Transcript 2010 National - Crain`s Detroit Business

What Michigan Thinks About
Health Care Reform
Paul H. Keckley, Ph.D.
Deloitte Center for Health Solutions
Washington, DC
October 14, 2010
The U.S. health system today: fragmented,
expensive, complicated, disconnected ($7,681
per capita, NHE 2008)
Administrators/Watchdogs
Regulators
Media
Insurers
Professional
Societies/
Special Interests
Innovators
Pharma
Academic
Medicine
BioTech
Accrediting
Agencies
Employers
HCIT
Hospitals
Disruptors
Device
Service Providers
Long Term
Care
Allied Health
Professionals
CAM
Physicians
Consumers
Outpatient
Facilities
Disease
Management
The “health reform” landscape includes several federal
bills starting with the stimulus bill (ARRA 2/09) and
PPACA (3/10), plus new rules and regulations to be
written 2010-2013
System-wide Disruption
Patient Protection and
Affordable Care Act
Health and Education
Reconciliation Act of 2010
New Clinical Coding Standards
(ICD-10)
State-based Reforms
Children’s Health Insurance Program
Reauthorization Act (CHIPRA)
Consumerism
CORE Standards Development
American Recovery and
Reinvestment Act and HITECH Act
Private Employer Initiatives
And more . . .
PPACA implementation: three major phases
While 2014 will see many of the most dramatic changes, some
changes have earlier – or later – effective dates, and additional
activities will be required to support implementation.
2010 - 2013
2014 - 2016
2017 +
Rules, Regulations &
New Funding
Mandates, Pilots &
Exchanges
“New Normal”
105 new
agencies/programs
Coordination between
states and federal
government
Coordination between
federal agencies
Insurance conformity
Excise taxes—insurance,
medical devices, drug
companies
Individual mandate
Health exchanges
Employer pay or play
Demonstration & pilot
programs
Delivery system
integration
Insurance market
shakeout
Legislative
amendments/
rulemaking
Appropriations
Overview of delivery system framework—post reform
Major investments: Medicaid expansion ($434 B);
commercial expansion via exchanges ($464 B); tax
credits for small employers ($40 B)
Payment system changes
• Increased performance-based
contracting by employers and
plans
• Increased enrollment in
individual insurance markets
(thru exchanges, thru
commercial plans-16 million)
• Increased enrollment in
government plans:
enrollment: military, Medicaid,
(16 million) Medicare, SCHIP,
exchanges, state and federal
employees
• Increased regulation of
business practices: premium
reviews, coverage, preventive
health
Funding ($1.083 Trillion)
Spending cuts: $575 B
• Medicare Advantage -$207B
• Medicare PPS -$157 B
Consumerism
Preventive health,
individual insurance,
PHR
4
Primary Care 2.0
Home monitoring, retail medicine,
LTC, medical homes, scope of
practice expansion, health coaching
• Medicare-Medicaid Cuts: $93 B
• Budget cuts: -$118B
New Revenues: $508 B
• Mandate penalties: $69 B
3
• Industry taxes and fees: $109 B
• Medicare payroll tax: $209 B
• Cadillac tax: $32 B
• Other taxes: $89 B
Comparative Effectiveness/EBM
Personalized medicine,
bundled payments, provider adherence/performance-based
payments liability reforms
Health Information Technology
EHR (HiTech), health information exchanges, ,fraud detection
administrative simplification, clinical data ware-housing, ICD-10,
direct to consumer e-medicine
2
1
Can consumers make the transition to
“the new normal”?
 Can the U.S. health system engage consumers
appropriately?
 Are U.S. consumers capable of engaging the health
system effectively?
Methodology
 Survey of Michigan:
 The Deloitte Center for Health Solutions, part of Deloitte LLP, commissioned this Harris Poll National
Quorum® telephone survey of 200 Michigan adults 18 years old and older September 29 – October
4, 2010
 Data were weighted to be representative of the total adult population on the basis of age, sex,
race/ethnicity, education, number of adults in the household, and number of phone lines in the
household where necessary
 The survey results have a sampling error of +/- 7 percentage points at the 95% confidence level
 Referred to as “2010 Michigan”
 Michigan comparative data:
 Based on Michigan portion of 2009 Survey of Health Care Consumers: 203 adults surveyed October
2–10, 2008, using a web-based questionnaire
 Referred to as “2009 Michigan”
 National comparative data:
 2010 Survey of Health Care Consumers: 4,008 adults surveyed December 28, 2009 – January 5,
2010, using a web-based questionnaire

Referred to as “2010 National”
 2009 Survey of Health Care Consumers: 4,001 adults surveyed October 2–10, 2008, using a webbased questionnaire

Referred to as “2009 National”
Michigan adults who have health insurance of
any kind declined since 2009, similar to
national trends
Question: Do you currently have primary health insurance?
2010 Michigan
2010 National
Currently Insured
2009 Michigan
2009 National
86%
87.7%
92.6%
89.7%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Similarly, employer-sponsored coverage
declined in the past year
2010 National
2010 Michigan
9%
1%
5%
5%
9%
11%
24%
18%
61%
56%
2009 Michigan
2%
2009 National
1%
5%
11%
3%
10%
11%
18%
* Numbers may add up to
more than 100% due to
the possibility of dual
coverage.
79%
64%
57% overall say they are in “excellent” / “very
good health”; by contrast, drops to 39% among
the uninsured
Question: In general, how would you rate your overall health?
Excellent
Very good
Good
Fair
 Additional results:
Poor

5%
18%

20%
61% of the uninsured and 47% of individually insured
said they are in “fair” or “poor” health, which is
statistically different than those with employer-provided
coverage (7%)
36% of those earning <$25K and 37% of $75-100K
said they are in “fair” or “poor” health, which
statistically different than those earning $100K+ (6%)
 Comparison to 2009 Michigan:


63% were in “excellent” or “very good” health
9% were in “fair” or “poor” health
 Comparison to 2010 National:


24%
33%
58% were in “excellent” or “very good” health
12% were in “fair” or “poor” health
34% of Michigan adults gave the U.S. health
care system a grade of A/B compared to 25%
who give a D/F—more favorable than the U.S.
overall grade
Question: Using a typical report card scale with grades of A, B, C, D and F,
how would you grade the overall performance of the current U.S. health care
system?
 Additional results:
A

10%

B
24%
C
36%
 Comparison to 2010 National:


D


12%
0%
10%
24% gave the system an A/B
35% gave the system a D/F
 Comparison to 2009 Michigan:
13%
F
39% of those with incomes of <$25K gave the system
a D/F, which is statistically different from $50-75K
(10%) and $75-100K (6%)
53% of the uninsured gave the system a D/F, which is
statistically different from those with employerprovided coverage (15%)
20%
30%
40%
* Numbers may not add up to 100% due to “Don’t Know” and refused categories.
25% gave the system an A/B
28% gave the system a D/F
58% say they are “very knowledgeable” or
“somewhat knowledgeable” about PPACA
Question: How knowledgeable are you about the components of the Patient
Protection and Affordable Care Act (PPACA)?
Very knowledgeable
Somewhat knowledgeable
Not at all knowledgeable
Don't know
 Additional points in Michigan results:

1%
9%

81% of those with incomes of $75-100K said
they were “very” or “somewhat knowledgeable”
about PPACA, which is statistically different from
<$25K (48%)
67% of the uninsured said they were “not at all
knowledgeable” about PPACA, which is
statistically different from those with Medicaid
(36%)
 Compared to June 2010 National Pulse
Survey:
41%

49%
61% said they were “very knowledgeable” or
“somewhat knowledgeable” about PPACA
Most are somewhat optimistic PPACA will
increase access; opinions about its
effectiveness in other areas are mixed
Question: Based on what you know, do you think PPACA will have a positive
impact, negative impact or no impact on the following aspects of the U.S.
health care system?
Positive
Increasing access to affordable health insurance for the
uninsured
57%
Extending the life of the Medicare program
46%
Reducing costs of health care in hospitals and doctors
43%
Reducing costs of prescription drugs
42%
Encouraging consumers to live healthier lives
42%
Reducing costs of health insurance
41%
Changing the way health insurance plans are regulated
41%
Facilitating seamless delivery of care by doctors and hospitals in
a more integrated way
41%
Eliminating waste, fraud and abuse
38%
Basing payments to doctors and hospitals on outcomes and
performance instead of volume
37%
Simplifying paperwork in the health care industry
36%
Helping achieve economic recovery
26%
0%
10%
20%
30%
40%
50%
60%
26% said they are financially prepared to handle
their future health care costs—slightly higher
than 2009
Question: On a scale from 1 (low) to 10 (high), to what extent do you feel your
household is financially prepared to handle future health care costs?
Not prepared
2010 Michigan

Prepared
23%
26%

2010 National
22.7%
24.3%

2009 Michigan
21.7%
2009 National
-30.0%
21.2%
24.7%
-20.0%
-10.0%
24.2%
0.0%
10.0%
20.0%
30.0%
54% of those “very knowledgeable” about PPACA
said their households are financially prepared to
handle future health care costs, which is
statistically different from “not at all
knowledgeable” (19%)
51% of the uninsured said their households are not
financially prepared to handle future health care
costs, which is statistically different from employersponsored coverage (15%) and Medicare (14%)
46% of those in “fair” or “poor” health said their
households are not financially prepared to handle
future health care costs, which is statistically
different from those in “excellent” or “very good”
health (13%)
59% say they used an over-the-counter
therapeutics instead of seeing a doctor for a
problem; a quarter tried other forms of
substitutionary care
Question: Which of the following have you done in the last 12 months?

Used an over the counter product instead of
seeing a doctor for a problem
59%
Traveled outside your area to consult with a
doctor, undergo a medical test or procedure, or
receive treatment
23%
Consulted an herbalist, homeopath,
chiropractor, or other alternative health care
practitioner or advisor instead of a traditional
physician to treat a medical problem
22%

Used a walk-in clinic located in a pharmacy,
grocery store, or other retail setting to get care
for a non-emergency health problem for you or
a family member instead of going to a hospital
or doctor for care
Purchased prescription medications from a
mail order or online pharmacy not in your
insurance plan
16%

8%
None of these
24%
0%
10%
20%
30%
40%
50%
60%
70%
39% of males 65+ said they traveled outside
their area to consult with a doctor, undergo a
medical test or procedure or receive
treatment, which is statistically different than
males 45-64 (21%), females 45-64 (19%) and
females 65+ (21%)
59% of Medicaid enrollees and 52% of the
individually insured said they traveled outside
their area to consult with a doctor, undergo a
medical test or procedure or receive
treatment, which is statistically different from
employer-sponsored coverage (15%) and the
uninsured (9%)
43% of those in “fair” or “poor” health said
they traveled outside their area to consult with
a doctor, undergo a medical test or procedure,
or receive treatment, which is statistically
different from those in “excellent” or “very
good” health (11%)
A substantial majority believe hospitals costs,
insurance company costs and fraud in the system
are major drivers of overall health care system
cost
Question: Based on what you know, does each of the following have a major
influence, minor influence or no influence on overall health care system costs?
Minor
Major
Hospital costs
17%
75%
Insurance company costs
16%
73%
Fraud in the system
20%
70%
Consumer behavior (e.g., unhealthy
lifestyles like obesity)
16%
68%
Overutilization of diagnostic testing like
MRIs and CT scans
24%
59%
New technologies and equipment
29%
59%
Prescription drugs
30%
57%
Government regulation
29%
53%
Overutilization of surgery
27%
52%
Payment incentives that reward volume
instead of performance
25%
51%
Defensive medicine
34%
-40% -20%
 78% of individually insured said
government regulation is a major
influence on system costs, which is
statistically different than those with
employer-sponsored coverage (39%)
 78% of those “somewhat knowledgeable”
and 76% of those “not at all
knowledgeable” said insurance company
costs are a major influence on system
costs, which is statistically different than
those “very knowledgeable” (42%)
 55% of those “very knowledgeable” about
PPACA said overutilization of diagnostic
testing like MRIs and CT scans have no
influence on the overall health care
system cost, which is statistically different
from those “somewhat knowledgeable”
(10%) and “not at all knowledgeable”
(11%)
42%
0%
20%
40%
60%
80% 100%
Most think 15% is a reasonable admin cost for
insurance companies
Question: What percentage of the total premium that you pay for health
insurance do you think is reasonable for insurance plan overheads?
 51% of those with employersponsored coverage said more
than 20% of total premiums is
reasonable for covering
insurance plan overheads,
which is statistically different
than those with Medicare
(26%)
 30% of the individually insured
said less than 5% of their total
premiums is reasonable for
covering insurance plan
overheads, which is statistically
different than employersponsored coverage (10%) and
Medicare (4%)
Observations about consumerism in Michigan
 Good news…
Michigan consumers
want to engage their
system: It matters
 Bad news…
Michigan consumers
are not equipped to
engage
Four major themes going forward…
The economy:
Economic recovery
and the consumer
quest for value
• Can we afford health reform NOW or can it wait?
• Can reforms be paid for without significant federal
spending cuts and increased taxes?
• Are incentives aligned with desirable behavior by
payers and providers?
• How can the value gap in health care be closed?
Balance: Reduce
costs or cover
everyone
• How can the uninsured be insured?
• Should the healthy and young subsidize the older and
less healthy?
• How should personal health and accountability be
pursued?
“Big Government”
• Can government improve the system or is the private
sector a better option?
• How much government is too much, and is it
good/bad?
Politics: Change
• What does it mean for 2010 election cycle?
• How will spin benefit partisans?
Big bets in the bill…
 Individual mandate: Will the uninsured and newly eligible for Medicaid enroll?
Will the insured increase 32,000,000 as targeted?
 Employer sponsorship: Will employers drop health benefits after 2016 to
facilitate direct consumer engagement and their reduce operating costs?
 State solvency: Will states be able to manage their expansion new
responsibilities and obligations?
 Delivery system changes: Will delivery system reforms – accountable care
organizations, value-based purchasing, medical homes, bundled payments,
comparative effectiveness – reduce costs over time?
 Consumers: Will they engage?
And the two big unknowns hanging over reform..
 Economic recovery: Will the economy recover?
 Physician pay and role: Will physicians collaborate or pursue independence?
Contact information
For more information, please contact:
Paul H. Keckley, Ph.D., Executive Director
Deloitte Center for Health Solutions
[email protected]
202-220-2150
For the latest Monday Memo, please
visit: www.deloitte.com/us/healthmemos
And visit our website to subscribe to our content:
www.deloitte.com/CenterforHealthSolutions/subscribe
September 27, 2010
Monday memo
Health reform update
This week’s headlines:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
My take
Senators request premium information from major plans
MLR proposed draft submitted Friday
HHS clarifies grandfathered, self-insured rules
FDA and CMS consider parallel review process;
crosswalk among federal health agencies a key focus
MACPAC hosts inaugural briefings
Administrative simplification: Update
IRS requests comments about health plan executive
compensation
HHS publishes rule on waste, fraud and abuse
Claims appeal process revisited, grace period extended
GAO announces PCORI board members
HHS seeks comments on quality improvement priorities
Insurers end child-only policies
Medicare Advantage premiums projected to decrease
NJ to establish medical home demo
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