making cent$ of health care costs - hfma texas gulf coast · 2017. 2. 15. · • health care costs...
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A Division of Health Care Service Corporation, a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association
Making Cent$ of Health Care Costs
Bob Morrow, MD, MBA Market President, Houston & Southeast Texas
Blue Cross and Blue Shield of Texas
@DrBobMorrow
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INTEGRITY RESPECT COMMITMENT CARING
To do everything in our power to stand with our members in sickness and in health
OUR PURPOSE
@DrBobMorrow
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Agenda - Growing health care costs
- Challenges for members and employers
- Creating solutions
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@DrBobMorrow
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State of U.S. Health Care
Source: 2014 International Profiles of Health Care Systems. The Commonwealth Fund. January 2015.
02468
1012141618
Percentage of GDP Spent on Health Care
Average: 10.4%
@DrBobMorrow
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Health Care Spending
@DrBobMorrow
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After Adjusting for Wealth
@DrBobMorrow
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The Premium Dollar
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0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1960 1966 1970 1980 1990 2000 20102012
Personal Health Care by Category (Source of Expense) 1960 - 2012
Hospital Care Physician and Clinical ServicesPrescription Drugs Other Health Care
Source: Centers for Medicare & Medicaid Services, National Health Expenditures, 2014 release. CCF InfoGraphic Data
U.S. Health Care expenses
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Factors Impacting Cost of Care
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Source: Center for Managing Chronic Disease, University of Michigan @DrBobMorrow
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Many costs are driven by behavior
• Obesity – 25% of all Americans got NO exercise in the last month
• Diabetes – A non compliant diabetic costs $11,000 more per year than a compliant one
• Smoking – $170 Billion per year
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But the US is not as sick as Europe
@DrBobMorrow
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Drug picture
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Source: PwC Health Research Institute, Medical cost trend: Behind the numbers 2015, June 2014, analysis based on data from CVS Caremark
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OECD Expenditure on Pharmaceuticals
@DrBobMorrow
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Specialty vs. Traditional Drug Spend
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The Impact of Hospital Consolidation
Robert Wood Johnson Foundation Study Key Findings: • Hospital consolidation generally
results in higher prices • Hospital competition improves
quality of care • Physician-hospital consolidation
has not led to either improved quality or reduced costs
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Are these ERs or Urgent Care Centers?
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The answer matters. @DrBobMorrow
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Explosion of Free-Standing ERs
50% 75% 10X of the USA’s
Free-standing ERs are in
Texas
Overlap in services between FSEDs and UCC
Service Costs are 10X that of
Urgent Care
@DrBobMorrow
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Where You Go Matters – Top 10 Dx
Diagnosis Hospital ER Freestanding
ER Urgent Care
Clinic Retail Clinic
Headache $2,214 $2,472 $170 $80
Urinary Tract Infection, Site $1,987 $1,579 $151 $66
Other and unspecified, Site $2,527 $2,729 $158 $77
Acute Bronchitis $1,298 $1,611 $175 $77 Acute Upper Respiratory
Infection $872 $1,127 $162 $82
Dizziness and Giddiness $2,696 $3,026 $167 $70
Acute Pharyngitis $888 $1,331 $166 $86
Nausea with Vomiting $2,257 $2,126 $169 $77 Unspecified Essential
Hypertension $1,872 $2,024 $142 $63
Lumbago $1,482 $1,814 $159 $66
Average Cost to Treat (per claim)
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Increase in Free-Standing ERs
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@DrBobMorrow
Data shows 2012-2016.
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FSERs are Located in Affluent Areas
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Shopping for Health Care
Source: Blue Cross and Blue Shield Association 27
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Transparency Tools: Cost Estimator
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Patient Engagement is Necessary
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Incentives are necessary
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VALUE
QUALITY
COST
• Achieve better outcomes • Increase safety • Improve satisfaction
• Reduce avoidable medical spending
• Decrease total cost of care
Redefining Value in Health Care
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Value Creation in New Models
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Bridges to Excellence
Pay for Performance
Fee-for- Service
Episodes of Care
Accountable Care
Organization
HMO Global
Payment
Our Medical Home
Approaches: EMH & IMH
Continuum of Payment Models
Provider Accountability (cost & quality)
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ACOINO
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Hospital A $2,000 per member per year; Attracts 500 XYZ employees Total costs = $2,000 x 500 = $1 M
Hospital B $1,000 per member per year; Attracts 500 XYZ employees Total costs = $1,000 x 500 = $0.5 M
Total Cost $1.5M
New ACO to cut 10% costs
$1,800 per member per year; Attracts 800 members Total costs = $1,800 x 800 = $1.44 M
$1,000 per member per year; Attracts 200 XYZ employees Total costs = $1,000 x 200 = $0.2 M
$1.64M
Beware of ACOs in Name Only
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Zooming in on an individual physician provides insight into who that physician connects with and how the efficiency of their connections impacts their efficiency
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@DrBobMorrow
Node Color Efficiency Percentile
High 75% - 100%
Med-High 50% - 75%
Med-Low 25% - 50%
Low 0% - 25%
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Our Accountable Care Organizations
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San Antonio • Christus Connected Care
Network* • Integrated ACO* • National ICN, Inc. (Tenet) • RGV ACO Health
Providers, LLC* • UPSA ACO, LLC
Dallas/Ft. Worth • Catalyst Health Network • National ICN, Inc. (Tenet) • Patient Physician Network Holding Company
LLC.* • Premier PHC Physician Group, Inc.* • Texas Health Resources (THR) • TXCIN • USMD Physician Services*
East Texas • Christus Connected Care Network* • East Texas Regional Accountable
Care Collaborative, LLC
El Paso • National ICN, Inc. (Tenet)
Kerrville • Hill Country Accountable
Care Organization, LLC*
Midland • Integrated ACO*
• National ICN, Inc. (Tenet) • Osler Medical Group ACO, LLC* • RGV ACO Health Providers, LLC* • Valley Organized Physicians, LLC*
Austin • Austin ARIA • Integrated ACO* • Southwest
Provider Accountable Care
Lubbock • Covenant Health
Partners*
Rio Grande Valley Laredo • Seven Flags ACO LLC*
Houston • Houston Regional Accountable Care
Organization, LLC • Memorial Hermann Accountable Care
Organization • National ICN, Inc. (Tenet) • Platinum Physician Associates • PracticeEdge Alliance ACO LLC. • Renaissance Physician Organization • Village Practice Management • The University of Texas Medical Branch
at Galveston*
* Denotes new ACOs
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Key Takeaways
• Health care costs are growing, and we must work together to keep health care affordable.
• Employers and consumers carry the weight of a heavy portion of health care costs.
• Creative solutions include increasing cost transparency and moving toward fee-for-value reimbursement.
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Thank You
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@DrBobMorrow