lsu now and in the post health care reform world fred cerise july 19, 2011
TRANSCRIPT
LSU Now and in the Post Health Care Reform World
Fred CeriseJuly 19, 2011
U.S. health care is expensive
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International Comparison of Spending on Health, 1980–2008
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United StatesNorwaySwitzerlandCanadaNetherlandsGermanyFranceDenmarkAustraliaSwedenUnited KingdomNew Zealand
Average spending on healthper capita ($US PPP)
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United StatesFranceSwitzerlandGermanyCanadaNetherlandsNew ZealandDenmarkSwedenUnited KingdomNorwayAustralia
Total expenditures on healthas percent of GDP
Source: OECD Health Data 2010 (June 2010).
A growing number of Americans cannot afford U.S. healthcare
Premiums Rising Faster Than Inflation and Wages
* 2008 and 2009 NHE projections. Data: Calculations based on M. Hartman et al., “National Health Spending in 2007,” Health Affairs, Jan./Feb. 2009 and A. Sisko et al., “Health Spending Projections Through 2018,” Health Affairs, March/April 2009. Insurance premiums, workers’ earnings, and CPI from Henry J. Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits Annual Surveys, 2000–2009.Source: K. Davis, Why Health Reform Must Counter the Rising Costs of Health Insurance Premiums (New York: The Commonwealth Fund, Aug. 2009).
Projected Average Family Premium as a Percentage of Median Family Income, 2008–
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25
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75
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125
2000 2001 2002 2003 2004 2005 2006 2007 2008* 2009*
Insurance premiums
Workers' earnings
Consumer Price Index
Cumulative Changes in Components of U.S. National Health Expenditures and Workers’
Earnings, 2000–09
Percent Percent
108%
32%
24%
1112
1314
1617
18 18 18 1819 19 19
20 2021 21
22 2223
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5
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25
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Projected
Health Care Costs for American Families Double in < 9 Years
• While health care costs increase, there is a strong public sentiment to reduce spending among public programs
• We have access problems today among our public program
• Having a Medicaid card does not ensure access to services
NEJM, June 16, 2011
NEJM June 16, 2011
NEJM, 2/10/11
The government can’t afford to continue feeding the medical-
industrial complex at its current rate
Slide from Uwe Reinhardtpresentation to NAPH 6/11
Current Health Care Spending is Non-Sustainable
• During the past 4 decades, per beneficiary costs under Medicaid and Medicare increased 2.5% faster per year than the rest of GDP.
• If that trend continues, federal spending on those two programs alone would rise from 4.6% GDP in 2007 to 20% by 2050. This represents the same share of the economy that the entire federal budget does today.
• For all of health care this would represent 40% of GDP in 2050
• That can’t happen
Public delivery systems can be capped and can offer predictable
spending and lower costs solutions for some populations
Total Medicaid Spending vs. LSU Hospital Medicaid & DSH
Millions
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Private Hospital vs. LSU Medicaid and DSH Hospital Spending FY 05-FY 10
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200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,600,000,000
FY 05 FY 06 FY 07 FY 08 FY 09 FY 10
Private Hospitals
LSU Hospitals
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The uninsured (and underinsured) are not going away.
Mini-Med Plans
• McDonald’s (Montana) employees pay $56/mo for coverage of up to $2,000/yr
• Ruby Tuesday employees pay $18/wk for $1,250 outpatient and $3,000 inpatient care/yr
• Denny’s employees pay $69/mo for no inpatient coverage and $300 maximum doctor’s office visits
Affordable Care Act Phases Out Some Caps
• Phases out annual dollar limits• Requires essential benefits package for
individuals purchasing their own coverage or through small employers
• Large employer requirements regarding benefits package not clearly laid out
What Does the Future Hold?2 or 3 Tiers
• Wholly Privates: Those who can afford high cost and overutilization
• Wholly Publics: Uninsured and Medicaid (Medicare?)
• Stressed in the Middle: ESI and Medicare – Delivery system reforms essential to maintaining
access– 30% “waste” in the system
Proposed Delivery System Reforms
• Medical Homes• Accountable Care Organizations• Coordinated Care Networks• Bundled Payments• Pay for Performance
• You get the idea
Delivery system reforms require infrastructure which requires scale.
Most U.S. physicians do not practice in large groups. Eighty eight percent of visits to office-based practices are to practices with 9 or fewer physicians.
Health Affairs, Web First, August 2011
Health Affairs, August 2011
Health Affairs, August 2011
But this world is changing too.
Hospitals are acquiring physician practices again.
Insurers are beginning to acquire physicians and hospitals.
NEJM, 5/12/11
NEJM, 5/12/11
Advantages of Hospitals Acquiring PhysiciansNEJM, 5/12/11
• Reduce costs associated with unnecessary practice variation and unnecessary expensive supplies selected by physicians– Standardizing surgical supplies– Selecting cost-effective devices– Requiring use of HIT– Requiring adherence to clinical guidelines– Scheduling elective procedures to maximize asset
utilization– Discharging patients consistently early in the day
• Doctors trading autonomy for employment
LSU A Huge Head Start – But Not For Long
• “Hospital owned practices”• Medical homes• Electronic health records• Chronic disease registries• Disease management programs• Funding flexibility
• LSU cannot rely upon being a default public provider. Others will attempt to provide some of these services for additional money.
• There is vocal rhetoric regarding our services without regard for the facts.
Strategies LSU Must Employ• Establish greater sense of urgency• Understand our finances• Manage our costs• Improve our quality• Improve patient experience• Improve access – the right thing to do (and
insurers will require it)– Primary care – Specialty care– Strategic use of NPs and PAs– Develop partnerships to maximize our services– Balance training and service
Improve Access and QualityBalance Training and Service
• We can train AND provide consistent reliable access
• We cannot rely SOLELY on residents as PCPs• Use of nurses, NPs and PAs• Consistent and accountable faculty
supervision
UHC = Blocking and Tackling
• Must have unit costs that are at least in-line with the industry. Should be lower.
• Must be able to demonstrate that FTEs are in-line with the industry
• Where it makes sense to outsource, outsource– But not for our core expertise
• Reliable measures and managers must be accountable to meeting them
Improve Quality
• Basics first• Goal for 2012:– No CMS core measure below 50th percentile
• All hospitals should be operating in top quartile
• Establish targets and managers must be accountable to meeting targets
Improve the Patient Experience
• Friendly, attentive, considerate staff• CLEAN facilities• Respect appointments• Be available• “Would you return for care….”• “Would you recommend.…”• Managers must demonstrate attention to the
measures and improvements
Develop Partnerships
• Among ourselves• Rural hospitals and practices• FQHCs– Capacity expected to double under ACA
• Other hospitals and practices
Developing Partnerships
• Ease of referrals– Clinics– Emergency departments– Inpatients
• Telemedicine• Shared electronic records• Strategic LINCCAs
Summary• Health care is expensive and unaffordable for the
entire U.S. population given current practices• Pressure to provide ongoing access while reducing
costs• Tiers likely to become more explicit • LSU has structural advantages that must be exploited
to allow us to continue providing public services (delivery, education, research)
• Others will attempt to profit from changes• LSU must outperform competitors; measure its results;
and report in simple, indisputable terms