implication of health care reform on hospitals national capitol healthcare executives falls church,...
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Implication of Health Care Reformon Hospitals
National Capitol Healthcare ExecutivesFalls Church, VA
Ashley ThompsonOctober 2, 2010
Why Health Reform?• 51 million uninsured
• Insurance premiums have risen 131% over 10 yrs
• Annual premiums > $13,000 for family of four
• U.S. ranks 1st in health care spending… but 38th in health outcomes (in 2000)
• Current system rewards volume over value
• Care is provided across silos; it is not coordinated
• We have a “sick care” system, ratherthan a “health care” system
It’s the law – March 23, 2010
What’s In It?Coverage & Insurance Reform
• Insurance Reform
• Individual Mandate
• Employer “Play or Pay”
• Government Subsidies
• Administrative Simplification
Delivery System Reforms
• Hospital VBP
• Bundling
• ACO/Shared Savings
• Readmissions
• CMI – Innovation Center
Medicare & Medicaid Payment Changes
• Reductions to Annual Payment Update
• Reductions to DSH
• 340B Expansion
• Wage Index Changes
• Geographic Variation Adjustment
• Enhanced Rural Payment
• Medicare Extenders
Workforce and GME
Wellness and Prevention
Quality
• Hospital Acquired Conditions
• Disparities
• Comparative Effectiveness Research
Regulatory Oversight
• Tax-Exempt Status
Legislation Regulation
“The Secretary
shall”
7
Hospitals will be:
• More Integrated
• More Accountable
• More At-Risk
Changing Payment ModelsPayment system changes encourage greater provider collaboration …
•Bundling – voluntary pilot program for acute care hospitals, LTCHs, IRFs, doctors, SNF, and HHA to receive bundled Medicare Part A and Part B payments for selected conditions
•Accountable Care Organizations – allows physicians, hospitals and others to participate in “shared savings” for managing a population
•Patient-Centered Medical Home – allows capitated payment to interdisciplinary primary care teams
•Center for Medicare & Medicaid Innovation – $10 billion to test innovative payment and service delivery models
Key Competencies for Forming ACOs
• Leadership
• Organizational culture of teamwork
• Relationships with other providers
• IT infrastructure for population management/care coordination
• Infrastructure for managing, monitoring quality
• Ability to assess and manage financial risk
• Ability to receive and distribute payments and savings
• Resources for patient education and support
Key Components:• Personal physician
• Physician directed medical practice
• Whole person orientation
• Coordinated or integrated care
• Quality and safety
• Enhanced access
• Additional (capitated) payment
Patient-Centered Medical Home
Primary Care
Physicians
Specialty Care
Physicians
Outpatient Hospital Care and
ASCs
Inpatient Hospital
Acute Care
Long Term Acute
Hospital Care
Inpatient Rehab
Hospital Care
Skilled Nursing Facility
Care
Home Health Care
Medical Home
Acute Care Bundling
Acute Care Episode with PAC Bundling
PAC Episode Bundling
Models of Service DeliveryAccountable Care Organizations
Clinical Integration is Critical
Five legal hurdles:
- Antitrust
- Self referral (Stark)
- Civil monetary penalties
- Anti-kickback
- Internal Revenue Code
Reward Value not VolumePayment system changes encourage patient safety, quality, value …. not volume
•Value-Based Purchasing – pay hospitals for actual performance on quality measures (not just reporting). Payments reduced 1% growing to 2% over 5 years.
•Hospital-Acquired Infections – penalizes hospitals with high rates of hospital-acquired conditions (top 25%) with a 1% reduction in Medicare payment for all discharges
•Readmission Penalties – hospitals with higher-than-expected readmissions will have a 1% (growing to 3%) reduction in Medicare payment for all discharges
Core Competency: Manage quality, patient safety, costs, and patient experience during more of the
episode
Reach: Connections to other care givers, patients pre- and post-
Sharing: Share information on patients, quality, costs; share
incentives
Integration:Accepting Risk, Managing Care
Integration
Least
Greatest
Make Collaborate Buy
Other Implications
• Lower rates of reimbursement
• More patient volume (impact on ED?)
• Stronger focus on quality, patient safety and measurement
• Enhanced Health Information Technology
• Workforce shortages ?
• Focus on wellness & community health
• Care will be more integrated, coordinated
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Reform resources
• Special Bulletin…brief summary
• Financial calculator
• Detailed summary
• Timelines
• Hospitals as employers
• Power-point presentations− Consumer audience− Internal hospital audience
• Member tools
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Tools and Guides
What comes next politically?
• Democrats− Selling the plan to public− Implementing regulations− Protecting those that took
tough votes
• Republicans− Overall repeal
− Constitutional challenges
− Incremental efforts to repeal or “de-fund” provisions
“We all know that there is a hurricane coming for the Democrats. We just don’t know if it will be a Category 4 or a Category 5.”
Peter D. HartDemocratic PollsterNewsweekSeptember 20, 2010
Senate 2010GOP Needs 10
House 2010GOP Needs 39
Governors 2010Currently 24 GOP
Senate 2010+ 8-9 GOP
House 2010GOP + 47
Governors 2010+ 8 GOP
GOP Control of Congress
• New players on key committees• Hearings, investigations and
subpoenas• Stake in governance• Different dynamic on labor issues• Efforts to “defund” health care reform• Focus on deficit
reduction
ImplicationsImplications
Marginal control by Democrats
• No working majority• Blue Dogs key swing vote• No actions possible without
bipartisan support • Focus on deficit
reduction
ImplicationsImplications
Immediate issues (Fall Agenda)• Medicare IPPS final rule
– Coding offset– CAH provider taxes
• Health information technology rules…multi-campus
• Medicare outpatient rule (proposed)– Physician supervision of outpatient
therapeutic services
• Physician payment fix
Positioning for reform• Achieve solid hospital-physician
(clinical) alignment
• Measure, report and deliversuperior outcomes
• Attain a favorable cost position
• Strategic alliances
Implementation
• Strategic plan and framework• Key areas of focus
– Health insurance reform– Medicaid/CHIP expansion– Delivery system and payment reforms– Medicare/Medicaid payment changes– Quality– Workforce/Graduate medical education– Reporting information– Prevention and wellness– Program integrity and oversight
“Now is not the end.It is not even the beginning of the end. But, it is, perhaps the end of
the beginning.”
Winston ChurchillNovember 1942