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Talking about the U.s. health care system

Talking about the U.s. health care system. Barry Scholl Senior Vice President for Communications and Publishing. May 1, 2014. Overview of the Commonwealth Fund. Established in 1918 by Anna Harkness Broad charge to “enhance the common good”

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Talking about the U.s. health care system

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  1. Talking about the U.s. health care system Barry Scholl Senior Vice President for Communications and Publishing May 1, 2014

  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 47 million uninsured; 31 million underinsured QUALITY Despite rapid advances, thousands of patients die each year from medical error

  4. International Comparison of Spending on Health, 1980–2011 Total expenditures on healthas percent of GDP Average spending on health per capita ($US PPP thru 2011) $8,508 17% $3,182 8.9% Note: $US PPP = purchasing power parity. Source: Organization for Economic Cooperation and Development, OECD Health Data, 2013

  5. Total Premiums for Employer-Sponsored Insurance Rise Sharply as Share of Median Income 2003 2012 Less than 17% 17%–19% 20%–22% 23%–28% Note: Premiums include employer and employee shares. Data sources: 2003, 2012 Medical Expenditure Panel Survey–Insurance Component; March 2004 and March 2013 Current Population Surveys for median income.

  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. New State Scorecard Released Yesterday: Pockets of Improvement; Widespread Stagnation and Decline • No meaningful change or decline in the majority of states for 2/3 of indicators with trends • 13 states where as many or more indicators declined as improved • Most states improved on indicators with national and state attention: • immunizations for children • safe prescribing of medications for the elderly • patient-centered care • avoidable hospital admissions • cancer-related deaths • States lost ground in insurance for adults and affordability of care 34 Indicators with Trends Indicators where the majority of states improved, or did not change/declined over 5 years up to 2011/12 Notes: Trend data are available for 34 of 42 total indicators. Trends generally reflect the 5-year period ending in 2011 or 2012. Improvement or decline refers to a change from baseline to current time of at least 0.5 standard deviations. See Exhibit 1 for indicators.

  11. Overall State Health System Performance: Scorecard Ranking, 2014 Overall performance, 2014 Top quartile (13 states) Second quartile (11 states + D.C.) Third quartile (14 states) Bottom quartile (12 states) Source: Commonwealth Fund Scorecard on State Health Performance, 2014

  12. Why?

  13. Hospital Discharges per 1,000 Population, 2011 *2010 Source: Organization for Economic Cooperation and Development, OECD Health Data, 2013

  14. Hospital Spending per Discharge, 2011Adjusted for Differences in Cost of Living US $ *2010 Source: Organization for Economic Cooperation and Development, OECD Health Data, 2013

  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 Primary Care Doctors Orthopedic Surgeons 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. Diagnostic Image Prices, 2012 MRI scanning and imaging fees CT scanning and imaging fees (head) Notes: US refers to the commercial average. MRI refers to magnetic resonance imaging; CT refers to computed tomography. Source: Organization for Economic Cooperation and Development, OECD Health Data, 2013

  18. Retail Price Indexes for Basket of In-Patent Pharmaceuticals, 2010US is set at 100 Price level Note: Calculations weighted relative to U.S. consumption patterns. U.S. retail prices were discounted from manufacturer prices according to the rebates obtained by the Medicaid program. Source: P. Kanavos, A. Ferrario, S. Vandoros et al., "Higher U.S. Branded Drug Prices and Spending Compared to Other Countries May Stem Partly from Quick Uptake of New Drugs," Health Affairs, April 2013 32(4):753–61.

  19. Health Policy at a Fork in the Road Cut payments, reduce benefits, and restrict eligibility for public programs Re-engineer health care, cover more people, 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

  20. So how does • the Affordable Care Act • tackle the problem?

  21. Two Main Ways: coverage expansion health system reform

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

  23. 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

  24. State Action on Establishing Health Insurance Marketplaces and Participation in Medicaid Expansion, As of April 2014 Health Insurance Marketplaces Medicaid Expansion Pursuing state-run exchange (16 + DC) Expanding (22 + DC) Pursuing state-federal partnership exchange^ (7) Customized approaches (5) Pursuing a state-run small business exchange and a federally run individual exchange (1) Options under discussion (4) Pursuing federally facilitated exchange , state will be responsible for the plan management functions (7) Not expanding (19) Pursuing federally facilitated exchange (19) Note: CMS has approved waivers for expansion with variation in Arkansas, Iowa, and Michigan. Pennsylvania’s waiver is currently under development by the state’s health department . **In New Mexico and Idaho, the federal government will operate the individual market in 2014. Source: National Conference of State Legislatures, Federal Health Reform: State Legislative Tracking Database. http://www.ncsl.org/default.aspx?TabId=22122;State Refor(u)m; K. Keith and K. W. Lucia, Implementing the Affordable Care Act: The State of the States, The Commonwealth Fund, January 2014, http://www.commonwealthfund.org/Publications/Fund-Reports/2014/Jan/Implementing-the-Affordable-Care-Act.aspx; Politico.com; Commonwealth Fund Analysis.

  25. More than 20 Million People Have Insurance Under the Provisions of the Affordable Care Act, as of March 31, 2014 Millions of people who have gained coverage or enrolled in a new plan under the Affordable Care Act

  26. Thirteen States Have Reached or Exceeded Their Five Month Marketplace Enrollment Target as of March 1, 2014 Percent of five month enrollment target reached by 3/1/2014 NH WA VT ME MT ND AK MN OR NY WI ID MA SD RI WY MI CT PA IA NJ OH NE NV DE IN IL MD UT WV VA CO DC CA KS MO KY NC TN OK SC AZ AR NM GA AL MS HI LA TX FL 100%+ 50%-<75% <50% 75%-<100% Source: Memo from Marilyn Tavenner, CMS Administrator, Projected Monthly Enrollment Targets for Health Insurance Marketplaces in 2014, September 5, 2013, http://waysandmeans.house.gov/uploadedfiles/enrolltargets_09052013_.pdf; Health Insurance Marketplace: March Enrollment Report, For the Period: October 1, 2013 – March 1, 2014, ASPE Issue Brief, U.S. Department of Health and Human Services, March 11, 2014,http://aspe.hhs.gov/health/reports/2014/MarketPlaceEnrollment/Mar2014/ib_2014mar_enrollment.pdf

  27. Commonwealth Fund Tracking Surveys find that more adults who visited the Marketplaces found it easy to compare plan benefits and premiums from October 2013 to December 2013

  28. Health Systems Reform • Payment Reforms: Pay for performance • Hospital and physician quality • Medicare readmissions • Hospital acquired conditions • 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

  29. 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

  30. Health Reform Slows Growth in Total National Health Expenditures (NHE), 2009–2019 6.3% annual growth $4.6 $4.3 5.7% annual growth $2.5 NHE in trillions 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).

  31. 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.

  32. Characteristics of Estimated Uninsured Population in 2016, Assuming Full Expansion of Medicaid 154 M (57%) ESI 5.1 M (20%) Undocumented Immigrants 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,

  33. 2014-15 Policy Discussion: Key Issues Bubbling Up Coverage of those in states not expanding Medicaid Employer mandate Individual mandate Coverage of undocumented immigrants Reinsurance and risk corridor programs Churn Affordability of premiums and cost- sharing Narrow networks Court challenge to subsidies in federal marketplaces

  34. Looking Ahead: Timeline and Key Delays for Health Reform Implementation 2014 2015 2016 2017 March 31st open enrollment closes for marketplace Nov. 2014-Feb. 2015 2015 open enrollment • Nov. 2014 • Online enrollment for federal SHOPs begins • Nov. 2013-Oct. 2016 • Transitional policy extension • Jan. 2014-Dec. 2016 • Phase out of reinsurance and risk corridor programs • Jan. 1, 2015 • Employer shared responsibility requirement • SHOPS open to small employers up to 100 employees • Jan. 1, 2017 • State option to open SHOPs to employers with 100+ • Ongoing: • Medicaid enrollment • Special enrollment periods for marketplaces

  35. Commonwealth Fund Resources

  36. Supporting Health Care Reporting • Association of Health Care Journalists • 2014 Reporting Fellowships in Health Care Performance • Fourth 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

  37. Supporting Health Care Reporting

  38. 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 Supporting Health Care Reporting • SABEW Symposium • March 28 & 39, 2014 • Phoenix Nebraska Press Association Pilot program for rural health news reporting

  39. Thank You! Barry Scholl Senior Vice President for Communications and Publishing bas@cmwf.org 212-606-3826

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