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Transparency has become even more important in the past year as we begin the health care reform discussion. There is not a signature event in Nashville to bring quality, marketing, transparency, and technology together. The Naked Hospital event will take the user experience from high level strategy through national and state legislative issues through practical hands on tools to walk away with. The event will focus on how and why health systems and hospitals should focus on quality reporting as well as financial reporting. At the end of the day, all of this puts additional strains on the information systems and resources deployed by most health systems and hospitals. How will they cope? What is the next step?


Slide 1

Breakfast Sponsor

Briefing:Health System Reform: Update

Paul Keckley, Ph.D., Executive Director

Deloitte Center for Health Solutions

Washington, DC

Nashville, TN

August 6, 2009


Center for Health Solutions Research


Pay for Quality

Consumer-Directed Health Plans: Update

Medicaid Medical Management

The Medical Home

Medical Tourism

Price Transparency in Health Care

Retail Medicine

Preparing for ICD-10

Retail Pharmacy and Disease Management

Connected Care: Technology Enabled Care at Home

2008 Survey of Health Care Consumers

Best Practices in Greening in Health Care Organizations


Monday Health Reform Memo (weekly ongoing)

ROI for Personalized Therapeutics (1/09)

Health Care and Public Policy: What Do Americans Really Want (1/09)

Reducing Costs While Improving Care in the U.S. Health System: The Health Reform Pyramid (1/09)

2009 Survey of U.S. Health Care Consumers (3/09)

Comparative Effectiveness (5/09)

Academic Medicine: Sustainability (6/09)

Episode Based Payments (Summer 2009)

The Long Term Care Market in Medicaid: Ticking Time Bomb (Summer 2009)

Wellness and Healthy Living: New Business Models and Opportunities (Summer 2009)

Retail Medicine: Update (Summer 2009)

Medical Tourism: Update (Summer 2009)

The Medical Home: Update (Summer 2009)



Current context for health reform

The U.S. economy is weakrecession began 12/07

Unemployment at 9.4%: highest since 1939

Banking industry solvency: 19 major banks stress tested

TARP program underway: results unknown, $140 billion yet to deploy

Containing health costskey element in economic recovery

Fastest growing expense in households, companies and government

Only industry with employment increase since 12/07 downturn

The new administrationchangeyes we can

Health care, energy, education priorities

Access to health insurancecampaign 2008 focus, but costs now a major theme

Copyright 2009 Deloitte Development LLC. All rights reserved.



Health costs increased from 5.9 to 16.2% of GDP from 1960 to 2007: Fastest growing expenditure in federal budget

2008-2018 Forecast:

US economy: +4.1% CAGR

Health costs: +6.2% CAGR

Government spending for health care (Medicare and Medicaid): +7.2%

Private sector spending for health care: +5.3%

25% of entire federal budget

Copyright 2009 Deloitte Development LLC. All rights reserved.


Annual health care expenditures in the United States have gone from $27.5 billion in 1960 to $2.24 trillion in 2007 and are projected to reach $4.35 trillion by 2018. Source: Department of Health and Human Services, Center for Medicare and Medicaid Services, the National Health Expenditures Accounts (NHEA)


Since December 2007, 6 million overall jobs have been lost; however, health care jobs have increased 190,000

Copyright 2009 Deloitte Development LLC. All rights reserved.


Source: Labor Department


Consumer inclined toward reform: The system isnt working very well

Source: 2009 Survey of US Health Consumers

Only 1 in 5 consumers give the U.S. health care system an above-average report card grade; those grading the system F outnumber those giving it an A by 6 to 1.



Consumers believe system is wasteful

52% of Americans feel that at least half of health costs are wasted.

Source: 2009 Survey of U.S. Health Consumers

Copyright 2009 Deloitte Development LLC. All rights reserved.



Not a systema federation of interests thats fragmented, costly

Copyright 2009 Deloitte Development LLC. All rights reserved.




Service Providers










Long Term





Special Interests











Allied Health




White House puts priority on health reform above energy, education: Reduce costs, cover everyone

February 24, 2009 to Joint Session of Congress: Reform energy, education and health care. Pass bill in 2009.

May 11, 2009 to Major Trade organizations: Cut CAGR to 4.7%, reduce costs by $2 trillion (2008 2018)

June 3, 2009: Everything on the tablemandates, employer tax exclusion, employer mandate, public plan, et al. Bill this summer.

Copyright 2009 Deloitte Development LLC. All rights reserved.



Fundingfollow the money

January 23: President Obama signs SCHIP expansion legislation, increasing eligibility to 4,000,000 children and pregnant women; $32.3B funded through increase of 62 cent federal tax on each pack of cigarettes

February 17: President Obama signs $787B stimulus package (Americas Recovery and Reconstruction Act) that includes $145B for health care

February 26: President announces down payment on health reforma $634B 10-year fund to pay for long-term health reforms; cuts to pharmaceutical companies and Medicare Advantage plans plus increased taxes for those earning more than $250,000

March 11: Congress approves $410B appropriation to operate government through September 2009, including modest increases in a few areas of health careprimary care, NIH, National Service Corps

April 29: Passage of FY10 budget; targeted investments in health reforms (FDA, bundled payments); 8% overall growth in federal spending for Medicaid and Medicare but effective rate increase of 0.1%; insurance reform

Copyright 2009 Deloitte Development LLC. All rights reserved.



Presidential news conference on July 22, 2009:health insurance reform

1Health reform is necessary to reduce escalating costs of the system that threaten economic recovery. The result of inaction is economic collapse: employers will drop employee benefits coverage or shift financial burdens to employees who cannot afford premiums. The status quo is not an option.

2Reform of the system must be deficit neutral: added costs for covering 47 million lacking insurance (there are actually 45.7 million) and changes to the delivery system must be offset by savings or new revenues. The White House believes a combination of two-thirds from savings and one-third from taxes on high income households is the appropriate funding mechanism.

3The President supports a public plan option available to uninsured and under-insured individuals and small businesses. Repeating an oft-used phrase, the President supports the public plan option to keep the plans honest and provide competition to commercial plans. NOTE: A positive earnings report from a major plan released today was referenced as evidence plans benefit at the expense of patients by denying coverage or refusing to pay for needed care.

4Agreement among legislators is a work in progress: there is agreement that individual mandates, a comparative effectiveness program, health insurance exchanges, fraud reduction, health information technology utilization and integrated delivery systems are key elements. Pressed about partisan issues and defections among moderate Democrats due to the costs of the plan, the President defaulted to the legislative process: messy, necessary, and soon to result in a reform bill. The forthcoming work in the Senate Finance Committee is a key part of the process.

5Key industry stakeholders support the need for reform: in his remarks and responses to reporters questions, three references to AARP and two each to AMA, ANA and PhRMA were used to suggest the White House has industry support.

6To deflect criticism of government intrusion in coverage decisions and payment calculations for providers, the White House supports the development of an independent board to make recommendations. Congress would have 30 days to prevent implementation based on a vote. It would make determinations about advisable diagnostic and therapeutics based on evidence and costs. It would also set payment rates for providers based on its assessment of comparative effectiveness and value. NOTE: Sen. Jay Rockefeller proposed MedPAC as the independent entity; OMB Director had previously proposed a new entity, IMAC (Independent Medicare Advisory Commission).

7The President anticipates signing a bill in 2009 but did not state his determination of a bill by the August recess.



Key players: Congressional Committee leadership


Senior Senator from Iowa


Senior Senator from Massachusetts


Senior Senator from Montana


Member of the U.S. House of Representatives from California's 30th district

Senate Finance Committee

Senate Health Education, Labor and Pensions

House Ways and Means Committee

House Energy and Commerce Committee

House Education and Labor


Member of the U.S. House of Representatives from California's 7th district


Member of the U.S. House of Representatives from New Yorks 15th district