Medicare & Health Care Savings: Can Entitlement Reforms Help to Bridge the Gaps for Healthy Aging

December 11, 2012

Welcome
Cost of chronic disease on the Medicare program
Medicare benefits that support healthy aging and can help lower costs Policy implications moving forward

The Landscape
While entitlement reform is at the top of the national agenda as a way to reduce the deficit, more than 99 cents of every Medicare dollar is spent on patients with one or more chronic conditions
Patients with one or more chronic condition Patients without a chronic condition

Source: Partnership for Solutions

Medicare Spending Dramatically Higher for People with Multiple Chronic Conditions
Percentage of Medicare Spending on Patients with Chronic Conditions, by Number of Treated Chronic Conditions
80 76.3

70 65.3

60

52.2 50

40

1987 1997 2002

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20 14.5 10.1 10 7.4 4.4 2.6 0.4 0 0.5 0.2 6.4 4.2 10.1 7.4 9.2 15.4 13.3

5 or more
Source: Health Affairs

Chronic Conditions & Functional Limitations Together Explain High Per-Person Medicare Spending

Source: H. Komisar & J. Feder, Transforming Care for Medicare Beneficiaries with Chronic Conditions and LongTerm Care Needs: Coordinating Care Across All Services, The SCAN Foundation, October 2011.

Medicare Spends More, Per Capita, on Seniors with Chronic Conditions and Functional Impairment than Seniors with Only Chronic Conditions
Annual Per Capita Medicare Spending in 2006, by Number of Chronic Conditions and Presence of Functional Impairment1
$20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0
Any Chronic Condition 1 Chronic Condition 2 Chronic Conditions 3 Chronic Conditions 4 Chronic Conditions 5 or More Chronic Conditions $2,626 $5,961 $4,039 $5,972 $7,116 $17,498 $19,763 $18,223 $15,435 $13,283 $10,133 $17,375

Seniors without functional impairment

1

Seniors with functional impairment

N = 22,104,694 with any chronic conditions and no functional impairment, N = 3,562,347 with any chronic conditions and functional impairment. Excludes beneficiaries who died during 2006.

Chronic Conditions Driving Medicare Spending

Much of the recent growth in spending among Medicare beneficiaries is attributable to rising spending on chronic conditions specifically diabetes and hypertension.
Source: Thorpe et al, Health Affairs, April 2010

Some costs can be avoided altogether by averting disease through reducing or eliminating risk factors

Projected Lifetime Medicare Health Care Expenditures for a Cohort of Seventy-Year-Olds, 2004 Dollars
$160,000

143,899
$140,000

$120,000

118,400 107,013

$36,886 =
difference in lifetime Medicare spending between obese and normal weight American senior citizens

FACT:
Medicare will spend about 34% more on an elderly obese person over their lifetime* than on someone of normal weight, even though they will live about as long.
*Lifetime costs refer to costs incurred between Medicare enrollment and death

$100,000

$80,000

$60,000

$40,000

$20,000

$0 Obese Overweight Normal

Source: Health Affairs

Medicare Is Supporting Healthy Aging

Some of the Preventive Services that Medicare Now Covers as a Result of the Affordable Care Act:
Osteoporosis Screenings Medical Nutrition Therapy Tobacco Cessation Counseling Depression Screening more Screening HIV comprehensive payment While these services are important,
Annual Wellness Visit Obesity Screening and Counseling Vaccinations Diabetes, Cancer and Cardiovascular Screenings

and delivery reform is still needed in Medicare to maximize the benefits of screening incentives:
Pilot Fatigue: Employ evidence-based programs that have been proven to work in the private sector New coding for transitional care coordination in CMS MPFS for FY 2013 is a start Use health IT to align incentives and pay for improved care coordination and better outcomes

Medicare Part D Contributes to Improved Health Outcomes

The Congressional Budget Office has confirmed that the use of medicines in Medicare Part D decreases medical spending in Medicare.

A recent JAMA study found that in the first year that Medicare Part D was implemented, there was a $1200 per year decrease in nondrug medical spending among beneficiaries who previously had limited prescription coverage. The savings in the first year of the program totaled approximately $13.4 billion.
A Harvard study found that Medicare Part D was responsible for significantly reducing hospitalization for 8 conditions which led to 4 percent fewer hospital admissions.

Policy Implications for Entitlement Reforms

Obesity epidemic generates both near-term and lifetime additional costs Healthy aging potential across the health status continuum (avoiding disease onset, progression, development of additional conditions) Need to preserve benefits that promote healthy aging

HHS Multiple Chronic Conditions Framework

Goal 2: Maximize the use of proven self-care management and other services by individuals with multiple chronic conditions.
Individuals must be informed, motivated, and involved as partners in their own care. Self-care management can be important in managing risk factors that lead to the development of additional chronic conditions.

Objective A: Facilitate self-care management

Strategy 2.A.1. Continually improve and bring to scale evidence-based, self-care management activities and programs, and develop systems to promote models that address common risk factors and challenges that are associated with many chronic conditions. Strategy 2.A.2. Enhance sustainability of evidence-based, selfmanagement activities and programs. Strategy 2.A.3. Improve the efficiency, quality, and cost-effectiveness of evidence-based, self-care management activities and programs.
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A nonprofit service and advocacy organization

2012 National Council on Aging

Chronic Disease Self-Management Saves Money

A study published in Medical Care found a 2.5 visit reduction in ER and outpatient visits per CDSMP participant over 2 years, and a 0.49 day reduction in hospitalizations in the first 6 months. A study published in Effective Clinical Practice of CDSMP participants found that, over a 1-year period, participants had a mean 0.97 day reduction in hospitalization and averaged 0.2 fewer ER visits, with estimated savings of about $1,000 per participant in the first year. In a 2010 United Kingdom study, 50% of CDSMP participants reported fewer unscheduled visits to their primary care physician. Total cost savings were approximately $3,000 per participant per year. According to a 2008 Lewin Group analysis, improving access to CDSMP could save Medicare approximately $280 million per year, or almost $1.5 billion over 10 years.
A nonprofit service and advocacy organization 2012 National Council on Aging

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Evidence-Based Falls Programs Save Dollars

Evidence-based programs delivered in community settings reaching those at risk

Effectiveness: proven through randomized controlled trials

Return on investment (ROI) for evidence-based programs over and above initial $1 investment

Tai Chi: Moving for Better Balance Fall rate among participants was reduced by 55% Stepping On Otago (for people 80+) Fall rate among participants was reduced by 30% Reduction of 35% in adults over age 80 a very high risk age group

$1.60 per dollar invested had the highest ROI $1.00 per dollar invested $.70 per dollar invested

A nonprofit service and advocacy organization

Stevens JA, Sogolow, ED. Preventing Falls: What Works A CDC Compendium of Effective Community-based Interventions from Around the World; Atlanta, GA: CDC, 2009. Carande-Kulis , VG, Stevens, JA, Beattie, BL & Arias, L. Stand and prevent: The returns from averting falls in older adults. ,CDC study pendingCouncil on Aging publication. 2012 National

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The Patient-Centered Medical Home

Enhancing the Practice and Delivery of Primary Care

Partnership to Fight Chronic Disease December 11, 2012

The Patient-Centered Medical Home Model

Redesigning the Way Primary Care is Delivered and Financed

Patient Trusted personal physician Physician who provides, manages and facilitates care Care is coordinated or integrated across healthcare system More accessible practice with increased hours 16 and easier scheduling

Personal Physician Enhanced payment that recognizes the added value of delivering care through the PCMH model Assistance to practices seeking transformation Support to practices adopting HIT for QI

The Patient-Centered Medical Home Model

Changes in Clinician Incentives
Prospective Payment
Blended Payment Fee For Service Better Work Environment Team-based care Greater support from health plans for care delivery Improved Patient Interaction Comprehensive care customized to meet the needs of the patient Better communication and access

Fee-for-Service Pay for Outcomes/Share d savings

Personal Physician

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The Joint Principles of the Patient-Centered Medical Home (2007)

Payment that Supports Transformation and Outcomes

Personal Physician

Enhanced Access

Joint Joint Principles Principles of the ofPCMH the PCMH

Physician-directed Medical Practice

Whole Person Orientation

Quality and Safety

Care is Coordinated and/or Integrated

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Broad Range of Blue PCMH Pilots

Practice Transformation

Incentives for Increased Medical Home Functionality

Accountable Care

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BCBS Patient-Centered Medical Home Initiatives October 2012

Blue Plans have PCMH programs in market or in development for 2013 in 47 states and the District of Columbia. Over 5.3 million members have receiving care in Blue PCMHs today.

Evidence of Early Success and Financial Sustainability

BlueCross BlueShield of North Dakota:

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Empowering the Patient and the PCP - Twelve PCMH Domains

Care planning based on partnership of patient, patients family and personal physician (Patient-Provider Partnership) Enhanced patient access to care and information (Extended Access, Patient Portal) Whole person orientation (Individual Care Management, SelfManagement Support) Focus on safety, quality, evidence-based medicine (Test Tracking & Follow-up, Preventive Services, Integration and coordination of services to provide patient with optimal care experience (Coordination of Care, Specialist Referral Process, Linkage with Community Services) Physician practice accepts responsibility, held accountable for patient population based on performance measures (Patient Registry, Performance Reporting)
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2,552 designated PCPs

776 practices

~ 820,000 members

7.5%
Lower rate of high-tech radiology usage

Patient- Centered Medical Home

11.4%
Lower rate of primary caresensitive emergency department visits

4.8%

Observed differences

22.0%

Lower rate of low-tech radiology usage

Lower rate of ambulatory caresensitive inpatient discharges

9.9%
Lower rate of emergency department visits

WellPoint Medical Home Programs Impact

WellPoints experience has shown that strengthening the primary care relationship makes a meaningful difference in patient quality, outcomes and cost
Dartmouth Hitchcock
ACO Pilot

Pilot Programs
Program Type Quality Improvement Inpatient Admissions/1K per year ER Visits/1K per year PC Pilot

Colorado
PC Pilot Yr 2

New Hampshire
PC Pilot Improved all diabetes measures

New York
PCMH Pilot 12 23% lower 12 23% lower for PCMH Providers 11 17% lower for PCMH Providers

Improved all diabetes measures Decrease 3.6% Decrease 18% vs 18% increase in control Decrease 15% vs 4% increase in control Flat vs to 10% increase control

Decrease 3.6%

Decrease 5.81%

Decrease 6.1%

Decrease 6.1%

Decrease 10.66% 18% avoidable

Specialist Visits Rx Usage

Decrease 2.0% Increase 1.3% in persistent Rx usage

Decrease 2.0% Increase 1.3% in persistent Rx usage Decrease 2.85% brand Rx usage 14.5% lower than non-PCMH Providers 3.4% PMPM reduction to projected cost

Overall Medical and Rx Cost/ROI

Overall ROI 2.5:1 - 4.5:1

WellPoints Patient-Centered Primary Care Approach

By visit By email By phone By report

Access

Pre-Visit Planning

Population Management Monitoring and Follow-up

Medical Neighborhood (co-located or referred)

Front Office Nurse / MA Provider (MD/PA/NP) Care Team

After the Visit

Specialists Mental health Dental / vision services Hospitals Pharmacy Community resources Social work Home health Complex case managers Peer programs Other ancillary services

During the Visit

Care Plan Management / Coordination 25

Partnering with CMMI Comprehensive Primary Care Initiative (CPCI)

Overview Multi-payer initiative between public and private payers Medicare working with commercial carriers and States to offer bonus payments to PCPs that offer high-quality care PCPs that participate are given resources to better coordinate primary care for Medicare beneficiaries

States/Regions
Arkansas Statewide Colorado Statewide New Jersey Statewide New York Capital District Hudson
Valley Region

Numbers 500 primary care practices Represents 2,100+ providers serving an estimated 313,000 Medicare beneficiaries

Ohio and Kentucky Cincinnati

Dayton Region Oklahoma Greater Tulsa Region Oregon Statewide

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Future Outlook
Ensuring Future Sustainability

Engaging the Patient

The Patient-Centered Medical Home

Continue to Innovate and Implement

Build the Neighborhood

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Contact Information

Anshu Choudhri, MHS Director, Office of Clinical Affairs

Blue Cross and Blue Shield Association

312-297-6659 anshuman.choudhri@bcbsa.com

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Medicare & Health Care Savings: Can Entitlement Reforms Help to Bridge the Gaps for Healthy Aging
December 11, 2012

Discussion & Questions