Impact of Health Care Reform on Major Stakeholders

Jeff KorsmoExecutive Director, Mayo Clinic Health Policy Center 2010 Health Care Forecast Conference ■ UC Irvine ■ 2/25/2010

Mayo Clinic Health Policy Center

Goal• Influence stakeholders to implement

substantive health care reform before 2011that will enhance the quality and availabilityof health care for all patients

Convener• 1,000 thought leaders• 1,400 patients

• 1,000 surveyed• 400 on 9-city tour

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2006 Mayo Clinic National Symposium on Health Care ReformTop 6 recommendations – Rated from least important to most important and least urgent to most urgent

Importance

Urgency

Encourage formation of integrated systems

Transparency among systems and physician practices

Results-based reimbursement, with patient component to incentive plan

Reward consumers for choosing high quality health plans and providers

Define essential health care services for all Americans

Build public and business mandate for national change

The Status Quo is Unsustainable

A reminder of the current state of American health care:

• 46+ million uninsured Americans • Skyrocketing costs • Uneven quality and safety of medical care• Lack of access for Medicare and Medicaid

patients • Medicare’s imminent collapse

Health care reform will not become easier with the passage of time.

Potential Paths

• House passes Senate bill with“sidecar” legislation via reconciliation

• Budget reconciliation (requires 51 votes)• Many provisions would not be included

(i.e. insurance reforms)

• Pass smaller bills to address most pressing issues

• Start over with comprehensive reform

• Do nothing

We All Have to Change

Providers• Improve outcomes and

satisfaction• Decrease costs and waste• Coordinate care

Payers/employers• Encourage prevention,

compliance and health• Value-based benefit design• Change payment to reward

providers who deliver value

Patients• Prevention/healthier lifestyles• Chronic disease adherence• Fair financial stake

Government• Independent “health board”

to ensure transparency, standardize billing and drive pay for value

• Financial help to those in need• Support research and education

Mayo Clinic Health Policy Center CornerstonesPrinciples to advance patient-centered reform

Coordinate care across people, functions,

activities, locations and time.

Create Value

Coordinate Care

Reform the Payment System

Insure Everyone

Improve outcomes and satisfaction.

Decrease medical costs and waste.

Change the ways providers are

paid in order to improve health and minimize

waste.

Provide guaranteed,

portable health insurance for all

individuals, giving them choice,

control and peace of mind.

MCHPC Cornerstones

Reform the

Payment System

Insure Everyone

It doesn’t work to leapIt doesn’t work to leapa ten-mile chasma ten-mile chasmin two five-mile jumps.in two five-mile jumps.American ProverbAmerican Proverb

http://looneytunes.kidswb.com/downloads/#/wile-e-coyote

Issue #1: Reform the Payment System to Reward Value

Yes

•Similar pilot programs

•Feedback on physician resource use

Yes

•ACO pilot program•Shared savings•Partial capitation

•Medical home and bundling pilot programs

•Efficient areas – 5% bonus for physicians

New payment models:

•Bundled payments

•Accountable Care Organizations

•Partial capitation / flexible delivery models

Yes

•Independent Medicare Commission

•CMS Innovation Center

Yes

•IOM value payment/ index study & recommendations

•CMS Innovation Center

Independent commission to test and recommend new delivery and payment models

Yes

•Value modifier for physician payments

Yes

•High-value care & geo. variation amendment

Value-based payment in Medicare

Senate BillsHouse BillMCHPC Position

Reform the Payment System to Reward ValueImplications for Providers

• Achieve highest outcomes, safety and service performance using current and future definitions

• Help define appropriate new value metrics

• Improve affordability of care• Address underlying cost structure• Examine utilization patterns

• Develop coordinated practices• Improve current care-delivery models• Explore/innovate new ways to deliver care• Demonstrate high-value performance across

all practice sites• Leverage HIT to aid in care coordination

Issue #2: Insure Everyone

Yes

State or regional exchanges

Yes

National exchange

Choice of private plans through an insurance exchange

YesYesSubsidies for low income

YesYesInsurance reforms

Public option dropped during negotiations

Includes public option

•Sets Medicare rates as the floor and average private insurance payment as the ceiling; Initial limits on eligibility

No government-run public option

YesYesIndividual mandate for insurance coverage

Senate BillsHouse BillMCHPC Position

Mayo Clinic Concerns

• Financing • Across-the-board cuts

• Pay-for-value timeframe and scope

• Authority and scope of the independent commission

• Government-run, Medicare-like public plan• How to negotiate with the government?• Will Medicare rates be the ceiling rather than the floor?• Slippery slope on eligibility

Financial Impact of Proposed Legislation

Provision Impact on Mayo ClinicMedicare cuts agreed to by the AHA

- $XX million over 10 years

Sustainable Growth Rate formula 

- $XX million in 2010 if no fix, plus - $XX million/year for 7 years

Medicaid expansion   - $XX million /year

Coverage for the uninsured versus current charity care write-offs

+ $XX million/year

Value Indexing for physician payments

?

Bottom Line: Take Steps Toward the Goal

• Define what we expect from our health care delivery system

• Measure our performance

• Reward providers that deliver what we expect

Questions and Comments