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The Nuts and Bolts of Arkansas Health Care: Crafting a New System Joseph W. Thompson, MD, MPH Arkansas Surgeon General Director, AR Center for Health Improvement.

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Presentation on theme: "The Nuts and Bolts of Arkansas Health Care: Crafting a New System Joseph W. Thompson, MD, MPH Arkansas Surgeon General Director, AR Center for Health Improvement."— Presentation transcript:

1 The Nuts and Bolts of Arkansas Health Care: Crafting a New System Joseph W. Thompson, MD, MPH Arkansas Surgeon General Director, AR Center for Health Improvement

2 Healthcare Financing in Transition 1928 Penicillin discovered 1944 first patient treated 1941 WWII Wage controls / Employers’ response 1957 Hill Burton Act stimulates hospitals 1965 Medicare / Medicaid established 1973 Federal HMO Act 1990s Employer / Medicaid HMO expansions 1997 State Children’s Health Insurance Program 2003 Medicare Modernization Act 2011 Patient Protection and Affordable Care Act

3 29%66%* 27% 34%* 71% 68% $6,355 $11,816 Changing Cost Allocations for Arkansas Families’ Annual Insurance Premiums Source: AHRQ, Medical Expenditure Panel Survey ( Tables of private-sector data by firm size and state (Table II.D.1) and II.D.2). Available at

4 U.S. Census Bureau health insurance coverage status for counties and states: Interactive tables. Small Area Health Insurance Estimates Web site. Published Accessed January 2, Arkansas Uninsured By County (19-64 years of age)

5 Medicaid ARKids First A ARKids First B Medicaid for Pregnant Women Medicare Currently Uninsured: ~550,000 Private Insurance Medicaid Disability* Medicaid—Extremely low-income parents* Current Health Insurance Distribution

6 New Health Insurance Distribution Medicaid—Extremely low-income parents* Medicaid ARKids First A ARKids First B Medicare Private Insurance Sliding Scale Subsidies for Private Insurance through the Exchange (~150, ,000 newly insured) Medicaid Expansion (~250,000 newly insured) Medicaid Disability* Private Insurance/ Medicaid

7 Overall State Vision 7 Population-based care delivery Medical Homes Health Homes Objective Care delivery strategies Enabling initiatives Improving the health of the population Enhancing the patient experience of care Reducing or controlling the cost of care Health information technology adoption Payment innovation Health care workforce development Consumer engagement and personal responsibility Episode-based care delivery Acute conditions, defined procedures Expanded coverage for health care services

8 8 Arkansas Health System Improvement Agency Organizational Structure State Leadership Implementation & Coordination Implementation Workgroup Participation Steering Group: DHS, ADH, BCBS, QualChoice, United, ACHI AID (Exchange) DHS (Mcd eligibility & expansion) EBD UAMS ADH & ACHI Higher Ed (2- & 4 yr) AFMC UAMS DIS Medicaid Governor Mike Beebe Payment & Quality Improvement Mr. John Selig Insurance Exchange Commissioner Jay Bradford Workforce Chancellor Dan Rahn & Dr. Paul Halverson Health Information Technology Mr. Ray Scott Governor’s Policy Staff & Dr. Joe Thompson ACHI

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10 Goals of Workforce Strategic Planning  Support the implementation of and transition to team-based care that is patient-centered, coordinated, evidence-based, and efficient  Enhance and increase the use of health information technology (HIT)  Increase the supply of and improve the equitable distribution of primary care providers  Adopt new financing, payment, and reimbursement policies and mechanisms

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12 Health Information Technology  Over 3,000 primary care providers and hospitals committed to EHRs adoption and have received nearly $140M (through Feb 2013)  State Health Alliance for Records Exchange (SHARE) Currently more than 2,300 secure message users from about 271 health care locations in Arkansas  U.S. Department of Commerce Broadband Technology Opportunities Program ($128M)

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14 Goals  Reward high quality care and outcomes  Ensure clinical effectiveness  Promote early intervention and coordination to reduce complications and associated costs  Encourage referral to higher-value downstream providers

15 Preliminary working draft; subject to change 15 Payers recognize the value of working together to improve our system, with close involvement from other stakeholders Coordinated multi-payer leadership… ▪ Creates consistent incentives and standardized reporting rules and tools ▪ Enables change in practice patterns as program applies to many patients ▪ Generates enough scale to justify investments in new infrastructure and operational models ▪ Helps motivate patients to play a larger role in their health and health care

16 16 Populations serve require care in three domains Acute and post-acute care Prevention, screening, chronic care Supportive care Patient populations (examples) Care/payment models Healthy, at-risk Chronic, e.g., ‒CHF ‒Diabetes Patient-centered medical homes Acute medical, e.g., ‒CHF ‒Pneumonia Acute procedural, e.g., ‒Hip replacement Focused episodes Developmental disabilities Long-term care Behavioral health (mental illness / substance abuse) Health homes

17 Patient Centered Medical Homes

18 18 Why primary care and PCMH? Most medical costs occur outside of the office of a primary care physician (PCP), but PCPs can guide many decisions that impact those broader costs, improving cost efficiency and care quality PCP Patients & families Specialists Community supports Hospitals, ERs Ancillaries (e.g., outpatient imaging, labs)

19 Preliminary working draft; subject to change Medical Home: Comprehensive Primary Care Initiative  69 primary care practices  Receiving FFS + enhanced payments  Improving patient experience: care coordination, access, communication  Practices responsible for ALL patients  Quality, cost and transformation milestones will be evaluated  PMPM began October ‘12  Medicare $8-40; risk-adjusted  Medicaid +$3 kids; +$7 adults  Private ~$5  Must meet targets  Quality, performance, transformation  Shared savings model year 2-4  Expansion in Summer 2013

20 Preliminary working draft; subject to change 20

21 Spending Breakdown for CHF 30-day Episodes with and without a Readmission 21 % Total Costs 63%0%27%3%4% % Total Costs 27%45%17%2%6%4% 24% 76% N=4,992 CHF episodes Source: Medicare FFS claims data, 2010 Avg Total Episode Cost = $23,511 Avg Total Episode Cost = $9,440 Readmits No readmits

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23 Episode Strategies for Care

24 24 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE 2012: episode-based payment was launched or 5 episodes, statewide Most relevant payor types Medicare Commercial* Medicaid* Key sources of value Readmission and post-acute stays, cost of implant Hip and knee replacement Acute/post-acute heart failure Pregnancy and delivery Upper respiratory infections Medicaid* Commercial* Eliminating unnecessary inductions, C-sections, and extended length of stay in the hospital Medicare Commercial* Medicaid* Encouraging hospitals to extend reach beyond point of discharge Medicaid* Commercial Eliminating inappropriate use of antibiotics and radiology Accountable provider Orthopedic surgeon Delivering physician Hospital Diagnosing physician ADHD Medicaid* Commercial Matching care to guidelines for pharmacotherapy vs. counseling Treating physician or psychologist * Implemented or in process; others to follow SOURCE: Arkansas Payment Improvement Initiative

25 2013: Wave 2 Episodes launch ▪ Wave 2a (April 2013) ▪ Tonsillectomy ▪ Cholecystectomy ▪ Colonoscopy ▪ Oppositional Defiant Disorder (ODD) ▪ Wave 2b to follow (Fall 2013) ▪ PCI & CABG ▪ COPD exacerbation/Asthma exacerbation ▪ Neonatal Care ▪ ODD / ADHD ▪ Wave 2a (April 2013) ▪ Tonsillectomy ▪ Cholecystectomy ▪ Colonoscopy ▪ Oppositional Defiant Disorder (ODD) ▪ Wave 2b to follow (Fall 2013) ▪ PCI & CABG ▪ COPD exacerbation/Asthma exacerbation ▪ Neonatal Care ▪ ODD / ADHD

26 Preliminary working draft; subject to change 26 APII scope and pace of rollout episodes, statewide, affecting 5-10% of spend for Medicaid, BCBS 69 medical homes for ~10% of Arkansans: MCaid, MCare, BCBS Reports and risk affecting >2,000 hospitals, physicians, other professionals Multi-payor portal for providers to enter data and receive reports episodes, >20% of spend Pediatric medical homes Reports and payment to >5,000 providers Multi-payor care model for care coordination EMR connectivity to multi- payor provider portal 50+ episodes, >40% of spend All primary care medical homes, >80% of Arkansans Reports and payment affecting >80% of providers Health information exchange Financial goal: 10% reduction in spend by 2017, followed by sustained reduction in trend* *Reflects goal publicly communicated by Arkansas Medicaid; similar success case for BCBS

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28 Arkansas Health Benefits Exchange Arkansas with potential of 450,000 newly covered lives Pursuing Federal-state partnership model Opportunity to strengthen competitive market Majority of expansion in rural underserved areas Plans offered by private insurance companies

29 New Health Insurance Distribution Medicaid—Extremely low-income parents* Medicaid ARKids First A ARKids First B Medicare Private Insurance Sliding Scale Subsidies for Private Insurance through the Exchange (~150, ,000 newly insured) Medicaid Expansion (~250,000 newly insured) Medicaid Disability* Private Insurance/ Medicaid

30 Progress on Private Insurance Exchange Exchange determines basic benefit package, plan participation, consumer support Arkansas implementing state-federal partnership model Major reforms for health insurance market Upcoming steps: –Finalization of basic benefit package –Private plans submit bids (late Spring) –Outreach and education (Summer) –Enrollment (October 2013) –Coverage (1/1/2014)

31 Arkansas’s Private Option Utilize health insurance exchange to purchase insurance coverage for those <138% FPL Qualified high-silver policies offered to all Federal funding via Affordable Care Act starting January, 2014 Essential health benefit plan with private provider payment rates Medically frail, dual eligible and children on Medicaid excluded Some existing Medicaid beneficiaries transitioned

32 Arkansas’s Private Option Plan doubles the size of the state exchange; shrinks share of Medicaid Less disruption in services for people who would move between Medicaid and private insurance because of change in income Reduce size of Medicaid program by transitioning pregnant women, medically needy, ARHealthNetworks, and others to Exchange while still ensuring coverage Entice more insurance companies to participate in Exchange Boost state revenues above original estimate with more federal dollars flowing into state’s health care system Eliminates employer exposure to $25-38M per year in penalties

33 How does expansion help the state? One-time opportunity to strive for complete coverage and “catch-up” to richer states through healthcare coverage Address unmet healthcare needs of citizens Fiscally advantageous –100% federally funded with opt-out provision –Takes over for existing state patchwork coverage –Relieves state from financing uncompensated care –Assists county and municipal governments –Estimated $1B in new funding stimulates economy

34 RAND Report: The Economic Impact of the ACA on Arkansas Unbiased, external assessment Model of full implementation of ACA –subsidies toward the purchase of private insurance through the health insurance exchange –Medicaid expansion Results –400,000 newly insured Arkansans –2,300 Lives saved annually –Net increase on state GDP of $550 million annually –6,200 jobs created

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