Putting It All Together: The Moving Pieces of the Health Care Puzzle Vermont Health Care Reform in...

Putting It All Together: The Moving Pieces

of the Health Care Puzzle

Vermont Health Care Reform in Context

Presented to the Vermont LegislatureFriday, February 18

Room 11

Hunt Blair, Bea Grause, Church Hindes, Glenn McRae, and Mary Val Palumbo

Just understanding the names Just understanding the names

& acronyms can be daunting…& acronyms can be daunting…

STEEEP - Vermont Blueprint - STEEEP - Vermont Blueprint - HIT - HRAP - IOM - State HIT - HRAP - IOM - State

Health Plan - Coalition 21 - Health Plan - Coalition 21 - IMPACT - RHIO - V3C - IHIIMPACT - RHIO - V3C - IHI

February 18, 2005 - 2


Every system is perfectly Every system is perfectly designed to achieve designed to achieve

exactly the results it gets.exactly the results it gets.

Don Berwick’s Don Berwick’s First Law of ImprovementFirst Law of Improvement

February 18, 2005 - 3


Health Care is Not MonolithicHealth Care is Not Monolithic

February 18, 2005 - 4


It’s not

THE HEALTH CARE

SYSTEM

It’s

MANY

SYSTEMS

MANY

MANY

HEALTH CARE

Actually, it’s Many Overlapping SystemsActually, it’s Many Overlapping Systems

February 18, 2005 - 5


It’s

MANY

SYSTEMS

MANY

MANY

HEALTH CARE

MANY

MANY

So what are these systems?So what are these systems?

Health care Health care deliverydelivery systems systemsHealth care Health care financingfinancing systems systemsHealth care Health care informationinformation systems systems

But even those categories are too broad…But even those categories are too broad…

February 18, 2005 - 6


Within those sub-system categories, Within those sub-system categories, Health Care Health Care Delivery, Financing, and Information SystemsDelivery, Financing, and Information Systems can be can be organized as:organized as:

Stand alone systemsStand alone systems Vertically or Horizontally integrated networks of careVertically or Horizontally integrated networks of care Less formal alliances, partnerships, or loose affiliations Less formal alliances, partnerships, or loose affiliations

They can be for-profit, not-for-profit, or most often, a They can be for-profit, not-for-profit, or most often, a hybrid of the two. hybrid of the two.

Critically, whatever the structure, their interests are not Critically, whatever the structure, their interests are not necessarily aligned.necessarily aligned.

February 18, 2005 - 7


All that said, even we policy wonks persist in calling it “the health All that said, even we policy wonks persist in calling it “the health care system,” because it often care system,” because it often simulatessimulates a system. a system.

That paradox is the heart of the challenge we face. It's That paradox is the heart of the challenge we face. It's sometimes difficult to figure out how and where to connect the sometimes difficult to figure out how and where to connect the dots. Or whether and where to disconnect them.dots. Or whether and where to disconnect them.

That is becauseThat is because Health Care is an an amalgam of accidental and Health Care is an an amalgam of accidental and intentional design, intentional design, with parts that are intricately enmeshed and with parts that are intricately enmeshed and intertwinedintertwined..

February 18, 2005 - 8



February 18, 2005 - 9

Centralized Decentralized Distributed

In many, many areas... In many, many areas... the parts and sub-systems work together... the parts and sub-systems work together...

Of course, there are also many areas Of course, there are also many areas where system structure, entrenched interests, as where system structure, entrenched interests, as

well as personal and institutional bias, lead to... well as personal and institutional bias, lead to...

...challenges....challenges.

February 18, 2005 - 10


So How to Start?So How to Start?

Going back to Don Berwick’s observation, what we Going back to Don Berwick’s observation, what we have here is largely…have here is largely…

A design problemA design problem

Provoking the obvious question: who designed what Provoking the obvious question: who designed what we have now? we have now?

February 18, 2005 - 11


How Did We Get Here?How Did We Get Here?

Strictly speaking, they weren’t all “accidents” of history, but there are some key dates, key transition points, that influence why our health care systems look the way they do in VT:Strictly speaking, they weren’t all “accidents” of history, but there are some key dates, key transition points, that influence why our health care systems look the way they do in VT:

1861-1876: Louis Pasteur1861-1876: Louis Pasteur 1932: Committee on Cost of Medical Care1932: Committee on Cost of Medical Care 1965-1966: Medicare and Medicaid1965-1966: Medicare and Medicaid 1979: Certificate of Need law adopted1979: Certificate of Need law adopted 1986: transition of control from fed.’s to the states1986: transition of control from fed.’s to the states

February 18, 2005 - 12


February 18, 2005 - 13


Regulatory Restraints

-- Most health care players—particularly providers and insurers—are not free to do as they please.

-- Depending on state where located and player type, they will fall somewhere along a “regulatory continuum”:

–laissez faire model (private, free market)

–self-regulating model (private players set own rules)

–limited public control model (such as C.O.N.)

–public utility model (public tightly controls the private system)

–public service model (public owns the system)

-- Regardless of location, virtually all providers are subject to the primary federal health care regulatory agency—the Centers for Medicare and Medicaid Services (“CMS”, formerly “HCFA”)

February 18, 2005 - 14


Regulatory programs stem from concern for the size, power, economic impact and Regulatory programs stem from concern for the size, power, economic impact and vital nature of health care services:vital nature of health care services:

- - FederalFederal levellevel: : - - State State levellevel::

Medicare conditions of participationMedicare conditions of participation Licensure Licensure

Medicare payment restrictionsMedicare payment restrictions Certificate of Need Certificate of Need

Medicare compliance enforcementMedicare compliance enforcement Rate Setting & Budget Controls Rate Setting & Budget Controls

Controls on Medicaid waiversControls on Medicaid waivers Professional Practice boards Professional Practice boards

HIPAA (privacy protection), etc.HIPAA (privacy protection), etc. Medicaid payment restrictions Medicaid payment restrictions

Mandated Benefit lawsMandated Benefit laws

“ “Rule 10” for Managed Care, etc.Rule 10” for Managed Care, etc.

-- Health Care IndustryHealth Care Industry level level *: *:

Accrediting, credentialing, certification, JCAHO (the “Joint Commission”), AAMC, Accrediting, credentialing, certification, JCAHO (the “Joint Commission”), AAMC, HEDIS, NCQA etc.HEDIS, NCQA etc. * Self-imposed* Self-imposed

““Layers” of Regulatory restraintsLayers” of Regulatory restraints

How does How does the U.S. design the U.S. design

compare compare to other models to other models

around the world?around the world?

February 18, 2005 - 15


The continuum of the five basic health care system paradigms… The continuum of the five basic health care system paradigms… 1. Private1. Private2. Pluralistic2. Pluralistic3. National Health Insurance3. National Health Insurance4. National Health Service4. National Health Service5. Socialized Health Service5. Socialized Health Service……and their distinguishing characteristics:and their distinguishing characteristics:

February 18, 2005 - 16


Fortunately, we are at an historic moment…Fortunately, we are at an historic moment…

People are looking beyond their own institutions People are looking beyond their own institutions and systems.and systems.

Providers, advocates, payers, business…Providers, advocates, payers, business…

All are undergoing – or at least starting to All are undergoing – or at least starting to consider consider – sweeping paradigm shifts.– sweeping paradigm shifts.

February 18, 2005 - 17


The Quest for AlignmentThe Quest for Alignment

Health care reform tops nearly Health care reform tops nearly everyone’s short list of policy everyone’s short list of policy priorities.priorities.

Vermont is awash in a wide array of Vermont is awash in a wide array of initiatives directed at studying, initiatives directed at studying, improving, and/or transforming the improving, and/or transforming the state’s health care financing and state’s health care financing and delivery systems.delivery systems.


February 18, 2005 - 18

These come in several These come in several forms…forms…

Legislative-mandated studies and Legislative-mandated studies and Agency directives carrying forward Agency directives carrying forward from previous sessionsfrom previous sessions

Public/private partnerships & Public/private partnerships & initiativesinitiatives

Provider and professional Provider and professional association initiativesassociation initiatives

Federal and multi-state initiatives, Federal and multi-state initiatives, projects, and alliancesprojects, and alliances


February 18, 2005 - 19

with several recurring with several recurring themes…themes…

Improving quality of careImproving quality of care Improving health care delivery and Improving health care delivery and

health care financing “systems”health care financing “systems” Implementing Health Information Implementing Health Information

TechnologiesTechnologies Chronic disease managementChronic disease management Patient case managementPatient case management And of course, containing costsAnd of course, containing costs


February 18, 2005 - 20

A wide array of studies mandated during the 2004 A wide array of studies mandated during the 2004 session are complete or are nearing completion, session are complete or are nearing completion, including :including :

The developmental and mental health services The developmental and mental health services provider system,provider system,

Small business insurance plans,Small business insurance plans, Expanding use of 340B pharmacy programs,Expanding use of 340B pharmacy programs, Mental Health reformMental Health reform Sustainable health care policy options,Sustainable health care policy options, Medical malpractice, andMedical malpractice, and Worker’s Comp. Worker’s Comp.


February 18, 2005 - 21

Act 53, 2003’s “Certificate of Need Reform” Act 53, 2003’s “Certificate of Need Reform” Bill put into motion creation of:Bill put into motion creation of:

A new State Health Plan (by the A new State Health Plan (by the Department of Health),Department of Health),

A Health Resource Allocation Plan (by A Health Resource Allocation Plan (by BISHCA),BISHCA),

Community Needs Assessments (with a Community Needs Assessments (with a four year horizon), and four year horizon), and

Annual Community Reports for hospital Annual Community Reports for hospital service areas (by Vermont’s 14 licensed service areas (by Vermont’s 14 licensed acute care hospitals).acute care hospitals).


February 18, 2005 - 22

The Health Resource Allocation PlanThe Health Resource Allocation Plan (or HRAP), is due July 1, 2005 and will: (or HRAP), is due July 1, 2005 and will:

Contain a “statement of principles…to Contain a “statement of principles…to be used in allocating resources.”be used in allocating resources.”

Identify the current supply and Identify the current supply and distribution of health care services, distribution of health care services, resources, workforce, technology, and resources, workforce, technology, and institutions.institutions.

Provide recommendations for the Provide recommendations for the appropriate supply and distribution of appropriate supply and distribution of resources, programs, and servicesresources, programs, and services. .


February 18, 2005 - 23

In addition to the HRAP, BISHCA was In addition to the HRAP, BISHCA was already responsible for: already responsible for:

Producing (since 1997) an annual Producing (since 1997) an annual Health Care Expenditure Analysis, Health Care Expenditure Analysis,

Regulating and providing reports on the Regulating and providing reports on the health insurance market,health insurance market,

Ruling on annual Hospital Budgets and Ruling on annual Hospital Budgets and capital expenditure applications -capital expenditure applications -Certificates of Need (C.O.N.) with the Certificates of Need (C.O.N.) with the Public Oversight Commission.Public Oversight Commission.


February 18, 2005 - 24

The State Health PlanThe State Health Plan, also mandated by , also mandated by Act 53, is due in January, 2005 and “shall:” Act 53, is due in January, 2005 and “shall:”

Include health promotion, health protection, Include health promotion, health protection, nutrition, and disease prevention priorities for nutrition, and disease prevention priorities for the state,the state,

Identify available human resources, as well as Identify available human resources, as well as those needed to achieve the state’s health those needed to achieve the state’s health goals and planning required to meet those goals and planning required to meet those needs,needs,

Identify geographic parts of the state needing Identify geographic parts of the state needing additional resources in order to improve the additional resources in order to improve the health of the population,health of the population,

All in sufficient detail to guide development of All in sufficient detail to guide development of the HRAP.the HRAP.


February 18, 2005 - 25


February 18, 2005 - 26

Vermont Model for HealthVermont Model for HealthA system for lifelong prevention and A system for lifelong prevention and carecare

FamilyHealth Care

Providers

Community Sector

Health

Car

e Sec

tor Public Health

Sector

(And other Governm

ent)

Individual

InformationSystem

External forcesEg: federal policy, mass culture,

media, local business,corporate policy.

InformationSystem

InformationSystem

The Vermont Department of Health’sThe Vermont Department of Health’s planning efforts, tied to federal funding planning efforts, tied to federal funding requirements and statute, also includes: requirements and statute, also includes:

Healthy Vermonters 2010Healthy Vermonters 2010: : Goals & Goals & objectives for continuing to improve the objectives for continuing to improve the health of Vermonters health of Vermonters

Rural Health PlanRural Health Plan (due to be updated in 2005)(due to be updated in 2005) State Oral Health PlanState Oral Health Plan (due in early 2005)(due in early 2005)

State EMS and Bioterrorism/All Hazards State EMS and Bioterrorism/All Hazards planningplanning, as well as multiple disease-, as well as multiple disease-specific planning efforts, surveillance specific planning efforts, surveillance and other public health programs. and other public health programs.


February 18, 2005 - 27

The Department of HealthThe Department of Health is also the lead agency in is also the lead agency in the the Vermont Blueprint for HealthVermont Blueprint for Health, a , a public/private partnership for Improving Chronic public/private partnership for Improving Chronic Illness Care.Illness Care.

Partners includePartners include: insurers, academic medical : insurers, academic medical centers, Schools of Medicine & Nursing, VAHHS, centers, Schools of Medicine & Nursing, VAHHS, VMS, VPQHC, OVHA, BISHCA, DAIL, and consumers.VMS, VPQHC, OVHA, BISHCA, DAIL, and consumers.

After the break, we’ll be hearing a lot more about both the After the break, we’ll be hearing a lot more about both the Blueprint…Blueprint…


February 18, 2005 - 28

Many Vermont organizationsMany Vermont organizations and reform and reform efforts identifying the HRAP, Blueprint efforts identifying the HRAP, Blueprint and Coalition21 have adopted what are and Coalition21 have adopted what are known as the IOM Aims: The IOM Aims known as the IOM Aims: The IOM Aims state run system should be:state run system should be: S safeS safe T timelyT timely E efficientE efficient E effectiveE effective E equitableE equitable P patient-centeredP patient-centered


February 18, 2005 - 29

The Vermont Association of Hospitals & The Vermont Association of Hospitals & Health SystemsHealth Systems’ is working toward the ’ is working toward the IOM Aims with the IOM Aims with the IHI IMPACT ProjectIHI IMPACT Project. .

IMPACTIMPACT brings together all of Vermont’s brings together all of Vermont’s acute care hospitals in a national acute care hospitals in a national program run by the Institute for program run by the Institute for Healthcare Improvement (Healthcare Improvement (IHIIHI), to work ), to work with Vermont providers, health insurers, with Vermont providers, health insurers, and other and other BlueprintBlueprint partners in a partners in a rigorous, collaborative process designed rigorous, collaborative process designed to create breakthrough improvements. to create breakthrough improvements.


February 18, 2005 - 30

Coalition 21Coalition 21 principles also embrace the IOM Aims principles also embrace the IOM Aims

Universal access to essential health care services.Universal access to essential health care services. Coverage for care that is comprehensive and continuous. Coverage for care that is comprehensive and continuous. Continuous improvement of health care quality and Continuous improvement of health care quality and

safety.safety. Health care financing that is sufficient, equitable, fair and Health care financing that is sufficient, equitable, fair and

sustainable.sustainable. Built-in accountability for quality, cost, access and Built-in accountability for quality, cost, access and

participation.participation. Engagement of all Vermonters in healthy lifestyles and Engagement of all Vermonters in healthy lifestyles and

informed use of the system.informed use of the system.


February 18, 2005 - 31

Health Information TechnologyHealth Information Technology (HIT) (HIT) issues and opportunities cut across all issues and opportunities cut across all of these initiatives and involve all of the of these initiatives and involve all of the stakeholder groups, including providers, stakeholder groups, including providers, insurers, and Medicaid. insurers, and Medicaid.

HIT includesHIT includes everything from practice everything from practice management, chronic disease management, chronic disease management, billing, and claims management, billing, and claims processing systems to Electronic processing systems to Electronic Medical Records. Medical Records.


February 18, 2005 - 32

VT health care stakeholders are fully VT health care stakeholders are fully committed tocommitted to implementing implementing comprehensive HIT. comprehensive HIT. We all see it asWe all see it as a a Critical Component to systems change.Critical Component to systems change.

But it requires a huge investment of capital But it requires a huge investment of capital and human resources, a high degree of and human resources, a high degree of trust and cooperation, and broad trust and cooperation, and broad consensus on system design.consensus on system design.

There’s no quick and easy fix… There’s no quick and easy fix…


February 18, 2005 - 33

Consider this “Clinical Connectivity” Consider this “Clinical Connectivity” map map from the Massachusetts Health Data from the Massachusetts Health Data Consortium:Consortium:


February 18, 2005 - 34

Of course even if the systems are Of course even if the systems are improved, someone needs to do the improved, someone needs to do the work.work.

For the last several years, the For the last several years, the Human Resources Investment Human Resources Investment Council’s Council’s Health Workforce Health Workforce Development Partnership CommitteeDevelopment Partnership Committee has been examining challenges we has been examining challenges we face in the health work force.face in the health work force.


February 18, 2005 - 35

At the At the Office of Nursing Workforce, Office of Nursing Workforce, Research, Planning and DevelopmentResearch, Planning and Development (located in the College of Nursing and Health (located in the College of Nursing and Health Sciences at the University of Vermont), Sciences at the University of Vermont), research into the nursing shortage has research into the nursing shortage has informed additional areas of study. informed additional areas of study.

We’re now compiling workforce data on LNAs, We’re now compiling workforce data on LNAs, Medical Lab staff, respiratory therapists, Medical Lab staff, respiratory therapists, radiation technologists, pharmacists and radiation technologists, pharmacists and pharmacy techs. pharmacy techs.


February 18, 2005 - 36


February 18, 2005 - 37

Why do we have a nursing Why do we have a nursing shortage?shortage?

Our aging societyOur aging society

Highly skilled Highly skilled nurses needed in a nurses needed in a variety of settingsvariety of settings

A decade of A decade of declining nursing declining nursing school enrollmentschool enrollment


February 18, 2005 - 38

Age of RN’s Working in VTAge of RN’s Working in VT

7%

17%

37%

31%

7%1%

20-30 31-40 41-50 51-60 61-70 71 +

Years of Age


February 18, 2005 - 39

Age 65 yrs. + in VT.Age 65 yrs. + in VT.

50

100

150th

ou

san

ds

1995

2000

2005

2015

2025

Years


February 18, 2005 - 40

RN FTE’s in VermontRN FTE’s in Vermont

1

3

5th

ou

san

ds

2000

2005

2010

2015

2020

Years


February 18, 2005 - 41

Steady Increase in Steady Increase in Vermont RN GraduatesVermont RN Graduates

By 2006, graduation of RN’s By 2006, graduation of RN’s predicted to increase by 74% predicted to increase by 74% from 1999.from 1999.

However, a nursing faculty However, a nursing faculty shortage threatens this progress.shortage threatens this progress.


February 18, 2005 - 42

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

2005 2010

4,563

4,526

4,998

6,030

2015 2020

4,424

5,292

4,324

5,529

6,737

Vermont Projected RN FTE’s, Projected Demand for RN’s, Effect of Increasing Nurse Graduates by 50% and 100%

# RN FTE’s

50% increased grads

100% increased grads

34% change in FTE’s

5,471

6,167

RN FTE’s

Years

RN FTE’s

Projection by

Bureau of

Labor Statis

tics

?????????

2003 Statewide RN Vacancies:

12% Hospital12% Home Health

19% LTC

Source: 2002 National Council of State Boards of Nursing – Nursing Workforce Supply Projection Tool


February 18, 2005 - 43

Systems…history…planning efforts and Systems…history…planning efforts and collaboration…workforce…collaboration…workforce…

All important, but…All important, but…

What About Rising Health Care Costs?What About Rising Health Care Costs?


February 18, 2005 - 44

Vermont resident spending on health care has grown from:

$1.3 Billion in 1991to

$2.8 Billion in 2002


February 18, 2005 - 45

Spending Distribution by Provider Category, 2002

DENTAL5.0%

HOME HEALTH

3.8%

ADMIN7.3%

NURSING HOME6.5%

PHYSICIAN SERVICES

16.0%

OTHER PROF4.0%

DRUGS & SUPPLIES

12.6%

HOSPITALS32.4%

OTHER*12.3%

*Govt health activities accounts for 74 percent of spending in "Other" (primarily Medicaid expenditures for direct care programs administered by the Vermont Agency of Human Services). Other also includes vision, DME and other miscellaneous providers.

VT: Resident View


February 18, 2005 - 46

A wealth of information on where the $’s go…

MORE BISHCA $’s here

www.bishca.state.vt.us


February 18, 2005 - 47

We want to “control costs”

and yet…

Health Care spending isn’t all bad:

Health Care spending is jobs.

Health Care spending is health.

With these “costs” we extend lives, we have better outcomes,

and we improve the quality of life.


February 18, 2005 - 48

Two (of many) Reform ParadigmsTwo (of many) Reform Paradigms

Define theBenefit Plan

(what’s covered)

Delivered in a Systemthat looks like…

Paid byMechanism X

Mechanisms X, Y, Z

Define theFinancing System

(how it’s paid)

Define theBenefit Plan

(what’s covered)

Delivered in a System

that looks like…

vs.

The Goal:The Goal:

A more rational design.A more rational design.

Wellness focused, patient centered, Wellness focused, patient centered, with tools for consumers and providers to with tools for consumers and providers to

manage health care collectively,manage health care collectively,supported by information technology.supported by information technology.

Over time: remove perverse incentives, Over time: remove perverse incentives, improve quality and outcomes, and improve quality and outcomes, and

create a system that can be a model for create a system that can be a model for the nation.the nation.


February 18, 2005 - 49

The Vision:The Vision: A sustainable healthcare system that A sustainable healthcare system that provides access to quality health care provides access to quality health care

services to all Vermontersservices to all Vermonters

The Strategy:The Strategy:Alignment of State effortsAlignment of State efforts

State & Federal CollaborationState & Federal CollaborationInvestment in Systems ChangeInvestment in Systems Change

Aligning Payment to Design GoalsAligning Payment to Design Goals


February 18, 2005 - 50

Sponsored bySponsored byAARPAARP

Bi-State Primary Care AssociationBi-State Primary Care AssociationCommunity of Vermont EldersCommunity of Vermont Elders

Fletcher Allen Health CareFletcher Allen Health CareOffice of Nursing Workforce, Research, Planning and Development Office of Nursing Workforce, Research, Planning and Development

Snelling Center for GovernmentSnelling Center for GovernmentVermont Assembly of Home Health AgenciesVermont Assembly of Home Health Agencies

Vermont Association of Hospitals & Health SystemsVermont Association of Hospitals & Health SystemsVermont Coalition of Clinics for the UninsuredVermont Coalition of Clinics for the Uninsured

Vermont Council of Developmental and Mental Health ServicesVermont Council of Developmental and Mental Health ServicesVermont Ethics NetworkVermont Ethics Network

Vermont Health Care AssociationVermont Health Care AssociationVermont Health FoundationVermont Health Foundation

Vermont Medical SocietyVermont Medical SocietyVermont Organization of Nurse LeadersVermont Organization of Nurse Leaders

Vermont Program for Quality in Health CareVermont Program for Quality in Health CareVermont Psychological AssociationVermont Psychological Association

Vermont State Dental SocietyVermont State Dental SocietyVermont State Nurses AssociationVermont State Nurses Association


February 18, 2005 - 51

Putting It All Together: The Moving Pieces of the Health Care Puzzle Vermont Health Care Reform in...

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