Global Healthcare Trends Byron C. Scott, MD, MBA Associate Chief Medical Officer—Truven Health Analytics

Agenda Puerto Rico Healthcare Trends Performance Improvement Population Health Management Consumerism Payers: Employers & Health Plans

Healthcare Reform!

Puerto Rico Healthcare Trends

Puerto Rico Healthcare Trends Puerto Rico Bond Debt Crisis Healthcare is 20% of Puerto Rico’s Economy 60% of the Population rely on Medicare, Medicare Advantage, or Medicaid Disparate reimbursements rates compared to mainland states Medicaid—70% lower than states Medicare Advantage--60% of states Lack of individual mandate Risk of future cuts to programs Puerto Rico Adopted via bills many of the ACA rules unlike other territories---except for individual mandate (everyone must have health insurance) Bond debt around $73 Billion Healthcare facilities everywhere will have to become more efficient with limited resources---Some more than others(Puerto Rico)

Performance Improvement

Performance Improvement Institute of Healthcare Improvement Triple Aim Improve the experience of care Improve the health of populations Reduce the per capita costs of healthcare Population Health and IHI Triple Aim-----guideline for really what most of us are in this for.

Aging Population Worldwide Japan—interest in nursing homes and assisted living because of aging population

U.S. Healthcare Spend Today US Total Cost in 2013 $2.9 Trillion Federal Spend in 2013 Medicare $586 Billion Medicaid $450 Billion

Center for Medicare & Medicaid Services Projects Spend by 2023 U.S. Total Cost $5.2 Trillion Continued Government Spend CMS will be ~33% of this! GDP on healthcare over 20%

Global Medical Cost Americans spend over twice as much per capita as any other developed country… approaching 18% of GDP Americans spend over twice as much per capita as any other developed country…approaching 18% of GDP *Peter G. Peterson Foundation Study

Performance Improvement Targets Readmissions Medicare 30 Day Readmissions 20% Medicare Patients 2 million patients per year $26 Billion per year Quality and Patient Safety Mortality Hospital Acquired Conditions Sepsis Healthcare reform going on in Europe---Cost containment is a major theme Drug Pricing Declining reimbursements for knee implants

Performance Improvement Targets Efficiency Length of Stay Throughput Operating Room Emergency Department Cost/Spend Supply Chain—Pharmaceuticals, Medical Device, Joint Implants Medicare Spend Per Beneficiary (MSPB) Patient Engagement Patient Satisfaction Compliance

Performance Improvement Tools Team Based Care Process Improvement tools like LEAN Electronic Health Records with Population Health Focus Outpatient areas connected to Inpatient Analytics Data

Population Health Management

Population Health Management Ability to view and manage patients/groups of patients across a continuum of time and location Retrospective, Real Time, and Predictive Population Health Management: More than collecting clinical information/data and performing analytics IHI—these groups are often geographic populations such as nations or communities, but can also be other groups such as employees, ethnic groups, disabled persons, prisoners, or any other defined group. Theme: Structure, Organization, Leadership, Physicians Population Health Strategies for Success: Health Promotion Prevention Screening Behavioral Change Consumer Education-----Self Management Disease Management Chronic Care Management

Population Health Management Hospital Home Health Skilled Nursing Rehab Hospital Physician Office A patient can be in anyone of these places along the time continuum—past, present, future---Location Continuum—Not just inpatient anymore Goal: being able to view information from any of these location systems at any time with immediate access Imagine: all may have separate EMR----interoperability Hospice Nursing Home Other Outpatient

Population Health Management Strategy Socioeconomic determinates impact on health in the community Care Coordination between Inpatient and Outpatient Skilled Nursing, Home Health, Nursing Home, Rehab, etc. Care Management Physician Engagement and Alignment Structure, Organization, Leadership, Physicians

Population Health Management Strategy Patient Engagement Behavioral Changes Wellness Prevention Information Technology Electronic Medical Records Health Analytics Capabilities Interoperability EMR’s—types, capabilities, and EMR’s

Population Health Management “The Nirvana of Population Health” Achieve both Cost & Quality Improvement by leveraging Predictive Analytics Target Patients at risk for admissions, readmissions, and chronic disease

Population Health Management—Global Issues Globalization Increased International Travel Need for Improved Real Time Surveillance Tools Malaria—Puerto Rico Ebola---Mainland U.S. MERS—outbreak in Korea outside the Middle East Influenza—when is the next pandemic?

Consumerism

Consumerism Patient Engagement Patient Satisfaction—improved satisfaction fosters better compliance Transparency Cost/Price Access to Health Information Make informed decisions on providers and quality

Payers: Employers & Health Plans

Payer Trends Key Issues Align higher reimbursement percentages tied to: Performance Value Based Readmissions Hospital Acquired Conditions Alternative Payment Models Accountable Care Organizations (ACOs) Medicare Shared Savings Program (MSSP) Bundled Payments Key Issues End 2016 30% of traditional Medicare FFS to quality or value through alternative payment models(ACOs, Bundles) 50 % by end of 2018 Moving toward Risk Contracts & Capitation Models

Payers Efforts to Control Cost Benefit Redesign Increase Employee Cost Share Higher Co-Pays and Deductibles Narrow Networks and Centers of Excellence Very Interested in Hospital and Physician Quality Metrics Employers Employers

Payers Efforts to Control Cost Plans to expand provider value based reimbursement Narrow Networks and Centers of Excellence Health Plans NEBGH conference end of April on provider quality—CMO/Medical Directors from health plans

Data Releases Driving New Reimbursement Models Release of hospital charge and reimbursement data on 2013 Hospital Medicare patients on June 1, 2015 by CMS Joint Replacement Surgery was most common Medicare Inpatient Surgery in 2013 with cost of $6.6 Billion Commercial Payers reviewing closely and could influence decisions about narrow networks & bundled payments Blue Cross Blue Shield Association released cost variation of hip/knee surgery in January 2015 CMS announces on July 9, 2015 that 800 hospitals in 75 geographic areas will have to participate in test of bundled payments for hip/knee replacement starting January 1, 2016 Huge variances within cities on charges

Bundled Payments A single payment for “bundles” of related services during an episode of care, rather than separate payments for each service CMS, Health Plans, and Employers interested in model Improve quality and reduce cost—more efficient Center for Medicare & Medicaid Innovation (CMMI) launched Bundled Payments for Care Improvement program (BPCI) Pays hospitals a bundled rate for certain hospital-based and outpatient services associated with select DRGs 4 Different Payment Models Over 2400 Providers participating

Bundled Payments Focus Areas for Success Post Acute Care Facilities and Physicians Reduce Physician Practice Variation Reduce Readmissions

Ortho Anchor Procedure Bundled Payments Timeframe Length of bundle varies Default is 30/60/90 days post-discharge 90 days is the typical market expected maximum length Inpatient Admission Ortho Anchor Procedure Post-Discharge Care Acute Discharge Readmission(s) 30 Days Post- Discharge 90 Days Post- Discharge Pre-Op Testing 60 Days Post- Discharge