1. A Journey Together: New Maryland Healthcare Landscape Health Montgomery Maryland Health Services Cost Review Commission March 2015

2. Health Reform March 23, 2010 November 1, 2013 Health Reform is much more than the Exchanges

3. The Context: Health Care System Challenges High costs Aging and sicker population Workforce shortages Health care disparities Fragmentation and variation Coverage & Access

4. More Challenges Ahead Changes in Demographics and Expenditures Age 65 plus 2010 40 million 2020 55 million 2030 72 million Federal Budget & Health Care Spending More Entitlements, Fewer Contributors

5. * PPP=Purchasing Power Parity. Data: OECD Health Data 2011 (database), Version 6/2011. Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011. US spending growth outpaces other developed countries and spending is a higher portion of GDP Higher Cost Without Better Outcomes

6. 15% of Medicare Beneficiaries have 6 or more chronic conditions—1/2 of cost

8. National Average

10. New Paradigm Improve the health of the population; Enhance the patient experience of care; Reduce the per capita cost of care.

11. In Response, a New Culture for Patient Care is Emerging Year 1 Shift to consumer-centric model Improve care transitions Payment reform Year 2 Modernize services to match new model Partner across hospitals, physicians, and other providers and communities to develop new consumer centered approaches Year 3 Improve care coordination and improve chronic care Work with people to keep them healthier, financially and clinically Engage communities

12. Implications All this means: – Payment moves away from fee-for service The more you do the more you get paid 12

13. Implications All this means: – Payment moves away from fee-for service The more you do the more you get paid The better you do the better you get paid – Pressure to assume more risk – Need for integration and collaboration CHANGE IS HERE – CHANGE IS EVERYWHERE 13

14. Maryland Hospitals are Paid Differently Maryland has set hospital rates since the mid- 1970s – Health Services Cost Review Commission Independent 7 member Commission Public utility model Provides oversight and regulation of hospitals Maryland hospitals are waived from Federal Medicare payment methods (the Medicare waiver) All payers participate Unique in the country 14

15.  Helped hold down costs relative to elsewhere  Funds access to care  Transparency  Leader in linking quality and payment  Local access to regulators Value of the All Payer System

16. New Federal Agreement 5 year demonstration with Medicare (CMS) –Effective 1/1/14 Focus on holding down costs More rewards for improving outcomes Encourages better team work among whole health care system

17. Implications for Patients and their Families Quality safety and satisfaction scores can account for a significant amount of revenue – Requires hospitals to become more patient and family centered Expect greater care coordination – Improved transitions of care between settings e.g., clear instructions for patients on discharge Expect more outreach from providers – Particularly true for those with chronic illnesses Movement of care to the most appropriate setting – Right care, right time, right place, right price 17

18. Model Has Been Tested Maryland Maryland has been testing the Model across the State for 4 Years: – Better quality – Reduced Costs – Reasonable Profitability Examples of Collaboration – School Health Program Collaboration – Nursing Home Collaboration 18

19. Concluding Thoughts New waiver is a call to action HSCRC is a State entity that represents the public – Ensure rates and costs are reasonable – Promote the Triple Aim for patients and purchasers of care Creates a path for change – Less disruptive than elsewhere – Proactive not reactive Value is the new gold standard – Quality – Appropriate hospital care – New Partnerships – Cost efficiency – Population health focus 19

20. THANK YOU ! 20