Transcript Atlantic Health Leadership Development Series

National Healthcare
Reform
Now What?
Sean J. Hopkins
Senior Vice President,
Health Economics
Source: New Jersey Hospital Association
Copyright 2010, New Jersey Hospital Association
The Bill(s)

Patient Protection and Affordable Care Act (H.R. 3590)
 Passed 219 to 212 (218 votes needed)

Reconciliation Act of 2010 (H.R. 4872) – “Sidecar”
 Passed 220 to 211

Cost – Congressional Budget Office Score = $940 billion/
10 years*
*Includes estimated savings associated with 21.5 percent
reduction in physician payments = $250 billion/10 years.
Source: New Jersey Hospital Association
Copyright 2010, New Jersey Hospital Association
What the Bills Do
■ Coverage expansion for 32 million by 2019
- Individual mandate
- Large employer mandate
- Medicaid expansion
- Health insurance exchanges
Estimated New Jersey coverage – 923,000
What the Bills Don’t Do
- Fix the SCR (Sustainable Growth Rate)
physician cut of 21.5 percent
Source: New Jersey Hospital Association
Copyright 2010, New Jersey Hospital Association
Hospitals Are Part of the
Funding
Market Basket Updates
$112.6 billion/10 years
(2011 = -.25) (2012 & forward = -0.1 to -0.3 + productivity)
Medicare DSH
$22.1 billion/10 years
(Starting in 2014)
Medicaid DSH
$14 billion/10 years
(Starting in 2014)
Inappropriate Hospital Readmissions
$7.1 billion/10 years
(Starting in 2013 – “Excess” vs. “Expected” for heart
attack, heart failure and pneumonia)
Total
$155.8 billion/10 years
Estimated New Jersey Share
$4.5 billion/10 years
Source: New Jersey Hospital Association
Copyright 2010, New Jersey Hospital Association
State Based Health Insurance
Exchanges

Effective 2011, requires states to establish HIEs (Health
Insurance Exchanges) where individuals and small
businesses can purchase private insurance.
-
Federal employee health benefit plan “like” offering
-
Consumer operated and oriented plans (Co-Ops)
-
No government public option
-
Payment rates are not tied into Medicare
-
Subsidies for 133 percent to 400 percent of FPL
(Up to $88,200 for a family of four)
-
States may work together to set up regional exchanges
-
Must be operational by 2014
Source: New Jersey Hospital Association
Copyright 2010, New Jersey Hospital Association
Insurance Reforms
-
No lifetime limits on coverage
-
No exclusions based on pre-existing conditions
-
No discrimination based on health status
-
No annual limits on coverage for preventative services
-
Allows parents to cover children up to age 26
-
Tax on Cadillac plans beginning 2018
-
Excise tax of 2.3 percent on medical devices beginning 2013
(excludes eye glasses and hearing aids)
Source: New Jersey Hospital Association
Copyright 2010, New Jersey Hospital Association
Non-Profit Hospital Requirements
 To retain tax exempt status hospitals
must:
- Periodically prepare community health needs
assessment
- Maintain a qualified financial assistance policy
- Limit charges on patients eligible for assistance
- Avoid excessive billing and collection practices
Source: New Jersey Hospital Association
Copyright 2010, New Jersey Hospital Association
Other Items
 Accountable Care Organizations

Starting in 2012 allows hospitals and physicians to jointly
create an ACO
- Requires management of beneficiary care
- Allows Secretary to share savings with provides
 Liability – sets aside $50 million for medical
liability demonstrations
 Geographic Variation

Sets aside $400 million for hospital payments in 2011 and
2012 in low cost states

Calls for two Institute of Medicine studies and a national
summit to discuss geographic variation
Source: New Jersey Hospital Association
Copyright 2010, New Jersey Hospital Association
Comparing Cost and Quality of Health Care Across the Country
Researchers at Dartmouth Medical School have found huge geographic variations in Medicare spending per
beneficiary, but areas that spend the most do not always produce better quality of care. Some point to the disparity
as evidence of inefficiency; others say higher spending often reflects higher cost of living and sicker population.
Source: The New York Times, September 8, 2009
Final Word
 Implementation will be key
 Congress already aware “Meat must be
put on the bones”
 The phrase “The Secretary shall….”
appeared over 1,300 times in the final bill
 State government and departments must
be monitored and directed as well.
Source: New Jersey Hospital Association
Copyright 2010, New Jersey Hospital Association
Questions?
Source: New Jersey Hospital Association
Copyright 2010, New Jersey Hospital Association