Transcript Cathy Schoen - Alliance for Health Reform

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THE
COMMONWEALTH
FUND
Bending the Curve:
Options for Achieving Savings and
Improving Value in U.S. Health
Spending
Cathy Schoen
Senior Vice President
The Commonwealth Fund
Alliance for Health Reform
January 28, 2008
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Report Context and Goals
• Context
– U.S. National Health Spending projected to double
from $2 trillion to $4 trillion and increase from 16%
to 20% of GDP over 10 years
– Rising numbers of uninsured and underinsured
– Wide variations in quality, efficiency, and low
performance
• Goals
– To illustrate that it is possible to reduce national
health expenditures while also improving access,
quality, and population health
– To spur and inform debate and stimulate action to
address national health care costs in a manner that
would yield greater value
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COMMONWEALTH
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Contribution of Report
• Examines impact on total national
health expenditures – all sectors, not
just federal costs
• Focuses on federal options with
potential to moderate spending growth
and improve value
– Savings plus better access, quality and
health outcomes
• Illustrates potential of combining
system reforms with affordable
insurance for all
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Overall Report Findings
•
–
It is possible to insure everyone while
achieving substantial savings and better
value
Strategic options combined with coverage for
all could save $1.5 trillion compared to
projected spending growth over the next
decade
•
Savings could offset the federal costs of
health insurance
•
“Bending the curve” is possible and it is
urgent to start now, because savings
accumulate over time
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Strategic Approaches for
Improving Value
• Producing and Using Better Information
• Promoting Health and Disease Prevention
• Aligning Incentives Quality & Efficiency
• Correcting Price Signals in the Health Care
Market
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Analysis
• Report examines 15 options aimed at
achieving savings and increasing value
• Estimates by the Lewin Group, 2008-2017
– Year-by-year impact on total national health
expenditures
– Effect on spending by federal government, state and
local governments, private purchasers and
households
– Cumulative savings over ten years
• Also estimates combined effect of multiple
options with affordable coverage for all
– Insurance Connector approach with mixed public
and private group insurance
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Fifteen Options that Achieve Savings
Cumulative 10-Year Impact
Producing and Using Better Information
• Promoting Health Information Technology
• Center for Medical Effectiveness & Health Care Decision-Making
• Patient Shared Decision-Making
-$88 billion
-$368 billion
-$9 billion
Promoting Health and Disease Prevention
• Public Health: Reducing Tobacco Use
• Public Health: Reducing Obesity
• Positive Incentives for Health
-$191 billion
-$283 billion
-$19 billion
Aligning Incentives with Quality and Efficiency
• Hospital Pay-for-Performance
• Episode-of-Care Payment
• Strengthening Primary Care & Care Coordination
• Limit Federal Tax Exemptions for Premium Contributions
-$34 billion
-$229 billion
-$194 billion
-$131 billion
Correcting Price Signals in the Health Care Market
• Reset Benchmark Rates for Medicare Advantage Plans
• Competitive Bidding
• Negotiated Prescription Drug Prices
• All-Payer Provider Payment Methods & Rates
• Limit Payment Updates in High-Cost Areas
-$50 billion
-$104 billion
-$43 billion
-$122 billion
-$158 billion
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Cumulative Impact on National Health Expenditures of
Insurance Connector Approach plus Selected Individual Options
Dollars in Billions
Savings to NHE
$2,000
Annual Net Impact
Cumulative Impact
$1,554
$1,258
$1,600
$997
$1,200
$770
$573
$800
$400
$0
8
$163
$31
2008
$272
$407
$84
2009
2010
2011
2012
2013
2014
2015
2016
2017
Savings options include: Health Information Technology, Center for Medical Effectiveness, Public Health, Episodeof-Care, Strengthening Primary Care, Benchmark Rates, and Prescription Drug Prices.
Source: Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending,
Commonwealth Fund, December 2008
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Total National Health Expenditures, 2008 – 2017
Projected and Various Scenarios
Dollars in Trillions
4.4
Projected under current system
4.1
Insurance Connector plus selected
individual options*
$4
$3
2.8
2.6
2.4
2.3
2.7
3.9
3.7
3.4
3.2
3.0
3.9
3.6
Spending at current proportion
(16.2%) of GDP
4.1
3.6
3.4
3.4
3.2
3.0
3.3
3.1
3.0
2.9
2.9
2.8
2.6
2.5
2.4
$2
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
*Savings options include: Health Information Technology, Center for Medical Effectiveness, Public Health,
Episode-of-Care, Strengthening Primary Care, Benchmark Rates, and Prescription Drug Prices.
*
Source: Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending,
S
Commonwealth
Fund, December 2008
2017
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Savings Can Offset Federal Costs of Insurance For All:
10
Net Change in Federal Spending with Insurance Alone or
Insurance Plus Savings Options
Dollars in billions
Federal spending offset
Net federal with insurance plus savings options*
$250
$205
Insurance Alone
$200
$150
$100
$50
$0
$82
Insurance Alone
$50
$31
2008
$122
Insurance Alone
$195
$109
$13
$10
2012
2017
* Selected options include improved information, payment reform, and public health.
Data: Lewin Group estimates of combination options compared with projected federal spending under current policy..
Source: Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending,
Commonwealth Fund, December 2008.
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Cross-Cutting Themes and Conclusions
•
Covering everyone and achieving savings with improved
quality and health outcomes should be possible
•
Addressing total health system costs, not shifting costs,
will be key to long term improvement
•
There are no “magic bullets” that alone fully address
rising costs and inefficiency
•
It will take a multi-faceted approach combined with welldesigned insurance to substantially improve performance
•
Value means more than just savings – some investments
yield substantial gains safety, quality, and health
•
Achieving high performance will mean that every
stakeholder must share in the solution and focus on the
potential national gain
•
Leadership to build consensus is critical
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Acknowledgements
• Coauthors
– Stuart Guterman, Anthony Shih, Jennifer Lau,
Sophie Kasimow, Anne Gauthier, and Karen Davis
• Lewin Group for modeling and
estimates
– John Sheils, Randall Haught and Jonathan Smith
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