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.