[PPT] - Health Legislation, Budget and Reform Update The 2011 NM PowerPoint Presentation

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Dan Derksen, MD Professor, Department of Family & Community Medicine Senior Fellow, Robert Wood Johnson Center for Health Policy

The 2011 NM Legislative Session and Federal Health Budget Cuts

March 30th, 2011

Family & Community Medicine Grand Rounds

Health Legislation, Budget and Reform Update

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New Mexico

Last in Access to Care*

32/33 Counties HPSA/MUA/P Uninsured 23% (49/50) Hispanic 44% Native Am 10%

*Commonwealth 2009 Study: Accessed 3/29/11 http://www.commonwealthfund.org/Maps-and-Data/State-Data-Center/State-Scorecard.aspx

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NM Legislature

Begins the third Tuesday in January
Odd years = 60 day session
Even years = 30 days (budget,

appropriations, priority items on the “Governor‟s call”)

50th Session: Jan 18 – Mar 19, 2011

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NM Legislature

42 Senators (27 D and 15 R)
70 Representatives (36 D, 33 R, 1

unaffiliated)

Nation‟s only unpaid volunteer

citizens‟ Legislature (per diem of $159 day)

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Who Represents You?

www.legis.state.nm
www.bernco.gov
then go to “Elected Officials” then to

“Clerk” then “Where Do I Vote”

When to advocate – between sessions (setting

agenda, formulating policy), during a session (informing policy), after a session (implementing policy), campaign

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Ten Essential Services of Public Health

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NM General Fund Expenditures „09

KFF State Health Facts 3/29/11 at: http://www.statehealthfacts.org/profileind.jsp?rgn=33&ind=33&cat=1

NM $ NM % US % Education K-12 $2.5 Billion 41.5% 35.8% Higher Education $0.87 Billion 14.3% 11.5% Medicaid $0.64 Billion 10.5% 15.7% Total Budget $6.08 Billion

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Governor‟s Proposed Budget FY‟12

$5.4 Billion General Fund Spending
4.4% Increase from 2011
Balance budget w/o increasing taxes
Preserve spending in the classroom K-12
Maintain health spending for vulnerable pop
Gov. Martinez Executive Budget Accessed 3/29/11 at:

http://budget.nmdfa.state.nm.us/cms/kunde/rts/budgetnmdfastatenmus/docs/1043714 049-01-10-2011-13-28-46.pdf

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HB 2 Budget FY‟12

$5.47 B General Fund Spending
Balanced w/o increasing taxes (state

employees pay 3.5% more retirement)

Preserve spending in the classroom

(1.5% cut non-classroom)

Maintain health spending for

vulnerable populations (# on Medicaid will grow, GF support will approach $1 billion in 2012, 4:1 federal match)

HB 2 accessed 3/29/11 at: http://www.nmlegis.gov/Sessions/11%20Regular/firs/HB0002.pdf

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Health Bills Passed 2011

Introduced: 1,511 total = bills + joint

memorials + resolutions

Passed: 284 (129 House, 155 Senate)
Bills Passed = 18.8%
Governor has until April 8 to sign or veto
Unsigned = “pocket veto”

Personal communication Michael Hely, NM Leg Council Service 3/29/11

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Health Bills Passed 2011

SB 14 Health Care Work Force Data,

Analysis & Policy Act

SB 33/370 Health Insurance Exchange
SB 333 Amend the Medical Malpractice Act
Gov. Martinez Executive Budget Accessed 3/29/11 at:

http://budget.nmdfa.state.nm.us/cms/kunde/rts/budgetnmdfastatenmus/docs/1043714 049-01-10-2011-13-28-46.pdf

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If we increase NM‟s primary care supply by 400 FTE‟s data shows we will:

Improve access to quality care.
Create 9,200 jobs in New Mexico
Generate $600 million in revenue for

communities

Addressing Access to Quality Care

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Principles of NM‟s Reform: 1)Decreased Statute of Limitations 2)Instituted Mandatory Screening Panel 3)Capped Non-Medical Damages, Since 1995: $600,000 ($200k primary, and $400,000 PCF)

Professional Liability Reform

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Protect individual physicians covered

and their corporations

Create a separate hospital comp. fund,

limit liability ($1.5 million)

Limit punitive damages (2X award)
Change to “Professional Liability Act”

Why Open Med Mal Act in 2011?

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Cap increased from 600,000 to $1 m
Cap increase 3%/yr or CPI (lesser of)
No separate hospital comp. fund
Corporations Covered
No limit punitive damages
Still “Medical Malpractice Act”

But what we got for 2012…

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Regional Professional Liability Premiums

Source: Medical Liability Monitor 2009

http://www.mymedicalmalpracticeinsurance.com/new-mexico-medical-malpractice-insurance.php#historicdata

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New Mexico Public Payer

Payer Source # New Mexicans Medicaid 550,000 Uninsured 450,000 Medicare 300,000 Other Public 150,000 CHAMPUS Tricare 50,000 Subtotal Public 1,500,000 Total Pop. NM 2,000,000

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Starting in 2014 in New Mexico

350,000 to 400,000 uninsured New

Mexicans will have health insurance

This will increase demand 25-30%
We need to prime the health

professions pipeline NOW!

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New Mexico‟s Physician Shortage Numbers and Distribution Problems

NM has a shortage of 2000 physicians currently The largest shortage is of primary care physicians (400 FTE‟s short) Of the 3,100 FTE active clinical physicians, 1,500 (48%) practice in Bernalillo County (which has 31%

f NM‟s population)

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40% (N=1,769)1 of NM‟s Total (N = 4,409)2 physicians with active license & NM Address are grads of UNM SOM‟s medical school/ residency programs

1UNM SOM Graduate Location Report 2010 2New Mexico Medical Board 2010 Official List of Active Physicians

Socorro 8/16 San Juan Taos McKinley Sandoval Los Alamos Santa Fe Cibola Sierra 3/10 Grant 20/65 Luna 2/23 Hidalgo 1/2 Doña Ana Colfax 4/17 Union 0/3 Mora 0/1 Harding 0/0 San Miguel Bernalillo Valencia Torrance Lincoln 8/29 Otero Eddy 10/62 Chaves Lea Roosevelt 4/16 De Baca 0/0 Guadalupe Quay 2/9 Curry 8/52 Rio Arriba Catron 54/165 16/46 22/73 21/55 26/102 54/128 131/489 21/54 1/2 3/3 1191/2412 14/23 4/15 0/3 38/115 7/51 16/61 80/307

UNM SOM Medical School and/or Residency Graduates by NM County - 2009 and NM Physicians with Active Licenses

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Can we keep more of our graduates in NM? YES - From 2005-2009, the # UNM grads practicing in NM increased by 103 per year

< http://hsc.unm.edu/som/Locations/ >

From 2000-2005, the # UNM grads practicing in NM increased by 27 per year. From 1994-1999, the # UNM grads practicing in NM increased by 60 per year.

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HB 710 Medical Homes

Medical Home Pilots

Medicaid CHIP SCI

Rep. Danice Picraux

Signed by Gov. Richardson 4/09

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Experiential Learning - RWJ Health Policy Fellowship

Dan Derksen, M.D.

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RWJ Health Policy Fellowship

Embedded in the Congressional Staff

POTUS

Finance Committee Health, Education, Labor & Pensions (HELP) Committee U.S. Senator Jeff Bingaman D-NM Elected in 1982, 5th Term Will Retire in 2012

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HR 3590 Patient Protection and Affordable Health Care for America Act

TITLE V – HEALTH CARE WORKFORCE

Subtitle B – Innovations in the Health Care Workforce

Sec. 5101.

National health care workforce commission.

Sec. 5102.

State health care workforce development grants.

Sec. 5103.

Health care workforce assessment.

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Health Workforce & the Affordable Care Act

$230 m Teaching Health Centers
$168 m PCP Training
$32 m Physician Asst Training
$45 m NP Training & Practice
$5 m State Hlth Workforce Grants
$1.5 b National Hlth Svc Corps

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Affordable Care Act

Covers 32 million

uninsured

Costs $794 billion
Reduces deficit

$138 billion 2010- 19

Congressional Budget Office, Joint Commission on Taxation

Accessed 8/23/10: < http://www.cbo.gov> < HTTP://www.thomas.gov >

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HR 3590 “Patient Protection and Affordable Health Care Act”

What happened 2010 :

Prohibits lifetime limits and recission of coverage
Requires coverage of preventive services
Reviews premium increases & “medical loss ratio”
Prohibits coverage denial children w pre-existing conditions
Reauthorizes, amends Indian Health Care Improvement Act

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HR 3590 “Patient Protection and Affordable Health Care Act”

What Happens In 2011:

10% Medicare bonus payment primary care
Creates CMS Innovation Center
Requires insurers to spend 85% premiums on claims
Expands CHC, NHSC by $10 billion over 5 years

In 2013

Increases Medicaid up to Medicare rates for primary care
States must demonstrate ability to operate a health

insurance exchange

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HR 3590 “Patient Protection and Affordable Health Care Act”

In 2014:

Creates health insurance exchanges
Requires guaranteed issue, adjusted community rating
Subsidizes premiums for 133 to 400% FPL
FPL family of 3 = $18,310
Expands Medicaid to those <133% FPL (100% 3 yr FMAP)

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Affordable Care Act In 2014 – THE MANDATE:

Taxes individuals without coverage 2.5%
f household income or $695 - $2,085 yr
Taxes businesses >50 employees w/o

insurance $2000/fte

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Growing Uninsured…. Uninsured in U.S. 2000 38.4 Million 2009 50.7 Million

US Census Bureau: Accessed 2/10/11 < http://www.census.gov/ >.

That‟s a 32% Increase in Ten Years!

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Congressional Budget Office: Peter Orszag

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$2.4 Trillion on Health (17% GDP)* $0.7 to 1.2 Trillion Waste (5% GDP, 30-50% health spending)**

$1.2 Trillion Wasted

$210 B - Overtesting $210 B - Claims Processing $155 B - Defensive Medicine $100 B - Ignoring MD Orders

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Top 3 Reasons We Need to Reform the Way We Manage Chronic Disease

Wennberg J: Tracking Health: A Researcher‟s Quest to Understand Health Care. Oxford Press. New York. 2010.

1) Overreliance on acute care “rescue medicine” for the chronically ill (DM) doesn‟t work 2) In looking to save money – hospitals (1/3 Medicare dollars spent in last 2 yrs of life, half spent in hospitals) 3) It‟s the quantity, stupid. 4 fold variation 306 hospital regions

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H.R. 2: “Repealing the Job-Killing Health Care Law Act”

2 This Act may be cited as the ‘‘Repealing the Job- 3 Killing Health Care Law Act’’. 4 SEC. 2. REPEAL OF THE JOB-KILLING HEALTH CARE LAW 5 AND HEALTH CARE-RELATED PROVISIONS IN 6 THE HEALTH CARE AND EDUCATION REC- 7 ONCILIATION ACT OF 2010. 8 (a) JOB-KILLING HEALTH CARE LAW.—Effective as 9 of the enactment of Public Law 111–148, such Act is re- 10 pealed, and the provisions of law amended or repealed by 11 such Act are restored or revived as if such Act had not 12 been enacted.

Accessed 2/2/11: < HTTP://www.thomas.gov >

1/19/11 PASSED HOUSE 245-189

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CBO Analysis of H.R. 2: “Repealing the Job-Killing Health Care Law Act”

3 Pages, CBO ESTIMATES the bill will:

Increase the federal deficit over 10 years

between 2012 and 2021: $230 billion

Increase uninsured by 2019 by 32 million,

to total 54 million uninsured

Elmendorf D. Letter to Speaker John Boehner Dated 1/6/11. < http://www.cbo.gov >

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Health Care Adds 19,000 Jobs in November

U.S. Economy Gained 39,000 Jobs Nov 2010 Health Care Employment Added 19,000 Jobs Health Care Industry Added an Average of 21,000 Jobs/Month in 2010

U.S. Bureau of Labor Statistics 12/3/10 Accessed at www.amednews.com

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Moving Upstream Applied Health Policy

Changing individual behavior is limited, &

more difficult with current incentive systems

Solving problems from a systems perspective
Preventing future disease and suffering
Applying wisdom from clinical practice

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The Nation‟s Physician Shortage

By 2025, the U.S. will be short 159,300 physicians The largest shortage – 46,000 primary care physicians

Dill MJ, Salsberg ES, 2008. “The Complexities of Physician Supply and Demand: Projections through 2025. Association of American Medical Colleges.

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Your Investment: Medical Student Debt

AAMC 2010 GQ Medical School Graduation Questionnaire. At: https://www.aamc.org/download/140716/data/2010_gq_all_schools.pdf

$124,598 Avg. Educational Debt of All Med Student Grads $158,996 Avg. Educational Debt of Indebted Med Student Grads

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Specialty 2010 Avg. Income Orthopedics $485,297 Gastroenterology $409,628 Cardiology(non-inv) $393,181 Urology $391,406 Cardiology(non-inv) $391,406 Dermatology $371,281 Emergency Med $266,826 Psychiatry $205,934

Gen. Internal Med

$205,671

Gen. Pediatrics

$193,135 Family Medicine $187,821

Average Compensation by Specialty Modern Healthcare Physician Compensation Survey 2010

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Payment Issues in Primary Care

>40% of primary care services (patient communication, arranging

referrals) not reimbursed in fee-for-service methodology1

Payment for procedures is 3X payment for primary care2

– For example, 30 minutes spent performing a surgical procedure vs a 30- minute visit with a patient with diabetes

AMA‟s specialty dominated RUC Committee (Resource Based Relative

Value Scale Update Committee) advises CMS (accepts >90% RUC rec‟s)

Family physician income is half that of specialists
1. Adams J et al. Patient-centered medical home. IBM Web site. www-

935.ibm.com/services/us/gbs/bus/html/gbs-medical-home.html. Accessed July 10, 2009.

2. Bodenheimer T. N Engl J Med. 2006;355:861–864.

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Graduates Intention to Pursue a Generalist Career

5 10 15 20 25 30 35 40 Percentage

Source: AAMC Graduation Questionnaire

1993 Clinton 1998 SGR

In Just 10 Years, US Grads Entering FM Declined >50%

Record number of students match in family medicine residencies

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Federal Funding Public Health Service Act

PHSA Discretionary Funding FY‟09 In Millions Title III – National Health Service Corps $135 Title VII – Primary Care, Dentistry $222 Title VIII - Nursing $171 Total PHSA Health Professions $528 M

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IME - Indirect Medical Education DGME - Direct Graduate Medical Education SSA Entitlement Funding

In Billions % Total IME $8.2 68% DGME $3.8 32% TOTAL $12 B 100%

Federal Funding of Teaching Hospitals – Social Security Act – Medicare/Medicaid

Derksen D, Whelan EM: Closing the Health Workforce Gap: Reforming Federal Health Care Workforce Policies to Meet the Needs of the 21st Century. Center for American Progress 2010. http://www.americanprogress.org/issues/2010/01/health_workforce.html

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For every $1 PHSA, $24 SSA go to teaching hospitals…

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2011 Appropriation

Federal fiscal year ends 9/30/11
Continuing resolution extends funding

to April 8, or government shutdown

Major battles over budget cuts –

discretionary spending targeted

“Third Rail” budget cuts to

entitlement programs - Social Security, Medicare, Medicaid

SLIDE 49

New Mexico‟s Innovative Reforms

Teaching Health Centers - Health Commons

Community Based, Team Based Education 50 to 75% Primary Care Graduates Practice in NM

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Physicians, Providers Community

Family Medicine Foundation

Office Staff Patients

Health IT

Improved Outcomes

Practice Organization Coordinated Care

Performance Measurement Public Reporting

Patient Experience Meaningful Use of EHR

Primary Care

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Health Information Technology for Economic and Clinical Health Act - HITECH

ARRA Stimulus Provision to Promote

Adoption Health Information Technology - HIT

Medicare + Medicaid Incentives $30

Billion (Penalties Come Later!) for Providers and Hospitals

Congressional Research Service 4/27/09

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ACOs Synergistic With Other Payment Reforms

ACOs strengthen ongoing reform efforts:

Patient Centered Medical home
Episode of Care, readmission initiatives
HIT, HIE

ACOs operate in conjunction with current payment structures

FFS
Bundled payments
Partial/full capitation

ACOs

Confusing aims Absent or poor measurement Fragmented care Wrong financial incentives

Source: Mark McClellan MD, Brookings Institute 2010

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Truth has no special time

f its own. Its hour is

now – always, and indeed most truly when it seems most unsuitable to actual circumstances.

Albert Schweitzer

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