THREE BREAKTHROUGHS POISED TO TRANSFORM THE US ECONOMY 1. Big data - - PDF document

JACK LEWIN, MD HON. FACC LEWIN AND ASSOCIATES HEALTH INNOVATION STRATEGIES LLC

THREE BREAKTHROUGHS POISED TO TRANSFORM THE US ECONOMY

• 1. Big data – internet as a “cloud”
• 2. Smart manufacturing – materials science

and supply chain management

• 3. Wireless revolution – cheap connectivity,

info and processing power to nearly everyone/everywhere! The Impacts to medicine will be huge for all three!

The Wall Street Journal, Mills and Ottino, Jan. 30, 2012 “The Coming Tech Led Boom”

DEFINING AMERICAN CHARACTERISTICS THAT WILL USHER IN TECHNOLOGICAL CHANGE

• Youthful demographics (by 2020, US will

be younger than China and Europe)

• Dynamic culture (US embraces change)
• Diverse educational system (one size does

not fit all in US education) Again – huge impacts medicine and m- health!

The Wall Street Journal, Mills and Ottino, Jan. 30, 2012 “The Coming Tech Led Boom”

THE FUTURE

• Acceleration of science and

Acceleration of science and technology technology

• Evolution of research

Evolution of research

• Delivery system reform

Delivery system reform

• Payment reform

Payment reform

• Evolution of learning

Evolution of learning

• Professionalism and Patients

Professionalism and Patients

BIG CHANGE IS COMING!

U.S. HEALTH CARE: THE GOOD THINGS THE GOOD THINGS

• Stunning technology and infrastructure
• Superbly trained workforce
• Excellent academic institutions
• World leader in science, research and health

innovation

• 84% of Americans have public or private health

insurance

• AND THE SGR ?
• AND the ACA?

U.S. HEALTH CARE: THE PROBLEMS THE PROBLEMS

• 16% of Americans remain uninsured
• Quality of care uneven – great variation
• Lack of care coordination

U.S. HEALTH CARE: THE PROBLEMS THE PROBLEMS

• 16% of Americans are still uninsured
• Quality of care uneven – great variation
• Lack of care coordination
• Costs

Costs remain remain out of control

• ut of control

PERCENT OF MEDIAN FAMILY INCOME REQUIRED TO PURCHASE FAMILY HEALTH INSURANCE

Source: Author’s calculations, using KFF and AHRQ premium data, CPS income data, plus projections from Carpenter and Axeen, The Cost of Doing Nothing, 2008.

HEALTH CARE IS THE PRIMARY DRIVER OF FUTURE FEDERAL SPENDING

10

SOURCE: Congressional Budget Office, Long-Term Budget Outlook, Figure 1-1; June 2009

Federal revenues and noninterest spending CBO’s extended-baseline scenario Percentage of GDP

5 10 15 20 25 30 35 40 5 10 15 20 25 30 35 40 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022 2025 2028 2031 2034 2037 2040 2043 2046 2049 2052 2055 2058 2061 2064 2067 2070 2073 2076 2079 2082

Revenues Social Security Medicareand Medicaid OtherFederal Noninterest Spending Actual Projected

THE THE ORIGIN OF THE ORIGIN OF THE AFFORDABLE CARE ACT AFFORDABLE CARE ACT

IS IT THE BEGINNING, THE NEMESIS, OR THE RESULT OF HEALTH REFORM PRESSURES?

BULLISH FORCES AND THE ACA ASIDE, THE CERTAINTIES ARE:

• The Science

The Science Future Future ---

• -- stunning progress coming

stunning progress coming

• The Pipeline of

The Pipeline of DM/Obesity/CV Risks DM/Obesity/CV Risks and and Morbidity Morbidity – – a a “ “tsunami tsunami” ”

• Delivery System Change Necessary

Delivery System Change Necessary --

• - > integration

> integration

• Payment Reforms Essential

Payment Reforms Essential --

• - value vs. volume

value vs. volume

• Services Must Become Cheaper; and practices

are being transformed

Journey To Value-Based Provider Reimbursement

Hospitals expect much more of their future reimbursement to be from performance-based risk than do physicians

22% of physicians and 40% of hospital executives expect a quarter or more

• f their reimbursement to be from performance-based risk within 10 years1

chart07 chart07

Full integration Limited integration Moderate integration Moderate % of financial risk Large % of financial risk Small % of financial risk

chart07

Compensation Continuum (Level of Financial Risk)

CURRENT REFORM STATUS

• Are ACOs are taking off?
• Real progress with PCMHs?
• Specialty PCMHs?
• The 5-10% that consume >50%
• Efficiency in use of intellectual capital
• Reimbursement future? (Brailer)
• Consumerism and patient power !!!!

THE ACA BEYOND JUSTICE ROBERTS!

UNCERTAINTY CAN CAUSE PARALYSIS UNCERTAINTY CAN CAUSE PARALYSIS

IT IT’ ’S S REALLY ALL ABOUT REALLY ALL ABOUT COUNTERING THE HEALTH COST COUNTERING THE HEALTH COST DEFICITS WITH VALUE DEFICITS WITH VALUE-

• BASED CARE

BASED CARE

• Value is the only goal that can unite the interests of all system

participants

• Value Based Health Care is the Path out of the

Value Based Health Care is the Path out of the National Deficit Dilemma !!!!!! National Deficit Dilemma !!!!!!

From Michael Porter 2011:

Redefining Health Care Delivery

• The core issue in health care is the value of health care delivered

Value: Patient health outcomes per dollar spent

THE OUTCOME MEASURES HIERARCHY

Survival Survival Degree of health/recovery Degree of health/recovery Time to recovery and return to normal activities Time to recovery and return to normal activities Sustainability of health /recovery and nature of recurrences Sustainability of health /recovery and nature of recurrences

Disutility of the care or treatment process (e.g., diagnostic errors and ineffective care, treatment-related discomfort, complications, or adverse effects, treatment errors and their consequences in terms

• f additional treatment)

Disutility of the care or treatment process (e.g., diagnostic errors and ineffective care, treatment-related discomfort, complications, or adverse effects, treatment errors and their consequences in terms

• f additional treatment)

Long-term consequences of therapy (e.g., care-induced illnesses) Long-term consequences of therapy (e.g., care-induced illnesses)

Tier 1 Tier 2 Tier 3

Health Status Achieved

• r Retained

Process of Recovery Sustainability

• f Health

Recurrences Care-induced Illnesses

Source: NEJM Dec 2010

OPPORTUNITIES FOR HEALTH CARE COST REDUCTION

Improved Inpatient Care Processes Use of lower-cost treatments Reduction in Adverse Events Reduction in Preventable Readmissions Improved Management Of Complex Patients Use of Lower- Cost Settings And Providers

Lower Total Health Care Costs! Hospitals and Specialists

Improved Prevention and Early Diagnosis Improved Practice Efficiency Reduction in Unnecessary Tests and Referrals Reduction in Preventable ER Visits and Admissions

Primary Care Practices Source: Harold D. Miller, “How to Create Accountable Care Organizations.” Center for Health Care Quality and Payment Reform All Providers

OPPORTUNITIES FOR HEALTH CARE COST REDUCTION

Improved Inpatient Care Processes Use of lower-cost treatments Reduction in Adverse Events Reduction in Preventable Readmissions Improved Management Of Complex Patients Use of Lower- Cost Settings And Providers

Lower Total Health Care Costs! Hospitals and Specialists

Improved Prevention and Early Diagnosis Improved Practice Efficiency Reduction in Unnecessary Tests and Referrals Reduction in Preventable ER Visits and Admissions

Primary Care Practices All Providers

MEDICAL HOME

OPPORTUNITIES FOR HEALTH CARE COST REDUCTION

Improved Inpatient Care Processes Use of lower-cost treatments Reduction in Adverse Events Reduction in Preventable Readmissions Improved Management Of Complex Patients Use of Lower- Cost Settings And Providers

Lower Total Health Care Costs! Hospitals and Specialists

Improved Prevention and Early Diagnosis Improved Practice Efficiency Reduction in Unnecessary Tests and Referrals Reduction in Preventable ER Visits and Admissions

Primary Care Practices All Providers

BUNDLING

OPPORTUNITIES FOR HEALTH CARE COST REDUCTION

Improved Inpatient Care Processes Use of lower-cost treatments Reduction in Adverse Events Reduction in Preventable Readmissions Improved Management Of Complex Patients Use of Lower- Cost Settings And Providers

Lower Total Health Care Costs! Hospitals and Specialists

Improved Prevention and Early Diagnosis Improved Practice Efficiency Reduction in Unnecessary Tests and Referrals Reduction in Preventable ER Visits and Admissions

Primary Care Practices All Providers

ACO’s

THE OPPORTUNITIES: USING PAYMENT REFORMS AND DATA FEEDBACK TO:

1.

• 1. Reducing unnecessary variation to increase value

Reducing unnecessary variation to increase value 2.

• 2. Improving chronic disease management and

Improving chronic disease management and prevention prevention 3.

• 3. Improving systems of care and coordination

Improving systems of care and coordination 4.

• 4. Identifying inefficient physicians and hospitals

Identifying inefficient physicians and hospitals 5.

• 5. Creating transparency and continuous feedback to

Creating transparency and continuous feedback to clinicians clinicians and hospitals in terms of quality and and hospitals in terms of quality and efficiency efficiency performance performance 6.

• 6. Engaging physicians and patients as partners in the

Engaging physicians and patients as partners in the process process

“WE BASICALLY HAVE TWO ECONOMIC HEALTH CARE OPTIONS: WE CAN CUT CARE; OR WE CAN IMPROVE CARE”

A NATIONAL CONSENSUS ON THE FUTURE?

• NCHC
• Partnership for Sustainable Healthcare
• Bipartisan Policy Center
• Brookings Institution
• Commonwealth Foundation
• Urban Institute
• Kaiser Family Foundation
• Bowles Simpson

A NATIONAL CONSENSUS ON THE FUTURE?

• Measure to manage, transparency, and IT
• Value based payment reform (docs-hospitals)
• Value based insurance design (patients)
• Everybody at top of license
• Science/outcomes based benefits
• State flexibilities
• Medicare and Medicaid structural reforms
• Administrative efficiencies and Med-Mal

PUT THIS IN THE CONTEXT OF THE SGR FIX

WHO WILL SAVE US? WHO WILL SAVE US?