The Changing Environment in Health Reform - Dr. John Lumpkin, SVP & Director, Healthcare Group, Robert Wood Johnson Foundation

1. The Changing Environment
in Health Reform
John R Lumpkin MD MPH
SVP & Health Care Director
Robert Wood Johnson Foundation

2. Victory awaits him who has everything in order – luck people call it. Defeat is
certain for him who has neglected to take necessary precautions in time; this is
called bad luck
Roald Amundsen, Norwegian polar explorer

3.  Why was health reform on the
National agenda in 2009?
 The same reason why health reform is
on today’s agenda:

5. Insurance Matters
• Medicaid expansion
• 90,000 applied
• 10,000 enrolled via lottery
• Outcomes
• Higher use of preventive services
• Better physical and mental health
• Less medical related debt

6. The system was/is broken:
 Insurance market concerns
• Pre-existing conditions
• Denial of coverage
• Retroactive denial of coverage
• Excessive rating gradients
• Annual and lifetime limits

7. Basics of Health Reform
 Insurance Market reforms
 Insurance works best if the risk pool
is large
 Allowances for the working poor

8. 2014 Coverage Expansion
• Protects consumers in the insurance market
• Requires individuals to purchase insurance
• Requires employers to purchase insurance
• Creates health insurance exchanges
• Provides subsidies
• Expands Medicaid

9. Coverage Expansion Categories
Medicaid Premium
Expansion Subsidy
138% 400%
Medicaid
Subsidy
$29,326 $88,000
Family Family of
Of Four Four
0 100 200 300 400 500
Federal Poverty Level

10. Supreme Court Decision
• Individual
mandate
constitutional
• Medicaid
expansion
constitutional,
but now a state
option

11. Supreme Court Decision
Supreme Court decision
Total Expansion = 32 Million
Exchange
Medicaid 15M
17M
Sources: Urban Institute analysis, HIPSM 2011.

12. The Future is already here, it is not
very evenly distributed.
William Gibson - 1993

13. Average Annual Contributions to Premiums for Family
Coverage, 1999-2011
$15,073*
$13,770*
$13,375*
$12,680*
$12,106*
$11,480*
$10,880*
$9,950*
$9,068*
$8,003*
$7,061*
$6,438*
$5,791
* Estimate is statistically different from estimate for the previous year shown (p<.05).
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2011.

14. Cumulative Percent Change in National Health Expenditures, by
Selected Sources of Funds, 2000-2010
Medicare
Medicaid
Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health
Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health Expenditures by type of service and source
of funds, CY 1960-2010; file nhe2010.zip).

15. Healthy Life Expectancy at Age
60, 2007
Developed by the World Health Organization, healthy life expectancy is based on
life expectancy adjusted for time spent in poor health because of disease and/or injury
Years
30
Women Men
22
21 21 21 21 20
20 20 20 20 20 20 20 20 19 19 19
20 18 18 18 19 19 19 19
18 18 18 18 18
17
16 17 18 17 16 17 17 17 18 17 17 17
16 16 16
15
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Data: Provided by C. Mathers. Unpublished data set consistent with HALE estimates published in
World Health Statistics 2009 (Geneva: World Health Organization).
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.

16. Mortality Amenable to Health Care
Deaths Avoidable Through Health Care:Nolte & McKee – Health Affairs August 29, 2012

17. EXHIBIT 16
Medical, Medication, and Lab Errors
Percent of adults reported medical mistake, medication error, or lab error in past two years
40
32
30 28
26
22 23
20 18 19
16
10
0
NETH FRA GER UK NZ CAN AUS US
Sicker adults met at least one of the following criteria: health is fair or poor; serious illness in past two years; or was hospitalized or
had major surgery in past two years. AUS=Australia; CAN=Canada; FRA=France; GER=Germany; NETH=Netherlands; NZ=New
Zealand; UK=United Kingdom; US=United States.
Data: 2008 Commonwealth Fund International Health Policy Survey.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.

18. Test Results or Records Not Available at Time of Appointment
Percent of adults reported test results or records were not available at time of appointment
in past two years
30
23
20 18 18
15 15 15
13
10 9
0
NETH GER AUS FRA UK CAN NZ US
Sicker adults met at least one of the following criteria: health is fair or poor; serious illness in past two years; or was hospitalized or
had major surgery in past two years. AUS=Australia; CAN=Canada; FRA=France; GER=Germany; NETH=Netherlands; NZ=New
Zealand; UK=United Kingdom; US=United States.
Data: 2008 Commonwealth Fund International Health Policy Survey.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.

23. We have run out of money, it
is time to start thinking.
Ernest Rutherford (1871-1937)
Nobel Laureate

24. Six Drivers of Excess Cost
Six Drivers of Excess Cost
Driver Examples Excess cost
Unnecessary services Defensive medicine, overuse $210 B
Inefficient services Mistakes, duplication $130 B
Excess administrative Administrative inefficiencies
$190 B
costs by payers and providers
Prices higher than
Prices that are too high $105 B
competitive benchmarks
Missed prevention Missed screenings and
$55 B
opportunities condition monitoring
Fraud Payer, provider, patient fraud $75 B
Source: Institute of Medicine
Better Care at Lower Cost
September, 2012

25. Key Trends in Response
 Transparency
 Payment reform
 Clinical re-engineering
 Informatics

26. Key Trends in Response
 Transparency
 Payment reform
 Clinical re-engineering
 Informatics

27. Consumer Reports

28. Community Highlight: Minnesota

31. Key Trends in Response
 Transparency
 Payment reform
 Clinical re-engineering
 Informatics

32. Payment Reform
 Shared Savings
 Bundled Payment
 Capitation
 Accountable Care Organizations (ACO)

33. Payment Reform
 Shared Savings

34. Payment Reform
 Shared Savings
 Bundled Payment
• Episode of acute care or procedure
• Treatment of chronic condition over time

36. Payment Reform
 Shared Savings
 Bundled Payment
 Capitation
• Upside benefit
• Downside risk

37. Payment Reform
 Shared Savings
 Bundled Payment
 Capitation
 Accountable Care Organizations (ACO)

38. Accountable Care Organizations
 Ability to provide care and manage patients
across the continuum of care
 Capability to prospectively plan budgets and
resource needs
 Sufficient size to support comprehensive, valid,
and reliable performance measurement
• 33 measures
• Patient experience
• Care coordination/safety
• Preventive health
• At-risk populations

39. Key Trends in Response
 Transparency
 Payment reform
 Clinical re-engineering
 Informatics

40. Clinical Re-Engineering
• Improved care coordination and communication
• Improved access – physician extenders – email – phone call etc.
• Prevention and early diagnosis
• ED and Immediate Care Center visits
• Increase generic medication utilization
• Hospital re-admissions and multiple ED visits
• Improved management of complex patients
• Care Coordination
• High Resource Utilizers

41. Key Trends in Response
 Transparency
 Payment reform
 Clinical re-engineering
 Informatics

42. Complexity
Increasing amounts of information

43. Current practice depends upon the clinical
decision-making capacity and reliability of
autonomous individual practitioners, for classes
of problems that routinely exceeds the bounds of
unaided human cognition
Daniel R. Masys, M.D.
2001 IOM Annual Meeting

44. Complexity
Clinical Complexity
• Physicians in private practice interact with as many as 229 other
physicians in 117 different practices just for their Medicare patient
population
• ICU clinicians have 180 activities per patient per day
• Chronic disease: a 79 year old patient with osteoporosis,
osteoarthritis, type 2 diabetes, hypertension, and chronic
obstructive pulmonary disease: 19 medications per day

45. The Vision
New Tools
• Computing Power
• Connectivity
• Improvements in organizational capabilities
• Collaboration between teams of clinicians and with
patients

47. The Future
 Big data
• Predictive Modeling
• Next infectious disease hot spot in hospital?
• How will utilization change with Medicaid expansion in ACA?
• How to predict patient demand to minimize use of contract nurses?
 Liberated data
 Patient generated data
 Advanced sensors

48. Archimedes

49. The Future
 Big data
• Predictive Modeling
• Next infectious disease hot spot in hospital?
• How will utilization change with Medicaid expansion in ACA?
• How to predict patient demand to minimize use of contract nurses?
• Hot spotting
 Liberated data
 Patient generated data
 Advanced sensors

50. 49

53. Pills with chips embedded track medication use

54. Change is the law of life. And those who look
only to the past or present are certain to miss the
future.
- John F. Kennedy

55. September 21, 2012 54

56. Key findings
 Health IT can improve patient safety in some areas such as
medication safety; however, there are significant gaps in the
literature regarding how health IT impacts patient safety
overall
 Safer implementation and use begins with viewing health IT
as part of a larger sociotechnical system
 All stakeholders need to work together to improve patient
safety
Slide 55 of 23

57. Current state of health IT
 Literature has shown that health IT may lead to safer care
and/or introduce new safety risks
 Magnitude of harm and impact of health IT on patient safety
is not well known because:
– Heterogeneous nature of health IT products
– Diverse impact on different clinical environments and
workflow
– Legal barriers and vendor contracts
– Inadequate and limited evidence in the literature
Slide 56 of 23

58. Recommendations: Summary
Current market forces are not adequately addressing the
potential risks associated with use of health IT.
All stakeholders must coordinate efforts to identify and
understand patient safety risks associated with health IT by:
 Facilitating the free flow of information
 Creating a reporting and investigating system for health IT–
related deaths, serious injuries, or unsafe conditions
 Researching and developing standards and criteria for safe
design, implementation, and use of health IT
Slide 57 of 23

59. Deadly Overuse
Disease X
Severe case mortality 50%  100 cases – 50 die
Treatment Y 50% to 25%  100 cases – 25 die
 Fatality rate 10%  100 cases – 35 die
New test
10% are severe  100 cases – 5 die
With Treatment  100 cases – 12 die

60. Deadly Overuse
Disease X
Severe case mortality 50%  100 cases – 50 die
Treatment y 50% to 25%  100 cases – 25 die
Fatality rate 10%  100 cases – 35 die
New test
10% are severe  100 cases – 5 die
With Treatment  100 cases – 12 die
Standard diagnosis with treatment 30% reduction
Enhanced diagnosis with treatment 140% increase