Transcript LOOKING AHEAD: Implications of Reform

HEALTH CARE REFORM:
MANAGEMENT ACADEMY
South Carolina Hospital Association
Columbia, SC
May 15, 2013
James Bentley, Ph.D.
Silver Spring, Maryland
Presentation
• Nomenclature
• Legal status and responses
• Reform Framework
– Coverage
– Quality
– Affordability
Nomenclature
• March 23: Patient Protection and
Affordable Care Act (PPACA)
• March 30: Health Care and Education
Reconciliation Act of 2010
• Common Usage: Affordable Care Act
(ACA) to refer to both acts combined
Supreme Court Decision
• The Individual Mandate stands because the
penalty for lacking coverage imposed by the
Federal Government is a tax.
• State participation in the Medicaid expansion
is optional.
Health Reform Objectives:
Balancing Priorities
Coverage
(too few)
Quality
(too variable)
Affordability
(too expensive)
Coverage Provisions
• About 94% covered if all states expand
Medicaid
• Coverage mandate to create a stable
insurance pool
• Insurance exchanges for purchasing by
individuals and small businesses
• Medicaid expansions for persons at or below
133% of poverty threshold
• Subsidies for persons between 134% and
400% of poverty threshold
Coverage Levels
Plan
Bronze
Silver
Gold
Platinum
% Actuarial Value
60
70
80
90
Coverage Timeline
• October 1, 2013
– Health Insurance Exchanges Operational
• January 1, 2014
– Coverage expansions effective
Coverage Uncertainities
• How many people will elect to pay the penalty for not obtaining
coverage?
• How many insurers will offer products through the insurance
exchanges?
• Which level of coverage will individuals and employers select:
bronze, silver, gold, or platinum?
• Will individuals find the initial insurance exchanges easy to use?
• Will employers offering group coverage continue that practice or
will they discontinue their policies and recommend employees
purchase individual policies through the insurance exchanges.
A Massachusetts's Lesson:
Coverage requires Access
Physician payment: to increase primary care
access
– Medicare:
• Primary care: Family Medicine, Internal Medicine,
Pediatrics, Nurse Practitioners, Clinical Nurse Specialists,
Physicians’ Assistants
• 60% of services in selected E&M codes
– 10% bonus for E&M services
– 2011 through 2015
• General Surgeons in HPSAs
– Medicaid: Primary care
• Pay at least Medicare rates for primary care
• 2013 and 2014
Hospital Strategies:
Coverage
• Create alternatives to the ED for primary care access
–
–
–
–
Primary care networks within community
Federally qualified health centers (FQHC)
Rural Health Clinics
Urgent care option to ED within the hospital
• Coordinate care with all patient sources
– Community physicians
– FQHCs and Rural Health Clinics
– Free Clinics
Quality Provisions
• Incentives for adopting best practices
– Penalize high readmission rates
• Competing against your own case mix
• Base = 2010-2012
– Penalize hospital-acquired conditions
• Competing against all hospitals: 25% penalized
• Base = 2012-2014
• Financial incentives for coordinating care
– Bundled care pilots
– Accountable Care Organization pilots
• Requires 5,000 Medicare patients minimum
• Improve the evidence base of medicine
– Comparative effectiveness research
– Practice variation research
Hospital Strategies:
Quality #1
• Identify the current system of care
– Who are your clinical partners?
• What are today’s care patterns?
• Are all the necessary components included?
• Assess partners’ performance
– Clinically
– Resources used (financially)
• Redesign the current system of care if necessary
– To improve quality
– To restrain costs
Hospital Strategies
Quality #2
• Make evidence-based practice routine
– Create the essential infrastructure
• Selection process for protocols/guidelines
• Updating process for protocols/guidelines
• Routine communication of protocols/guidelines
– Create a process for the “off-protocol case”
• What documentation for atypical patient
• How share learning?
Hospital Strategies
Quality #3
• Be able to coordinate care as efficiently as the best in
your area.
• Develop capability to manage care across settings/
practices
Health Reform:
Payment Reductions
• Delivery system payment
– Medicare incentives to conserve resources
• Productivity offset to annual update
– Started at- 0.25% in 2010, rises to -0.75% in 2019
• Value-based purchasing
– Starts at -1% in 2013, rises to -2% in 2017
• Readmission penalty
– Starts at -1% in 2013, rises to -3% in 2015
• Hospital acquired condition penalty
– A constant -1%
– Medicare and Medicaid: Decreased DSH payments
– Smaller payment differentials in private sector likely
• Physician payment
– No permanent fix to fee update
Hospital Strategies:
Payment
• PPS hospitals: Avoid the payment penalties
• Lower the hospital’s cost structure
– Project multi-year trend lines
– PPS stretch goal: Breakeven at Medicare’s price
• Share diagnostic and treatment information to reduce
duplication of ancillary services for patients
– Especially important for bundled payment and ACOs
Impacting the
Medicare Update
Base: Prior-year rate
Plus market-basket update
Minus productivity offset
Minus Value Based Purchasing
Minus excess readmission
Minus hospital acquired conditions
Plus shared savings of improved efficiency
•
•
Bundled payment
Accountable Care Organizations
Equals Actual change in payment
Closing Comments
•Three keys
•Quality of Care
•Efficiency of Care
•Coordination across continuum
•Think of yourself as part of a health system
–Not an individual hospital, nursing home, or home health
agency.
•Conserve capital to invest in a “new business model.”
•Assure that the quality and efficiency of care in your system are
competitive with the best in your area.