Managing the Velocity of Change in a New Era of Connected Commerce

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					The Future of the Healthcare Marketplace:
    Life in the Gap, Life in the Game

           Ian Morrison PhD


           www.ianmorrison.com
                              Outline

         The Second Curve
         Emerging Context: an Update
           – The Quest for Value
           – Healthcare Reform
         Implications for Hospitals and Physicians




Slide 2
                        The Second Curve


          First Curve                 Second Curve




Slide 3
                  The Holy Trinity


         Cost
         Quality
         Access
         (Security of Benefits)

Slide 4
            Defining Value of Health Services



                  (Access+Quality+Security)
          Value =
                          Cost




Slide 5
          Health Care Spending per Capita in 2007
                      (Adjusted for Differences in the Cost of Living)




           Source: OECD 2009
Slide 6
          International Comparison of Spending on Health,
                            1980–2006

                Total expenditures on health          Average spending on health
                      as percent of GDP                  per capita ($US PPP)




           Data: OECD Health Data 2008 (June 2008).
Slide 7
          International Health Comparisons, 2007




Slide 8         Source: OECD 2009
     International Health Comparisons, 2007




Slide 9
          Source: OECD 2009
                              Mortality Amenable to Health Care
                       U.S. Rank Fell from 15 to Last out of 19 Countries
 Deaths per 100,000 population *




* Countries’ age-standardized death rates before age 75; from conditions where timely effective care can make a
difference. Includes: Diabetes, asthma, ischemic heart disease, stroke, infections screenable cancer.
Data: E. Nolte and C. M. McKee, ―Measuring the Health of Nations,‖ Health Affairs, Jan/Feb 2008).
Source: The Commonwealth Fund Commission on a High Performance Health System, Why Not the Best? Results
from the National Scorecard on U.S. Health System Performance, 2008, (New York: The Commonwealth Fund, July
  Slide
2008). 10
  US Primary Care Physicians Are Much More Likely To Report Their Patients




                                                                                                                         strategic health perspectives
           Having Problems Paying For Medications Or Other Care

  %               AUS        CAN         FR       GER        ITA       NET         NZ       NOR        SWE     UK   US
  reporting
  Often
  Have
  difficulty
  paying for
  medications      23         27         17        28         37         33        25          5         6     14   58
  or other
  care
  Have
  difficulty
  getting
  specialized      21         47         42        26         52         15        60         11        22     16   24
  diagnostic
  tests

  Experience
  long waiting
  times to see     34         75         53        66         75         36        45         55        63     22   28
  a specialist




                 Source: 2009 Commonwealth Fund and Harris Interactive International Health Policy Survey of
Slide 11                                       Primary Care Physicians
US Is One Of 5 Countries Where More Primary Care Doctors Said The Quality




                                                                                                                        strategic health perspectives
  Of Care Became Worse Rather Than Improved In The Past Three Years


                                  Percent saying quality of care in past three years has…

                GER         FR       CAN        AUS         US       SWE        ITA        NET        NZ     NOR   UK



  Improved        1         19         17        13         19         28        32         36        32     29    51


  Stayed the
  same           24         39         50        65         54         42        40         42        56     61    37


  Became
  worse          73         41        31         22         26         28        27         19        12      9    12




               Source: 2009 Commonwealth Fund and Harris Interactive International Health Policy Survey of
                                             Primary Care Physicians
Slide 12
    Practice Routinely Uses Written Treatment
             Guidelines, by Condition




                                                                                                         strategic health perspectives
           Source: 2009 Commonwealth Fund and Harris Interactive International Health Policy Survey of
Slide 13                                 Primary Care Physicians
           Physicians Do Generally Support Government-Sponsored




                                                                                                         strategic health perspectives
                 Comparative Effectiveness Review Research

               “The Federal government has allocated funds to compare the effectiveness of
               various treatments to identify what treatments work best and for what patients.
               Do you support or oppose funding these studies.”



                                                            PCPs              Specialists        TOTAL
 Base: All Respondents                                         252                    106         358

 Top 2 Box (Support)                                           52                     53          53
 Neither Support Nor Oppose                                    26                     30          29
 Bottom 2 Box (Oppose)                                         22                     17          18




                             SOURCE: Strategic Health Perspectives Physician Survey 2009
Slide 14
       They Also Support Limiting Access and Reimbursement for




                                                                                                           strategic health perspectives
                  Therapies that Show No Advantages

                        “Please rate you level of agreement with the following statements about studies
                        to compare effectiveness of different health care treatments.”

(Top Two Box—Agree)                                                  PCPs           Specialists    TOTAL
Base: All Respondents                                                  252                 106      358

Percent answering ―Strongly/Somewhat agree‖                             %                      %    %

Patients should use this information when choosing                     74                  77       76
treatments
It is OK to limit access to treatments that cost more                  60                  71       69
when they are no more effective than less costly
alternatives
It is OK to limit reimbursement for treatments that                    62                  66       65
cost more when they are no more effective than less
costly alternatives



                                 SOURCE: Strategic Health Perspectives Physician Survey 2009

 Slide 15
 Primary Care Doctors Use of Electronic Patient Medical Records
               in Their Practice, 2006 and 2009*
 Percent




* 2006: ―Do you currently use electronic patient medical records in your practice?‖
* 2009: ―Do you use electronic patient medical records in your practice (not including billing systems)?‖
 Slide 16   Source: 2006 and 2009 Commonwealth Fund International Health Policy Survey of Primary Care Physicians.
         Primary Care Practices with Advanced Electronic
                  Health Information Capacity
 Percent reporting at least 9 of 14 clinical IT functions*




* Count of 14 functions includes: electronic medical record; electronic prescribing and ordering of tests; electronic
access test results, Rx alerts, clinical notes; computerized system for tracking lab tests, guidelines, alerts to provide
patients with test results, preventive/follow-up care reminders; and computerized list of patients by diagnosis,
medications, due for tests or preventive care.
 Slide 17
Source: 2009 Commonwealth Fund International Health Policy Survey of Primary Care Physicians.
Physician Satisfaction with Practicing Medicine



Percent*




* The other responses were somewhat dissatisfied or very dissatisfied.
 Slide 18 Source: 2009 Commonwealth Fund International Health Policy Survey of Primary Care Physicians.
             American Healthcare:
           Caught in a Bad Romance

                    ―I want your ugly, I want
                    your disease
                    I want your everything,
                    as long as it’s free.‖


                     America’s leading
                     contemporary philosopher:
                     Stefani Germanotta aka Lady
                     Gaga
Slide 19
                        Why the Big Difference?

      The Fallacy of Excellence
      The 6 Point Spread
           – Everyone makes more money: Not just doctors, higher prices and incomes
             for everyone
           – Administrative Waste Motion: 25%-30% Price of Pluralism
           – Intensive and Expensive Use of Technology
                End of Life Care: 30% of Medicare

                Intensive use of Diagnostics, procedures, and high-tech interventions

                Primary versus Specialty Care Balance

      Is it fixable?
           – Some is culture: Values, expectations, and attitudes
           – Some is population differences: Way too much is made of this e.g. The
             Natural Experiment Paper
           – Most is policy, management and payment system


Slide 20
           Canadians are Different from Americans




Slide 21
                       The Battle for Quality:
                     IOM versus ―Pimp My Ride‖



      The IOM Vision of Quality:
           Charles Schwab meets
           Nordstrom meets the
                Mayo Clinic

           The Prevailing Vision of
             Quality in American
                Healthcare:
              ―Pimp My Ride‖
Slide 22
                      The Battle for Quality:
                    IOM versus ―Pimp My Ride‖

              Really Bad Chassis
              Unbelievable amounts of high technology on a frame that is
               tired, old and ineffective
              Huge expense on buildings, machines, drugs, devices, and
               people at West Coast Custom Healthcare
              People who own the rides are very grateful because they don’t
               have to pay for it in a high deductible catastrophic coverage
               world
              It all looks great, has a fantastic sound system, and nice seats
               but it will break down if you try and drive it anywhere




Slide 23
           Health Plans are Most Worried about
            Hospital Prices as the Cost Driver
                “What single factor do you think will contribute most to increased costs
                                        in the next two to three years?”

                                        2006            2007             2008            2009    2010
                                         100              100              94              100   100
  Base: All Respondents

  Hospitalization fees                   18               33              22               23     23
  Biologic or injectable
                                         28               21              17               22     15
  drugs
  Prescription drug costs                30               15              20               21     22
  Diagnostic, screening,
                                          11               8              12               10     14
  laboratory costs
  Professional fees                       5                6               7                6     12
  Medical equipment costs                 5                2               7                4     3
  Other                                   3                8               9                5     5
  Not sure                                ---              7               5                8     4
                           SOURCE: Strategic Health Perspectives Health Plan Survey 2006-2010
Slide 24
           HEALTHCARE REFORM
            The Recent Past and
            the Emerging Future




Slide 25
           Healthcare Reform: The Basic Problem

  •    The Average family cannot afford the
       Average Premium
  •    There are not enough Rich People to go
       around (The 98/2 Problem)
  •    It’s the Delivery System Stupid!
  •    We don’t want less than what we have now,
       we want more
  •    Nobody wants to take a pay cut or to be
       denied even ineffective care
Slide 26
                       New American Compromise

              Shared Sacrifice
                – Healthcare is both a right and an obligation
                – Example: ―Healthcare for All, Paid by All‖ AHA
                – Rhetoric behind Massachusetts and California
              Strategic Incrementalism
                – Build on existing public and private programs
              Compel participation
                – Employer mandate: Pay or Play
                – Individual Mandate
                – Provider contribution: Hospital or physician taxes
                – Other sources of payment e.g. tobacco tax, surtax on very rich
              Restructure/Regulate Insurance market
                – Connectors
                – Guaranteed issuance and terms of offer
                – Public Plan
              Federal Matching of Medicaid Investment
              More about Coverage expansion than cost containment but it is about:
                – HIT, Primary Care, CER and reimbursement reform
Slide 27
                            The Future Vision?

                   Clinical HIT Systems, Health Information Exchanges




                            Evidence-Based Medicine



            Results-Based                                 Value-Based
           Reimbursement                                 Benefit Design


           (Provider)                                   (Consumer)
Slide 28
           How Do Americans Feel Today About
                    Washington?

             Positive Ratings of President Obama, Congress




                   Harris Interactive, HarrisPoll
Slide 29
                              Democratic Plan

   Expand Medicaid by 16 million because it is such a swell
    program
   Have taxpayers in the states with generous Medicaid programs
    subsidize the Medicaid expansion in the states with less generous Medicaid
   Mandate most other uninsured Americans buy health insurance they can’t
    really afford…
   And then subsidize them so they can
   Regulate insurance companies to take all comers even though all comers are
    not going to come
   Raise fees and taxes on stakeholders who will pass it on in higher costs to the
    end consumer
   Start the taxes now, add the coverage later so in the next ten years it actually
    reduces the deficit
   In the long run, hold your breath and be prepared to borrow even more
    money from the Chinese

Slide 30
                          Republican Plan


      Repeat after me: ―Start Over. Clean sheet of Paper.
       Step by Step. ‖
      Create high risk pools at the state level so you can turbo
       charge the death spiral in the insurance market
      Provide tiny wee tax credits for ―affordable insurance‖
      Create ―affordable insurance policies‖ that don’t cover anything
      Encourage consumers to buy ―affordable insurance‖ from an insurance
       company in another state that has no consumer protection and no
       contractual relationship with local doctors and hospitals
      Reform Malpractice Caps to reduce defensive medicine and let doctors
       focus on offensive medicine
      Borrow more money from the Chinese so we can cut taxes

Slide 31
                       The Anthem Issue

       Huge political and media issue: How do you explain 39% rate
        increases?
    Not just Anthem happening across the country
    The Sibelius letter is not wrong
         – Death spiral
         – Poor economy means young, healthy leave
         – Provider rates
         – Protection against increases post reform
    Media starting to understand true source of insurance costs increases
    ―It’s the Delivery System Stupid‖ meets market failure in private health
        insurance markets
         – Cream Skimming
         – Adverse selection
Slide 32
         – Moral hazard
    Premiums for Family Coverage, by State, 2008

                                                                          You are Here




Data source: 2008 Medical Expenditure Panel Survey–Insurance Component.

 Slide 33
           Scenarios for US Healthcare: 2010

      Unprecedented Reform Rollercoaster
         Major Health Reform passes both Houses of Congress
         Yet, special election in Ted Kennedy’s seat derails reform
         Democrats regroup and then Big Bill passes
      Short term Scenarios until 2010 Election
         Big Bill has passed and emboldened Democrats
         Republicans Running on Repeal for 2010 and Beyond
      Spinning the effects of the bill will be important for both sides up until
       November
      But, make no mistake, passage of a Big Bill sets up the policy framework (and
       the scenarios that follow) for much bigger change in healthcare than if the bill
       had not passed
      ―This is a Big Biden Deal‖
      Beyond November 2010, there are more options
      We will consider four…
Slide 34
                Four Scenarios for US Healthcare
                                2010-2015

                              Health Reform:
                      Major                    Minor
                                                       2
                      1

         Strong
       Recovery
                                                           4
      Economy:

                          3
              Weak
           Recovery


Slide 35
                                                               3
              Life in The Gap: From 2010-2014
      Healthcare reform relief is on the way, but the immediate effects are minimal.
      Coverage improvements on lifetime benefits, high risk pools, extension of coverage options to 27
       year old dependents are relatively small steps, the key will be how the media and the public feel
       about life in the gap.
      But, commercial premiums will likely continue to increase substantially in large group (8%) and small
       and individual market (10-25%) no matter what, who will get the blame for that? Will the inevitable
       short term rise in premiums in the small group market be seen generally as a negative result of
       Obamacare?
      Employers will use cost sharing as their primary cost containment weapon. Large Employers will see
       cost shifting
      Small businesses and individuals will continue to be priced out, even with small tax credits
      Number of uninsured may rise substantially from 2010 to 2014 when COBRA and Medicaid subsidies
       from stimulus bill run out, if there is not a significant improvement in the employment market, which
       is very uncertain.
      Continuing state budget crises will force states to cut Medicaid provider rates or scale back on
       eligibility
      Can states do the planning and implementation to implement health reform provisions by 2014?
      Help is on the way but will it arrive soon enough?
Slide 36
            Life in the Game: 2014 and Beyond…
          Massive expansion in coverage will mean increased demand for services.. But at lower
           reimbursement rates?
          Will newly covered have access? Who will take 16 million new Medicaid patients?
          Will incumbent insurers win new business in the exchanges or will disruptive innovators?
          In the absence of meaningful costs controls on total health care costs will there be
           massive cost shifting to large employers?
          Providers are already concerned that attention will turn to the deficit and are bracing for
           BBA II like scenario where rates for Medicare and Medicaid get ground down.
          Can the payment reform initiatives be ramped up fast enough to bend the curve in the
           longer run? Do pilots ever take off?
          Will budget deficit forecasts continue to deteriorate, to the point where Obamacare will
           be unsustainable?
          Cost containment and reimbursement reform will likely be permanent policy agenda
           items for 2014 and beyond.


Slide 37
                       Clear Winners Under Reform

      Low-Income people especially those who are currently uninsured or have pre-
       existing conditions
      People with chronic conditions or pre-existing conditions especially in the
       individual insurance market
      Small businesses who were considering health insurance but couldn’t quite
       afford it
      Worried parents who wanted to keep twenty somethings on coverage
      Primary Care Physicians
      Any physicians or providers with significant share of uncompensated care
      Bio-Pharmaceutical companies
           –   Avoided Government Price Negotiation and Re-Importation
           –   Closed the Do-Nut Hole with Brands especially biologics
           –   Got 12 year exclusivity before Bio-Similars
               Got new customers
      Elderly not in Medicare Advantage plans

Slide 38
                   Clear Losers Under Reform

      Tanning Salons
      Health Insurers, especially executives (although they get 32 million new
       customers for a business that had zero source of growth)
      Rich people earning over a quarter million dollars a year especially from
       investment income (means one less Safari a year)
      Insurance brokers who don’t add value
      Specialists who don’t see poor people
      30 plus youngsters ―who don’t need insurance‖
      Medical Device Manufacturers, who have hidden from view until now
      Seniors on Medicare Advantage who were bribed to go private
      Hospitals with open doors who may be overwhelmed by volume of new
       patients paying below costs of service
      States who did not want to expand coverage to low income people

Slide 39
           Republican and Democratic Attitudes about Who Has the
           Best Health Care System




               Debating Health: Election 2008, Harvard School of Public Health/Harris Interactive. March 5-8, 2008
Slide 40
           The Jocks and The Nerds




Slide 41
   Public Support for the Obama/Congressional Health
               Reform Before Enactment




RJ Blendon, JM Benson, NEJM.org, April 7, 2010.

 Slide 42
   Public Support for the Obama/Congressional
    Health Reform Before Enactment, By Party

                                             % favoring




RJ Blendon, JM Benson, NEJM.org, April 7, 2010.

 Slide 43
      Public Support for the Most Popular Elements of the
     Obama/Congressional Health Reform Before Enactment

                                                                              Support
                            Element of Reform                                (Percentage
                                                                               Range)
  Tax breaks to small business to make coverage more affordable                 90%
  New health insurance exchange                                                 81%
  Expand Medicare to fill ―doughnut hole‖                                       79%
  Require employers to offer health insurance to employees or pay penalty       69%
  Federal and state government review of insurance premium increases            66%
  Increase taxes on families making more than $250, 000 a year                  64%
  Require insurers to cover all applicants, even if they have pre-existing   58% - 80%
  conditions
  Prevent insurance companies from dropping coverage for people who          59% - 62%
  are sick
  Individual mandate subsidies                                               56% - 59%
  RJ Blendon, JM Benson, NEJM.org, April 7, 2010.
Slide 44
      Public Support for the Least Popular Elements of
       Obama/Congressional Health Reform Before
                          Enactment


                                                                                  Support
                               Element of Reform                                 (Percentage
                                                                                   Range)
   Additional taxes on healthcare industries, including insurers, drug makers,      38%
   and medical-device manufacturers
   Tax most expensive health plans or insurers that offer them                   24% - 34%
   Individual mandate with penalties                                                28%
   Reduce spending for Medicare                                                     19%




RJ Blendon, JM Benson, NEJM.org, April 7, 2010.


 Slide 45
       Public Support for the Obama/Congressional
       Health Reform After It Was Signed into Law:
                                             % saying




Average of three polls from NBC/WSJ, USA Today/Gallup, and AP in June, 2010.
 Slide 46
           Public Support for the New Health Reform Law
                           Percentage saying




Slide 47
            Public Support for the New Health Reform Law
                    by Party Identification and Age




AP poll, June 2010.

 Slide 48
      Americans’ Approval of the Way Congress Is Doing Its Job




                                                        June
ABC News/Washington Post polls.


Slide 49
           Americans’ Inclination to Vote to Re-elect Their Representative to
             Congress or to Look Around for Someone Else to Vote For




                                                                         June
ABC News/Washington Post, 1994-2010.


Slide 50
                       Who Would Voters Choose




NBC/WSJ Poll of registered voters, June, 2010.


 Slide 51
              Public Support for Increased Federal
                Regulation in the Private Sector




NBC/WSJ Poll of registered voters, June 10, 2010.


 Slide 52
  If Rogue States Fail to Implement Exchanges the Federal
Government Will Come into Town and Implement Them for You




                 Federal Health Insurance
                   Exchange Task Force
Slide 53
      Now Reimbursement Reform Must Follow

     Health Care as we know it is clearly economically
      unsustainable
     Provisions of legislation will NOT fundamentally alter cost
      trends
     Projected savings under the law are achieved by:
        Reducing Provider Reimbursement
        Reducing Payments to MA Plans
        Imposition of New Taxes & Fees
     Fundamental economic incentives which drive excess
      utilization and intensity of servicing are essentially
      unaddressed by the legislation
Slide 54
   Reimbursement Reform will Become the Imperative




Slide 55
           Source: CBO, P. Orzag, Sept. 2008
      Reimbursement Reform: The Long Run Challenge

      • Growing cost of care
              Cost of Care Greatest Driver of Overall Cost
      • Demographics
              Aging Society




Slide 56
      Reimbursement Reform Leads to Delivery Reform

     Systemic Change - Organized Systems of Care with economic incentives for
      High Performance – Minor Provisions and building blocks in the New Law
        Accountable Care Organizations
        Bundled Payments
        Medical Home
        Value Purchasing
        Comparative Effectiveness
     ―Bending the Curve‖ has been lost to Political Expedience in the short run, will
      become even more important in the long run because 32 million more covered
     Smart Top Down Approaches (Global Budgeting, Capitation, Bundled Payment,
      ACOs etc)
     Crude Top Down Approaches (Price controls, Cost shifting, and Rationing)
     Bottom Up Approaches (Disruptive Innovations, clinical redesign, process
      improvement)

Slide 57
   The Majority of Physicians are Somewhat Satisfied with Their
                 Current Reimbursement Method

 How satisfied are you with the method through which you are currently being reimbursed for patient care?




                                                       2008 (K)                        2009 (L)

            Base: All Respondents                           389                          358
                                                             %                            %

            NET Satisfaction                                52                           60K
            Very satisfied                                   8                           11
            Somewhat satisfied                              44                           49
            NET Dissatisfaction                             48                           40K
            Somewhat dissatisfied                           33                           26
            Very dissatisfied                               15                           14

                              SOURCE: Strategic Health Perspectives Physician Survey
Slide 58
      Physicians Don’t Seem to Like Any of the Provider Payment




                                                                                                                   strategic health perspectives
                    Reform Ideas Now Circulating


             “There are a number of different proposals being discussed for changing the way physicians are
             reimbursed . Do you favor or oppose the following options?”

                                                   Top Two Box (Favor)               Bottom Two Box (Oppose)
           Base: All Respondents                               358                             358
           Pay For Performance                                 37                              49
           Episode Based Payments                              25                              54
           Global Payments                                     16                              65
           “Do you favor or oppose health insurance plans paying more to hospitals and medical groups which have
           been shown to provide better care and paying less to those who have not?”

                                                           PCPs               Specialists        Total
                 Base: All Respondents                       252                   106               358

                 Favor                                       35                    40                39
                 Oppose                                      28                    25                25
                 Not Sure                                    37                    35                36
Slide 59             SOURCE: Strategic Health Perspectives Physician Survey 2009
       Medical Staff will Negotiate Aggressively
               over Bundled Payments




Slide 60
      Physicians Believe That Biotech And Pharmaceutical Firms Help Them
          Deliver Quality Care—The Same Is Not True Of Health Plans

In recent years, has each of the following helped or hurt your ability to provide quality patient care?
                                                                           Hurt        Helped

       Concern about malpractice litigation
       Managed care plans
       HDHPs
       Government
       Health Insurance Companies
       AMA
       Patient Advocacy Groups
       Medicare Part D
       Hospitals
       Med Device Companies
       Pharma Companies
       Medicare Administration
       Medical Specialty Societies
       Biotech Companies
       The Internet

                         SOURCE: Strategic Health Perspectives Physician Survey 2009
Slide 61
              Payment to Cost Ratio (Illustrative)




Slide 62   Source: Morrison Estimates, in other words a good guess
  Dartmouth vs Commercial: Top 5 Medicare




           Geographic Correlation Between Large-Firm Commercial Spending and Medicare Spending
           Michael E. Chernew, PhD; Lindsay M. Sabik, BA; Amitabh Chandra, PhD;
           Teresa B. Gibson, PhD; and Joseph P. Newhouse, PhD
Slide 63   Am J Manag Care. 2010; 16 (2): 131-138
  Dartmouth vs Commercial: Top 5 Commercial




           Geographic Correlation Between Large-Firm Commercial Spending and Medicare Spending
           Michael E. Chernew, PhD; Lindsay M. Sabik, BA; Amitabh Chandra, PhD;
           Teresa B. Gibson, PhD; and Joseph P. Newhouse, PhD
           Am J Manag Care. 2010; 16 (2): 131-138

Slide 64
                      New Age of Transparency

      Value for Money
           – All Payer Dartmouth Atlases meet CER on steroids
      Focus on Outcomes not Just Indicators or Process Measures
      Management and reporting across the Continuum of Care and Over
       Time
      Digital Capture of Performance in Action
           – Data captured in workflow, not as separate workflow
           – Kaiser like Data sets everywhere
      New Science of Patient Engagement: Beyond Dumb Cost-Shifting
           – Value Based Benefit Design
           – Persistence, Adherence and Compliance




Slide 65
                            The Future Vision?

                   Clinical HIT Systems, Health Information Exchanges




                            Evidence-Based Medicine



            Results-Based                                 Value-Based
           Reimbursement                                 Benefit Design


           (Provider)                                   (Consumer)
Slide 66
               High Performing Systems

      Board and CEO Leadership Commitment Drives
       Change
      Strategic Planning Matters
      Quality as Core Business Strategy
      Performance Review and Compensation
      Measurement Mania
      Rapid Cycle Improvement
      System Level Resources
      Break Down Silos
Slide 67
                Implications for Hospitals (1)

          Insurance expansion but not delivery reform
          You gave at the office
          More covered at lower reimbursement levels
          Reimbursement reform pilots such as P4P,
           Non Payment for Non Performance, bundled
           payments, and the results of Massachusetts
           deliberations will eventually change the game
           but it will take time


Slide 68
             Implications for Hospitals (2)

        Learn to make money on Medicare
        Cost shifting to employers in short run
         may be exacerbated by growth in public
         payment
        Integration with physicians: from trolling
         for invasive cardiology to high
         performing systems of care


Slide 69
                Implications for Physicians (1)

          The law does not affect that much in the next two-
           three years
          Medicaid will be squeezed in short run because of
           state financing
          Medicare hospital cuts start before the new coverage
           starts putting pressure on hospital financing
           immediately
          SGR will be a permanent piece of legislative
           brinksmanship, unless………
          Insurance expansion but not delivery reform in the
           medium term 3-5 years, this all means…..
          More covered at lower reimbursement levels per unit
Slide 70
                Implications for Physicians (2)

          Reimbursement reform pilots such as P4P, Non
           Payment for Non Performance, bundled payments,
           and the results of Massachusetts deliberations will
           eventually change the game but it will take time
          Patient Centered Medical Homes is a place to start
           that saves money, improves quality and patient
           satisfaction and aligns incentives
          Reimbursement Reform leads to Delivery Reform
          Learn to make money on Medicare, for doctors too
          Integration for accountable care becomes a key
           imperative
          It’s better than Hamster Care
Slide 71
                         The Second Curve


           First Curve                 Second Curve




Slide 72
       Flip the Switch: When the Time is Right

      Integrate for Accountable Care
           – Financial risk for the care of patients
           – Integrated medical staffs dedicated to high performance
           – Performance measurement and management across the continuum
             of care
           – Business model to sustain it all
      Make it Cheaper
      Make it Better
      Focus on Outcomes
      Innovate on the Side
      Flip the Switch

Slide 73
               Focus on Making a Better Future

      Sabotaging the Future is Not Smart
      Let the Nerds Decide: Let the Jocks Respond
      The Alan Kay Effect:
           – The Best Way to Predict the Future is to Invent It
      You Own Your Own Future:
           – It’s Local
           – It’s Hospitals’ to Lose
           – You have time…if you start immediately
      The Power of Leaders, Heroes and Stories
Slide 74

				
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