Health Reform Impact June 2011 John Walton Group/Executive VP Resurrection Health Care Gracie meets Lord Stanley Charlie’s First Birthday Welcome Massive Change Underway The Patient Protection and Affordable Care Act of 2010 (PL 111-148) Why the need for ACA? National Health Expenditures per Capita, 1980–2007 Average spending on health per capita ($US PPP) 8000 United States Canada France Germany Netherlands United Kingdom 7000 6000 5000 4000 3000 2000 1000 0 1980 1984 Data: OECD Health Data 2009 (June 2009). 1988 1992 1996 2000 2004 Premiums Rising Faster Than Inflation and Wages Cumulative Changes in Components of U.S. National Health Expenditures and Workers’ Earnings, 2000–09 Projected Average Family Premium as a Percentage of Median Family Income, 2008–20 Percent Percent 125 25 Insurance premiums 108% 21 21 24 22 22 20 20 Workers' earnings 100 23 20 18 18 18 18 18 Consumer Price Index 16 15 75 13 11 19 19 19 17 14 12 10 50 32% 5 25 24% Projected * 2008 and 2009 NHE projections. Data: Calculations based on M. Hartman et al., “National Health Spending in 2007,” Health Affairs, Jan./Feb. 2009 and A. Sisko et al., “Health Spending Projections Through 2018,” Health Affairs, March/April 2009. Insurance premiums, workers’ earnings, and CPI from Henry J. Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits Annual Surveys, 2000–2009. Source: K. Davis, Why Health Reform Must Counter the Rising Costs of Health Insurance Premiums (New York: The Commonwealth Fund, Aug. 2009). 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2007 2008* 2009* 2006 2006 2005 2005 2004 2004 2003 2003 2002 2002 2001 2001 2000 2000 1999 0 0 Right out of a movie Projected Savings and Effectiveness of System Reform Provisions in Comprehensive Reform Law 2010–19 (in billions) CBO Estimate of Budget Savings, Affordable Care Act of 2010, 03/30/09 Establish health insurance exchanges Percent Opinion Leaders Favor, or View as Effective Projected Effectiveness in Containing Costs 92%b ++ Create new nonprofit plan choices + Review premiums and require minimum medical loss ratios ++ Incentivize primary care and prevention $6 61%c + Stimulate innovative provider payment reform –$8 97%c +++ Create accountable care organizations –$5 54%f ++ –$176 75%e ++ 53%a + Control spending growth; IPAB and productivity improvement Promote quality improvement and public reporting Encourage Medicare private plan competition –$201 77%c + Tax high premium health insurance plans –$32 58%d + Authors’ views of long-term effectiveness in controlling total health system spending: Very effective = +++, Effective = ++, Somewhat effective = +. Health Care Opinion Leaders Surveys: a Sept/Oct 2008; b Dec. 2008; c April 2009; d June 2009; e Oct. 2009, f July 2010. IPAB = the Independent Payment Advisory Board Source: Commonwealth Fund estimates; Congressional Budget Office, Letter to the Honorable Nancy Pelosi, Mar. 20, 2010. Aspects of Health Reform The Good Positive 39+ Million Americans 133% of federal poverty limit covered by Medicaid. Offer affordable health insurance through exchanges modeled at Medicare payment rates. Bending the health care cost escalation trend line. Aspects of Health Reform The Bad? Potential Payment Cuts Value Based Purchasing with new cost reduction & quality incentives. Accountable Care Organizations changing the delivery of care; integrated? High cost to form. Elimination of Disproportionate Share hospital funding. Aspects of Health Reform The Ugly! Politics (and we’re not done yet) Curtailment of ACA either federally or state by state action? Lobbying efforts by insurance and medical industries? Changing public opinion? Hospital Reaction Lower costs of delivering care to current Medicare DRG payments (excess days, transfer penalties). Reduce high 30 day readmit penalties for AMI, CHF and PNE; partner with post-acute providers. Improve quality outcomes and patient satisfaction metrics to achieve top Value Based Purchasing incentives. High Opportunity Service Lines Total Excess Days by Service Line 2/13/11 – 5/7/11 Average daily census of 112 (five acute care hospitals) *All-payer excess days excludes behavioral, substance abuse, rehab, and neonate/newborn MS-DRGs Source: HBI Weekly Excess Days Highlight Monthly Excess Days Performance by Site Site Excess Days as % of IP Days: Monthly Trending Against FY12 Target FY11 YTD: July 2010 - April 2011 35.0% 30.0% 25.0% Excess Days as % of IP Days FY12 Target Jul-10 20.0% Aug-10 Sep-10 Oct-10 Nov-10 15.0% Dec-10 Jan-11 Feb-11 10.0% Apr-11 5.0% 0.0% OLR RMC SFH SJH SMEMC RHC *All-payer excess days excludes behavioral, substance abuse, rehab, Diamond Headache, and neonate/newborn MS-DRGs Source: HBI Utilization Trends Monthly Excess Days Highlight Excess Day Reductions Requires active case management setting discharge date in advance. Physician alignment (payments currently fee for service). Palliative care promotion. Excellent hand off to post-acute services: medical home, home health, nursing home, sub-acute, & LTACH and follow up too. National Readmission Results Average 30-day hospital readmission rates are high with high area variation – Acute MI 19.9% – Heart Failure 24.5% – Pneumonia 18.2% Jul’05 – Jun’08 discharges The goal is not zero; all hospitals have room to improve AHRQ 2009 Annual Conference Michael T. Rapp, MD, JD, FACEP Director, Quality Measurement and Health Assessment Group Office of Clinical Standards & Quality, CMS CMS’ goal: shift the curve Hospitals with high readmission rates will have lower Medicare payments in FFY’12 18 18 RHC CMS Heart Failure Readmissions RHC CMS Heart Failure 30-Day All Cause Readmission Rate by Site FY09 Q4 to FY11 Q3 OLR Readmission Rate (%) 50% RMC . SFH. SJH . SMEMC. 40% 30% GOAL=24.7% 20% 10% 0% 09 FY 4 Q 10 FY Q 4 09 FY 4 Q 10 FY Q 4 09 FY 4 Q Q 4 10 09 FY FY Quarter 4 Q 10 FY 4 Q 09 FY Q 4 10 FY 4 Q *Readmission definition is aligned with CMS definition. This chart reflects the unadjusted readmission rate. Data Source: Horizon Performance Manager Goal Source: C MS US National HF Readmission Rate FY06-FY09 Value Based Purchasing Mandated by Affordable Care Act; Released 4/29/11 Rewards for achievement or improvement Budget neutral payment changes begin with October 1, 2012 discharges reducing base operating payments for all DRGs by 1% in FFY 2013 (increasing by .25% each year thru FFY 2017) Quality measures from Hospital Compare measure set: – 20 measures (12 process/8 HCAHPS dimensions) in FFY 2013 – Adds 13 measures (3 mortality, 8 HACs, 2 IQI/PSIs) in FFY 2014 Value Based Purchasing Purpose/Goals Transform Medicare from a passive payer of claims to an active purchaser of quality health care for its beneficiaries Important step toward revamping how care and services are paid for, moving increasingly toward rewarding better value, outcomes, and innovations instead of merely volume Rewards/penalizes hospitals based on actual quality performance rather than simply reporting data for measures Portion of Medicare hospital payment will be tied to performance on quality measures FFY 2013 VBP Measures Acute Myocardial Infarction (AMI) AMI-7a Fibrinolytic Therapy Received w/in 30 min AMI-8a PCI Received w/in 90 min Heart Failure (HF) HF-1 Discharge Instructions Pneumonia (PN) PN-3b Blood Culture in ED Prior to Initial Abx PN-6 Initial Abx Selection Surgical Care SCIP-Inf-1 Prophylactic Abx Timing SCIP-Inf-2 Prophylactic Abx Selection SCIP-Inf-3 Prophylactic Abx Discontinuation SCIP-Inf-4 Cardiac Surg Postop Serum Glucose SCIP-Card-2 Beta Blocker During Periop Period SCIP-VTE-1 Recommended VTE Prophylaxis Ordered SCIP-VTE-2 VTE Prophylaxis Timing Patient Satisfaction Nurse Communication (% Always) Doctor Communication (% Always) Cleanliness and Quietness (% Always) Overall Rating (% 9 or 10) Responsiveness of Hospital Staff (% Always) Pain Management (% Always) Communication about Medications (% Always) Discharge Information (% Yes) FFY 2013 Measures: Achievement Benchmarks Measure Acute Myocardial Infarction (AMI) AMI-7a Fibrinolytic Therapy Received w/in 30 min AMI-8a PCI Received w/in 90 min Heart Failure (HF) HF-1 Discharge Instructions Pneumonia (PN) PN-3b Blood Culture in ED Prior to Initial Abx PN-6 Initial Abx Selection Surgical Care SCIP-Inf-1 Prophylactic Abx Timing SCIP-Inf-2 Prophylactic Abx Selection SCIP-Inf-3 Prophylactic Abx Discontinuation SCIP-Inf-4 Cardiac Surg Postop Serum Glucose SCIP-Card-2 Beta Blocker During Periop Period SCIP-VTE-1 Recommended VTE Prophylaxis Ordered SCIP-VTE-2 VTE Prophylaxis Timing CMS Achievement Benchmark (mean of top decile) 91.9% 100.0% 100.0% 100.0% 99.6% 99.6% 100.0% 99.7% 99.6% 100.0% 100.0% 99.9% * To receive full achievement points (10/10), the CMS Achievement Benchmark must be met 2013 VBP Methodology Measure Weighting – Clinical Process Measures: 70% – Patient Experience: 30% Each measure is scored based on 10 point scale Two Ways to Gain Points: – Achievement of National Benchmark (mean of top decile): based on performance period (Max. points = 10/10) – Rate of Improvement : measured by comparing scores during baseline period to those of performance period (Max. points = 9/10) Measure Timelines: – Baseline Period: July 1, 2009 – March 31, 2010 – Performance Period: July 1, 2011 – March 31, 2012 FFY 2014 VBP Measures Mortality AMI 30-Day Mortality Rate HF 30-Day Mortality Rate PN 30-Day Mortality Rate Hospital Acquired Conditions Foreign Object Retained After Surgery Air Embolism Blood Incompatibility Stage III or IV Pressure Ulcers Falls and Trauma Catheter Associated UTI Vascular Catheter Associated Infections Poor Glycemic Control AHRQ Patient Safety and Inpatient Quality Indicators Complication/patient safety for selected indicators (composite) Mortality for selected medical conditions (composite) Potential to be added for FFY 2014: Medicare spending per beneficiary for period from 72 hours prior to admit to 90 days post discharge In memory of a good friend and mentor of many RTs