120424 masstlc sarah iselin, bcbsma foundation presentation
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Sarah Iselin presented the need for technology for providers under payment reform at MassTLC's breakfast seminar on 4/24/12TRANSCRIPT
HEALTH REFORM 2.0: FROM COVERAGE TO COSTS AND THE ROLE OF TECHNOLOGY
SARAH ISELINMass Technology Leadership CouncilApril 24, 2012
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
Series1
5.9%6.7%
7.4%6.4%
5.7%
2.6% 2.7%1.9%
13.1%13.9%
14.9% 15.2% 14.7% 14.9%16.1% 16.3%
Massachusetts Now Has the Lowest Rate of Uninsurance in the Country
2
PERCENT UNINSURED, 2000–2010, ALL AGES
2000 2002 2004 2006 2007 2008 2009 2010
U.S.AVERAGE
NOTE: The Massachusetts-specific results are from a state-funded survey, the Massachusetts Health Insurance Survey (MHIS), which estimated that 372,000 Massachusetts residents were uninsured in 2006, or 6.4 percent of the state's population. Using a different methodology, researchers at the Urban Institute estimated that 507,000 Massachusetts residents were uninsured in 2005, or approximately 8.1 percent of the total population. Starting in 2008, the MHIS sampling methodology and survey questionnaire were enhanced. These changes may affect comparability of the 2008 and later results to prior years. The national comparison presented here utilizes a different survey methodology, the Current Population Survey, which is known to undercount Medicaid enrollment in some states.
SOURCES: Urban Institute, Health Insurance Coverage and the Uninsured in Massachusetts: An Update Based on 2005 Current Population Survey Data In Massachusetts , 2007; Massachusetts Division of Health Care Finance and Policy, Massachusetts Health Insurance Survey 2000, 2002, 2004, 2006, 2007, 2008, 2009, 2010; U.S. Census Bureau, Current Population Survey 2010.
MASS.
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
But the Highest Per Person Health Care Spending…
3
PER CAPITA PERSONAL HEALTH CARE EXPENDITURES, 2009
NOTE: District of Columbia is not included.SOURCE: Centers for Medicare & Medicaid Services, Health Expenditures by State of Residence, CMS, 2011.
UT AZ GA ID NV TX CO AR CA AL VA SC TN NC OK MS OR KY MI MT NM IN IL KS WA LA HI IA MO WY NE SD OH FL WI MN MD NJ VT WV PA ND NH RI NY DE ME CT AK MA$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
State
NATIONAL AVERAGE
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION 4
Though Health Reform Helped, Costs Are Still a Problem for Many Massachusetts Residents
SOURCES: Massachusetts Health Reform Survey, 2010
Had Out-of-Pocket Spending at or Above 10% Family Income
Had Problems Paying Medical Bills Had Medical Debt
10%
19% 19%
6%
18%
20%
2006 2010
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION 5
Overall Spending Will Double Between 2009 and 2020
ACTUAL AND PROJECTED MASSACHUSETTS TOTAL PERSONAL HEALTH CARE EXPENDITURES, 1991-2020(BILLIONS OF DOLLARS)
SOURCES: Centers for Medicare & Medicaid Services, Health Expenditures by State of Residence, CMS, 2011; Massachusetts Division of Health Care Finance and Policy, “Massachusetts Health Care Cost Trends, Historical (1991-2004) and Projected (2004-2020),” November 2009.
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
$20 $21 $23 $24 $25 $27 $28 $30 $31 $33$36
$39$42
$45$48
$52$56 $58
$6168
7277
8186
9297
103109
116123ACTUAL PROJECTED
Year
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
$0
$2
$4
$6
$8
$10
$12
$14
$16
The More We Spend on Health Care, the Less We Have for Other Things
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STATE BUDGET FY 2001 VS. FY 2011 (BILLIONS OF DOLLARS)
PublicHealth
MentalHealth
Education Infra/Housing
HumanServices
LocalAid
PublicSafety
HealthCoverage
+$5.1 B (+59%)
-38% -33%
-15%
-23%
-13%
-50%
FY2001 FY2011
-$4.0 Billion (-20%)
STATE EMPL.
MEDICAID/HCR
STATE EMPL.+40%
MEDICAID/HCR+61% -11%
SOURCE: Data extracted from Massachusetts Budget and Policy Center’s Budget Browser
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
July 7, 2010
The Massachusetts
Health Care ‘Train Wreck’
The future of ObamaCare is unfolding
here: runaway spending, price controls,
even limits on care and medical
licensing.
7
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
PLEASE TELL ME IF YOU CONSIDER IT TO BE A CRISIS, A MAJOR PROBLEM, A MINOR PROBLEM, OR NOT A PROBLEM IN THE STATE OF MASSACHUSETTS.
5%
11%
14%
25%
26%
22%
32%
53%High cost of health care
Limited ability to get needed health care
Low quality of health care services
Long wait time for medical appointments
Crisis Major problem
78%
46%
33%
31%
QA
Costs Are Now the Most ImportantHealth Care Issue for the Public
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SOURCE: Blendon, R.J. et al., 2011. “Public Perceptions of Health Care Costs in Massachusetts.”
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
HOW IMPORTANT IS IT FOR THE STATE GOVERNMENT OF MASSACHUSETTS TOTAKE SOME MAJOR ACTION TO ADDRESS RISING HEALTH CARE COSTS IN THE STATE?
6%
1%
3%
14%
74%Very Important
Somewhat Important
Not Very Important
Not At All Important
MA State Government should not try to address rising costs in state
88%
QA
And the Public Is Ready for Major Actionby the State Government
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SOURCE: Blendon, R.J. et al., 2011. “Public Perceptions of Health Care Costs in Massachusetts.”
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
Key Affordability/Cost-Related Developments in Massachusetts
Health reform passes (Ch. 58)– Begins path
to near universal coverage
Much of Chapter 58 enacted, e.g.:– MassHealth
expansion– Commonwealth
Care– Consumer
affordability schedule
– New health plan options for young adults
– Employer Fair Share
Cost Containment Part 1 (Ch. 305) passes– Increased
transparency about cost drivers
– Reports on health insurer and hospital “reserves”
Special Commission on Payment Reform– Recommends
move to global payment
Government reports and hearings on cost drivers
Governor rejects small group premiums
Cost Containment Part 2 (Ch. 288) passes– Aims to
control premiums for small business, individuals
Governor Patrick files payment reform legislation
Special Commission on Provider Price Reform
Cost Containment Part 3?
2006 2007 2008 2009 2010 2011 2012
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
SOURCE: Smith S, Newhouse JP, Freeland, MS. “Income, Insurance, and Technology: Why Does Health Spending Outpace Economic Growth? Health Affairs 2009; 28(5): 1276-1284.
Technological Advances in Care Have Been a Major Driver of Health Care Spending GrowthCONTRIBUTION TO GROWTH IN SPENDING 1960 – 2007 OECD COUNTRIES Using data from
developed countries around the world, economists estimate that advances in medical technology explain up to about half of the total increases in real spending between 1960 and 2007; this is split evenly between straight technological advances in care, and the fact that as income grows, consumers demand proportionally more high tech care.
26%
27%
11%
7%
5%
29%Income Effects
Medical Price Inflation
Population Aging
Increased Insurance Coverage
Technology-Income Interaction
Technology
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION 12
Much of the Increased Spending on Medical Technology Has Bought Increased Health Value
SOURCE: Cutler, D.M. and M. McClellan, 2001. “Is Technological Change in Medicine Worth It?” Health Affairs, 20 (5): 11-29.
Technological advances in care have dramatically increased the costs of medical treatments. In one study, economists found that the cost to treat a heart attack rose $10,000 between 1984 and 1998. But the improvement in care created $70,000 “worth” of health over the same period, measured as the dollar value of additional years of life gained by a patient undergoing the more advanced treatments.Heart Attack Treatment 1984 - 1998
Increase in Treatment Cost $10,000
Additional Health Value $70,000 Net Benefit of
Additional Cost of
Treating Heart At-
tacks
$60,000
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
But Certainly Not All of It
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BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
Health Care Technology – Especially Information Technology – Can Be a Major Health Care Cost-Saver
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$80 Billion in potential savings
SOURCE: Hillestad, R et al. 2005. “Can Electronic Medical Record Systems Transform Health Care? Potential Health? Potential Health Benefits, Savings and Costs” Health Affairs, 24 (5): 1103-1117.
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
But Mere Installation of Technological Tools Will Not Yield Cost Savings Alone
15
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
Increased HIT Adoption Could Be Cost-Saving or Cost-Additive in Massachusetts
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SOURCE: RAND. “Controlling Healthcare Spending in Massachusetts: An Analysis of Options.” 2009.
PROJECTED SAVINGS AS A SHARE OF SPENDING 2010–2020
-7% -6% -5% -4% -3% -2% -1% 0% 1% 2%
-5.9%
-4.0%
-2.7%
-1.8%
-1.8%
-1.3%
-1.3%
-0.9%
-0.9%
-0.2%
-0.2%
-0.1%
-0.1%
0.0%
-0.2%
-1.1%
0.6%
-0.1%
-0.6%
0.0%
0.4%
-0.1%
0.2%
1.0%
Utilize bundled payment
Institute hospital all-payer rate setting
Institute regulation for academic medical centers
Eliminate payment for adverse hospital events
Increase adoption of HIT
Institute reference pricing for academic medical centers
Expand scope of practice for NPs and PAs
Promote growth of retail clinics
Create medical homes
Decrease resource use at end of life
Encourage value-based insurance design
Increase use of disease management
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
It’s All About Incentives
17
The current payment system, called fee-for-service (FFS), rewards doctors and hospitals for doing more.
This is doubly true for new medical technologies, as newer, high-tech services tend to garner higher payments.
Providers also face few incentives to invest in information technology that could help reduce unnecessary use of health care.
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
PATIENT-CENTERED GLOBALPAYMENT SYSTEM
THE SOLUTIONGlobal payments made to a group of providers for all care. Providers are not rewarded for delivering more care, but for delivering the right care to meet patient’s needs.
PRIMARY CARE
HOSPITAL
SPECIALIST
HOME HEALTH
$
CURRENT FEE-FOR-SERVICE PAYMENT SYSTEM
THE PROBLEMCare is fragmented instead of coordinated. Each provider is paid for doing work in isolation, and no one is responsible for coordinating care. Quality can suffer, costs rise and there is little accountability for either.
SPECIALIST PRIMARYCARE
HOMEHEALTH
HOSPITAL
GOVERNMENT, PAYERS AND PROVIDERS WILL SHARE RESPONSIBILITY FOR PROVIDINGINFRASTRUCTURE, LEGAL AND TECHNICAL SUPPORT TO PROVIDERS IN MAKING THIS TRANSITION.
Special Commission on the Health Care Payment System’s Recommendation
$ $ $ $$
18
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
Information Technology Will Be Key for the Success of Payment Reform
19
Under global payments, providers will face greater incentives to invest in innovative technologies that help manage and coordinate care across settings.
Provider groups accepting global payments will need tools and IT to help “divide the pie.”
Insurers and providers will also need innovative ways to engage consumers in selecting high-value care.
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION 20
But How Much We Pay – Prices – Is Just as Important as the Way We Pay for Care
NOTES: 1) Reflects fully-insured commercial trend2) “Unit price” reflects increases in provider rates. “Provider Mix and Service Mix” reflect changes in the location of care (shift to more expensive providers) and the intensity of services provided. “Utilization” reflects increases in the number of services provided.SOURCE: Office of Attorney General Martha Coakley, March 2010, “Investigation of Health Care Cost Trends and Drivers.”
BCBSMA COST DRIVERS FROM 2004-2008PERCENT OR INCREASE IN COSTS DUE TO CHANGE IN PRICE VS. PROVIDER/SERVICE MIX VS. UTILIZATION
2004 2005 2006 2007 20080%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
33.1%
53.3%58.0%
54.8% 53.8%
UNIT PRICE(amount providers get paid)
PROVIDER MIX AND SERVICE MIX
UTILIZATION(number of visits)
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
The Crux of the Current Political Debate Centers on the Appropriate Role for Government and the Market
21
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION
Stay Tuned…
Massachusetts has made health care “universally accessible, but not yet universally affordable…Massachusetts led the nation on health care reform and is poised to lead again on cost containment.” -Governor Deval Patrick
“…I think more immediately the issues of the health care debate and the budget really are going to require our attention” -House Speaker Robert A. DeLeo
“A careful, phased-in transition of this system-wide reform [removing fee-for-service within 5 years] is achievable. But we need to take the first step this year.” -Senate President Therese Murray
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