Transcript LSU in the Post Health Care Reform World

LSU Now and in the Post Health
Care Reform World
Fred Cerise
July 19, 2011
U.S. health care is expensive
International Comparison of Spending on Health, 1980–2008
Total expenditures on health
as percent of GDP
Average spending on health
per capita ($US PPP)
16
7000
6000
5000
4000
United States
Norway
Switzerland
Canada
Netherlands
Germany
France
Denmark
Australia
Sweden
United Kingdom
New Zealand
14
12
10
8
2000
4
1000
2
0
0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
3000
6
Source: OECD Health Data 2010 (June 2010).
United States
France
Switzerland
Germany
Canada
Netherlands
New Zealand
Denmark
Sweden
United Kingdom
Norway
Australia
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
8000
3
A growing number of Americans
cannot afford U.S. healthcare
Premiums Rising Faster Than Inflation and Wages
Cumulative Changes in Components of U.S.
National Health Expenditures and Workers’
Earnings, 2000–09
Projected Average Family Premium as
a Percentage of Median Family Income, 2008–
20
Percent
Percent
125
25
Insurance premiums
108%
21 21
24
22 22
20 20
Workers' earnings
100
23
20
18 18 18 18 18
Consumer Price Index
16
15
75
13
11
19 19 19
17
14
12
10
50
32%
5
25
24%
Projected
* 2008 and 2009 NHE projections.
Data: Calculations based on M. Hartman et al., “National Health Spending in 2007,” Health Affairs, Jan./Feb. 2009 and A. Sisko
et al., “Health Spending Projections Through 2018,” Health Affairs, March/April 2009. Insurance premiums, workers’ earnings,
and CPI from Henry J. Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits Annual
Surveys, 2000–2009.
Source: K. Davis, Why Health Reform Must Counter the Rising Costs of Health Insurance Premiums (New York: The
Commonwealth Fund, Aug. 2009).
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2007 2008* 2009*
2006
2006
2005
2005
2004
2004
2003
2003
2002
2002
2001
2001
2000
2000
1999
0
0
Health Care Costs for American
Families Double in < 9 Years
• While health care costs increase, there is a
strong public sentiment to reduce spending
among public programs
• We have access problems today among our
public program
• Having a Medicaid card does not ensure
access to services
NEJM, June 16, 2011
NEJM June 16, 2011
NEJM, 2/10/11
The government can’t afford to
continue feeding the medicalindustrial complex at its current rate
Slide from Uwe Reinhardt
presentation to NAPH 6/11
Current Health Care Spending is NonSustainable
• During the past 4 decades, per beneficiary costs
under Medicaid and Medicare increased 2.5%
faster per year than the rest of GDP.
• If that trend continues, federal spending on those
two programs alone would rise from 4.6% GDP in
2007 to 20% by 2050. This represents the same
share of the economy that the entire federal
budget does today.
• For all of health care this would represent 40% of
GDP in 2050
• That can’t happen
Public delivery systems can be
capped and can offer predictable
spending and lower costs solutions
for some populations
Millions
Total Medicaid Spending vs.
LSU Hospital Medicaid & DSH
17
Private Hospital vs. LSU Medicaid and
DSH Hospital Spending FY 05-FY 10
1,600,000,000
1,400,000,000
1,200,000,000
1,000,000,000
Private Hospitals
800,000,000
LSU Hospitals
600,000,000
400,000,000
200,000,000
FY 05
FY 06
FY 07
FY 08
FY 09
FY 10
10
The uninsured (and underinsured)
are not going away.
Mini-Med Plans
• McDonald’s (Montana) employees pay
$56/mo for coverage of up to $2,000/yr
• Ruby Tuesday employees pay $18/wk for
$1,250 outpatient and $3,000 inpatient
care/yr
• Denny’s employees pay $69/mo for no
inpatient coverage and $300 maximum
doctor’s office visits
Affordable Care Act Phases Out Some
Caps
• Phases out annual dollar limits
• Requires essential benefits package for
individuals purchasing their own coverage or
through small employers
• Large employer requirements regarding
benefits package not clearly laid out
What Does the Future Hold?
2 or 3 Tiers
• Wholly Privates: Those who can afford high
cost and overutilization
• Wholly Publics: Uninsured and Medicaid
(Medicare?)
• Stressed in the Middle: ESI and Medicare
– Delivery system reforms essential to maintaining
access
– 30% “waste” in the system
Proposed Delivery System Reforms
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Medical Homes
Accountable Care Organizations
Coordinated Care Networks
Bundled Payments
Pay for Performance
• You get the idea
Delivery system reforms require
infrastructure which requires scale.
Most U.S. physicians do not practice in
large groups. Eighty eight percent of
visits to office-based practices are to
practices with 9 or fewer physicians.
Health Affairs, Web First, August 2011
Health Affairs, August 2011
Health Affairs, August 2011
But this world is changing too.
Hospitals are acquiring physician
practices again.
Insurers are beginning to acquire
physicians and hospitals.
NEJM, 5/12/11
NEJM, 5/12/11
Advantages of Hospitals Acquiring Physicians
NEJM, 5/12/11
• Reduce costs associated with unnecessary practice
variation and unnecessary expensive supplies
selected by physicians
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Standardizing surgical supplies
Selecting cost-effective devices
Requiring use of HIT
Requiring adherence to clinical guidelines
Scheduling elective procedures to maximize asset
utilization
– Discharging patients consistently early in the day
• Doctors trading autonomy for employment
LSU
A Huge Head Start – But Not For Long
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“Hospital owned practices”
Medical homes
Electronic health records
Chronic disease registries
Disease management programs
Funding flexibility
• LSU cannot rely upon being a default public
provider. Others will attempt to provide some
of these services for additional money.
• There is vocal rhetoric regarding our services
without regard for the facts.
Strategies LSU Must Employ
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Establish greater sense of urgency
Understand our finances
Manage our costs
Improve our quality
Improve patient experience
Improve access – the right thing to do (and
insurers will require it)
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Primary care
Specialty care
Strategic use of NPs and PAs
Develop partnerships to maximize our services
Balance training and service
Improve Access and Quality
Balance Training and Service
• We can train AND provide consistent reliable
access
• We cannot rely SOLELY on residents as PCPs
• Use of nurses, NPs and PAs
• Consistent and accountable faculty
supervision
UHC = Blocking and Tackling
• Must have unit costs that are at least in-line
with the industry. Should be lower.
• Must be able to demonstrate that FTEs are inline with the industry
• Where it makes sense to outsource, outsource
– But not for our core expertise
• Reliable measures and managers must be
accountable to meeting them
Improve Quality
• Basics first
• Goal for 2012:
– No CMS core measure below 50th percentile
• All hospitals should be operating in top
quartile
• Establish targets and managers must be
accountable to meeting targets
Improve the Patient Experience
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Friendly, attentive, considerate staff
CLEAN facilities
Respect appointments
Be available
“Would you return for care….”
“Would you recommend.…”
Managers must demonstrate attention to the
measures and improvements
Develop Partnerships
• Among ourselves
• Rural hospitals and practices
• FQHCs
– Capacity expected to double under ACA
• Other hospitals and practices
Developing Partnerships
• Ease of referrals
– Clinics
– Emergency departments
– Inpatients
• Telemedicine
• Shared electronic records
• Strategic LINCCAs
Summary
• Health care is expensive and unaffordable for the
entire U.S. population given current practices
• Pressure to provide ongoing access while reducing
costs
• Tiers likely to become more explicit
• LSU has structural advantages that must be exploited
to allow us to continue providing public services
(delivery, education, research)
• Others will attempt to profit from changes
• LSU must outperform competitors; measure its results;
and report in simple, indisputable terms