Susan Dentzer Editor-in-Chief
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Transcript of Susan Dentzer Editor-in-Chief
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Susan DentzerEditor-in-Chief
Moving Forward on Health Reform
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How Health Care Reform Must Bend The Cost Curve
David M. CutlerHarvard University
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The Drivers of Productive Industries
IT and its use[ARRA, 2009]
Move from pay-for-volume to pay-for-value[PPACA, 2010]
Engaging employees and consumers in continuous quality improvement
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Bundled payment
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Performance-based payment
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Forecast of Cost Savings
Total savings = $9.0 trillion
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What It Will Take• Administrative Implementation
– Shorten demonstration time– Openness to new approaches
• Provider response– Changing existing operations– New organizational forms
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Health Reform And Federal Budget Deficits: Likely to Broaden The Gap, Not Reduce It
Michael RamletAnalyst, The Advisory Board Company
Douglas Holtz-EakinPresident, American Action Forum
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It Was Ugly Before Reform
Source: Congressional Budget Office. The long-term budget outlook. Washington (DC): CBO; 2009 Jun.
Federal Revenues and Noninterest Spending, by Category
Perc
en
tag
e (
%)
of
Gro
ss D
om
esti
c P
rod
uct
(GD
P)
Congressional Budget Office’s Alternative Fiscal Scenario
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Modest Deficit Reduction Projected
Congressional Budget Office (CBO) Score – H.R. 4872, Reconciliation Act of 2010$ Billions
CBO Projections2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2010-2019
Total Subsidies 4 11 13 9 70 125 181 204 219 236 1072Total Cost Savings 2 -2 -11 -18 -43 -51 -59 -75 -91 -109 -455
Total Tax Revenues 0 -8 -15 -43 -77 -90 -114 -123 -131 -141 -739Net Deficit Effecta 6 1 -14 -50 -48 -15 7 6 -3 -13 -124
CBO Extrapolationsb
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2020-2029
Subsidies (3.4% CAGR) 244 252 261 270 279 288 298 308 319 330 2850Cost Savings (10.0%
CAGR) -120 -132 -145 -160 -176 -193 -212 -234 -257 -283 -1911Tax Revenues (2.51%
CAGR)c -145 -148 -152 -156 -160 -164 -168 -172 -176 -181 -1620Net Deficit Effecta -20 -28 -36 -46 -56 -68 -82 -97 -114 -134 -681
Source: Congressional Budget Office. The long-term budget outlook. Washington (DC): CBO; 2009 Jun.
Really
Notes: Components may not sum to totals because of rounding. aPositive numbers indicate increases in the deficit, and negative numbers indicate reductions in the deficit. bExtrapolations for 2020-2029 calculated using CBO estimated compounded annual growth rates (CAGR).cThe CBO pegs tax revenues to the rate of general inflation. U.S. Breakeven 20-Year Inflation rate between normal bonds and inflationary bonds was 2.51 percent (accessed via Bloomberg, 9 April 2010).
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Substantial Deficits More Likely
Alternative Scenarios 2010201120122013201420152016201720182019 2010-19Official CBO Score 6 1 -14 -50 -48 -15 7 6 -3 -13 -124Unachievable Savings 0 1 5 10 20 26 32 42 52 65 254Unscored Budget Effect 8 15 17 18 18 20 23 26 29 35 275Uncollectable Revenue 0 -1 -2 -5 1 6 14 18 22 27 78Premiums Reserved 0 0 5 9 10 11 11 9 8 7 70Net Deficit Effecta 14 16 12 -20 -1 47 89 101 108 119 554 Extrapolated Scenariosb 2020202120222023202420252026202720282029 2020-29Subsidies (3.4% CAGR) 244 252 261 270 279 288 298 308 319 330 2850Cost Savings (10% CAGR) -10 -11 -13 -14 -15 -17 -19 -20 -22 -25 -167Tax Revenues (2.51% CAGR)c -110 -113 -115 -118 -121 -124 -128 -131 -134 -137 -1232
Net Deficit Effecte 124 128 133 137 142 147 152 157 162 168 1451
Scenario Analysis Summary – H.R. 4872, Reconciliation Act of 2010$ Billions
A Lot
Source: Congressional Budget Office. The long-term budget outlook. Washington (DC): CBO; 2009 Jun.
Notes: Components may not sum to totals because of rounding. aPositive numbers indicate increases in the deficit, and negative numbers indicate reductions in the deficit. bExtrapolations for 2020-2029 calculated using CBO estimated compounded annual growth rates (CAGR).cThe CBO pegs tax revenues to the rate of general inflation. U.S. Breakeven 20-Year Inflation rate between normal bonds and inflationary bonds was 2.51 percent (accessed via Bloomberg, 9 April 2010).
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Hello Greece?• In light of the fiscal threat from growing spending, the budgetary
impacts of the Patient Protection and Affordable Care Act are central to any discussion of its merits
• Even with the budgetary gimmicks, if everything goes well there is only a modest projected decline in the deficit of $124 billion in the first 10 years and $681 billion in the second 10 years
• If one accounts for the dubious budgetary provisions related to unachievable cost savings, unscored budget effects, uncollectible revenue, and already reserved premiums, the act would raise, not lower, federal deficits by $554 billion in the first ten years and $1.4 trillion over the succeeding 10 years
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Bruce H. HamoryExecutive Vice President, Chief Medical Officer EmeritusGeisinger Health System
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Delivery System Reform and Bending the Cost Curve
Rich UmbdenstockAmerican Hospital Association
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A Framework for Health Reform
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• $12.9 billion prevention fund• Increases coverage of preventive services • No cost sharing for recommended preventive services • Annual Medicare wellness visits • Grants for workplace wellness programs• Creates a national public health council with advisory groups
• Comparative effectiveness• Hospital Value-Based Purchasing (VBP)• Enhanced public reporting• Numerous provisions to reduce health disparities• National quality center
• Pilot programs on payment bundling• Accountable Care Organizations • Center for Medicare and Medicaid Innovation (CMI)• Independent Payment Advisory Board (IPAB)• Administrative Simplification
• HIT Medicare/ Medicaid Incentive programs • Expansion of broadband technology• Funding for HIT infrastructure
• 32 million more people with health coverage• Shared responsibility • Insurance reforms• Medicaid expansions• Tax credits
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Assisting with Health Reform
Education, Tools, Leadership Development and National Projects to Support Implementation
National Framework for System Reform
Key Health Reform Quality Issues
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National ProjectsComprehensive Unit-based Patient Safety Program (CUSP) to reduce Central Line Associated Blood Stream Infections (CLABSI) and Catheter Associated Urinary Tract Infections (CAUTI)
CLABSI: 28 states, over 600 hospitals and growing
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Work To Be Done• Policy Adjustments
– Readmissions – Hospital acquired conditions– DSH
Additional Issues• Campaigns
– GME slots– 340B expansions– Medicaid hospital payments– Liability reform– Coverage (undocumented
immigrants)
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The New Health Reform Law and Private Insurance
Scott KeeferAmerica’s Health Insurance Plans
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Laying the Foundation
Building Up to Successful
Implementation
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2010 Market Reforms and Impact
Impact on Costs and Premiums; Provider
Capacity?
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Changes in Coverage and Cost Impact?
Reforms & Reflection through 2015
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Broader Reforms and Key Challenges
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Sustainability: Driving Value in Delivery
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Implementing Insurance Market Reforms Under the Federal Health Reform Law
Len M. Nichols, Ph.D. Director, Center For Health Policy Research and EthicsCollege of Health And Human ServicesGeorge Mason University
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Jon KingsdaleExecutive DirectorCommonwealth Health Insurance Connector Authority
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PPACA is NOT a Federal Takeover• Takeover not 2000 pages, rather, 2
lines
• Federalism:– Federal Goals – State Implementation
• McCarran-Ferguson• HIPAA• Patient Protection and Affordable Care Act
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Examples of Federalism in PPACA• Grants to states for Ombudsmen• Reporting and regulation of MLRs• Setting up an exchange, with federal
start-up funds, and flexibility in key areas
• high-risk Pools• Annual review of premium increases• State insurance departments and
regulation of immediate and 2014 reforms
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Successful Implementation
AuthorityCapacity
Self-Interest
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Major Challenges• Coordinating Medicaid and
Exchange subsidy eligibility in the dynamic real world
• Politics of non-cooperation
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Playing for Time: The Federal high-risk Program
Deborah CholletMathematica Policy Research
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Why focus on high-risk individuals?• Unlike groups, individuals who apply
for coverage now can be:– Denied coverage– Offered coverage that excludes care
broadly related to their condition– Charged a much higher premium
• Even minor conditions can trigger denial, exclusions, or a “rate up”
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Where do high-risk individuals find coverage now?
• In 35 states, a state high-risk pool funded by premiums, assessments on insurers, state funds
• In 5 states, the insurance market• An insurer of last resort• No option if not transferring from
group coverage
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State high-risk pools• High premiums• Rarely, enrollment limits• High cost sharing• Annual/lifetime benefit limits• Waiting periods for coverage of
preexisting conditions
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The Federal High-Risk Program• Temporary, pending 2014 market
reforms• Premiums equal to market rates• No waiting periods, lower cost
sharing• Eligible if
– Qualifying condition, denied coverage or offered exclusion or higher premium
– Uninsured 6 months or more
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Ready, Set, Plan, Implement: Executing the Expansion of Medicaid
Leighton KuGeorge Washington University
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Medicaid Eligibility in a Typical State: Now and 2014
Now 2014
Parents64% of poverty($14,000
family of 4)
138% of poverty($30,000
family of 4)
Adults without Children
Not Eligible
138% of poverty
($15,000 for one person)
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Countdown for Key ChangesNow• States must retain Medicaid & CHIP
eligibility (limited exceptions)• States may begin expansions for adults earlySoon• CMS & states begin planning & systems
developmentJan. 2014• Expand eligibility for non-elderly adults• Narrower benefit packages for newly
covered• Coordinated applications for Medicaid, CHIP
& health insurance exchanges
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Big Challenges Ahead
• Will the health care system be ready?
• How much will this cost?
• Will the states be ready?
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States Opposing Health Reform Have More to Gain
39%
26%
Opposing States Other States
% of Medicaid-Eligible Adults Uninsured
Source: Author’s analysis of March 2009 Current Population Survey dataNotes: Opposing states include Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia and Washington state. Estimates are for people 19 to 64 with income below 138 percent of poverty, adjusted for immigrant status.
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New Roles For States In Health Reform Implementation
Alan WeilNational Academy for State Health Policy
Raymond ScheppachNational Governors Association
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The State To-Do List• Medicaid Eligibility Expansion• Commercial Health Insurance
Regulation• Insurance Exchanges• Many Other Provisions
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What States Need• Knowledge• Executive-Branch Leadership• Strategic Plan• Operational Plan• Needs Assessment• Short-Term Plan
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Conditions For Success• Federal Cooperation• Stakeholder Engagement• State-to-State Learning• Vision, Leadership, Commitment
and Willingness to Take Risks
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Health Reform’s Late-Term Delivery: Struggling with Political Birth Defects
Thomas P. MillerAmerican Enterprise Institute
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Political Strategies
Smoke Screens
Budget Extenders
All or Nothing
Beat the Clock
Health Reform Stooges
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Raymond C. ScheppachExecutive DirectorNational Governors Association
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Thank you!www.HealthAffairs.org