National Health Care Reform: Policy Options that Can Promote Affordability and Higher Quality Debra L. Ness Co-Chair, Consumer-Purchaser Disclosure Project President, National Partnership for Women & Families Peter V. Lee Co-Chair, Consumer-Purchaser Disclosure Project Executive Director, National Health Policy Pacific Business Group on Health Discussion Forum March 6, 2009

1 Agenda Welcome and Introductions –Debra Ness, Disclosure Project and NPWF Overview of Policy Options that Can Promote Affordability and Quality –Peter Lee, Disclosure Project and PBGH –Reactors: Debra Ness, NPWF Steve Findlay, Consumers Union –Roundtable Discussion Messaging About Reform –Robert Crittenden, Herndon Alliance –Rick Johnson, Lake Research –Reactor: Chuck Alston, Manning, Selvage & Lee –Roundtable Discussion

2 Rising Costs: Unsustainable for All Projected Spending on Health Care as a Percentage of Gross Domestic Product Percent Source: Congressional Budget Office, 2008

3 * In 1999, CPS added a follow-up verification question for health coverage. Source: Analysis of the March 1988–2004 Current Population Surveys by Danielle Ferry, Columbia University, for The Commonwealth Fund. Adapted from “A Need to Transform the U.S. Health Care System: Improving Access, Quality, and Efficiency,” compiled by A. Gauthier and M. Serber, The Commonwealth Fund, October Middle Income Workers are Losing Insurance Most Quickly (Uninsurance kills ~5,000 annually; rising ~450 annually) The Uninsured Moral and Financial Debacle

4 The Problem: More Care is NOT Better Care $700 Billion Overspending: Regional variations in quality and cost US: 10 th in life expectancy; 27 th in infant mortality Avoidable harm: 99,000 deaths in hospitals from health care acquired infection Overuse: 13 million unneeded antibiotic RX

5 If care provided nationally AS IT IS to 4 million Medicare beneficiaries, we could save 29% of Medicare spending WITH coordinated care – risk of heart disease mortality reduced 30% (example of Kaiser No.Cal) Thousands of hospitals participating in the 5 Million Lives Campaign – many hospitals proving ZERO infections is doable If all health plans performed at the NCQA’s 90 th percentile – over 40,000 lives would be saved each year and over $2 billion The Promise & Potential

6 The Odds – Will “Big Reform” Occur? Health care IS a core economic issue President-elect Obama said so More than Congressional interest -- we have thoughtful Congressional leadership. Reform interest is bipartisan. Proposals have low “fright factor” for existing insureds Coverage expansion is framed as BOTH about the “right thing to do” and addressing cost. Bigger is often more doable than smaller. Special interests recognize the need for reform. Over ($) 2 trillion reasons say no… but:

7 First Rule of Politics: Follow the Money Funds Flow 2006: $2,105.5 Billion

8 Legislative Process – The Reality: Chutes and Ladders with Trillions at Play The Players: Senate House of Reps White House Chutes or Ladders – those who can move reform forward or back (and their ten year lobbying + federal contributions to Congress): Clinicians -- $980 million Hospitals -- $752 million Pharma -- $1.6 BILLION Insurers -- $555 million AND…if we play our cards right: Labor Consumers Employers Why have we failed to do health care reform: “…the power of the interest groups – doctors, hospitals, insurers, drug companies, researchers, and even patient advocates – that have a direct stake.” Tom Daschle, 2008

9 1.Promotes better quality. 2.Makes it MORE likely that patients “ALWAYS AND ONLY” get the right care, at the right time from the right clinician in the right setting – especially for those who need care the most 3.Promotes more affordable care and slowing growth of health care costs. 4.Fosters coordination of care. 5.Improves accountability of clinicians and all providers 6.Fosters innovation. Scorecard for ALL Policy Options

10 Health Reform Elements 1.Coverage Expansion and Financing –Affordable coverage/Universal access Expanding public programs (Medicaid, SCHIP, Medicare) Connector/Exchange –Subsidies for low-income –Public plan option Small business tax credits –Shared Responsibility Individual mandate Employer mandate (play or pay) –Insurance market reforms Guaranteed issue Rating reforms –Tax code changes (eliminating or modifying tax exclusion for ESI) –Individual out-of-pocket contributions 2.Benefits –Minimum, standard benefit package –Specified in statue or delegated to outside entity? –Value based insurance design –Long term care

11 Health Reform Elements 3.System Reforms –Quality improvement Measurement and Reporting (transparency) Address disparities Promote primary care and chronic care management –Wellness/Prevention –Patient Engagement & Shared Decision-making –Payment reform Promote primary care, collaboration/integration and paying for “Value” –Medical home –Revised RBRVS –Episodes, bundles –Gain-sharing, accountable entities –Payment/non-payment based on quality/outcomes 4.Infrastructure –Oversight: Health Fed/Independent Health Coverage Council –Health Information Technology –Comparative effectiveness research –Workforce –Medical malpractice reform –Assure innovation is fostered

12 What could blow up reform? The “Public Plan” – very different views of the value versus danger of having a public plan option in a connector Unintended Consequences of USING Performance Information – fears that the use of comparative information on treatments or providers will exacerbate history of access problems for those how need care the most Privacy versus use of data – need to strike the balance between protecting patient privacy and allowing for “meaningful use” Potential Minefield Issues

13 Eleven reforms that will promote quality and affordability

14 Solutions Must be Public and Private National: Medicare and Medicaid Cost Shift as percent of Commercial Hospital Costs Source: Hospital and Physician Cost Shift: Payment Level Comparison of Medicare, Medicaid, and Commercial Payers, Milliman, December 2008 California: Medicare and Medicaid Cost Shift as percent of Commercial Hospital Costs Source: California Cost Shift: Payment Level Comparison Between Medicare, Medi-Cal and Commercial Payers in California, Milliman, August 2007

15 Value Policy #1: Public & Private Alignment Need alignment to avoid the cost-shift train wreck: The “[F]ederal health spending trends should not be viewed in isolation from the health care system as a whole.... Rather, in order to address the long-term fiscal challenge, it will be necessary to find approaches that deal with health care cost growth in the overall health care system.” Peter Orszag, quoting David Walker, Comptroller of GAO Use the same measures Address cost-shifting from public to private

16 Value Policy #2: If there’s a “Connector,” make sure it fosters value Need to assure: Effective tools for consumers to choose right plan for them those offered All Connector plans measure, report and have payments to providers that promote better quality Allow participation of high- value local/regional plans

17 Value Policy #3: Create “Balanced Benefit Design” Affordability Promote wellness Incentives for consumers based on value (quality and cost) Catastrophic care Need to assure:

18 Value Policy #4: Measures and Public Reporting No More Driving Blind Performance measures are the foundation for all reforms: All clinicians and settings Measures that matter and are actionable Outcomes, equity, functional status, resource use, patient experience Support “Stand for Quality” to assure public support for the public good of measurement ( ty.org) ty.org

19 Value Policy #5: Measures and Public Reporting Release of Medicare Data Medicare data is a rich source of information: Protect PATIENT privacy, not clinician Allow access to enriched data (claims, RX, lab where available) physician, medical group and hospital service lines Need profiles of quality and efficiency (aka "total cost of care per acute episode or per chronic illness patient per year) Need to allow standalone and merging with private sector data

20 Getting and staying healthy is about more than medical care: All Americans get needed preventive services Healthy lifestyles, diet, exercise Promoting health where people live: communities, schools, workplaces Value Policy #6: Promote Wellness

21 Value Policy #7: Consumer & Provider Incentives to Promote Shared Decision-Making Patients -- for individuals with low/moderate risk of heart disease: –No copay for intensive diet and exercise support –Some copay for medication (low/no for generic, etc) –Bigger copay for stents and CABG (after shared decision- making) –Biggest copay for stents and CABG (if NO informed decision- making) Clinicians – for referring and providing physicians –Higher/real payments for nutrition/lifestyle support (not necessarily by a physician) –Payment rewards to referring providers who send patients to interventionsts with better track record –Payment rewards to those doing procedure: “full” payment only where patient completed approved shared decision-making process; 75% payment otherwise The right incentives for consumers and providers. For example:

22 Value Policy # 8: Promote Payment Reform by Assuring Consumers, Employers AND Providers at “At the Table” Yes, FFS is toxic Yes, move to rewarding value Yes, promote primary care Yes, reward coordination Yes, gainsharing BUT… Essential payment reforms will ONLY happen if we take decisions from the (virtual) smoke-filled back rooms controlled by those receiving payments and make them majority controlled by those who receive and pay for care

23 Value Policy #9: Comparative Effectiveness Information to Meet Patients’ Needs Patients and physicians need good information on cost and clinical effectiveness Without good information “right care” is too easily defined by industry agendas

24 Value Policy #10: Bridge to Somewhere HIT that Promotes Better Care HIT is NOT about boxes in doctors offices – fostering true “meaningful use” Supporting decisions by clinician at the point of care and reduce errors Involving patient in their own information Collecting real-time performance information for measurement purposes Gives feedback to patients and clinicians Promotes innovation

25 Value Policy #11: Look to the Future Assure Policies Foster Innovation Promote telemedicine by allowing cross- state border practice of medicine by physicians Need policies that allow for/foster innovation, NOT entrenched status quo, examples:

26 Health Reform Elements Major Policy AreaCritical Value Policies Coverage expansion and Financing 1. Align public and private policies 2. Connector or Exchange promoting value Benefits 3. Assure core benefits promote affordable “right care” System Reforms 4. Full measures and public reporting 5. Release Medicare data 6.Promote wellness 7.Consumer and provider incentives for shared decisions 8. Payment reform – Change the decision process Infrastructure 9. Patient-centered comparative effectiveness 10. HIT that promotes better care 11. Foster innovation

27 Messaging Health Reform Some key resources when it comes to messaging around health reform include: Key Messaging Lessons About System Changes in Health Care Reform: This memo from The Herndon Alliance and Lake Research Partners provides key findings and top messages (both pro and con) on reform issues such as comparative effectiveness, evidence-based medicine, and overuse. Quality and Equality in U.S. Healthcare: A Message Handbook: A recent publication from The Robert Wood Johnson Foundation, this handbook was created to provide the Aligning Forces for Quality (AF4Q) communities with information and messaging on a range of reform policy strategies, including consumer engagement, quality improvement, rewarding quality care, and performance measurement and public reporting. From Our Lips to Whose Ears? Consumer Reaction to Our Current Health Care Dialect: This study examines how the language of health policy and reform commonly used by stakeholders actually gets “heard” by the lay public, with some surprising results.

28 The Consumer-Purchaser Disclosure Project is a coalition more than 50 of the nation’s leading consumer, labor, and employer organizations that are working to advance the measurement and subsequent use of nationally standardized measures of clinical quality, efficiency, equity, and patient centeredness for health plans, hospitals, medical groups, physicians, other providers, and treatments. The Disclosure Project’s goal is to see these measures become publicly reported for the purposes of advancing the use of consumer support tools, performance-based payment reform, and quality improvement. The project is supported by financial and in-kind support of participating organizations and by financial support from the Robert Wood Johnson Foundation. Previous Discussion Forums and briefings are available at National Health Care Reform: The Odds, the Players and the Issues – January 12, 2009 Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 – September 4, 2008 National Performance Measurement Landscape: Basics for Consumers & Purchasers – December 10, 2007 and January 17, 2008 Medicare’s Physician Performance Agenda: Understanding Next Steps and Shaping the Future Course – February 28, 2007 Using Electronic Data to Assess Physician Quality and Efficiency – September 29, 2006 Provider Payments: How They Work, Implications for Cost & Quality, and Creating a Consumer/Purchaser Policy Agenda – July 26, 2006 Cost/Price Transparency – May 25, 2006 About the Disclosure Project