1/17/2012

1

H U M A N S E RV I C E S C O M M I S S I O N E R

LU C I N DA J E S S O N

M I N N E S OTA H O S P I TA L A S S O C I AT I O N

JA N UA RY 6 , 2 0 1 2

The State of Minnesota Health Care

Three balanced goals of

health care reform

Reduce Cost

Enhance

Access

Improve Quality

A short backdrop on

Minnesota

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2

Well Above Average…

� We rank first in outcomes.

� We rank seventh in

determinants.

� We dropped from third to

sixth overall in two years.

� Concern for the future:

“Minnesota ranks lower for health

determinants than for health

outcomes, indicating that overall

healthiness may decline over

time.”

Source: America’s Health Rankings®

Trends in coverage and uninsured in Minnesota

Source: Minnesota Health Access Surveys, 2001 to 2009

68.1%62.6%* 62.5% 57.4%*

4.8%4.6% 5.1%

5.1%

21.1%25.1%* 25.2%

28.5%*

6.1% 7.7%* 7.2% 9.0%*

2001 2004 2007 2009

Uninsured

Public

Individual

Group

* indicates statistically significant difference from previous year shown

Quality is improving; chasm remains

Minnesota Optimal Diabetes Care Measure

0%

20%

40%

60%

80%

100%

2004 2005 2006 2007 2008 2009

Health Plan DataMNCM all rights reserved

% of

patients

at goal

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This decade and next will see unprecedented

increases in Minnesota’s 65+ population

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

70s 80s 90s 00s 10s 20s 30s

Ch

an

ge

Decade

Minnesota State Demographer projection

Growth in other age groups flat

Paying for long term care

� More than 50 percent of current retirees do not have sufficient resources for long term care

� By 2030, Medical Assistance (MA) will serve 71,000 elderly at a cost of $5 billion

� Today, MA serves 43,000 elderly at a cost of $1.1 billion

� We need to find ways to make care sustainable in the future

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Growth in cash, food and health care programsBy Enrollment

Fiscal Year 2007 - 2011

Average annual growth in per enrollee spending

1998-2004 and 2004-2009

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

1998-2004 2004-2009

United States

Minnesota

5.2

10.7

9.4

5.24.6 4.5

0

2

4

6

8

10

12

MN African

American

American

Indian

Asian Hispanic White

Racial and Ethnic Health Disparities

Infant Mortality Rateper 1,000 births (less than 1 year of age)

MN Birth Year 2005-2009

Rate per 1,000 births

2.41

2.11.2 1

*Ratio (Populations of Color/American Indian rate divided by the White rate)

Source: Minnesota Department of Health Center for Health Statistics

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5

26.1

68.8

98.1

46.8

96.2

16.6

0

20

40

60

80

100

120

MN African

American

American

Indian

Asian Hispanic White

Racial and Ethnic Health Disparities

Teen Birth Rate per 1,000 (females ages 15-19)

Minnesota 2006-2010

Rate per 1,000 births

1

5.8

2.8

5.94.1

1

*Ratio (Populations of Color/American Indian rate divided by the White rate)

Source: Minnesota Department of Health Center for Health Statistics

Nearly 14 percent of U.S. Nearly 14 percent of U.S. residentsresidents

- an estimated 35 million people age 12 and older -

report using prescription pain report using prescription pain relievers relievers nonmedicallynonmedically

at least once in their lifetime.at least once in their lifetime.

SOURCE: 2009 National Survey on Drug Use and Health (NSDUH).

Source of prescription narcotics other than heroin among 12th graders nationally who used in the past year

(checked all that apply)

SOURCE: The Monitoring the Future Study, University of Michigan.

18.8

59.1

37.8

19.5

32.5

1.1

11

2009-20100

20

40

60

80

100% of 12th graders

Took without asking

Given for free

Bought from friend

Bought from stranger

From Rx I had

Bought Online

Other

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Admissions to Minneapolis/St. Paul area addiction treatment programs with

heroin and other opiates as the primary substance problem: 2002 - 2010

SOURCE: Minnesota Department of Human Services, Drug and Alcohol Abuse Normative Evaluation System (DAANES), May 2011.

1223

1422

1613

19482032

2157

2479

3366

3171

0

500

1000

1500

2000

2500

3000

3500Other opiates Heroin

2002 2003 2004 2005 2006 2007 2008 2009 2010

Exhibit 11

Health Care Homes

Summary:

The Minnesota backdrop

� Early innovator on payment reform in the Private Sector

� 2008 reforms featuring provider peer grouping and

development of health care homes

� Long time reputation for high quality

� High access state

� But rising costs, the recession and changing

demographics create serious future challenges

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How to incentivize change?

Incentives for Health Plans

� MA care for non-disabled

through MCOs

� Rates based on past MCO

history plus medical trend

� 2011 initiative to competi-

tively bid rates in metro

� $174 million in savings

Incentives for Providers

� Move toward Total Cost of

Care models through new

care models and strategies

� Minnesota is the land of

pioneers

� At DHS, Demonstration

Projects to allow providers

to share in the risks and

gains of care

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Payment model

Integrated delivery systems providing a broad spectrum

of care as a common entity

Savings

achieved are shared

between the

payer and

delivery system

at pre-

negotiated

levels

Delivery system

pays back a pre-negotiated

portion of

spending

above the

projection

Payment model agreements

� Three year projects

� Reconciliation payments will

occur at least annually

� The amount of risk will be

negotiated

� Contract terms will be

revisited annually

� Watch out for waves of

additional providers and

populations!

Incentives for people

� Wellness incentives

� Diabetes prevention grant and research

� Incentives for Medicaid enrollees

� Incentives to save for LTC

� Build incentives for a healthy Minnesota and an exchange

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Driving change through transparency

� Report cards for LTC beyond nursing homes?

� Quality reporting for clinics

� Integration of quality measures into exchanges

Integration done right

Substance abuse

Long Term

Care

HospitalsClinics

Mental health

Breaking out of our health care silos

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Integration with Social Services and Behavioral health

� “Safety net ACO” created

� Focus on early MA

Expansion population

� Build on CCDS lessons

learned

� Opportunity for savings

outside the Medicaid

program (i.e. corrections

and social services

Dual Eligible Demonstration

� Contract with CMS to develop integrated service and

payment models for dual eligibles.

� Full integration of Medicaid and Medicare services as well

as integration of medical care, behavioral health, long-

term care and community services

� Builds off existing Medicare-integrated programs for seniors and

people with disabilities

� Allows states to share in savings to the Medicare program

Challenges for integration

� Less competition

� Will less competition lead to price escalation in long term?

� Where will integration in Greater Minnesota lead? To fewer providers? Less access?

� How do we integrate and maintain local input, if not control?

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Long term care challenges

First, the good news

We’re number one!• Minnesota first in home

and community based services

• Study: AARP, Commonwealth Fund, SCAN Foundation

• All states have room for improvement

Aging issues for Minnesota

� Impacts on everything in society – health care, building

codes, public safety, infrastructure, etc.

� Unsustainable Medicaid costs without significant,

immediate LTC financing reform.

� Alzheimer’s and dementia “tsunami” (Alzheimer’s 2020

planning).

� Fewer young people working to pay for huge increases in

public entitlement programs.

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Redesigning long term

care services

� Legislature directed comprehensive redesign of home and

community-based services

� In process of rethinking services provided through MA

waivers

� Higher level services should be reserved for those with

greatest needs

� Changes required will be significant

The next generation of services

Short-term institutional care

HCBS 1915(c)Waivers

State Plan services and other flexible options

Information and AssistanceAssessments and support planning

state grants

People need assistance

Level of support required

Assisted living without walls

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Saving for long term care

� Public campaign to increase savings

� Most people either think they will never need LTC or that Medicare pays for it

� New product development may be necessary, especially given demise of CLASS Act

� Incentives to save built into system

Implementing the ACA

Our Charge

Advise the Governor and Legislature on health care reform consistent with enacted law and the following vision:

� Better health care: Expand health coverage and provide a better consumer experience through effective and positive community engagement on issues related to health care, public health and insurance;

� Lower costs: Reduce unsustainable growth in per capita health costs while improving health care quality and efficiency; and

� Healthier communities: Improve the health of all Minnesotans and decrease health disparities.

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ACA: Opportunities to

Build on Minnesota’s Efforts

• Increase coverage through premium tax credits and

Medicaid expansion

• Reform health insurance market for more affordable and

fair coverage

• Option for a Basic Health Plan to replace Minnesota Care

• Create a Health Insurance Exchange

• Strengthen the health care workforce

• Increase focus on prevention and wellness

• Better address health disparities

• Implement payment reform to reward value

Medicaid & the Subsidy Exchange are Linked –

States will Design these Together

Exchange Subsidy

Exchange Plan – no Subsidy

Medicaid & CHIP

CHURN

133% FPL

400% FPL0% FPL

AHBE:

Individual Market

SHOP:

Small Group Market

Focus: Individuals

Eligible Users:

� US citizen or legal alien

� Not incarcerated

� Resident of the state in which exchange is based

Focus: Employers

Eligible Users:

Full-time employees of small

businesses with 1 to 100 workers.

� State option: businesses of 1-50 or less until

2016

� State option: expand to 100+ as of 2017, with

approval of USHHS

Subsidies available: Subsidies available:

� Between 134-400% FPL

� Not offered affordable Minimum Essential

Coverage via employer or government program

� Employers of less than 25 employees

� Average taxable wages less than $50K per year

� Sliding-scale credit max 50% of premium

contributions

� Maximum of 2 consecutive years

No Cafeteria Plan Pre-Tax Treatment Section 125 “Cafeteria Plan” Allows Pre-Tax

Treatment

Exchanges under the ACAby January 1, 2014, all 50 states must establish

(or defer to feds)

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Insurers

Purchasing Through an Exchange: AHBE

Eligibility - For Medicaid and CHIP- For Subsidy- To purchase

Web PortalAND CALL CENTER

SHOPPING: - QHP’s- Metal

Levels- Subsidy

calculator

ENROLL:

$

Medicaid/CHIP

HHS

Income &

Citizenship or

Residency

Verification

IRS

Purchasing Through an Exchange: AHBE

$

Insurers

Purchasing Through an Exchange: SHOP

Eligibility Determination1-100 Employees

The Exchange: Web Portal and Call Center

SHOPPING-QHP’s -Metal LevelsENROLL

$

Employer

Sets

Contribution;

Determines

level of

employee

choice

The Exchange: Web Portal; Call Center

Payroll

Deduction; Premium

Aggregation

$

Employees

Purchasing Through an Exchange: SHOP

What’s next?

� Should we move forward on a Basic Health Plan?

� What do we want our programs to look like?

� How can we pay for value, not volume?

� How can we support Minnesotans to be healthy?

� What about undocumented individuals?

� How can we use health reform as a platform for other

social services?