Controlling Health Care Spending Growth While Maintaining or Improving the Quality of Care


1
Controlling Health Care Spending Growth While
Maintaining or Improving the Quality of Care

Michael Chernew May 14, 2013
2
Definitional issues matter
  • Spending at the population level (e.g. national
    or firm)
  • Spending Price Quantity
  • Total spending or government spending
  • Total spending is the most comprehensive measure
  • Government spending causes most alarm
  • Taxes

3
Data
4
Federal Spending on Health as of GDP
Medicaid, CHIP, and Exchange Subsidies
Medicare
Source Congressional Budget Office. The 2012
Long-Term Budget Outlook. http//cbo.gov/sites/def
ault/files/cbofiles/attachments/LTBO_One-Col_2.pdf
5
Our Debt is Unsustainable
Source Congressional Budget Office. The 2012
Long-Term Budget Outlook. http//cbo.gov/sites/def
ault/files/cbofiles/attachments/LTBO_One-Col_2.pdf
6
Consequences of Higher Taxes
  • If finance higher health care spending by taxes
  • Marginal tax rates of high income earners could
    rise to 70 by 2060
  • GDP declines(relative to trend) by 11.
  • Magnitudes depend on the exact assumptions about
    tax policy

Source Baicker and Skinner 2011 Assumes
health care spending growth
consistent with 2010 CBO long run forecast
7
Health Care Spending Pressures Wages
8
Concepts and Evidence
9
Slowing spending growth
  • Spending

High spending, rapid growth
Low spending, rapid growth
Low spending, slow growth
Time
10
Level vs. Growth
11
Long run spending drivers
  • Medical technology
  • New knowledge (and associated stuff)
  • Less important factors
  • Deteriorating health/ obesity
  • Prices
  • Aging
  • Rising incomes
  • More generous coverage (static effects)
  • Inefficiency
  • Inappropriate use
  • Liability

12
What will slow spending growth
  • Payment
  • Consumer strategies (benefit design)
  • Organization of medical practice
  • Wellness

13
Payment Reform
14
Payment Reform
  • Pay less
  • Reductions in payment to providers
  • Reductions in payment to plans
  • Bundle payments aggregate payment across
    services and providers
  • Episode bundles
  • Patient bundles (global payment)

15
Will payment reform work
16
Impact of Capitation
  • Physicians in highly capitated environments spent
    3.86 less than salaried physicians both in terms
    of total spending and costs per episode. a
  • VA Clinics with capitated payment had 4-16 less
    utilization in most outpatient services and 16
    lower total expenditures per patient than VA
    clinics with salaried payment. b
  • Countries that reimburse physicians by capitation
    had 17-21 lower health expenditures than those
    that reimbursed by fee for service. c

a Landon et al. 2011. The Relationship between
Physician Compensation Strategies and the
Intensity of Care Delivered to Medicare
Beneficiaries. Health Research and Educational
Trust. 46(6) 1863-1882. b Liu et al. 2007. The
Impact of Contract Primary Care on Health Care
Expenditures and Quality of Care. Medical Care
Research and Review. 65(3) 300-314. c Gerdtham
et al. 1998. The determinants of health
expenditure in the OECD countries a pooled data
analysis. Developments in Health Economics and
Public Policy 1998113-34.
17
Alternative Quality Contract
18
Basics
  • Launched in 2009
  • Contract between plan and provider organization
  • Providers join, not enrollees
  • Provider groups must have at least 5000 BCBSMA
    patients
  • HMO/ POS patients only
  • Patients must designate a primary care physician
    (regardless if they are in AQC)
  • PCP must authorize referrals (regardless if they
    are in AQC)

19
Three Pillars of AQC
  • Global payment
  • Pay for performance
  • Technical support

20
AQC Global Payment
  • Covers all services
  • Inpatient
  • Outpatient
  • Drugs
  • Includes costs regardless of who delivers care
  • Inside and outside of AQC
  • Contract covers 5 years
  • Base payment
  • Growth rate
  • Rates set through negotiation
  • Maintain (or increase) base payment
  • Lower trend to projected CPI rate

21
History
  • 7 groups joined in 2009
  • Very diverse
  • Some had some prior risk with AQC
  • Some large integrated groups
  • Some diffuse IPA models
  • Different relationship with hospitals
  • 4 more joined in 2010

22
(No Transcript)
23
AQC Quality Process Measures
2009 AQC Cohort vs. Non-AQC Between-Group Difference 2009 AQC Cohort vs. Non-AQC Between-Group Difference Between-Group DifferenceBy Year Between-Group DifferenceBy Year Between-Group DifferenceBy Year Between-Group DifferenceBy Year
  Avg effect Avg effect Year-1 (2009) effect Year-1 (2009) effect Year-2 (2010) effect Year-2 (2010) effect
    p p p
Chronic care management (aggregate) 3.7 lt0.001 2.6 lt0.001 4.7 lt0.001
Adult preventive care (aggregate) 0.4 0.004 0.1 0.67 0.7 lt0.001
Pediatric care (aggregate) 1.3 lt0.001 0.7 0.001 1.9 lt0.001
.
24
Payment Reform Summary
  • Can slow spending
  • Providers capture efficiencies
  • Payers only capture savings if they lower payment
    rates
  • Quality could be a concern
  • Couple with pay for performance
  • Measures are imperfect

25
Benefit Design
26
Benefit Design Options
  • Higher co-premiums/ premium support
  • Higher copays, co-insurance or deductibles
  • Reference pricing
  • Tiered networks
  • Value Based Insurance Design (VBID)
  • Align copays with value

27
Will Benefit Design Changes Work
  • Can clearly solve the public spending problem
  • Simply shift spending to patients
  • Will reduce utilization
  • HIE participants in the large-cost sharing plan
    (95 coinsurance) plan used 25-30 fewer services
    than those in the free-care plana

aJ.P. Newhouse and the Insurance Experiment
Group. Free for All? Lessons from the RAND Health
Experiment. Cambridge, MA. Harvard University
Press 1993
28
Benefit Design Concerns
  • Reductions in appropriate use same as for
    inappropriate use (Sui et al. 1986)
  • Copays reduce use of preventive services
  • Copays reduce use of valuable pharmaceuticals
  • How much risk do we transfer?
  • How does this affect disparities?

29
Value-Based Insurance Design
  • VBID Align copays with value
  • The value of any service depends on who it is
  • delivered to.
  • Any VBID program will not be perfect.

Sources Fendrick et al. 2001. A Benefit-Based
Copay for Prescription Drugs Patient
Contribution Based on Total Benefits, Not Drug
Acquisition Cost. American Journal of Managed
Care. 7(9)861-867 Chernew et al. 2007.
Value-Based insurance Design. Health Affairs.
26(2)w195-w203. Chernew et al. 2008. Impant of
Decreasing Copayments on Medication Adherence
Within a Disease Management Environment. Health
Affairs. 27(1) 103-112.
30
VBID Variations
  • Targeting
  • Simple VBID Target a service
  • Blood pressure medication for everybody
  • More complex VBID Target services only for
    selected patient groups
  • Blood pressure medications for patients with
    diabetes
  • Copay lowering only or aligning?
  • Target increase vs across the board increase

31
Defining Value
Cost Saving
Cost Effective
Not Cost Effective
0
100,000
Cost effectiveness ratio (/Quality adjusted life
year) ? Always relative to next best
alternative
This should be higher (250,000), but decline
as overall spending rises
32
Impact of VBID on Adherence
Increase in Adherence
Drug Class
SOURCE Chernew ME, Health Affairs. Impact of
Decreasing Copayments on Medication Adherence
Within a Disease Management Program. January 2008.
33
Financing
  • Offsets
  • Lower costs due to fewer adverse events
  • do not fully offset employer spending
  • Payer spends more
  • may offset total costs
  • Approximately break even from societal
    perspective
  • Productivity gain
  • Increase costs for other services
  • Specifically low value services

34
Summary of cost containment
  • Bundled payments could work
  • Broad enough programs
  • Strict enough update rules
  • Politically sustainable
  • Cost sharing strategies could work (particularly
    at reducing payer spending)
  • May transfer a lot of risk (or just shift premium
    cost)
  • Exacerbate disparities
  • VBID may mitigate some concerns
  • Other strategies may be good, but small impact

35
End
About PowerShow.com