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Health Care Reform:A View From Washingtong
NAPR/NALTO
Atul Grover, AAMC April 8, 2010p 8, 0 0
At the Beginning of Reform• “Alignment”: how does the behavior of individual
physicians integrate with other care • “Value” & “Quality”: paying for outcomes instead
of volume• “Comparative Effectiveness”: are providers
practicing in line with evidence base A bili• Accountability
All with limited resources to enact change
Driving Health Care Reform?
Delivery
Payment
I
Payment
Insurance
The Health Security Plan of 1993• 1990 – 91 Recession broadly affected the middle
class and their jobs, tying health care coverage to l temployment was scary
• One week after inauguration, Clinton creates Presidential Task Force on National Health Reform (January 1993)Reform (January 1993)
• Health care bill was delivered to Congress• Health care bill was delivered to Congress November 20, 1993
Politics of 1993 Plan
• Task force was secretiveTask force was secretive, 500 people in 30 working groups
• Plan was crafted independent of Congressp g• Stakeholders were not involved—bill became
something to fight “over”, not “for”• No guarantee of what people could keep
Public Support for Clinton’s Health Security Plan
71%
59%59%
43 %
A il 1993 September A il 1994April 1993 September 1993 April 1994
US News and World Report poll, 1993. USA Today/CNN polls, 1993, 1994.
AAMC Broad Priorities for Health Care Reformfor Health Care Reform• Insure Everyone!• Preserve the Safety Net• Develop the Workforcep• Payment Reform, Including Repeal of
Medicare’s Sustainable Growth Rate (SGR) • Improve the Delivery of Health • Advance Innovation and Discoveryy
Continue to Advocate for Academic Medicine d S t f it Mi iand Support for its Missions
Timeline• February 24th 2009 President Obama addresses joint
session of Congress
• April 8th President Obama establishes WH Office of Health Reform
• July 15, 2009 HELP votes bill out of committee
• July 17, 2009 W&M, Education pass bills in House
• July 23, 2009 Reid announces Senate vote after summerJuly 23, 2009 Reid announces Senate vote after summer
• July 31, 2009 Last House cmte (E&C) clears bill
• August 2009 Town Hall meetings erupt
Reform Timeline ContinuedReform Timeline, Continued• September 9, 2009 President addresses Congress
• October 13, 2009 Senate Finance passes bill
• November 7th House passes H.R. 3962, Affordable Health Care for America Act
• December 24th Senate passes H.R. 3590, Patient P t ti d Aff d bl C A tProtection and Affordable Care Act
Senate Bill and Reconciliation (PL 111-148 & 111-152)( )• 32 million reduction in the number of uninsured by 2019
(94%), 16 million added to Medicaid
• Significant insurance reforms (pre-existing cndn, caps)
• Expands Medicaid to 133%: Feds pay 100% for new Medicaid 2014-2016, 95% in 2017, 94% in 2018, 93% in 2019
• $938 billion cost over 2010-2019
Savings from hospitals, home care, Rx, MA, insurers
• $124 billion reduction in federal deficit over 2010-2019
• Creates individual mandate (weak), State exchanges
• Credits for < 400% FPL Out of pocket premium maximum• Credits for < 400% FPL, Out of pocket premium maximum
• Excise tax on ‘Cadillac plans’ in 2018, Payroll taxes
Reform Bill and ProvidersHospitalp• Market basket cuts $116.9 billion over 10 years• DSH cuts $36 billion /10 years – reductions start in
FY2014FY2014• Readmissions policy ~$7 billion• VBP incentive pool, budget neutral, no add-onsp , g ,• No cuts to GME, some financing improvements
Physician• PQRI, VBP requirements for 2011• Primary care, general surgery bonuses 5 yr• Does not address SGR• Does not address SGR• Medicaid for primary care (at Medicare rates)
HIZ, CER, Sunshine Act, ACO/Bundling demos, IPAB,
Physician Payment ChangesPhysician Payment Changes• Creates a new “value-based payment modifier”
for physician payments The modifier isfor physician payments. The modifier is separate from the geographic adjustment factors (Sec. 3007).
• Starting in 2015, will provide differential g , ppayments based on the quality and cost of care (Sec. 3007).
• The payment adjustments are budget neutral (Sec 3007)(Sec. 3007).
Primary Care Income Less Than Most Other SpecialtiesMedian Salary by Specialty in thousands of dollars
Di ti R di lCardiology-Invasive
Hematology/OncologyAnesthesiology
GastroenterologyOrthopedic Surgery Diagnostic Radiology
General Surgery Otorhinolaryngology
DermatologyUrology
gy gy
General Internal MedicinePsychiatry
Emergency MedicineOB/GYN
Opthalmology
$50 $150 $250 $350 $450
Family Medicine/General PracticeGeneral Pediatrics
General Internal Medicine
Source: MGMA Physician Compensation and Production Survey, 2006
How important were the following factors in determining your specialty choice? *
100
60
70
80
90
20
30
40
50
0
10
20
Role M
odel
hip
Train
ing
pect
ation
s
pect
ation
s
cy T
rain
ing
of S
pecia
lty
tiona
l Deb
t
sts,
& Skil
ls
f Spe
cialty
Mento
r/Ro
Optio
ns fo
r Fell
owsh
ip
Salary
Exp
e
Fam
ily E
xpe
Leng
th o
f Res
iden
cyCom
petit
ivene
ss o
f
Leve
l of E
duca
ti
Fit w
ith P
erso
nality
, Inte
res
Conte
nt o
f
Fi
Strong Influence Moderate Influence
* 2008 AAMC Graduate Questionnaire
Moving Forward from “Reform”…• HIT implementation• SGR/Physician payment• IPAB/Debt Commission• Medicaid Expansion• “Value” and “efficiency”•“Accountability”• Comparative effectiveness•Developing new payment and delivery models•Will there be enough physicians?•Medicare spending?p g
Medicare Spending Under Fee For ServiceFor Service
ServicesBenefits
& $$$$
Paid forServicesBeneficiaries Spent
Paid for Services
Medicare Spending per Beneficiary, by Hospital Referral Region, 2006y p g ,
Hospital Care pIntensity (HCI)IndexVariations within States
Variation within Markets Virginia
North Carolina
Conclusions: Dartmouth AtlasVariation in Medicare spending indicative of overall area efficiencyy
O ers ppl of hospitals and doctors ca ses highOversupply of hospitals and doctors causes high spending on “chronic care conditions
Up to 30% of U.S. healthcare spending is wasted, and waste is in the high spending regions like Losand waste is in the high spending regions like Los Angeles, New York, Miami
.
Medicaid per capita spending on children FY2006
Average Annual Percent Growth in Medicare Spending per Enrollee by State of Residence 1995-2004.pdf
Major Components of Variation• Utilization of services• Pricing of services
2006 Relative Regional Medicare Spending Per Aged Beneficiary2006 Relative Regional Medicare Spending Per Aged Beneficiary2006 Relative Regional Medicare Spending Per Aged Beneficiary
g
2006 Relative Regional Medicare Spending Per Aged BeneficiaryLocation Index of Spending Per Enrollee to the U.S. Average
State Core Based Statistical Area (CBSA) Total
Adj. for Risk,
Location Index of Spending Per Enrollee to the U.S. Average
State Core Based Statistical Area (CBSA) Total
Adj. for Risk,
Location Index of Spending Per Enrollee to the U.S. Average
State Core Based Statistical Area (CBSA) Total
Adj. for Risk,
Location Index of Spending Per Enrollee to the U.S. Average
State Core Based Statistical Area (CBSA) Total
Adj. for Risk,
Abbr. Code Name Total Adj. for RiskAdj. For Risk and Wages
Wages, and GME/DSH
United S 1 00
Abbr. Code Name Total Adj. for RiskAdj. For Risk and Wages
Wages, and GME/DSH
United S 1 00 1 00
Abbr. Code Name Total Adj. for RiskAdj. For Risk and Wages
Wages, and GME/DSH
United S 1 00 1 00 1 00
Abbr. Code Name Total Adj. for RiskAdj. For Risk and Wages
Wages, and GME/DSH
United States 1.00
CA 31084 Los Angeles-Long Beach-Santa Ana, CA 1.29
OK 36420 Oklahoma City, OK 1.05
States 1.00 1.00
CA 31084 Los Angeles-Long Beach-Santa Ana, CA 1.29 1.14
OK 36420 Oklahoma City, OK 1.05 1.13
States 1.00 1.00 1.00
CA 31084 Los Angeles-Long Beach-Santa Ana, CA 1.29 1.14 1.03
OK 36420 Oklahoma City, OK 1.05 1.13 1.22
States 1.00 1.00 1.00 1.00
CA 31084 Los Angeles-Long Beach-Santa Ana, CA 1.29 1.14 1.03 0.99
OK 36420 Oklahoma City, OK 1.05 1.13 1.22 1.24
Analysis courtesy of Karen Heller, GNYHA
Medicare Spending per Beneficiary Adjusted for Wages, Health Status, and DGME/IME/DSH by State 2006DGME/IME/DSH, by State, 2006
“Value” and VariationM di di i f di• Medicare spending is a poor proxy for spending overall.
• Low cost does not equate to quality or• Low cost does not equate to quality or efficiency.
• Health status—influenced by poverty and otherHealth status influenced by poverty and other factors—accounts for much of the variation in utilization rates.
• When patients are properly risk adjusted, higher utilization rates often lead to improved outcomes and are not considered “waste” byoutcomes—and are not considered waste by those patients.
But the geographic battle will continueBut the geographic battle will continue…
AAMC Baseline Projections: Primary Care Specialties Face Greatest Shortages; Health Care p gReform Will Increase Demand and Shortages
Projected baseline Pct. of total jshortage in 2025
(FTEs)shortage
Total Patient CareTotal Patient Care Physicians -124,000 100.0%
G l P i C 46 000 37 3%General Primary Care -46,000 37.3%Medical Specialties -8,000 6.3%Surgical Specialties -41,000 32.9%Other Patient Care -29,000 23.4%
Source: Michael J. Dill & Edward S. Salsberg. (2008). The Complexities of Physician Supply and Demand Projections Through 2025;
Note: These are baseline projections
US Medical School Matriculants
17,600
17,00017,20017,400
Cooper et al
16,40016,60016,800
Cooper et al
15,80016,00016,200
AAMC
15,40015,600
,
1992 1996 2000 2004 2006
First-Year Enrollment at U.S. Medical Schools Will Increase 30% No effect without GME growthWill Increase 30%--No effect without GME growth
21,000
22,000
Existing + New Schools21,567
19,000
20,000
Existing Schools
20,487
17,000
18,000Existing Schools
16,488
15,000
16,000
2002 2005 2008 2011 2014 20172002 2005 2008 2011 2014 2017
Source: AAMC
First Year MD and DO Enrollment in 2013 is Likely to Exceed Training Positions AvailableLikely to Exceed Training Positions Available
2002 2013 # and % Increase
MD 16,488 19,795 3,259 20%
DO 3,079 6,250 3171 103%_______________________________________________Combined 19,567 26,045 6,478 33%
Source: AAMC Dean’s Enrollment Survey: 2008 Preliminary Findings2008 AACOM Enrollment Analysis: 2013 CWS Estimate
Growth in GME Slots, 1980--2005
Total Residents
105 000
95,000100,000105,000
80 00085,00090,000
70 00075,00080,000
60,00065,00070,000
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
Unless GME Positions Grow, Someone Likely to be Squeezed Outy q35,000
Projected Growth in MD and DO Entrants into GME
25,000
30,000
IMG GME Entrants
26,000 Currently Available Residency Positions
15 000
20,000
DO GME Entrants
IMG GME Entrants
10,000
15,000
MD GME Entrants
-
5,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Preliminary Data Prepared by: Center for Workforce Studies (SAS) 7/09
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Sources:2008: AAMC Dean’s Enrollment Survey2008: AACOM Enrollment Analysis
In Your Shoes…Wh ill h i i l k lik i 10 ?• What will physician payment look like in 10 yrs?
• Demand for physicians in most specialties will far outstrip supply while policymakers try to narrow the income gap how will it affect the market?income gap…how will it affect the market?
• How will you recruit on the basis of cost quality• How will you recruit on the basis of cost, quality, outcomes of physicians?
• As more physicians seek to become employed how• As more physicians seek to become employed, how will that change your job?
• Can docs work together & with others?
