1. The Future of Medicine and Physicians Role in Innovation
Ian Morrison PhD

2. Outline Key Issues Driving Change Healthcare 2020 Private Purchaser
Consumer
Employer
Exchanges
Public Purchaser
Medicare
Medicaid
Payment Reform
Delivery System Transformation
Physician Engagement with Change and Innovation

3. Key Issues: ACA and Coverage Expansion
ACA is the “the Law of the Land”…at least until the 2016 Election
Two Americas
Public Exchanges got off to very rocky start, year two saw less drama
Private Exchanges gaining momentum, but question has shifted from why not to why?
Exchanges both public and private shift the market toward retail
Insurers are consolidating partly as a result of ACA and coverage expansion by public sector

4. Health Plan Consolidation Continues
Aetna buys Humana for $37 billion making a $115 billion run rate company
Anthem closes on Cigna in $54 billion makes a $117 billion run rate company
New Rivals for $154 billion UnitedHealth Group
Other:
Centene buys Health Net for $6.3 billion

5. Key Issues: Health Systems
Accountable Care is a megatrend, but maybe not ACOs
Medicare Advantage may be the end game for some
Pressure on costs and and delivering value intensifies
Hospital “prices” under intense scrutiny by press and purchasers
“Learning to live on Medicare” means taking out 10-20% of costs (more for academic institutions) and Medicare reimbursement rates will keep getting pressurized
From Volume to Value means high cost procedure oriented specialties (cardiovascular, ortho, neuro, oncology) move from key assets to liabilities in a capitated environment, how long, how much is extremely uncertain
Focus on Primary Care

6. Key Issues: Health Systems
The Massive Consolidation continues toward Large Regional Systems
Doctors running to hospitals
Hospitals consolidating regionally
Role of private equity and for profits in consolidation
Focus on “Essentiality” may run into Attorney Generals and Anti-Trust concerns
The rich get richer: significant returns to scale and to integration
Doctors discretion in selection of specific technologies and clinical protocols will be increasingly constrained by large motivated health systems that employ them
Purchasers are extremely unhappy and are using consumer incentive tools, Skinny Networks and Spot Market trends as counter forces e.g. CalPers reference pricing
Care coordination of transitions will be at a premium
From fill the hospital to empty the hospital, it is going to be economically and culturally challenging
Will doctors, nurses and consumers go along with all this?
No matter what we must redesign the delivery system: and it needs to be science-based, technology-enabled and consumer friendly

7. REGIONAL VARIATION IN ATTITUDES TOWARDS CONSOLIDATION
SHP HOSPITALS 2015
REGIONAL VARIATION IN ATTITUDES TOWARDS CONSOLIDATION
Health systems in the east are a bit more skeptical, pragmatic about the reasons behind consolidation.
Hospitals need to be increasingly wary of antitrust considerations when integrating with other hospitals.*
54%
Agree
East (n=42)
Midwest (n=52)
South (n=57)
West (n=49)
67%South
54%
46%
53%
In the short term, our efforts towards consolidation are more about bargaining leverage than about quality or value (even if we get there eventually).*
48%
Agree
East (n=42)
Midwest (n=52)
South (n=57)
West (n=49)
60%West
58%West
42%
35%
*New attribute in 2015
Base: All Hospital-Based Execs (2015: n=200)
Q715: Please indicate how much you agree or disagree with each of the following statements.

8. Why is it different this time?
The ACA is a stimulator and accelerator of change
We have hit the wall of affordability for business, government and households
The data and tools are better for quality measurement and care management
The commitment of leaders to change is greater
Doctors have been “softened up” for employment and integration by bombardment of ACA, meaningful use, and lifestyle pressures
Consumers have been “empowered”
Slow but inexorable movement to value based purchasing may have hit tipping point in 2015
Personalized precision medicine calls the bluff on solo practice
Population health requires scale and integration
Healthcare journalists no longer defenders of FFS and opposed to managed care but now data-driven champions of transparency
There are high profile champions of change not just Kaisinger…but AHA elites, large regional systems, and new enablers

9. CMS States Clear Value Goals for Medicare
“Our goal is to have 85% of all Medicare fee-for-service payments tied to quality or value by 2016, and 90% by 2018.
Perhaps even more important, our target is to have 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016, and 50% of payments by the end of 2018.
Alternative payment models include accountable care organizations (ACOs) and bundled-payment arrangements under which health care providers are accountable for the quality and cost of the care they deliver to patients.”
Sylvia Burwell, CMS Administrator, January 26th, NEJM

10. Healthcare Transformation Taskforce
Chaired by Richard Gilfillan MD CEO of Trinity
Major health systems, payers and other stakeholders committing to 75% of their business in value-based models by 2020
Participants include Advocate, Ascension, Trinity, Providence, Partners and more
California Players include Dignity, Heritage, Providence, Blue Shield, Optum and Aetna
More at hctf.org

11. The Tension Bundles Population Health/Risk/Accountable Care
More is still better economically for providers
Encourage improvement of teams on dimensions they actually control and that patients care about
But what do you do about the complex co-morbid and the fact that not everything is easily bundled
“Screw me on the bundle, and I’ll screw you on the rest”
Population Health/Risk/Accountable Care
Frequency
Appropriateness
Determinants of Healthcare
The Mutual Disrespect Problem
Social Work not Medical Care

12. What Population Level Analytics Reveal
The 5/50 Problem
5% account for 50% of spending
1% account for 20%
Bottom 50% account for about 2%
Segmentation of populations
What you will find…
HONDAS
Behavioral Health
End of Life Care
Cancer
Frail elderly
Social Work not Medical Care
Specialty Pharmaceuticals

16. Insured adults ages 19–64 who pay a copayment or coinsurance
Insured Adults with Lower Incomes Were More Likely to Report They Had Delayed or Avoided Getting Care Because of Their Copayments or Coinsurance
Percent responding “yes”
Insured adults ages 19–64 who pay a copayment or coinsurance
Note: FPL refers to federal poverty level.
Source: The Commonwealth Fund Health Care Affordability Tracking Survey, September–October 2014.

17. Consumers Don’t Feel “Empowered” By Escalation In Cost Shifting
Consumer Emotions Towards Healthcare They Receive
Empowered
Hopeful
Relieved
Accepting
Neutral
Resigned/ Given up
Powerless
Depressed
Angry
This year, again, 3 in 10 (29%) say they had to forego medical care due to cost this (vs. 30% in 2013) & and 2 in 10 (23%) asked a doctor for a cheaper medication (vs. 24% in 2013)
Prepared for: Strategic Health Perspectives
Base: All 2014 US Adults (n=2501)
Source: Q1850 How would you describe your feelings about the health care you receive today, including how much you pay for it and the benefits you receive? Please select all that apply.

18. CONSUMERS AT RISK FEEL EXTREMELY POWERLESS, NEGATIVE
Consumer Emotions Towards Healthcare They Receive
Empowered
Hopeful
Relieved
Accepting
Neutral
Resigned/ Given up
Powerless
Depressed
Angry
Borderline are those who have major burden of health care cost and are extremely concerned about ability to pay for a serious health problem.
Prepared for: Strategic Health Perspectives
Base: All 2014 US Adults (n=2501)
Source: Q1850 How would you describe your feelings about the health care you receive today, including how much you pay for it and the benefits you receive? Please select all that apply.

19. Consumers feel less empowered and accepting of their healthcare
This year, significantly more say they are powerless, angry, resigned, and depressed; fewer are relieved, though slightly more are hopeful.
Consumer Emotions Towards Healthcare They Receive
Empowered
Hopeful
Relieved
Accepting
Neutral
Resigned/ Given up
Powerless
Depressed
Angry
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015 4%
14% 5%
15% 8%
37%
62%
43%
52%
BORDERLINE (n=433)
Prepared for: Strategic Health Perspectives
Base: All US Adults (2014 n=2501, 2015 n=5037)
Source: Q47 How would you describe your feelings about the health care you receive today, including how much you pay for it and the benefits you receive? Please select all that apply.

20. TRENDED
SHP CONSUMER 2014
Consumers consistently value Lower premiums, want to keep current doctor
Virtually no difference over prior year in benefit tradeoffs
Relative Importance of Benefit, Under Age 65
2014 rank
3 yr trend
2013 rank
2012 rank 1 -- 2 5 3 4 ▲ 7 6 10 ▼ 11 8 9 12 13 14
Low monthly premiums
Keeping my current doctor(s)
Unrestricted access to all medical technologies
Low copay costs for generic drugs
Coverage for dependents
Direct access to all specialist(s)
Direct access to leading specialist(s) in my area
Reasonable copays for brand name drugs
Unrestricted access to cutting edge medical devices
Choice of hospitals
Unrestricted access to cutting edge drugs
Access to all brand name drugs at low cost-sharing
Coverage for a wide selection of brand name drugs
Access to prestigious institutions
Above Average
Average*
Below Average
Base: All US Adults Less Than 65 (2010 n=2501, 2012 n=2052, 2013 n=1546), 2014 n=1233 in half sample)
Respondents were given a maximum difference trade off exercise in which they were forced to choose the most preferred
and least preferred plan feature.

21. The Policy Context

22. Obama Care: The Original Simple Version
Coverage Expansion to 30 million people by 2015 on
15 million through Medicaid Expansion
15 million through subsidized health insurance exchanges
Regulation of health insurance practices
Guaranteed issuance
Individual Mandate
Paid for by supplementary Medicare Tax on $250K+ earners and “voluntary” taxes on healthcare stakeholders
Promising pilots and processes for reimbursement reform
Patient Centered Medical Homes
Accountable Care Organizations
Innovation Center at CMS
The Cadillac Tax

23. Current Status of State Individual Marketplace and Medicaid Expansion Decisions, 2014WY
WI* WV WA
VA* VT
UT* TX TN SD SC RI
PA* OR OK OH ND NC NY NM NJ
NH* NV NE MT
MO* MS MN
MI* MA MD ME LA KY KS
IA*
IN* IL ID HI GA FL DC DE CT CO CA
AR* AZ AK AL
State-based Marketplace and Moving Forward
with the Medicaid expansion (16 States including DC)
Federally-Facilitated or Partnership Marketplace and Moving Forward with the Medicaid Expansion (11 States)
State-based Marketplace and Not Moving Forward
with the Medicaid expansion (1 State)
Federally-Facilitated or Partnership Marketplace and Not Moving Forward with the Medicaid Expansion (23 States)
NOTES: *AR and IA have approved waivers for Medicaid expansion; MI has an approved waiver for expansion and plans to implement in Apr NH passed legislation approving the Medicaid expansion in March 2014; the expansion will start July 1, WI amended its Medicaid state plan and existing waiver to cover adults up to 100% FPL, but did not adopt the expansion. IN and PA have pending waivers for alternative Medicaid expansions. These states along with MO, VA, UT have been classified as Open Debate on the Medicaid expansion decision.
SOURCE: State Decisions on Health Insurance Marketplaces and the Medicaid Expansion, 2014, KFF State Health Facts,

24. Big Drop in Uninsured under Obamacare

25. Uninsured Rate Has Dropped Almost Everywhere
Even in states not expanding Medicaid, uninsured rates have fallen

26. Minnesota had Exchange Challenges Wisconsin did the Badger Care Switcheroo
United States Total
Minnesota
Wisconsin
Population
310,197,000
5,076,000
6,794,000
Marketplace Plan Selected 2014
8,019,763
48,495
139,815
Marketplace Plan Selected 2015
11,688,074
59,704
207,349
Medicaid Enrollment Pre ACA
57,794,096
873,040
985,531
Medicaid Enrollment
February 2015
70,515,716
1,029,334
1,053,400
% Increase
20.3%
17.9%
6.9%
Oregon Medicaid grew 69% over the same period
Source: KFF from DHHS, May , March 2015

27. How to Pick a Health Plan on an Exchange
Step 1. Decide on the diseases you and your family are going to have in the coming year
Step 2. Find the best doctors and hospitals for those diseases
Step 3. Identify which plans offer those doctors and hospitals
Step 4. Select the cheapest plan
Step 5. If there are no affordable plans with all the doctors and hospitals you want, go back to Step 1 and pick some new diseases

28. Private Purchasers will Act by 2020
Short Term (1-3 years)
Transparency on Cost and Quality
CDHP/HDHP
Benefit Buy Downs (including retirees and spouses)
Reference Pricing
Private Exchanges
Narrow Networks
Out of Network Prices
Longer Term (3-10 Years)
Stay or Go
Defined Benefit to Defined Contribution
Activist Engagement
Cadillac Tax 2018

29. Two Competing Visions
Berwickian Nirvana of large Accountable Care Organizations encourages rationalization of the delivery system
Atomistic view of consumers armed only with High Deductible health plans will impose market discipline on providers
See E. Emanuel et al., "A Systemic Approach to Containing Health Care Spending," and J. Antos et al., "Bending the Cost Curve through Market-Based Incentives," Aug. 1, 2012.)

30. Employers Are Seeing a prolonged respite from double-digit premium increases, but these are still running at two times CPI
Projections For 2015: Trend before plan & contribution changes =6.5%
Trend after plan and contribution changes =5.0%
CPI-U= 2.5%
SOURCE: Towers-Watson NBGH Annual Surveys ( )

31. Private Purchasers reassessing their role
Redefinition of benefits: Buy-downs (CDHP) and elimination or scaling back of commitment to spouses, dependents, retirees and early retirees, part timers etc
Consideration of the role of Exchanges and possible ‘exit’ from employer-sponsored benefits
Growing interest in direct contracting with providers and ‘accountable’ systems
Pushing greater responsibility onto employees to encourage them to shop based on cost, quality (movement toward defined contribution strategy, more limited plan offering, consumer shopping tools).
More activist wellness including biometric screening
Source: Personal Communication, PBGH, 2013

32. Employers are of two minds on providing health insurance
SHP EMPLOYERS 2014
Employers are of two minds on providing health insurance
Exploring ways to get out of providing it, and feeling a responsibility to employees
Agreement with Statements About Healthcare
(Top-2 Box % - Agree Somewhat/Strongly)
Although many employers appear eager to get out of providing benefits, this proportion is flat from last year, suggesting no mass exodus. Most still feel a responsibility to employees.
* Asked only of Employers with 50 or more employees
Base: All Employer Health Benefit Decision Makers (n=337)
Q800: Please indicate your level of agreement with the following statements. Do you strongly agree, somewhat agree, somewhat disagree or strongly disagree?

33. Company’s Position on Employer-Sponsored Healthcare (Labor Market)
SHP EMPLOYERS 2014
Coinciding with economic improvement, the perceived value of employer healthcare in the labor market is on the upswing
Company’s Position on Employer-Sponsored Healthcare (Labor Market)
(Top-2 Box % - Describes Completely/Very Well)
Note: Scale changed (added “well” in the middle) in 2012
Base: All Employer Health Benefit Decision Makers (n=337)
Q1100: How well does each of the following statements describe your company’s position on employer-sponsored healthcare? Does the statement describe your company completely, very well, well, somewhat well or not at all?

34. Seven Large Employer Archetypes
How do these archetypes view their benefit responsibilities?
GE:
Large Diversified company with unions and high wage base.
Very sophisticated Purchaser using consumerism and DB to DC for retirees to reduce benefit burden.
Spread across a dozen or more regional markets
Disney:
Bifurcated workforce: Theme Park workers and Johnny Depp
Geographic Concentration in Orange County California and Orange County Florida
Consumerism strategy and engagement with local delivery systems
Wal-Mart
National retailer with 2 million plus associates
Centers of Excellence Model for high cost cases
Eliminating coverage for part-timers and encouraging them to use exchanges
Walgreen’s
Large pharmacy/retail chain
Private Exchange model outsourced to AON/Hewitt
142,000 signed up
Insured product model
Choice causes buy-down
80% picked silver or bronze
Intel
Geographic concentration of fabrication plants and facilities: OR, NM, and CA
Healthcare treated just Like any supplier: tough performance requirements
Going direct e.g. Presbyterian in New Mexico, onsite clinics
Silicon Valley Employer Network
War for talent
Average age 12
Want the primary care on campus and telehealth for everything else
CALPERS
Large public purchaser system
Unionized workers
Pioneered reference pricing as shot across the bow of providers
In the retiree health benefits business big time
Wants high performing HMO product

35. Access to After-Hours Care
Adults, 2013
Easy getting after-hours care without going to the ER
Primary care physicians, 2012
Practice has arrangement for patients’ after-hours care to see doctor or nurse
Percent
Base: Needed care after hours.
* In Norway, doctors asked whether their practice had arrangements or there were regional arrangements.
Source: 2012 and 2013 Commonwealth Fund International Health Policy Surveys.

36. Silicon Valley Elite Employers Say “Bring the Doctors to Us”
Stanford Health Care
Onsite and Nearsite Clinics
Qualcomm
Dreamworks
Santa Clara Nearsite Clinic
PAMF’s Care A Van
Brocade
Cadence
KLA Tencor
Marvell
Net App
Nvidia
Oracle
San Desk
Symantec
Synopsys
Varian
VM Ware
Yahoo
Kaiser’s Mobile Health Van
Facebook
E Bay
Net App
Nvidia
Oracle
Stanford
VM Ware
Yahoo

37. Public Purchasers Medicare Advantage is surprisingly resilient
Medicaid expansion is massive in half the country
Public exchanges will grow after a rocky start
Public employers have huge retiree health benefit problems
Public payers more dominant by 2020

38. Medicare Advantage Enrollment is Highly Variable Across the Country (0% to 53%) and Growth Continues

39. Boomers, Young People Attracted to Medicare Advantage
Total
18-29
30-49
50-64
65+
(When you retire,) If you had a choice, would you prefer to get your Medicare health insurance benefits from…
The current government Medicare program
34%
26%
28%
33%
57%
A private health plan, such as a PPO or HMO offered through Medicare
56%
65%
63%
29%
Don’t know/refused
10% 7% 8% 9%
13%
Harvard School of Public Health/SSRS poll, Mat 13-26, 2013.

40. Massive Medicaid, 2015
US Medicaid Population edges out France for top 20 spot in total population with 70,515,716 enrollees
US Medicaid spending edges out Argentina for top 25 economies at $540 billion
US Medicaid is bigger than Wal-Mart by $50 + billion

41. Massive Medicaid
Medicaid expansion is a big deal in the states that are doing it…e.g. California Medi-Cal has 12.2 million enrollees and a budget in excess of $90 Billion for FY most from Federal sources
Oregon Medicaid enrollment now over 1,000,000 a 69 % increase over pre ACA levels
The last mile of enrollment
Churning in Medicaid eligibles
Who will take these enrollees and what will be the financial impact on providers that do take them?

42. Ahead of the Curve on Value-Based Payment
“The future is already here…it is just not evenly distributed”
William Gibson
California has 55.4% in value-based payment (in all in-network commercial based payment) up from for 41.8% in 2013
US has leapt up to 40% in 2014 up from 10.9% in 2013 according to CPR exceeding CPR’s 2020 goal of 20%
Source: Catalyst for Payment Reform, 2014

43. SHP HOSPITALS 2015
EVEN LARGE SYSTEMS ANTICIPATE ONLY HALF CAPITATED PAYMENTS IN NEXT 5 YEARS
Anticipated Growth in Capitation/Value
Completely Fee
for Service
Evenly Split
Completely Capitated
Payments
(0)
(50)
(100)
TODAY: 35
IN 5 YRS 51
Total:
(↓2%)
TODAY: 38
IN 5 YRS 49
Smaller
smaller standalone
medium standalone or smaller systems
larger standalone or system
TODAY: 36
IN 5 YRS 56
Mid Size
TODAY: 31
IN 5 YRS 52
Larger
Base: All Hospital-Based Execs (2015: n=200; 2014: n=202; 2013 n=210)
Q705/Q706/Q707: Many hospitals are starting to be paid differently for their services, moving from a fee for service environment to more capitation or value based payments. Where is your hospital/hospital system on the spectrum today, and where will you be five years from now?

44. Office based Specialists Hospital based Specialists
SHP PHYSICIANS 2015
PCPS ANTICIPATE FASTER MOVE, BUT STILL ONLY HALF OF PAYMENTS CAPITATED IN 5 YEARS
Anticipated Growth in Capitation/Value
Completely Fee
for Service
Evenly Split
Completely Capitated
Payments
(0)
(50)
(100)
TODAY: 27
IN 5 YRS 47
Total:
TODAY: 31
IN 5 YRS 51
PCPs
Office based Specialists
TODAY: 22
IN 5 YRS 45
Hospital based Specialists
TODAY: 33
IN 5 YRS 47
Base: All Physicians (2015: n=626; 2014 n=600)
Q1280: Many physician practices are starting to be paid differently for their services, moving from a fee for service to more capitation or value based payments. Where is your practice on the spectrum today, and where will you be in five years from now?

45. Health Systems Taking Risk
STRATEGIC HEALTH PERSPECTIVES℠
Health Systems Taking Risk
Lots of big systems showing interest but patient flow through these models is not large except for legacy players
Referral management (preventing leakage from the IDN) can provide FFS fuel for transformation to risk
“Eat your own cooking” is a common starting point
Link to ACO strategy
Link to going direct to employers or exchanges e.g. North Shore Long Island Jewish
Link to Population Health Interest and Clinical Integration Organization strategy

46. Health Systems Taking Risk
Health Systems with Legacy Health Plans
Inter-Mountain, Sharp, Presbyterian, Spectrum Health, Providence
Health Systems that recently built, acquired or merged with a Health Plan function
Partners (Boston), Sutter, Dignity Health (Western Healthcare Advantage), Memorial (Long Beach), Baylor Scott and White, North Shore Long Island Jewish, Ascension, CHI
Health Systems that are going deep on Commercial ACO plans and/or CMS ACOs with plan partners
Montefiore, Steward, Aetna Whole Health (Inova, Banner, Aurora), Memorial Hermann, Stanford
Vivity (UCLA, Cedars, Memorial, Torrance, Good Samaritan, PIH, Huntington and Anthem Blue Cross)
About Health/Blue Priority Anthem Wisconsin
Health Systems “Go Your Own Way”
Evolent Health (UPMC and Advisory Board Offering) includes Piedmont/Wellstar, Medstar

47. No real differences by size of system
SHP HOSPITALS 2015
Majority exploring risk bearing strategies
Directional growth in hospitals committing to clinical integration for contracting w/ payers.
Hospital Insurance Risk Management Strategy
51% of smaller hospitals have no plans
No real differences by size of system
No Plan On Journey
Base: All Hospital-Based Execs (2015: n=200; 2014: n=202)
Q980: Which of the following best describes your hospital’s/hospital system’s “risk bearing” strategy?

48. At the end of the day, people trust hospitals more than health plans
SOURCE: Harris Poll for STRATEGIC HEALTH PERSPECTIVES
At the end of the day, people trust hospitals more than health plans
% Trust in Industries
Confirmed/Updated with Larry Shannon-Missal (07/15)
42 % Trust none of the Industries on the list
Source: Harris Poll, December 2013

49. New Thinking: Some Examples
STRATEGIC HEALTH PERSPECTIVES℠
New Thinking: Some Examples
Montefiore
An AMC on the way to being an at risk integrated system of care
Centura/Colorado Health Neighborhoods
2,200 Physicians at various places on the journey
System steps to Integration and “Leakage management”
Vivity
Health systems in LA including UCLA Health, Cedars and Memorial Care come together with Anthem to develop an HMO product to compete with Kaiser
Stanford Health Care Alliance
Going head to head with KP for Stanford employees, what’s next?
Medicare Advantage, Employer Specific Narrow Network

50. Increasing awareness, intent to do something about it
SHP HOSPITALS 2015
Managing Referrals: continued focus
Increasing awareness, intent to do something about it
Current Approach to Referral Management from Physicians Affiliated with Hospital
We have already made significant investments in an organized referral management system and are actively keeping more referrals within our employed physician network
We have identified that modifying referral patterns of our medical staff is a critical success factor in our clinical integration strategy and we are planning to actively manage referrals in the future using an organized approach to keep more referrals within our facilities/ medical groups
We recognize that there is considerable inpatient and outpatient volume that "leaks" to our competitors because our medical staff does not refer exclusively to our facilities, but we have no immediate plans to influence those referrals beyond offering privileges
We do not actively manage referral patterns of the physicians who admit to our facilities and have no plans to do so beyond offering hospital privileges
Not sure not applicable
Base: All Hospital-Based Execs (2015: n=200; 2014: n=202)
Q417: Which of the following best describes your approach to the management of the referrals from physicians affiliated with your hospital?

52. The Work Centrality of Clinical Integration
Health IT as platform not panacea
Learning to live on Medicare
Managing Business Model Migration
Building a culture of Quality and Accountability
“We have the anatomy of an Accountable Care Organization but none of the physiology”

53. The Scout Badge Problem
STRATEGIC HEALTH PERSPECTIVES℠
The Scout Badge Problem
Patient Centered Medical Home
E-Consults
Readmission Reduction Program
Accountable Care Organization
Telehealth Initiative
Quantified Self App
Patient Portal
Care Bundles
Diabetes Disease Registry
Remote Patient Monitoring
But how many? And what is the denominator?

54. GENERAL OUTLOOK FOR Physicians in 2015
We used to think things couldn’t change unless the docs were happy
The docs aren’t really happy
But things are changing
More are resigned, while more are moving into integrated practices
A solid minority is really frustrated and despondent
EHRs* are a huge source of frustration across the board
Fundamentally this is a pocketbook issue

55. Physician Survey, Key Facts 2015
Physician satisfaction with their own practice fluctuates over time but is still 68/32 net positive in compared to 70/29 in 2002
But, as in last three years physicians are 26% optimistic versus 55% pessimistic about the practice of medicine today
One Third support ACA versus 55% oppose
Majority (68%) of physicians see impact on their practice of ACA as negative only 22% positive
23% of physicians claim to be in an ACO up from 10% last year and 7% in 2013
19% of physicians claim to be in an Patient Centered Medical Home up from 6% last year and 4% in 2013
14% claim to be in a narrow network (up from 11% last year) offering a typical discount of 29%
74% of physicians say they “will continue to see and accept new” Medicare patients (59% for Medicaid and 80% for exchange)
Solo physicians less likely to be participative in future trends compared to affiliated group practice and those physicians who are in Integrated Delivery Systems
Source: Nielsen, Strategic Health Perspectives, 2015 Confidential

56. Many physicians STILL dissatisfied
SHP PHYSICIANS 2015
Many physicians STILL dissatisfied
Though it may be rebounding from last year’s historic low, 1 in 3 doctors is still dissatisfied with his or her practice situation.
Overall Satisfaction with Current Practice
Data updated 07/16 (2012 data unchanged)
Base: Office-Based Physicians (2015: n=476; 2014: n=434; 2013: n=432; 2012: n=461; 2011: n=377)
Q800: Overall, how satisfied are you with your current practice situation?.
Significant change

57. SHP PHYSICIANS, CONSUMERS 2015
PHYSICIANS CLOSELY RESEMBLE CONSUMERS IN EMOTION, FRUSTRATION AROUND HEALTH CARE
Empowered
Hopeful
Relieved
Accepting
Neutral
Resigned/ Given up
Powerless
Depressed
Angry
Physicians
Consumers
Base: All 2015 Physicians (n=626)
Q1850: How would you describe your feelings about the health care system today? Please select all that apply.
Base: All US Adults (2015 n=5037)
Q47 How would you describe your feelings about the health care you receive today, including how much you pay for it and the benefits you receive? Please select all that apply.

58. CME widely cited as a way to help adapt to changing system.
SHP PHYSICIANS 2015
Physicians feel unprepared for today’s medicine
CME widely cited as a way to help adapt to changing system.
Medical School Preparation, Programs Used for Today’s Healthcare*
16%
Continuing medical education
Post graduate business certificate programs
An MBA or other management degree
Something else
None of the above
45%
*New in 2015
Base: All 2015 Physicians (n=626)
Q1851: How well do you feel medical school prepared you for practicing medicine in today’s healthcare system?
Q1852: Have you used any of the following to help you adapt to changes in our healthcare system? Please select all that apply.

59. BUT ARE THEY RESIGNED TO IT?
SHP PHYSICIANS 2015
BUT ARE THEY RESIGNED TO IT?
Back in 2012, we created a segmentation to understand how US doctors are dealing with all this consolidation and integration. Are they drinking the kool-aid? Or sitting it out?
THE SEGMENTATION OF BERWICKIAN NIRVANA (1)
Optimistic Intenders I haven’t reformed yet, but I want to.
Blazing Believers Integrating…and happy about it.
Reluctant Objectors Integrating…and NOT happy about it.
Independent Resisters I haven’t reformed, and don’t plan to.
Experience with Integration  
Attitude towards Integration  
20%
39%
20%
21%
Segmentation inputs include:
Use of EHRs
Knowledge about meaningful use criteria
% of medication DAW vs generic allowable
P12M experience on salary, management by health plan, or use of evidence based guidelines
Willingness to work in solo practice
Perceptions on physician responsibility for patient treatment compliance

60. Change is harder to resist
SHP PHYSICIANS 2015
Change is harder to resist
Believers are increasing and Resisters are shrinking. Once they are in, they may become more accepting—perhaps not happy about it per se, but going along with the program.
THE SEGMENTATION OF BERWICKIAN NIRVANA (2) B
Total Experienced “Integration”
45%
57%
52%
60%
*The 2014 sample skewed a bit different (higher solo practice than the population).

61. Who is satisfied with their EHR?
SHP PHYSICIANS 2015
Who is satisfied with their EHR?
Overall satisfaction is low across the board, with no real differences by specialty or affiliation. A few differences stand out:
More Satisfied
Work in IDNs
Younger
Lean left politically
More optimistic about future of medicine
Less Satisfied
Age 50+, more years in practice
More FFS compensation
Less optimistic about future of medicine
Age
Not satisfied physicians:
More likely to have some P4P income 35% vs 18% of satisfied
BUT 24% of satisfied are WILLING to work under P4P vs 14% of not satisfied
More willing to work under all models
Engaging differently with patients
Dedicating time to answer questions by phone (44% vs 31%)
Expanding office hours (ie: weekends) (39% vs 26%)
More optimistic about impact of telemedicine overall
“Important evolution in medicine” (50% vs 36%)
“Important step to reduce costs of care” (34% vs 22%)
“Good for patients” (51% vs 34%) A A BC
EHR Satisfied A
EHR Smwt Satisfied B
EHR Not Satisfied C

62. EHR dissatisfaction leads to depression, anger
SHP PHYSICIANS, CONSUMERS 2015
EHR dissatisfaction leads to depression, anger
Though equally powerless, those satisfied with EHR system more than twice as likely to feel hopeful, accepting.
Empowered
Hopeful
Relieved
Accepting
Neutral
Resigned/ Given up
Powerless
Depressed
Angry
Physicians
Base: All 2015 Physicians Using EMR (Satisfied 148, Not Satisfied 153)
Q1850: How would you describe your feelings about the health care system today? Please select all that apply.
Base: All US Adults (2015 n=5037)
Q47 How would you describe your feelings about the health care you receive today, including how much you pay for it and the benefits you receive? Please select all that apply.

63. Looking to 2020 Pressure on public payment sources will continue
Private Payers will not tolerate costs shift willingly
Exchanges and DB to DC among employers makes market more retail
Consumer becomes more important as decision-maker
Long run three payer segments: Managed Medicaid, HDHP (Exchange and Employer) and Medicare Advantage/ACO increase pressure to deliver value
Care Redesign for higher performance
High Reliability Organizations
Migrating Business model to Risk
Care coordination and management across the continuum of care
Alignment of all physicians, nurses and caregivers with this process
Consumer facing innovation in delivery and telehealth
Innovation at Scale
Governance and leadership to sustain it all

64. Implications for Physicians
Consolidation and integration continue leading to constraints on clinical and economic autonomy for many, but new opportunities for innovators
Mixed signals for a long time
Volume to value
RVU productivity
Overcoming Improvement Fatigue
Physician leadership
Strategic communication on the why of change
The Quadruple Aim
Innovation for higher performance
Remember what brought you to medicine