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Transforming Healthcare Collaboration among Payors, Providers and Community Leaders Vinod K. Sahney, PhD Senior Vice President and Chief Strategy Officer.

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Presentation on theme: "Transforming Healthcare Collaboration among Payors, Providers and Community Leaders Vinod K. Sahney, PhD Senior Vice President and Chief Strategy Officer."— Presentation transcript:

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2 Transforming Healthcare Collaboration among Payors, Providers and Community Leaders Vinod K. Sahney, PhD Senior Vice President and Chief Strategy Officer Presented at Purdue University November 29, 2006

3 3 Blue Cross Blue Shield of Massachusetts Outline Introduction Performance of U.S. Healthcare System Collaboration to Improve Access to Healthcare Collaboration to Improve Healthcare Delivery System Collaboration to Improve Quality of Care in Massachusetts Growing Conflicts Conclusions

4 4 Blue Cross Blue Shield of Massachusetts Introduction: Key Messages Healthcare Delivery – Non System Lack of Aims for Improvement System Performance Compares Poorly to Developed Nations Focus on Medical Technology Gives False Sense of Quality Enough Money in System to Cover All Collaboration Initiatives – Improve Care and Health Status Leadership by Community Organizations Needed

5 5 Blue Cross Blue Shield of Massachusetts Per-Capita Health Spending in the United States in Constant 2000 Dollars MANAGED CARE

6 6 Blue Cross Blue Shield of Massachusetts Health Insurance Premiums Compared to Other Indicators Percent Increase Source: Employer Health Benefits Survey, KFF, 2004 Premium costs have risen five times faster than inflation and four times faster than wages

7 7 Blue Cross Blue Shield of Massachusetts International Healthcare Trends International Health Spending per Capita 2002 Note: Because these data are based on Purchasing-Power Parity values, they will differ slightly from earlier values cited herein. Source: Adapted from Anderson, GF et al. (2005) Health Affairs In fact, the U.S. spends much more per person on healthcare than other countries, as well as a larger percent of Gross Domestic Product. Turkey ($446, 6.6%) Mexico ($553, 6.1%) Poland ($654, 6.1%) Japan ($2,077, 7.8%) U.K. ($2,160, 7.7%) Canada ($2,931, 9.6%) U.S. ($5,267, 14.6%) Switzerland ($3,446, 11.2%)

8 8 Blue Cross Blue Shield of Massachusetts Healthcare expenditures are projected to more than double between 2000 and 2010, and healthcare is expected to account for 17% of the Gross Domestic Product by *Projected by Centers for Medicare and Medicaid Services. Source: Adapted from Centers for Medicare and Medicaid Services (2005a) National Healthcare Trends National Health Expenditures (NHE) and Percentage of GDP

9 9 Blue Cross Blue Shield of Massachusetts …and retirees are not faring any better According to an analysis by the Urban Institute, by 2030 out- of-pocket expenses for retirees will consume: 30.3% of income for older unmarried adults, up from 17.3% in 2000, and 35.1% of income for older married couples, more than double the 16% in 2000 Source: Henry E. Simmons, Pres. National Coalition on Health Care. November 14, 2005 address to International Foundation of Employee Benefit Plans

10 10 Blue Cross Blue Shield of Massachusetts National Scorecard on U.S. Health System Performance (Commonwealth Fund, September 2006) IndicatorU.S National Rate Benchmark Measure Benchmark Rate Score: Ratio of U.S. to Benchmark (%) Mortality/ 1,000115Top 3 Countries Infant Mortality/ 1,0007Top 3 Countries Healthy Life Expectancy at age Top 3 Countries Children missed 11 or more school days 5.2Top 10% states Adults received screenings and preventive care (%) 49.0Target80.061

11 11 Blue Cross Blue Shield of Massachusetts National Scorecard on U.S. Health System Performance (Commonwealth Fund, September 2006) IndicatorU.S National Rate Benchmark Measure Benchmark Rate Score: Ratio of U.S. to Benchmark (%) Chronic Disease under control (%) % Medicare Private Plans Nursing Home residents with pressure sores (%) 16.0Top 10% states Ability to see doctor on same day or next day when sick (%) 47.0Top 6 Countries Easy to get care after hours without going to ER (%) 38.0Top 6 Countries Adults with no access problems due to cost (%) 60.0Top 5 countries

12 12 Blue Cross Blue Shield of Massachusetts National Scorecard on U.S. Health System Performance (Commonwealth Fund, September 2006) IndicatorU.S National Rate Benchmark Measure Benchmark Rate Score: Ratio of U.S. to Benchmark (%) Overuse/Waste (%)22.0Various ER visits for conditions could have been treated by PCP (%) 26.0Top 6 countries % of National Health Expenditure on Health Administration 7.3Top 3 Countries Physicians using electronic records (%) 17.0Top 3 Countries

13 13 Blue Cross Blue Shield of Massachusetts Why Are We In This Situation? No national healthcare goals No organized leadership for improvement Cottage industry structure Defined benefit with no planning No accountability No one owns enough of the system to enforce change

14 Massachusetts Healthcare Reform

15 15 Blue Cross Blue Shield of Massachusetts Health Care Reform: The Genesis October 31, 2003 : CONSENSUS DECLARED AT THE BCBSMA FOUNDATION: WE NEED A ROADMAP TO HEALTH CARE REFORM

16 16 Blue Cross Blue Shield of Massachusetts Healthcare Reform Timeline Health care reform has dominated the political landscape for over one year. _________________ Summer 2004 to early 2005 Legislation drafted April 2005 Governor, Senate bills released October 2005 House bill released November 2005 House, Senate final bills/ conference committee appointed Legislation finalized April 4, 2006 Governor signs into law April 12, 2006

17 17 Blue Cross Blue Shield of Massachusetts Expanding the Focus As first proposed, the concept of health care reform was about: Lowering health care costs for employers Efforts to enroll those eligible for Medicaid but unenrolled Increasing access to care

18 18 Blue Cross Blue Shield of Massachusetts Expanding the Focus With input from BCBSMA, other issues were added to the mix: Addressing the Quality of Care Medicaid Provider Shortfalls In the end, all the issues came together in one bill.

19 19 Blue Cross Blue Shield of Massachusetts Massachusetts: The Key Elements of Reform Medicaid Expansions Health Insurance Connector Commonwealth Care – Premium Subsidy Program Individual Mandate for all MA adult residents Health Insurance Market Reforms Employer Responsibilities (for firms > 11 employees) Medicaid provider rate increases

20 20 Blue Cross Blue Shield of Massachusetts MA Health Care Reform Law Key Components $540+ million over next 3 years Hospitals increases to be tied to quality standards in areas including addressing health disparities Medicaid provider rate increases for hospitals, physicians and community health centers

21 21 Blue Cross Blue Shield of Massachusetts MA Health Care Reform Law: Key Components (contd) Commonwealth Health Insurance Connector New public authority (10-member board) Administers Commonwealth Care low income premium subsidy program Will offer affordable health insurance products to individuals and small businesses (50 or fewer employees)

22 22 Blue Cross Blue Shield of Massachusetts MA Health Care Reform Law: Key Components (contd) <100% FPL – fully subsidized, comprehensive benefits (including dental) % FPL - sliding scale subsidies, no annual deductibles Commonwealth Care Health Insurance Program (C-CHIP) – Premium Subsidy Program

23 23 Blue Cross Blue Shield of Massachusetts Mass Health Care Reform Law Key Components (contd) Individual Mandate for all MA adult residents Enforcement mechanisms Indicate insurance policy number on state tax return Loss of state personal income tax exemption for tax year 2007 Fine for each month without insurance equal to 50% of affordable insurance product cost for tax year 2008

24 24 Blue Cross Blue Shield of Massachusetts Mass Health Care Reform Law Key Components (contd) Health Insurance Market Reforms Non-group and small-group insurance markets merged Young Adult plans for year olds Age for eligibility for dependent coverage for health insurance raised to 25 years

25 25 Blue Cross Blue Shield of Massachusetts MA Health Care Reform Law Key Components (contd) Employer Responsibilities (for firms > 11 employees) Must offer access to pre-tax purchase of health insurance Fair share assessment of no more than $295 per worker

26 26 Blue Cross Blue Shield of Massachusetts Stakeholders Health advocacy organizations Organized labor Business community Hospitals Health plans Faith-based organizations Physicians Community Health Centers Nurses Appointed and elected officials

27 27 Blue Cross Blue Shield of Massachusetts Health Care Delivery System: Introduction: Key Messages 1.Serious Problems in Quality 2.Great Degree of Variability 3.Source of Problems – Systems 4.Increased Quality and Cost Reduction Possible 5.Immediate Benefits by Improving Reliability of Healthcare Delivered

28 28 Blue Cross Blue Shield of Massachusetts Conformance With Care Agreed by US Health Experts CARE PERCENTAGE RECEIVING CURRENT RECOMMENDED PRACTICE Preventive Care50% Acute Problems (colds, stomach pain) 70% Chronic Illness (diabetes, hypertension) 60% Beta blockers after heart attack21% Care provided that was not needed – may be harmful - acute care - chronic care 33% 20%

29 29 Blue Cross Blue Shield of Massachusetts And the Latest Large American Study… McGlynn, et al: The quality of health care delivered to adults in the United States. NEJM 2003; 348: (June 26, 2003) 439 indicators of clinical quality of care 30 acute and chronic conditions, plus prevention Medical records for 6712 patients Participants had received 54.9% of scientifically indicated care (Acute: 53.5%; Chronic: 56.1%; Preventive: 54.9%) Conclusion: The Defect Rate in the technical quality of American health care is approximately 45%

30 30 Blue Cross Blue Shield of Massachusetts Clinical Effectiveness Focusing on effectiveness and efficiency of clinical processes Great deal of variability within university hospitals: Major surgery complications49% CHF re-admission rates49% Mortality30% Total direct costs/OR hour24% Total cost/adj. discharge80%

31 Collaboration to Improve Healthcare Delivery System

32 32 Blue Cross Blue Shield of Massachusetts IHI Mission The Institute for Healthcare Improvement is a not-for-profit organization driving the improvement of health by advancing the quality and value of health care.

33 33 Blue Cross Blue Shield of Massachusetts IHI Vision The Institute for Healthcare Improvement is a premier integrative force, an agent for profound change, dedicated to improving health care for all. Our measures of success include improved safety, effectiveness, patient- centeredness, timeliness, efficiency, and equity.

34 34 Blue Cross Blue Shield of Massachusetts IHI Initiatives Breakthrough Series Emergency Rooms ICU Surgical Infection Ventilator Associated Pneumonia Pursuing Perfection – 13 Hospitals Impact Network – 210 Hospitals Care at the Bedside Patient Safety Officer Training Executive Quality Academy

35 35 Blue Cross Blue Shield of Massachusetts IHI Breakthrough Series (6 to 13 months time frame) Select Topic (develop mission) Planning Group Develop Framework & Changes Participants ( teams) Prework LS 1 P S AD P S AD LS 3 LS 2 Supports Visits PhoneAssessments Monthly Team Reports Congress, Guides, Publications etc. AD P S Expert Meeting

36 36 Blue Cross Blue Shield of Massachusetts IHI – 100,000 Lives Saved Campaign Campaign: December June 2006 Save 100,000 lives by improving reliability of healthcare within U.S. hospitals Target 2,300 hospitals Six proven initiatives

37 37 Blue Cross Blue Shield of Massachusetts Six Initiatives Deploy Rapid Response Teams at the first sign of patient decline Deliver reliably, evidence-based care for acute myocardial infarction Prevent adverse drug events by implementing medication reconciliation Prevent central line infections – Implement bundles Prevent surgical site infections – Implement bundles Prevent ventilator associated pneumonia – Implement bundles

38 38 Blue Cross Blue Shield of Massachusetts Accomplishments Co-Sponsors: Agency for Healthcare Research and Quality American Medical Association Association of American Medical Colleges Center for Medicare and Medicaid Joint Commission on Accreditation of Healthcare Organizations National Patient Safety Foundation University Health System Consortium American College of Cardiology

39 39 Blue Cross Blue Shield of Massachusetts Accomplishments (continued) Co-Sponsors (continued): Centers for Disease Control and Prevention Society for Healthcare Epidemiology of America American Nurses Association Leapfrog The National Business Group on Health 20 State Hospital Associations 3,300 Hospitals Voluntarily Signed Up $15M Private Contributions 122,000 Lives Saved

40 Collaboration to Improve Quality of Care in Massachusetts

41 41 Blue Cross Blue Shield of Massachusetts Seven Levers of Change I.Governance Focus I. Trustees as champions of New Quality Standards II. Governance Practices Linked to Hospital Contracts Quality and Safety Standards Adoption of Standardized Quality Measures Transparent Reporting of Performance Information Public Recognition Programs to Highlight Extraordinary Achievements in Quality Improvement

42 42 Blue Cross Blue Shield of Massachusetts Seven Levers of Change (contd) III.Financing and Incentives I.Incentives to Achieve New Quality Performance Standards II.Partnerships with Multiple Quality Improvement Organizations Including IHI, Dartmouth, Rand III.Funded 100,000 Lives Saved Campaign I.$35K to each hospital II.$5M contribution IV.$400M in Incentives Tied to Quality Goals V.Redesign Payment Systems to Reduce Overuse and Misuse

43 43 Blue Cross Blue Shield of Massachusetts Seven Levers of Change (contd) IV.Legislation and Regulation I. Cost and Quality Council II. Healthcare Reform V.Public Engagement I. Segmented Focus Groups II. Seminar Series – Public Forums III. Public Education IV. Eastern Massachusetts Health Collaborative

44 44 Blue Cross Blue Shield of Massachusetts Seven Levers of Change (contd) VI.Technology I.E-Health Collaborative II.Three Communities III.500 Physicians IV.$50M Investment Organizational Readiness I.LEAD Organization II.Capability Building

45 Growing Conflicts

46 46 Blue Cross Blue Shield of Massachusetts Growing Conflicts A.Demographics: Beneficiariesvs.Contributors Aging of population Utilization increases exponentially with age: 65 years vs. 45 years2 times 85 years vs. 45 years4 times 95 years vs. 45 years8 times

47 47 Blue Cross Blue Shield of Massachusetts Growth Trends - Aging Baby Boomers Elderly Population by Age, 1990 to 2050: Percent 65 + and 85 + By 2030 one fifth of the population will be over 65 years of age Growing Conflicts Growth Trends – Aging Baby Boomers

48 48 Blue Cross Blue Shield of Massachusetts U.S. Iceland Canada Australia Netherlands Switzerland Germany France U.K. Japan Sweden Health Spending and Aging Selected OECD Countries 2000 Source: OECD Data, 2002 Now over 16%

49 49 Blue Cross Blue Shield of Massachusetts B.Acute Care vs. Chronic Care Half of seniors have at least one chronic condition: arthritis: 49% hypertension: 36% hearing impairment: 30% cardiovascular disease: 27% Chronic care now accounts for more than 70% of all healthcare expenditures: acute care system trying to deliver chronic care Growing Conflicts

50 50 Blue Cross Blue Shield of Massachusetts C.Severe Workforce Shortages: Nursing Pharmacy Radiology technicians Physicians - specialties Growing Conflicts: Current Environment - Crumbling

51 51 Blue Cross Blue Shield of Massachusetts D.Growing Complexity of Science and Technology: Rapidly expanding knowledge base Significant investment in R & D New medical technologies: transplantation laparoscopic procedures robotic surgery CT/PET scanners gene therapy implants E.Rising Uninsured and Underinsured Current Environment – Crumbling Foundation

52 52 Blue Cross Blue Shield of Massachusetts Healthcare in the USA is at a crossroad: Managed care rejected Healthcare benefit cost increasing rapidly Growing Conflicts

53 Conclusions

54 54 Blue Cross Blue Shield of Massachusetts Conclusions Large Country with Diverse Population Time for Leadership Healthcare Score Card Aims for Regional Healthcare Universal healthcare Primary care and public health Coordinated care Transparency Coalition for Healthcare System Change


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