Deloitte Center for Health Solutions

October 1, 2012

Monday memo

Health reform update

This week’s headlines: My take

Implementation update - HHS provides funding for mental health workforce expansion targeting at-risk populations

- CMS: new initiative to study avoidable hospitalizations for nursing home residents

- Health insurance exchange update: guidance for multi-state plans

- Report: safety net providers critical for ACA’s insurance coverage provisions

- Hospitals submit comments on IRS charitable hospital rule

Legislative update - House bill proposes CBO expand projections for prevention and wellness programs

- FDA receives approval from Congress to collect funding from the generic drug industry

State update - Health insurance exchange update

- State round-up

Industry news - mHealth task force releases recommendations for expanded use of mobile health - HHS, DOJ warn about fraud in hospitals

- Military leaders say junk food is a threat to national preparedness

Quotable

Fact file

Subscribe to the Health Care Reform Memo

Deloitte Center for Health Solutions research

Upcoming life sciences and health care Dbriefs webcasts

Deloitte contacts

My take

From Paul Keckley, Executive Director, Deloitte Center for Health Solutions

I just finished the final accounting for my knee episode last November and subsequent

blood clot. The scorecard: total charges billed by doctors, hospitals, labs, pharmacies, and

over-the-counter “stuff” including bandages, etc.: $23,786. Of this, I paid $1,975 out-of-

pocket. Pretty good deal! I was a guest in four hospital emergency rooms, including three to

aspirate my knee so I could walk, and used 12 different labs in seven states for blood

testing to monitor my warfarin dosage. I saw my primary care physician and surgeon twice,

gratefully engaging with both via e-mail regularly through the process.

It took a while to figure this out, and along the way I learned a lot about the health care

system:

It’s hard to know how much anything costs. Prices are not readily available, and often

they bear no resemblance to what things cost or what’s actually paid by the

insurance company. Getting answers about costs is tough, too. Front desk folks

seem put-off if queried about costs, though quite effective in collecting insurance

information and co-payments up front.

The insurance company’s “explanation of benefits” sometimes bears resemblance to

what’s paid out-of-pocket, but not always.

Getting anything scheduled or a question answered by telephone requires a ten

minute wait to get to a living, breathing person. And for a physician’s office, unless

it’s an emergency, forget about it.

The system is archaic when it comes to information management: I filled out

countless forms that repeatedly asked the same questions, sometimes for the same

organization that did not have the capacity to share information across its multiple

sites.

But thankfully, all the “piece work” for me came together for a successful outcome: I am

walking without pain, except when going down stairs, jogging more frequently, and off

medication.

Since 2008, the Deloitte Center for Health Solutions has surveyed consumers in the U.S.

and other countries to assess their views about their own health and how they navigate their

systems of care. We use a sophisticated multivariate methodology to determine differences

between folks. Individuals navigate the system in several different ways—what patterns of

behaviors and attitudes portray consumers’ unique views of the health care market? The

result was a behavioral and attitudinal segmentation scheme we’ve monitored since. Our

2012 segmentation results will be released shortly.

In the U.S. market, we identified six segments: “content and compliant,” “sick and savvy,”

“casual and cautious,” “online and onboard,” “shop and save,” and “out and about.” The

“content and compliant” and “sick and savvy” tend to behave like “patients,” not particularly

inclined to challenge a professional’s recommendation and query clinicians. The “casual and

cautious” are simply not engaged because they don’t see the need. The other three

segments show characteristics of activism, certainly disruptive to a system more

comfortable with patients than consumers. “Out and about” actively seek and use

alternative, non-Western medicine, often without the knowledge of their clinicians; “online

and onboard” use online tools and mobile applications to assess providers and compare

treatment options and provider competence; and “shop and save” is simply the value

purchaser and is not content with paying more than necessary under any non-emergency

scenario.

2012 health care consumer segments:

Source : Deloitte Center for Health Solutions, “2012 Health Care Consumer Segments,”

October 2012

Amazingly, the composition of the U.S. consumer market has changed little across the half

decade that endured the second longest economic downturn in our history and an

unprecedented spotlight on the health care system via the Affordable Care Act (ACA). I am

struck by the 11% increase in the “casual and cautious”—perhaps health care is “fait

accompli” and beyond their control to change their plight or its trajectory. And the “shop and

save”: 4% who, then and now, comprise the cost-conscious, price-driven element of the

market. Go figure. Virtually every other industry in our economy has seen an uptick in price

sensitivity and value purchasing—cars, housing, furniture and clothing. Store brands have

gained market share vs. national brands, discount retailing has increased dramatically, and

the same is true in other industries as well. In most sectors, “premium brands” have been

resilient for the upscale cohort but increased price sensitivity has driven more purchasers to

seek better deals.

It’s easy to see why “shop and save” is such a small and seemingly stagnant segment. The

fact is it’s hard to be a “value shopper” in health care when all this “stuff” is so confusing and

outsiders have limited access to what things cost or how much they’ll spend. The market is

deluged with “Top 100” lists intended to help consumers cut through the noise, but with 700

“Top 100” hospitals, which list matters most? And every airline magazine now features “top

doctors” along with steakhouses to shortcut our shopping. But costs and pricing are rarely

provided.

Having gone through this knee ordeal, I have concluded the health system operates as if

we’re not consumers. We are “patients” to our hospitals, doctors think us incapable of

managing health on our own or are too lazy to engage, and drug manufacturers depend on

prescribers to sell their products. And we are “members” to health plans and employers who

choose insurance options for us and then monitor our use. It’s easier for providers to

manage patients than engage consumers; it’s a completely different business for health

insurers to plan to sell to individual consumers vs. employers and government contractors.

In my view, the most significant trend in the U.S. system not fully understood nor embraced

by its stakeholders is the impact of engaged consumers. Engaged consumers will test our

value propositions, require information technologies that eliminate redundant testing and

paperwork, and demand information about the evidence supporting a treatment

recommendation and its associated costs before the “transaction” is finished. This will

accelerate as employers embrace defined contributions in lieu of defined benefits and state

health insurance exchanges (HIXs) create a new market for individuals to purchase

coverage.

Millennials (18-29 years olds) are there now; the younger Generation X (40-45 years olds) is

just behind. It’s not a matter of if, but how soon. And for them, it can’t come soon enough.

I am thankful to have survived my knee episode without further complication, but it could

have been much easier and perhaps less costly—it’s hard to know. The secrets of the

system’s costs are still perhaps its most guarded.

PS – This Wednesday, the first of three Presidential debates will be aired at 9pm EDT from

Denver with PBS’ Jim Lehrer moderating. Health care is slated as one of the six topics for

the domestic issue focused agenda.

return to top

Implementation update

HHS provides funding for mental health workforce expansion targeting at-risk

populations Last week, the U.S. Department of Health and Human Services (HHS) announced $9.8

million in funding for 24 graduate schools that offer social work and psychology degrees.

The three-year grants are intended to increase the mental health workforce to provide

services for at-risk individuals, including veterans and individuals with mental illnesses living

in rural areas.

Background: Section 5306 of ACA allocates funding for mental and behavioral health

education and training grants for higher education institutions.

return to top

CMS: new initiative to study avoidable hospitalizations for nursing home

residents Last week, the Centers for Medicare and Medicaid Services (CMS) introduced the Initiative

to Reduce Avoidable Hospitalizations among Nursing Facility Residents program partnering

with seven organizations and 145 nursing facilities to study avoidable hospitalizations for

seniors living in nursing homes.

Background: Section 3201 of the ACA established the Center for Medicare and Medicaid

Innovation to implement innovative payment systems to improve quality of care and reduce

costs for plan participants and beneficiaries. Section 2602 of the ACA established the

Medicare-Medicaid Coordination Office to improve coverage and payment coordination for

dual eligibles.

return to top

Health insurance exchange update: guidance for multi-state plans The U.S. Office of Personnel Management (OPM) released the draft 2014 Multi-State Plan

Program (MSPP) application for interested health insurance issuers this month. Per ACA

Section 10104, the OPM must contract with at least two multi-state plans (MSPs) that offer

coverage through HIXs in all geographic regions. The OPM proposes the following:

MSP issuers may phase in over four years. In the first year of the MSPP contract,

MSPs must be offered in 60% of states and 85% in the third year

MSPs would be able to participate in part rather than all of the states initially

OPM may enter into contract negotiations with any applicant who submits a

complete, responsive application that demonstrates to OPM’s satisfaction that the

applicant is able and willing to meet the requirements to become an MSPP issuer

MSPP issuers must accept enrollments beginning October 1, 2013 for coverage

beginning as early as January 1, 2014

(Source: OPM, “2014 Multi-State Plan Program Application DRAFT,” September 2012)

Comments will be accepted through October 22, 2012.

return to top

Report: safety net providers critical for ACA’s insurance coverage provisions Last week, the National Academy of State Health Policy released a report about the role

safety net providers could play relative to the insurance coverage expansion provisions in

the ACA. The report highlighted areas where safety net provider involvement is critical:

Conducting outreach to uninsured or under-insured clients to help determine

eligibility for a state’s HIX or Medicaid program

Assisting individuals with enrollment, as many safety net providers already have

services in place

Safety net providers participating in Qualified Health Plans (QHPs) in a HIX can help

promote continuous insurance coverage for low-income individuals at-risk of churning

between Medicaid and the HIX

Background: Section 1311 of the ACA requires that QHPs include “essential community

providers, where available, that serve predominantly low-income, medically underserved

individuals.” Also, per Section 2201 of the ACA, states must coordinate enrollment efforts

between the state’s HIX and Medicaid program. According to guidance from HHS, the U.S.

Supreme Court’s June 2012 ruling allowing states to reject Medicaid expansion does not

exempt states from Section 2201 of the ACA.

return to top

Hospitals submit comments on IRS charitable hospital rule Last week, the American Hospital Association (AHA) and the Catholic Health Association

(CHA) submitted comments to the U.S. Internal Revenue Service (IRS) about its Additional

Requirements for Charitable Hospitals proposed rule released in June 2012. Among others,

their recommendations include:

The effective date for final regulations be postponed to after January 1, 2014

The IRS allow hospitals to individually decide the most effective and efficient way to

meet financial assistance policy (FAP) requirements with full disclosure rather than

the adoption of the proposed uniform procedures

The U.S. Department of the Treasury establish an “intermediate sanctions” period to

allow hospitals with infractions to resolve them without losing tax exemption status

The IRS provide clarification that other procedures for publicizing FAP will be allowed

to ensure hospitals use the most effective way to inform their community

The removal of additional requirements for emergency medical care that go beyond

the scope of Emergency Medical Treatment and Labor Act (EMTALA) requirements

Issuing clarification to allow hospitals to continue to include insured patients who

struggle to pay deductibles and co-pays in their FAP, and limit the notice and

application period for financial assistance to no more than 180 days total

Background: per ACA Section 9007, IRS code was amended to include new requirements

hospitals must satisfy to maintain charitable organization status including: the information

that must be included in its FAP and emergency medical care policy, methods to widely

publicize its FAP, maximum amounts FAP-eligible individuals may be charged for

emergency care. The rule also describes hospital collections practices that are permitted

and prohibited in charitable hospitals, and all requirements would apply to taxable years

beginning after March 23, 2012.

return to top

Legislative update

House bill proposes CBO expand projections for prevention and wellness

programs Before Congress went on its pre-election recess, Representative Michael Burgess (R-TX),

with 16 co-sponsors, introduced the Preventive Health Savings Act (H.R. 6482), which

would require the U.S. Congressional Budget Office (CBO) to look beyond the typical 10-

year forecasting period when determining cost savings related to disease prevention and

wellness programs. The bill was referred to the House Committee on the Budget on

September 21, 2012.

return to top

FDA receives approval from Congress to collect funding from the generic

drug industry Before leaving for pre-election recess, Congress authorized the U.S. Food and Drug

Administration’s (FDA) collection of fees from the generic drug industry per the Generic

Drug User Fee Amendments (GDUFA) of 2012, which is part of the FDA Safety and

Innovation Act. GDUFA was passed in July of this year to increase availability of generic

drugs on the market and would allow the FDA to receive funding from the generic drug

industry to help expedite reviews of generic drug applications. The FDA has been unable to

review generic drug applications in a timely manner due to the high volume of applications

and its limited resources. According to the FDA, there are 2,500 applications for new

generic drugs waiting for FDA approval. The FDA is scheduled to begin the program today.

return to top

State update

Health insurance exchange update Thursday, HHS announced that Arkansas, Colorado, Kentucky, Massachusetts,

Minnesota, and the District of Columbia (D.C.) were awarded grants to establish their

HIXs. To date, a total of 49 states, D.C., and four territories have received HIX planning

grants, and 34 states and D.C. have received HIX establishment grants. South Dakota

Governor Dennis Daugaard (R) announced Wednesday the state will not set up its own HIX,

and will allow the federal government to establish a Federally-Facilitated Exchange (FFE).

Senator Orrin Hatch (R-UT) sent a letter to HHS expressing concern over the “lack of

transparency” from the agency with regard to the implementation of the FFE. The Senator

remarked that with the November 16, 2012 exchange blueprint deadline quickly

approaching, states have yet to receive adequate information on how the FFE will operate

with state insurance law or cost estimates associated with selecting the FFE. Senator Hatch

requests a response to his inquiries from HHS by October 19, 2012.

Related: Friday, Representative Fred Upton (R-MI) and Senator Chuck Grassley (R-IA) sent

a letter to Secretary of HHS, Kathleen Sebelius, asking how HHS is tracking state spending

of federal funds disbursed to states for HIX implementation. The letter also asks HHS

whether effectiveness of grant use is being measured and whether HHS is providing

guidance to states on how to avoid fraud, waste, and abuse.

Background: per Section 1311 of the ACA, a state can choose to establish a state-operated

HIX, participate in a State Partnership Exchange (SPE), or allow the federal government to

run an FFE in the state. States seeking to operate a state-based exchange or participate in

a SPE must submit a blueprint of its plan and operational capabilities by November 16,

2012. States choosing to implement a HIX through the federal partnership with HHS will be

responsible for day-to-day management of plans and/or any consumer assistance functions,

but HHS will be the authority over the FFE selecting state partners through which plan

management and consumer assistance functions will be provided (i.e., infrastructure and

operational partnerships).

return to top

State round-up Last week, Insurance Commissioner Michael Consedine of Pennsylvania sent a

letter to HHS Secretary Kathleen Sebelius seeking clarity on whether today’s

deadline for the essential health benefit (EHB) benchmark plan is a hard or soft

deadline. “HHS recently has directed states that they must identify their EHB

benchmark by September 30th. Some communications from your agency indicate

that this is a suggested response date while other indicates that it is a deadline of

some sort. We again are asking for clarity on the process and timing for decision

making at both the state and federal levels.” (Source: Insurance Commissioner

Michael Consedine, letter to HHS Secretary Kathleen Sebelius, September 23, 2012)

Background: per section 1302 of the ACA, states must define an EHB benchmark

plan that includes all ten statutorily required benefit categories. Each state must

model its plan after one of the following health insurance plans: one of the three

largest small group plans in the state by enrollment, one of the three largest state

employee health plans by enrollment, one of the three largest federal employee

health plan options by enrollment, or the largest HMO plan offered in the state’s

commercial market by enrollment. According to HHS, states that do not define an

EHB benchmark plan must use the small group plan with the largest enrollment in the

state.

Governor Jerry Brown (D) recently signed the California Birth Control Bill,

authorizing registered nurses in primary care clinics to dispense specified birth

control drugs or devices with an order issued by a physician, surgeon, certified

nurse-midwife, nurse practitioner, or physician assistant. The bill prohibits clinics from

employing nurses solely to perform drug dispensing duties. It also establishes

standardized procedure including training requirements regarding educating patients

on medical standards for ongoing women’s preventive health, and the extent of

physician and surgeon supervision required.

Nebraska issued a request for proposal for bidders to provide a Web portal to

support the state’s HIX, administered by the Department of Insurance. The state has

yet to adopt legislation or an executive order creating an HIX, but has received

almost $6.5 million from HHS in HIX planning and establishment grants.

A recent study of Arizona’s Medicaid program expansion found that the state would

receive close to $8 billion in federal funding, insure an additional 435,000 residents,

and create 21,000 jobs by 2017 with a $1.5 billion investment over the first four years

if it elects to expand its Medicaid eligibility to 133% federal poverty level (FPL).

Researchers also found that complying with ACA expansion to 133% FPL would

save the state $1.2 billion when compared to complying with the “Healthy Arizona”

proposition, which would expand eligibility to 100% FPL and offer more coverage to

children.

return to top

Industry news

mHealth task force releases recommendations for expanded use of mobile

health Last week, the mHealth Task Force met with Federal Communications Commission (FCC)

Chairman Julius Genachowski to discuss its recommendations for successful adoption of

wireless health technologies. The goal of the task force is to guide the FCC and other

agencies in making wireless electronic health solutions routinely available as part of best

practices for medical care by 2017. Highlights:

Task Force Goals Recommendations of the Task Force

1. FCC should continue to play a

leadership role in advancing

mobile health adoption

FCC should appoint a Health Care Director, improve educational

outreach activities to health care organizations, launch a health

care website, and continue to seek public input and further its

engagement with the mHealth Task Force

2. Federal agencies should

increase collaboration to promote

innovation, protect patient safety,

and avoid regulatory duplication

The Secretary of HHS should convene a formal working group as permitted under the FDA Safety and Innovation Act of 2012

FCC should explore how to share specific health data between

federal agencies, standardize health technology nomenclature, and provide expertise and resources

3.The FCC should build on

existing programs and link

programs when possible in order to expand broadband access for

health care

FCC should update the Rural Health Care Program, and modernize the Lifeline Program for Broadband

4. The FCC should continue

efforts to increase capacity,

reliability, interoperability, and radio frequency (RF) safety of

mHealth technologies

FCC should make available more licensed spectrum for mobile broadband, work with international counterparts to allocate

spectrum for services, solicit input from the medical community to

assess 2 to 5 year needs to support technology, and evaluate and

make recommendations to address the issues of affordable

connectivity and compatibility in home environments

5. Industry should support continued investment, innovation,

and job creation in the growing

mobile health sector

Industry should adopt standard based technologies to transmit authenticated messages and encrypted health information provide

access and documentation for secure and trusted application

interfaces (API’s) for health data service, and seek collaborative

opportunities for informal and formal private public partnerships

with federal partners

Source: mHealth Task Force, “Findings and Recommendations: improving care delivery

through enhanced communications among providers, patients, and payers,” September

2012

return to top

HHS, DOJ warn about fraud in hospitals Last week, HHS Secretary Kathleen Sebelius and U.S. Attorney General Eric Holder issued

a letter to five major hospital associations, calling attention to the use of electronic systems

to duplicate records for the sole purpose of increasing payments. The letter warned that

early reports have indicated that providers may be committing fraud by “upcoding” the

severity of patients’ conditions for their own profit. CMS is currently reviewing billing through

audits, and will use new tools authorized by the ACA to cease Medicare payments for those

suspected of fraud.

Response: the AHA quickly issued a response noting that on 11 occasions they have

requested CMS develop national guidelines for the reporting of hospital emergency

department (ED) and clinic visits since 2001. Despite these requests, CMS continues to

propose that, until national guidelines are established, hospitals should continue to report

visits according to their own internal hospital guidelines to determine the different levels of

clinic and ED visits. The letter also expressed hospitals’ concerns that without standardized

guidelines new auditing programs are causing redundant audits, unmanageable medical

record requests, and inappropriate payment denials that require time to appeal. AHA offered

to assist CMS in the development of such guidelines and recommends that investments are

made in provider education and payment system fixes to prevent payment mistakes.

Background: according to a recent New York Times analysis, hospitals have changed the

Medicare billing codes they are using and have received $1 billion more in reimbursements

in 2010 than in 2006 as a result. Hospital emergency rooms increased use of the two

highest-paying reimbursement categories in 2010: 54% vs. 40% in 2006. (Source: Reed

Abelson, New York Times “Medicare Bills Rise as Records Turn Electronic,” September 21,

2012)

My take: historically, when information systems are implemented in medical practices and

hospitals, coding accuracy is increased. Hospitals are understandably frustrated by the

warning and anticipate intensified anti-fraud efforts by government overseers.

return to top

Military leaders say junk food is a threat to national preparedness Childhood obesity and junk food in schools poses a threat to national security, according to

a report by retired military leaders released last Tuesday. The report highlights that one in

four young adults are currently too overweight to join the military, and being overweight or

obese is the number one medical reason adults are unable enlist. The study suggests that

schools are a major contributor to the problem by offering poor food choices and lack of

education about proper nutrition. Other notable findings include:

U.S. Department of Defense spends an estimated $1 billion per year for medical care

associated with weight-related health problems

TRICARE—the military health insurance system serving active duty personnel, their

dependents, and veterans—spends over $1 billion a year treating weight-related

diseases including diabetes and heart disease

Overweight recruits were 47% more likely to experience a musculoskeletal injury (i.e.

sprain or stress fracture)

More overweight recruits had to recycle back through boot camp

(Source: Mission Readiness: Military Leaders for Kids, “Still Too Fat to Fight”, September

2012)

My take: many schools are trying to improve cafeteria offerings and increase educational

activities about nutrition; but demand from students for “junk” food and sugar-loaded

beverages is problematic, as is parental involvement, food choices at home, and adequate

exercise. Tackling obesity seems a matter of national urgency requiring an all-out war on its

causes. It’s not just schools.

return to top

Quotable “We have to remember that 30% of our health care dollars are wasted according to recent

studies. And that’s about $750 billion dollars. Fraud, waste, and abuse represents a small

part of that, but in order to really make some headway on everything from inefficient care to

improper diagnoses and lack of coordinated care, we have to have electronic medical records as a foundation to move that forward.”—Harry Greenspun, M.D., Senior Advisor,

Deloitte Center for Health Solutions, Fox Business, “Electronic Medical Records Causing

Rise in Medicare Spending?” September 24, 2012

“Big employers are planning a radical change in the way they provide health benefits to their

workers, giving employees a fixed sum of money and allowing them to choose their medical

coverage and insurer from an online marketplace….The approach will be closely watched

by firms around the US. If it eventually takes hold widely, it might parallel the transition from

company provided pensions to 401(k) retirement savings plans controlled by workers and funded partly by employer contributions.” —Anna Wilde Matthews, Wall Street Journal, “Big

Firms Overhaul Health Coverage,” September 27, 2012

“Nearly 40% of consumers surveyed last year said they use hospital ratings to choose a

health care facility, but there’s little agreement among the lists, raising questions about their

value…At least 15 different groups rank health care organizations, but no two judge them

the same way, which leads to widely divergent results.” —Joyce O Donnell, USA Today, “A

Health Disagreement: Which Hospitals are best? Even the experts can’t agree,” September

28, 2012

return to top

Fact file Life expectancy: 78 years in U.S.; 75.5 years for men and 80.5 years for women.

The U.S. ranks 41st in the world in life expectancy for women vs. 14th in 1985. (Source: U.S. Census Bureau and New York Times, “Life Spans Shrink for Least-

Educated Whites in the U.S.,” September 20, 2012)

Health care investments: in 2011, investments in health care increased to $368

million, up from $261 million in 2010. (Source: National Venture Capital Association)

Medicare costs: 3.25% of gross domestic product (GDP) and forecasted to be

4.25% in 2030 if left as is; both Representative Paul Ryan (R-WI) and President Obama would lock in Medicare at GDP plus .5%. (Source: CBO)

Organ donation: one of five donated kidneys is thrown away; over 115,000 on donor

wait list; country divided in 50 donor districts; in 2011, 2,644 of 14,784 discarded—

500 because a recipient could not be found. (Source: United Network for Organ

Sharing)

Employer sponsored health insurance: 9% of companies representing 2.58 million

workers (3% of the workforce) anticipate dropping coverage in the next one to three

years. (Source: Deloitte Center for Health Solution, 2012 Employer Survey, 2012)

Illicit drug use: among youth age 12 to 17, 2.8% reported current non-medical use

of prescription-type drugs in 2011—down from 4% in 2002. The rate of non-medical

pain reliever use also declined during this period from 3.2% to 2.3% in 2011. Fifty-

four percent obtained the pain relievers from a friend or relative or free, and 12%

purchased them from a friend of relative. Among young adults aged 18 to 25, the rate

of current nonmedical use of prescription drugs in 2011 was 5%. (Source: HHS, 2011

National Survey on Drug Use and Health, September 2012)

Consumer spending: consumers increased their annual spending 3.3% last year,

the fastest growth rate since 2006. The average level of spending in 2011, $49,705

—highest since 2008. Consumer prices rose 3.2% last year, offering one potential

explanation for increased spending. (Source: Wall Street Journal, “Consumers Back

to Feeling Flush,” September 2012)

Total knee arthroplasty (TKA) volume increase: the number of annual primary

TKAs increased 161.5% between 1991 and 2010 (93,230 to 243,802) while per

capita utilization increased 99.2% (from 31.2 procedures per 10,000 Medicare

enrollees in 1991 to 62.1 procedures per 10,000 in 2010). (Source: JAMA, “Total

Knee Arthroplasty Volume, Utilization, and Outcomes Among Medicare Beneficiaries,

1991-2010,” September 2012)

Variation in episode costs: episode costs for major medical procedures vary about

2.5-fold, and up to 15 for common chronic conditions. Costs were on average 14%

lower among physicians who met certain quality and efficiency benchmarks. “This

suggests a potential opportunity exists to improve the current efficiency of care

across the health care system.” (Source: Health Affairs, “Wide Variation In Episode

Costs Within A Commercially Insured Population Highlights Potential To Improve The

Efficiency Of Care,” September 2012)

Americans’ opinions of the ACA: 88% of Americans believe the ACA will be

implemented in full/part either with minor changes (41%), major changes (31%), or as

passed (11%). Twelve percent of respondents anticipate the ACA to be repealed

completely. (Source: Associated Press, “AP-GfK Poll: Health Care Reform,”

September 2012)

Election issues: top issues in Presidential campaign: the economy (49%), federal

budget deficit (41%), Medicare (36%). Among seniors, Medicare was more important,

with 46% indicating Medicare is extremely important to their vote compared with 51%

saying the economy is extremely important. Democrats (48%) are much more likely

than Republicans (28%) to say Medicare is an extremely important factor in their

presidential pick. Seniors (64%) and Democrats (62%) heavily favor keeping

Medicare as it is today while many Republicans (48%) and voters ages 18-54 (44%) support switching to a fixed-value voucher program. (Source: Kaiser Family

Foundation, “Kaiser Health Tracking Poll,” September 2012)

Poverty rates: in 2011, the U.S. poverty rate was 15%, which represents 46.2 million

people. (Source: U.S. Census Bureau)

Medicare fix: 50% think Obama will fix Medicare vs. 44% Romney. (Source:

Gallup/USA Today Poll of 1096 registered voters September 11-17, 2012)

Excessive alcohol consumption: 14 drinks per week for men, or no more than four

per day; seven per week for women, or no more than three per day. (Source:

National Institute on Alcohol Abuse and Alcoholism)

return to top

Subscribe to the Health Care Reform Memo

Health Care Reform Memo — The weekly Health Care Reform Memo is available for

subscription. Please visit www.deloitte.com/us/healthmemos/subscribe. First, confirm

your sector(s) of interest. Then, select the Health Care Reform Memo as one of your Email

Newsletters (under Health Sciences). return to top

Deloitte Center for Health Solutions research

Coming soon:

2012 Survey of U.S. Health Care Consumers – INFOBrief series and Five-year report

Impact of Health Care Reform on Insurance Coverage: Project Scenarios Over 10 Years—

Update

Currently available: State Medicaid Program Management: Update and considerations—September 2012.

Available online at www.deloitte.com/us/2012statemedicaid

Meeting the Challenge: Maximizing the value of employer-sponsored health care—

August 2012. Available online at www.deloitte.com/us/meetingthechallenge

2012 Deloitte Survey of U.S. Employers: Opinions about the U.S. health care system

and plans for employee health benefits—July 2012. Available online at

www.deloitte.com/us/2012employersurvey

A look around the corner: Health care CEOs’ perspectives on the future—July 2012.

Available online at www.deloitte.com/us/healthcareceoperspectives

Deloitte 2012 Survey of U.S. Health Care Consumers: The performance of the health

care system and health care reform—June 2012. Available online at

www.deloitte.com/us/2012consumerism

Health Care Reform: Center Stage 2012 Perspectives from consumers, physicians

and employers—June 2012. Available online at

www.deloitte.com/us/healthcarecenterstage2012

return to top

Upcoming life sciences and health care Dbrief webcasts Anticipating tomorrow's complex issues and new strategies is a challenge. Stay fresh with

Dbriefs – live webcasts that give you valuable insights on important developments affecting

your business.

October 9: State Health Insurance Exchanges: Where Are We and What Lies Ahead?

November 13: Market Forces at Work: Life Sciences Implications of Changes in Health Care

Delivery, Access, and Coverage

return to top

Deloitte contacts

Jessica Blume, U.S. Public Sector National Industry Leader, Deloitte LLP

(jblume@deloitte.com)

Bill Copeland, U.S. Life Sciences and Health Care National Industry Leader, Deloitte LLP

(bcopeland@deloitte.com)

Jason Girzadas, National Managing Director, Life Sciences & Health Care, Deloitte

Consulting LLP (jgirzadas@deloitte.com)

Harry Greenspun, M.D., Senior Advisor, Health Care Transformation and Technology,

Deloitte Center for Health Solutions (hgreenspun@deloitte.com)

Paul H. Keckley, Ph.D., Executive Director, Deloitte Center for Health Solutions

(pkeckley@deloitte.com)

Mitch Morris, M.D., National Leader, Health Information Technology, Deloitte Consulting

LLP (mitchmorris@deloitte.com)

George Serafin, Managing Director, Health Sciences Governance Regulatory & Risk

Strategies, Deloitte & Touche LLP (gserafin@deloitte.com)

Rick Wald, Director, Human Capital, Deloitte Consulting LLP (rwald@deloitte.com)

To receive email alerts when new research is published by the Deloitte Center for Health Solutions, please register at www.deloitte.com/centerforhealthsolutions/subscribe.

To access Center research online, please visit

www.deloitte.com/centerforhealthsolutions.

To arrange a briefing for your team, contact Jennifer Bohn (jebohn@deloitte.com).

return to top

Deloitte.com | Security | Legal | Privacy

30 Rockefeller Plaza

New York, NY 10112-0015

United States

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee,

and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and

its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of

Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and

regulations of public accounting.

Disclaimer

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is

not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action

that may affect your business. Before making any decision or taking any action that may affect your business, you

should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

Copyright © 2012 Deloitte Development LLC. All rights reserved.

36 USC 220506

Member of Deloitte Touche Tohmatsu Limited

To unsubscribe, reply to this message and add “Unsubscribe” in the subject line.