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Health Care Challenges and Opportunities for Primary Care in West Virginia James Becker, MD Medical Director WV DHHR, Bureau for Medical Services

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Page 1: Becker_Options WV

Health Care Challenges and

Opportunities for Primary Care

in West Virginia

James Becker, MD

Medical Director

WV DHHR, Bureau for Medical

Services

Page 2: Becker_Options WV
Page 3: Becker_Options WV

“We are all faced with a series of

great opportunities – brilliantly

disguised as insoluble problems.”

-- John W. Gardner

Page 4: Becker_Options WV

The evolution of systems

Investment

Growth

Plateau

Decline

Excerpt from “The Age of Paradox,” Charles Handy, 1994

Page 5: Becker_Options WV

National Health Expenditures per Capita, 1960-

2009

Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2009; file nhegdp09.zip).

Page 6: Becker_Options WV

National Health Expenditures and Their Share of

Gross Domestic Product, 1960-2009

Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2009; file nhegdp09.zip).

Dollars in Billions:

5.2% 7.2% 9.2% 12.5% 13.8% 14.5% 15.4% 15.9% 16.0% 16.0% 16.1% 16.2% 16.6% 17.6%

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Projected National Health Expenditures: In Billions and as Percent of GDP

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

16.0%

16.5%

17.0%

17.5%

18.0%

18.5%

19.0%

19.5%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Bill

ion

s % G

DP

$2.57 Trillion 17.3% GDP

$4.48 Trillion 19.3% GDP

2008 version of the National Health Expenditures (NHE) released in January 2010

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Average Annual Health Insurance Premiums and Worker

Contributions for Family Coverage, 2001–2011

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43 49

3958

4120

1526

3226

126127

2010 Population 2015 Population

Large Group Risk & ASO

Small Group

Individual

Uninsured

Medicaid

Medicare

Medicare, Medicaid, individual and small group markets

% of

Total

58%

42%

% of

Total

41%

296M 306M

59%

Segments impacted

by Exchange/Other

Government

Subsidies by 2015

Source: Booz & Co. research (Total Population,

Commercial & Individual); Cowen & Goldman

Sachs estimates (Government splits)

Market Shifts to Greater

Government Subsidization

Page 10: Becker_Options WV

*Manufacturer price; ** Assumes 15% rebates from manufacturers to payors and PBMs; *** Average of U.K., Germany, Italy, France, and Spain

Source: IMS Health; McKinsey Global Institute analysis

U.S. vs. OECD: U.S. Higher

Drug Costs

Page 11: Becker_Options WV

US vs. OECD:

Hospital Stays / Costs Fewer and shorter hospital stays are offset by higher unit cost

Source: OECD, McKinsey

Global Institute Analysis

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AGING OF THE BABY BOOM

GENERATION

78 million people

30 percent of U.S. population

Unfunded liability in Medicare = $70 Trillion

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System Objectives

The Triple Aim

(Institute for Healthcare Improvement)

1. Improve population health

2. Reduce per capita cost

3. Improve patient experience

Outcome

Safety

Satisfaction

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Chronic Disease*

People with chronic diseases → 70% HC spending

Diabetes

Coronary Artery Disease

Congestive Heart Failure

Asthma

Mental health / chemical dependency

*George Halvorson Health Care Reform Now

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Distribution of Health Care Expenditures*

1% of population → 35% of HC spending

5% of population → 60% of HC spending

10% of population → 70% of HC spending

*George Halvorson Health Care Reform Now

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Health Field Model

Influence Factors on Health Status

Source: McGinnis J.M., Williams-Russo, P., Knickman, J.R. (2002). Health Affairs, 21(2), 83

Lifestyle & Behavior 40%

Human Biology 30%

Medical Care 10%

Environmental 5% Social 15%

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The Second Curve

Scenario B

B

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WHERE THE RUBBER

MEETS THE ROAD

Cost continues to escalate Acute care system lacks capacity to absorb

2011 Baby Boomers Eligible for Medicare

Increase national debt

Increasing access problem for the elderly

Public dissatisfaction with care quality and

coordination

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Where are the solutions?

• Development of a model that creates a Health Community.

• Improved data collection systems that allow analysis of

outcomes rather than just collecting process measures

• Prevention, wellness and medical care that are integrated to

create a true health system.

• A reimbursement model that rewards healthy outcomes

• Integration of behavioral and physical health

Page 20: Becker_Options WV

Profile of WV Medicaid

400,000 Medicaid member

We will expand by 170,000 new members

Medical costs in 2010 were $2.5 billion

We have had several years of surplus

We face a short fall in 2013

Reimbursement for most services is at 72-

75% of Medicare

50% of members are in managed care

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Major Challenges

Expanded population

Higher cost for services

New therapies

Requirement to cover more conditions

Mental health parity

Risky lifestyle issues (substance abuse)

Readmissions, HCACs, Never events

Page 22: Becker_Options WV

Facts about our duals..

There are just under 50,000 West Virginia dual eligible members. That’s 12% of Medicaid eligibles.

Of the $2.5 billion in SFY 2010 medical expenditures $420 million Medicaid dollars are attached to the care of duals.

71% of that amount is spent caring for those over 65 years of age.

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Facts about duals..

40% of the duals had a hospital admission in

2010.

28% had more than one admission.

32,000 dual eligible members (66%) had care

from a specialist in 2010 but no care claim by

a PCP.

20% of the dual population had at least one

nursing home stay in 2010.

Page 24: Becker_Options WV

West Virginia’s foster care

children….

Medicaid covers 8,500 children in foster

care.

600 of those children have asthma.

Many have behavioral, developmental or

psychiatric diagnoses. 60% are labeled as

“oppositional defiant disorder”

Medication profile: stimulants, AAPs,

mood meds

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What are we doing in WV?

Data to guide decisions

Data warehouse, APCD, benchmarks

Many care coordination efforts

Health homes, PCMH, care integration

Using evidence to guide decisions

Working with stakeholders

FQHCs, comprehensives, private payers

Page 26: Becker_Options WV

The importance of coordinated

effort!

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What else?

Major pharmacy efforts on opiates, psych

meds, high dollar oncology products

EHR, incentives, ePrescribing, meaningfull

use, Health Information Technology

WV is creating a Health Insurance

Exchange

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This is clearly a time of challenge

and opportunity for primary care

physicians as we move forward

improving health and the health

care system. Primary care needs

to lead the way.

Page 30: Becker_Options WV