The Future of Medicine and Physicians Role in Innovation Ian Morrison PhD .

The Future of Medicine and Physicians Role in Innovation

Ian Morrison PhD

www.ianmorrison.com

Outline

• Key Issues Driving Change• Healthcare 2020– Private Purchaser

• Consumer• Employer• Exchanges

– Public Purchaser• Medicare• Medicaid

– Payment Reform– Delivery System Transformation– Physician Engagement with Change and Innovation

3

Key Issues: ACA and Coverage Expansion

• ACA is the “the Law of the Land”…at least until the 2016 Election

• Two Americas• Public Exchanges got off to very rocky start, year two saw less

drama• Private Exchanges gaining momentum, but question has

shifted from why not to why?• Exchanges both public and private shift the market toward

retail• Insurers are consolidating partly as a result of ACA and

coverage expansion by public sector

Health Plan Consolidation Continues

• Aetna buys Humana for $37 billion making a $115 billion run rate company

• Anthem closes on Cigna in $54 billion makes a $117 billion run rate company

• New Rivals for $154 billion UnitedHealth Group

• Other:– Centene buys Health Net

for $6.3 billion

5

Key Issues: Health Systems

• Accountable Care is a megatrend, but maybe not ACOs• Medicare Advantage may be the end game for some • Pressure on costs and and delivering value intensifies • Hospital “prices” under intense scrutiny by press and

purchasers• “Learning to live on Medicare” means taking out 10-20% of

costs (more for academic institutions) and Medicare reimbursement rates will keep getting pressurized

• From Volume to Value means high cost procedure oriented specialties (cardiovascular, ortho, neuro, oncology) move from key assets to liabilities in a capitated environment, how long, how much is extremely uncertain

• Focus on Primary Care

6

Key Issues: Health Systems

• The Massive Consolidation continues toward 100-200 Large Regional Systems– Doctors running to hospitals– Hospitals consolidating regionally– Role of private equity and for profits in consolidation– Focus on “Essentiality” may run into Attorney Generals and Anti-Trust concerns– The rich get richer: significant returns to scale and to integration– Doctors discretion in selection of specific technologies and clinical protocols will be

increasingly constrained by large motivated health systems that employ them• Purchasers are extremely unhappy and are using consumer incentive tools, Skinny

Networks and Spot Market trends as counter forces e.g. CalPers reference pricing• Care coordination of transitions will be at a premium• From fill the hospital to empty the hospital, it is going to be economically and culturally

challenging• Will doctors, nurses and consumers go along with all this?• No matter what we must redesign the delivery system: and it needs to be science-

based, technology-enabled and consumer friendly

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7Base: All Hospital-Based Execs (2015: n=200)Q715: Please indicate how much you agree or disagree with each of the following statements.

Health systems in the east are a bit more skeptical, pragmatic about the reasons behind consolidation.

REGIONAL VARIATION IN ATTITUDES TOWARDS CONSOLIDATION

SHP HOSPITALS 2015

*New attribute in 2015

Hospitals need to be increasingly wary of antitrust considerations when integrating with other hospitals.*

54%Agree

In the short term, our efforts towards consolidation are more about bargaining leverage than about quality or value (even if we get there eventually).*

48%Agree

East(n=42)

Midwest(n=52)

South(n=57)

West(n=49)

67%South 54% 46% 53%

East(n=42)

Midwest(n=52)

South(n=57)

West(n=49)

60%West 58%West 42% 35%

Why is it different this time?• The ACA is a stimulator and accelerator of change• We have hit the wall of affordability for business, government and

households • The data and tools are better for quality measurement and care

management• The commitment of leaders to change is greater• Doctors have been “softened up” for employment and integration by

bombardment of ACA, meaningful use, and lifestyle pressures• Consumers have been “empowered”• Slow but inexorable movement to value based purchasing may have hit

tipping point in 2015• Personalized precision medicine calls the bluff on solo practice• Population health requires scale and integration• Healthcare journalists no longer defenders of FFS and opposed to

managed care but now data-driven champions of transparency• There are high profile champions of change not just Kaisinger…but AHA

elites, large regional systems, and new enablers

“Our goal is to have 85% of all Medicare fee-for-service payments tied to quality or value by 2016, and 90% by 2018.

Perhaps even more important, our target is to have 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016, and 50% of payments by the end of 2018.

Alternative payment models include accountable care organizations (ACOs) and bundled-payment arrangements under which health care providers are accountable for the quality and cost of the care they deliver to patients.”

Sylvia Burwell, CMS Administrator, January 26th, NEJM

CMS States Clear Value Goals for Medicare

•Chaired by Richard Gilfillan MD CEO of Trinity

•Major health systems, payers and other stakeholders committing to 75% of their business in value-based models by 2020

•Participants include Advocate, Ascension, Trinity, Providence, Partners and more

•California Players include Dignity, Heritage, Providence, Blue Shield, Optum and Aetna

•More at hctf.org

Healthcare Transformation Taskforce

The Tension

Bundles• More

is still better economically for providers

• Encourage improvement of teams on dimensions they actually control and that patients care about

• But what do you do about the complex co-morbid and the fact that not everything is easily bundled

• “Screw me on the bundle, and I’ll screw you on the rest”

Population Health/Risk/Accountable Care• Freque

ncy• Appro

priateness

• Determinants of Healthcare

• The Mutual Disrespect Problem

• Social Work not Medical Care

What Population Level Analytics Reveal

• The 5/50 Problem– 5% account for 50% of spending– 1% account for 20%– Bottom 50% account for about 2%

• Segmentation of populations• What you will find…

– HONDAS– Behavioral Health– End of Life Care– Cancer– Frail elderly– Social Work not Medical Care– Specialty Pharmaceuticals

STRATEGIC HEALTH PERSPECTIVES℠

Insured Adults with Lower Incomes Were More Likely to Report They Had Delayed or Avoided Getting Care Because of Their

Copayments or Coinsurance

Note: FPL refers to federal poverty level.Source: The Commonwealth Fund Health Care Affordability Tracking Survey, September–October 2014.

0

25

50

75

30 28 2824

46

10 10 12 10

21

<200% FPL 200% FPL or more

Insured adults ages 19–64 who pay a copayment or coinsurance

Percent responding “yes”

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Prepared for: Strategic Health PerspectivesBase: All 2014 US Adults (n=2501)Source: Q1850 How would you describe your feelings about the health care you receive today, including how much you pay for it and the benefits you receive? Please select all that apply.

CONSUMERS DON’T FEEL “EMPOWERED” BY ESCALATION IN COST SHIFTING

Consumer Emotions Towards Healthcare They Receive

9%

17% 19%

37%

28%

15%

23%

11%14%

Empowered Hopeful Relieved Accepting Neutral Resigned/ Given up Powerless Depressed Angry

This year, again, 3 in 10 (29%) say they had to forego medical care due to cost this (vs. 30% in 2013) & and 2 in 10 (23%) asked a doctor for a cheaper medication (vs. 24% in 2013)

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Prepared for: Strategic Health PerspectivesBase: All 2014 US Adults (n=2501)Source: Q1850 How would you describe your feelings about the health care you receive today, including how much you pay for it and the benefits you receive? Please select all that apply.

CONSUMERS AT RISK FEEL EXTREMELY POWERLESS, NEGATIVE


9%

17% 19%

37%

28%

15%

23%

11%14%

4%

12%

5%

14% 14%

46%

57%

42%

48%

Total Borderline


Borderline are those who have major burden of health care cost and are

extremely concerned about ability to pay for a serious health problem.

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This year, significantly more say they are powerless, angry, resigned, and depressed; fewer are relieved, though slightly more are hopeful.

Prepared for: Strategic Health PerspectivesBase: All US Adults (2014 n=2501, 2015 n=5037)Source: Q47 How would you describe your feelings about the health care you receive today, including how much you pay for it and the benefits you receive? Please select all that apply.

Consumers feel less empowered and accepting of their healthcare


9%

17% 19%

37%

28%

15%

23%

11%14%

6%

20%

13%

32%

24%

17%

31%

14%18%

2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015


4% 14% 5% 37% 43% 52%15% 8% 62%

BORDERLINE(n=433)

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Below Average

Average*

AboveAverage

Low monthly premiums

Keeping my current doctor(s)

Unrestricted access to all medical technologies

Low copay costs for generic drugs

Coverage for dependents

Direct access to all specialist(s)

Direct access to leading specialist(s) in my area

Reasonable copays for brand name drugs

Unrestricted access to cutting edge medical devices

Choice of hospitals

Unrestricted access to cutting edge drugs

Access to all brand name drugs at low cost-sharing

Coverage for a wide selection of brand name drugs

Access to prestigious institutions

198

153

119

111

110

106

100

90

88

82

73

72

57

42

Base: All US Adults Less Than 65 (2010 n=2501, 2012 n=2052, 2013 n=1546), 2014 n=1233 in half sample)Respondents were given a maximum difference trade off exercise in which they were forced to choose the most preferredand least preferred plan feature.

2014 rank

3 yr trend

2013 rank

2012 rank

1 -- 1 1

2 2 5

3 -- 3 4

4 -- 5 3

5 ▲ 7 2

6 -- 6 10

7 ▼ 4 11

8 -- 9 6

9 -- 8 8

10 ▲ 12 13

11 ▼ 10 7

12 ▼ 11 9

13 -- 13 12

14 -- 14 14

CONSUMERS CONSISTENTLY VALUE LOWER PREMIUMS, WANT TO KEEP CURRENT DOCTOR

Relative Importance of Benefit, Under Age 65

TRENDED

Virtually no difference over prior year in benefit tradeoffs

SHP CONSUMER 2014

THE POLICY CONTEXT

Obama Care: The Original Simple Version

• Coverage Expansion to 30 million people by 2015 on– 15 million through Medicaid Expansion– 15 million through subsidized health insurance exchanges

• Regulation of health insurance practices– Guaranteed issuance– Individual Mandate

• Paid for by supplementary Medicare Tax on $250K+ earners and “voluntary” taxes on healthcare stakeholders

• Promising pilots and processes for reimbursement reform– Patient Centered Medical Homes– Accountable Care Organizations– Innovation Center at CMS

• The Cadillac Tax

NOTES: *AR and IA have approved waivers for Medicaid expansion; MI has an approved waiver for expansion and plans to implement in Apr. 2014. NH passed legislation approving the Medicaid expansion in March 2014; the expansion will start July 1, 2014. WI amended its Medicaid state plan and existing waiver to cover adults up to 100% FPL, but did not adopt the expansion. IN and PA have pending waivers for alternative Medicaid expansions. These states along with MO, VA, UT have been classified as Open Debate on the Medicaid expansion decision. SOURCE: State Decisions on Health Insurance Marketplaces and the Medicaid Expansion, 2014, KFF State Health Facts, http://kff.org/health-reform/state-indicator/state-decisions-for-creating-health-insurance-exchanges-and-expanding-medicaid/.

Current Status of State Individual Marketplace and Medicaid Expansion Decisions, 2014

WY

WI*

WV

WA

VA*

VT

UT*

TX

TN

SD

SC

RI PA*

OR

OK

OH

ND

NC

NY

NM

NJ

NH*

NV NE

MT

MO*

MS

MN

MI*MA

MD

ME

LA

KY KS

IA*

IN* IL

ID

HI

GA

FL

DC

DE

CT

CO CA

AR*AZAK AL

State-based Marketplace and Not Moving Forward with the Medicaid expansion (1 State)

Federally-Facilitated or Partnership Marketplace and Not Moving Forward with the Medicaid Expansion (23 States)

Federally-Facilitated or Partnership Marketplace and Moving Forward with the Medicaid Expansion (11 States)

State-based Marketplace and Moving Forward with the Medicaid expansion (16 States including DC)

http://kff.org/health-reform/state-indicator/state-decisions-for-creating-health-insurance-exchanges-and-expanding-medicaid/

http://kff.org/health-reform/state-indicator/state-decisions-for-creating-health-insurance-exchanges-and-expanding-medicaid/

Big Drop in Uninsured under Obamacare


Uninsured Rate Has Dropped Almost Everywhere

Even in states not expanding Medicaid, uninsured rates have fallen

Minnesota had Exchange ChallengesWisconsin did the Badger Care Switcheroo

United States Total Minnesota WisconsinPopulation 310,197,000 5,076,000 6,794,000

Marketplace Plan Selected 2014

8,019,763 48,495 139,815

Marketplace Plan Selected 2015

11,688,074 59,704 207,349

Medicaid Enrollment Pre ACA

57,794,096 873,040 985,531

Medicaid Enrollment February 2015

70,515,716 1,029,334 1,053,400

% Increase 20.3% 17.9% 6.9%

Source: KFF from DHHS, May 1 2014, March 2015

Oregon Medicaid grew 69% over the same period

How to Pick a Health Plan on an Exchange

• Step 1. Decide on the diseases you and your family are going to have in the coming year

• Step 2. Find the best doctors and hospitals for those diseases

• Step 3. Identify which plans offer those doctors and hospitals

• Step 4. Select the cheapest plan• Step 5. If there are no affordable plans with all the

doctors and hospitals you want, go back to Step 1 and pick some new diseases

Private Purchasers will Act by 2020

• Short Term (1-3 years)– Transparency on Cost and Quality– CDHP/HDHP– Benefit Buy Downs (including retirees and spouses)– Reference Pricing– Private Exchanges– Narrow Networks– Out of Network Prices

• Longer Term (3-10 Years)– Stay or Go– Defined Benefit to Defined Contribution– Activist Engagement– Cadillac Tax 2018

Two Competing Visions

Berwickian Nirvana of large Accountable Care Organizations encourages rationalization of the delivery system

Atomistic view of consumers armed only with High Deductible health plans will impose market discipline on providers

See E. Emanuel et al., "A Systemic Approach to Containing Health Care Spending," and J. Antos et al., "Bending the Cost Curve through Market-Based Incentives," www.NEJM.org, Aug. 1, 2012.)

http://www.nejm.org/

Employers Are Seeing a prolonged respite from double-digit premium increases, but these are still running at two times CPI

Projections For 2015: Trend before plan & contribution changes =6.5% Trend after plan and contribution changes =5.0% CPI-U= 2.5%

SOURCE: Towers-Watson NBGH Annual Surveys (2014-2015)

Private Purchasers reassessing their role

Redefinition of benefits: Buy-downs (CDHP) and elimination or scaling back of commitment to spouses, dependents, retirees and early retirees, part timers etc

Consideration of the role of Exchanges and possible ‘exit’ from employer-sponsored benefits

Growing interest in direct contracting with providers and ‘accountable’ systems

Pushing greater responsibility onto employees to encourage them to shop based on cost, quality (movement toward defined contribution strategy, more limited plan offering, consumer shopping tools).

More activist wellness including biometric screeningSource: Personal Communication, PBGH, 2013

2009 2010 2011 2012 2013 2014

18%21%

27%

44% 46%

0.26

0.45

0.59 0.58

96%91% 88% 91% 90% 91%

Employers are of two minds on providing health insurance

* Asked only of Employers with 50 or more employeesBase: All Employer Health Benefit Decision Makers (n=337)Q800: Please indicate your level of agreement with the following statements. Do you strongly agree, somewhat agree, somewhat disagree or strongly disagree?

Agreement with Statements About Healthcare(Top-2 Box % - Agree Somewhat/Strongly)

58%

87%89%

Health care premiums should be tax deductible

My senior management is paying more attention to the cost of our health benefits offerings

It is our responsibility to ensure our employees' health needs are met

My company is actively exploring ways to get out of providing health insurance to our employees

Employer-based health insurance will soon become a thing of the past

My company feels it is worth it to pay the penalty associated with not providing employee health benefits rather than provid-ing health benefits to our employees.*

SHP EMPLOYERS 2014

Exploring ways to get out of providing it, and feeling a responsibility to employees

Coinciding with economic improvement, the perceived value of employer healthcare in the labor market is on the upswing

Note: Scale changed (added “well” in the middle) in 2012Base: All Employer Health Benefit Decision Makers (n=337) Q1100: How well does each of the following statements describe your company’s position on employer-sponsored healthcare? Does the statement describe your company completely, very well, well, somewhat well or not at all?

Company’s Position on Employer-Sponsored Healthcare (Labor Market)(Top-2 Box % - Describes Completely/Very Well)

2007 2008 2009 2010 2011 2012 2013 2014

87% 87%

76%

67% 69%

49%

57%61%

53% 54%

66%

58%

45%51%

58%

25% 22% 25% 26%32%

39% 41%

Provide health benefits to stay labor market competitive

Employees view health benefits as compensation requirement

Generous benefits compensate for lower salaries

SHP EMPLOYERS 2014


• Large Diversified company with unions and high wage base.

• Very sophisticated Purchaser using consumerism and DB to DC for retirees to reduce benefit burden.

• Spread across a dozen or more regional markets

GE:

• Bifurcated workforce: Theme Park workers and Johnny Depp

• Geographic Concentration in Orange County California and Orange County Florida

• Consumerism strategy and engagement with local delivery systems

Disney:

• National retailer with 2 million plus associates

• Centers of Excellence Model for high cost cases

• Eliminating coverage for part-timers and encouraging them to use exchanges

Wal-Mart

• Large pharmacy/retail chain• Private Exchange model outsourced

to AON/Hewitt• 142,000 signed up• Insured product model• Choice causes buy-down• 80% picked silver or bronze

Walgreen’s

• Geographic concentration of fabrication plants and facilities: OR, NM, and CA

• Healthcare treated just Like any supplier: tough performance requirements

• Going direct e.g. Presbyterian in New Mexico, onsite clinics

Intel

• War for talent• Average age 12• Want the primary care on campus

and telehealth for everything else

Silicon Valley Employer Network

• Large public purchaser system• Unionized workers• Pioneered reference pricing as shot

across the bow of providers• In the retiree health benefits

business big time• Wants high performing HMO product

CALPERS

Seven Large Employer Archetypes How do these archetypes view their benefit responsibilities?

UK

NOR

GER

NETH NZ

SWIZ

AUS

US

CAN FR

SWE

0

20

40

60

80

100

6958 56 56 54

49 4639 38 36 35

Access to After-Hours Care

Percent

95 9590 90

81 80 78 7668

4635

Adults, 2013Easy getting after-hours care

without going to the ER

Primary care physicians, 2012Practice has arrangement for patients’

after-hours care to see doctor or nurse

Source: 2012 and 2013 Commonwealth Fund International Health Policy Surveys.

Base: Needed care after hours. * In Norway, doctors asked whether their practice had arrangements or there were regional arrangements.

Silicon Valley Elite EmployersSay “Bring the Doctors to Us”

Kaiser’s Mobile Health Van

PAMF’s Care A Van• Brocade• Cadence• KLA Tencor• Marvell• Net App• Nvidia• Oracle

• San Desk• Symantec• Synopsys• Varian• VM Ware• Yahoo

• Facebook• E Bay• Net App• Nvidia

• Oracle • Stanford • VM Ware• Yahoo

Stanford Health Care Onsite and Nearsite Clinics• Qualcomm• Dreamworks• Santa Clara Nearsite Clinic

Public Purchasers

• Medicare Advantage is surprisingly resilient• Medicaid expansion is massive in half the

country• Public exchanges will grow after a rocky start• Public employers have huge retiree health

benefit problems• Public payers more dominant by 2020

Medicare Advantage Enrollment is Highly Variable Across the Country (0% to 53%) and Growth Continues

38

Boomers, Young People Attracted to Medicare Advantage

Harvard School of Public Health/SSRS poll, Mat 13-26, 2013.

Total 18-29 30-49 50-64 65+

(When you retire,) If you had a choice, would you prefer to get your Medicare health insurance benefits from…

The current government Medicare program

34% 26% 28% 33% 57%

A private health plan, such as a PPO or HMO offered through Medicare

56% 65% 63% 57% 29%

Don’t know/refused 10% 7% 8% 9% 13%

Massive Medicaid, 2015• US Medicaid Population

edges out France for top 20 spot in total population with 70,515,716 enrollees

• US Medicaid spending edges out Argentina for top 25 economies at $540 billion

• US Medicaid is bigger than Wal-Mart by $50 + billion

Massive Medicaid

• Medicaid expansion is a big deal in the states that are doing it…e.g. California Medi-Cal has 12.2 million enrollees and a budget in excess of $90 Billion for 2014-15 FY most from Federal sources

• Oregon Medicaid enrollment now over 1,000,000 a 69 % increase over pre ACA levels

• The last mile of enrollment• Churning in Medicaid eligibles• Who will take these enrollees and what will be the

financial impact on providers that do take them?

Ahead of the Curve on Value-Based Payment• “The future is already here…it

is just not evenly distributed”– William Gibson

• California has 55.4% in value-based payment (in all in-network commercial based payment) up from for 41.8% in 2013

• US has leapt up to 40% in 2014 up from 10.9% in 2013 according to CPR exceeding CPR’s 2020 goal of 20%

Source: Catalyst for Payment Reform, 2014

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smaller standalone

medium standalone or smaller systems

larger standalone or system

Completely Fee for Service

Completely CapitatedPayments

Evenly Split

Total:

(0) (50) (100)

Anticipated Growth in Capitation/Value

IN 5 YRS 51

TODAY:35

Smaller

Larger

Mid Size

TODAY:38

TODAY:36

TODAY:31

IN 5 YRS 49

IN 5 YRS 56

IN 5 YRS 52

(↓2%)

EVEN LARGE SYSTEMS ANTICIPATE ONLY HALF CAPITATED PAYMENTS IN NEXT 5 YEARS

Base: All Hospital-Based Execs (2015: n=200; 2014: n=202; 2013 n=210)Q705/Q706/Q707: Many hospitals are starting to be paid differently for their services, moving from a fee for service environment to more capitation or value based payments. Where is your hospital/hospital system on the spectrum today, and where will you be five years from now?

SHP HOSPITALS 2015

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Completely Fee for Service

Completely CapitatedPayments

Evenly Split

Total:

(0) (50) (100)

Anticipated Growth in Capitation/Value

IN 5 YRS 47

TODAY:27

PCPs

Hospital based

Specialists

Office based Specialists

TODAY:31

TODAY:22

TODAY:33

IN 5 YRS 51

IN 5 YRS 45

IN 5 YRS 47

PCPS ANTICIPATE FASTER MOVE, BUT STILL ONLY HALF OF PAYMENTS CAPITATED IN 5 YEARS

Base: All Physicians (2015: n=626; 2014 n=600)Q1280: Many physician practices are starting to be paid differently for their services, moving from a fee for service to more capitation or value based payments. Where is your practice on the spectrum today, and where will you be in five years from now?

SHP PHYSICIANS 2015

Health Systems Taking RiskLots of big systems showing interest but patient flow through these models is not large except for legacy players

Referral management (preventing leakage from the IDN) can provide FFS fuel for transformation to risk

“Eat your own cooking” is a common starting point

Link to ACO strategy

Link to going direct to employers or exchanges e.g. North Shore Long Island Jewish

Link to Population Health Interest and Clinical Integration Organization strategy


Health Systems Taking Risk• Health Systems with Legacy Health Plans

– Inter-Mountain, Sharp, Presbyterian, Spectrum Health, Providence• Health Systems that recently built, acquired or merged with a Health Plan

function– Partners (Boston), Sutter, Dignity Health (Western Healthcare Advantage), Memorial

(Long Beach), Baylor Scott and White, North Shore Long Island Jewish, Ascension, CHI• Health Systems that are going deep on Commercial ACO plans and/or CMS

ACOs with plan partners– Montefiore, Steward, Aetna Whole Health (Inova, Banner, Aurora), Memorial

Hermann, Stanford– Vivity (UCLA, Cedars, Memorial, Torrance, Good Samaritan, PIH, Huntington and

Anthem Blue Cross) – About Health/Blue Priority Anthem Wisconsin

• Health Systems “Go Your Own Way”– Evolent Health (UPMC and Advisory Board Offering) includes Piedmont/Wellstar,

Medstar

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47Base: All Hospital-Based Execs (2015: n=200; 2014: n=202)Q980: Which of the following best describes your hospital’s/hospital system’s “risk bearing” strategy?

Directional growth in hospitals committing to clinical integration for contracting w/ payers.

Hospital Insurance Risk Management Strategy

MAJORITY EXPLORING RISK BEARING STRATEGIESSHP HOSPITALS 2015

31%

25% 26%

12%8%

41%

29%

19%

10%

1%

20152014

51% of smaller hospitals have no plans

No real differences by size of system

No Plan On Journey

At the end of the day, people trust hospitals more than health plans

SupermarketsHospitals

Online Search EnginesBanks

Computer Hardware CompaniesOnline Retailers

Electic and Gas UtilitiesComputer Software Companies

Packaged Food CompaniesAirlines

Car ManufacturersLife Insurance Companies

Pharmaceutical and Drug CompaniesHealth Insurance Companies

Telecommunications CompaniesManaged Care Companies, such as HMOs

Social Media CompaniesOil Companies

Tobacco Companies

4034

3527

2223

2014

1113

712

4

43

3028

1818

1715

1413

111111

1010

77

66

43

2013 2003

Source: Harris Poll, December 2013

SOURCE: Harris Poll for STRATEGIC HEALTH PERSPECTIVES

% Trust in Industries

42 % Trust none of the Industries on the

list


NEW THINKING: SOME EXAMPLES

Montefiore

An AMC on the way to being an at risk integrated system of care

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Base: All Hospital-Based Execs (2015: n=200; 2014: n=202)Q417: Which of the following best describes your approach to the management of the referrals from physicians affiliated with your hospital?

Increasing awareness, intent to do something about it

Current Approach to Referral Management from Physicians Affiliated with Hospital

MANAGING REFERRALS: CONTINUED FOCUS

We have already made significant investments in an organized referral management system and are actively keeping more referrals within our

employed physician network

We have identified that modifying referral patterns of our medical staff is a critical success factor in our clinical integration strategy and we are

planning to actively manage referrals in the future using an organized approach to keep more referrals within our facilities/ medical groups

We recognize that there is considerable inpatient and outpatient volume that "leaks" to our competitors because our medical staff does not refer

exclusively to our facilities, but we have no immediate plans to influence those referrals beyond offering privileges

We do not actively manage referral patterns of the physicians who admit to our facilities and have no plans to do so beyond offering hospital

privileges

Not sure not applicable

18%

41%

30%

7%

6%

18%

45%

24%

10%

7%20142015

SHP HOSPITALS 2015

The Work

• Centrality of Clinical Integration• Health IT as platform not panacea• Learning to live on Medicare• Managing Business Model Migration• Building a culture of Quality and

Accountability – “We have the anatomy of an Accountable Care

Organization but none of the physiology”

The Scout Badge Problem

Patient Centered Medical Home

Accountable Care Organization

Telehealth Initiative

Patient Portal

Readmission Reduction Program

Diabetes Disease Registry

Quantified Self App

Care Bundles

Remote Patient Monitoring

E-Consults

But how many? And what is the denominator?


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GENERAL OUTLOOK FOR PHYSICIANS IN 2015

More are resigned, while more are moving into integrated practices

A solid minority is really frustrated and despondent

EHRs* are a huge source of frustration across the board

Fundamentally this is a pocketbook issue

We used to think things

couldn’t change

unless the docs were

happy

The docs aren’t really

happyBut things

are changing

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PHYSICIAN SURVEY, KEY FACTS 2015

• Physician satisfaction with their own practice fluctuates over time but is still 68/32 net positive in 2015 compared to 70/29 in 2002

• But, as in last three years physicians are 26% optimistic versus 55% pessimistic about the practice of medicine today

• One Third support ACA versus 55% oppose

• Majority (68%) of physicians see impact on their practice of ACA as negative only 22% positive

• 23% of physicians claim to be in an ACO up from 10% last year and 7% in 2013

• 19% of physicians claim to be in an Patient Centered Medical Home up from 6% last year and 4% in 2013

• 14% claim to be in a narrow network (up from 11% last year) offering a typical discount of 29%

• 74% of physicians say they “will continue to see and accept new” Medicare patients (59% for Medicaid and 80% for exchange)

• Solo physicians less likely to be participative in future trends compared to affiliated group practice and those physicians who are in Integrated Delivery Systems

Source: Nielsen, Strategic Health Perspectives, 2015 Confidential

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Overall Satisfaction with Current Practice

SHP PHYSICIANS 2015

Base: Office-Based Physicians (2015: n=476; 2014: n=434; 2013: n=432; 2012: n=461; 2011: n=377)Q800: Overall, how satisfied are you with your current practice situation?.

MANY PHYSICIANS STILL DISSATISFIEDThough it may be rebounding from last year’s historic low, 1 in 3 doctors is still dissatisfied with his or her practice situation.

2011 2012 2013 2014 2015

80%74% 76%

62%68%

20%26% 24%

38%32%

NET Satisfaction NET Dissatisfaction

Significant change

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2%

23%

1%

23%16%

23%

43%

24% 23%Physicians

SHP PHYSICIANS, CONSUMERS 2015

Base: All 2015 Physicians (n=626)Q1850: How would you describe your feelings about the health care system today? Please select all that apply.


6%

20%13%

32%

24%17%

31%

14%18%

Consumers

PHYSICIANS CLOSELY RESEMBLE CONSUMERS IN EMOTION, FRUSTRATION AROUND HEALTH CARE

Base: All US Adults (2015 n=5037)Q47 How would you describe your feelings about the health care you receive today, including how much you pay for it and the benefits you receive? Please select all that apply.

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Medical School Preparation, Programs Used for Today’s Healthcare*

SHP PHYSICIANS 2015

Base: All 2015 Physicians (n=626)Q1851: How well do you feel medical school prepared you for practicing medicine in today’s healthcare system?Q1852: Have you used any of the following to help you adapt to changes in our healthcare system? Please select all that apply.

2015

11%

34%

39%

13%2%

Extremely well

Very well

Somewhat well

Not very well

Not at all well

16%

45%

*New in 2015

CME widely cited as a way to help adapt to changing system.PHYSICIANS FEEL UNPREPARED FOR TODAY’S MEDICINE

Continuing medical education

Post graduate business certificate programs

An MBA or other management degree

Something else

None of the above

80%

5%

3%

14%

15%

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BUT ARE THEY RESIGNED TO IT?

Optimistic IntendersI haven’t reformed yet, but I want to.

Blazing BelieversIntegrating…and happy about it.

Reluctant ObjectorsIntegrating…and NOT happy about it.

Independent ResistersI haven’t reformed, and don’t plan to.

Experience with Integration

Attitu

de to

war

ds

Inte

grati

on

20%

20%

39%

21%

Back in 2012, we created a segmentation to understand how US doctors are dealing with all this consolidation and integration. Are they drinking the kool-aid? Or sitting it out?

Segmentation inputs include: • Use of EHRs• Knowledge about meaningful use criteria• % of medication DAW vs generic allowable• P12M experience on salary, management by health plan,

or use of evidence based guidelines

• Willingness to work in solo practice• Perceptions on physician responsibility for patient

treatment compliance

THE SEGMENTATION OF BERWICKIAN NIRVANA (1)

SHP PHYSICIANS 2015

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CHANGE IS HARDER TO RESIST

2012 2013 2014* 2015

23% 34% 28% 39%16%

19% 35% 20%22%23%

24% 21%32% 25% 14% 20%

Independent ResistersReluctant Ob-jectorsOptimistic In-tendersBlazing Be-lievers

B

*The 2014 sample skewed a bit different (higher solo practice than the population).

Total Experienced “Integration”

45% 57% 52% 60%

THE SEGMENTATION OF BERWICKIAN NIRVANA (2)

Believers are increasing and Resisters are shrinking. Once they are in, they may become more accepting—perhaps not happy about it per se, but going along with the program.

SHP PHYSICIANS 2015

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More Satisfied• Work in IDNs• Younger • Lean left politically• More optimistic about future of medicine

Less Satisfied• Age 50+, more years in practice• More FFS compensation• Less optimistic about future of medicine

WHO IS SATISFIED WITH THEIR EHR?Overall satisfaction is low across the board, with no real differences by specialty or affiliation. A few differences stand out:

84% 65% 62%

16% 35% 38%

NET Practice DissatisfactionNET Practice Satisfaction

BC

A A

EHRSatisfied

A EHRNot Satisfied

CEHRSmwt Satisfied

B

SHP PHYSICIANS 2015

27% 46% 27%

Satisfied Somewhat Not Satisfied

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Physicians

SHP PHYSICIANS, CONSUMERS 2015

Base: All 2015 Physicians Using EMR (Satisfied 148, Not Satisfied 153)Q1850: How would you describe your feelings about the health care system today? Please select all that apply.


Base: All US Adults (2015 n=5037)Q47 How would you describe your feelings about the health care you receive today, including how much you pay for it and the benefits you receive? Please select all that apply.

3%

34%

1%

38%

15% 16%

42%

13% 15%

0%

18%

2%

17%14%

27%

44%

31%35%

Satisfied with EMR Not Satisfied with EMR

Though equally powerless, those satisfied with EHR system more than twice as likely to feel hopeful, accepting.

EHR DISSATISFACTION LEADS TO DEPRESSION, ANGER

Looking to 2020• Pressure on public payment sources will continue• Private Payers will not tolerate costs shift willingly• Exchanges and DB to DC among employers makes market more retail• Consumer becomes more important as decision-maker• Long run three payer segments: Managed Medicaid, HDHP (Exchange and

Employer) and Medicare Advantage/ACO increase pressure to deliver value• Care Redesign for higher performance

– High Reliability Organizations– Migrating Business model to Risk– Care coordination and management across the continuum of care– Alignment of all physicians, nurses and caregivers with this process– Consumer facing innovation in delivery and telehealth – Innovation at Scale

• Governance and leadership to sustain it all

Implications for Physicians

• Consolidation and integration continue leading to constraints on clinical and economic autonomy for many, but new opportunities for innovators

• Mixed signals for a long time– Volume to value– RVU productivity

• Overcoming Improvement Fatigue– Physician leadership– Strategic communication on the why of change– The Quadruple Aim

• Innovation for higher performance • Remember what brought you to medicine

The Future of Medicine and Physicians Role in Innovation Ian Morrison PhD .

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