Transcript Today’s discussion

The Politics of Reform
A National and State Perspective
Steve Dickson
President/CEO
Stratagem
Today’s discussion:
• Quick History of Major Health Care Reforms in Modern America.
• Why Health Care Reform is Needed.
• What the Health Care Reform Act Does.
• Political Reality and the Current Environment.
• Health Care Reform Implementation.
• Will it be Repealed?
1
Health Reform Becomes Law
The Patient Protection and Affordable Care Act (PPACA) was
signed into law March 23. It was amended by the Health Care
& Education Affordability Reconciliation Act, which was signed
into law March 30. Together, the legislation:
→ Provides coverage to 32 million uninsured people
by 2019.
→ Costs an estimated $940 billion over 10 years
(2010-2019).
2
Why Was Health Reform Needed?
3
Why Health Reform?
→ Today, there are 51 million
uninsured individuals.
That number grows daily.
→ Over the last 10 years,
insurance premiums have
risen 131%.
→ An average family of four
pays more than $13,000 annually in
premiums.
4
What’s Included in Health Reform?
5
Health Reform: Key Elements
→ Expanding coverage
→ Reforming the
delivery system
→ Building the
workforce
→ Wellness and
prevention
→ Financing reform
→ Quality and safety
→ Protecting Medicare &
Medicaid payments
→ Regulatory oversight
& program integrity
6
Expanding Coverage to 32 Million
25 million
158 million
Source: Congressional Budget Office
7
Coverage: Individual Mandate
→ In 2014, all individuals will be required to
obtain coverage or face a penalty.
→ Individuals can purchase coverage from
newly created “insurance exchanges.”
→ Federal help for some individuals to
pay for insurance.
8
Coverage: Insurance Exchanges
“Small companies and
individuals who don’t have
insurance through work will be
able to purchase insurance
through newly created
marketplaces, known as
insurance exchanges, created
and regulated by states.
… Think of it as an Orbitz or
Travelocity for health care
plans.”
- USA Today
9
Coverage: Large Employers
Large employers (businesses with 50 or more employees) will be
fined if their employees purchase health care coverage through
new insurance exchanges and receive federal help to pay their
premiums.
10
Coverage: Small Employers
Small businesses are eligible for subsidies to offer insurance and
will have access to the exchange
→ Employers with 10 or fewer employees
who earn, on average, less than
$25,000 a year can get a 50% tax credit
for providing health insurance.
→ Employers with 25 or fewer employees
who earn, on average, less than
$50,000 can receive a partial tax credit.
11
Immediate Insurance Reforms
Effective September 23, 2010
→ No cancellation of coverage when someone becomes sick.
→ No lifetime benefit limits or unreasonable annual limits.
→ No pre-existing condition exclusions for children (under 19).
→ Free preventive care (including immunizations for children).
→ Adult children up to age 26 can stay on their parents’ plan.
12
Additional Insurance Reforms
Effective September 23, 2010
→ Limits insurers’ ability to set premiums
based on health status.
→ Provides important administrative simplification.
Effective 2014
→ Coverage can’t be denied based on
pre-existing conditions.
13
Reforming the Delivery System
Creates new ways to tie payments to quality improvement.
→ Accountable Care Organizations
→ Bundling Pilots
→ CMS Center for Innovation
→ Value-Based Purchasing
→ Geographic Variation
→ Medical Homes
→ Gainsharing
→ Medical Liability Demonstrations
Prohibits physician self-referral to hospitals
in which physicians have an ownership
interest.
14
Financing Reform
Source: Congressional Budget Office
15
Hospitals’ “Shared Responsibility”
$155 billion over 10 years is mainly achieved through:
→ Reduced hospital updates
→ Medicare/Medicaid DSH payment reductions
→ Hospital readmissions policy
→ Hospital-acquired conditions
But hospitals will experience reduced uncompensated care
and additional revenue/payment for the newly insured.
16
Encouraging Quality and Safety
The law encourages quality and safety by:
→ Establishing a national quality improvement strategy.
→ Creating a public-private institute to analyze the
comparative effectiveness of treatments.
→ Creating a patient safety research center to
promote best practices.
→ Taking steps to pay for QUALITY rather than VOLUME.
“Pay for Reporting” systems for all providers.
Value-Based Purchasing pilot systems for many providers.
17
The overarching strategic umbrella
of healthcare reform
Track 1
Cuts to Existing FFS System
• Market basket reductions
• DHS cuts
• Nonpayment for anything
preventable or unnecessary
Track 2
Disrupt Existing System
• Bundled Payments
• Innovation Center
• Demonstrations
• ACOs
Regulations implementing reform: 2011
Hospital
value-based
purchasing
(Proposed)
1/7/11
Jan
Program
integrity additional
provider
screening
(Final)
1/21/11
Annual
inpatient
Uniform
update
explanation of
Long-term benefits, + Readmission
Accountable
reduction Medicaid
and CLASS coverage,
care
HACs
program
Act
definitions
organizations
(Proposed ) (Proposed)
(Proposed) (Proposed)
(Final)
Feb
March
April
Accountable
State
care
Innovation –
organizations
Review &
approval (Proposed)
process
(Proposed)
May
Hospital
value-based
purchasing
(Final)
June
Exchange
(Proposed)
July
Annual
outpatient
update
(Final)
Annual
outpatient
update
(Proposed)
Aug
Annual
Inpatient
update +
Readmission
reduction
program
(Final
Sep
Oct
Transparency
reports (PPSA)
(Procedures)
Target dates for release of proposed and final regulations in 2011
implementing provisions of the Affordable Care Act (these are fluid and
likely to move)
Nov
Dec
Future state
•
Winners and losers
•
Accountability & transparency
•
People-centered primary care
•
E-health and other innovations
•
New focus on population health and social
determinants
•
Risk-based, value-driven reimbursement (P4P)
•
Cost reductions
•
Quality across the continuum and
focus on transitions
•
Smaller hospitals with more
intensive care
•
New roles of public and private sector
(partnerships?)
TOMORROW
Primary & preventative care
Intensive
care
Non-Acute/
Non-Acute/
specialty
specialtycare
care
Intensive
care
Primary & preventative
care
1766
TODAY
Health Reform: Key Dates
→ Begins reductions in Medicaid &
Medicare DSH
→ Provides 100% federal budget for cost
of coverage for those who are “newly
eligible” for Medicaid through 2016.
→ Federal funding declines to 95% of
coverage cost in 2017, 94% in 2018 and
90% in 2019
→ Begins state-based health benefits
exchanges, through which individuals and
small businesses with up to 100 employees
can purchase coverage
22
Health Reform: Key Dates
→ Begins individual mandate for
health insurance
→ Sets up an independent payment
advisory board to recommend to
Congress ways of reducing Medicaid
spending − PPS hospitals are exempt.
23
Benefits of Reform
The law:
→ Expands coverage to 32 million people.
→ Builds on employer-based insurance system.
→ Initiates major insurance reforms.
→ Sets in motion future payment and delivery system
reforms.
→ Increases the focus on wellness and prevention.
24
The Environment: Trepidation
• 9% Unemployment
• 2010: Federal Spending 24% of GDP (highest since WWII)
– Tax revenues 15% of GDP
• 2001 Debt: 33% of GDP; 2010 Debt = 62% of GDP
• If We Remain on the Current Course:
– Deficit remains high through decade and debt will increase to
90% of GDP by 2020.
– 2025: All Federal Revenues will Only Cover Interest Payments,
Medicare, Medicaid, Social Security
– 2035: Debt will Outstrip Entire Economy
25
The Big Deficit Driver is Healthcare, Even w/o Reform
Election implications
•
•
•
2012
Jobs and deficit
Healthcare focus: costs
–
–
•
•
•
Implementation, oversight & investigations
Coverage expansion?
Republicans well positioned; another historic election?
–
–
•
Transparency
Pay for value (not volume); Test and scale: Innovation Center
2012 Senate (23D/10R); Redistricting (195 R; 49 D;92 split;92 Comm), economy,
jobs, Tea Party
Open seats: Bingaman (NM); Ensign, R-NV); Lieberman (CT), Conrad (ND), Kyl
(AZ), Hutchinson (TX), Webb (VA); Akaka (HI) – (5Ds – 3Rs)
2013
We are not going back to the way things were.
Best to proceed as though no change has occurred.
26
Presidential reelection and
unemployment
27
Senate
Total Members: 100
Needed for Majority: 51
Total Number of Democrats: 51
(Plus 2 Independents who caucus with them).
Total Number of Republicans: 47
28
Largest State Budget Shortfalls on
Record
*Reported to date
Source: Center on Budget and Policy Priorities survey, revised December 2010.
• Implications: Maintenance of effort/state flexibility debate
• Provider tax limitations ($18.7/10 years)
• Long terms financial stains on state budgets
29
Questions?
Steve Dickson
President/CEO
Stratagem