making the transition to a sustainable health care system the oregon approach: so far … sean...
TRANSCRIPT
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Making the Transition to a Sustainable Health Care System
The Oregon Approach: so far …
Sean Kolmer, MPH Health Policy Advisor
Governor John Kitzhaber
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Overview1. State and Federal Budget Issues
2. System Challenges
3. Oregon’s Path
4. Q & A
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Unsustainable • Health care costs are increasingly
unaffordable to individuals, businesses, the state and local governments
• Inefficient health care systems bring unnecessary costs to taxpayers and all other purchasers
• Dollars from education, children’s services, public safety, salaries and wages
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Oregon’s Long Term Budget
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
28,000
30,000
2009-11 LAB 2011-13 2013-15 2015-17 2017-19
Revenues (11/2010)
Expenditures
Best 4 Biennia
Worst 4 Biennia
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Comparing the rate of increase in Medicaid and PEBB health care expenditures vs rate of increase in state General Fund revenue
100
150
200
250
300
350
400
2001-2003 2003-2005 2005-2007 2007-2009 2009-2011 2011-2013(proj)
2013-2015(proj)
2015-2017(proj)
2017-2019(proj)
Perc
ent C
hang
e (In
dex=
100)
Medicaid (TF) PEBB (TF) Statewide General Fund Revenue
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• Medicare growth of all federal income taxes. • 2004- 8%
• 2015 – 19%
• 2025 - 32%
• 2075 – 90%
• Medicare Trust Fund assets are exhausted in 2024
2000 2025
Number of beneficiaries
39.5M 69.7M
Beneficiaries as share of pop.
13.8% 20.6%
Future of Medicare
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Failure of the “Super Committee”
• Two percent reduction in Medicare spending, which must come from:
Payments to hospitals Doctors Nursing homes Other providers
• And not in benefits
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Private sector facing similar cost increases
Source: Medical Expenditure Panel Survey, MEPSnet Insurance Component.
• Average per Oregon premiums (1996-2010)
• Employee only rose almost 300%
• Average per family premium rose over 300%
• As premiums have increased, cost have been shifted more and more to employees and their families (1996-2010)
• Employee only contributions rose almost 400%
• Family contributions rose 370%
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System Challenges: Cost Shifting Cycle
Public Private
Those who do not fit into a
category(uninsured)
Change eligibility
Pressure on state/federal
budgets
Employers and/or
employees drop coverage
Increase in premiums, co-
pays, co-insurance
ER(uncompensated, expensive care)
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If food were health care
If food prices had risen at the same rates as medical inflation since the 1930’s:
1 dozen eggs $80.20 1 roll toilet paper $24.20 1 dozen oranges $107.90 1 pound bananas $16.04 1 pound of coffee $64.17
Total for 5 items $292.51
Source: American Institute for Preventive Medicine 2007
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Quality vary widely • National Data
– 44% Oregon adults over age 50 receive recommended preventive care (17th in the nation)
– 90% of hospitalized patients receive recommended care for heart attack, heart failure, pneumonia (40th in the nation)
– 66% of heart failure patients received written instructions at discharge (46th in nation)
– Best state for preventing hospital admissions for children with asthma
• Quality Corporation data showed diabetes care exceeds the national average but there is wide variation across practices
– 58% diabetics received an annual eye exam
– 82% diabetics had their kidney function checked
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In Oregon, wide variation in cost for similar outcomes...
Sources: Office for Oregon Health Policy & Research. Hospital Quality Indicators Report, 2007. http://www.ohpr.state.or.us/OHPPR/HQ/index.shtml
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Not working Better Even better
Payment Fee for service
Episode-based reimbursement
QualityGlobal budgeting
Incentives
Conduct procedures
Evidenced-based carePay for performance
Address root causesReduce obstacles to behavior change
Metrics Revenue improvement
QualityReduced hospitalization Reduced disparities
Better health Improved quality of lifeReduced costs
Governance
Informal relationships & referrals
Joint partnerships between organizations(e.g., mental health & behavioral health)
New community accountability linking ALL
System Challenges: Misaligned Incentives
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Oregon Health Plan
15
50% of babies born in Oregon
16% of Oregonians
Thousands of providers
11% percent of total state budget
Fastest growing portion of state budget
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System Challenges: Fragmentation of Care
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Cost of fragmentation
• Even for all we spend, health outcomes are not what they should be – estimated 80% of health care dollars go to 20% of patients, mostly for chronic care
• Lack of coordination between physical, mental, dental and other care and public health means worse outcomes and higher costs
• Behavioral health major driver of bad outcomes and high costs– Human and financial cost
• Chronic conditions– Care delayed is too often care denied
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Ways to Reducethe Cost of Health Care
• Reduce what we pay for it (provider cuts)
• Reduce the number of people covered
• Reduce the benefits covered
… or
• Change the way care is organized and delivered
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Senate Bill 1580Launches Coordinated Care Organizations
(CCOs)
• CCOs are local health entities that deliver health care and coverage for people eligible for Medicaid (the Oregon Health Plan)
• Follow up to 2011’s HB 3650
• Strong bi-partisan support
• A year of public input – more than 75 public meetings or tribal consultations
• Built on 1994’s Oregon Health Plan that covers 600,000 Oregonians today
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GOAL: Triple AimA new vision for a healthy Oregon
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Changing health care delivery
www.health.oregon.gov
Benefits and services are
integrated and coordinated
One global budget that grows at a fixed rate
Local flexibility
Local accountability for health and
budget
Metrics: standards for
safe and effective care
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Coordinated Care Organizations
www.health.oregon.gov
A local network of all types of health care providers working together to deliver care for Oregon Health Plan clients.
Care is coordinated at every point – from where services are delivered to how the bills are paid.
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CCOs: governed locally
www.health.oregon.gov
State law says governance must include: • Major components of health care delivery system• Entities or organizations that share in financial risk• At least two health care providers in active practice
– Primary care physician or nurse-practitioner– Mental health or chemical dependency treatment
provider• At least two community members• At least one member of Community Advisory
Council
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Community Advisory Council• Majority of members must be consumers• Must include representative from each county
government in service area• Duties include Community Health Improvement Plan and
reporting on progress
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Benefits & services are integrated and coordinated
www.health.oregon.gov
• Physical health, behavioral health, dental health• Focus on chronic disease management• Focus on primary care• Get better outcomes:– Health equity– Prevention
• Community health workers/non-traditional health workers
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Global budget
www.health.oregon.gov
• Current system– MCO/MHO/DCO/FFS– Payments based on actions– No incentives for health outcomes
• CCO Global Budget– One budget– Accountable to health outcomes/metrics– Local vision, shared accountability, shared savings– Flexibility to pay for the things that keep people healthy
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Flexibility: pay for non-traditional health workers and other means to coordinate care
Addressing behavioral health: Reduced ED visits by 49% and reduced costs per patient $3,100.
Central Oregon pilot project
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CCO Criteria
www.health.oregon.gov
Coordinate physical, mental health and chemical dependency services, oral health care
Encourage prevention and health through alternative payments to providers
Engage community member/health care providers in improving health of community
Address regional, cultural, socioeconomic and racial disparities in health care
Manage financial risk, establish financial reserves, meet minimum financial requirements
Operate within a global budget
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Federal Oregon partnership
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CCO Waiver Framework
• Waiver effective July 5, 2012• Establishment of CCO’s as Oregon’s Medicaid delivery
system in order to improve health, improve healthcare, and lower per capita costs
• Flexibility to use federal funds for improving health• Federal investment:
– $1.9 billion over five years
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Oregon’s Accountabilities• Savings:– 2% reduction in per capita Medicaid trend– Baseline is calendar year 2011 Oregon spend– Trend 5.4% as calculated by OMB for President’s
Budget– State to achieve 4.4% by end of year 2 and 3.4%
there after.– No reductions to benefits and eligibility in order to
meet targets– Financial penalties for not meeting targets
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Oregon’s Accountabilities
• Quality:– Measurement and benchmarks– Financial incentives (sticks and carrots) at CCO level
• Transparency• Workforce
– $2 million per year for primary care loan repayment– Training of minimum 300 additional community health
workers by end of 2015
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Across Oregon, unprecedented
collaboration
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CCOs-Wave 1 (effective 8/1/12)
www.health.oregon.gov
3535
CCO Service AreaUmpqua Health Parts of Douglas CountyFamilyCare Tri-County Clackamas, Multnomah and Multnomah
Counties, parts of Marion
AllCare Health Plan Select zips of Curry, Josephine, Jackson and Douglas Counties
PacificSource Health Plans- Central Oregon
Crook, Deschutes, Jefferson Counties, Parts of Klamath County
Trillium Community Health Plan Lane County including contiguous zips in Benton and Linn Counties
Willamette Valley Community Health Marion County including contiguous zips in Polk county
InterCommunity Health Network Benton, Lincoln and Linn counties
Western Oregon Advanced Health Coos and Curry counties
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CCOs-Wave 2 (effective 9/1/12)
www.health.oregon.gov
3636
CCO Service AreaColumbia Pacific Clatsop, Columbia, Tillamook counties,
parts of Coos and Douglas
Jackson County CCO Jackson county
PrimaryHealth of Josephine County Josephine county, parts of Douglas and Jackson counties
Eastern Oregon CCO Baker, Malheur, Union, Wallowa, Sherman counties
Health Share of Oregon Clackamas, Multnomah and Washington counties
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CCOs-Wave 3 & 4 (in progress)
www.health.oregon.gov
3737
CCO Service AreaCascade Health Alliance (effective 10/1/12)
Parts of Klamath county
PacificSource-Columbia Gorge CCO (effective 11/1/12)
Hood River and Wasco counties
Yamhill County CCO (effective 11/1/12) Yamhill county, parts of Marion, Clackamas, and Polk counties
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OHP Providers
Providers will contract
directly with CCOs
Fee-for-service will be phased into CCO
OHP medical benefits are
not changing
Metrics will be staggered
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“One of the problems we can solve is the tremendous fragmentation among the people who pay for the care and what they expect from us.”
Hood River family physician
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Long-term
• Begin to have as an option the redesigned delivery system platform for other state contracts:– Public Employees Benefit Board– Oregon Educators Benefit Board
• Redesigned delivery system could be core component of health insurance exchange and an opportunity for private sector to participate
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Cost of doing nothing…and the opportunity