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April 18, 2013 Talking About the U.S. Health Care System

April 18, 2013 Talking About the U.S. Health Care System. Barry Scholl, MSJ Sr. Vice President, Communications and Publishing The Commonwealth Fund bscholl@commonwealthfund.org Twitter: @ barryscholl www.commonwealthfund.org. Overview of the Commonwealth Fund.

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April 18, 2013 Talking About the U.S. Health Care System

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  1. April 18, 2013Talking About the U.S. Health Care System Barry Scholl, MSJ Sr. Vice President, Communications and Publishing The Commonwealth Fund bscholl@commonwealthfund.org Twitter: @barryscholl www.commonwealthfund.org

  2. Overview of the Commonwealth Fund • Established in 1918 by Anna Harkness • Broad charge to “enhance the common good” • Today we accomplish this by creating and funding independent research on health policy and delivery • Mission • To promote a high performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable

  3. A Broken System COST Billions in unnecessary and wasteful spending Overuse puts patients at risk, drains resources, and makes healthcare less accessible and less effective COVERAGE 52 million uninsured; many more underinsured QUALITY Despite rapid advances, thousands of patients die each year from medical error

  4. International Comparison of Spending on Health, 1980–2010 Average spending on health per capita ($US PPP) Total expenditures on healthas percent of GDP $8,233 17.6% 9.1% $3,022 Note: $US PPP = purchasing power parity. Source: Organization for Economic Cooperation and Development, OECD Health Data, 2012(Paris: OECD, Nov. 2012).

  5. Health Spending is a Problem Not Only for Government,But Also for Businesses and Families NHE in $ billions % GDP: 17.9%18.7%20.5% Note: GDP = gross domestic product. Source: Estimates by Actuarial Research Corporation for The Commonwealth Fund.

  6. Health Insurance Coverage in the U.S., 2011 307.9 million people total SOURCE: KCMU/Urban Institute analysis of the 2012 ASEC supplement to the CPS

  7. 52 Million Adults Under Age 65 Uninsured, 81 Million Either Underinsured or Uninsured Uninsured during year 52 million (28%) Uninsured during year 45.5 million (26%) Insured, not underinsured 110.9 million (65%) Insured, not underinsured 102 million (56%) Underinsured* 29 million (16%) Underinsured* 15.6 million (9%) 2003 Adults 19–64 (172 million) 2010 Adults 19–64 (184 million) * Underinsured defined as insured all year but experienced one of the following: medical expenses equaled 10% or more of income; medical expenses equaled 5% or more of income if low income (<200% of poverty); or deductibles equaled 5% or more of income. Source: C. Schoen, M. Doty, R. Robertson, S. Collins, “Affordable Care Act Reforms Could Reduce the Number of Underinsured U.S. Adults by 70 Percent,” Health Affairs, Sept. 2011. Data: 2003 and 2010 Commonwealth Fund Biennial Health Insurance Surveys.

  8. Percent Uninsured In Other Wealthy Nations

  9. U.S. Lags Other Countries: Mortality Amenable to Health Care Deaths per 100,000 population* * Countries’ age-standardized death rates before age 75; including ischemic heart disease, diabetes, stroke, and bacterial infections. Analysis of World Health Organization mortality files and CDC mortality data for U.S. Source: Adapted from E. Nolte and M. McKee, “Variations in Amenable Mortality—Trends in 16 High-Income Nations,” Health Policy, published online Sept. 12, 2011.

  10. *Age-standardized deaths before age 75 from select causes; includes ischemic heart disease. **Excludes District of Columbia. DATA: Analysis of 2001–02 and 2004–05 CDC Multiple Cause-of-Death data files using Nolte and McKee methodology, BMJ 2003 SOURCE: Commonwealth Fund State Scorecard on Health System Performance, 2009

  11. Why?

  12. Hospital Discharges per 1,000 Population, 2008 * 2007. ** 2006. Source: The Organisation for Economic Co-operation and Development (OECD) Health Data 2010 (Oct. 2010).

  13. Average Length of Stay for Acute Care, 2008 Days * 2007. ** 2006. Source: OECD Health Data 2010 (Oct. 2010).

  14. Hospital Spending per Discharge, 2008Adjusted for Differences in Cost of Living Dollars * 2007. ** 2006. Source: OECD Health Data 2010 (Oct. 2010).

  15. a Percentage of National Health ExpendituresSpent on Administration, 2008 Net costs of administration as percent of current expenditure on health b b b a1999 b2007 Source: OECD Health Data 2010, October 2010.

  16. Physician Incomes, 2008Adjusted for Differences in Cost of Living Orthopedic Surgeons Primary Care Doctors Source: M.J. Laugesen, S.A. Glied, “Higher Fees Paid To US Physicians Drive Higher Spending For Physician Services Compared To Other Countries,” Health Affairs, September 2011 vol. 30 no. 9 1647-1656.

  17. Computer Tomography (CT) Exams per 1,000 Population, 2008 * 2007. Source: OECD Health Data 2010 (Oct. 2010).

  18. U.S. Prices Often Exceed International: Wide Spread in U.S.Scans and Imaging Fees: MRI Scan (US$) (Average) Source: International Federation of Health Plans, 2010 Comparative Price Report, Medical and Hospital Fees by County, November 2010.

  19. Drug Prices for 30 Most Commonly Prescribed Drugs, 2006–07,Brand-Name and GenericUS is set at 1.0 Source: IMS Health.

  20. Health Policy at a Fork in the Road Cut payments, reduce benefits, and restrict eligibility for public programs Re-engineer health care and improve health markets • OR Regardless of how you envision the role of government, health care and the markets in which it’s purchased need to be improved

  21. Health Care Reform and the Federal Budget Deficit: What Are the Choices? • Cutting Benefits • Cover fewer people, fewer services, or pay for a smaller fraction of total spending for services (i.e. increased patient cost-sharing or premiums) • Or, restructure current patient out-of-pocket costs to shape better care choices • Trim Payment Rates • Across the board cuts or selective cuts of over-priced services • Or, use purchasing leverage and pay smarter • Ensuring the Right Care • Restrict use of effective services, i.e. ration care • Or, reduce misuse, overuse, and underuse through payment and delivery system reforms, apply comparative-effectiveness research Source: K. Davis and S. Guterman, Achieving Medicare and Medicaid Savings: Cutting Eligibility and Benefits, Trimming Payments, or Ensuring the Right Care?, (New York: The Commonwealth Fund, July 2011).

  22. Need to Engage and Inform ConsumersThe sickest 5% account for the majority of health spending, andneed better choices and the information to choose wisely 1% 5% 22% $90,061 10% 50% $40,682 65% 50% $26,767 97% $7,978 Distribution of health expenditures for the U.S. population, by magnitude of expenditure, 2009 Annual mean expenditure Source: Agency for Healthcare Research and Quality analysis of 2009 Medical Expenditure Panel Survey.

  23. Simply stated, • the ACA is helping to make it easier to do the right thing…

  24. Ongoing ACA Implementation…Hundreds of provisions in two big buckets: coverage expansion health system reform

  25. Coverage Extension • Medicaid expansions (16 million) • Subsidies for uninsured to buy private insurance (20 million) • private markets: • Insurance mandate • Children to 26 • No limits on lifetime coverage and no discrimination against sick • State health insurance exchanges • Regulate administrative costs

  26. 2019 (estimated) 2008-2009 NH ME WA NH VT ME WA VT ND MT ND MT MN MN OR NY MA WI OR MA NY ID SD WI RI MI ID SD RI WY MI CT PA WY NJ CT IA PA NJ NE IA OH DE IN NE OH NV DE IN IL MD NV WV UT VA IL MD CO DC WV UT VA KS MO KY CA CO DC KS MO KY CA NC NC TN TN OK SC AR OK AZ NM SC AR AZ NM MS GA AL MS GA AL TX LA TX LA FL FL AK AK HI HI 23% or more 7.1%–13.9% 19%–22.9% 14%–18.9% 7% or less Health Reform Reduces Numbers of UninsuredPercent of Adults 19–64 Uninsured by State Data: U.S. Census Bureau, 2009–10 Current Population Survey ASEC Supplement; estimates for 2019 by Jonathan Gruber and Ian Perry of MIT using the Gruber Microsimulation Model for The Commonwealth Fund. SOURCE: Commonwealth Fund State Scorecard on Child Health System Performance, 2010

  27. 32 Million Uninsured Covered Under Affordable Care Act, Employers Remain Primary Source, 2019 23 M (8%) Uninsured 16 M (6%) Other 54 M (19%) Uninsured 16 M (6%) Other 162 M (57%) ESI 159 M (56%) ESI 51 M (18%) Medicaid 35 M (12%) Medicaid 24 M (9%) Exchanges (Private Plans) 15 M (5%) Nongroup 10 M (4%) Nongroup Pre-Reform Affordable Care Act Among 282 million people under age 65 * Employees whose employers provide coverage through the exchange are shown as covered by their employers (5 million), thus about 29 million people would be enrolled through plans in the exchange. Note: ESI is Employer-Sponsored Insurance. Source: K. Davis, S. Guterman, S. R. Collins, K. Stremikis, S. Rustgi, and R. Nuzum, Starting On the Path to a High Performance Health System: Analysis of the Payment and System Reform Provisions in the Patient Protection and Affordable Care Act of 2010, (New York: The Commonwealth Fund, September 2010).

  28. Health Reform Slows Growth in Total National Health Expenditures (NHE), 2009–2019 NHE in trillions 6.3% annual growth $4.6 $4.3 5.7% annual growth $2.5 Notes: * Estimate of pre-reform national health spending when corrected to reflect underutilization of services by previously uninsured. Source: D. M. Cutler, K. Davis, and K. Stremikis, TheImpact of Health Reform on Health System Spending, (Washington and New York: Center for American Progress and The Commonwealth Fund, May 2010).

  29. Health Reform Lowers Insurance Premiums, 2019 9.2% Source: D. M. Cutler, K. Davis, and K. Stremikis, The Impact of Health Reform on Health System Spending, (Washington and New York: Center for American Progress and The Commonwealth Fund, May 2010).

  30. The ACA aims to reduce percent of families with high medical care expenses compared to income (by state, 2009) NH WA VT ME MT ND AK MN OR NY WI MA SD ID WY MI RI PA CT IA NJ NE OH DE NV IL IN MD UT WV VA CO DC CA MO KS KY NC TN OK SC AZ NM AR MS GA AL HI LA TX 12-13% FL Percent of families who spent 10% or more of income on out-of-pocket medical care expenses or 5% if low income 14-16% 17-19% 20-24% Note: Households under 65 years old. Expenses are family out-of-pocket for medical care as a share of annual income, not including premiums. 5% threshold applies to incomes below 200% of poverty. Source: Analysis of the 2010 Current Population Survey by N. Tilipman and B. Sampat of Columbia University for The Commonwealth Fund.

  31. Health Reform Will Improve U.S. Health System Performance Note: * Estimate. Expenditures shown in $US PPP (purchasing power parity). Source: Calculated by The Commonwealth Fund based on 2007 International Health Policy Survey; 2008 International Health Policy Survey of Sicker Adults; 2009 International Health Policy Survey of Primary Care Physicians; Commonwealth Fund Commission on a High Performance Health System National Scorecard; and Organization for Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009).

  32. Payment Reforms: Pay for performance • Hospital and physician quality • Medicare readmissions • Hospital acquired conditions Health Systems Reform • Organizational Reforms • Accountable care organizations • Patient centered medical homes • Increased training and payment for primary care • Information Availability • Comparative effectiveness research ($500 million/year) • Health information technology

  33. Health Systems Reform Independent Payment Advisory Board (IPAB) Commission with power to promulgate changes designed to contain rate of growth of Medicare costs to GDP plus 0.5 percent. • Center for Medicare and Medicaid Innovation (CMMI) • $10 billion over ten years to undertake virtually unrestricted reform experiments and incorporate into routine Medicare and Medicaid practice.

  34. Health System Reform: Early Signs of Overall Declines in Hospital Readmissions Monthly 30-day All-Cause Hospital Readmission Rate, January 2010 – September 2012 Source: CMS Office of Information Products and Data Analysis, Medicare Claims Analysis

  35. Health System Reform: ACO Participation is Growing Rapidly All ACOs Assigned Beneficiaries by County (4.0 million total) Source: ACO Assignment Summary Reports (2012 for January starts and 2012Q3 for April/July Starts).

  36. Coverage and Access Risks After Full Implementation of the Affordable Care Act Gaps in the Law • 25-30 million people estimated to remain uninsured through 2022. • Undocumented immigrants are ineligible for Medicaid, premium tax credits, and exchanges. • Potential for unaffordable premiums, risk of underinsurance. Gaps in Implementation • States that do not expand Medicaid programs. • States that expand but use funds for private plans in exchanges. • Poorly functioning IT systems and lack of coordination between Medicaid and exchanges. • Insufficient outreach in some states, so many are eligible but uninsured. • Insufficient network capacity in health plans sold through exchanges. • Insufficient number of essential community providers in networks.

  37. Characteristics of Estimated Uninsured Population in 2016, Assuming Full Expansion of Medicaid 5.1 M (20%) Undocumented Immigrants 154 M (57%) ESI 13.3 M (53%) People not subject to individual mandate tax because of low income or plans not affordable 6.7 M (27%) People subject to individual mandate tax and choose to pay tax Among 25.3 million uninsured people under age 65 Source: Gruber MicroSimulation Model (GMSIM) Congressional Budget Office,

  38. Legitimate Concerns Going Forward Will employers continue to provide coverage to employees? Will insurance markets lead to competition on value or adverse risk selection? Will innovation work gaining widespread voluntary participation of physicians, hospitals, and other providers, and lead to widespread change? Will the affordability provisions be adequate? Will the safety net hold together until coverage is expanded and improved? Will the incentives for primary care and care coordination generate a strong primary care foundation for the health system of the future? Will federal and state government agencies be up to the implementation task? Source: K. Davis, A New Era in American Healthcare, (New York: The Commonwealth Fund, June 2010).

  39. Timing 2014 Mandate goes into effect Subsidies go into effect Medicaid expansions go into effect Anti-discrimination provisions for private insurance become effective Health Insurance Exchanges activated the year of decision

  40. Next Steps:Synergistic Policies to Stabilize Costs and Improve Outcomes Goal: To create incentives for better care and to lower cost throughout the continuum of health care services Tools: • Payment reforms to accelerate delivery system innovation • Policies to expand and encourage high-value choices • System-wide action to improve how health care markets function

  41. Commonwealth Fund Resources

  42. Supporting Health Care Reporting • Association of Health Care Journalists • 2013 Reporting Fellowships in Health Care Performance • Third year of the fellowship saw dramatic increase in applicant pool • Experienced reporters concentrate on performance of local, regional, national health care systems • Examine policies, practices, outcomes, roles of stakeholders

  43. Supporting Health Care Reporting

  44. Supporting Health Care Reporting CUNY TV: Talking Health The series features notable experts in the world of health care policy and practice; topics have included: • Patient-Centered Medical Homes • Health Care Costs • Long-Term Care • ACA implementation • state-based healthcare exchanges • Medicare reform & Medicaid • healthcare payment innovation and reform • healthcare data • healthcare bundling • business insurance plans for employees • SABEW Symposium • January 17 & 18, 2013 • New York Nebraska Press Association Pilot program for rural health news reporting

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