the mayo clinic health policy center plan (robert smoldt)

8/7/2019 The Mayo Clinic Health Policy Center Plan (Robert Smoldt)

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National Press FoundationWhy Pursue Health Reform One Providers View

National Press FoundationWhy Pursue Health Reform One Providers View

Robert K. SmoldtMayo Clinic

November 14, 2007

Robert K. SmoldtMayo Clinic

November 14, 2007


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Fundamental Issuesfrom a Providers Perspective


Uninsured Uninsured


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Ian Morrison*Ian Morrison*

The U.S. is theonly country where

owning a gunis a right and

getting health care

is a privilege

The U.S. is theonly country where

owning a gunis a right and

getting health care

is a privilege

*Ian Morrison quote from Mayo Clinic/RANDHealth Reform Forum, March 6, 2007


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Uninsured

Variable quality

Uninsured

Variable quality


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70.270.2MinnesotaMinnesota Mortality Amenable

to Health Care

Mortality Amenable

to Health Care

International variation, 1998International variation, 1998

Deaths before age 75that are potentially

preventable with timelyand appropriate

medical care

Deaths before age 75that are potentially

preventable with timelyand appropriate

medical care

Source: Commonwealth FundNational Scorecard on U.S. Health

System Performance, 2006

Source: Commonwealth FundNational Scorecard on U.S. Health

System Performance, 2006

Deaths per 100,000 populationDeaths per 100,000 population

8181

8484

8888

8888

8888

92929797

9797

9999

106106

107107

109109109109

115115

129129

130130

132132

7575

114.7114.7

00 5050 100100 150150

FranceFranceJapanJapan

SpainSpain

SwedenSweden

ItalyItaly

AustraliaAustralia

CanadaCanadaNorwayNorway

NetherlandsNetherlands

GreeceGreece

GermanyGermany

AustriaAustria

New ZealandNew ZealandDenmarkDenmark

U.S.U.S.

FinlandFinland

IrelandIreland

U.K.U.K.

PortugalPortugal


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Uninsured

Variable quality

Disintegrated,fragmented care

Uninsured

Variable quality



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Why is coordinated,integrated care needed?

Why is coordinated,integrated care needed?

Medicare patients with 4+ chronicconditions are what % of total cost?

68% Yearly per person average

13 physicians

50 prescriptions

Medicare patients with 4+ chronicconditions are what % of total cost?

68% Yearly per person average

13 physicians

50 prescriptions

Sources: WSJ, Feb 8, 2006; Archives of IM, Nov 11, 2002


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Uninsured

Variable quality


High cost

Uninsured

Variable quality


High cost


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Is U.S. only place where health carecosts are rising?

Is U.S. only place where health carecosts are rising?

Health spending per person in real terms,average annual % increase 1970-2002

Health spending per person in real terms,average annual % increase 1970-2002

Source: The Health of Nations, Economist, July 17, 2004

4.0%4.0%OtherOECDcountries

OtherOECDcountries

4.4%4.4%

00 1.01.0 2.02.0 3.03.0 4.04.0 5.05.0

U.S.U.S.


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Variability in EfficiencyVariability in Efficiency

Leapfrogs Honor Roll 39 U.S. teachinghospitals (based primarily on processmeasures)

Dartmouth data on cost per Medicareenrollee in last 6 months of life*

Most efficient hospital $15,800

Least efficient $45,600

Leapfrogs Honor Roll 39 U.S. teachinghospitals (based primarily on processmeasures)

Dartmouth data on cost per Medicareenrollee in last 6 months of life*

Most efficient hospital $15,800

Least efficient $45,600

*Dartmouth Atlas, 2006(?)


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A view that health spending does yieldbenefits


NY Times, August 22, 2006:Making Health Care the Enginethat Drives the Economy

By 2030, predicts Robert Fogel, NobelLaureate at the University of Chicago, about 25%of GDP will be spent in health care making it thedriving force of the economy. Dr. Fogel is notalarmed. Americans can afford it. He explains,

At the end of the 19th century, food, clothing andshelter accounted for 80% of the family budget.Today it is about a third.


By 2030, predicts Robert Fogel, NobelLaureate at the University of Chicago, about 25%of GDP will be spent in health care making it thedriving force of the economy. Dr. Fogel is notalarmed. Americans can afford it. He explains,

At the end of the 19th century, food, clothing andshelter accounted for 80% of the family budget.Today it is about a third.


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Says Robert E. Hall (Stanford) andCharles I. Jones (University of California, Berkley),We have to spend our money on something.So we get older and richer, which is morevaluable: a third car, yet another television, more

clothingor an extra yearof your life?


Says Robert E. Hall (Stanford) andCharles I. Jones (University of California, Berkley),We have to spend our money on something.So we get older and richer, which is morevaluable: a third car, yet another television, more

clothingor an extra yearof your life?


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Mayo Clinic Health Policy CenterMayo Clinic Health Policy Center

Goal

Influence stakeholders to implement

substantive health care reformbefore 2011 that will preserve qualityand availability of health care for allpatients

Goal

Influence stakeholders to implement

substantive health care reformbefore 2011 that will preserve qualityand availability of health care for allpatients


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Top Issues from SymposiumTop Issues from Symposium

Baker Center Univ. of TennesseeBaker Center Univ. of Tennessee Health insurance for all Americans Health insurance for all Americans

Improving effectiveness and

efficiency

Improving effectiveness and

efficiency

Improving integration of care Improving integration of care

Pay for value Pay for value

Harvard Kennedy Health Policy CenterHarvard Kennedy Health Policy Center

RAND CorporationRAND Corporation

Dartmouth Evaluative Clinical SciencesDartmouth Evaluative Clinical Sciences


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Individual Ownershipof Insurance for All

Individual Ownershipof Insurance for All

Provide health insurance and access to basichealth care for all Americans regardlessof their ability to pay

Require individual ownership of insurance Provide sliding-scale subsidies for those in need

Create a simple mechanism (FEHBP) tocoordinate insurance offerings

Appoint an independent health board to defineessential health care services

Allow people the option to buy more coverage

Provide health insurance and access to basichealth care for all Americans regardlessof their ability to pay

Require individual ownership of insurance Provide sliding-scale subsidies for those in need

Create a simple mechanism (FEHBP) tocoordinate insurance offerings

Appoint an independent health board to defineessential health care services

Allow people the option to buy more coverage


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Are there models of this approach?Are there models of this approach?

NetherlandsNetherlands

FEHBPFEHBP


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Effectiveness and EfficiencyEffectiveness and Efficiency

Increase quality and patient satisfaction.Decrease medical errors, costs and waste.

Develop a common definition of value

Measure and display outcomes, patientsatisfaction scores and costs as a whole

Create a trusted mechanism to synthesizescientific, clinical and medical information

Reward consumers for choosing high-qualityhealth plans and providers

Hold all sectors accountable for reducingwaste and inefficiencies

Increase quality and patient satisfaction.Decrease medical errors, costs and waste.

Develop a common definition of value

Measure and display outcomes, patientsatisfaction scores and costs as a whole

Create a trusted mechanism to synthesizescientific, clinical and medical information

Reward consumers for choosing high-qualityhealth plans and providers

Hold all sectors accountable for reducingwaste and inefficiencies


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Improving IntegrationImproving Integration

Patient care services must be coordinated acrosspeople, functions, activities, sites and timeto increase value

Center care around the needs of the patient

Form coordinated systems to deliver effectiveand appropriate care to patients

Develop incentives to encourage teamwork

Increase support for health care delivery science

Provide accurate information so patients canmake informed decisions

Patient care services must be coordinated acrosspeople, functions, activities, sites and timeto increase value

Center care around the needs of the patient

Form coordinated systems to deliver effectiveand appropriate care to patients

Develop incentives to encourage teamwork

Increase support for health care delivery science

Provide accurate information so patients canmake informed decisions


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Mayo/Dartmouth ForumMayo/Dartmouth Forum

Principles for Payment Reform

Payment systems should be designed toprovide patients with no less than the care

they need and no more than fullyinformed, cost-conscious patients wouldwant

Pay providers based on value

measurable outcomes, safety and servicecompared to the cost over time

Principles for Payment Reform

Payment systems should be designed toprovide patients with no less than the care

they need and no more than fullyinformed, cost-conscious patients wouldwant

Pay providers based on value

measurable outcomes, safety and servicecompared to the cost over time


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Mayo/Dartmouth ForumMayo/Dartmouth ForumProvider scores on the importance of continuing

development of the payment approachProvider scores on the importance of continuing

development of the payment approach

00 22 44 66 88 1010

Score (10 = very important)Score (10 = very important)

FFS with shared savingsFFS with shared savings

Overall capitationOverall capitation

FFS with outcomes rewardFFS with outcomes reward

5.65.6

5.85.8

5.95.9

Mini-capitationMini-capitation

Shared decision makingShared decision making

Chronic disease coordinator(medical home)

Chronic disease coordinator(medical home)

7.57.5

7.67.6

8.68.6

Present Medicare P4P based onprocess delivered by individual provider

Present Medicare P4P based onprocess delivered by individual provider

1.81.8


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Dr. Len M. Nichols(New America Foundation) testimony to U.S.

Committee of the Budget, June 26, 2007

Dr. Len M. Nichols(New America Foundation) testimony to U.S.

Committee of the Budget, June 26, 2007

The secret is not, however, to re-jigger10,000 prices in 3,000 counties so that we

get them right once and for all (untilmedical knowledge or technology or inputprices change again). The secret is

tobundle ever-larger sets of services into

one payment, which frees clinicians andproviders to find the most efficient way todeliver health.

The secret is not, however, to re-jigger10,000 prices in 3,000 counties so that we

get them right once and for all (untilmedical knowledge or technology or inputprices change again). The secret is

tobundle ever-larger sets of services into

one payment, which frees clinicians andproviders to find the most efficient way todeliver health.


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Hypothetical example of problemwith line item pricing emphasis

Hypothetical example of problemwith line item pricing emphasis

MDTeam A

$7,200

0.5

$18,000

2,500

$45.0 M

MDTeam A

$7,200

0.5

$18,000

2,500

$45.0 M

MDTeam B

$6,500

1.2

$21,000

4,400

$92.4 M

MDTeam B

$6,500

1.2

$21,000

4,400

$92.4 M

CoronaryAngioplasty

Fee

ICU days

Cost per episode

No. per 1 million

populationCost per 1 million

population

CoronaryAngioplasty

Fee

ICU days

Cost per episode

No. per 1 million

populationCost per 1 million

population

Cost of Bas % of A

-10%

+17%

+105%

Cost of Bas % of A

-10%

+17%

+105%


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Total Cost =Price x Use Rate

Total Cost =Price x Use Rate


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Price Controls: Graysons MaximPrice Controls: Graysons Maxim

Add (price) controls and you will see newservices appear. Expect unbundling ofservices with the price of individual units,

when added together, totaling more thanthe original services.

C. Jackson Grayson Jr.Chair, U.S. Price Commission (1971-1973)

Add (price) controls and you will see newservices appear. Expect unbundling ofservices with the price of individual units,

when added together, totaling more thanthe original services.


Source: Wall Street Journal, 29 Mar 1993


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Annual Rates of Increase in Physician Feesand Expenditures/Fee-for-Service BeneficiaryAnnual Rates of Increase in Physician Fees

and Expenditures/Fee-for-Service Beneficiary

Source: Letter to Medicare Payment Advisory Commissionfrom Herb B. Kuhn, Director, Center for Medicare Management, CMS 4/7/06

as referenced by Dr. Stuart Guterman, The Commonwealth Fund

.4

-0.7

7.4 7.4

-

0

4

6 Fees

SGR-related

expenditures/fee-for-servicebeneficiary

Fees

SGR-related

expenditures/fee-for-servicebeneficiary

Annualpercentchange

Annualpercentchange

1997- 0011997- 001 001- 005001- 005


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Price Controls: Graysons MaximPrice Controls: Graysons Maxim

No matter how simply you begin,your controls will get morecomplex and voluminous.

We started with3 pagesof regulations and ended with1,534. In an effort to correct oneinequity, you create another.


No matter how simply you begin,your controls will get morecomplex and voluminous.

We started with3 pagesof regulations and ended with1,534. In an effort to correct oneinequity, you create another.


Source: Wall Street Journal, 29 Mar 1993


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Patient/Public Input Focus GroupsPatient/Public Input Focus Groups

Six sessions in Atlanta, Cincinnati,and Los Angeles with chronicdisease patients

Reviewed cornerstones of MCHPCrecommendations without identifyingthem with Mayo Clinic: Insurance

for all, coordinated care, value

Six sessions in Atlanta, Cincinnati,and Los Angeles with chronicdisease patients

Reviewed cornerstones of MCHPCrecommendations without identifyingthem with Mayo Clinic: Insurance

for all, coordinated care, value


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Public Views OverallPublic Views Overall

Cornerstones accepted when explainedbut are not self evident

When changing delivery system,concerned about major shifts

Recommend a phased approach trynew things, see if work, then put in playmore broadly

People are dissatisfied with U.S. healthsystem, BUT are happy with their providers

Change could make things worsefor them

Cornerstones accepted when explainedbut are not self evident

When changing delivery system,concerned about major shifts

Recommend a phased approach trynew things, see if work, then put in playmore broadly

People are dissatisfied with U.S. healthsystem, BUT are happy with their providers

Change could make things worsefor them


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YOUR VOICE, NEW VISION ProgramYOUR VOICE, NEW VISION Program

Nine city tour to collect letters and filmand record woman/man on the streetviews

Mayo organized, but other partners:

Partners

American Hospital Association

American Medical Group Association Kaiser Permanente

Nine city tour to collect letters and filmand record woman/man on the streetviews

Mayo organized, but other partners:

Partners

American Hospital Association

American Medical Group Association Kaiser Permanente


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Mayo Clinic National Symposiumon Health Care Reform

Mayo Clinic National Symposiumon Health Care Reform

Brief review of forum principles

Review/analyze major health reform proposalsfrom presidential candidates

Identify/prioritize actions that different sectorscan take to contribute to positive health carereform

Begin creating an action plan for change

Brief review of forum principles

Review/analyze major health reform proposalsfrom presidential candidates

Identify/prioritize actions that different sectorscan take to contribute to positive health carereform

Begin creating an action plan for change

March 9-11, 2008Leesburg, VA

March 9-11, 2008Leesburg, VA

the mayo clinic health policy center plan (robert smoldt)

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