1. 2014 Advances in Inflammatory Bowel Diseases Orlando, Florida December 4, 2014 1 How Recently Federally Mandated Changes are Altering the Care of our IBD Patients Robert Burakoff, MD MPH Clinical Chief, Division of Gastroenterology Director, Center for Digestive Health Associate Professor of Medicine Harvard Medical School Brigham and Women’s Hospital Richard Johannes, MD MS Instructor of Medicine Harvard Medical School

2. Agenda Background Goals of federal healthcare policy –Broaden coverage (ACA) –Modify payment incentives –Delivery system redesign The transition from Volume to Value 2

3. A growing portion of annual GDP 3

4. The number of uninsured Americans is down 4

5. What is the proper target of resource allocation of the healthcare system? 1.Should we only provide care that avoids errors of harm but doesn’t provide care that could produce improved health (value)? OR 2.Should we target a level where the increased health benefits are balanced by the increased costs? OR 3.Should we target a level where we provide all care that is potentially beneficial regardless of cost? 5

6. Graphical Depiction #1 Resources put into Healthcare #3 Maximum Impact #2 Economic Optimum Health Outcomes 0 6

7. What is the proper target of resource allocation of the healthcare system? Choice 1 is unrealistic What about choice 2? Many policy makers and business leaders would suggest this choice. However, practicing physicians, healthcare professionals, patients, state and federal agencies (Medicaid, Medicare, FDA) and laws require or behave as though choice 3 was the best target. 7

8. Graphical Depiction #1 Resources put into Healthcare #3 Maximum Impact #2 Economic Optimum Health Outcomes 0 #4 Harm 8

9. Some Surprises in US healthcare 9

10. 5 Trends that will Impact Our Practices Cost containment Consolidation at all levels of health care Accountability Performance measurement Population management Clinical Gastroenterology and Hepatology 10

11. Cost Containment Merit based incentive payment system 11 2018201920202021202220232024 (+/-) 4%(+/-) 5%(+/-) 7%(+/-) 9% PQRS EHR Meaningful Use Value Based Payment Modifier* Resource Use Clinical Practice Improvement Activities

12. Lower cost and fairness Hospital Acquired Infections for example Perhaps as many as 2 million, with costs between $17-$29 billion They are already on the CMS Hospital Acquired Conditions list There have been some great successes (esp. central line bloodstream infections) But without a cost sharing models nearly all of the economic benefits accrue to insurers despite all of the work being done by hospitals and providers 12

13. Consolidation Potential for enhanced efficiency Recent JAMA paper by Robinson & Miller at least suggests consolidation has the potential to actually increase costs through larger overhead. After adjustment for severity and local factors between 2009-2012: –Hospital owned organizations incurred costs of 10.3% higher than physician owned organizations –Multi-hospital owned organizations incurred cost increases of 19.8% higher than physician owned organizations. 13 Source: Robinson JC, Miller K. JAMA. 2014 Oct 22-29;312(16):1663-9.

14. Will GI become an employed specialty? Specialty2009 % Employed Family Medicine56% Internal Medicine46% Neurosurgery41% Neurology41% OB/GYN39% General Surgery37% Oncology29% Cardiology26% Otolaryngology25% Orthopedic Surgery21% Gastroenterology19% Urology16% Source: MGMA 2009 | Advisory Board 2009 Hospital Reasons for Employment % Net Revenue from Employed Physicians 16% 2000200420082012 18% 25% 35% Gain Leverage For Growth Strategy Stabilize Market / Secure Access Transform Care Delivery 14

15. Accountability ACOs and alternative delivery strategies In September 2014 CMS reported their results Encouraging but there are only 19 “pioneer” ACOs Experimental Payment models 1.Base payment 2.Quality component (Performance) 3.Warranty component? 15

16. Performance 16 Most measures today are based on billing data only

17. Population Health No one really knows what this is However, could one reimburse a region’s gastroenterologists by the size of the population and its risk adjusted colon cancer incident rate versus just the volume of colonoscopies performed? Regardless of how you feel, this would be a daunting task to implement. 17

18. Where is this going? Getting people insured doesn’t answer how care will be financed or provided Do we have the appetite for “experiments” in provision of healthcare? Expect changes – but not too soon –ICD-10 –Recent election 18

19. Scenarios 19 2014 2016 ACA remains mostly as is Much better congressional picture Win the Presidency 2016 Attempt repeal knowing it will be vetoed but to set stage for the presidential election Veto results in the 2014-2016 provisions moving forward Hold the Congress Win the Presidency ACA repealed Innovative Payment Approaches Tort Reform Single Payer System Rational Regulation

20. Summary ACA will go forward for the next two years because veto can’t be overridden So will we just see delay until 2016 or.. –Might bipartisan efforts lead to locating a middle ground –Could discussions of a single payer system resurface –Will tort reform resurface in the discussions 20 ?