NATIONAL AND REGIONAL
ENVIRONMENTAL OVERVIEW OF
HEALTH CARE
7 RIVERS ALLIANCE
2015 State of the Region Annual Meeting
Radisson Hotel
La Crosse, WI
November 4, 2015
Political Landscape
Reducing the federal deficit is bipartisan and both political parties are willing
to reduce health care expenditures to get there—often threatening support
for both Medicare and Medicaid.
Results from the Commonwealth Fund’s Scorecard on State Health System
Performance, 2014: Improvements in childhood immunizations, hospital
readmissions, safe prescribing, and cancer deaths, but costs continue to
increase with little or no improvement relative to improving access to care,
reducing health disparities, and improving care coordination.
Increasing diversity in the U.S. electorate: Huge impact on politics…and health
care.
Population Projections Reflect Slower Growth and Increasing Diversity
Population Characteristics
78 M baby boomers expected to live longer (84) and with chronic
conditions.
Palliative care, a rapidly growing field, likely will fill many of the gaps in
health care coverage in the future.
Only 10–15% of an individual’s health status is attributable to the health
care services received. The rest is driven by behavior, genetics and social
factors – including housing, access to food, jobs, and education status.
Nationally, 42.5 M adults 18 or older (18.2% of U.S. population) experienced
a mental illness in the past year. Even so, in 2012, only 62.9% of adults in
the U.S. with serious mental illness (6 million) received mental health in the
prior 12 months.
Health Care Expenditures per Capita by State of Residence, 1996-2009
$30,000
$25,000
$7,233
$6,850
$7,003
$6,540
$6,147
$20,000
$5,752
$5,408
$5,079
$4,730
$15,000
$3,375
$3,534
$10,000
$3,482
$3,335
$5,000
$3,421
$0
1996
$3,659
$3,491
$3,705
$3,957
$3,780
$4,026
$4,143
$3,991
$4,306
$4,461
$4,222
$4,860
$4,541
$5,238
$4,820
$5,609
$5,930
$6,252
$6,612
$6,978
$7,133
$7,409
Minnesota
Iowa
United States
$5,793
$6,618
$6,921
$6,118
$6,358
$5,182
$5,445
$5,411
$5,726
$6,028
$6,318
$6,566
$6,815
2004
2005
2006
2007
2008
2009
$3,574
$3,728
$3,902
$4,127
$4,435
$4,767
$5,096
1997
1998
1999
2000
2001
2002
2003
Wisconsin
Health Care Expenditures by State of Residence (in millions), 1996-2009
$38,371
$36,438
$34,067
$17,650
$16,411
$18,612
$17,428
$9,606
$10,093
1996
1997
$19,628
$19,049
$10,973
1998
$21,470
$20,193
$11,644
1999
$23,141
$22,007
$12,363
2000
$25,578
$24,215
$13,301
2001
$27,666
$26,282
$29,631
$28,329
$31,704
$30,126
$36,222
$39,410
$40,871
$38,994
$37,306
$34,040
$31,928
Iowa
$14,120
2002
$15,206
2003
$16,021
2004
$17,091
2005
$18,141
2006
$18,947
2007
$19,818
2008
$20,822
Minnesota
Wisconsin
2009
National Health Insurance Trends
Impact of ACA: Increase of about 30% in inpatient utilization, 15%
increase in ER use rates, and 40 - 70% increase in outpatient elective
services.
Employers are moving employee health plans from defined benefit to
defined contribution structures.
Exchange carriers use narrow or “ultra narrow” networks to limit access
to certain “cost effective” physicians and facilities. Consequently, patients
are sometimes surprised by charges from out-of-network specialists
when they go to in-network hospitals.
Health Insurance Coverage of the Total Population
(YE 2013)
57%
55%
54%
17%
14%
13%
13%
14%
13%
9%
9%
7%
7%
5%
EMPLOYER
9%
OTHER PRIVATE
1%
MEDICAID
Iowa
MEDICARE
Minnesota
Wisconsin
0
OTHER PUBLIC
0
UNINSURED
Hospital Emergency Room Visits per 1,000 Population 1999 vs 2013
450
418
400
350
365
357
300
250
1999 Total
2013 Total
200
150
100
50
0
Iowa
Minnesota
Wisconsin
Hospital Admissions per 1,000 Population by State of Residence, 1999-2013
400
Chart Title
350
300
105
103
100
101
111
111
108
104
125
112
111
110
106
Total
Total
Total
Total
Total
250
99
200
112
150
100
50
0
Iowa
Minnesota
Wisconsin
Health System Transformation
86% of health care CEOs believe technological advances will transform their
businesses in the next five years.
Demographics will force transformation in customer growth and retention strategies.
Unsustainable health care costs and an inordinate share of GDP are forcing the U.S.
health care system to transform from hospital-centric sick care to a super outpatient
model that will emphasize community-based care.
Hospitals are increasing scale through horizontal and vertical integration and moving
toward better collaboration, prioritization of programs, increasing purchasing
power, consolidating services and cutting costs.
Practitioners, payers, patients, and policymakers are demanding value, best
outcomes, and transparency.
Community Hospitals by Ownership Type, 1999 vs 2013
400
350
129
123
300
250
121
120
200
131
134
150
100
2
92
2
42
95
36
118
115
50
59
59
56
0
State/Local
Government
1
0
For-Profit
Non-Profit
Total
State/Local
Government
1999
57
6
0
2
For-Profit
Non-Profit
2013
Iowa
Minnesota
Wisconsin
Total
Physicians
With SGR reform, physician payment shifts by 2019 from payment for volume to
value. Consequently, physicians will need capital resources and infrastructure to
capture cost, quality, and outcome data or work with an entity that can provide it.
Therefore, physicians are like to:
• Retire earlier;
• Move into mega groups; or
• Become employed by hospitals/health systems or insurers.
As physicians become employed, certain issues need to be addressed: Trust, loss of
autonomy, loss of referral networks, loss of connections and collegiality with
specialists, and concerns about hospitals not providing support for improving quality.
Health Care Workforce
Increased hospital CEO turnover: Increased in 2013 to 20% vs 14 – 18% in early 2000.
53% of CEOs want to hire, but 63% are concerned about finding qualified people.
Private-sector health care employment was essentially flat falling by 400 jobs (Bureau
of Labor Statistics Employment Situation Summary, February 2014) compared to
previous 24-month average gain of 18,500 jobs.
• Hospitals lost 4,500 jobs compared to previous the 24-month average gain of
1,100.
• Ambulatory care added 9,000, but well below the 24-month average gain of
14,800.
• Nursing and residential care facilities lost 4,900 jobs – well below the 24-month
average gain of 2,600 jobs.
Information and Technology
Although expensive, IT will be the major platform or strategy for advancing
Health care organizations in the new payment and delivery world.
Care coordination of patients with chronic and complex health conditions who
see multiple physicians can be supported by better IT. Yet, security, access,
and interoperability issues across electronic health record systems remain
substantial barriers.
Disruptive technologies such as satellites, drones, smart phones, and webbased services will force adaption and innovation by all parties in health care.
Patient Safety and Quality
Medicare readmission rates have declined since 2011 to less than 18% leading to
approximately 130,000 fewer hospital readmissions between January 2012 and
August 2013.
Palliative care and end of life care are being discussed, but no real “political will” to
develop meaningful national policy
ACA Leading to Lower Hospital Readmission Rates for Medicare Beneficiaries
(CMS)
NATIONAL AND REGIONAL
ENVIRONMENTAL OVERVIEW OF
HEALTH CARE
Kim Byas, Sr., PhD, MPH, FACHE
Regional Executive
American Hospital Association
Chicago IL
312-422-2885
kbyas@aha.org