LSU-HCSD Health Care Effectiveness Quarterly Meeting July 15, 2008 Alan Levine

1. LSU-HCSD Health Care Effectiveness Quarterly Meeting July 15, 2008 Alan Levine Secretary, Department of Health & Hospitals

2. Organizing principles Our efforts to improve health outcomes are organized around the following major principles: • Transparency • Consumer choice • Community leadership • Aligned incentives for improved outcomes • Changing consumer behavior • Modernizing our safety-net • Maximizing affordable coverage • Portability of benefits • Health planning & evaluation of outcomes

3. Reform background Louisiana Health Care Redesign Collaborative • The Collaborative process produced four major recommendations: • expand access to affordable health care coverage; • promote the use of health information technology; • implement a medical home system of care; • form the Louisiana Health Care Quality Forum.

4. Reform background Expanding access to affordable coverage • Coverage expansion – has not moved forward to-date: • Health care Reform Act of 2007. • The Louisiana Health Care Redesign Collaborative did not take-up the rebuilding of MCLNO, nor the role of the safety-net system in general: • Expanding coverage, rebuilding MCLNO, and modernizing the safety-net must be part of an integrated, comprehensive reform.

5. Health system reform to-date • Health system reform since Governor Jindal took office has focused on: • Behavioral health services • MCLNO business plan • Health Information Technology • Transparency

6. Behavioral health services In response to the situation in New Orleans, and as a catalyst to state-wide reform, the state: • Provided a transformation team led by Col. James McDonough to Metropolitan Human Service District; implementing management reform, personnel changes & launching new services. • Passed legislation providing for expansion of community led human service districts once new readiness criteria have been met, and holding these districts responsible for their outcomes. • Passed legislation providing for Crisis Receiving Centers as single points of entry for persons in behavioral health crisis & funded start-up of new centers; • 79% of US reported they routinely held psych patients in waiting rooms for some period of time due to lack of immediate services. • Increased behavioral health funding by $89 million over last year.

7. MCLNO business plan Governor Jindal requested that DHH lead a collaborative assessment of the business plan with Tulane and LSU • Results include: • 2016 Region I bed-demand projections decreased from 966 to 862; • Bed-size based on patient mix, payor mix, faculty practice patterns and use and utilization decrease from 416 to 364 med-surg beds; • The original pro-forma was revised to reflect a projected annual net loss of $58m in 2016 down from a projected $21m annual profit; • $130m in annual state general fund subsidy will be required under this model. • Both are better than a “do-nothing” scenario which projects a $153m loss in 2016 if the Interim LSU Hospital continues in operation as is.

8. Health Information Technology • Louisiana Rural Health Information Exchange • more than $13 million in new FY to connect 7 additional rural hospitals to the Exchange and provide them with electronic medical records; • $4 million for the Louisiana Health Information Exchange to build the infrastructure and staff for a system that will allow health care providers state-wide to securely share privacy protected health information and electronic medical records; • DHH is providing hand held e-prescribing devices to 523 Medicaid doctors statewide: • 65% of our Medicaid patients receive a pharmacy service; • Initial estimates place Louisiana’s annual savings at $4.8 million. • CMS-EMR demonstration project which will provide incentives to 100 physicians practices in the state to use EHRs, and to report and improve quality. The state has committed $1 million (matchable) Medicaid dollars to this effort.

9. Transparency The Consumers Right to Know Act will allow the state to collect and publish financial and outcomes data for all health care providers in Louisiana; SB 337 will require the state to collect and publish the use of funds for uncompensated care within all non-rural providers.

10. Reforms to be introduced • Medicaid reform • Coverage reform • Strengthening delivery systems

11. Medicaid reform Provider Service Networks • Medicaid spending in Louisiana grew by approximately 20% last year – a combination of legislatively mandated rate increases and increased utilization; • Very little care coordination exists in the current Medicaid system; • The Health Care Reform Act of 2007 appropriated $25m for Medicaid reform based on the medical home system of care: • In 2008 legislative regular session, $4.7m was included for PSNs.

12. Medicaid reform Provider Service Networks • PSNs are contracted networks of providers charged with delivering care to the defined population who choose their network. They: • Would require at least 25% provider ownership; • Would be awarded through an RFP process within each demonstration market (New Orleans, Baton Rouge, Shreveport); • Would implement NCQA patient-centered medical home criteria; • Could be fee-for-service or prepaid. DHH recently appointed a Medicaid reform advisory group to assist in the design of the program

13. Medicaid reform Enrollee and provider satisfaction reporting; Anti-fraud and abuse systems; Robust utilization management; Aggressive disease management; Increased EPSDT screening rates for children; Health IT (EMR, Web-based tools, telemedicine) to improve care coordination and measure health outcomes; Incentives for high performers. Provider Service Networks will be required to implement: Children with special needs and persons receiving developmental services would be carved out of this system

14. Coverage reform • Commonwealth Fund links better access to better quality; • Different individuals and families have different coverage needs: • Coverage reform does not need to be “one-size-fits-all”. • Reforms working elsewhere: • Individual and employer tax credits for high-deductible health plans and health savings accounts; • Connectors/exchanges which merge multiple-funding streams for health care from individuals, employers and government to pay health insurance premiums.

15. Strengthening delivery systems Leverage federal and state initiatives in Region I • Three major federal grants assisting in transforming the safety-net delivery system in Region I to a more primary care, community based, medical home model; • Our intent is that by the end of the grant periods, participating clinics and practices grow to provide efficient and effective services: • to a broad-array of patient and payor types; • in locations close to where users live and work; • that decrease the reliance on emergency rooms. • DHH is convening a strategic planning session in the late summer to begin system-level sustainability planning with the grant recipients and other local stakeholders.

16. Strengthening delivery systems 3-year $100m grantPrimary Care Access & Stabilization Grant • Ensure the ability of the health care infrastructure in the Greater New Orleans area to: • Provide primary care and behavioral health services to the low-income and uninsured population; • Increase sustainable clinic capacity to meet unmet demand for these services. • Twenty-five private and public not-for-profit organizations delivering care at approximately 70 sites (including LSU); • $46.3 million awarded to date; • Delivered services to over 80,000 individuals to-date; • The population associated with these clinics grew by over 10% during the last 6-month reporting period. Funding for this grants expires September 2010

17. Strengthening delivery systems $50m Katrina Healthcare Related Professional Workforce Supply Grant • Recruitment and retention program for the Greater New Orleans area: • Available to physicians, dentists, nurses and certain allied health providers; • Each must agree to provide substantial care to persons with Medicaid and the uninsured; • To date, $35.6m has been awarded and obligated to 958 applicants; • DHH is negotiating with HHS new recruitment and retention uses for remaining funds, such as practice management support to build thriving practices. The nation, and Louisiana in particular, faces a looming crisis in medical workforce supply

18. Strengthening delivery systems $3.5m ER Diversion Grant • Intended to lower Medicaid beneficiaries improper use of costly hospital emergency departments. This program will: • Establish alternate public-private networks of non-emergency care in Baton Rouge and New Orleans; • Incentivize this network using Medicaid payments to offer extended evening and weekend hours, and urgent care facilities; • Target outreach to high users of ER services at the point of contact within the ER. This grant is in the implementation planning stage

19. Questions?