Susan Dentzer: Analyst on Health, PBS NewsHour; Senior Policy Adviser, Robert Wood Johnson Foundation MO Health Policy Summit 2013

1. + Reform,
Health
System Transformation
And the
Implications
for Health, Hospitals and
Health Care Systems
By Susan Dentzer
Senior Policy Adviser,
Robert Wood Johnson Foundation
University of Missouri
Health Policy Summit
October 25, 2013

2. +
This Presentation at a Glance

The United States face a number of health and health care challenges –
one reason for the Affordable Care Act

System transformation is being accelerated by the law but will extend far
beyond it

Pursuit of the Triple Aim: Challenges in health, health care and health
care costs

Key aspects of reform and transformation and the implications for
hospitals and health systems


Coverage expansion, influx of chronically ill patients, and impact of not
expanding Medicaid

Innovations in health care delivery, payment and technology


Focus on population and community health
Patient activation and engagement
Some conclusions

3. + First, a story….

4. + Once upon a time, there was a
―country‖…
With an economy the size of France: $2.8
trillion…
With tens of millions of unhealthy people – and life
expectancy below that of 28 of the world’s richest countries…
Where every day, a group of the natives ―experimented‖ on
others by subjecting them to ―medical care,‖ about half of which
has no evidence suggesting that it works…
Where adverse events that occurred in the course of this
―care‖ were among the top ten causes of death annually…
Where tens of millions didn’t get care they needed and tens of
thousands died each year as a result…
And partly because of the cost of the flawed care it does
provide, the country was possibly going broke!

5. What would you do with
this country?

Send in the Marines?

Send in the International
Monetary Fund?

Send in Amnesty International?

Other?
+

6. + We know this country’s identity…
The
United
States
of
Health Care
Ripe for Change!

7. What The US Did In 2010…
…Enact the Affordable Care Act

8. + A Heavy Lift?

9. +And about that country…
Our $2.8 trillion health system is
unequivocally a major economic engine…
But the system is propelled by the volume of services, not
sufficiently by value
The degree to which cost exceeds value is an opportunity
cost – i.e., we might better spend the money some
other way – for example, on education
Expenditures on care not reflected in superior
health outcomes
For more fundamental reasons, Americans may be at
a health disadvantage relative to others
How much will more ―health care‖ solve this?

10. The Triple Aim


Donald Berwick, MD
Former Administrator
Centers for Medicare
and Medicaid Services
Better health care

Lower cost

+
Better health
Core principle now at heart
of major U.S. payment and
delivery system reform
efforts

11. + Better Health

12. Fans line up outside Paula Deen’s The Lady and Sons restaurant,
Savannah, Georgia, June 2013

13. The State Of US Population Health
Key Drivers of Health Status
Obesity
Physical Inactivity
66% adults obese
or overweight
Contribution to Premature Death
Genetic
Predisposition
Social
Circumstances
28% inactive
15%
30%
Smoking
23% smokers
Environmental
5% Exposure
10%
Stress
36% high stress
Aging
Health Care
22% > 55 years old
40%
Behavioral
Patterns
Source: Schroeder S. N Engl J Med 2007;357:1221-1228

14. + Geographic Health Differences:
Your zip code matters more than your
genetic code

15. + Health Factors and Outcomes

Health Factors:

Low birth weight, tobacco use, adult obesity, physical
inactivity, alcohol use, sexually transmitted infections,
teen birth rate

Rates of uninsured, certain clinical care measures (e.g.
preventable hospital stays, screening)

Social and economic factors such as high school
graduation rates, employment and income, violent crime
rate, fast food restaurants

Environmental quality (safe drinking water), access to
recreational facilities

Health Outcomes: premature death; poor or fair health;
poor mental health days

16. + Missouri: Health Factors by County

17. + Missouri: Health Outcomes
(Premature death; poor health)

18. + Comparison, factors vs. outcomes

19. + Institute of Medicine Study, January 2013

―For many years, Americans have been dying at younger
ages than people in almost all other high-income
countries.‖

―Not only are their lives shorter, but Americans also have a
longstanding pattern of poorer health that is strikingly
consistent and pervasive over the life course – at birth,
during childhood and adolescence,
for young and middle-aged adults, and
for older adults.‖

20. Difference: almost double

21. Difference: almost double

22. + Rising Mortality, Declining Life Expectancy
For Many

Trends in male and female mortality rates from 1992–96 to
2002–06 in 3,140 US counties.

Female mortality rates increased in 42.8 percent of
counties, while male mortality rates increased in only
3.4 percent.

Factors associated with areas that had lower mortality:
higher education levels; low smoking rates

Source: DA Kindig, ER Cheng,‖Even As Mortality Fell In Most US Counties, Female
Mortality Nonetheless Rose In 42.8 Percent Of Counties From 1992 To 2006.‖ Health
Affairs, March 2013

23. Change In Male Mortality Rates From 1992–96 To 2002–06 In US Counties.
Kindig D A , and Cheng E R Health Aff 2013;32:451-458
©2013 by Project HOPE - The People-to-People Health Foundation, Inc.

24. Change In Female Mortality Rates From 1992–96 To 2002–06 In US Counties.
Kindig D A , and Cheng E R Health Aff 2013;32:451-458
©2013 by Project HOPE - The People-to-People Health Foundation, Inc.

25. + What are we doing about these
challenges?

Good news: some efforts to tackle child obesity, for
example, seem to be working

Centers for Disease Control and Prevention data show
child obesity falling in 19 states, including Missouri

26. Source: Centers for Disease Control and Prevention

27. Source: Centers for Disease Control and Prevention

28. +

Hospitals’ New Roles in Population Health
New requirements under ACA on tax-exempt hospitals and
health systems

To retain 501(c)(3) [tax exempt] status, organization must
conduct a ―community health needs assessment‖ at least every
three years

Must adopt implementation strategy to meet the community
health needs identified through the assessment

Penalty: $50,000 excise tax for each year that a tax-exempt
hospital subject to these provisions fails to satisfy requirement

29. +
Example of Innovation
In Population Health

Austen BioInnovation
Institute, an ―accountable
care community‖ in Akron,
OH

Nonprofit entity that

Conducted community-wide
combines activities among
assessment of health and health care
three independent health
assets and gaps
care systems and two
universities

Programs launched include costeffective diabetes prevention
program; ½ of participants lost

Source: Population Health Implications of
weight and cost of diabetes care fell
the Affordable Care Act: Workshop
Summary. Institute of Medicine, 2013.
by 10 percent

30. + ―Hot-spotting:‖ The Camden Coalition of
Healthcare Providers

31. + ―Hot-spotting‖ unhealthy communities

King County Public Health Director
David Fleming

―The solutions to health in this
country lie beyond the walls of the
clinic and in our communities.‖

Echoing Jeffrey Brenner and the
Camden Coalition

What if hospitals and health systems
―hot spotted‖ – using similar
techniques to identify the nation’s
poorest and least healthy
communities—and then teamed up
with public health and local
community development
organizations to set them on a path to
better health?

32. + The fundamental drivers of health

―Improving health outcomes across the United States will
require increased public and private investment in the
social and environmental determinants of health—beyond
an exclusive focus on access to care or individual health
behavior.‖

Source: DA Kindig, ER Cheng,‖Even As Mortality Fell In Most US Counties, Female
Mortality Nonetheless Rose In 42.8 Percent Of Counties From 1992 To 2006.‖ Health
Affairs, March 2013

33. Social determinants of health
+

Income and Income Distribution

Education

Employment or unemployment; job security; working
conditions

Early Childhood Development

Food Insecurity

Housing

Social Exclusion; Social Safety Network

Access to Health Services; Disability

Gender, Race, Aboriginal (Native American/Indian) Status

34. + The Social Determinants
―Ten Tips For Better Health‖
 1. Don’t be poor. If you can, stop. If you can’t, try not to be poor for
long.

2. Don’t have poor parents.

3. Own a car.

4. Don’t work in a stressful, low-paid manual job.

5. Don’t live in damp, low-quality housing.

6. Be able to afford to go on a vacation and sunbathe.

7. Practice not losing your job and don’t become unemployed.

8. Make sure you have access to benefits, particularly if you are
unemployed, retired, or sick or disabled.

9. Don’t live next to a busy major road or near a polluting factory.

10. Learn how to fill in the complex housing benefit/shelter
application forms before you become homeless and destitute.

Source: Centre for Social Justice, Canada; Social Determinants Across the Lifespan, <http://www.socialjustice.org/subsites/conference/resources.

35. + Issues for hospitals and health systems

How do you broaden your focus beyond your ―population of
patients‖ (panel) to the overall health of the community?

Which among these social and economic determinants
should you focus on, how, and with whom?

How do you engage with the public health system?

How do you fund these activities or make the case for more
public and private funding of them?

Is there a particular role in transforming community health for
―repurposed‖ critical access hospitals?

36. + One Model – for critical access hospitals,
e.g.?

Maryland’s Total Patient Revenue Program – population
based rate method

10 rural hospitals in state operating under guaranteed global
budget

If revenue falls below budget hospitals can increase prices; if
exceeds budget they must return surplus

Western Maryland Hospital, e.g.: FY 2013 operating profit of
$15 million on $370 million in revenues; provides $ for
population health focus, care transitions programs, etc.

Admissions down 15 percent; 30 day readmission rate now 9
percent

37. +
Better Health Care

38. + Bringing More Americans Under The Health
Insurance Security Blanket

39. Health Insurance Coverage in
the United States, 2010, and Changes Under
Affordable Care Act
Uninsured
16%
EmployerSponsored
Insurance
49%
Total =
305.2
million
Approximately
20-30 million
will
remain
Medicaid uninsured
17%
Medicare
12%
Private NonGroup
5%
This group will
also grow and
purchase coverage
through insurance
exchanges
* Medicaid also includes other public programs: CHIP, other state programs, military-related coverage. Numbers may not add to 100
due to rounding.
SOURCE: KCMU/Urban Institute analysis of 2011 ASEC Supplement to the CPS.

40. + Marketplaces and Medicaid:
Across the States

41. + Medicaid Expansion – Or Not
Republican Gov.
bypassed legislature
to embrace expansion
Premium assistance
model; Arkansas approved
by CMS; PA considering

42. + Who Will Be Left Out
Source:
New York Times,
Oct. 2, 2013

43. + Who’s Hurt in States Not Moving Ahead
With Expansion?
Source:
Kaiser
Commission
On Medicaid
And The
Uninsured

44. The Federal Government Will Pay for the
Large Majority of the Medicaid Expansion
Federal
95.4%
$443.5 Billion
Total: $464.7 billion over 2014-2019
Note: Adults less than 133% FPL under standard participation scenario.
SOURCE: Analysis for KCMU by The Urban Institute, May 2010
State:
4.5%
$21.1 Billion

45. + Impact on health: Oregon Medicaid Study

After one year of Medicaid coverage, previously
uninsured adults in Oregon were 10 percent less
likely to report having depression

25 percent more likely to report their health as good,
very good, or excellent.

Also experienced lower financial strain because of
lower out-of-pocket expenditures, lower debt on
medical bills, and lower rates of refused medical
treatment because of medical debt

Source: Sommers BD, Baicker K, Epstein AM,. N Engl J Med 2012;367:1025-34.

46. + Quality of Care and Care
Coordination Issues

47. + Care Coordination/Avoidable hospital use

Advanced Illness/End of Life

Half of older Americans (51%) visited emergency
department in last month of life; 77% of those seen in ED
admitted to hospital

68% of admitted died in hospital

Americans’ broad preference is to die at home

Emergency department use in last month of life rare when
enrolled in hospice one month before death

Source: Alexander K. Smith et al, ―Half of Older Americans Seen In Emergency Department In Last
Month of Life; Most Admitted To Hospital, And Many Die There,‖ Health Affairs, June 2012

48. + High-Value Health Care Collaborative

Cleveland Clinic, Dartmouth-Hitchcock Medical Center, Denver
Health, Intermountain, Mayo, and nearly 20 others

Identified nine high volume, high cost, high variation
conditions to focus on:









total knee replacement
diabetes
congestive heart failure
depression
spine surgery
labor and delivery
asthma
hip surgery
bariatric surgery

49. + Variability, even among ―the best‖

Pooled data to examine differences in primary total knee
replacements (total US costs in 2008 = $9 billion)

Found substantial variations in such metrics as hospital
lengths-of-stay; longer operating times associated with
higher complication rates

Used findings to alter care, including more coordinated
management for complex patients

Source: Ivan M. Tomek et al, Health Affairs, June 2012 vol. 31 no. 6 1329 ff

50. + Comparison among institutions
Metric
A
B
C
D
E
Total
Mean
LOS
3.6
4.2
3.9
3.3
3.2
3.2
Median
LOS
3
4
3
3
3
3
By
MD # of
procedures
(annual)
0-99
3.6
3.8
4.4
3.5
3.3
3.5
200+
--
--
3.4
3.0
2.8
2.9
Surgery
on Mon.
3.6
4.2
3.7
3.2
2.9
3.1
On
Fri.
3.6
--
4.3
3.4
3.0
3.3
31.2%
difference,
low
to
high
16%
difference

51. Care Moving Out of Hospitals:
―Hospital At Home‖

Presbyterian Health Services,
New Mexico, in partnership with
Johns Hopkins

Identified patients who could be
―hospitalized‖ at home and
deployed physicians and nurses
to care for them

All results equal or better than in
hospital

Variable costs per stay are
$1000-$2000 lower = 19%

Patient satisfaction mean score =
90.7%

Source: Lesley Cryer et al, ―Cost For Hospital At Home PtientsWere 19 Percent Lower, With Equal
Johnny Baker, then 49, COPD patient in
―Hospital At Home‖ program

52. Telehealth/telemedicine

Project ECHO (Extension for
Community Healthcare Outcomes) in
New Mexico

Via technology, specialists at
University of New Mexico partner
with primary care clinicians in
underserved areas

Deliver complex specialty care to
patients with hepatitis C, asthma,
diabetes, pediatric obesity, chronic
pain, substance use disorders,
rheumatoid arthritis, cardiovascular
conditions, and mental illness

Source: ―Partnering Urban Academic Medical Centers And Rural
Primary Care Clinicians To Provide Complex Chronic Disease
Care‖. Sanjeev Arora et al, Health Affairs, June 2011

18 states now have laws mandating
payment for covered services using
broadband telehealth technology

53. + Virtual Visits: Verizon, Cisco, Others

54. + Waste in Health Care:
The Savings Opportunity

Estimated to equal 21% to 34% of all US health spending
(estimated $558 billion to $910 billion annually)
Source: Donald M. Berwick and Andrew D. Hackbarth, ―Reducing Waste in Health Care Spending,‖ ,
Journal of the American Medical Association, April 11, 2012.

55. +
Focus on ―Lean‖

Example in Washington: Virginia Mason

56. + Reengineering Primary Care at
Virginia Mason via Lean

Lean concept of jidoka - having the instructions and knowledge necessary to do one’s job
right the first time

Result: new ―standard work‖ in appointment scheduling

When a patient requests appointment, patient services representative checks the
computer to identify preventive tests patient is due for and schedules them right at the
point of service

Lean concept of having each team member doing the right work for their skill level, also
known as level loading or heijunka

Some tasks that physicians handled reassigned to others

Medical assistants practice to the top of certification, going through the problem list with
the patient, reviewing medication lists, verifying allergies, reviewing test results and
administering vaccines.

Source: http://www.virginiamasoninstitute.org/workfiles/Virginia-Mason-Institute-Case-StudyMistake-Proofing-Primary-Care.pdf

57. + Patient Engagement and Activation

Engagement = actions that people take for their health or health
care

Activation = understanding own role in care process and having
knowledge, skills and confidence to take it on

Increasingly understood as a distinguishable factor in achieving
Triple Aim (better health, better care, lower costs)

58. + Patient Activation Measure

Gauges the knowledge, skills and confidence essential to managing
one’s own health and healthcare

13-item questionnaire; patients rate selves on a scale

Statements include

“When all is said and done, I am the person who is responsible
for managing my health condition.

“I am confident that I can take actions that will help prevent or
minimize some symptoms or problems associated with my
health condition.

“I know what each of my prescribed medications do.”

Measure segments consumers into one of four progressively higher
activation levels

Source: Judith Hibbard et al, Health Affairs, Feb. 2013

59. + Patient Activation Measure

Patient activation and the ―3 M’s‖

It can be measured

It can be moved – patients’ low scores can be improved via
engagement over time

It matters – the degree to which patients are activated
predicts their factors such as their success in medication
adherence, use of emergency department, and their
likelihood of having avoidable readmissions

60. +
Lower Costs

61. ―Health care costs are the pounding headache to which all
of us in medicine will awaken each day for the rest of our
lives.‖
--Thomas Lee, former network president,
Partners
Healthcare System

62. Annual Growth Rates, Gross Domestic Product (GDP) And National Health Expenditures
(NHE), Calendar Years 1990–2022.
Cost
curve
still
not
bent
enough
Cuckler G A et al. Health Aff doi:10.1377/hlthaff.2013.0721
©2013 by Project HOPE - The People-to-People Health Foundation, Inc.

63. It’s the Prices, Stupid!
International Price Variation
Service
(US$)
Cost*
(US$; 25 and 95%tile)
Canada
US (4,001; 45,902)
Medical Tourism**
(US$)
Cost/Hosp. Stay
7,707
14,427
Angioplasty
12,581 New Zealand
29,055 US (18,266 – 60,448)
US CA Bypass
67,583
Normal Delivery
1,336
2,997
France
US (2,380 – 4,848)
India Hip R.
4,308
MRI Imaging
874
1,009
Switzerland
US (509-2590)
US Hip R.
*International Federation Health Plans 2010 Report
India CA Bypass 4,525
38,017

64. Safeway Reference Pricing For
Colonoscopy (Limit = $1,250)
Range of Prices Paid by Safeway for Colonoscopy in Three
Markets, plus Reference Price Limit Established in 2010
$6,000
$5,984
$5,000
$4,571
$4,000
$3,508
$3,000
MIN
MAX
$2,000
$848
$1,000
$1,386
$443
$Houston
Source: Safeway Health
San Francisco
Portland, OR
Safeway
reference price
set at $1,250

65. + How we (mostly) pay for health care

Paying by ―piecework‖ –
known as ―fee for service‖
for outcomes

Paying for the ―package‖ –
known as bundled
payment, capitation etc. –
and tying payment to
quality outcomes

66. + Payment Innovation:
Improving Value And Affordability
Old Model
New Model
Reward unit cost
Reward health
outcomes and
population health
Inadequate focus on
care efficiency and
patient centeredness
Lower cost while
improving patient
experience
Payment for unproven
services; limited
alignment with quality
Improve quality, safety
and evidence

67. + Performance-based Innovations under
CMS

Patient Centered Medical homes: e.g., all-payer national
pilot; federally qualified health centers; ½ of states in
Medicaid

Comprehensive Primary Care initiative

Accountable Care Organizations

State Demonstration Projects for Dual Eligibles

State Innovation Model Grants

Partnership for Patients/program to reduce avoidable
readmissions

68. + Throwing It Up Against The Wall
To See What Sticks?

69. + CMMI Innovations in Missouri

70. + Medicare ACO’s

71. + ACOs in Private Sector – e.g., Blue Shield of
California

Launched pilot ACO with Dignity Health (formerly Catholic
Health Care West) and Hill Physicians in January 2010 for
41,000 CalPERS employees and dependents

Global budget; shared upside and downside risk
 Tactics included eliminating unnecessary care, such as excessive
bariatric surgery; coordinating processes such as discharge
planning; reducing variation in practices and resources; reducing
pharmacy costs
 2010-11 combined results: $37 million in savings to CalPERS;
compounded annual growth rate for per member per month costs
was ~ 3% vs. ~7% for everyone else

72. + Medical homes in Private Sector

Alabama Health Improvement Initiative Medical Home Pilot –
Blue Cross Blue Shield of Alabama

Health plans in Maryland, Pennsylvania, Ohio, elsewhere
reporting savings from medical homes

E.g., in Maryland, CareFirst reported 2.7% savings in health
costs for its 1 million members in 2012

Group Health-University of Washington: TEAMcare program
for people with depression and either diabetes, heart disease
or both, saved as much as $594 per patient in outpatient
costs after expenses of program

73. + Performance-based Innovations under
CMS

Programs to reduce unnecessary readmissions

Partnership for Patients, Community-Based Care Transitions program
(organizations paid an all-inclusive rate per eligible discharge based on cost
of care transition services)

Medicare penalties: hospitals above certain ratios for 30-day readmissions in
3 conditions (heart attack, heart failure, pneumonia) begin to be penalized
under Medicare in October 2012

Readmissions rates in Medicare dropped 1 percentage from an average of 19
percent during 2008-2011 to 17.8 percent in 2012, according to CMS

Declines largest in hospitals participating in Partnership for Patients.

Source: Economic Report of the President, 2013

74. + Reducing Avoidable 30-Day Readmissions

75. + Hospital inpatient utilization down
and projected to decline further
40 percent difference
Sources: Milliman, Kaiser State Health Facts, American Hospital Association

76. +
State Innovation Models under
Center for Medicare and Medicaid
Innovation
Examples:
• Arkansas: majority of population
in patient-centered medical
homes
• Minnesota: majority of population in ACO’s, including
long-term services and
supports
• Oregon: ―Coordinated Care
Organizations‖

77. Overall Trends
+

Care moving out of hospital to ambulatory settings and
homes; inpatient utilization falling

Primary care fees up; hospital reimbursement down

Emphasis on team-based care with ―task-shifting‖

Primary care physician panels becoming larger; 1
physician in a team handling10,000 patients considered
goal in many systems

Population health approach dramatically increases
emphasis on prevention and patient engagement

78. Hospital of the Future?
+
Narayana Hrudayalaya (NH)

Narayana Hrudayalaya – ―God’s
Compassionate Care‖ –
Bangalore, India-based health and
hospital system/network

5,000 beds in India now; aims for
30,000 in next five years

Average cost of heart surgery is
$2,000 and is aiming for $800

―Our vision: Affordable Quality
Healthcare for the Masses
Worldwide‖

Partnering with Ascension Health
Alliance on $2 billion tertiary care
hospital in Cayman Islands
Above: Chairman, Dr. Devi Shetty; NH hospital in
Bangalore

79. Some Conclusions
+ About Health Reform

80. ―I don’t believe there’s any problem in
this country, no matter how tough it
is, that Americans, when they roll up
their sleeves, can’t completely ignore.‖
The Late Comedian
George Carlin

81. ―The Americans always do the right thing…after
they’ve exhausted all the other alternatives.‖
Sir Winston Churchill

82. ―There has never been a better time to be
an innovator in health care.‖
--Don Berwick, former administrator, CMS
Military Health System conference
January 2011

83. ―Those who say it can’t be done are usually interrupted
by others doing it.‖
--the late James Baldwin, American novelist, essayist
and playwright

84. “We always overestimate the change that will occur
in the next two years and underestimate the change
that will occur in the next ten.‖
--Bill Gates Jr.

85. The Final Verdict on Building an American Health and
Health Care System?
―Somebody has to do something, and it’s just incredibly
pathetic that it has to be us.‖
--the late Jerry Garcia of the Grateful Dead

86. +
The End