Introduction to the health care major reform bill...and the healthcare system that substantially...
Transcript of Introduction to the health care major reform bill...and the healthcare system that substantially...
INTRODUCTION TO THE
HEALTH CARE
MAJOR REFORM BILLRep. Jim Butler
THE PROBLEM2
MEDICAID CONSUMING INCREASING
SHARE OF STATE BUDGET
14%
16%
18%
20%
22%
24%
26%
28%
30%
197
5
197
6
197
7
197
8
197
9
198
0
198
1
198
2
198
3
198
4
198
5
198
6
198
7
198
8
198
9
199
0
199
1
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5**
201
6**
*
201
7**
*
State Medicaid Spending as percentage of State GRF
Source: LSC Historical Expenditures by Program, Table 2 and 3 (GRF)
3
FEWER RESOURCES FOR EDUCATION,
ECONOMIC DEVELOPMENT, AND PUBLIC SAFETY
4
2013 MEDICAID EXPANSION - ADDITIONAL STATE
SPENDING PROJECTIONS *(ENROLLMENT IS 34% OVER PROJECTIONS)
Sources: (for projections) Health Policy Institute of Ohio, Policy Briefing, March 1, 2013, http://www.healthpolicyohio.org/expanding-medicaid-in-ohio-analysis-of-likely-effects/; (for
underestimation) Columbus Dispatch, Feb. 12, 2015
5
PER CAPITA MEDICAID SPENDING
PER CAPITA COSTS INCREASING WHEN ABLE-BODIED, LOWER COST, ADULTS JOINING ROLES
OHIO’S PER CAPITA COSTS HIGHER THAN NATIONAL AVERAGE FOR LAST TWO DECADES*
Sources: LSC, Baseline Forecast of GRF Revenues & Medicaid Expenditures FY 2016-FY 2017 Biennial Budget; Kaiser Family Foundation
$5,000
$5,500
$6,000
$6,500
$7,000
$7,500
$8,000
$8,500
$9,000
Per capita Medicaid spending
6
SOLUTION HAS BEEN TO CUT REIMBURSEMENTS =
LESS ACCESS TO CARE
Source: National Center for Policy Analysis, An Economic and Policy Analysis of Medicaid Expansion in Ohio, September 19, 2013, http://www.ncpa.org/pub/ib128
7
THREE GOALS
1) Significantly lower Medicaid spending, while
improving patient health
2) Significantly lower overall healthcare
spending, while improving patient health
3) Apply Medicaid savings below current funding
levels to pools to care for needy populations
8
1) Skin in the Game - Healthy Ohio Plan
2) Lower Defensive Medicine - Medical Injury Compensation System (MICS)
3) Proper Utilization - ER Diversion
4) Medical Device and Prescription Purchasing Pool
5) Price Transparency – Advertising and Cost Estimates
6) Quality Incentives - Value Based Purchasing
7) Cost incentives – MMCC bonus and Hospital Network Entry
8) Competitive Marketplace - Reimbursement parity
9) Promote Small Business Health Coverage – MEWA Assistance
9
Re
du
ce
Me
dic
aid
Sp
en
din
g
Create cost consciousness
“skin in the game”
Healthy Ohio Plan*
Ensure competitive marketplace
10% limit on reimbursement variation
Promote hospital and
MMC competition -
Quality
Continuous competition on objective health outcomes (6% Medicaid redistributed)
Promote hospital and
MMC competition -
Cost
Flat rate reimbursements for acute conditions at state
median rates
20% bonus for MMC if beats regional Medicaid cost (lose
contract if above)
Hospital can run MMC network if price/patient 20% <
MMC
•Negotiate Medicaid waiver to use savings to cover certain pools
•Honorably discharged veterans (no access to VA)
•Severely mentally ill
•Developmentally disabled
•Addicted
•Chronic disease maintenance therapies
•Parents (90-100%) poverty
•Childless adults (50-100% of poverty)
•DSH reimbursement to hospitals to pre ACA levels
•Return additional savings to tax-payers
Use savings
to benefit
Ohioans
Low
er
ov
era
ll
he
alth
ca
re c
ost
s
Reduce waste due to defensive
medicine
Medical Injury Compensation System (MICS)
Lower preventable
medical errorsData clearinghouse of errors
Divert unnecessary ER
visitsEscort system
Encourage free market
competition (price
transparency)
Written estimates before non-emergent service
Advertising of health costs
Published out-of-pocket costs for top 20% of services
Leverage strong purchasing
power
Central purchasing for everyone accepting state
dollars
Promote small business health
coverage
State umbrella insurance guarantee for 5 years
Ohio has a unique opportunity to take advantage of the recent focus on health care to devise and implement reforms to Medicaid and the healthcare system that substantially curtail Medicaid and overall health care costs, improve health outcomes and provideadditional coverage for Ohioans who need it
* Modeled after the Healthy Indiana Plan. Participant contributes $99 ($149 smokers), state contributes $1000. Account used for co-pays etc. Balances carry forward and can be used for future premiums, credits for health outcomes
I have a slight
headache today
after drinking a lot
last night.
Maybe I have a
brain tumor.
11
Better ask for a
CAT scan to make
sure.
Why not? It
doesn’t cost
anything…
12
Re
du
ce
Me
dic
aid
sp
en
din
g
Create cost consciousness
“skin in the game”
Healthy Ohio Plan*
Ensure competitive marketplace
10% limit on reimbursement variation
Promote hospital and
MMC competition -
Quality
Continuous competition on objective health outcomes (6% Medicaid redistributed)
Promote hospital and
MMC competition -
Cost
Flat rate reimbursements for acute conditions at state
median rates
20% bonus for MMC if beats regional Medicaid cost (lose
contract if above)
Hospital can run MMC network if price/patient 20% <
MMC
•Negotiate Medicaid waiver to use savings to cover certain pools
•Honorably discharged veterans (no access to VA)
•Severely mentally ill
•Developmentally disabled
•Addicted
•Chronic disease maintenance therapies
•Parents (90-100%) poverty
•Childless adults (50-100% of poverty)
•DSH reimbursement to hospitals to pre ACA levels
•Return additional savings to tax-payers
Use savings
to benefit
Ohioans
Low
er
ov
era
ll
he
alth
ca
re c
ost
s
Reduce waste due to defensive
medicine
Medical Injury Compensation System (MICS)
Lower preventable
medical errorsData clearinghouse of errors
Divert unnecessary ER
visitsEscort system
Encourage free market
competition (price
transparency)
Written estimates before non-emergent service
Advertising of health costs
Published out-of-pocket costs for top 20% of services
Leverage strong purchasing
power
Central purchasing for everyone accepting state
dollars
Promote small business health
coverage
State umbrella insurance guarantee for 5 years
Ohio has a unique opportunity to take advantage of the recent focus on health care to devise and implement reforms to Medicaid and the healthcare system that substantially curtail Medicaid and overall health care costs, improve health outcomes and provide additional coverage for Ohioans who need it
* Modeled after the Healthy Indiana Plan. Participant contributes $99 ($149 smokers), state contributes $1000. Account used for co-pays etc. Balances carry forward and can be used for future premiums, credits for health outcomes
HEALTHY OHIO PLAN (HOP)
-BASED ON SUCCESSFUL HEALTHY INDIANA PLAN (HIP)
Skin in the Game – Enrollees pay yearly premium - $99 adults, $49 children, $149 smokers
State adds $1,000 into Health Care Savings Account (“Buckeye Account”) – Debit card issued to each participant to use for co-pays and deductibles
Encourage cost-consciousness and preventative care - Money in Buckeye Account rolls over to next year and can be used for premiums if patient gets required preventative care
Reward healthy outcomes - Bonuses awarded for measurable health outcomes, like lowering blood pressure, losing weight – can be used for non-covered services
Increased Access to Care – Providers paid a much higher Medicare rates, so more doctors will accept Medicaid patients.
Mobility up and out of Medicaid – Buckeye Account frozen into “Bridge Account” that can be used for private insurance premiums and other health care expenses
14
Okay, a CT scan
will cost me, but I
have no idea
how much.
15
Re
du
ce
Me
dic
aid
Sp
en
din
g
Create cost consciousness
“skin in the game”
Healthy Ohio Plan*
Ensure competitive marketplace
10% limit on reimbursement variation
Promote hospital and
MMC competition -
Quality
Continuous competition on objective health outcomes (6% Medicaid redistributed)
Promote hospital and
MMC competition -
Cost
Flat rate reimbursements for acute conditions at state
median rates
20% bonus for MMC if beats regional Medicaid cost (lose
contract if above)
Hospital can run MMC network if price/patient 20% <
MMC
•Negotiate Medicaid waiver to use savings to cover certain pools
•Honorably discharged veterans (no access to VA)
•Severely mentally ill
•Developmentally disabled
•Addicted
•Chronic disease maintenance therapies
•Parents (90-100%) poverty
•Childless adults (50-100% of poverty)
•DSH reimbursement to hospitals to pre ACA levels
•Return additional savings to tax-payers
Use savings
to benefit
Ohioans
Low
er
ov
era
ll
he
alth
ca
re c
ost
s
Reduce waste due to defensive
medicine
Medical Injury Compensation System (MICS)
Lower preventable
medical errorsData clearinghouse of errors
Divert unnecessary ER
visitsEscort system
Encourage free market
competition (price
transparency)
Written estimates before non-emergent service
Advertising of health costs
Published out-of-pocket costs for top 20% of services
Leverage strong purchasing
power
Central purchasing for everyone accepting state
dollars
Promote small business health
coverage
State umbrella insurance guarantee for 5 years
Ohio has a unique opportunity to take advantage of the recent focus on health care to devise and implement reforms to Medicaid and the healthcare system that substantially curtail Medicaid and overall health care costs, improve health outcomes and provideadditional coverage for Ohioans who need it
PRICE TRANSPARENCY CREATES COST
CONSCIOUSNESS AND LOWER SPENDING
In a recent JAMA study, relative claim payments
for searchers on a pricing website were lower for
searchers than non-searchers by 13.93% for
laboratory tests, 13.15% for advanced imaging,
and 1.02% for clinician office visits.
Another recent study found an 18.7% savings in
diagnostic testing when patients could compare
costs.
Source: JAMA, Association Between Availability of Health Service Prices and Payments for These Services, October 2014; Health Affairs, Price Transparency For MRIs Increased Use
Of Less Costly Providers And Triggered Provider Competition, August 2014,
http://content.healthaffairs.org/content/33/8/1391.full?ijkey=ATeYKvxsnfVdc&keytype=ref&siteid=healthaffReferring%2520URL%2520=%2520http://www.aimspecialtyhealth.com/ne
wsroom/news/price-transparencyExpiration%2520Date%2520=%25206%2520Aug%25202015
17
SKIN THE GAME AND COST
CONSCIOUSNESS MATTER
80
100
120
140
160
180
200
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Cosmetic Medicine vs. Ohio Overall
Healthcare Inflation
Cosmetic Surgical Procedure Cosmetic Non-Surgical Procedure
Overall Ohio Healthcare Costs
18
He is only 20 years
old and just got a
headache today
(after drinking last
night).
Probably one in a
million chance of a
tumor.
19
But what if he
actually does
have a tumor,
then I get sued?
Better order it.
20
DEFENSIVE MEDICINE
Defensive Medicine: the practice of ordering medical tests, procedures, or consultations of doubtful clinical value in order to protect the prescribing physician from malpractice suits
90 percent of physicians reported practicing positive defensive medicine in the past 12 months
92.5 percent of surgeons indicate they have ordered imaging tests to protect themselves from lawsuits
Physicians in other major countries do not practice defensive medicine because they are no personally liable (they cannot be sued).
In a recent Gallup survey, physicians attributed 34 percent of overall healthcare costs to defensive medicine
Liability reform has been estimated to result in a 5 percent to 34 percent reduction in medical expenditures via a reduction in defensive medicine
In Ohio, even a 10 percent reduction in Medicaid costs would save $2.5B/year
Sources: Costly Defense: Physicians Sound Off on the High Price of Defensive Medicine, Jackson Healthcare, http://www.jacksonhealthcare.com/;AAOS Now, December 2010,
http://www.aaos.org/news/aaosnow/dec10/advocacy2.asp.
21
$247M
Ohio Total Medical
Liability Costs (verdicts,
settlements and defense
costs)
Source: Ohio Department of Insurance, 2012 Medical Professional Liability Closed Claim Report, April 2014,
22
$247M
Ohio Total Medical
Liability Costs (verdicts,
settlements and defense
costs)
$4B to $27B
Ohio Defensive
Medicine Costs
(unnecessary medical
tests, prescriptions,
procedures, and
consultations)
Source: 2012 Report from Insurers on Medical Malpractice Claims; Kaiser Family Foundation, 2009 overall health spending $81.6B (5-34%)
23
TRADITIONAL TORT REFORM IS INEFFECTIVE AT
DECREASING DEFENSIVE MEDICINE
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Signifcantly Decreased
Somewhat Decreased
Not Changed
Somewhat Increased
Significantly Increased
Physician Survey: How Have the Following Reforms
Affected the Practice of Defensive Medicine?
"I'm Sorry" Law Aggressive Statute of Limitations Joint and Several Liability
Attorney Fee Limits Certificates of Merit Pre-trial Screening Panels
Pain and Suffering Caps
Source: Survey Findings: Physicians on Tort Reform, Jackson Healthcare, http://www.jacksonhealthcare.com/media-room/surveys/physicians-on-tort-reform/
24
ACTIVE DUTY MILITARY CANNOT FILE LAWSUITS
AGAINST DOD PHYSICIANS
92%
19%
0
10
20
30
40
50
60
70
80
90
100
All Physicians DOD Physicians
Defensive Medicine Rates
Sources: Costly Defense: Physicians Sound Off on the High Price of Defensive Medicine, Jackson Healthcare, http://www.jacksonhealthcare.com/
25
Re
du
ce
Me
dic
aid
sp
en
din
g
Create cost consciousness
“skin in the game”
Healthy Ohio Plan*
Ensure competitive marketplace
10% limit on reimbursement variation
Promote hospital and
MMC competition -
Quality
Continuous competition on objective health outcomes (6% Medicaid redistributed)
Promote hospital and
MMC competition -
Cost
Flat rate reimbursements for acute conditions at state
median rates
20% bonus for MMC if beats regional Medicaid cost (lose
contract if above)
Hospital can run MMC network if price/patient 20% <
MMC
•Negotiate Medicaid waiver to use savings to cover certain pools
•Honorably discharged veterans (no access to VA)
•Severely mentally ill
•Developmentally disabled
•Addicted
•Chronic disease maintenance therapies
•Parents (90-100%) poverty
•Childless adults (50-100% of poverty)
•DSH reimbursement to hospitals to pre ACA levels
•Return additional savings to tax-payers
Use savings
to benefit
Ohioans
Low
er
ov
era
ll
he
alth
ca
re c
ost
s
Reduce waste due to defensive
medicine
Medical Injury Compensation System (MICS)
Lower preventable
medical errorsData clearinghouse of errors
Divert unnecessary ER
visitsEscort system
Encourage free market
competition (price
transparency)
Written estimates before non-emergent service
Advertising of health costs
Published out-of-pocket costs for top 20% of services
Leverage strong purchasing
power
Central purchasing for everyone accepting state
dollars
Promote small business health
coverage
State umbrella insurance guarantee for 5 years
Ohio has a unique opportunity to take advantage of the recent focus on health care to devise and implement reforms to Medicaid and the healthcare system that substantially curtail Medicaid and overall health care costs, improve health outcomes and provideadditional coverage for Ohioans who need it
Find lawyer
•Must have enough damages
•Children and Seniors have hardest time
Request medical records
File Complaint
Health care provider(s) file
Answer
Exchange of written information
(discovery)
Hire experts, expert draft reports
Take depositionsMotions for
summary judgmentSettlement
conferences
Trial Preparation/ Motions
TrialPost-trial
Motions/Appeal
Initial Administrative Review
•Medical Professional reviews file –short hearing possible
•If compensable, MICS economist calculates award (multiplied by ratio to hold payouts constant with pre-MICS total amounts)
Three-member panel
•Three medical professionals hold hearing – each side submits one expert report
•Award same as below
Common Pleas Court
•Appeals process same as workers compensation
•Award same as below
Current System
More patients compensated
more often
•Legal standard makes it easier to receive compensation
•Reviewers must find by clear and convincing evidence that conduct was within standard of care to find medical injury not compensable
Patients compensation
is quick and easy
•Because of streamlined administrative process, patients can receive award within a few months instead of years
•Simpler process makes it easier to navigate and understand
2-3 months to
award
6 months
1 - 5 years
to award
3-9 months
Medical Injury Compensation System (MICS)
6–24 months
Administrative claim filed –Insurer becomes only party Eventual lawsuit filed
against health care providers
MICS Healthcare
Oversight Board
More patients compensated
more often
•Legal standard makes it easier to receive compensation
•Reviewers must find by clear and convincing evidence that conduct was within standard of care to find medical injury not compensable
Patients compensation
is quick and easy
•Because of streamlined administrative process, patients can receive award within a few months instead of years
•Simpler process makes it easier to navigate and understand
MIC
S C
laim
s a
uto
ma
tic
ally
fo
rwa
rde
d t
o H
ea
lth
ca
re O
ve
rsig
ht
Bo
ard
Membership
made up of
board
examiners
Investigates
repeated or
gross
negligence
Temporary or
permanent
suspension of
license
Similar to Ohio
Supreme Court
oversight over
attorneys
Accountability and oversight of healthcare
providers
Medical Injury
Prevention
Database
All reported
medical injuries
from MICS and
Oversight Board
analyzed for
improved
processes
Lower preventable medical injuries
Administrative claim filed –Insurer becomes only party
Initial Administrative Review
•Medical Professional reviews file –short hearing possible
•If compensable, MICS economist calculates award (multiplied by ratio to hold payouts constant with pre-MICS total amounts)
Three-member panel
•Three medical professionals hold hearing – each side submits one expert report
•Award same as below
Common Pleas Court
•Appeals process same as workers compensation
•Award same as below
Re
du
ce
Me
dic
aid
Sp
en
din
g
Create cost consciousness
“skin in the game”
Healthy Ohio Plan*
Ensure competitive marketplace
10% limit on reimbursement variation
Promote hospital and
MMC competition -
Quality
Continuous competition on objective health outcomes (6% Medicaid redistributed)
Promote hospital and
MMC competition -
Cost
Flat rate reimbursements for acute conditions at state
median rates
20% bonus for MMC if beats regional Medicaid cost (lose
contract if above)
Hospital can run MMC network if price/patient 20% <
MMC
•Negotiate Medicaid waiver to use savings to cover certain pools
•Honorably discharged veterans (no access to VA)
•Severely mentally ill
•Developmentally disabled
•Addicted
•Chronic disease maintenance therapies
•Parents (90-100%) poverty
•Childless adults (50-100% of poverty)
•DSH reimbursement to hospitals to pre ACA levels
•Return additional savings to tax-payers
Use savings
to benefit
Ohioans
Low
er
ov
era
ll
he
alth
ca
re c
ost
s
Reduce waste due to defensive
medicine
Medical Injury Compensation System (MICS)
Lower preventable
medical errorsData clearinghouse of errors
Divert unnecessary ER
visitsEscort system
Encourage free market
competition (price
transparency)
Written estimates before non-emergent service
Advertising of health costs
Published out-of-pocket costs for top 20% of services
Leverage strong purchasing
power
Central purchasing for everyone accepting state
dollars
Promote small business health
coverage
State umbrella insurance guarantee for 5 years
Ohio has a unique opportunity to take advantage of the recent focus on health care to devise and implement reforms to Medicaid and the healthcare system that substantially curtail Medicaid and overall health care costs, improve health outcomes and provideadditional coverage for Ohioans who need it
65% OF EMERGENCY DEPARTMENT
VISITS ARE UNNECESSARY
35%
41%
24%
Emergency Department Visits
Required Emergency Care
Required Primary Care
Required No Care
Source: Becker Hospital Report, http://www.beckershospitalreview.com/capacity-management/study-71-of-ed-visits-unnecessary-avoidable.html, citing study by Truven Health
Analytics, April 25, 2013.
30
EMERGENCY DEPARTMENT VISITS ARE NEARLY
10X MORE EXPENSIVE
$1,316
$145 $0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Average Cost of ED Visit Average Cost of Primary Care Visit
Average Cost Difference
Source: Becker Hospital Report, http://www.beckershospitalreview.com/capacity-management/study-71-of-ed-visits-unnecessary-avoidable.html, citing study by Truven Health
Analytics, April 25, 2013.
31
THE EMERGENCY MEDICAL TREATMENT AND LABOR ACT (EMTALA) IS A
FEDERAL LAW THAT REQUIRES ANYONE COMING TO AN EMERGENCY
DEPARTMENT TO BE STABILIZED AND TREATED, REGARDLESS OF THEIR
INSURANCE STATUS OR ABILITY TO PAY
Emergency Department
Requires Emergency
Care Requires Primary Care
Requires No Care
Source: American College of Emergency Physicians, http://www.acep.org/News-Media-top-banner/EMTALA/
32
EMERGENCY DEPARTMENT ESCORT SYSTEM:1) PATIENT REPORTS SYMPTOMS TO INTAKE NURSE
2) IF PATIENT REPORTS OBVIOUSLY NON-EMERGENCY SYMPTOMS, PATIENT IS SEEN IN ADJACENT
URGENT/PRIMARY CARE
3) CUSTODY OF PATIENT CONTINUOUSLY MAINTAINED SO NOBODY IS TURNED AWAY
4) IF URGENT CARE DETERMINES EMERGENCY EXISTS, PATIENT TRANSFERRED TO EMERGENCY
DEPARTMENT
Intake Nurse
Requires Emergency
Care
Urgent CareEmergency Department
Requires Primary
Care
Requires No Care
33
Re
du
ce
Me
dic
aid
Sp
en
din
g
Create cost consciousness
“skin in the game”
Healthy Ohio Plan*
Ensure competitive marketplace
10% limit on reimbursement variation
Promote hospital and
MMC competition -
Quality
Continuous competition on objective health outcomes (6% Medicaid redistributed)
Promote hospital and
MMC competition -
Cost
Flat rate reimbursements for acute conditions at state
median rates
20% bonus for MMC if beats regional Medicaid cost (lose
contract if above)
Hospital can run MMC network if price/patient 20% <
MMC
•Negotiate Medicaid waiver to use savings to cover certain pools
•Honorably discharged veterans (no access to VA)
•Severely mentally ill
•Developmentally disabled
•Addicted
•Chronic disease maintenance therapies
•Parents (90-100%) poverty
•Childless adults (50-100% of poverty)
•DSH reimbursement to hospitals to pre ACA levels
•Return additional savings to tax-payers
Use savings
to benefit
Ohioans
Low
er
ov
era
ll
he
alth
ca
re c
ost
s
Reduce waste due to defensive
medicine
Medical Injury Compensation System (MICS)
Lower preventable
medical errorsData clearinghouse of errors
Divert unnecessary ER
visitsEscort system
Encourage free market
competition (price
transparency)
Written estimates before non-emergent service
Advertising of health costs
Published out-of-pocket costs for top 20% of services
Leverage strong purchasing
power
Central purchasing for everyone accepting state
dollars
Promote small business health
coverage
State umbrella insurance guarantee for 5 years
Ohio has a unique opportunity to take advantage of the recent focus on health care to devise and implement reforms to Medicaid and the healthcare system that substantially curtail Medicaid and overall health care costs, improve health outcomes and provideadditional coverage for Ohioans who need it
MARSHALLING OHIO'S PURCHASING
POWER FOR PRESCRIPTION DRUGS AND
MEDICAL EQUIPMENT CAN LOWER COSTS
Drugs account for 12 percent of all healthcare costs.
Drugs in the United States cost 50 percent more than in any other major country for the same or an equivalent drug.
When the drug mix is factored in, the U.S. spends 120 percent more for equivalent drugs.
Loose purchasing coalitions have resulted in savings for pharmaceuticals of tens of millions of dollars.
A mandatory purchasing pool for pharmaceuticals and durable medical/diagnostic testing equipment has the potential to achieve significant saving for both Medicaid and state and local government plans.
Because all providers who contract with the state will be required to use the pool, overall healthcare savings should be significant.
Source: Accounting for the cost of US health care: A new look at why Americans spend more; McKinsey Global Institute, December 2008.
35
Re
du
ce
Me
dic
aid
Sp
en
din
g
Create cost consciousness
“skin in the game”
Healthy Ohio Plan*
Ensure competitive marketplace
10% limit on reimbursement variation
Promote hospital and
MMC competition -
Quality
Continuous competition on objective health outcomes (6% Medicaid redistributed)
Promote hospital and
MMC competition -
Cost
Flat rate reimbursements for acute conditions at state
median rates
20% bonus for MMC if beats regional Medicaid cost (lose
contract if above)
Hospital can run MMC network if price/patient 20% <
MMC
•Negotiate Medicaid waiver to use savings to cover certain pools
•Honorably discharged veterans (no access to VA)
•Severely mentally ill
•Developmentally disabled
•Addicted
•Chronic disease maintenance therapies
•Parents (90-100%) poverty
•Childless adults (50-100% of poverty)
•DSH reimbursement to hospitals to pre ACA levels
•Return additional savings to tax-payers
Use savings
to benefit
Ohioans
Low
er
ov
era
ll
he
alth
ca
re c
ost
s
Reduce waste due to defensive
medicine
Medical Injury Compensation System (MICS)
Lower preventable
medical errorsData clearinghouse of errors
Divert unnecessary ER
visitsEscort system
Encourage free market
competition (price
transparency)
Written estimates before non-emergent service
Advertising of health costs
Published out-of-pocket costs for top 20% of services
Leverage strong purchasing
power
Central purchasing for everyone accepting state
dollars
Promote small business health
coverage
State umbrella insurance guarantee for 5 years
Ohio has a unique opportunity to take advantage of the recent focus on health care to devise and implement reforms to Medicaid and the healthcare system that substantially curtail Medicaid and overall health care costs, improve health outcomes and provideadditional coverage for Ohioans who need it
Re
du
ce
Me
dic
aid
Sp
en
din
g
Create cost consciousness
“skin in the game”
Healthy Ohio Plan*
Ensure competitive marketplace
10% limit on reimbursement variation
Promote hospital and
MMC competition -
Quality
Continuous competition on objective health outcomes (6% Medicaid redistributed)
Promote hospital and
MMC competition -
Cost
Flat rate reimbursements for acute conditions at state
median rates
20% bonus for MMC if beats regional Medicaid cost (lose
contract if above)
Hospital can run MMC network if price/patient 20% <
MMC
•Negotiate Medicaid waiver to use savings to cover certain pools
•Honorably discharged veterans (no access to VA)
•Severely mentally ill
•Developmentally disabled
•Addicted
•Chronic disease maintenance therapies
•Parents (90-100%) poverty
•Childless adults (50-100% of poverty)
•DSH reimbursement to hospitals to pre ACA levels
•Return additional savings to tax-payers
Use savings
to benefit
Ohioans
Low
er
ov
era
ll
he
alth
ca
re c
ost
s
Reduce waste due to defensive
medicine
Medical Injury Compensation System (MICS)
Lower preventable
medical errorsData clearinghouse of errors
Divert unnecessary ER
visitsEscort system
Encourage free market
competition (price
transparency)
Written estimates before non-emergent service
Advertising of health costs
Published out-of-pocket costs for top 20% of services
Leverage strong purchasing
power
Central purchasing for everyone accepting state
dollars
Promote small business health
coverage
State umbrella insurance guarantee for 5 years
Ohio has a unique opportunity to take advantage of the recent focus on health care to devise and implement reforms to Medicaid and the healthcare system that substantially curtail Medicaid and overall health care costs, improve health outcomes and provideadditional coverage for Ohioans who need it
POSITIVE AND NEGATIVE INCENTIVES WILL
PROMOTE MANAGED CARE COST
INNOVATION
$5,000
$5,500
$6,000
$6,500
$7,000
$7,500
$8,000
$8,500
$9,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Per capita Medicaid Costs
Ohio per capita Expected based on Medicaid inflation Hospital Entry Level
20%
bo
nu
s
Lose
Co
ntr
ac
t
38
Re
du
ce
Me
dic
aid
Sp
en
din
g
Create cost consciousness
“skin in the game”
Healthy Ohio Plan*
Ensure competitive marketplace
10% limit on reimbursement variation
Promote hospital and
MMC competition -
Quality
Continuous competition on objective health outcomes (6% Medicaid redistributed)
Promote hospital and
MMC competition -
Cost
Flat rate reimbursements for acute conditions at state
median rates
20% bonus for MMC if beats regional Medicaid cost (lose
contract if above)
Hospital can run MMC network if price/patient 20% <
MMC
•Negotiate Medicaid waiver to use savings to cover certain pools
•Honorably discharged veterans (no access to VA)
•Severely mentally ill
•Developmentally disabled
•Addicted
•Chronic disease maintenance therapies
•Parents (90-100%) poverty
•Childless adults (50-100% of poverty)
•DSH reimbursement to hospitals to pre ACA levels
•Return additional savings to tax-payers
Use savings
to benefit
Ohioans
Low
er
ov
era
ll
he
alth
ca
re c
ost
s
Reduce waste due to defensive
medicine
Medical Injury Compensation System (MICS)
Lower preventable
medical errorsData clearinghouse of errors
Divert unnecessary ER
visitsEscort system
Encourage free market
competition (price
transparency)
Written estimates before non-emergent service
Advertising of health costs
Published out-of-pocket costs for top 20% of services
Leverage strong purchasing
power
Central purchasing for everyone accepting state
dollars
Promote small business health
coverage
State umbrella insurance guarantee for 5 years
Ohio has a unique opportunity to take advantage of the recent focus on health care to devise and implement reforms to Medicaid and the healthcare system that substantially curtail Medicaid and overall health care costs, improve health outcomes and provideadditional coverage for Ohioans who need it
HOSPITAL-OWNED OFFICES GET REIMBURSED
SIGNIFICANTLY MORE THAN INDEPENDENTLY-OWNED
PRACTICES FOR THE SAME SERVICE
Cardiac Stress Test –
Independent physician office - $2,100
Same office, same test, same patient, but owned by hospital - over $8,000
Office Visit –
Independent physician office - $20
Same office, owned by hospital - $65
Office visits and echocardiograms –
Medicare paid $1.5B more than it would have paid had same services been performed by independently-owned office
Source: Medical Economics, http://medicaleconomics.modernmedicine.com/medical-economics/content/tags/hospital-employment/monopolizing-medicine-why-
hospital-consolidation-?page=full; http://medicaleconomics.modernmedicine.com/medical-economics/content/tags/facility-fees/hospital-facility-fees-why-cost-
may-give-independent-ph?page=full
40
Re
du
ce
Me
dic
aid
Sp
en
din
g
Create cost consciousness
“skin in the game”
Healthy Ohio Plan*
Ensure competitive marketplace
10% limit on reimbursement variation
Promote hospital and
MMC competition -
Quality
Continuous competition on objective health outcomes (6% Medicaid redistributed)
Promote hospital and
MMC competition -
Cost
Flat rate reimbursements for acute conditions at state
median rates
20% bonus for MMC if beats regional Medicaid cost (lose
contract if above)
Hospital can run MMC network if price/patient 20% <
MMC
•Negotiate Medicaid waiver to use savings to cover certain pools
•Honorably discharged veterans (no access to VA)
•Severely mentally ill
•Developmentally disabled
•Addicted
•Chronic disease maintenance therapies
•Parents (90-100%) poverty
•Childless adults (50-100% of poverty)
•DSH reimbursement to hospitals to pre ACA levels
•Return additional savings to tax-payers
Use savings
to benefit
Ohioans
Low
er
ov
era
ll
he
alth
ca
re c
ost
s
Reduce waste due to defensive
medicine
Medical Injury Compensation System (MICS)
Lower preventable
medical errorsData clearinghouse of errors
Divert unnecessary ER
visitsEscort system
Encourage free market
competition (price
transparency)
Written estimates before non-emergent service
Advertising of health costs
Published out-of-pocket costs for top 20% of services
Leverage strong purchasing
power
Central purchasing for everyone accepting state
dollars
Promote small business health
coverage
State umbrella insurance guarantee for 5 years
Ohio has a unique opportunity to take advantage of the recent focus on health care to devise and implement reforms to Medicaid and the healthcare system that substantially curtail Medicaid and overall health care costs, improve health outcomes and provideadditional coverage for Ohioans who need it
HELP FOR SMALL BUSINESSES TO
PROVIDE HEALTHCARE INSURANCE
MEWAs allow small businesses to pool risk to self-insure and avoid
expensive mandates
Umbrella Insurance guarantee phased down over five years
helps with up front reserve requirements – starts at $150,000
Businesses served represented on MEWA Board
Must use Reference-based pricing to control costs – 120% of
Medicare
42
Re
du
ce
Me
dic
aid
Sp
en
din
g
Create cost consciousness
“skin in the game”
Healthy Ohio Plan*
Ensure competitive marketplace
10% limit on reimbursement variation
Promote hospital and
MMC competition -
Quality
Continuous competition on objective health outcomes (6% Medicaid redistributed)
Promote hospital and
MMC competition -
Cost
Flat rate reimbursements for acute conditions at state
median rates
20% bonus for MMC if beats regional Medicaid cost (lose
contract if above)
Hospital can run MMC network if price/patient 20% <
MMC
•Negotiate Medicaid waiver to use savings to cover certain pools
•Honorably discharged veterans (no access to VA)
•Severely mentally ill
•Developmentally disabled
•Addicted
•Chronic disease maintenance therapies
•Parents (90-100%) poverty
•Childless adults (50-100% of poverty)
•DSH reimbursement to hospitals to pre ACA levels
•Return additional savings to tax-payers
Use savings
to benefit
Ohioans
Low
er
ov
era
ll
he
alth
ca
re c
ost
s
Reduce waste due to defensive
medicine
Medical Injury Compensation System (MICS)
Lower preventable
medical errorsData clearinghouse of errors
Divert unnecessary ER
visitsEscort system
Encourage free market
competition (price
transparency)
Written estimates before non-emergent service
Advertising of health costs
Published out-of-pocket costs for top 20% of services
Leverage strong purchasing
power
Central purchasing for everyone accepting state
dollars
Promote small business health
coverage
State umbrella insurance guarantee for 5 years
Ohio has a unique opportunity to take advantage of the recent focus on health care to devise and implement reforms to Medicaid and the healthcare system that substantially curtail Medicaid and overall health care costs, improve health outcomes and provideadditional coverage for Ohioans who need it
SAVINGS BELOW EXISTING
MEDICAID FLOWS INTO POOLS
$20,000
$21,000
$22,000
$23,000
$24,000
$25,000
$26,000
$27,000
2015 2016 2017
Total Medicaid Spending (in millions)
Medicaid Spending (State and Fed) Medicaid Spending After Reform
$3.1B goes to pools in 2017 – when pools full, goes back to budget/taxpayers
44
POOLS FUND NEEDED SERVICES
REST OF SAVINGS, BACK TO
BUDGET/TAXPAYERS
Honorably discharged veterans
(no access to VA)
Severely mentally ill
Developmentally disabled
Addicted
Chronic disease maintenance
therapies
Parents (90-100%) poverty
Childless adults (50-100% of
poverty)
DSH reimbursement to
hospitals to pre-ACA levels
Return additional savings to
taxpayers
45