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A Framework for Health Reform September 2010
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Transcript of Framework
A Framework for Health Reform
September 2010
PPACA H.R. 3590
BenefitsFunding Sources
CBO: $940 billion over 10 yrsEstimated Federal Deficit Reduction: $138 billion over 10 yrs
94% of American lives coveredSpans 2,409 pages
Coverage
Efficiency
Taxes & Fees
• Excise tax on high cost insurance plans• Individual mandate• Employer responsibility• Medicare tax on high income individuals• Pharmacy tax• Device tax• Business-related taxes• Health-related fees
• Immediate access for pre-existing conditions• Exchange subsidies & spending• Medicaid expansion• Part D “Doughnut Hole”• Increased health insurance regulation• Community health centers
• Strengthening quality infrastructure• Fraud prevention measures• Low cost/high quality in Medicare Advantage• CMS innovation center
Reductions & Spending Cuts• Medicare provider reductions• Reported LTC CLASS savings reduction
$416B
$572B
($48B)
$794B
$146B
Two Underlying Assumptions
1. The federal deficit cannot grow forever.
2. The United States has neither the political
will nor the economic capacity to resolve this
issue through benefit cuts or new taxes.
Health Reform FrameworkCORE THEMES: Federalization, Risk Allocation, and Value Driven Integration
Corporate
Integrated
Health systems
EVOLVING
MODELS
Collaborative
Network integration
Regulatory
Single payer system
STRUCTURAL SHIFTS
Delivery Models
Smart Medicine
Increased Regulation and More Federal Control
Reapportionment of Wealth and Risk
Reordering of Insurance Markets
Reimbursement Design
Tiered System of Access
Information Transparency
Government
Legislation
Regulation
Deficit Spending
Market
Health care spending
Flow of capital
Aging
National Health
ECONOMIC:
DEMOGRAPHIC:
TECHNOLOGICAL:
Standards
EMR/HIT adoption
CONSUMERISM:
Accountability
Utilization
INFLUENCERS
Evolving Models
Corporate NetworkE.g. Cleveland Clinic, Mayo Clinic,
Geisinger, Intermountain
Collaborative NetworkE.g. Accountable Care Organizations,
Medical Homes
Regulatory NetworkE.g. Government Regulated Utility
Patient Patient Patient
Employer Facility
Physician
Rx
Other ASONew EntityFederal Government
Physician Facility
Rx
ASO ASO ASO
Facility
Physician
Rx
Payer
1. Increased Regulation and More Federal ControlThe federal government usurps state regulatory authority, methodically restricting private sector autonomy and
profitability.
2. Tiered System of AccessDecreasing government reimbursements and significantly expanded coverage changes patient access to care.
3. Reapportionment of Wealth and RiskFunding for new entitlements is extracted from industry and individuals. Risk gradually shifts from rate payers to tax payers
and from insurers to providers.
4. Reordering of Insurance MarketsThree dominant and distinct payer markets emerge: large employers, exchanges and Government.
5. Information TransparencyConsumers, employers, and the government demand new information and benefit designs that maximize “value”.
6. Reimbursement DesignFee-for-service payment will be converted to payment based on value.
7. Delivery ModelsCost pressures drive providers to coordinate care while utilizing more efficient locations, personnel, and technologies.
8. Smart MedicineGenetic information and comparative effectiveness research combine with information technology to empower providers
and patients.
Structural ShiftsFe
de
raliz
atio
nR
isk
Allo
cati
on
Inte
grat
ion
Structural Shifts: Federalization
Increased Regulation
and More Federal
Control
Tiered System of
Access
State Federal
Legislation Regulation
Food or airline Utility
From To
Ration by $$ Ration by Waiting Times & $$
Primary Care Shortage Major Primary Care Shortage
Shifts in state coordination of care, payment,
technology, and consumer engagement
FEDERALIZATION
Structural Shifts: Risk
Shifts in regulation,
business model, and individual
responsibility
RISKReapportionment of
Wealth and Risk
Reordering of
Insurance Markets
Information
Transparency
Insurer Provider
Rate Payers Tax Payers
Industry & Individuals Government
From To
Individual/Small Group Exchanges
Self-insured Self-insured or Dumping
Medicaid: Disabled/children Medicaid: Families, Childless adults
Numerous MA Plans Fewer MA Plan Choice
Quality Silent Quality Ratings
Blind Purchaser Informed Purchaser
High premium/low deductible
Low premium/High deductible with HSA
Structural Shifts: Integration
Shifts in state coordination of care, payment,
technology, and consumer engagement
INTEGRATION
Smart Medicine
Delivery Models
Reimbursement
Design
Uniform Procedures Personalized Medicine
Best Guess/Habits Comparative Effectiveness
Paper Records Electronic Health Records
Blind Follower Empowered Patient (PHRs)
Reg Apprvl: New & Safe Reg Apprvl: Cost-effective
From To
Silos (mainframes) Care Coordination
Emergency Rooms Urgent Care Sites
Hospital Inpatient Outpatient Services
Doctor’s Office Retail Clinic/Home-based
Physician Physician’s Assistant
Fee-for-Service payments Bundled Care
FFS rate pressures Gainsharing for in-network
“Reasonable and Necessary” Comparative Effectiveness
A Framework for Shift AnalysisG
OV
ER
NM
EN
T IN
FL
UE
NC
E
CenterMarket and government forces combine to hasten profound transformation
LeftWith market forces largely silent, government forces
are driving change
STRUCTURALSHIFTS
RightIrrespective of
government involvement, market forces move
incrementally forward
MARKET INFLUENCE
What is the catalyst
for movement?
How fast is it
moving?
Where is it taking
us?
Shift Analysis (2010-2013)
MARKET INFLUENCE
GO
VE
RN
ME
NT
INF
LU
EN
CE
RightIrrespective of government
involvement , market forces
move incrementally
forward
CenterMarket and
government forces combine to hasten
profound transformation
LeftWith market forces largely
silent, government forces are driving
change
STRUCTURALSHIFTS
Reordering of
Insurance Markets
Increased Regulation
and More Federal
Control
Tiered System
of Access
Information Transparency
Reimbursement
DesignReapportionment
of Wealth and
Risk
Delivery Models
Smart Medicine
Shift Analysis (2013-2018)
MARKET INFLUENCE
GO
VE
RN
ME
NT
INF
LU
EN
CE
RightIrrespective of government
involvement , market forces
move incrementally
forward
CenterMarket and
government forces combine to hasten
profound transformation
LeftWith market forces largely
silent, government forces are driving
change
STRUCTURALSHIFTSReordering of
Insurance Markets
Increased Regulation
and More Federal
Control
Tiered System
of Access
Information
Transparency
Reimbursement
Design
Reapportionment
of Wealth and
Risk Delivery Models
Smart Medicine
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