Building Quality and Cost Containment Into Health Care Reform Peter V. Lee Executive Director, National Health Policy Pacific Business Group on Health Health Care Reform: The California Perspective Insure the Uninsured – Washington, DC Workgroup September 3, 2009

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 slows the 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 1 © Pacific Business Group on Health, 2009

Health Reform – Key Employer Issues  Defining “Shared Responsibility”  New Rules, Exchanges, Connectors & the Public Plan  Minimum Benefits  Delivery System Reform 2 © Pacific Business Group on Health, 2009

Health Reform Elements Shared Responsibility  Financing – Limits on Tax Exclusion?  Individual Mandate  Level/type of subsidy  Employer Mandate  All employers or cut off at “very small”  If “pay or play” – what’s the “pay”  What would make employer mandate “palatable”  For some:  Nothing  For others:  Reasonable definition of “pay” and “play”  Clear path to cost reduction  System change  Permeability – require, allow, prohibit  For others:  Get employers out entirely (Wyden/Bennett; CED) 3 © Pacific Business Group on Health, 2009

Health Reform Elements New Rules, Coverage Expansion & Connector/Exchange  New Insurance Rules  Guaranteed Issue  No Pre-existing conditions  Rating Rules  Exchange – who’s in/out  Permeability – require, allow, prohibit  Which plans  Subsidies for individuals/businesses  “Public plan” options  Price Setting  Required inclusion of providers  Cooperative Option Minimum Benefits  Minimum, standard benefit package  Level of actuarial equivalence (65%?)  Specified in statue or delegated to outside entity  Value based insurance design 4 © Pacific Business Group on Health, 2009

Health Reform Elements Delivery and System Reforms  Quality improvement  Provider-Level Measurement  Public Reporting (transparency)  Comparative Effectiveness Research (AND use)  Chronic care management  Wellness/Prevention  Patient Engagement & Shared Decision-making  Payment reform: moving from volume to value  Alignment between public and private programs  Promote primary care, collaboration/integration and paying for “Value”  Medical home  Accountable care organizations  Episodes, bundles  Health Information Technology  Workforce  Medical malpractice reform 5 © Pacific Business Group on Health, 2009

6 Big Issues: 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 If “public plan”…do it to promote value © Pacific Business Group on Health, 2009

7 Big Issues: Bending the Curve with Confidence Need to “score” for Congress (federal spending) AND for the nation (national health expenditures): “We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount.” Doug Elmendorf, Director CBO © Pacific Business Group on Health, 2009

8  — an overview of PBGH programs and initiatives  — Consumer Purchaser Disclosure Project, good source for background and resources on the value agenda  – Leadership effort to reform payment to foster value  – Coalition promoting the measurement of performance as the foundation for reform Contact: Peter Lee at To subscribe to the PBGH E-Letter, go to To Learn More and Additional Resources © Pacific Business Group on Health, 2009