June 11, 2008

Patrick Miller, MPH, Research Associate Professor, UNH NHIHPP &Senior Staff, Citizens Health Initiative

NH Citizens Health Initiative:

Healthcare Issues, Challenges, and Initiatives

National Trends

U.S. Health Care Spending Reaches $2.1T in 2006,

Increasing 6.7%

Source: Kaiser Family Foundation

Chronic illness costs the economy more than $1 trillion a year

35.7 billion22.1 billion13.6 billion2.4 millionStroke

131.8 billion104.7 billion27.1 billion13.7 millionDiabetes

138.9 billion93.7 billion45.2 billion49.2 millionPulmonary conditions

169.3 billion104.6 billion64.7 billion19.1 millionHeart disease

216.7 billion170.9 billion45.8 billion30.3 millionMental disorders

312 billion279.5 billion32.5 billion36.8 millionHypertension

$319.3 billion$271.2 billion$48.1 billion10.6 millionCancer

Total economic expense

Value of lost productivity

Treatment cost

Reported cases*Disease

Source: The Milken Institute's "Unhealthy America: The Economic Burden of Chronic Disease" relied on data from the Medical Expenditure Panel Survey (2003), U.S. Census Bureau, the Behavioral Risk Factor

Surveillance System and the National Health Interview Survey.

5

Estimated Source of Funds Personal Health Care in US, 2006

Other Public8%

Medicaid16%

Other Private4%

Medicare22%

Insurance36%

Out-of-Pocket14%

Public Sources

46%

Private Sources

54%

Note: Some of the spending that is categorized as private insurance actually originates from public funds: insurance for teachers, postal employees, and other government workers.

Source: CDC, UCSF, IFTF

10%

20%

20%

50%

Factors that influence our health

Medical Care

Environment

Genetics

Healthy Behaviors

Healthy Behaviors A Case of Misaligned Resources

88%

$2.1 Trillion

Medical Care

4 %8 %

Healthy BehaviorsOther

Where we’re spending our money

We Get What We Pay For …

Products Paid For:TestsVisitsProceduresPrescriptionsErrors

Results Wanted: Improved HealthBetter Outcomes

Return to WorkInformed

EmployeesEfficiency

Safety

“Tell me how you measure

me, and I will tell youhow I will behave. If you

measure me in an illogicalway … do not complain about

illogical behavior.”

– Eli Goldratt, author of “The Goal”

Need to create a healthcare market with the following characteristics:

Informed and Engaged Consumers

Market Transparency• Treatment Options• Outcome and Quality Metrics• Cost

Aligned Incentives

Leverage National and Community Partnerships (medical, education, coalitions, public policy)

Start of a Solution

NH Marketplace

12

NH Health Expenditure as % of Gross State Product (GSP)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

1985

1986

1987

1988

1989

1990

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

Year

Projected

Source: Calculations by Douglas E. Hall, NH Center for Public Policy Studies, based on national projections made by Office of the Actuary, Center for Medicare and Medicaid Services, Washington DC.

13

NH Personal Health Care Spending, 1990-2005

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,00019

90

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Year

Expe

nditu

re ($

mill

ions

)

Hospital CarePhysician ServicesOther Professional ServicesDental ServicesHome Health CarePrescription DrugsOther Non-Durable Medical ProductsDurable Medical ProductsNursing Home CareOther Personal Health Care

14

Most costs are for those over 40.

Distribution of Total Private Insurance Payments by Age <= 65CHIS Data, NH Residents Only, 2005

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64Age

U.S. Life Expectancy at Birth (1900-2000)

47.3

51.5

55.7

59.9

64

68.2 69.7 70.873.7 75.4 77

30

35

40

45

50

55

60

65

70

75

80

Year

s

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

16

Grand Total Approved CON Applications~ $63 million per year

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

~ $700 Million

17

Hospital OwnershipCritical Access Designation?

Operating Margin After Tax

Parkland Medical For Profit 11.9%Portsmouth Regional For Profit 10.4%Exeter Not-For-Profit 10.3%So. NH Regional Not-For-Profit 10.0%Elliot Not-For-Profit 8.8%Memorial Not-For-Profit Yes 8.7%Catholic Med Ctr Not-For-Profit 7.3%Wentworth-Douglass Not-For-Profit 7.0%Littleton Not-For-Profit Yes 6.8%Frisbie Memorial Not-For-Profit 6.6%Lakes Region Not-For-Profit 5.8%St. Joseph Not-For-Profit 5.4%Concord Not-For-Profit 3.9%Cheshire Not-For-Profit 3.3%Upper Conn Valley Not-For-Profit Yes 3.3%Mary Hitchcock Not-For-Profit 3.2%Speare Memorial Not-For-Profit Yes 3.2%Androscoggin Not-For-Profit Yes 2.7%Valley Regional Not-For-Profit Yes 1.7%Weeks Memorial Not-For-Profit Yes 1.4%Huggins Not-For-Profit Yes 1.0%New London Not-For-Profit Yes 0.5%Franklin Regional Not-For-Profit Yes 0.3%Monadnock Not-For-Profit Yes 0.3%Cottage Not-For-Profit Yes 0.2%Alice Peck Day Not-For-Profit Yes -2.1%

NH Post-Tax Operating Margins (2005)

18

Use of Premiums by 5 NH Health Insurers, 2005

Medical/Hospital64%

Pharmacy12%

Other Professional Services

2%

ERs & Out of Area3%

Outside Referrals1%

General Administration7%

Net Underwriting Gain (Loss)

8%Claims Adjustment

3%82% of premiums paid for

claims while 18% was administration and profit

Total spending:$1,263,919,626

Based on annual financial reports filed with NH Department of Insurance

19

2006 Net Underwriting Profit (Loss)

$32,076,297

$62,431,535

-$7,496,736

-$938,436-$2,340,652

-$20,000,000

-$10,000,000

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

Anthem Mathew Thorton Cigna Patriot Harvard Pilgrim

Anthem combined = $95.5M

Over the last 30 years, after adjusting for inflation, healthcare premiums have increased more than 300%, yet average hourly wages for private employees have actually decreased by 4%.(2008, JAMA, Emmanuel and Fuchs)

Plans Cost by StateAnnual Medical/RX Costs Per Associate 2006 Estimate – Hannaford’s Plan

$4,100 $4,300$4,900

$6,400 $6,500

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Ann

ual C

ost P

er A

ssoc

iate

(200

6 Pr

ojec

ted

Cos

t)

New York Mass Vermont Maine New Hampshire

Hannaford Average $5600

The Initiative

Committee Definition ofHealth:

“Health is a state of well-being and the capability to function in the face of

changing circumstances”

Definition, Institute of Medicine Committee

The Institute of Medicine, 1997

Improving Health in the Community

“For too long, the personal health care and public health systems have shouldered their respective roles and responsibilities separately from each other…we need to invest in a process that mobilizes expertise and action…if we are to substantially improve community and population health.”

CommunityHealth

Population (public) Health

(Social Justice)

Personal (medical) Care

(Market Justice)

Initiative Goal

Our long term goal is to create and sustain a public dialogue that will measurably improve the “systems” that finance and provide health care in New Hampshire in order to accomplish two fundamental objectives:

1. Assure a healthy population

2. Create an effective system of care

Policy Teams Management &Operations

•Administration

•Bd. Of Advisors

•Communications

•Reporting

•Finance

•Policy

NH CHI Structure

Integration and EvaluationProjects:

HEAL Home, RAPHIC, Reimbursement Pilot,

Transparency Web Tools

Partners:NHPGH, Foundations, NH DHHS, NH DOI, Providers,

Payers, WebSolutions

Intake and Release

Management

Health Promotion &Disease Prevention

Finance, Transparency, & TechnologyQuality & Efficiency

•Physical Activity / Nutrition

•Tobacco

•Alcohol

•HIT/E Strategic Plan

•Transparency

•Engagement

•Reimbursement

•ePrescribing

•Primary Care Workforce

•Medical Home

•Reimbursement

Health Promotion & Disease Prevention (HPDP) Team

The leading underlying causes of death in New Hampshire are similar to the rest of the U.S.

Tobacco usePoor diet and physical inactivityAlcohol consumption Microbial agentsToxic agents

Pound of Prevention - 2006

Primary Care Workforce

Access to Primary Care Services

Which Physicians are Primary Care?F.P., I.M., Peds., Ob-Gyn, Behavioral Health, Oral Health

What is Primary Care?Access to acute illness care, preventative services, chronic care and coordinate/navigate a complex healthcare system.

Why the "risk of collapse"?Rapidly decreasing supply, while demand for services is increasing. Decreased access to timely primary care services will Increase health care costs and Decrease the quality of care (Rand, IOM ,ACP, AMA)

Recruit/retain the primary care workforce for NH by “competitive” incentives (e.g., loan forgiveness programs)

Expand "dedicated" positions at professional schools for qualified NH students

Expand NH health careers programs –"grow your own"

Develop mechanism for statewide primary care workforce planning and development

Recommendations

Reimbursement and Medical Home Team

Reimbursement

Goal of redesigning reimbursement in NH to:

• Align reimbursement to promote comprehensive primary care

• Reward explicitly defined quality care • Slow the rate of growth in healthcare expenditures • Reward excellence in the delivery of evidence-based

clinical practices • Incent the use health information technology • Recognize administrative best practices.

Medical Home Pilot

Target 1/1/2009Multi-payerMultiple provider types/settingsIn process of developing work plan and

funding plan

NH Purchasers Group on Health

MaineGeneral Medical Center

4% more

0% at state avg762.5

Miles Memorial Hospital

33% more

28% more61.1 7

Too Few Cases

Mercy Hospital 24% less

9% more562.5

St. Mary’s Regional Medical Center

13% more

8% less557.5

Penobscot Bay 18% more

10% lessNA45.0

Maine Medical Center

5% less

14% less67.5 1

Mid Coast Hospital 2% less

5% less465.0

Central Maine Medical Center

15% more

1% more57.5 3

PatientSatisfaction°

Patient Safety MeasuresMedication(MHMC)

Overall(Leapfrog)

Cost (Compared to State Average)Inpatient Outpatient

Why create this report card? • In 2005, BIW employees and their families received $24 million in services from Maine hospitals.• In 2004 and 2005, Maine hospitals reported 35 deaths due to Medical errors, 10 instances where a patient

permanently lost some form of body function, and 6 cases where surgery was done on the wrong person or body part.

Parkview Hospital 12% less

2% less260.0

Commitment To Safety

Selected Clinical Quality MeasuresHeart Attack

Heart Failure Pneumonia

Surgical Infection

Overall Score

Report Card #3:Report Card #3:MAINEMAINEHOSPITALSHOSPITALS

Excellent Unsatisfactory or not reported

KEY: Good PoorFair

1 2 3 4 5 6 7 8 9 10

Each of the measures is worth up to 10 points; Best score=100*

This is a lot of data. How do I use it in making my healthcare decisions? First:See where your hospital scores on each of the measures above.

Make note of where your hospital did really well. Have confidence in those areas if you or a loved one have to be hospitalized in the future.

Second:Identify areas where your hospital scored below your comfort level.

Third:If you or a loved one are in the hospital, be sure to ask questions of your provider regarding your areas of concern. Be involved!

Fourth:

Last years ranking

*Points assigned: 10 points 0 points7.5 points 2.5 points5 points

° All hospitals used the Avatar Patient Satisfaction tool with the exception of CMMC, which uses Press-Ganey to measure satisfaction.

As of April 2, 2007

NHPGH Benchmark

Reports

2005-2007

ePrescribing

(1) Institute of Medicine. Preventing Medication Errors, 2006

ePrescribing Benefits

ePrescribing results in • improved patient safety by prevention of

medical errors, • improved efficiencies for physicians and

pharmacists, • increased formulary compliance,• reduced medical costs, and • improved patient satisfaction.

Core Components

ePrescribing has three core quality improvement and efficiencycomponents:

• Medication history. This information may come from a variety of sources, including electronic medical records, pharmacy claims data, or from prescriber-to-pharmacy transactions.

• Drug-to-drug interaction and allergy alerts. These provide decision support rules at the point of prescribing and combine this information with health insurance formularies and pharmacy benefit plans to assist the prescriber in their drug selection.

• Bi-directional pharmacy communication. This allows the prescribing practitioner to electronically write the prescription and transmit it to the pharmacy. Additionally, the pharmacy may request refills electronically without needing to fax or call the prescriber.

3 Ways to Connect

Phone/PDAComputerElectronic Medical

Record

NH’s Approach

In October 2006, the Governor issued a challenge to the industry to make ePrescribing happen

The NH Citizens Health Initiative provides project management, education, and marketing resources to stimulate the market

Active partnerships have been developed with providers, employers, payers, and ePrescribing industry to provide a “market” based solution to ePrescribing implementation

NH’s Progress to Date

~50% of clinicians have an EMR with some level of electronic prescribing; “eRx Lite”; the base is largely in place

More than 80% of our pharmacies are ready to accept fully electronic prescriptions

Significant payer connectivity to RxHub or SureScripts

Payers – Providers – Employers Anthem/WellPoint partnership with NEPSI/Sprint 2007Keene Clinic rolled in spring 2008The Municipal Association is providing funding via their PBM contract to assist 40 high prescribers in 2008Several FQHCs, specialists, and hospitals are actively pursuing

Health Information Technology & Exchange

“We are looking for a system that will include electronic medical records, a system that will allow us to reduce medical errors, reduce duplicative procedures, control costs, help with encouraging pay for performance for health care providers, and ensure that patients are getting the highest standards of care.”

~ New Hampshire Governor John Lynch

Health Information Technology & Exchange (HIT/HIE)

HIT/HIE: Setting the Stage

Federal GovernmentWhite HouseHHS ONC Strategic PlanHISPCAHRQ

NH Connects for HealthNH Citizens Health Initiative

Vision and PrinciplesSupport of Executive Order

National Governors Association eHealth Alliance

National Standards Development

HITSP, HL7, ANSI, ASTM, ISO, CCHIT

New England Telehealth Consortium (FCC)New England HIEs

VITL (VT)HealthInfoNet (ME)MAShare (MA)Rhode Island HHS (RI)

April 28, 2008

Individual and Population Health & Well-being

Health IT solutions must support the needs of BOTH

“perspectives”

Population Health(Public health, Research, Quality,

Emergency preparedness)

Health Care(Higher Quality, More Efficient,

Patient-Focused)

57

April 28, 2008

Nationwide Health Information Network (NHIN)

Health Bank orPHR Support Organization

Community #1

IntegratedDelivery System

Community Health Centers

Community #2

CDC VA

CMS

DoD

SSA

Mobilizing Health Information Nationwide

The Internet

Standards, Specifications and Agreementsfor Secure Connections

Source: ONC Federal HIT Strategic Plan 2008-2012

Percentage of Office Practices UsingElectronic Medical Records

27%

73% 68%

32%

65%

35%45%

55%

0%10%20%30%40%50%60%70%80%

Single SpecialtyPractice

Multi SpecialtyPractice

Hospital/Institution Other

Yes No

Overall: 46% yes and 54% no

Source: UNH Survey Center, 2006

Should Patients Have Access to Own Electronic Medical Records?

Yes, Definitely; 16%

Yes, Probably; 42%

No; 42%

Source: UNH Survey Center, 2006

Pharmacies

Labs

Doctors Radiology

Public Health

Hospitals/Clinics Insurers

Move From This….

Pharmacies

Labs

Doctors Radiology

Public Health

Hospitals/Clinics Insurers

HIE

To This….

HIE Motivation

Quality and Safetyex. ADEs & increased clinical knowledge

Administrative Efficiencyex. 90% of 30B transactions are fax, mail, phone

Longitudinal Medical Recordex. Ability to see across provider settings & portability

Public Healthex. Disease surveillance & reporting

Key Implementation Issues

Governance / Legal Structure

Privacy and Security

Technical Architecture

Start Up Funding / Sustainability

72

Commercial Claims Medical Care Expenditures for NH Residents by State w/

Pharmacy REMOVED CY 2006

NH, 83%

VT, 1%MA, 10%ME, 1%

Other, 4%

State of the State – HIT / HIE

•Competition for investment dollars (physical plant, Federal shortfalls)

•A system that can afford to invest

•Privacy and security picture is incomplete; controlled substances cannot be ePrescribed

•Few regulatory barriers

•Industry slow to adopt interchange standards

•ME & VT are developing statewide health information exchanges; NH interest exists

•ePrescribing “lite” wide spread•ePrescribing adoption is increasing

•Increasing “haves” and “have nots”•High levels of investment in electronic medical records

The RubThe Good News

Vision for NH Health Care Information Technology and Exchange in 2014

…there is a need to recognize the interrelationships and importance of patient privacy, patient safety, and public health….the following vision for HIT/HIE for 2014:

Private and Secure. A patient’s personal health information will be secure, private, and accessed only with patient consent or as otherwise authorized or required by law.

Promotes Quality, Safety, and Efficiency. HIT and HIE will serve as vehicles to promote quality and patient safety, increase efficiencies in health care delivery, and improve public health;

Electronic. All health care providers will use a secure, electronic record for their patients’ personal health information;

Accessible. All patients will have access to a secure, electronic, and portable health record;

Equitable. HIT will be a vehicle to support equitable access to health careservices.