health reform after the elections: opportunities …health reform after the elections: opportunities...
TRANSCRIPT
Health Reform After the Elections:
Opportunities and Challenges
Bob Doherty
SVP, Governmental Affairs and Public Policy, ACP
Presentation to
ACP’s Washington DC Chapter
November 16, 2012
The five biggest
opportunities/challenges
1.Coverage
2.Cost
3.Entitlements
4.Sequestration
5.Payment and delivery reform
ACP’s abiding vision
“A nationwide program is needed to assure access to health care for all Americans, and we recommend that developing such a program be adopted as a policy goal for the nation. The College believes that health insurance coverage for all persons is needed to minimize financial barriers and assure access to appropriate health care services.”
Ginsburg, et al, American College of Physicians, Position Paper, Annals of Internal Medicine, May
1, 1990 www.annals.org/search?fulltext=ACP+universal+health+insurance&submit=yes&x=15&y=9
3
Dorn, Uninsured and Dying Because of It: Updating the Institute of Medicine Analysis on the Impact of Uninsurance on Mortality, Urban Institute, 2008
Why does it matter? Because being uninsured is a matter of life and death
Age
U.S.
populatio
n
(millions)
Percent
uninsured
within
age
group
Total deaths
Uninsured
excess
deaths ).
:
2000
2001
2002
2003
2004
2005
2006
Total:
21,000
23,00
Year Number of deaths due to uninsurance
2000 20,000
2001 21,000
2002 23,000
2003 24,000
2004 24,000
2005 25,000
2006 27,000
Total 165,000 Dorn, Uninsured and Dying Because of It: Updating the Institute of Medicine Analysis on the Impact of Uninsurance on Mortality, Urban Institute, 2008
Because of the election
1.No plausible scenario where
the ACA will be repealed
2.State resistance may
undermine its effectiveness
3.Federal government’s ability
to implement the program will
be stressed
2012 elections: federal government
Re-elected the candidate who promised
to continue implementation (Obama)
over the candidate who promise repeal
on “Day One” (Romney)
Expanded Democratic control over the
Senate and reduced GOP majority in
the House
2012 elections: views on health care
Only 25% of voters favored “full” ACA repeal
Slightly more (47%) favored keeping or
expanding it over repealing all or some of the
law (45%)
It remains deeply unpopular in many GOP-
controlled states http://www.dailykos.com/story/2012/11/06/1157266/-EXIT-POLLS-majority-do-
not-repeal-Obamacare
http://www.kaiserhealthnews.org/Daily-Reports/2012/November/07/exit-polls-and-
the-health-law.aspx
2012 elections: states
Democrats took control of 8 state legislative
chambers and added about 200 legislators
nationwide; GOP won 4 chambers while
defending others that were vulnerable
30 states will be controlled by GOP governors,
and 24 will have GOP-controlled legislatures
The big question going forward: will GOP
states support, undermine, resist, or accede to
the ACA’s coverage expansions?
What does the ACA do about
coverage? 2700 pages in four bullets
Provides HI coverage to nearly all residents
• Medicaid up to 133% of FPL
• Subsidized purchase of qualified health plans (up to 400% of FPL)
through state or federal exchanges
Improves Medicare benefits
Pilots new ways of paying and delivering care
Financed by taxes (higher income people,
devices, insurers) and cuts to hospitals, MA plans
SCOTUS and Medicaid
ACA (as written): carrots and sticks
States would expand Medicaid to include everyone with incomes
up to 133% of FPL
Carrots: 100% paid for by the federal government, gradually
declining to 90% by 2020, compared to usual 57% contribution
Sticks: feds can take away funds for existing Medicaid
ACA (post-SCOTUS): carrots only
People with incomes up to 100% of FPL are
not eligible for subsidies or exchanges
Expanding Medicaid is a good $ deal for the states
Sarah Kliff, Wonkblog, Washington Post, July 3, 2012 http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/03/why-hospitals-heart-the-medicaid-expansion-in-one-chart
What happens if the states opt-out
of Medicaid expansion?
In states that decline to enroll their
poor in Medicaid, a law designed to
cover nearly everyone could end up
extending coverage to everyone
except the poor—an unfortunate
detour on the road to universal
coverage.
States and health exchanges
States must have exchanges
that meet federal standards by
early 2013 or feds run them
Some are ready to go, but
many are behind, others are
resisting (inviting feds to run
them)
What is ACP doing about coverage?
Continued qualified support for
the ACA—with improvements
Medicaid Patient Advocacy
Campaign
Education and information:
www.healthcareandyou.org
ACP’s Medicaid Patient Advocacy
Campaign Cover letter from College leadership, seeking 100% U.S.
chapter participation
Concise action plan with one-click links to all supporting
materials, background information, presentation slides,
instructions and timetable
Customized state-specific reports (available now!) and press
releases to be issued by all chapters
http://www.acponline.org/cln/medicaid_campaign.htm
Template and web interface to send the report to your
state’s governor and legislators
The five biggest
opportunities/challenges
1.Coverage
2.Cost
3.Entitlements
4.Sequestration
5.Payment and delivery reform
Health care costs
What’s the trend?
Where does the $ go?
Why does it matter?
13.0% 12.8%
4.5% 3.7%
1.9%
4.9%
0.0%
6.0% 4.0% 2.0%
14.0% 12.0% 10.0% 8.0%
Canada Japan United Kingdom
Foreign Average (trade
weighted)
U.S. Manufacturers at Competitive
Disadvantage due to Health Costs
Employer Health Benefit Contribution Costs as a Share of Hourly Pay
United States France * Germany * •! Figures for France and Germany include employer contributions for other forms of social insurance in
addition to health benefits. Derived by NIHCM Foundation from information presented in Nichols LM and Axeen S. “Employer Health Costs in a Global Economy: A Competitive Disadvantage for U.S. Firms.” New America Foundation. May 2008.
Manufacturing sector competes globally, making it harder to shift health care costs to consumers through higher prices. 6.5%
$60,000
$170,000
$60,000
$357,000
$119,000
$357,000
$0
$50,000
$100,000
$150,000
$200,000
$300,000 $250,000
$350,000
A Beneficiary Lifetime Perspective: Payroll Contributions < Expected Benefits $400,000
Average Average Wages
Medicare Expected Benefits, Lifetime Medicare Payroll Taxes, Lifetime
$188,000 Female
Male
Source: Steuerle CE and Rennane S. "Social Security and Medicare Taxes and Benefits Over a Lifetime.” Washington, DC: The Urban Institute. June 2011.
Single, Average Wage Single, Average Wage One-Earner Couple, One-Earner Wage Couple, Average Wage
Two-Earner Couple, Two-Earner Couple, Average Wage
28
Hospital & Physician Sectors Accounted for More than 70 Percent of Private Premium Growth Over Past Five Years
$48.3
$108.5
$20 $0
$40
$120 $100 $80 $60
Hospital Care Physician & Clinical Services
Prescription Drugs & DME
Dental & Other Professional
Services
Home Health & Other LTC
Facilities & Services
Net Cost of Health Insurance
Total Change in Premiums
45% of net change
26% of net change $28.0
14% of net change
$15.4
9% of net change
$9.5
4% of net change $4.0
2006-2010
% Change 20.3% 13.2% 14.5% 14.3% 20.5% 3.1% 14.7%
3% of net change $3.1
Source: NIHCM Foundation analysis of data from the National Health Expenditure Accounts.
97 percent of change in premiums was due to growth in insurers’
spending for health care services
2006 to 2010 Change ($ Billions
So what is ACP doing about cost?
High Value, Cost Conscious Care Initiative
Proposed ways to achieve hundreds of billions in
budgetary savings
Position papers on rational allocation of
resources and controlling costs
Support for comparative effectiveness research
Advocacy for value-based payment reforms
The five biggest
opportunities/challenges
1.Coverage
2.Cost
3.Entitlements
4.Sequestration
5.Payment and delivery reform
Entitlement reform
Medicare: open-ended entitlement
with reforms to focus on “cost
drivers” (Obama/Biden), or defined
contribution (Ryan budget)?
Medicaid: expanded entitlement and
more funding for states
(Obama/Biden), or turn it over to the
states with fewer federal $ (Ryan
budget)?
2012 elections: entitlement reform
Having campaigned against Medicare
premium support and Medicaid block grants,
no prospect that President Obama will agree to
them, or that the Senate majority would enact
them
But something has to be done: Grand
Bargain tied to tax reform/revenue deal?
Incremental adjustments?
So what is ACP doing about
entitlements? New position papers on Medicare and Medicaid reforms
Reduce spending by addressing cost-drivers: reduce unnecessary care, reform medical liability system (health courts), evidence-based benefit redesign, cap tax deductibility of high-cost insurance, fund research on comparative effectiveness, negotiate drug prices, and reform payment systems
Opposes Medicare premium support, but could support pilot-
test (possible compromise?)
Against Medicaid block grants but supports improved waiver
process to give states more flexibility
The five biggest opportunities/
challenges
1.Coverage
2.Cost
3.Entitlements
4.Sequestration
5.Payment and delivery reform
Sequestration
Failure of Congress’ “Super-Committee”
will result in $1.2 trillion in savings being
achieved through across-the-board cuts:
• Cuts annual funding for non-exempt domestic
discretionary programs by 8.2 percent (in 2013)
• Cuts annual funding for defense programs by 9.4%
percent (in 2013)
Sequestration cuts
Would have a devastating impact on:
NIH: $2.5 billion
CDC: $409 Million
HRSA: $605 million
Medicare: $11 billion
Physicians: 30% cut with SGR
Hospitals and GME (2 percent)
Sequestration cuts
Would have a devastating impact on:
FDA: $319 million
Health care for military: $3.2 billion
And many other programs!
So what is ACP doing about
sequestration?
Sequestration
January, 2012: ACP said “Across-the-board cuts shouldn’t
stand”
Established priorities for funding, including public health,
CDC, NIH, AHRQ, GME, and workforce programs
Offered alternative plan to reduce federal spending by
focusing on cost drivers
ACP Advocate Grass Roots Campaign
The five biggest opportunities/challenges
1.Coverage
2.Cost
3.Entitlements
4.Sequestration
5.Payment and delivery reform
Payment and delivery system reform
SGR?
FFS?
New approaches?
Future of SGR and FFS?
Policymakers across the spectrum want to get rid of
the SGR (but can’t agree on how to pay for it)
And move away from “volume” to “value”
But FFS will be a component of value-based
payments, even as FFS itself will change
• Under-valuation of cognitive care and work outside clinical encounter
• Linked to P4P incentives/disincentives
• Medicare Value Modifier: BN adjustment in Medicare payments
• Targeted policies: Medicaid pay parity, Medicare primary care bonus
“New” approaches
ACOs
Episode-of-care bundles
Risk-adjusted global capitation
PCMH and PCMH-N practices: FFS+risk-
adjusted capitation+shared savings, linked
to quality and cost metrics=total payment
So what is ACP to reform
payment/delivery systems? Developed conceptual framework for Patient-Centered
Medical Homes with other primary care organizations
• PCMHs now available to tens of millions of patients
from dozens of insurers
Worked with CMS to recruit 500 practices for
Comprehensive Primary Care Initiative (PCMH model)
in seven sites
Council of Subspecialty Societies: PCMH-neighborhood
concept, forthcoming NCQA certification
Testified twice before Congress (July) on SGR and
transitioning to value-based payments
What is ACP doing to reform
payment/delivery systems? Influenced CMS to improve ACO program,
reducing barriers to smaller practices
Advocated for new RUC primary care seat; ACP
nominee Doug Leahy elected; opposed AAFP
proposal to eliminate IM subspecialty seat
Worked with Rep. Allison Schwartz (D) and Joe
Heck (R) on Medicare Physician Innovation Act
to stabilize payment and transition to new
models; persuaded them to allow higher updates
for E/M codes not restricted by specialty
What is ACP doing to reform
payment/delivery systems?
It’s not just about new payment
models—ACP advocacy has
resulted in big wins for
internists on improving
Medicare and Medicaid fee-for-
service
New CMS rules: big wins for IM!
Direct result of ACP advocacy! New CPT codes 99495-99496: Medicare will pay
physicians for transitional care management services, the
non-face-to-face time they and their clinical staff spend on
patient cases. Until now, only the face-to-face reimbursed
• National pay of $164-$231, depending on whether a patient is seen
within 7 or 14 days of discharge, prior to geographic adjustment
(Assumes Congress does not allow SGR cut to go into effect).
• Combined with other changes in the Medicare fee schedule, total 2013
gain for IM of 4-5% in total Medicare payments [FPs average gain
higher only because mix of services different)
• These gains are on top of ACA’s 10% Medicare primary care bonus
(Average of $8000 more each year for qualified internists, 2011-15)
New CMS rules: big wins for IM!
Direct result of ACP advocacy!
Medicaid pay parity rule, effective 2013-2014:
increases payments for evaluation and
management and vaccine services to no less than
Medicare rates, paid fully by federal government
• CMS agreed with ACP that increases should apply to both primary
care internists and IM subspecialists
• Applies to E&M codes 99201 through 99499 to the extent that those
codes are covered by the approved Medicaid state plan or included
in a managed care contract
• Also, applies to services not covered by Medicare: New and
Established Patient Preventive Medicine; Counseling Risk Factor
Reduction and Behavior Change Intervention; and Consultations
Medicaid pay parity=big gains for DC
internists!
DC Medicaid primary care payments
=47% of Medicare
Because of the new rule, DC Medicaid
payments:
=100% of Medicare (2013-2014)
http://statehealthfacts.org/profileind.jsp?cmprgn
=1&cat=4&rgn=10&ind=196&sub=51
What’s next? The Mother of Lame Duck Congresses
Congress and the President must reach
agreement on legislation involving
hundreds of billions of dollars
With enormous short- and long-term
consequences
Lame-duck scenarios
SGR—temporary extension of current rates,
combined with instructions to committees to
develop plan to transition to new models
Temporary deal on expiring tax cuts,
sequestration linked to agreement to develop
plan for more revenue combined with tax and
entitlement reforms
Obama appears to be holding firm that he will
not agree to extension of all Bush tax cuts
Summary
2012 election: the ACA is here to stay, only a
minority of voters favor full repeal, but
electorate remains divided, and law remains
deeply unpopular in some states
States are the new battleground: decisions on
Medicaid and exchanges may determine how
effective the ACA is in covering uninsured
Summary
Cost is an abiding concern: ACA reforms may
help “bend the curve” (although critics say we
can’t afford it) but more must be done to make
spending sustainable
Entitlement reform will (must) happen—but
how and when?
Payment and delivery system reforms will
accelerate, standing still is not an option
Summary
Even as new models are developed, FFS will
continue to be part of the equation, but it won’t
be your father’s FFS
ACP advocacy: design new models that
recognize value of internists’ services (PCMH)
and improve FFS payments
ACP advocacy is paying off: big wins for
internists in Medicare and Medicaid pay rules
Summary
No other physician organization is doing as
much as ACP to put forth ideas on how to
address coverage, cost, entitlement reform,
sequestration and delivery system reform in a
fiscally- and socially-responsible way
In this time of challenge and opportunity,
physician leadership is essential, because the
public has extraordinary trust in you!
The way forward
“You’ve got be careful, if you don’t know where you’re going, cause you might not get there.”
Yogi Berra
The way forward
“We’re lost but we’re making good time!”
Yogi Berra