Paul H Keckley PhD Deloitte Center for Health Solutions Washington DC October 14 2010 Innovators AdministratorsWatchdogs Service Providers Physicians HCIT Pharma Device Hospitals Outpatient ID: 706090
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Slide1
What Michigan Thinks About Health Care Reform
Paul H. Keckley, Ph.D.
Deloitte Center for Health Solutions
Washington, DC
October 14, 2010Slide2
Innovators
Administrators/Watchdogs
Service Providers
Physicians
HCIT
Pharma
Device
Hospitals
Outpatient
Facilities
Insurers
Regulators
Long Term
Care
BioTech
Professional
Societies/
Special Interests
Accrediting
Agencies
Disease
Management
Employers
CAM
Media
Academic
Medicine
Consumers
Allied HealthProfessionals
Disruptors
The U.S. health system today: fragmented, expensive, complicated, disconnected ($7,681 per capita, NHE 2008)Slide3
The “health reform” landscape includes several federal bills starting with the stimulus bill (ARRA 2/09) and PPACA (3/10), plus new rules and regulations to be written 2010-2013
System-wide Disruption
State-based Reforms
New Clinical Coding Standards
(ICD-10)
Private Employer Initiatives
And more . . .
Health and Education Reconciliation Act of 2010
American Recovery and
Reinvestment Act and HITECH Act
CORE Standards Development
Consumerism
Patient Protection and Affordable Care Act
Children’s Health Insurance Program Reauthorization Act (CHIPRA)Slide4
PPACA implementation: three major phases
While 2014 will see many of the most dramatic changes, some changes have earlier – or later – effective dates, and additional activities will be required to support implementation.
Rules, Regulations & New Funding
105 new agencies/programs
Coordination between states and federal government
Coordination between federal agenciesInsurance conformity Excise taxes—insurance, medical devices, drug companies
2010 - 2013
2014 - 2016
2017 +
Mandates, Pilots &
Exchanges
“New Normal”
Delivery system integration
Insurance market shakeout
Legislative amendments/ rulemaking
Appropriations
Individual mandate
Health exchangesEmployer pay or playDemonstration & pilot programsSlide5
Payment system changes
Increased performance-based contracting by employers and plans
Increased enrollment in individual insurance markets (thru exchanges, thru commercial plans-16 million)
Increased enrollment in government plans: enrollment: military, Medicaid, (16 million) Medicare, SCHIP, exchanges, state and federal employees
Increased regulation of business practices: premium reviews, coverage, preventive health
Overview of delivery system framework—post reform
Major investments: Medicaid expansion ($434 B); commercial expansion via exchanges ($464 B); tax credits for small employers ($40 B)
2
1
3
4
Consumerism
Preventive health, individual insurance, PHR
Comparative Effectiveness/EBM
Personalized medicine,
bundled payments, provider adherence/performance-based payments liability reforms
Health Information Technology
EHR (HiTech), health information exchanges, ,fraud detection
administrative simplification, clinical data ware-housing, ICD-10, direct to consumer e-medicine
Primary Care 2.0
Home monitoring, retail medicine, LTC, medical homes, scope of practice expansion, health coaching
Funding ($1.083 Trillion)
Spending cuts: $575 B
Medicare Advantage -$207B
Medicare PPS -$157 B
Medicare-Medicaid Cuts: $93 B
Budget cuts: -$118B
New Revenues: $508 B
Mandate penalties: $69 B
Industry taxes and fees: $109 B
Medicare payroll tax: $209 B
Cadillac tax: $32 B
Other taxes: $89 BSlide6
Can consumers make the transition to
“the new normal”?
Can the U.S. health system engage consumers appropriately?
Are U.S. consumers capable of engaging the health system effectively?Slide7
Methodology
Survey of Michigan:
The Deloitte Center for Health Solutions, part of Deloitte LLP, commissioned this Harris Poll National Quorum
®
telephone survey of 200 Michigan adults 18 years old and older September 29 – October 4, 2010Data were weighted to be representative of the total adult population on the basis of age, sex, race/ethnicity, education, number of adults in the household, and number of phone lines in the household where necessary
The survey results have a sampling error of +/- 7 percentage points at the 95% confidence levelReferred to as “2010 Michigan”Michigan comparative data:
Based on Michigan portion of 2009 Survey of Health Care Consumers: 203 adults surveyed October 2–10, 2008, using a web-based questionnaireReferred to as “2009 Michigan”
National comparative data:2010 Survey of Health Care Consumers: 4,008 adults surveyed December 28, 2009 – January 5, 2010, using a web-based questionnaire
Referred to as “2010 National”2009 Survey of Health Care Consumers: 4,001 adults surveyed October 2–10, 2008, using a web-based questionnaire
Referred to as “2009 National”Slide8
Michigan adults who have health insurance of any kind declined since 2009, similar to national trends
Question:
Do you currently have primary health insurance?Slide9
Similarly, employer-sponsored coverage declined in the past year
* Numbers may add up to more than 100% due to the possibility of dual coverage.Slide10
57% overall say they are in “excellent” / “very good health”; by contrast, drops to 39% among the uninsured
Additional results:
61% of the uninsured and 47% of individually insured said they are in “fair” or “poor” health, which is statistically different than those with employer-provided coverage (7%)
36% of those earning <$25K and 37% of $75-100K said they are in “fair” or “poor” health, which statistically different than those earning $100K+ (6%)
Comparison to 2009 Michigan:
63% were in “excellent” or “very good” health
9% were in “fair” or “poor” healthComparison to 2010 National:58% were in “excellent” or “very good” health
12% were in “fair” or “poor” health
Question: In general, how would you rate your overall health?Slide11
34% of Michigan adults gave the U.S. health care system a grade of A/B compared to 25% who give a D/F—more favorable than the U.S. overall grade
Additional results:
39% of those with incomes of <$25K gave the system a D/F, which is statistically different from $50-75K (10%) and $75-100K (6%)
53% of the uninsured gave the system a D/F, which is statistically different from those with employer-provided coverage (15%)
Comparison to 2010 National:24% gave the system an A/B
35% gave the system a D/FComparison to 2009 Michigan:25% gave the system an A/B
28% gave the system a D/F
Question: Using a typical report card scale with grades of A, B, C, D and F, how would you grade the overall performance of the current U.S. health care system?
* Numbers may not add up to 100% due to “Don’t Know” and refused categories.Slide12
58% say they are “very knowledgeable” or “somewhat knowledgeable” about PPACA
Additional points in Michigan results:
81% of those with incomes of $75-100K said they were “very” or “somewhat knowledgeable” about PPACA, which is statistically different from <$25K (48%)
67% of the uninsured said they were “not at all knowledgeable” about PPACA, which is statistically different from those with Medicaid (36%)
Compared to June 2010 National Pulse Survey:
61% said they were “very knowledgeable” or “somewhat knowledgeable” about PPACA
Question:
How knowledgeable are you about the components of the Patient Protection and Affordable Care Act (PPACA)?Slide13
Most are somewhat optimistic PPACA will increase access; opinions about its effectiveness in other areas are mixed
Question:
Based on what you know, do you think PPACA will have a
positive
impact, negative
impact or no impact on the following aspects of the U.S. health care system?Slide14
54% of those “very knowledgeable” about PPACA said their households are financially prepared to handle future health care costs, which is statistically different from “not at all knowledgeable” (19%)
51% of the uninsured said their households are not financially prepared to handle future health care costs, which is statistically different from employer-sponsored coverage (15%) and Medicare (14%)
46% of those in “fair” or “poor” health said their households are not financially prepared to handle future health care costs, which is statistically different from those in “excellent” or “very good” health (13%)
Question:
On a scale from 1 (low) to 10 (high), to what extent do you feel your household is financially prepared to handle future health care costs?
26% said they are financially prepared to handle their future health care costs—slightly higher than 2009Slide15
59% say they used an over-the-counter therapeutics instead of seeing a doctor for a problem; a quarter tried other forms of substitutionary care
39% of males 65+ said they traveled outside their area to consult with a doctor, undergo a medical test or procedure or receive treatment, which is statistically different than males 45-64 (21%), females 45-64 (19%) and females 65+ (21%)
59% of Medicaid enrollees and 52% of the individually insured said they traveled outside their area to consult with a doctor, undergo a medical test or procedure or receive treatment, which is statistically different from employer-sponsored coverage (15%) and the uninsured (9%)
43% of those in “fair” or “poor” health said they traveled outside their area to consult with a doctor, undergo a medical test or procedure, or receive treatment, which is statistically different from those in “excellent” or “very good” health (11%)
Question:
Which of the following have you done in the last 12 months?Slide16
A substantial majority believe hospitals costs, insurance company costs and fraud in the system are major drivers of overall health care system cost
78% of individually insured said government regulation is a major influence on system costs, which is statistically different than those with employer-sponsored coverage (39%)
78% of those “somewhat knowledgeable” and 76% of those “not at all knowledgeable” said insurance company costs are a major influence on system costs, which is statistically different than those “very knowledgeable” (42%)
55% of those “very knowledgeable” about PPACA said overutilization of diagnostic testing like MRIs and CT scans have no influence on the overall health care system cost, which is statistically different from those “somewhat knowledgeable” (10%) and “not at all knowledgeable” (11%)
Question: Based on what you know, does each of the following have a
major
influence, minor influence or no influence on overall health care system costs?Slide17
Most think 15% is a reasonable admin cost for insurance companies
51% of those with employer-sponsored coverage said more than 20% of total premiums is reasonable for covering insurance plan overheads, which is statistically different than those with Medicare (26%)
30% of the individually insured said less than 5% of their total premiums is reasonable for covering insurance plan overheads, which is statistically different than employer-sponsored coverage (10%) and Medicare (4%)
Question:
What percentage of the total premium that you pay for health insurance do you think is reasonable for insurance plan overheads?Slide18
Observations about consumerism in Michigan
Good news…
Michigan consumers want to engage their system: It matters
Bad news… Michigan consumers are not equipped to engageSlide19
The economy: Economic recovery and the consumer quest for value
Balance: Reduce costs or cover everyone
“Big Government”
Politics: Change
What does it mean for 2010 election cycle?
How will spin benefit partisans?
Can government improve the system or is the private sector a better option?
How much government is too much, and is it good/bad?
How can the uninsured be insured?
Should the healthy and young subsidize the older and less healthy?
How should personal health and accountability be pursued?
Can we afford health reform NOW or can it wait?
Can reforms be paid for without significant federal spending cuts and increased taxes?
Are incentives aligned with desirable behavior by payers and providers?
How can the value gap in health care be closed?
Four major themes going forward…Slide20
Individual mandate:
Will the uninsured and newly eligible for Medicaid enroll? Will the insured increase 32,000,000 as targeted?
Employer sponsorship:
Will employers drop health benefits after 2016 to facilitate direct consumer engagement and their reduce operating costs?
State solvency: Will states be able to manage their expansion new responsibilities and obligations?Delivery system changes: Will delivery system reforms – accountable care organizations, value-based purchasing, medical homes, bundled payments, comparative effectiveness – reduce costs over time?
Consumers: Will they engage?
And the two big unknowns hanging over reform..Economic recovery: Will the economy recover?
Physician pay and role: Will physicians collaborate or pursue independence?Big bets in the bill…Slide21
Contact information
For more information, please contact:
Paul H. Keckley
, Ph.D., Executive Director
Deloitte Center for Health Solutionspkeckley@deloitte.com
202-220-2150 For the latest Monday Memo, please
visit: www.deloitte.com/us/healthmemosAnd visit our website to subscribe to our content:
www.deloitte.com/CenterforHealthSolutions/subscribe
September 27, 2010
Monday memo
Health reform update
This week’s headlines:
My take
Senators request premium information from major plans MLR proposed draft submitted Friday
HHS clarifies grandfathered, self-insured rules FDA and CMS consider parallel review process; crosswalk among federal health agencies a key focus
MACPAC hosts inaugural briefings Administrative simplification: Update
IRS requests comments about health plan executive compensation HHS publishes rule on waste, fraud and abuse
Claims appeal process revisited, grace period extended GAO announces PCORI board members
HHS seeks comments on quality improvement priorities Insurers end child-only policiesMedicare Advantage premiums projected to decrease
NJ to establish medical home demo Slide22
About the Center
The Deloitte Center for Health Solutions (DCHS) is the health services research arm of Deloitte LLP. Our goal is to inform all stakeholders in the health care system about emerging trends, challenges and opportunities using rigorous research. Through our research, roundtables and other forms of engagement, we seek to be a trusted source for relevant, timely and reliable insights.
To learn more about the DCHS, its research projects and events, please visit: www.deloitte.com/centerforhealthsolutions
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