9/30/2010 All Healthcare is Local: Working Together to Prepare for Healthcare Reform in Colorado Dale Jarvis, CPA MCPP Healthcare Consulting, Inc. Seattle, Washington dale@mcpp.net 1 Overview • Colorado is embarking on a Medicaid Healthcare Reform experiment (Regional Care Collaborative Organizations) that will surely disrupt the status quo and may or may not work. • In order to support Coloradans in the safety net, Community Health Centers and Community Behavioral Healthcare Organizations need to: – Obtain a deep understanding of how healthcare reform should unfold in the U.S. and Colorado; – Build on work already underway by Colorado’s CHCs and CBHOs; and – Plan and implement a set of local and statewide strategies to promote a Next Generation Safety Net Healthcare System , leveraging the opportunities (and working within the limitations) of the Accountable Care Act and the RCCO RFP. 2 1
9/30/2010 But wait, I live in Seattle…and • All Healthcare is Local • We are moving into a new era in how the US Healthcare System is organized and funded • So we are going to have to figure this out together… 3 Three Discussion Topics • The Safety Net Delivery System in the Context of the Overall US Healthcare System • Redesigning the US Healthcare System – Opportunities in the Accountable Care Act and Lessons from the Field • Designing the Next Generation Colorado Safety Net Healthcare System 4 2
9/30/2010 The Safety Net Delivery System in the Context of the Overall US Healthcare System 5 A Tale of 2 Siblings This session is partly a story of two siblings that were separated when they were children: CHCs and CMHCs 6 3
9/30/2010 CHCs: Federal Program Managed by HRSA 1960s Migrant Health Act of 1962 for farm workers/families Economic Opportunity Act of 1964 funds CHCs 1970s Section 330 of the Public Health Services Act - Community Health Center Program – Section 330(e) - Migrant Health Center Program – Section 330(g) National Health Service Corps begins Health Care for the Homeless Program – Section 330(h) 1980s The 3 Types of CHCs become known as FQHCs FQHC Cost-Based Payments for Medicare & Medicaid 1990s Free Federal Tort Protection (Malpractice Insurance) Public Housing Primary Care Program – Section 330(i) 2000s Prospective Payment System States Required to Cover Difference between Rates & PPS Expansion of Funding and Capacity, adding BH Services 7 CMHCs: De-Federalized Program Managed by the States Sister of CHCs in the 1960s and 1970s Part of the Shift and Shaft strategy that began in 1981 Leaving success or failure up to each state’s leadership and funding levels and the ability of local CBHOs to succeed (or not) in a highly regulated and underfunded environment. 8 4
9/30/2010 SMHA-Controlled Mental Health Revenue by State, FY 2006 $ Over % Over Total State Target # of Revenue (Under) (Under) Mental Health Persons to per Target Top 10 Top 10 State Revenue Serve/Year Client Rank Average Average Pennsylvania $3,332,904,698 544,949 $6,116 1 $1,644 37% Maine $464,300,000 76,362 $6,080 2 $1,608 36% District of Columbia $229,400,000 38,093 $6,022 3 $1,550 35% Alaska $183,200,000 33,512 $5,467 4 $995 22% New Hampshire $166,100,000 38,394 $4,326 5 -$146 -3% Maryland $810,000,000 233,097 $3,475 6 -$997 -22% New Jersey $1,241,600,000 365,082 $3,401 7 -$1,071 -24% Minnesota $721,100,000 213,635 $3,375 8 -$1,096 -25% Vermont $122,500,000 36,426 $3,363 9 -$1,109 -25% New York $3,982,300,000 1,287,434 $3,093 10 -$1,379 -31% Top 10 Average $4,472 Wyoming $52,600,000 22,248 $2,364 13 -$2,108 -47% Arizona $977,900,000 447,063 $2,187 15 -$2,284 -51% Kansas $248,700,000 125,940 $1,975 22 -$2,497 -56% South Dakota $57,800,000 31,047 $1,862 25 -$2,610 -58% Colorado $340,000,000 221,881 $1,532 29 -$2,940 -66% Nebraska $108,700,000 71,758 $1,515 31 -$2,957 -66% Utah $150,000,000 116,070 $1,292 33 -$3,180 -71% Nevada $151,000,000 118,765 $1,271 34 -$3,200 -72% Idaho $67,100,000 69,246 $969 38 -$3,503 -78% 9 Meanwhile… • The dysfunction of the rest of the American Healthcare System has been creating a huge sucking sound in the American Economy • And funding for the safety net has taken a back seat to centers of power : insurance companies, pharmaceutical companies, hospitals, specialty physicians, etc… Billions % FQHC Funding $9.1 0.3% CMHC Funding $19.7 0.7% Combined Funding $28.8 1.0% US Healthcare Funding $2,776 100% Millions % Medicaid or Indigent/Uninsured 69 22% Total US Residents 307 100% Sources: HRSA, NASMHPD, SAMHSA, Kaiser, Commonwealth Fund 10 5
9/30/2010 Which has created an upside down Resource Allocation Triangle Acute Care Acute Care Specialty Specialty Care Care Prevention Prevention Primary Primary Care Care 11 Results: Healthcare Cost The Cost Growth of the current American Healthcare System is unsustainable Growing at a rate much higher than the rest of the Economy 12 6
9/30/2010 Results: Healthcare Quality Preventable Deaths* per 100,000 Population The U.S. in 2002-2003 (19 Industrialized Nations, Healthcare Commonwealth Fund ) (* by conditions such as diabetes, epilepsy, stroke, influenza, System is both ulcers, pneumonia, infant mortality and appendicitis) 110 the Best and 110 101 103 103 104 the Worst 100 96 93 90 90 Healthcare 80 82 82 84 84 77 80 System in the 74 74 71 71 70 65 Industrialized 60 World 13 Results: Americans with a SMI and a COD • The 53 year lifespan for Americans with a Serious Mental Illness is comparable with Sub-Saharan Africa • Americans with a Co-Occurring Disorder are dying, on average, at age 45 (Oregon Department of Human Services Addiction and Mental Health Division, June, 2008) 14 7
9/30/2010 The Consequences for the Overall Healthcare System Total Healthcare Expenditures of Americans with a Serious Mental Illness are 2 to 3 times higher 15 The Consequences for the Overall Healthcare System Mental Health, Substance Use, and Co-Occurring Disorders: an inseparable part of the equation GA-U: General Assistance Unemployable 16 8
9/30/2010 The Challenge for Americans in the Safety Net and the Organizations that Serve Them • Nationally, CHCs, CMHCs and other Safety Net Providers need to find new ways to work together to plan for and deliver quality and cost-effective services through the development of a Next- Generation Safety Net Healthcare System. Accountable Care Organization Clinic Food Mart Specialty Clinics Clinic Food Mart Person Person Centered Centered Hospitals Health Health Hospitals Care Care Specialty Clinics Homes Homes Social Service Schools Child Care Etc. Agencies Safety Net Healthcare System 17 Redesigning the US Healthcare System – Opportunities in the Accountable Care Act and Lessons from the Field 18 9
9/30/2010 Four Strategies in the Accountable Care Act... 19 Atul Gawande: Testing, Testing • Insurance Reform and Coverage Expansion are “technical fixes” • Service Delivery Redesign and Payment Reform will require pilots to test ideas and models 20 10
9/30/2010 Strategy: Insurance Reform Addresses Many Problems • Many New Protections, including: – Insurance Companies can’t Deny Coverage – Bans Pre-Existing Condition Exclusions – Prohibits all Annual and Lifetime Limits – Provide Dependent Coverage for Children up to Age 26 in Individual and Group Policies 21 Strategy: Coverage Expansion • Expands Coverage to most Americans – Expands Medicaid for all Under 133% of the Federal Poverty Level – Creates State Health Insurance Exchanges to help Newly Insured and those with Individual and Small Group Coverage to Purchase Affordable Policies (large buying club) – Provides Credits & Subsidies up to 400% of the Federal Poverty Level to help Individuals and Families Purchase Insurance Important Note: The majority of low income, uninsured Americans with behavioral health disorders will obtain coverage by 2014 22 11
9/30/2010 Coverage Expansion: BIG NUMBERS Insurance Coverage of Nonelderly Coloradans (0-64) with Incomes up to 133% Federal Poverty Level (2007-2008) CO # CO % Employer 150,400 18.9% Individual 62,700 7.9% Medicaid 222,900 28.0% Other Public 35,300 4.4% Uninsured 324,100 40.7% Total 795,400 100.0% http://www.statehealthfacts.org/profileind.jsp?cmprgn=1&cat=3&rgn=7&ind=849&sub=177 23 Service Delivery Redesign and Payment Reform Identified 10 Health Care Reform Policies that can save $3 trillion over 10 years ( Commonwealth Fund 2009) Commonwealth Fund Report The Path to a High Performance U.S. Health System "Near" Universal Coverage Net Savings from Insurance Expansion Reduced Administative Costs Payment Reforms Enhanced Payment for Primary Care Adoption of the Medical Home Bundled Payment for Acute Care Correcting Medicare Rates Improving Quality and Outcomes Accellerating Spread and Use of IT Center for Comparative Effectiveness Reducing Tobacco Use Reducing Obesity Net Impact 2010 - 2020 (-$2,998 Billion) 24 12
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