state of healthcare in kansas and missouri · 340b drug discount program. the 340b drug pricing...
TRANSCRIPT
State of Healthcare in Kansas and Missouri
January 24, 2019
Thomas L. BellPresidentKansas Hospital Association
Herb B. KuhnPresident and CEOMissouri Hospital Association
The Value of Kansas and Missouri Hospitals
Agenda Overall Trends in Health Care Trends in Health Policy – Federal Level Trends in Health Policy – Kansas and Missouri
Looking Around the Corner:Emerging Issues in Health Care
2
Overall Trends in Health Care
The Value of Kansas and Missouri Hospitals
4
The Value of Kansas and Missouri Hospitals
5
The Value of Kansas and Missouri Hospitals
6
The Value of Kansas and Missouri Hospitals
7
The Value of Kansas and Missouri Hospitals
8
The Value of Kansas and Missouri Hospitals
Source: CNBC, Dec. 4, 2017.
“It’s the perfect time to bring [CVS and Aetna] together to create a new healthcare platform that can be easier to use, less expensive for consumers, and create a new front door to healthcare in our country.”
—LARRY MERLO, CEO, CVS HEALTH
Traditionally, Health Care Change Has Been Incremental.
But New Entrants Are Thinking Big.
9
The Value of Kansas and Missouri Hospitals
From CVS’s 2018 Q1 Earnings Report Describing its Preliminary Strategy with Aetna
Transaction creates opportunity to rethink and reinvent U.S. health care We have begun to identify populations and intervention tools for first programs
Primary patient populations:
– Those with one of five chronic diseases: diabetes, hypertension, hyperlipidemia, asthma, depression
– Patients undergoing transition in care
– Broader focus on managing high-risk patients
Initial tools in four major categories:
– Interventions in stores
– Activities in patients’ homes
– New digital tools and capabilities
– Data and advanced analytics
This combination will create an innovative, new health care platform that will be easier to use, less expensive for consumers, and integrated broadly within the marketplace to deliver superior, coordinated care
Source: CVS Health: First Quarter 2018 Earnings Conference Call. Presentation, May 2, 2018.
10
The Value of Kansas and Missouri Hospitals
The Competitive Landscape
Early entrant
Approved
In Conversation
Constant Speculation
Action and Speculation
Powerful outpatient footprint
Aggressive strategic plan
Walmart: 5,000 stores, especially in rural America; 140 million in-store and online customers per week
Humana: 14 million members
Joint venture with Berkshire Hathaway and JPMorgan Chase
Announced employee clinics; CEO Tim Cook says health care is a
“big area for Apple’s future”
11
The Value of Kansas and Missouri Hospitals
• 115 announced hospital transactions in 2017 (compared with 74 in 2010)
• 16 transactions involved organizations with revenues between $500 million and $1 billion (compared with 2 in 2010)
Dec. 4, 2017
Dec. 7, 2017
• 10th largest U.S. health system• 27 hospitals• 3 million patients per year
• Largest U.S. hospital system• 140 hospitals• 700 care sites in 28 states
$200 Billion $240 Billion $540 Billion
Getting Bigger, but Relatively Speaking, Not Big
12
The Value of Kansas and Missouri Hospitals
Vulnerability: Digital
Sources: Salesforce: 2016 State of the Connected Patient,; Rock Health: “50 Things We Now Know about Digital Health Consumers,” Jan. 9, 2017; Ripton, J.T.: “Five Ways Millennials Are Changing the Healthcare Industry,” Becker’s Hospital Review, March 1, 2017; Koren, D.: “What Millennials Want When It Comes to Healthcare.” Media Post, Dec. 23, 2016; Kaufman Hall: 2017 State of Consumerism in Healthcare. August 2017.
However, hospitals are still largely analog
• Only 14% offer digital tools and information to enable consumer engagement
• Only 23% offer a range of virtual/telehealth access points
• Only 20% have an online price estimation tool
• Only 43% provide messaging between patients and providers
Millennials especially are demanding digital health care
• 71% want to book appointments with mobile apps
• 74% would prefer to see a doctor virtually
• 75% look at online reviews before selecting a physician
• 42% have used synchronous video telemedicine
13
The Value of Kansas and Missouri Hospitals
Vulnerability: Access
Contemporary access is still a work in progress for traditional health systems
• 89% offer no access or limited access through retail clinics
• 77% offer no access or limited access through virtual visits
• 52% offer no access or limited access through urgent care centers
• A key value proposition for CVS, Optum, and others is conveniently located and operated facilities and 24/7 access to virtual care — this is the expectation of today’s health care consumer
Source: Kaufman Hall: 2017 State of Consumerism in Healthcare. August 2017.
14
The Value of Kansas and Missouri Hospitals
Vulnerability: Convenience
Health care consumer interactions are among the least convenient of any industry
• Health care consumers face inconvenience in appointment scheduling, communication with providers, wait times, wayfinding, repetitive paperwork, confusing billing, and lack of digital options
• Companies like Amazon take experiences that consumers don’t even perceive as problematic and transform them into something actionable, appealing, and engaging
• These companies are never satisfied with the level of convenience and engagement for consumers
Source: Kaufman Hall: 2017 State of Consumerism in Healthcare. August 2017.
15
The Value of Kansas and Missouri Hospitals
What These Observations Show About the Business of Health Care
Far more resources are needed to be a leader in health care A huge investment of financial and intellectual capital is needed to
transform health care A new level of competition is entering health care
New entrants are large, highly capable, and highly competitive companies
Becoming a commodity is a real—and a really bad—possibility Any organization—provider, insurer, pharmacy—that focuses on a
single business line is in danger of being commoditized
16
The Value of Kansas and Missouri Hospitals
Current Missouri Hospital Operating Margins
17
The Value of Kansas and Missouri Hospitals
Current Kansas Hospital Operating Margins
18
LOSS GAIN
Percent of hospitals operating at a loss/gain
Based on 2017 AHA Data
Trends in Health Policy Federal Level
19
The Value of Kansas and Missouri Hospitals
Holy Grail of Health PolicymakingFind a model that aligns the interests of health care providers and patients.
Healthy Consumer
Continued Health Preventable Condition
No Hospitalization Acute Care Episode
High Cost and Successful Outcome
Efficient and Successful Outcome
Complications, Infections,
Readmissions
20
The Value of Kansas and Missouri Hospitals
A Strategic Journey
Integration
PopulationHealth
Fee-For-Service
Fragmentation
Current ModelFee-for-ServiceIllness and cureVolume incentiveFragmentation
New ModelPopulation Health
IntegrationValue-base payments
Accountability
21
The Value of Kansas and Missouri Hospitals
The Challenge of Managing in Two Worlds
Pay for value Accountable care Coordinated care across
the continuum Global payment Right care, right setting,
right time Triple Aim metrics Fostering wellness Payer partners Fully wired systems
Pay for volume Fragmented care Fee-for-Service Treating sickness Adversarial payors Little HIT Lack of outcome
based metrics Duplication and
waste
Source: Premier, Inc.22
The Value of Kansas and Missouri Hospitals
Third year of Trump Administration Several cabinet positions changing Health care positions stable, but changes at OMB House
Democratic control New leaders on key health committees Senate
Slight improvement in GOP control Some changes on key health committees Supreme Court
More conservative
23
The Value of Kansas and Missouri Hospitals
Alex Azar – HHS Secretary
“One of my top 4 priorities … will be to use the power of Medicare and Medicaid to drive transformation of our healthcare system from a procedure-based system that pays for sickness to a value-based system that pays for quality and outcomes.”
Four Priorities: 1. Private insurance market competition (Medicare Advantage, other plans)2. Increase drug market competition3. Move to value-based payment models4. Increase price and quality transparency
24
The Value of Kansas and Missouri Hospitals
25
The Value of Kansas and Missouri Hospitals
Still defining what Medicare for all means?
The Value of Kansas and Missouri Hospitals
Cost AnalysisRecent study from George Mason University
$32.6 trillion over 10 years Starts at 10.7 percent of GDP and moves to 12.7 percent of GDP
“Doubling all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan.”
Health care providers asked to do the heavy lifting Medicare hospital payment rates are 62 percent of private insurance Medicare physician payment rates 75 percent of private insurance MedPAC shares that hospital Medicare margins were -9.6 percent in 2016 Health care providers will be reimbursed at rates that are 40 percent lower than those
currently paid by private insurance “Perhaps some facilities and physicians would be able to generate heretofore
unachieved cost savings that would enable their continued functioning without significant disruption. However, at least some undoubtedly would not, hereby reducing the supply of healthcare services at the same time Medicare for all increases healthcare demand.”
27
The Value of Kansas and Missouri Hospitals
Estimated Ideology of House Democratic Candidates
28Source: Washington Post, May 16, 2018
29
30
The Value of Kansas and Missouri Hospitals
Baby Boomers’ Aging Contributes to Rapid Population Aging
Source: U.S. Census Bureau, 2010 Census, 2012 National Population Projections and MedPAC.
31
The Value of Kansas and Missouri Hospitals
2.0
2.5
3.0
3.5
4.0
4.5
5.0
1970 1990 2010 2030 2050
Workers per HI beneficiary
Projected
0
20
40
60
80
100
1970 1990 2010 2030 2050
Medicare enrollment (in millions)
ProjectedHistorical
Historical
Note: HI (Hospital Insurance, otherwise known as Medicare Part A).Source: Boards of Trustees 2014 and MedPAC.
Medicare Enrollment Projected to Grow Rapidly Workers per HI Beneficiary Projected to Decline
32
How Spending Growth is Impacted by the “Silver Tsunami”
2 1 2 3 3 3
9
66
1
4 3
0
2
4
6
8
10
12
1980s 1990s 2000s 2010-2014 Trustees CBO
Aver
age
annu
al c
hang
e (i
n pe
rcen
t)
Enrollment Spending per beneficiary
Historical Projections, 2015-2025
78
4
76
11
Note: CBO (Congressional Budget Office), Trustees (Boards of Trustees of the Medicare Trust Funds). Values are rounded to the nearest one.Source: 2015 annual report of the Boards of Trustees of the Medicare Trust Funds and CBO report Updated Budget Projections: 2015 to 2025, released March 2015.
Spending
33
The Value of Kansas and Missouri Hospitals
340B Drug Discount ProgramThe 340B Drug Pricing Program is a critical program to Kansas and Missouri hospitals.
77 Kansas hospitals have signed up to participate 69 Missouri hospitals have signed up to participate
ACTIVITY ON MULTIPLE FRONTS1) Addressing the Final OPPS Rule
– Reduced payments for 340B drugs from ASP+6% to ASP-22.5%
– Exemptions for CAHs, rural Sole Community Hospitals, Children’s Hospitals, and Cancer Hospitals
2) Lawsuit - Original lawsuit filed on Dec. 21stt
– Court ruled in favor of HHS– Lost Appeal…Suit Refiled
3) Congressional Hearings and Bills4) President’s Blueprint for Reducing Drug Pricing
– Feedback provided on 340B program
34
The Value of Kansas and Missouri Hospitals
35
The Value of Kansas and Missouri Hospitals
36
The Value of Kansas and Missouri Hospitals
Drug Price Frustration
37
The Value of Kansas and Missouri Hospitals
Actions being take by Trump Administration and Congress to Reduce or slow the increase in drug pricesAdministration Dept. of Justice expanding investigation of possible generic drug-price fixing HHS releases series of memoranda, white papers, tweets and official
statements on topics related to containment of drug prices New policy – use of step therapy for Medicare Advantage plans ad
prohibition of pharmacy gag clauses Proposed policy – change Medicare Part B prices, pegging them to an
“international price index” as a means to align the U.S. with other countriesCongress Senator Sanders/Representative Cummings – legislate international price
index for Medicare Part B drugs; permit Medicare to negotiate Medicare Part D prices; permit U.S. residents to purchase medicines directly from Canada and other countries
38
“For decades, other countries have rigged the system so that American patients are charge much more – and in some cases, much, much more – for the exact same drug. In other words, Americans pay more, so that other countries can pay less.” President Donald Trump
The Value of Kansas and Missouri Hospitals
Unique Alignment among Democrats, Republicans and StakeholdersThe beginning of 2019 ushered in new price increases for nearly 300 medications. Pharmaceutical companies are boosting their prices just as the new Congress is setting its agenda. These 2019 changes have once again raised the ire of Democrats and Republicans.
Republicans and Democrats committed to hold hearings on the issue – drug company CEOs to be hauled before Congress
Same goals, different ideas? Sec. Azar meets with Republicans and Democrats. After meeting with House Oversight Chairman Elijah Cummings, there were hopeful feelings of common ground. “We are headed for the same goals, but not necessarily the exact same legislation,” Cummings said.
A new survey from the American Hospital Association says that price hikes and continuous shortages of basic medicines continue to add pressure, leading to staff reductions and delay in investments.
Trends in Health PolicyKansas and Missouri
40
The Value of Kansas and Missouri Hospitals
Current Status of State Medicaid Expansion Decisions
Source: Status of State Medicaid Expansion Decisions. KFF State Health Facts
The Value of Kansas and Missouri Hospitals
Medicaid Expansion Ballot Initiatives
Result % “Yes” % “No”
Idaho Approved 61 39
Montana Defeated 45 55
Nebraska Approved 53 47
Utah Approved 53 47
42
The Value of Kansas and Missouri Hospitals
Medicaid: Culprit for Budget Woes
“It's one of the largest budget items in the state of Missouri. And when you start talking $300 or 400 million every year, you can't sustain that.” -Governor Mike Parson
“If we do nothing to shore up and to improve the sustainability of our Medicaid program, it will continue to strain nearly every other area of the state budget.” -Medicaid Director Todd Richardson
43
The Value of Kansas and Missouri Hospitals
The Value of Kansas and Missouri Hospitals
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2003
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016.
46
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2004
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 47
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2005
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 48
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2006
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 49
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2007
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 50
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2008
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 51
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2009
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 52
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2010
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 53
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2011
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 54
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2012
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 55
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2013
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 56
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2014
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 57
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2015
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 58
The Value of Kansas and Missouri Hospitals
States with More DRUG-INDUCED Than Motor Vehicle-Related Deaths
2016
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Washington DC
Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Underlying Cause of Death 1999-2016 on CDC WONDER Online Database, released December, 2017. Data are from the Multiple Cause of Death Files, 1999-2016. 59
The Value of Kansas and Missouri Hospitals
Addict?
60
The Value of Kansas and Missouri Hospitals
Opioids and Substance Use Disorders
KHA/KMS Committee on Opioid Use Focused on provider led initiatives
to address opioid and substance use disorders
Committee comprised of representatives from KHA and KMS
Governor’s Task Force on Substance Use Disorders Focused on developing policy
recommendations for the Governor and the 2019 Legislature
Committee comprised of a variety of stakeholder groups
K-TRACS
Kansas Perinatal Quality Collaborative
Kansas Partnership for Pain Management
Project ECHO
KHA/KMS Joint Committee on Opioid Use
BlueCross BlueShield of Kansas
Governor's Substance Use Disorder Task Force
61
The Value of Kansas and Missouri Hospitals
Missouri Government Action
Senate Bill 501, signed into law Grants immunity from arrest, prosecution or other penalties for certain drug-related
crimes if seeking medical assistance for a drug or alcohol overdose Permits the director of the Missouri Department of Health and Senior Services or
physician designee to issue a statewide standing order for Naloxone Revises standards for medication-assisted treatment of substance abuse Allows the Board of Pharmacy to allocate funds for drug “take-back” programs
Executive Order 17-18: “Multi-phase PDMP” Retrospective data mining for prescribing variance from pharmacy benefit manager
organizations and dispensers and through use of technology and software 2018 Legislation
Prescription drug monitoring program – no bill proposed Needle exchange programs Expanded take-back programs
Governor’s Budget Fund Executive Order 17-18 Expand community treatment services to support medication-assisted treatment
Multi-agency prescriber letter initiative Targets Medicaid prescribers
62
The Value of Kansas and Missouri Hospitals
Policy and Advocacy
63
The Value of Kansas and Missouri Hospitals
64
The Value of Kansas and Missouri Hospitals
Hospital Closures in Missouri
65
The Value of Kansas and Missouri Hospitals
Rural Emergency Medical Center LegislationH.R. 5678
HIGHLIGHTS OF THE LEGISLATION
• Establishes a new rural facility designation under the Medicare program: Rural Emergency Medical Center (REMC)
• Allows CAHs and prospective payment system hospitals with 50 or fewer beds to convert to a 24/7 emergency department.
• REMCs would provide 24/7 emergency care and other outpatient services (e.g., observation, diagnostic and telehealth).
• Post-acute care could be provided in a separately licensed SNF unit
• REMC reimbursement would be the combination of the Medicare OPPS rate for services and a fixed facility fee payment.
• REMCs would be required to provide transportation to an inpatient hospital, when needed.
66
The Value of Kansas and Missouri Hospitals
Why An Alternative Model for Kansas?
Kansas 2013 Acute Patient Data 18 hospitals </= 1 15 more </= 2 19 more </= 3 13 more </= 5 Others 5+
Kansas 2013 Swing Bed Patient Data All hospitals: Highest ADC = 10 Hospitals <5 acute ADC: Highest SB ADC = 5
</= 1
</= 2
</= 3</= 5
5+
67
The Value of Kansas and Missouri Hospitals
Principles for a Sustainable Rural Health System
Improve Health Provide Access Encourage Collaboration High Quality Promote Efficiency and Value Embrace Technology Financed Fairly to Address Population Health
68
The Value of Kansas and Missouri Hospitals
Governor’s Rural Health Summit
Presentations addressed a variety of rural health topics. Don Babb was the keynote speaker, describing
the evolution of Citizens Memorial Hospital.
Governor Parson hosted a Rural Health Summit in Bolivar on December 3.
69
The Value of Kansas and Missouri Hospitals
MHA Rural Health Initiative
MHA Rural Health initiative focuses on 10 policy issues taken from the Governor’s Rural Health Summit.
The 10 issues and related policy proposals are posted on MHA’s website. Weekly promotions highlight an issue and its
policy proposals, targeting a broad coalition and social media.
70
The Value of Kansas and Missouri Hospitals
MHA Rural Health Initiative
Extensive outreach with Reimagine Rural Health Initiative Distributed to more than 800 lawmakers and
opinion leaders across Missouri ― many from nonhealth care groups (agriculture, banking, etc.)
Extensive use of social media Op-eds and letters to the editor Meetings with state legislators
71
The Value of Kansas and Missouri Hospitals
MHA Rural Health Initiative
72
The Value of Kansas and Missouri Hospitals
Thank YouQuestions?
73