The Affordable Care Act & Diabetes Care
Geoffrey Joyce, PhD
Schaeffer Center for Health Policy & Economics
Outline
Why reform health care
Overview of the ACA
Impact on diabetes care
Innovations
Why Health Reform?Because the Status Quo is Not Good
1. We spend too much
—$2.8 trillion in total health care spending (17% of GDP)
—Per capita spending 50% - 100% higher than OECD countries
2. Many lack insurance coverage
– 50 million uninsured + 25 million underinsured
3. Quality is mixed
– High infant mortality, medication errors, readmission rates
– Longer wait times
$2,729$2,870 $2,902
$3,129$3,353 $3,470
$3,677 $3,696 $3,737$3,970 $4,063 $4,079
$4,627
$5,003
$7,538
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Per
Capita S
pendin
g -
PPP A
dju
sted
Total Health Expenditure per Capita, U.S. and Selected Countries, 2008
Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en(Accessed on 14 February 2011).Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates. Numbers are PPP adjusted.
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
1970 1975 1980 1985 1990 1995 2000 2005
Per
Capita S
pendin
g -
PPP A
dju
sted
Growth in Total Health Expenditure Per Capita, U.S. and Selected Countries, 1970-2008
United States
Switzerland
Canada
OECD Average
Sweden
United Kingdom
Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en (Accessed on 14 February 2011).Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates. Numbers are PPP adjusted. Break in series: CAN(1995); SWE(1993, 2001); SWI(1995); UK (1997). Numbers are PPP adjusted. Estimates for Canada and Switzerland in 2008.
On Average, Spending Increase Has Been Worth It
0
10
20
30
40
50
60
40 45 50 55 60 65 70 75
DeathsPer
1,000Pop.
1974
1984
1994
2004
14.6
Source: Martin, Freedman, Schoeni, 2008.6
Age
But High Costs Drive People Out of the Market
12
13
9
5
3
5
0
2
4
6
8
10
12
14
Below FPL 100-199%FPL
200-299%FPL
300-399%FPL
400-499%FPL
500%+FPL
Number ofUninsured(millions)
Note: FPL=Federal poverty level (about $21,000 for family of 4)
But It’s Larger Than Reforming Health Care…It’s also a Public Finance Issue
0 100 200 300 400 500 600 700 800 900 1000
Executive Office of the PresidentLegislative Branch
National Science FoundationDepartment of Commerce
Corps of EngineersEnvironmental Protection Agency
Department of the InteriorOther Independent Agencies
NASAInternational Assistance
Department of StateDepartment of EnergyDepartment of Justice
Homeland SecurityHousing and Urban Development
Department of EducationOffice of Personnel Management
Department of TransportationDepartment of Veterans Affairs
Department of LaborDepartment of Agriculture
Department of the TreasuryDepartment of Defense
Social Security AdministrationHealth and Human Resources
Federal Spending in 2011 (Billions of Dollars)
Outline
Why reform health care
Overview of the ACA
Impact on diabetes care
Innovations
Key Tenets of the Affordable Care Act (ACA)
•Expand Coverage
•Protect Patients
•Reform Payment
Expand Insurance Coverage
• Individual mandate
• Employer “pay-or-play”
• Insurance exchanges (e.g. Covered California)
• Medicaid expansions (voluntary)
• Insurance subsidies (Cost=$1 Trillion/10 yrs)
– Subsidize purchase of insurance up to 400% FPL
11
Health Insurance Exchanges
• As of January 1, 2014:
– Individuals without other coverage & small employers can purchase coverage through exchanges
• Currently, “open enrollment” for 2015
– An estimated 20-27 million will enroll in coverage through these new exchanges by 2017
– Premium and cost-sharing subsidies available
12
The ACA Medicaid Expansion Fills Current Gaps in Coverage
Adults
Elderly & Persons with Disabilities
Parents
PregnantWomen
Children
Extends to Adults
≤138% FPL*
Medicaid Eligibility in 2013Medicaid Eligibility in 2014
Limited to Specific Low-Income Groups
Extends to Adults ≤138% FPL*
Current Status of State Medicaid Expansion Decisions, as of July 1, 2013
WY
WI
WV
WA
VA
VT
UT
TX
TN1
SD
SC
RI
PA
OR
OK
OH1
ND
NC
NY
NM
NJ
NH
NVNE
MT2
MO
MS
MN
MI1
MA
MD
ME
LA
KYKS
IA1
IN1IL
ID
HI
GA
FL2
DC
DE
CT
COCA
AR1AZ
AK
AL
Debate Ongoing (6 States)
Moving Forward at this Time (24 States including DC)
Not Moving Forward at this Time (21 States)
With Medicaid Expansion
Without Medicaid Expansion
Up to 100% of poverty
Medicaid Unsubsidized
100-138% of poverty* Medicaid Exchange
138-400% of poverty Exchange Exchange
>400% of poverty Unsubsidized Unsubsidized
NOTES: Poverty Level is $11,170 for a single person and $23,050 for a family of four*Medicaid eligibility cut off is 133% FPL, however 5% of income is disregarded, making the threshold 138% FPLSOURCE: Kaiser Family Foundation
How People Get Covered
NOTE: This assumes that all states choose to expand Medicaid eligibility up to 138% FPL January 2014.SOURCE: Congressional Budget Office, March 2012. Total may not equal 100% due to rounding
Estimated Health Insurance Coverage in 2016
59% 56%
10% 17%
12%
18%
20%9%
Without Health Reform With Health Reform
Total Nonelderly Population = 275 million
Uninsured
Medicaid/CHIP
Private
Non-Group/Other
Employer-
sponsored
Insurance
Uninsured
Medicaid/CHIP
Private
Non-Group/Other
Employer-
sponsored
Insurance
Protections for the Insured
• New restrictions on benefit limits
• No exclusions of preexisting conditions (<19 yr)
• No recission of coverage
• Adult children covered up to age 26
• Coverage of some preventive services
17
In Theory, the ACA is Budget Neutral
• Medicare reform ($500b)
– Slow payment increases to hospitals, nursing homes, providers, and Medicare Advantage plans
• Taxes ($500b)
– Fees on insurers, Pharma, device makers, high cost plans
– Taxes on high income individuals/families (>$200k/$250k)
– Taxes are not Indexed, so will affect more over time
18
Why So Much Opposition?
• Public’s ambivalence on the need for reform
• About 70% say health care system fails to meet the
needs of most Americans
• About 70% say health care system meets the needs of
their family
• May interfere with the MD-patient relationship
• Will not control spending
19
1. Electronic Medical Records
• Measure clinical outcomes & things that matter
2. Payment reform
• Incentivize providers via “shared savings”
3. Benefit design
• Incentivize patients to make cost-effective choices
4. Comparative effectiveness (CER)
• Accumulate good evidence on what works
5. Independent Payment Advisory Board
20
But How Will it Control Spending?
Outline
Why reform health care
Overview of the ACA
Impact on diabetes care
Innovations
Mostly Positive Changes in the Near Term
1. Cannot deny coverage to persons with diabetes
• Cannot exclude diabetes as a pre-existing condition
• Cannot cancel coverage
• No annual or lifetime benefit limits
2. Requires insurers to cover more services
– E.g. preventive services, including diabetes screening
– Diabetes education, annual eye exams, dental services
3. Lower Rx costs in Medicare Part D (doughnut hole)
4. Explicit and implicit subsidies
Longer Term Impacts Depend on System Reform
Current focus is on revenue growth
• Large capital investments & high fixed costs
• Incentives for more use
- Extra MRI means more revenue
- Only way to make margins is to use more or charge more
• Always leads to greater health care spending
Longer Term ImpactAccountable Care Organizations (ACOs)
Future focus is on spending targets & population health
Provides incentive to:
Avoid increases in capacity
Improve care in domains previously ignored
e.g. care coordination, end-of-life
Beneficial to persons with chronic disorders
ACOs are not a radical shift
Can be implemented with fee-for-service payment
Financial Risk Of Care For Provider And Payer,
By Payment Method.
Source: Frakt A B , Mayes R Health Aff 2012;31:1951-1958
Outline
Why reform health care
Overview of the ACA
Impact on diabetes care
Innovations
CMMI Project Overview
Integrate clinical pharmacists into primary care
at 10 large clinics:
– Improve care coordination and quality of care
– Educate patients about their condition(s)
– Manage drug therapies
27
Better health
Better care
Lower costs
Meets CMS Triple Aim:
Recruit High-Risk PatientsMission Accomplished
• Enrolled > 5,000 patients since Oct 2012
– Predominantly Hispanic, non-elderly women
• 3/4ths have hypertension, 36% uncontrolled
• 2/3rds have diabetes, 60% uncontrolled
• High rates of hospitalizations
28
Clinical Markers Are Improving
29
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Less than 7 7 to 8 8 to 9 9 to 10 Greater than 10
Blood Sugar Levels
Baseline 6 months Most Recent
Collaborating with USCInstitute For Creative Technologies (ICT)
• USC engineers and computer scientists developed “avatars”
– Help veterans identify/cope with PTSD (DoD funded)
– Not diagnostic or treatment oriented
• Rather, a resource and referral tool
– Wide applicability to health care
• Provide “script” or clinical content
• Create an avatar of “your” provider
• High risk and elderly are ideal targets
30
1533
One Solution: SimCoa c h
An online intelligent, interactive Virtual Human Agent program
Designed to attract and engage Service Members and their significant others who might not otherwise seek help
Create an experience that will motivate users to take the first step to empower themselves with regard to their Healthcare
Support users’ efforts to understand their situation better, explore available options and initiate the treatment process when needed.
SimCoach will not provide diagnostic or therapy services.
Beta Test Site: http://www.simcoach.org/
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