Presentation Transcript

1. National Business Coalition on Health Brian Klepper, PhD, CEO Why Only Business Can Save America From Health Care Greenville, SC May 13, 2014
2. Runaway Health Care Cost Is The Most Serious Current Threat To The US’ National Economic Security
3. 70% of CFOs Worry Most About Health Care Costs “7 of 10 CFOs and other top financial executives ranked health care among their top business concerns for 2013.”  Bank of America Merrill Lynch Survey In USA Today, 7/23/13
4. How Much Health Care Cost Is Waste? PwC 2008* – 54.5% In 2014 $s, >$1.5 trillion annually 9% of GDP The US’ 2012 Budget Deficit *The Price of Excess
5. We Spend Double
6. Most Health Care Purchasers Join Business Health Coalitions Because They No Longer Trust The Motives Or Practices of Mainstream Health Care. They Seek Alternative Approaches That Can Manage Excessive Clinical and Financial Risk
7. Institutionalized Mechanisms of Excess Health Plans Paying (and Passing Through Costs) For Services At Multiples of Market Rates Primary Care Payment That Encourages Specialty Referral Control and then Non-Management of High Cost Acute and Chronic Patients Open, Performance-Neutral Networks Physicians and Vendors AMA RVS Update Committee Health Systems Overtreatment Excessive Unit Pricing EHR Vendors Refusal to Interoperate
8. How Bad Is It?
9. Avg Annual Health Insurance Premiums and Worker Contributions for Family Coverage, 2009-2013
10. Premium Has Grown 4.5x Inflation For 14 Years 4.55x
11. Employer Sponsored Coverage Dropped 17% in 11 Years
12. Projected Annual Total Household Compensation & Compensation Net of Health insurance Premiums
13. American Health Care Cost Is Absorbing Nearly ALL Economic Growth In the decade preceding 2009, 79% of all household income growth was siphoned off by health care. Source: Auerbach DI and Kellermann AL, “A Decade of Health Care Cost Growth Has Wiped Out Real Income Gains for an Average U.S. Family,” Health Affairs, 30:9, 9/2011.
14. Impact on Family Income If health care costs tracked general inflation over the past 15 years, average family income would have been $8,410 (13.9%) higher in 2010 than it was. ($68, 805 vs. 60,395) Young and Devoe Family Medicine, Oct 2012
15. Health Care’s Growing Burden on Federal Budget Crowds Out Other Needs Source: White House Council of Economic Advisors
16. Health Care Thrived During the Recession Source: Bureau of Labor Statistics, Cited 12/07/12 on WashPostWonkBlog
17. US Health Care Unit Pricing Is Much Higher
18. And Lucrative Pricing Drives Higher Utilization
19. And Lucrative Pricing Drives Higher Utilization
20. Structural Supports Of The Health Care Cost Crisis
21. The Multi-Headed Cost Monster Need for Care (Illness, Congenital Conditions & Injury) Lifestyle Behaviors Lack of Patient Engagement Mis-Aligned Incentives/Benefit Design Catastrophic Events (Poor Health, Bad Luck) Inappropriate Care Patterns Overtreatment Egregious Unit Pricing Conventional Steerage Lack of Care Coordination
22. Current Structural Supports of the Cost Crisis – Market and Policy Other Key Drivers Excessive Unit Pricing/Utilization Out-Of-Pocket Costs Inappropriate Patient Financial Incentives No IT Interoperability, So Poor Care Coordination Unnecessary Complexity Yellow Pages Networks Most Important Lobbying & Regulatory Capture Fee-For-Service (Conflicted) Reimbursement Little Quality/Safety/Cost Data (Transparency) Subjugated Primary Care
23. Cost/Quality Performance Transparency Medicare Physician Data Was Locked Until Recently. Hospital Procedure Base Fees Are Often Unknown Until Billing. Recent Health Affairs California Appendectomy Study Showed 3 Day LOS Pricing $1,529 - $186,955, A 122x Difference. Health Care Markets Don’t Work Except For The Most Aggressive Commercial Enterprises. Providers/Vendors Under Little External Pressure To Improve.
24. AMA Relative Value Scale Update Committee (RUC) 31 Physicians - 26 Specialists & 5 PCPs CMS’ Sole Advisors On Medical Services Valuation Secret Proceedings, Sham Survey Methods, Composition Unrepresentative Of Physicians In Market, Financially Conflicted CMS Has Historically Accepted 90% Of Recommendations Commercial Health Plans Typically Follow Medicare’s Payment Lead
25. Real World Impacts of RUC Influence Over-values Specialty Services While Under-valuing PC Inhibits PC’s Moderating Influence And Accountability Function Over Specialty Services. Creates Systemic Incentives To Perform More Services, And More Expensive Services. (Specialists “Practicing To The Codes.”) Payment Disparities Between Pc And Specialties. Crisis-level PC Shortage Now.
26. Increasing Primary Care Referrals To Specialists Typical 2012 Established Primary Care Office Visit Duration = 7.5-12 Min. 30 Years Ago, It Was 20-25 PCPs Paid By Visit, So May Refer Time-consuming Problems Most Specialists Profit From Procedures Result: Huge Increases In Specialty Visits, Outpt Diagnostics, Procedures
27. Winners & Losers Winners Nearly Everyone in the Health Industry (Except Primary Care) Losers Patients – Unnecessary Care and Risk of Harm Purchasers (Employers, Taxpayers, Individuals) – Immense Unnecessary Cost Primary Care Physicians
28. Market-Based Solutions
29. Market-Based Reforms Over The Past 20 Years, Employers (& Health Plans) Have: Significantly Increased Co-pays For “Steerage.” Introduced Generic Drugs And Mail-order. Introduced Wellness, Disease Mgmt, Lifestyle Coaching Programs. Introduced Incentives. Renegotiated Network Discounts. Given Employees “More Skin In The Game.”
30. Market-Based Reforms But We Mostly Haven’t Managed The Care Process, Like Businesses Would.
31. Management of Full Continuum Health Care Risk Rx Dispensary & Mgmt Stop-Loss Arrangements + Benefit Refinement Convenience/ UrgentCare Occupational Health + + Chronic Disease & Lifestyle Mgmt + Utilization Review Carrots & Sticks Health IT Case Management Telemedicine Primary Care Medical Home Referral Mgmt Centers of Excellence High Performing Narrow Networks Direct Contracting
32. 6 Broad Management Approaches Comprehensive, Advanced Primary Care Medical Home Onsite, Face-to-Face Wellness/Prevention/DM Avoid Unnecessary Care Ensure the Appropriateness of Necessary Care Cost-Effective Acquisition of High Value Products/Services Revise Benefit Structure and Process To Favor Patient Adherence/Vendor Accountability
33. Leveraging Purchaser Collaboration To Drive Health Care Value
34. Acting In All Our Interests Health Care Organizations Comprise Almost 1/5 of the US Economy and 1/10 of US Jobs. Only One Group is Larger, With the Influence to Overpower Health Care in Policy. The Non-Health Care Business Community
35. Poor Prospects Until Now Employers Haven’t Meaningfully Mobilized To Date Many Seem Resigned Or Are Fleeing Appears To Be Little Sense Of Enlightened Self-interest
36. NBCH’s Mobilization Strategy: Marketplace and Policy 52 Regional Coalitions 7,000 Businesses 25 Million People
37. Appropriate Care & Cost Goal: Drive Higher Value (Appropriate) Care and Cost Objectives: Disrupt Institutionalized Mechanisms of Excess Incentives That Drive Appropriateness
38. NBCH’s New Approach – Strategies/Tactics Gain Business Leaders’ Buy-In and $$ Support. Educate Them About Gravity of Health Cost Problem For Their Businesses and the US. Through Coalitions, Deliver Measurable Savings/Value Ancillary Risk Management Carve Outs: Advanced Imaging, Musculoskeletal Mgmt, Oncology Mgmt, Ambulatory Surgery, etc. Leverage Collective Strength To Drive Value In Markets, Make Visible Purchasing Decisions That Punish Bad and Reward Good Behaviors In Policy, Become A Counterweight to the Health Industry’s Influence
39. He Should Know “How many businesses do you know that want to cut their revenue in half? That’s why the healthcare system won’t change the healthcare system.” Rick Scott Governor of FloridaFormer CEO, Hospital Corporation of America
40. Brian R. Klepper, PhD is a health care analyst and commentator. He is CEO of the National Business Coalition on Health, a national collaborative driving improved health care value, and representing 52 regional business health coalitions, 7,000 businesses and 25 million people. He is also Chief Development Officer for WeCare TLC, LLC, an onsite primary care clinic and medical management firm based in Lake Mary, FL. An active author and speaker, Dr. Klepper has provided health care commentary to CBS Evening News, the Wall Street Journal, the New York Times, and the Washington Post. He has published articles on Kaiser Health News, Healthleaders, The New England Journal of Medicine, Modern Healthcare, Business Insurance and newspapers nationally. Brian is a columnist on Business of Medicine and Primary Care for Medscape, the most-read medical site, and a regular contributor to the Self-Insurer, the most widely read publication by the Self-Funded Health Plan Employer community.. He is an editor for The Doctor Weighs In, an online professional health care magazine, and a regular contributor to the Health Affairs Blog, Kevin MD,Health Care Policy and Marketplace Review, and other expert health care blogs. With his wife, he also maintains Elaine’s Journey, which details their struggle against primary peritoneal (ovarian) cancer. Brian served on the American Academy of Family Physicians’ Primary Care Services Valuation Task Force, and is a reviewer for Health Affairs and The Journal of Ambulatory Care Management. He is an Advisor to the Lundberg Instituteandthe Patient-Centered Primary Care Collaborative, which advocates for medical homes. In his spare time, he is an offshore sailor. 904.395.5530 (o), 904.343.2921 (c) bklepper@nbch.org