Health Reform’s Cost Impact Can More be Done to Bend the Cost Curve?

Healthcare Cost in the U.S.

ACA Cost Impact 165 Provisions impacting Medicare ◦ Cost reduction/increased revenues ◦ Fraud and abuse protections ◦ Provider payment mechanisms Medicare Hospital Insurance ◦ Solvency extended from 2017 to 2029 Federal Deficit ◦ : Net reduction of $143 billion ◦ : Net reduction of ¼ - ½ of 1%

Are there More Cost-Savings? Health expenditures consuming a growing percentage of GDP despite ACA Additional opportunities to rein in cost still remain Framework for thinking about opportunities: ◦ Cost – Administrative Waste ◦ Access – Improving Access to Primary Care ◦ Quality – Enhancing Quality

Administrative Waste

Addressing Administrative Waste State-based insurance exchanges ◦ Spread risk across a larger group ◦ Coverage offered at uniform rates regardless of health status ◦ Administratively burdensome underwriting no longer required New health insurance rules to reduce administrative complexity Medical loss ratio limits on health insurers

What More Could be Done? Estimates of $300 billion in administrative waste Plans are often nonstandard, complicated & include formularies & cost-sharing Continued Simplification ◦ Standardize payment systems across payers ◦ Simplify administrative coordination ◦ Encourage sharing of administrative best practices among payers

Access to Primary Care

Addressing Access to Primary Care Primary Care – less expensive than other healthcare alternatives Primary care workforce shortage ◦ Fewer residents choosing family medicine ◦ Aging population increases demand ◦ 32 million newly insured increase demand ◦ Primary care workforce shortage of 35,000 – 44,000 by 2025

Addressing Access to Primary Care, Cont’d Increased Reimbursements for PCPs through 2015 Creation of Workforce Advisory Committee Graduate Medical Education (GME) redistribution to favor primary care Additional grants & funding for primary care workforce education

What More Could be Done? Increase number of medical residencies ◦ No increase in medical residencies under ACA Expand role of APNs ◦ Can provide primary care services ◦ Roles sometimes limited by rules determined by state boards of nursing

Enhancing Quality

Addressing Care Quality Reimbursement-related quality strategies ◦ Reduced Medicare payments for hospitals with high readmission rates ◦ Value-Based Purchasing ◦ Reduced payments for hospitals with high rates of certain hospital acquired conditions Creation of Innovation Center within CMS Patient-Centered Outcomes Research Institute to support CER

What More Could be Done? Recognize Patient Role in Care Quality Link Comparative Effectiveness Research to Cost-Effectiveness ◦ Patient-Centered Outcomes Research Institute prohibited from including cost- effectiveness calculations in its work ◦ Opportunity for independent research to do this

Suggestions for Stakeholders Support efforts to increase administrative efficiency Urge policymakers to do more to increase the number of primary care physicians such as allocating additional funding for graduate medical education Ask your Ohio representative or senator to reintroduce legislation to remove restrictions on APN prescriptive authority Include patients as part of the quality equation Support research that includes value as a component of CER