Speeding up Improvement in Chronic Care: What should be the Federal Role? Sandra M. Foote Senior Vice President, Capitol Health January 29, 2009

9 Days Ago, We Inaugurated a New President 2

Both Candidates Promised to Reform Health Care 3

Pressures for Health Reform 47 million uninsured Coverage eroding Unemployment increasing $2+ trillion and rising Premiums up 80%, 2000-2006 Competitiveness Medical errors Average premiums for employee-only coverage increased from $28 to $52 per month from 2000 to 2006, an 86% increase. Average family-coverage premiums increased from $138 to $248 per month from 2000 to 2006, an 80% increase. In contrast, the consumer price index (CPI) increased by 17% from 2000 to 2006. Quality gaps Variations in care 4

82% of Americans Say the Health Care System Needs Fundamental Change Only minor changes: 16% Rebuild completely: 32% Fundamental changes: 50% Source: Commonwealth Fund Survey of Public Views of the U.S. Health System, 2008 5

RECOMMENDED REFORM STRATEGIES If the political will exists, what fundamental changes are needed? Policy compass, not Rx for change 6

Key Message: To be successful, reforms aimed at expanding access must also address the underlying problems of quality and cost. Structure reforms to include the building blocks of a high performance health system. Source: M. O’Kane et al. “Crossroads in Quality,” Health Affairs 27, no. 3 (2008): 749-757. 7

Obama Health Reform Plan Building Blocks Plan Features Evidence base Independent institute for comparative effectiveness research New models of care Federal investment in HIT Support providers in developing care management, medical home, care integration & coordination programs Disease management and prevention programs included in federal programs Payment for High-Value Care Align incentives for excellence National Performance Measurement Strategy Full transparency on quality and costs Report preventable errors Support practice improvement Use validated performance measures Multi-stakeholder Approach to Improving Population Health Develop regional and national public health strategy and align funding to support Tackle disparities Develop public health infrastructure 8

Medicare Reform : A Major Opportunity Sustainable Growth Rate formula resulted from urgent need to reduce rate of growth Source: The Congressional Budget Office, Social Security and the Federal Budget: The Necessity of Maintaining a Comprehensive Long-Range Perspective August 1, 2002 9

Medicare Growth Projections SOCIAL SECURITY Medicare's cost in 2007—3.2 percent of GDP— is projected to surpass the cost of Social Security in 2028 HI= Hospital Trust Fund SMI=Supplementary Medical Insurance Trust Fund OASI=Old Age Survivors Insurance DI=Disability Insurance Source: Summary of the 2008 Annual Social Security and Medicare Trust Fund Report http://www.ssa.gov/OACT/TRSUM/trsummary.html 10

Medicare Shapes Chronic Care Dominant payer nationally – by far $500 billion projected expenditures 2009 45 million beneficiaries, most with multiple chronic conditions Fee For Service policies reinforce status quo Poor coordination of care Lack of self-care support Uneven adherence to evidence-based medicine Demonstrations not producing rapid progress 11

Medicare Leadership Needed: Change Agent for Chronic Care Time to move beyond research paradigm Make Population Health Improvement a core component of the CMS’ mission Draw on lessons from the quality improvement field 12

Many QI examples nationally Towers Perrin 2008 Health Care Cost Survey – comparison of high and low performance employers: 72% of high performing companies say they play a significant role in employee health management (e.g., identifying and managing health risks in the population and managing disease, chronic conditions and high cost patients). 13

Critical Success Factors Impassioned leadership commitment Explicit goals & performance metrics Organizational structure Authority and resources for innovation Incentives Processes to drive rapid innovation with partners Tolerance of mistakes Review and action based on findings “Continuous Innovation In Health Care: Implications of the Geisinger Experience” (Health Affairs 27:5, 2008) 14

Build on CMS experience Large population-based programs Public-private partnerships Pay for performance structures Beneficiary and caregiver engagement Provider support and incentives Broad multi-stakeholder collaboration New data flows Rich data bases for learning about chronically ill subpopulations 15