Update from the IU Healthcare Reform Workgroup

1. Co-Chairs: Eric R. Wright, Ph.D. Eleanor D. Kinney, J.D., M.P.H. Update from the IU Healthcare Reform Workgroup

2. What is the IU Healthcare Reform Workgroup? • Origin: FSSA has awarded a grant to IU to form a faculty workgroup to study policy options for improving the quality, efficiency, and effectiveness of our healthcare system • Role: • an independent, non-partisan, non-governmental group committed to helping the State identify the best policy options for state-level healthcare reform • Objectives: • to develop a long-term vision of the ideal healthcare system for Indiana • to provide data-driven and evidence-based policy recommendations for specific steps to achieve this vision by 2035 • to provide technical assistance and support in the development of legislation to implement these policy recommendations during the 2008 legislative season

3. Core Workgroup Members • Eric R. Wright, PhD, Director, Center for Health Policy • Eleanor D. Kinney, JD, MPH, Co-Director, Hall Center for Law and Health • John Fitzgerald, MD, MBA, Associate Dean, IU School of Medicine • David Handel, MHA, Director, Health Administration Program, SPEA • Ann M. Holmes, PhD, Associate Professor of Health Economics, SPEA • Douglas B. McKeag, MD, Professor and Chair, Department of Family Medicine. • Eric M. Meslin, PhD, Director, Center for Bioethics, IU School of Medicine • Gregory Steele, PhD, MPH, Associate Professor, Department of Public Health, IU School of Medicine

4. Workgroup Sub-Committees Principles and Values Finance, Access, and Insurance Delivery, Utilization, Price, and Costs Public Health and the Environment Workforce and Workforce Development Legal and Regulatory Issues State of State/Data Group

5. Project Plan – Phase 1 Summer Late Summer Early Fall Workgroup subcommittees examine critical healthcare reform challenges Report Outlining Best Policy Alternatives and their Likely Costs and Consequences Core Workgroup Synthesizes Key Findings Listening Tour with Stakeholders and the Public on Vision for Indiana’s Future Healthcare System

6. Project Plan – Phase 2 Fall 2007 Winter 2008 Workgroup assists the State Legislature, the Governor, and FSSA to examine the policy alternatives Development of Legislative Proposals Listening Tour to Discuss Policy Alternatives with Stakeholders and the Public

7. Accomplishments to Date • Core Workgroup/Seven Subcommittees have been meeting and working since early 2007 • Summer 2007 Listening Tour • Report Drafted: Hoosiers’ Vision for the Future of Indiana’s Health Care System: Findings from the IU Workgroup on Healthcare Reform June 2007 Listening Tour • Five Subcommittees drafted and in final stages of editing • Principles and Values, Finance, Utilization, Public Health, Workforce • Workgroup has begun selecting and compiling the specific recommendations from the subcommittees into a general framework

8. A Working Framework for Healthcare Reform in Indiana

9. Factors Contributing to the Healthcare Crisis in Indiana • Uninsured • Inefficient delivery system • Variation in the availability and quality of services • Over and underuse of some care services • Incentives do not reward most critical health care needs • Poor Health Status/Outcomes • Poor ranking in terms of the quality of care • Poor ranking relative to significant morbidity and mortality • Significant health disparities

10. The Three Principal Challenges in Healthcare Reform

11. Draft Vision for 2035 By 2035, Indiana will have as a top priority the health of its citizens by providing everyone access to a reasonable continuum of health care, mental health, and addiction services. The health care system will emphasize a primary care first, disease-prevention approach that integrates a foundational structure consisting of a defined health care home and coordinated public health initiatives. Care will be provided in an array settings in a holistic, patient-centered manner by a variety of health profession disciplines who will work in collaboration guided by the principles of innovative quality and evidence-based care where the outcomes are aimed at maximizing the health and quality of life for the patients they care for. Citizens will be inspired to share individual responsibility for their health with respect to their personal conduct and financial ability to pay. Patients will be cared for with dignity, respect, compassion, and humility cognizant of their uniqueness as a human being and rights to privacy. Transparency, efficiency, open communication, and the competent coordination of care will promote an environment whereby citizens can make informed and thoughtful decisions about their care in an environment where health providers are involved as partners in the health delivery process.

12. Goals for Reform Indiana will be a national leader in providing an environment and healthcare system which maximizes the health of its population. • Indiana will be in the lowest quartile of states in the percent of the population that smoke, are obese, and lead sedentary lifestyles. • Indiana will be in the highest quartile of states on positive health status measures. • Indiana will be in the highest quartile of states in terms of health care quality of outcomes and performance. • Indiana will be in the lowest quartile of states in healthcare spending per capita.

13. Key Components of Indiana’s Future Healthcare System • Hoosiers will have universal access • Universal insurance coverage • Effective access to all aspects of the healthcare system by all residents and are not dependent on income class, cultural identity, or place of residence within Indiana • Disease prevention and health promotion will be the primary foci of both the delivery and public health systems • All residents will have a medical/healthcare home which will be the source of primary care, disease management, and care coordination

14. Key Components of Indiana’s Future Healthcare System (cont.) • The delivery system will focus on and maximize healthcare quality, outcomes, and patient safety • The payment system will be aligned to achieve desired patient quality and outcomes and to insure an adequate supply and range of healthcare providers and services • There will be a workforce with adequate capacity to meet the needs of Indiana residents • There will be an effective, statewide infrastructure in IT and quality indicators and a public system to support and monitor the delivery of high quality cost effective patient care

15. Key Components of Indiana’s Future Healthcare System (cont.) • Hoosiers will take an active role in preserving their own health and working collaboratively with their healthcare providers to address health challenges.

16. Sample Short-Term Recommendations for Policy Action Items • F1: The complexity of the enrollment process for current public insurance programs should be simplified, particularly for populations with eligibility for multiple programs (e.g., Medicaid, Medicare, VA, etc.). • F3: Targeted educational outreach is needed to ensure people enroll in all public insurance programs for which they are currently available, particularly for rural residents. Outreach efforts also need to be coordinated between providers and FSSA, particularly for children who are eligible through school or welfare programs.

17. Sample Short-Term Recommendations for Policy Action Items (cont.) • U1: Increase the Number of Community Health Centers • U2: Improve care for chronic conditions by targeting high-risk populations and implementing education and disease management programs • U4: Create a Statewide Clinical Quality Program • U10. Expand the Indiana Health Information Exchange and other Health Information Exchanges plus Quality Health First’s Program to cover most if not all of population.

18. Sample Short-Term Recommendations for Policy Action Items (cont.) • W2: Increase financial aid targeted to URMD students and students based on prediction for rural and urban inner-city primary care practice and provide this aid to students studying out of state who are willing to practice in Indiana. •  W4: Legislatively  mandate required clinical training experiences in rural and urban inner-cite primary care medically underserved settings for health care students • W11: Encourage interdisciplinary training of teams of providers so that mid-level providers could team with higher level providers to help meet more of the health care needs.

19. Sample Short-Term Recommendations for Policy Action Items (cont.) • P2: Adopt legislation, fully consistent with CDC’s Best Practice recommendations, to take the state smoke-free in all public and work places. • P5: The state support and fund the implementation of a comprehensive, coordinated, state-wide program to promote healthy lifestyle choices among citizens of all ages.

20. Sample Long-range Recommendation for Policy Action - Access • Recommendation: Achieve universal coverage in Indiana by 2010 • Individual mandate • Premium linked to income and/or subsidy provided by state (tax credit too expensive considering admin costs) • Continuous enrollment = same premium if no lapses (vs. opt-out and then re-enter, premium reassessed/adjusted) • Tax penalty for non-compliance • Supplemental insurance allowed

21. Sample Long-range Recommendation for Policy Action – Access (cont.) • Define standard minimum benefit • Question: include catastrophic occurrences in this? • Employer contribution • Payroll tax – every employer pays, including non-profit entities • Tax credit/deduction (corporate tax) – for employers already providing

22. Sample Long-range Recommendation for Policy Action – Access (cont.) • Out-of-pocket • Tiered co-payment (3-4 levels small co-pay, negative co-pay, etc.) • Can be income-adjusted, health/illness adjusted, but that adds complexity and administrative cost • Corporate tax (already high) • Rate = expected cost recovery from the reform and would either be on • HC providers/Insurance co’s (?) OR • FP HC providers and specialty hospitals

23. Sample Long-range Recommendation for Policy Action – Access (cont.) • Sales & Income tax • Piggy-back admin on IT • Incorporate bulk-billing incentives if standardized w/ public (+ P4P) • Insurance pool • Max benefit guaranteed issue • Reinsurance or risk-adjusted • Specialty Hospital/Health Insurance Corporate Tax (like an excess profits tax)

24. Sample Long-range Recommendation for Policy Action - Delivery Recommendation: Enhance public health and primary care infrastructure to provide healthy Indiana regional networks for the efficient delivery of services to the uninsured and/or underserved • Establish primary care districts in the same ten districts as the public health districts. In each primary care district, identify primary care health providers, including primary care medical groups, community health centers and hospital-based clinics, that would (upon meeting established criteria) constitute a medical home for the target population.

25. Sample Long-range Recommendation for Policy Action – Delivery (cont.) • Consolidate publicly funded public health services to public health authorities in ten districts throughout the state to provide a more coordinated, consistent, and efficient system of public health service delivery. The ten-district model, first initiated in Indiana for purposes of emergency preparedness, is a promising model. The district model would allow for more fluid and efficient allocation of staff and resources as well as improved coordination of services both locally and with state agencies. In addition, the privatization of specific public health functions currently performed at the county level, such as inspections of regulated facilities, should be adopted where appropriate.

26. Sample Long-range Recommendation for Policy Action – Delivery (cont.) • Within each public health/primary care district, establish regional networks of service providers that will support the designated “medical homes” in the districts and enable these medical homes to qualify as medical homes eligible for reimbursement breaks and other benefits. • Such networks will include hospitals will take to provide secondary and tertiary care to those in the population enrolled in the Healthy Indiana, Medicaid or other health insurance programs and secondary care (from the hospital’s community benefit obligation) for the uninsured.

27. Sample Long-range Recommendation for Policy Action – Delivery (cont.) • The entire network oversight and delivery can be established to manage the care for this population, which often is not transient and can be followed for many years. Records and disease management techniques can be used to support the care. The network can be administered through the existing State Department of Health, much as the CMHCs are administered that the State Division of Mental Health.

28. Next Steps • Over the next few weeks, we will continue to develop the framework and associated recommendations and plans. • At the SCI Institute in Chicago, we will work on refining the proposals. • Work with FSSA, Legislators to identify specific components to develop into formal legislative proposals for 2008. • Publish the subcommittee reports and the document outlining the framework. • Launch the second listening tour in mid October to get Hoosiers’ feedback on the recommendations.