Employers’ Stake in Health Reform

1. Employers’ Stake in Health Reform Len M. Nichols, Ph.D. Center for Health Policy Research and Ethics Virginia Health Care Conference Richmond, VA June 6, 2013

2. Fiscal Cliff? US to Default????

4. Family Premium / Median Income

5. Manufacturing Institute of the National Association of Manufacturers

7. The Bottom Line of Where We Are

8. Two Roads to Fiscal Balance RE-ALIGN INCENTIVES CUTS

9. Incentive Alignment Is Multi-Dimensional Community Community Decision Support Wellness & Cost Sharing Payment Reform

10. Innovation Center Portfolio ACO Suite: • Shared Savings Program • Pioneer ACO Model • Advance Payment ACO Model • Accelerated and Learning Development Sessions Primary Care Suite • Comprehensive Primary Care Initiative (CPCI) • Federally Qualified Health Center Advanced Primary Care Practice Demonstration • Multi-Payer Advanced Primary Care Practice (MAPCP) Demonstration • Independence at Home • Medicaid Health Home State Plan Option Bundled Payment Suite • Bundled Payment for Care Improvement Dual Eligible Suite: • State Demonstration to Integrate care for Dual Eligible Individuals • Financial Alignment to Support State Efforts to Integrate Care • Demonstration to Reduce Avoidable Hospitalizations of Nursing Facility Residents • Medicaid Health Home State Plan Option Diffusion and Scale Suite: • Partnership for Patients • Million Hearts Campaign • Innovation Advisors Program • Care Innovations Summit Healthcare Innovation Challenge Rapid Cycle Evaluation and Research Learning and Diffusion

12. The Budget World is Skeptical • Results less than hype/hope so far • ACO takeup, bundling, PGP + CABG demo in 1990s • New ACO/PCMH results to date: • AQC, CalPERS-Blue Shield-Hill-Dignity • PCPCC vs. AHRQ/Mathematica review • Reality that PCMH is zero sum vs. specialists and hospitals • No one’s market share is “enough” • Not clear we are willing to do multi-payer reform

13. Comparing VA /US Sources: AHRQ premiums, CMS/OACT spending

14. Comparing Virginia to US Premium Paid OOP by Employees > 50 workers < 50 Sources: AHRQ premium, Census income data

15. Hospital Charge Variation in VA SOURCE: CMS MEDPAR charge data, 2011.

16. Choices Employers Face: Competition? Collaboration?

17. In general, when is Collaboration wise? When economies of scale from necessary investment are large relative to any one player When no one knows exactly how to improve When incentives have to be fundamentally changed to support necessary improvements When basic level of trust exists, or can be cobbled together and maintained with incentives and DATA

18. What LEADERS are saying… “David Howes, President and CEO of Martin’s Point Health Care, summed up our challenge eloquently, ‘The age of competing for market share by controlling access to data is over. Transparent all-payer data should be made widely available and competition should be based solely on performance’. Testimony of Elizabeth Mitchell CEO, Maine Health Management Coalition and Foundation and Board Chair, Network for Regional Healthcare Improvement to the Subcommittee on Health, Committee on Energy and Commerce U.S. House of Representatives February 14, 2013

19. Multipayer Advanced Primary Care Practice demonstration states

20. Comprehensive Primary Care Initiative

21. State Innovation Model Awards

22. All Payer Claims Data Bases

23. What Can/Must Communities Do? Employers > Plans Grand Junction, Rochester, Portland Maine… Partnerships With All Stakeholders

25. Virginia Health Innovation Center Created on 2010 recommendation of Virginia Health Reform Initiative Advisory Council 501c3, housed at state Chamber of Commerce Seed money from stakeholder associations Surveyed state, found over 350 “examples” 6 task forces creating proposals for funding Led by private actors in cooperation with state

26. Stuff to collaborate on Analytic database construction (HIE + APCD) Quality measures Patient acuity adjusters Payment STRUCTURE Diagnostic and treatment protocols Risk sharing contract parameters

27. Stuff to compete on Patient Experience and (risk adjusted) Outcomes Total Cost (of care plus absentee/presenteeism) Quality execution Continuous learning

28. What You Need to Succeed Change your attitude about who owns data Change all attitudes about collaboration Arrange for state-action immunity from anti-trust Your crow-bar, at least for a while Medicaid expansion to smooth the way Vivid memory of the consequences of failure