The Changing Environment in Health Reform

John R Lumpkin MD MPHSVP & Health Care DirectorRobert Wood Johnson Foundation

Victory awaits him who has everything in order – luck people call it. Defeat is certain for him who has neglected to take necessary precautions in time; this is

called bad luck

Roald Amundsen, Norwegian polar explorer

Click icon to add picture

Why was health reform on the National agenda in 2009?

The same reason why health reform is on today’s agenda:

Click icon to add picture

• Medicaid expansion

• 90,000 applied

• 10,000 enrolled via lottery

• Outcomes

• Higher use of preventive services

• Better physical and mental health

• Less medical related debt

Insurance Matters

The system was/is broken:Click icon to add picture

Insurance market concerns

• Pre-existing conditions

• Denial of coverage

• Retroactive denial of coverage

• Excessive rating gradients

• Annual and lifetime limits

Basics of Health Reform

Insurance Market reforms

Insurance works best if the risk pool is large

Allowances for the working poor

2014 Coverage Expansion

• Protects consumers in the insurance market

• Requires individuals to purchase insurance

• Requires employers to purchase insurance

• Creates health insurance exchanges

• Provides subsidies

• Expands Medicaid

Coverage Expansion Categories

0 100 200 300 400 500

Medicaid

Subsidy

$88,000 Family of

Four

$29,326 Family Of Four

Medicaid Expansion

138%

Premium Subsidy

400%

Federal Poverty Level

Supreme Court Decision

• Individual mandate constitutional

• Medicaid expansion constitutional, but now a state option

Supreme Court decision

Exchange 15M

Medicaid17M

Total Expansion = 32 Million

Supreme Court Decision

Sources: Urban Institute analysis, HIPSM 2011.

William Gibson - 1993

The Future is already here, it is not very evenly distributed.

Average Annual Contributions to Premiums for Family Coverage, 1999-2011

* Estimate is statistically different from estimate for the previous year shown (p<.05).

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2011.

$5,791

$6,438*$7,061*

$8,003*

$9,068*

$9,950*

$10,880*

$11,480*

$12,106*$12,680*

$13,375*$13,770*

$15,073*

Cumulative Percent Change in National Health Expenditures, by Selected Sources of Funds, 2000-2010

Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health Expenditures by type of service and source of funds, CY 1960-2010; file nhe2010.zip).

Medicare

Medicaid

Healthy Life Expectancy at Age 60, 2007

2221 21 21 21 20 20 20 20 20 20 20 20 20 19 19 19 19 19 19 19 18 1818 18 18 17 18 18

1618 17 18 17 16 17 17 17 18 17 17 17 16 16 16

15

0

10

20

30

Japa

n

Switzerla

nd

France

Spain

Italy

Australia

Finlan

d

Icel

and

Canada

Sweden

Austria

Belgiu

m

Norway

Germ

any

Nether

lands

New Zeala

nd

Irela

nd

Greece

United

Kingdom

United

State

s

Portugal

Denmar

k

Czech

Repub

lic

Women Men

Years

Data: Provided by C. Mathers. Unpublished data set consistent with HALE estimates published in World Health Statistics 2009 (Geneva: World Health Organization).

Developed by the World Health Organization, healthy life expectancy is based on life expectancy adjusted for time spent in poor health because of disease and/or injury

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.

Deaths Avoidable Through Health Care:Nolte & McKee – Health Affairs August 29, 2012

Mortality Amenable to Health Care

Medical, Medication, and Lab Errors

1618 19

22 23

2628

32

0

10

20

30

40

NETH FRA GER UK NZ CAN AUS US

Sicker adults met at least one of the following criteria: health is fair or poor; serious illness in past two years; or was hospitalized or had major surgery in past two years. AUS=Australia; CAN=Canada; FRA=France; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States.Data: 2008 Commonwealth Fund International Health Policy Survey.

EXHIBIT 16

Percent of adults reported medical mistake, medication error, or lab error in past two years

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.

Test Results or Records Not Available at Time of Appointment

9

1315 15 15

18 18

23

0

10

20

30

NETH GER AUS FRA UK CAN NZ US

Sicker adults met at least one of the following criteria: health is fair or poor; serious illness in past two years; or was hospitalized or had major surgery in past two years. AUS=Australia; CAN=Canada; FRA=France; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States.Data: 2008 Commonwealth Fund International Health Policy Survey.

Percent of adults reported test results or records were not available at time of appointment in past two years

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.

We have run out of money, it is time to start thinking.

Ernest Rutherford (1871-1937)

Nobel Laureate

Six Drivers of Excess Cost

Driver Examples Excess cost

Unnecessary services Defensive medicine, overuse $210 B

Inefficient services Mistakes, duplication $130 B

Excess administrative costs

Administrative inefficiencies by payers and providers $190 B

Prices that are too high Prices higher than competitive benchmarks $105 B

Missed prevention opportunities

Missed screenings and condition monitoring $55 B

Fraud Payer, provider, patient fraud $75 B

Source: Institute of Medicine

Better Care at Lower Cost

September, 2012

Six Drivers of Excess Cost

Transparency

Payment reform

Clinical re-engineering

Informatics

Key Trends in Response

Transparency

Payment reform

Clinical re-engineering

Informatics

Key Trends in Response

Consumer Reports

Community Highlight: Minnesota

Transparency

Payment reform

Clinical re-engineering

Informatics

Key Trends in Response

Payment Reform

Shared Savings

Bundled Payment

Capitation

Accountable Care Organizations (ACO)

Payment Reform

Shared Savings

Payment Reform

Shared Savings

Bundled Payment

• Episode of acute care or procedure

• Treatment of chronic condition over time

Payment Reform

Shared Savings

Bundled Payment

Capitation

• Upside benefit

• Downside risk

Payment Reform

Shared Savings

Bundled Payment

Capitation

Accountable Care Organizations (ACO)

Accountable Care Organizations

Ability to provide care and manage patients across the continuum of care

Capability to prospectively plan budgets and resource needs

Sufficient size to support comprehensive, valid, and reliable performance measurement

• 33 measures• Patient experience

• Care coordination/safety

• Preventive health

• At-risk populations

Transparency

Payment reform

Clinical re-engineering

Informatics

Key Trends in Response

Clinical Re-Engineering• Improved care coordination and communication

• Improved access – physician extenders – email – phone call etc.

• Prevention and early diagnosis

• ED and Immediate Care Center visits

• Increase generic medication utilization

• Hospital re-admissions and multiple ED visits

• Improved management of complex patients

• Care Coordination

• High Resource Utilizers

Transparency

Payment reform

Clinical re-engineering

Informatics

Key Trends in Response

ComplexityIncreasing amounts of information

Current practice depends upon the clinical decision-making capacity and reliability of

autonomous individual practitioners, for classes of problems that routinely exceeds the bounds of

unaided human cognition

Daniel R. Masys, M.D.

2001 IOM Annual Meeting

Complexity

• Physicians in private practice interact with as many as 229 other physicians in 117 different practices just for their Medicare patient population

• ICU clinicians have 180 activities per patient per day

• Chronic disease: a 79 year old patient with osteoporosis, osteoarthritis, type 2 diabetes, hypertension, and chronic obstructive pulmonary disease: 19 medications per day

Clinical Complexity

The Vision

• Computing Power

• Connectivity

• Improvements in organizational capabilities

• Collaboration between teams of clinicians and with patients

New Tools

The Future

Big data

• Predictive Modeling

• Next infectious disease hot spot in hospital?

• How will utilization change with Medicaid expansion in ACA?

• How to predict patient demand to minimize use of contract nurses?

Liberated data

Patient generated data

Advanced sensors

Archimedes

The Future

Big data

• Predictive Modeling

• Next infectious disease hot spot in hospital?

• How will utilization change with Medicaid expansion in ACA?

• How to predict patient demand to minimize use of contract nurses?

• Hot spotting

Liberated data

Patient generated data

Advanced sensors

50

Pills with chips embedded track medication use

Change is the law of life. And those who look only to the past or present are certain to miss the future. 

- John F. Kennedy

55April 13, 2023

Slide 56 of 23

Key findings

Health IT can improve patient safety in some areas such as medication safety; however, there are significant gaps in the literature regarding how health IT impacts patient safety overall

Safer implementation and use begins with viewing health IT as part of a larger sociotechnical system

All stakeholders need to work together to improve patient safety

Slide 57 of 23

Current state of health IT

Literature has shown that health IT may lead to safer care and/or introduce new safety risks

Magnitude of harm and impact of health IT on patient safety is not well known because:

– Heterogeneous nature of health IT products– Diverse impact on different clinical environments

and workflow– Legal barriers and vendor contracts– Inadequate and limited evidence in the literature

Slide 58 of 23

Recommendations: Summary

Current market forces are not adequately addressing the potential risks associated with use of health IT.

All stakeholders must coordinate efforts to identify and understand patient safety risks associated with health IT by:

Facilitating the free flow of information

Creating a reporting and investigating system for health IT–related deaths, serious injuries, or unsafe conditions

Researching and developing standards and criteria for safe design, implementation, and use of health IT

Disease X

Severe case mortality 50%

Treatment Y 50% to 25%

Fatality rate 10%

New test

10% are severe

With Treatment

Deadly Overuse

100 cases – 50 die

100 cases – 25 die

100 cases – 35 die

100 cases – 5 die

100 cases – 12 die

Disease X

Severe case mortality 50%

Treatment y 50% to 25%

Fatality rate 10%

New test

10% are severe

With Treatment

Deadly Overuse

100 cases – 50 die

100 cases – 25 die

100 cases – 35 die

100 cases – 5 die

100 cases – 12 die

Standard diagnosis with treatment 30% reductionEnhanced diagnosis with treatment 140% increase