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Making the Transition to a Sustainable Health Care System The Oregon Approach: so far … Sean Kolmer, MPH Health Policy Advisor Governor John Kitzhaber.

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Presentation on theme: "Making the Transition to a Sustainable Health Care System The Oregon Approach: so far … Sean Kolmer, MPH Health Policy Advisor Governor John Kitzhaber."— Presentation transcript:

1 Making the Transition to a Sustainable Health Care System The Oregon Approach: so far … Sean Kolmer, MPH Health Policy Advisor Governor John Kitzhaber

2 Overview 1. State and Federal Budget Issues 2. System Challenges 3. Oregons Path 4. Q & A

3 Unsustainable Health care costs are increasingly unaffordable to individuals, businesses, the state and local governments Inefficient health care systems bring unnecessary costs to taxpayers and all other purchasers Dollars from education, childrens services, public safety, salaries and wages 3

4 Oregons Long Term Budget

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6 Medicare growth of all federal income taxes % 2015 – 19% % 2075 – 90% Medicare Trust Fund assets are exhausted in Number of beneficiaries 39.5M69.7M Beneficiaries as share of pop. 13.8%20.6% Future of Medicare

7 Failure of the Super Committee Two percent reduction in Medicare spending, which must come from: Payments to hospitals Doctors Nursing homes Other providers And not in benefits

8 Private sector facing similar cost increases Source: Medical Expenditure Panel Survey, MEPSnet Insurance Component. Average per Oregon premiums ( ) Employee only rose almost 300% Average per family premium rose over 300% As premiums have increased, cost have been shifted more and more to employees and their families ( ) Employee only contributions rose almost 400% Family contributions rose 370%

9 System Challenges: Cost Shifting Cycle System Challenges: Cost Shifting Cycle Public Private Those who do not fit into a category (uninsured) Change eligibility Pressure on state/federal budgets Employers and/or employees drop coverage Increase in premiums, co-pays, co-insurance ER (uncompensated, expensive care)

10 If food were health care If food prices had risen at the same rates as medical inflation since the 1930s: 1 dozen eggs$ roll toilet paper $ dozen oranges $ pound bananas $ pound of coffee $64.17 Total for 5 items $ Source: American Institute for Preventive Medicine 2007 If food prices had risen at the same rates as medical inflation since the 1930s: 1 dozen eggs$ roll toilet paper $ dozen oranges $ pound bananas $ pound of coffee $64.17 Total for 5 items $ Source: American Institute for Preventive Medicine 2007

11 Quality vary widely National Data – 44% Oregon adults over age 50 receive recommended preventive care (17 th in the nation) – 90% of hospitalized patients receive recommended care for heart attack, heart failure, pneumonia (40 th in the nation) – 66% of heart failure patients received written instructions at discharge (46 th in nation) – Best state for preventing hospital admissions for children with asthma Quality Corporation data showed diabetes care exceeds the national average but there is wide variation across practices – 58% diabetics received an annual eye exam – 82% diabetics had their kidney function checked

12 In Oregon, wide variation in cost for similar outcomes... Sources: Office for Oregon Health Policy & Research. Hospital Quality Indicators Report,

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14 Not workingBetterEven better PaymentFee for serviceEpisode-based reimbursement Quality Global budgeting IncentivesConduct procedures Evidenced-based care Pay for performance Address root causes Reduce obstacles to behavior change MetricsRevenue improvement Quality Reduced hospitalization Reduced disparities Better health Improved quality of life Reduced costs GovernanceInformal relationships & referrals Joint partnerships between organizations (e.g., mental health & behavioral health) New community accountability linking ALL System Challenges: Misaligned Incentives

15 Oregon Health Plan 15

16 System Challenges: Fragmentation of Care

17 Cost of fragmentation Even for all we spend, health outcomes are not what they should be – estimated 80% of health care dollars go to 20% of patients, mostly for chronic care Lack of coordination between physical, mental, dental and other care and public health means worse outcomes and higher costs Behavioral health major driver of bad outcomes and high costs – Human and financial cost Chronic conditions – Care delayed is too often care denied 17

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19 Ways to Reduce the Cost of Health Care Reduce what we pay for it (provider cuts) Reduce the number of people covered Reduce the benefits covered … or Change the way care is organized and delivered

20 Senate Bill 1580 Launches Coordinated Care Organizations (CCOs) CCOs are local health entities that deliver health care and coverage for people eligible for Medicaid (the Oregon Health Plan) Follow up to 2011s HB 3650 Strong bi-partisan support A year of public input – more than 75 public meetings or tribal consultations Built on 1994s Oregon Health Plan that covers 600,000 Oregonians today 20

21 GOAL: Triple Aim A new vision for a healthy Oregon

22 Changing health care delivery

23 Coordinated Care Organizations

24 CCOs: governed locally State law says governance must include: Major components of health care delivery system Entities or organizations that share in financial risk At least two health care providers in active practice – Primary care physician or nurse-practitioner – Mental health or chemical dependency treatment provider At least two community members At least one member of Community Advisory Council

25 Community Advisory Council Majority of members must be consumers Must include representative from each county government in service area Duties include Community Health Improvement Plan and reporting on progress

26 Benefits & services are integrated and coordinated Physical health, behavioral health, dental health Focus on chronic disease management Focus on primary care Get better outcomes: – Health equity – Prevention Community health workers/non-traditional health workers

27 Global budget Current system – MCO/MHO/DCO/FFS – Payments based on actions – No incentives for health outcomes CCO Global Budget – One budget – Accountable to health outcomes/metrics – Local vision, shared accountability, shared savings – Flexibility to pay for the things that keep people healthy

28 Flexibility: pay for non-traditional health workers and other means to coordinate care Addressing behavioral health: Reduced ED visits by 49% and reduced costs per patient $3,100. Central Oregon pilot project 28

29 CCO Criteria Coordinate physical, mental health and chemical dependency services, oral health care Encourage prevention and health through alternative payments to providers Engage community member/health care providers in improving health of community Address regional, cultural, socioeconomic and racial disparities in health care Manage financial risk, establish financial reserves, meet minimum financial requirements Operate within a global budget

30 Federal Oregon partnership

31 CCO Waiver Framework Waiver effective July 5, 2012 Establishment of CCOs as Oregons Medicaid delivery system in order to improve health, improve healthcare, and lower per capita costs Flexibility to use federal funds for improving health Federal investment: – $1.9 billion over five years 31

32 Oregons Accountabilities Savings: – 2% reduction in per capita Medicaid trend – Baseline is calendar year 2011 Oregon spend – Trend 5.4% as calculated by OMB for Presidents Budget – State to achieve 4.4% by end of year 2 and 3.4% there after. – No reductions to benefits and eligibility in order to meet targets – Financial penalties for not meeting targets 32

33 Oregons Accountabilities Quality: – Measurement and benchmarks – Financial incentives (sticks and carrots) at CCO level Transparency Workforce – $2 million per year for primary care loan repayment – Training of minimum 300 additional community health workers by end of

34 Across Oregon, unprecedented collaboration

35 CCOs-Wave 1 (effective 8/1/12) 35 CCOService Area Umpqua HealthParts of Douglas County FamilyCare Tri-CountyClackamas, Multnomah and Multnomah Counties, parts of Marion AllCare Health PlanSelect zips of Curry, Josephine, Jackson and Douglas Counties PacificSource Health Plans- Central Oregon Crook, Deschutes, Jefferson Counties, Parts of Klamath County Trillium Community Health PlanLane County including contiguous zips in Benton and Linn Counties Willamette Valley Community HealthMarion County including contiguous zips in Polk county InterCommunity Health NetworkBenton, Lincoln and Linn counties Western Oregon Advanced HealthCoos and Curry counties

36 CCOs-Wave 2 (effective 9/1/12) 36 CCOService Area Columbia PacificClatsop, Columbia, Tillamook counties, parts of Coos and Douglas Jackson County CCOJackson county PrimaryHealth of Josephine CountyJosephine county, parts of Douglas and Jackson counties Eastern Oregon CCOBaker, Malheur, Union, Wallowa, Sherman counties Health Share of OregonClackamas, Multnomah and Washington counties

37 CCOs-Wave 3 & 4 (in progress) 37 CCOService Area Cascade Health Alliance (effective 10/1/12) Parts of Klamath county PacificSource-Columbia Gorge CCO (effective 11/1/12) Hood River and Wasco counties Yamhill County CCO (effective 11/1/12)Yamhill county, parts of Marion, Clackamas, and Polk counties

38 OHP Providers

39 One of the problems we can solve is the tremendous fragmentation among the people who pay for the care and what they expect from us. Hood River family physician One of the problems we can solve is the tremendous fragmentation among the people who pay for the care and what they expect from us. Hood River family physician

40 Long-term Begin to have as an option the redesigned delivery system platform for other state contracts: – Public Employees Benefit Board – Oregon Educators Benefit Board Redesigned delivery system could be core component of health insurance exchange and an opportunity for private sector to participate

41 41 Cost of doing nothing…and the opportunity

42 For more information


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