US Health Care System:Its impact on your future practice and patients

(Your name here)

What’s the problem?Medicine is the #1 industry in the US

ACCESS50 Million uninsured/10 M underinsured

COST: $2.9 trillion

National Health Spending In 2013: Growth Slows, Remains In Step With The Overall Economy. CMS Office of the Actuary. Health Affairs. Dec. 2014.

“The US Government is an insurance company with a large army”

US Treasury and OMB/2012

Half of all children born after 2000 will live to be 100

One in three will develop Type II diabetes

The Lancet Oct 1, 2009 and National Diabetes Fact Sheet, Jan 26, 2011

QUALITYEmphasize acute care over wellness and prevention

Fee for service paymentrewards quantity over quality

Health disparities among racial and ethnic minorities

Outcomes are poorer than countries which spend much less

Understanding the US Health Care

System(s):

Evolution or Intelligent Design?

Access to Insurance Equals Access to Care for 250 Million Americans

HALF have Employer-based group insurance

or

Single policy

or

Out of Pocket

Half have State and Federal Government Insurance

Medicare (elderly)

Medicaid (destitute)

Children’s Health Insurance Program (CHIP)

Veterans Affairs

Indian Health Service

Federal Employees Health Benefit Program

Safety Net for 60 M Uninsured/Underinsured

• Emergency rooms• Public hospitals• Federally Qualified Health Centers (FQHCs) NY has > 60• Migrant worker health centers

$61 B per year in uncompensated care

Urban Institute: Health Care Spending Under Reform: Less Uncompensated Care and Lower Costs /2010http://findahealthcenter.hrsa.gov/Search_HCC.aspx

Government InsuranceHealth and Human Services

HHS Budget:$967 B

Medicare $597B Medicaid $254B (fed)

Total CMS $851 B

www.hhs.gov CBO Medicare Baseline May 2013

Medicare

Serves 47 million people over age 65 3,093,591 in NY

www.hhs.cms.govKaiser State Health Facts/Medicare/NNY Accessed 3/5/15

B

Medicare Reimbursement• Reimburses at 80% of “customary and reasonable charge”

• Resource Based-Relative Value Unit - RUC

• Fee for Service

• Sustainable Growth Rate (SGR)

• Physician Quality Reporting System

– Currently voluntary – earn 2% of Part B fees

– Mandatory in 2015: Part B payment will be ‘adjusted’ for not submitting quality data

CMS.gov Affairshttp://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment Instruments/PQRS/

CMS pays $9B for Graduate Medical Education (GME)

– med school enrollment increasing but cap on federally-funded residency slots

Happy Birthday Boomers!"You’ve got . . . 10,000 new seniors, baby boomers,

becoming eligible for the entitlement programs" . . . everyday for the next 18 years.

Rep. Eric Cantor, R-VAFormer House Majority Leader

Representative Eric Cantor, April 27, 2011, PoliticFact, Richmond Times Dispatch 4/27/11

. . . Enrollment will increase from 47 million to approx 74 million – number of beneficiaries over age 80 will triple.

Congressional Budget Office 2/1/12

The Silver Tsunami

MedicaidHealth care for 60 million eligible poor > 133% FPL

5,161,400 in NY

Kaiser State Health Facts (2012 Data). Accessed 3/5/15

50%FMAP 50% NY state dollars

Medicaid’s Fiscal Challenges• Takes up >25% of most state budgets• Increases in unemployment = increases in eligibility• Fairly generous benefits but access problems due to

low reimbursement – pays 70% of Medicare’s 80% rate

Changing the System

Values Affect Policy: Is Healthcare a Right or a Responsibility?

Stakeholders Impact Policy

Approval rating: 9%

Politics affect Policy: Even Congress Hates Congress

“It’s so bad sometimes I tell people I’m a lawyer,” Senator Lindsey Graham (R-S.C.). “I don’t want to be associated with a body that in the eyes of your fellow citizens seems to be dysfunctional.”

“We’re below sharks and contract killers,” added Rep. Trey Gowdy (R-S.C.).

Politico, October 26, 2011/January 2012

Limited Resources Affect Policy

“We can’t keep filling infinite need with finite resources.”Former four-term Colorado Governor Richard Lamb

“I love change except for the part about doing things differently” anonymous

“There is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order.”

Machiavelli Rule of Reform

What’s in thePatient Protection and Affordable Care Act?

1. Will the health reform law require nearly all Americans to have health insurance by 2014 or else pay a fine?

1. Yes2. No3. Don’t know

1 2 3

33% 33%33%

2. Will the health reform law allow a government panel to make decisions about end-of-life care for people on Medicare?

1. Yes2. No3. Don’t know

1 2 3

33% 33%33%

"The America I know and love is not one in which my parents or my baby with Down syndrome will have to stand in front of Obama's 'death panel' so his bureaucrats can decide, based on a subjective judgment of their 'level of productivity in society,' whether they are worthy of health care.” Sarah Palin 8/7/09

3. Will the health reform law cut benefits that were previously provided to all people on Medicare?

1. Yes2. No3. Don’t know

1 2 3

33% 33%33%

4. Will the health reform law expand the existing Medicaid program to cover low-income, uninsured adults regardless of whether they have children?

1. Yes2. No3. Don’t know

1 2 3

33% 33%33%

Yes and No

5. Will the health reform law provide financial help to low and moderate income Americans who don't get insurance through their jobs to help them purchase coverage?

1. Yes2. No3. Don’t know

1 2 3

33% 33%33%

Don’t Know Yet

King vs. Burwell: Subsidies for people in state AND federally run exchanges?

6. Will the health reform law prohibit insurance companies from denying coverage because of a person's medical history or health condition?

1. Yes2. No3. Don’t know

1 2 3

33% 33%33%

7. Will the health reform law require all businesses, including small businesses, to provide health insurance for their employees?

1. Yes2. No3. Don’t know

1 2 3

33% 33%33%

8. Will the health reform law create a new government run insurance plan to be offered along with private plans?

1. Yes2. No3. Don’t know

1 2 3

33% 33%33%

9. Will the health reform law allow undocumented immigrants to receive financial help from the government to buy health insurance?

1. Yes2. No3. Don’t know

1 2 3

33% 33%33%

65

18

Health Care“On Demand”

Very Poor

Near Poor

Uni

nsur

ed

Dual Eligibles

Und

erin

sure

d

Medicare

Med

icai

d

Work. Poor

Very Rich

Middle Class

Upper-Mid Class

Retiree Benefits

CHIP

Employer- Provided

Managed Care

Health Care System: Before the ACA

Age

IncomeAdam Sheingate, Professor, John Hopkins University Political Science Department, August 2012

65

18

Health Care“On Demand”

Very Poor

Near Poor

Dual Eligibles Medicare

Work. Poor

Very Rich

Middle Class

Upper-Mid Class

CHIP

Employer- Provided

Managed Care

Health Care System: After ACA

Age

Income

Med

icai

d

Hea

lth

Exc

hang

es

Med

icai

d E

xpan

sion

Und

erin

sure

dU

nins

ured

Retiree Benefits

Circa 2012: Medicaid

Exp.,Health Exch.

Adam Sheingate, Professor, John Hopkins University Political Science Department, August 2012

Good News for the Uninsured

Cover up to 35 million more people– Individual Mandate (SCOTUS considers the fine a “tax”)– Employer Mandate– Insurance Regulation

• Kids covered on parents policy to age 26• No exclusion for pre-existing conditions

– Health Insurance Exchanges and subsidies– Changes to Medicaid

Good News for Seniors

• Fill in donut hole in Medicare Rx• Reduce Hospital readmissions• Reduce Medicare premiums• Increase Medicare preventive

services• Increase access and

quality for dual eligibles

Carrots and Sticks for Providers

• Primary Care team focuses on wellness and coordination of care

• Goal: Keep people healthy and out of the hospital

• Responsible for quality and costs; can earn shared savings

Medicare Electronic Health Records (EHR) Incentive Program

$44,000 bonus for ‘meaningful use’ of HIT– The use of a certified EHR in a meaningful manner, re: e-prescribing.– Electronic exchange of health information to improve quality of health

care– Submit clinical quality and other measures

-.5 to 5% penalty for no EHR after 2015

Bonus for Primary Care Providers10% bonus to primary care physicians and surgeons working in Health Profession Shortage Areas (HPSAs)Incentive payments for PC services if patient stays out of the hospital “Independence at Home”

Medicare Value Based Payment Modifier

• Value-based ‘purchasing’ based on physician performance and quality

• New physicians could be ‘dinged’ as their cost profiles are higher

Increase Reimbursement to Medicare Advantage

Medicare Prospective Payment System for FQHCs

Mostly ‘Sticks’ for Hospitals

• No payment for preventable readmissions• Reduce payment updates for hospitals, home

health and SNFs• Bundled payment for an episode of care• Eliminate DSH payments

Control Medicare Spending

• Independent Payment Advisory Board – to reduce rate of growth – depoliticize process

Get Involved

• Invite speakers on key issues– AOA Dept Gov. Relations– AACOM Dept Gov. Relations– Former HPF and TIPS Fellows

• Educate yourself– Monitor, analyze and advocate for issues

• Educate elected officials about key issues• Attend DO Day on the Hill – or Visit State Capitol• AACOM Health Policy Internship • Training in Policies Studies Program OGME II and III

Generate Discussion

Stay Informed