Health Care Reform An age of change; An era of opportunity Medicine Grand Rounds / Indiana University School of Medicine Presented by Ora Hirsch Pescovitz, M.D., Executive Vice President for Medical Affairs, University of Michigan, & Chief Executive Officer of the U-M Health System / March 23, 2012 The University of Michigan Health System University of Michigan U-M Health System 3 Hospitals & >30 Health Centers U-M Medical School (incl.1,625 member Faculty Group Practice) 28 Schools & Colleges (3 campuses) U-M School of Nursing (clinical services) Michigan Health Corp. The University of Michigan Health System By the numbers • $3B in overall revenue • 22,000 employees • 895 staffed beds • 45,000 discharges • 1.9M outpatient visits • 46,000 surgical cases National rankings • Hospitals: #14; Honor Roll 17 consecutive years (USNWR) • Mott is the only ranked children’s hospital in MI (USNWR) • One of 5 hospitals to have both USNWR Honor Roll and Leapfrog Group top designation • Tied for 2nd in residency directors’ ranking of Medical School graduates’ “desirability “(USNWR) • #6 in NIH research funding ($319M; 2.76% market share) • Researchers produce an average 10 publications/day National Challenges The Cost of American Health Care • U.S. health expenditures hit $2.6 trillion in 2010 ($8,402 per capita) • Expected to reach $4.6 trillion in 2020 – Nearly half will come from government sources Growth in Total Health Care Expenditure Per Capita, 1970-2008 $8,000 $7,911 Per Capita Spending - PPP Adjusted $7,000 $6,000 United States $5,000 Switzerland $4,000 Canada $3,000 OECD Average $2,000 Sweden $1,000 $0 1970 1975 1980 1985 1990 1995 2000 2005 United Kingdom The Insurance Factor • In 2010, there were 49 million uninsured nonelderly Americans • The U.S. is one of only 3 developed countries where a sizable share of its population is uninsured (Mexico, Turkey) • Americans say they will skip medicines or medical appointments due to their high cost • Uninsured people receive fewer preventive and diagnostic services, and tend to be more severely ill when diagnosed • Research shows that insurance coverage could reduce mortality by 4-25%, depending on condition The Quality of American Health Care • “Quality health care means doing the right thing at the right time in the right way for the right person and having the best results possible.” (AHRQ) • What are the dimensions of good quality care? 1. 2. 3. 4. 5. 6. 7. 8. Acceptability Accessibility Appropriateness Care environment and amenities Competence/capability Continuity Expenditure or cost Effectiveness 9. 10. 11. 12. 13. 14. 15. Efficiency Equity Governance Patient-centeredness or responsiveness Safety Sustainability Timeliness The Quality of American Health Care Infant Mortality Rate: Deaths per 1,000 live births (2011 est.) 7 6.06 6 4.92 5 4.62 4.08 4 3 3.43 2.74 2.78 4.24 3.52 INDIANA 7.3 2 1 0 MICHIGAN 7.7 The Quality of American Health Care Compared to patients in other countries, Americans are less satisfied with: • The quality of communication they have with their medical team • Their engagement in medical decision-making • Access to care outside of traditional working hours Ready for Change? “We’re ready to begin the next phase of keeping things exactly the way they are.” 12 If improvement [of the American health care system] is the plan, then we own the plan. Government can’t do it. Don Berwick Payers can’t do it. Regulators can’t do it. Only the people who give the care can improve the care. My Perspective • We are those people • Only we can improve health care processes, because we create, manage and use those processes. • Only we can improve the quality and safety of care, because we discover and deliver that care. Affordable Care Act: The blueprint for change? Basic Goals of Affordable Care Act • Insure more Americans • Increase quality, safety and efficiency of care for individuals • Improve the health of populations • Contain and control national health care spending • Adopt reimbursement models based on quality, performance and outcomes • Improve care delivery systems through increased coordination, shared accountability, better information technology and new business models • Right care, right time, right place, right cost Public Views on ACA 2 Years Later Given what you know about the health reform law, do you have a generally favorable or generally unfavorable opinion of it? Q: 80% Favorable Unfavorable Don’t know/Refused 60% 48 46 50 45 44 40% 40 41 44 43 41 40 51 50 49 42 42 42 40 41 48 46 44 46 43 41 43 41 42 41 42 42 44 42 39 41 18 14 10 44 43 42 41 41% 40% 37 34 20% 14 43 37 35 14 44 43 18 18 15 12 11 13 9 14 15 17 19 16 15 17 19 19% 15 12 8 0% Apr May Jun 2010 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2011 Jul Aug Sep Oct Nov Dec Jan 2012 Feb Mar Public Views on ACA 2 Years Later Q: If the Supreme Court rules that the federal government cannot require Americans to have health insurance, do you expect some parts of the health care law will still be implemented, or do you think this will effectively mean the end of the entire law? 28% Effectively means end of the entire law 10% Don’t know/ Refused 62% Some parts of the law will still be implemented My Best Guess on What Sticks Least Controversial • Children on parents’ insurance through age 26 • Protection for individuals with pre-existing conditions • Doughnut hole fill for Medicare recipients • Insuring the uninsured My Best Guess on What Sticks Percent of Uninsured Adults 19–64 2008–2009 2019 (estimated) WA VT NH ME MT NH WA ND VT OR ID NY WI SD MI WY PA IA NE UT IL CO KS MO NJ OH IN NV CA MA WV VA KY RI CT MN OR ID MI PA IA NE IL CO CA KS MO AZ NM MS TX AL NC AZ GA NM OK SC AR MS LA TX AL GA LA FL AK VA TN SC AR WV KY TN OK OH IN NV UT FL AK HI HI 23% or more 19%–22.9% 8%–13.9% 14%–18.9% Less than 8% MA NY WI SD WY DE MD DC NC ME ND MT MN NJ RI CT DE MD DC My Best Guess on What Sticks More Controversial • Transition to pay-for-performance reimbursement • Development and implementation of better information management systems • Establishment of Accountable Care Organizations: Systems of providers responsible for the quality, cost and delivery of health care for a population Payer $$$ Based on quality and performance indicators ACO Outpatient Care Hospital Care Schoolbased Clinics PATIENT Community Health & Social Services Nursing Home Home Care Reporting Integrated Health IT (EMR/PHR, Portals, etc.) Outpatient Care Hospital Care Schoolbased Clinics Integrated Business Systems (i.e. Bundled payments, Partial or Full Capitation) Patient Engagement PATIENT Community Health & Social Services Reimbursement Structure (Quality, Satisfaction, Clinical Data, Research Data) Nursing Home Home Care Physician Engagement & Alignment Can ACOs work? I think so. Laying The Foundation Collaborative Quality Initiatives • Physicians at more than 50 hospitals across MI worked together to share and analyze clinical data • Goal: Improve quality and reduce costs of care Laying The Foundation Collaborative Quality Initiatives: Outcomes • Angioplasty – Reductions in kidney injury, stroke, transfusions and deaths – Saved $8.5M/year • Bariatric Surgery – Reduced readmissions by 35%, LOS by 20%, adverse events by 22% and complications by 13% – Saved $4.1M/year • General & Vascular Surgery – Reduced surgical site infections by 18%; complications by 37% – Saved $13M/year Laying The Foundation Physician Group Incentive Program: Outcomes • Established a platform for statewide multi-disciplinary health services research • Improved quality of care for patients with chronic conditions • Increased patient capacity at physician practices through care redesign • Savings – Ex: $20M/year in Radiology Services An ACO Case Study: Physician Group Practice Medicare Demonstration Project (PGP) PGP: Why We Participated • Develop skills for population management • Leverage experience from running M-CARE health plan for 20 years • Prepare for Medicare Value Based Purchasing and pay-forperformance • Collaborate across specialties and with hospitals, leading physician groups and CMS • Earn financial returns from shared savings • Opportunity to be part of Medicare’s first Pay for Performance ACO prototype, as outlined in the Affordable Care Act PGP: Overview • Participation: 10 large U.S. physician groups, incl. U-M Faculty Group Practice • Duration: 2005-2010 • Goals: – Determine whether care can be coordinated in a way that generates Medicare savings in acute, ambulatory and postacute care settings – Reduce Medicare cost growth while maintaining quality (32 quality metrics) PGP: Outcomes • All 10 groups met at least 29 of the 32 quality goals • U-M was one of two groups to achieve success in financial measures all five years – UM saved Medicare >$46M; Earned back $17M • Demonstrated lower readmission rates • Improved care coordination for high risk/high cost patients • Received national recognition as a leader in health care value and in developing ACOs ACO Next Steps • Now participating in CMS Innovation Center’s Pioneer ACO Model – Intended to test the impact of different payment arrangements in achieving quality and cost goals – 32 provider organizations in 18 states are participating Personalized Medicine Personalized Medicine 1990: U.S. Human Genome Project initiated 2000: INGEN created (LE, IU & IUSM) • $153 million investment by LE • $744M in awards and grants supported by INGEN • 3,725 articles published with INGEN support • Recruitment of 94 new faculty • Indiana Physician-Scientist Initiative ($60M LE investment) • Indiana Institute for Personalized Medicine 2001: Scientists reported “working draft” of the human genome Personalized Medicine 2003: First human genome sequenced Time per genome Year Cost per Genome 2007 $9,408,739 16 months (ILMN 1G) 2009 $232,735 26 days (ILMN GAIIx) 2010 $46,774 11 days (ILMN HiSeq2000) 2011 $20,963 11 days (ILMN HiSeq2000) 2012 (est) $7,950 25 hours (ILMN HiSeq 2500) Data generation only, 1 instrument Source: The Genome Institute at Washington University, Washington University School of Medicine Personalized Medicine Before 2013, I predict that: We will sequence for under $1,000 and in less than 4 hours. (Faster than Moore’s Law) We will be able to diagnose diseases and treat patients like never before. What is the Future of Health Care? We have an opportunity to rethink and advance medicine. This is an era of unprecedented opportunity. The Future of Health Care Through Discovery Right Target [Translation] Right Mechanism [Discovery] Right Therapy for the Right Patient at the Right Time [Personalized Medicine] Beery Family: Dealing With Dystonia http://dystonia.thebeerys.com/Video/Video_P layer/VideoId/71/Today-Show-October-272011.aspx “When it comes to the future, there are three kinds of people: Those who let it happen; Those who make it happen; Those who wonder what happened.” John M. Richardson, Jr. You are the people who make it happen.