Health Care Reform

1. Health Care Reform An age of change; An era of opportunity Medicine Grand Rounds / Indiana University School of Medicine Presented by Ora Hirsch Pescovitz, M.D., Executive Vice President for Medical Affairs, University of Michigan,& Chief Executive Officer of the U-M Health System / March 23, 2012

2. The University of Michigan Health System University of Michigan 28 Schools & Colleges (3 campuses) U-M Health System U-M Medical School (incl.1,625 member Faculty Group Practice) U-M School of Nursing (clinical services) 3 Hospitals & >30 Health Centers Michigan Health Corp.

3. The University of Michigan Health System • By the numbers • $3B in overall revenue • 22,000 employees • 895 staffed beds • 45,000 discharges • 1.9M outpatient visits • 46,000 surgical cases • National rankings • Hospitals: #14; Honor Roll 17 consecutive years (USNWR) • Mott is the only ranked children’s hospital in MI (USNWR) • One of 5 hospitals to have both USNWR Honor Roll and Leapfrog Group top designation • Tied for 2nd in residency directors’ ranking of Medical School graduates’ “desirability “(USNWR) • #6 in NIH research funding ($319M; 2.76% market share) • Researchers produce an average 10 publications/day

4. National Challenges

5. The Cost of American Health Care • U.S. health expenditures hit $2.6 trillion in 2010 ($8,402 per capita) • Expected to reach $4.6 trillion in 2020 • Nearly half will come fromgovernment sources

6. Growth in Total Health Care Expenditure Per Capita, 1970-2008 $7,911

7. The Insurance Factor • In 2010, there were 49 million uninsured nonelderly Americans • The U.S. is one of only 3 developed countries where a sizable share of its population is uninsured (Mexico, Turkey) • Americans say they will skip medicines or medical appointments due to their high cost • Uninsured people receive fewer preventive and diagnostic services, and tend to be more severely ill when diagnosed • Research shows that insurance coverage could reduce mortality by 4-25%, depending on condition

8. The Quality of American Health Care • “Quality health care means doing the right thing at the right time in the right way for the right person and having the best results possible.” (AHRQ) • What are the dimensions of good quality care? • Acceptability • Accessibility • Appropriateness • Care environment and amenities • Competence/capability • Continuity • Expenditure or cost • Effectiveness • Efficiency • Equity • Governance • Patient-centeredness or responsiveness • Safety • Sustainability • Timeliness

9. The Quality of American Health Care Infant Mortality Rate: Deaths per 1,000 live births (2011 est.) INDIANA7.3 MICHIGAN7.7

10. The Quality of American Health Care Compared to patients in other countries, Americans are less satisfied with: • The quality of communication they have with their medical team • Their engagement in medical decision-making • Access to care outside of traditional working hours

11. Ready for Change?

12. “We’re ready to begin the next phase of keeping things exactly the way they are.”

13. If improvement [of the American health care system] is the plan, then we own the plan. Government can’t do it. Don Berwick Payers can’t do it. Regulators can’t do it. Only the people who give the care can improve the care.

14. My Perspective • We are those people • Only we can improve health care processes, because we create, manage and use those processes. • Only we can improve the quality and safety of care, because we discover and deliver that care.

15. Affordable Care Act: The blueprint for change?

16. Basic Goals of Affordable Care Act • Insure more Americans • Increase quality, safety and efficiency of care for individuals • Improve the health of populations • Contain and control national health care spending • Adopt reimbursement models based on quality, performance and outcomes • Improve care delivery systems through increased coordination, shared accountability, better information technology and new business models • Right care, right time, right place, right cost

17. Public Views on ACA 2 Years Later Given what you know about the health reform law, do you have a generally favorable or generally unfavorable opinion of it? Q: Favorable Unfavorable Don’t know/Refused 2010 2012 2011

18. Public Views on ACA 2 Years Later If the Supreme Court rules that the federal government cannot require Americans to have health insurance, do you expect some parts of the health care law will still be implemented, or do you think this will effectively mean the end of the entire law? Q: Effectively means end of the entire law Some parts of the law will still be implemented Don’t know/ Refused

19. My Best Guess on What Sticks Least Controversial • Children on parents’ insurance through age 26 • Protection for individuals with pre-existing conditions • Doughnut hole fill for Medicare recipients • Insuring the uninsured

20. 2008–2009 2019 (estimated) 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 8%–13.9% 19%–22.9% 14%–18.9% Less than 8% My Best Guess on What Sticks Percent of Uninsured Adults 19–64

21. My Best Guess on What Sticks More Controversial • Transition to pay-for-performance reimbursement • Development and implementation of better information management systems • Establishment of Accountable Care Organizations: Systems of providers responsible for the quality, cost and delivery of health care for a population

22. Payer Based on quality and performance indicators $$$ Population: 5,000+ members ACO Outpatient Care Hospital Care School-based Clinics PATIENT Medical Home Nursing Home Community Health & Social Services Home Care

23. Outpatient Care Reporting(Quality, Satisfaction, Clinical Data, Research Data) Integrated Health IT (EMR/PHR, Portals, etc.) Hospital Care School-based Clinics Medical Home PATIENT Patient Engagement Integrated Business Systems Nursing Home Community Health & Social Services Home Care Reimbursement Structure (i.e. Bundled payments, Partial or Full Capitation) Physician Engagement & Alignment

24. Can ACOs work? I think so.

25. Laying The Foundation Collaborative Quality Initiatives • Physicians at more than 50hospitals across MI worked together to share and analyze clinical data • Goal: Improve quality and reduce costs of care

26. Laying The Foundation Collaborative Quality Initiatives: Outcomes • Angioplasty • Reductions in kidney injury, stroke, transfusions and deaths • Saved $8.5M/year • Bariatric Surgery • Reduced readmissions by 35%, LOS by 20%, adverse events by 22% and complications by 13% • Saved $4.1M/year • General & Vascular Surgery • Reduced surgical site infections by 18%; complications by 37% • Saved $13M/year

27. Laying The Foundation Physician Group Incentive Program: Outcomes • Established a platform for statewide multi-disciplinary health services research • Improved quality of care for patients with chronic conditions • Increased patient capacity at physician practices through care redesign • Savings • Ex: $20M/year in Radiology Services

28. An ACO Case Study: • Physician Group Practice Medicare Demonstration Project (PGP)

29. PGP: Why We Participated • Develop skills for population management • Leverage experience from running M-CARE health plan for 20 years • Prepare for Medicare Value Based Purchasing and pay-for-performance • Collaborate across specialties and with hospitals, leading physician groups and CMS • Earn financial returns from shared savings • Opportunity to be part of Medicare’s first Pay for Performance ACO prototype, as outlined in the Affordable Care Act

30. PGP: Overview • Participation: 10 large U.S. physician groups, incl. U-M Faculty Group Practice • Duration: 2005-2010 • Goals: • Determine whether care can be coordinated in a way that generates Medicare savings in acute, ambulatory and post-acute care settings • Reduce Medicare cost growth while maintaining quality (32 quality metrics)

31. PGP: Outcomes • All 10 groups met at least 29 of the 32 quality goals • U-M was one of two groups to achieve success in financial measures all five years • UM saved Medicare >$46M; Earned back $17M • Demonstrated lower readmission rates • Improved care coordination for high risk/high cost patients • Received national recognition as a leader in health care value and in developing ACOs

32. ACO Next Steps • Now participating in CMS Innovation Center’s Pioneer ACO Model • Intended to test the impact of different payment arrangements in achieving quality and cost goals • 32 provider organizations in 18 states are participating

33. Personalized Medicine

34. Personalized Medicine 1990: U.S. Human Genome Project initiated 2000: INGEN created (LE, IU & IUSM) • $153 million investment by LE • $744M in awards and grants supported by INGEN • 3,725 articles published with INGEN support • Recruitment of 94 new faculty • Indiana Physician-Scientist Initiative ($60M LE investment) • Indiana Institute for Personalized Medicine 2001: Scientists reported “working draft” of the human genome

35. Personalized Medicine 2003: First human genome sequenced Source: The Genome Institute at Washington University, Washington University School of Medicine

36. Personalized Medicine Before 2013, I predict that: • We will sequence for under $1,000 and in less than 4 hours. (Faster than Moore’s Law) • We will be able to diagnose diseases and treat patients like never before.

37. What is the Future of Health Care?

38. Cost control, quality metrics Personalized medicine Population health Technology

39. We have an opportunity to rethink and advance medicine.

40. This is an era of unprecedented opportunity.

41. The Future of Health CareThrough Discovery

42. Beery Family: Dealing With Dystonia http://dystonia.thebeerys.com/Video/Video_Player/VideoId/71/Today-Show-October-27-2011.aspx

43. “When it comes to the future, there are three kinds of people: • Those who let it happen; • Those who make it happen; • Those who wonder what happened.” • John M. Richardson, Jr.

44. You are the people who make it happen.