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Health Care Reform Memo:
July 16, 2012

Deloitte Center for Health Solutions publication

The health care reform memos are issued on a weekly basis, highlighting news from the previous week's activities in the administration and implications for the C-suite and various stakeholder groups.

My take: health care CEOs: what keeps them up at night

From Paul Keckley, Executive Director, Deloitte Center for Health Solutions

I often ponder which chief executive officers (CEO) in health care have an easier time sleeping at night. “Looking around the corner” at the industry, the realities in each sector certainly make for an interesting parlor game…

Hospital CEOs face pressures to cut costs from government and commercial payers, increased labor and supply costs, expanding requirements, intensified competition, and perplexing challenges of physician alignment. If you happen to be a CEO of a multi-hospital system, the complexity amps up as unique factors make life more complicated in efforts to standardize across multiple sites and satisfy bond holders and debt issuers.

Health insurance plan CEOs face a barrage of new Affordable Care Act (ACA) requirements coupled with intensified state and federal oversight, caps on premiums and administrative costs, premium resistance pressures from individuals and groups, and pressure to build public trust. The certainty of increased enrollment is dampened by the reality that the industry’s transition to an individual market is daunting, and its top line increasingly truncated by pricing constraints. And the opportunity to differentiate beyond size and scope of services is increasingly complicated by regulatory efforts to standardize offerings to facilitate consumer transparency.

CEOs running drug manufacturing companies face the risk of being the odd man out in the race to cost containment. Becoming commodities in the U.S. supply chain is perplexing for drug manufacturing companies. They must replace revenue from lost patents, transition their pipelines from blockbusters to large molecule and companion diagnostics, and implement comparative effectiveness research (CER) and advanced analytics to stay competitive. If in start-up mode, tougher access to working capital and fewer strategic investors with unflattering term sheets rob sleep time. If an established player, the question of globalization keeps CEOs awake at night—which country, how big a bet, what’s the right entry and growth strategy, and is it sustainable given political and economic conditions in those markets?

CEOs in device manufacturing ditto the sleep deprivation profile of drug manufacturer CEOs—the same issues and challenges but with a unique twist. Parts of the device industry in the U.S. are tightly regulated, but new areas force new regulations that might be imposed today and changed tomorrow. Are mobile communication and biomonitoring devices considered “medical devices” that are subject to the same scrutiny as others, and how might purchasing by provider organizations change as group purchasing organizations (GPO) modify their business models and direct-to-consumer device advertising increases?

And the distributers in this industry—the CEOs who lead the organizations that get our stuff from here to there—face similar challenges that make sleeping difficult at times: tougher negotiations with manufacturers and GPOs, increased regulatory and performance risk in the value chain, and a dearth of new gadgets and pills that markets require. And in some sectors, drawing the ire of regulators using “channel choking” to disrupt the flow of health care goods and services keeps many awake.

So, I am not sure which CEO has the hardest time sleeping. But I do know what helps each sleep a little better: knowledgeable boards and competent management teams.

CEOs lead organizations to make educated bets with measurable risk. They are constantly second guessed, rarely given credit for right calls, and usually the fall guy or gal for the public failures. And most will admit that it’s a lonely role.

Those with boards of directors and management teams that “have their backs” are the lucky ones. All too often, CEO turnover is more the result of wounds from friendly fire than navigation of market pressures and opportunities. They are hired to bring about change and often fired because they changed things.

In recent years, most CEOs in this industry have been bringing messages to their organizations that are not popular: going big or getting out, cutting cost aggressively, transforming culture insulated from outside input, crafting deals with unusual collaborators, rebuilding operational models, re-engineering the workforce to reward competence over comfort, and taking risk and managing in uncertainty are not things rank and file employees wish to hear. CEOs with trustees and C-suites that understand these messages act on the basis of facts, and those who act boldly are the ones who might get better sleep. And kudos to those who have the CEO’s back when the daggers start flying from the rear.

The health care industry has had a great run: each of our sectors has operated for 35 years using a variety of adaptive models focused on growth. And while the ebb and flow of reimbursement changes and regulatory requirements forced adjustments, each sector was suitably capable of sustainability simply because there has been enough money and growth to go around. A generation of CEOs with a set of talents attuned to growth prospered in this era.

I believe that era has ended. I believe we’re at the start of a new era requiring new CEO capabilities. Health care spending increased at 7 percent for the past decade, providing false security. The recent Congressional Budget Office (CBO) forecast of 5.7 percent annual spending increases through 2022 might make sleep easier for some were it not for an inconvenient fact: that’s well above the gross domestic product (GDP), and well above what is necessary to keep per capita spending on an even keel with the rest of the economy. Given global and domestic economic uncertainty, what’s clear is a new era is upon us, and radical cost reduction is necessary to achieve sustainability.

So, I admire health care CEOs across the industry that are visionaries and are pragmatic and realistic about their role as game changers. I respect CEOs who speak honestly and candidly with their boards and management teams. I respect those that seek individuals for these roles based on required competencies and experiences needed for the future rather than rubber stamps and insulated thinking.

It boils down to this: every CEO who is in touch with reality is sleepless these days. It is easier for some because their board and management team has their back. But all are sleeping less these days.

Paul Keckely

Paul Keckley, Ph.D., Executive Director, Deloitte Center for Health Solutions

P.S. We recently interviewed CEOs from major health systems as part of our Insights from the C-suite series: “A look around the corner: Healthcare CEOs’ perspective on the future,” an Issue Brief from the Deloitte Center for Health Solutions, presents the results of Deloitte's interviews with 24 CEOs of acute-sector hospitals and multi-hospital health systems, looking at the short-term (next three to five years) and long-term future (to 2020). 

Implementation update

HHS to states: Medicaid expansion optional but most expected to participate

Speaking at The George Washington University last week, U.S. Department of Health and Human Services (HHS) Secretary Sebelius expressed her belief that most states will not turn down the federal funding available, and will choose to expand their Medicaid coverage despite the U.S. Supreme Court decision making state participation optional.Thursday, Centers for Medicare & Medicaid Services (CMS) acting administrator Marilyn Tavenner responded to a letter from Republican governors indicating there is no deadline for states to notify the agency of plans to implement the Medicaid expansion but states can receive funding for Medicaid information technology costs whether they proceed with the expansion or not.

According to Bloomberg Government analytics, the 27 states that sued HHS will leave $207 billion on the table that might otherwise flow into the system. Counter-point from skeptical governors: states will bear 10 percent of costs for the expansion after 2016 so the impact may be quite negative for states seeking fiscal recovery.

Some comments issued by Republican state executives last week:

  • Governor Rick Scott (R-FL): “That’s what I’m focused on, getting our citizens jobs to afford insurance. This expansion will cost the federal government, which is our tax money, and the state a lot of money. We can’t afford it…If you talk to the citizens, they want a job, they want to make sure their kids can get a great education. Every time we expand Medicaid, we make it more difficult to fund our education system, which is very important to our citizens.
  • Governor Rick Perry (R-TX): “I oppose both the expansion of Medicaid as provided in the Patient Protection and Affordable Care Act and the creation of a so-called ‘state’ insurance exchange, because both represent brazen intrusions into the sovereignty of our state. Neither a ‘state’ exchange nor the expansion of Medicaid under the Orwellian-named PPACA would result in better ‘patient protection’ or in more ‘affordable care.’
  • Governor Gary Herbert (R-UT): “They ought to be giving all states more flexibility, block grant the money and let us find our own unique ways with our own unique populations and demographics to find the best way to provide health care.”
  • Governor Bill Haslam (R-TN): “I don’t see a reason to make a final decision right now…There’s a boatload of questions about expanding Medicaid,” he said. “I think what you hear from every governor here is, Republican and Democrat, the more flexibility you give us, the better. I’m just convinced we can control the costs better than the federal government.”

HHS announces 89 ACOs, total now 154

Monday, HHS announced that, as of July 1, 89 new accountable care organizations (ACOs) serving 1.2 million Medicare enrollees in 40 states entered into agreements with CMS. Per the HHS news release, almost half of all the ACOs are physician-operated businesses serving fewer than 10,000 enrollees, demonstrating smaller organizations’ willingness to operate ACOs. For 2012, CMS developed 33 quality measures for ACOs to meet including:

  • Care coordination and patient safety
  • Appropriate use of preventive health services
  • Improved care for at-risk populations
  • Patient and caregiver experience of care

Note: for background on ACOs, download the “Accountable Care Organizations: A New Model for Sustainable Innovation” Issue Brief from the Deloitte Center for Health Solutions or contact John Keith or Bob Williams, leaders of Deloitte’s Accountable Care Solutions team.

USPSTF revises obesity guidelines

According to the Centers for Disease Control and Prevention (CDC), 36 percent of the U.S. adult population is obese—defined as having a body mass index (BMI) of 30 or higher. The U.S. Preventive Services Task Force (USPSTF) is recommending increased counseling and behavior modification under the ACA’s requirement that certain services be accessible to consumers without a co-pay.

Employers are concerned: as Helen Darling, president of the National Business Group on Health stated, "Does this mean that employers and the government will be paying for up to 26 intense visits every year for every obese person for the rest of their lives?" According to USPSTF, effective programs for the treatment of obesity involve anywhere from 12 to 26 sessions over the course of a year that cover multiple behavioral management techniques. HHS has indicated they will evaluate whether to issue additional guidance on the new rules.

Legislative update

Rockefeller: dual eligible demonstrations too big, costly

Tuesday, Senator John Rockefeller (R-WV) wrote a letter to HHS Secretary Kathleen Sebelius calling for a halt in the implementation of the pilot program for dual eligibles—the nine million individuals eligible for both Medicare and Medicaid services, accounting for 15 percent of Medicaid enrollees and 39 percent of the program’s costs.

In addition to his concern about the savings target, Rockefeller expressed concern that the pilots proposed by 27 states participating in the program are too large to be considered pilot projects since they enroll three million beneficiaries—one million more than proposed in the original design of the program. Senator Rockefeller urged CMS to:

  • Focus on providing high-quality care as the primary goal instead of up-front programmatic savings—which was never the intent of the law.
  • Rigorously test new care coordination concepts and make recommendations to Congress about programmatic changes that show promise for broad implementation.
  • Guarantee that dual eligibles retain all the rights and same access to care as all other Medicare beneficiaries.

Related: the Medicare Payment Advisory Commission (MedPAC) also wrote a letter to CMS addressing concerns about the demonstration projects suggesting the scope of the proposed demonstrations is too broad. It projected that if all state proposals are approved, approximately three million dual eligible beneficiaries will be enrolled thus possibly destabilizing the Medicare Part D prescription drug plan market by moving the drug benefit back to the states, resulting in uneven benefits across the country for the low income population. MedPAC also recommended passive enrollment with opt out—beneficiaries are given the opportunity to opt out of the demonstrations before they are passively enrolled.

CMS releases proposed annual Medicare payment update

Friday, July 6, CMS released proposed rules to update payment policies and rates under the Medicare Physician Fee Schedule (MPFS) in hospital outpatient departments (HOD) and ambulatory surgical centers (ASC), outpatient services, and home health agencies for calendar year (CY) 2013. Highlights:

  • Primary care: increased payments to family physicians by 7 percent and other primary care services 3-5 percent.
    Note: CMS proposes to make separate payments to physicians providing care for the 30 days after patients are discharged from a hospital or nursing facility.
  • Hospital outpatient: HOD payment rate increases of 2.1 percent and ambulatory surgery centers 1.3 percent.
  • Home health: decreased 0.1 percent.
    Note: provisions of ACA apply a 1 percent reduction to the CY2013 home health market basket update of 2.5 percent, resulting in a 1.5 percent increase for home health agencies in CY2014.

House votes to repeal ACA

Wednesday, the House passed H.R. 6079, Repealing the Affordable Care Act, by a vote of 244-185, with five Democrat members supporting the measure. The vote marked the 33rd time the House has voted to repeal the entire law or provisions of ACA. The bill is not expected to be picked up by the Senate and President Obama said he would veto the bill should it pass through Congress.

President signs PDUFA into law

Monday, July 9, President Obama signed into law S. 3187, the Food and Drug Administration Safety and Innovation Act (FDASIA), reauthorizing the Prescription Drug User Fee Act (PDUFA) after passing through both the House and Senate with bipartisan majorities.

For information on what the legislation includes, see the Monday Memo for July 9, 2012.

House Veterans’ panel focus on transparency efforts

The Veterans’ Affairs Committee passed by voice vote H.R. 4057, Improving Transparency of Education Opportunities for Veterans Act of 2012, to develop a comprehensive policy to improve outreach and transparency to veterans. The legislation package would require the U.S. Department of Veteran Affairs (VA) Secretary to establish a registry to monitor service members and veterans to determine whether exposure to burn pits in war zones has caused health problems, and to develop a public information campaign to inform those eligible about the registry. The full House is expected to vote on the bill prior to the August recess.

Note: in May, the Government Accountability Office (GAO) released a report finding that open burn pits on or near military bases produced “harmful emissions that military and other health professionals believe may cause acute and chronic health effects.” The report conflicts with a previous Institute of Medicine (IOM) report that found insufficient evidence that long-term health effects might be seen in service members exposed to burn pits. The Department of Defense (DOD) and VA are under increased pressure to develop more transparency in dealings with veterans. (Sources: GAO, “DOD Can Improve Its Response to Environmental Exposures on Military Installations,” May 2012; IOM, “Long-Term Health Consequences of Exposure to Burn Pits in Iraq and Afghanistan,” October 2011)

State update

CMS awards new CO-OP grant

CMS has awarded an $85.4 million loan to a new Consumer Operated and Oriented Plan (CO-OP) in Utah—the Aarches Community Health Care. It is the 17th CO-OP funded under ACA Section 1322: the Act authorizes $6 billion to fund the CO-OP program to foster creation of nonprofit, member-run health insurance companies that serve individuals in one or more states. CO-OP grantees shall compete in the reformed individual and small group insurance markets. Federal funds shall be distributed as loans and grants; loans to assist with start-up costs, grants to meet state solvency requirements.

Health exchange update

Thirteen states have sent letters to HHS indicating their intention to set up state-based health insurance exchanges (HIX): California, Colorado, Connecticut, Hawaii, Massachusetts, Maryland, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington, and Kentucky.

State round-up

  • Arkansas Insurance Commissioner Jay Bradford issued a proposed rule to establish a process for the state to set benchmark essential health benefit plan by the end of September.
  • Massachusetts voters will decide on two health-related measures in November: whether to allow terminally ill residents with less than six months left to live to obtain life-ending drugs, and whether to legalize medicinal marijuana, setting up a regulated system of dispensaries and patient ID cards.

Industry update

Study: health system CEOs concerned about cost pressures, uncertainty about health reform

Based on one-on-one interviews with health system CEOs: on a scale of 1 to 10, with 10 your highest/greatest concern, how would you rank these issues as they impact your organization?

Statement, ranked by level of concern Mean Range
A concern: the issue/challenge that is getting more attention and remains challenging
Our current cost structure is optimal for value-based purchasing by Medicare and payers 6.0 4-9
We are prepared for the eventualities that might come from health reform 6.1 2-8
Our board is well informed about the industry and its future challenges 6.7 5-10
Our culture lends itself to innovation 6.7 3-10
Our clinical programs are the right balance of acute and ambulatory services 6.7 3-10
We have the information systems necessary to prepare for the future 6.7 3-8
A source of concern: issue/challenge is getting attention and can use more
Our relationship and structure with our physicians is well positioned to share risk with insurance plans 7.1 7-10
Our physicians are well informed about the industry and changes that will impact their future 7.2 3-9
Our competitive position is strong relative to our local competitors 7.4 3-10
A major concern that is being managed
We enjoy the trust and confidence of our core medical staff 8.6 7-10
Our balance sheet is strong: we can access adequate capital at favorable rates 8.8 8-10

Source: Deloitte Center for Health Solutions, “A look around the corner: Healthcare CEOs’ perspective on the future,” 2012. See My Take for link to full report.

OIG report to CMS: inadequate conflict of interest surveillance for contractors found

Last week, the HHS Office of Inspector General (OIG) released a report in response to a letter from Senators Max Baucus (D-MT), Thomas R. Carper (D-DE), and Claire McCaskill (D-MO) raising concerns about potential conflicts of interest among Medicare contractors. The OIG review of 1,919 contractual relationships concluded that CMS does not have an adequate policy for reviewing conflict and financial interest information submitted by contractors nor does it capture information that is consistent or complete.OIG offered CMS the following recommendations:

  • Provide clearer guidance in the Requests for Proposals to offerors and subcontractors regarding which business and contractual relationships should be identified as actual conflicts and possible conflicts.
  • Require offerors and subcontractors to distinguish those business and contractual relationships that they deem to be actual conflicts from those they deem to be possible conflicts.
  • State whether offerors and subcontractors need to report income amounts, periods of performance, and types of work performed for their contracts with CMS and income amounts generated from key personnel's other employment.
  • Create a standardized format for reporting information in the Organizational Conflict of Interest Certificate and require its use by offerors and subcontractors.
  • Develop a formal, written policy outlining how conflict-of-interest information provided by offerors should be reviewed by CMS staff.

Note: CMS notified OIG that it is implementing the recommendations beginning with development of a new policy and staff training to spot, document, and mitigate conflicts of interest. (Source: OIG, Conflicts and Financial Relationships Among Potential Zone Program Integrity Contractors,” July 2012)

Physicians no longer in demand for independent private practices

A new survey from Merritt Hawkins’ indicates that 63 percent of recent search assignments for hospital employment of physicians were up from 56 percent the 2011 and 11 percent in 2004. See Fact File for more. (Source: Source: Merritt Hawkins, “Survey: Search for Solo Doctors Coming to an End,” July 2012)

WellPoint, AmeriGroup deal announced

Last week, the acquisition of Medicaid managed care #2 player, AmeriGroup by WellPoint for $4.9 billion cash (18.4 times 2013 earnings) was announced. The combined companies will serve 4.5 million of the nation’s 53 million Medicaid enrollees.

Note: state and federal outlays for the Medicaid program were $457 billion in 2011—$263 billion from the federal government.

Trade group asks Congress to revise observational stay regulations

The American Health Care Association (AHCA) is urging Congress to fix the hole of coverage that older adults hit when their physicians call for observatory stays following discharge from inpatient stays. Observational stays are currently considered outpatient stays and do not qualify for the 100-days of nursing facility care Medicare normally pays for. Representative Joe Courtney (D-CT) introduced H.R.1543, Improving Access to Medicare Coverage Act of 2011, which will consider a patient under observation as an inpatient with respect to the 3-day hospital stay Medicare requires before paying for long term care claims. ACHA members have also been encouraged to discuss the initiative surrounding nursing home quality measures to include increasing staff stability by 15 percent and customer satisfaction up to 90 percent and reducing hospital readmissions by 15 percent and off-label anti-psychotic use by 15 percent. The bill currently has 27 cosponsors and has been referred to the Subcommittee on Health.

Note: from AHCA website—The American Health Care Association is a non-profit federation of affiliate state health organizations, together representing more than 11,000 non-profit and for-profit nursing facility, assisted living, developmentally-disabled, and subacute care providers that care for approximately one million elderly and disabled individuals each day.

Physicians to Congress: SGR replacement will take years to develop

Wednesday, the Senate Finance Committee heard testimony from physician organizations about a replacement for the sustainable growth rate (SGR), the formula used to compensate physicians. While the whole group advocated that real-time data from CMS is required for them to improve quality of care, statements from specific groups included:

  • American Medical Association (AMA) president-elect Ardis Hoven indicated that multiple formulas may be needed and also commended a new Innovation Center for its method of paying $20 per month per beneficiary for offering longer and more flexible office hours, coordinating treatment with other physicians, and using electronic health records.
  • American Academy of Family Physicians (AAFP) President Glen Stream urged CMS to use the patient-centered medical home model more, citing evidence that these models save money and improve the quality of care. While all of the physicians acknowledged the formula is flawed and needs to be replaced, they also emphasized that CMS data needs to be more up-to-date in order for physicians to track their patients’ care and control costs.
  • Douglas Weaver of the American College of Cardiology (ACC) offered that CMS should encourage more use of clinical data registries that allow for the tracking, reporting, and improvement of health care quality.
  • The American College of Surgeons (ACS) described its proposal to add quality measures developed by medical specialties to currently existing measurements—specialties would choose a target goal and all health care professionals who help achieve those goals would receive part of a bonus.

Senator Orrin Hatch (R-UT) asked panelists to submit ideas for compromising on medical malpractice, stating that defensive medicine is responsible for a large part of unnecessary spending in the program.

Note: a full replacement for the SGR was not presented by the physician organizations.

Hospital trade groups seek avoidance of Medicare cuts from sequester

Last week, the American Hospital Association (AHA) and Federation of American Hospitals (FAH) announced a campaign to prevent funding cuts of 2 percent to Medicare that go into effect January 1, 2013—a cut of $124 billion over ten years to providers (32 percent of sequester cuts hit hospitals, 8 percent outpatient facilities). The hospital groups are planning a targeted push against the spending cuts beginning in September, and will include outside groups such as business trade associations. Representative Edolphus Towns (D-NY) introduced H. R. 3519 to exempt the Medicare program from fallback sequestration under the Budget Control Act of 2011 last year. It has eight Democratic and no Republican co-sponsors.

Quotable

“In the decade before the law was passed, national health expenditures increased about 7 percent a year. But in the past two years, those increases have dropped to less than 4 percent per year, saving Americans more than $220 billion...You can see the same trend with premiums. Between 2000 and 2009, the average family premium more than doubled, from $6,438 to $13,375, an annual increase of 8.1 percent. From 2009 to 2011, family premiums still rose—but at a rate 25 percent lower. That generated savings of more than $1,200 per family…Another falsehood...is that it is putting ...a greater burden on small businesses…Small businesses were struggling in the health insurance market long before the law passed, spending an average of 18 percent more than their large competitors annually… [and] the number of small businesses offering coverage to employees was falling rapidly—from nearly 70 percent in 2000 to less than 60 percent in 2009…People are entitled to their opinions but not to their own facts.” 

— HHS Secretary Kathleen Sebelius, “The Truth about Health Reform,” Washington Post Editorial, July 11, 2012

“For the most serious infections, where few alternatives exist, the FDA should create streamlined regulatory pathways for approval of new antibiotics. Alarm bells have been ringing for a long time about the march of the microbes. It is time to pay attention.”

— Editorial Board, “Resistance to antibiotics is becoming a crisis,” Washington Post, July 10, 2012

“These trends reflect a sea change in American culture toward more individualism. That can be both good and bad. Some people have argued that individualism has been on the rise in Western cultures for centuries but that the increase accelerated after the late 1960’s. These results suggest that’s indeed the case.”

—Jean Twenge, Keith Campbell, and Brittany Gentile, “Increases in Individualistic Words and Phrases in American Books, 1960–2008,” PLoS ONE, July 10, 2012

Fact file

  • The 27 states that sued the federal government will forego $207 billion over five years in federal funding if they choose not to expand their Medicaid programs. Five states—Florida, Texas, Pennsylvania, Ohio, and Georgia—account for $106 billion. (Source: Bloomberg Government, “Supreme Court Ruling May Undermine Increase In Medicaid Spending,” March 2012)
  • Health care workforce: 10.8 percent of total employment—one in nine jobs in the economy; highest on record. (Source: Bureau of Labor Statistics, June 2012)
  • Federal tax rates 2009: Household income fell 12 percent from 2007-2009 (top 20 percent paid 23.2 percent in 2009 vs. 24.7 percent in 2007; bottom 20 percent tax rate fell from 5.1 percent in 2007 to 1 percent in 2009). The federal tax rate fell to 17.4 percent in 2009 from 19.9 percent in 2007—previous low was 19.4 percent in 2003. (Source: Congressional Budget Office, “The Distribution of Household Income and Federal Taxes, 2008 and 2009,” July 2012)
  • Lobbying investments: labor unions $4.4 billion 2005 thru 2011 including soft costs not captured in Federal Election Commission filings. (Source: Tom McGinty, Wall Street Journal, “Political Spending by Unions Far Exceeds Direct Donations,” July 10, 2012)
  • Supervisory care: in the past three months, 39.8 million people over 15 provided unpaid care to someone over 65 because of a condition related to aging; 22 percent of those aged 45-64 identify themselves as elder care providers—56 percent of these are women. (Source: Bureau for Labor Statistics, “American Time Use Study,” June 22, 2012)
  • Voter opinions of ACA:
    • ACA individual mandate is a tax hike: 55 percent yes, 36 percent no
    • Agree with the Supreme Court decision to uphold the law: 48 percent yes, 45 percent no
    • Believe Congress should repeal ACA: 49 percent yes, 43 percent no
    • Presidential candidate’s position on health care is extremely or very important to their vote in November: 55 percent
    • Supreme Court decision effect on their vote: 59 percent no effect, 27 percent less likely to vote for President Obama, 12 percent more likely to vote for President Obama
      (Source: Quinnipiac University poll, “American Voters Say Health Care Law Is A Tax Hike, Quinnipiac University National Poll Finds; Most Want Arizona-Type Immigration Law In Their State,” July 12, 2012)
  • Medicaid patient visits to emergency department (ED): nonurgent visits represented 10 percent of ED visits paid by nonelderly Medicaid patients, while 7 percent of ED visits were privately insured in 2008. Slightly more than half of Medicaid and private payer visits were categorized as “urgent” or “emergent,”—the difference in the rate of nonurgent visits per 100 enrollees between Medicaid and private insured account for 13 percent of the total difference in ED visit rates. (Source: Center for Health System Change, “Dispelling Myths About Emergency Department Use: Majority of Medicaid Visits Are for Urgent or More Serious Symptoms,” July 2012)
  • National health expenditures: increase of 3.8 percent in May 2012 vs. 4.2 percent observed in April. Health spending as a share of GDP was 18 percent in April, down from the all-time high of 18.1 percent in June 2011—up from 16.4 percent in December 2007, the start of the recession. (Source: Altarum Institute, Center for Sustainable Health Spending, “Insights from Monthly National Health Expenditure Estimates through May 2012,” July 2012)
  • Solo practices: according to a new survey, only 1 percent of new physician recruiting assignments were for solo practices, down from 22 percent in 2004. The researchers predict that, in two years, 75 percent of newly hired physicians will be hospital employees. (Source: Merritt Hawkins, “Survey: Search for Solo Doctors Coming to an End,” July 2012)
  • Global spending on pharmaceuticals: a new report predicts global spending on medicines to reach nearly $1.2 trillion by 2016—rising from 2011 levels of $956 billion. U.S. spending is projected to grow by less than 2 percent in 2012 and 2013 before rising up to 4 percent in 2014—the year that an expected 30 million uninsured American gain insurance. The U.S. share of the world’s prescription drug spending dropped from 41 percent in 2006 to 34 percent last year, and will continue to drop, reaching approximately 31 percent by 2016. (Source: IMS Institute for Healthcare Informatics, “The Global Use of Medicines: Outlook through 2016,” July 2012)
National health reform: What now?

National health reform: What now?

At Deloitte, we continue to explore and debate the key questions facing 
the industry, and we look forward to helping our clients find and implement 
the right answers for their organizations. To learn more, visit www.deloitte.com/us/healthreform/whatnow today.

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