Health Care Reform Memo: April 25, 2011 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 

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

Last week, Standard and Poor’s lowered its outlook on U.S. debt from stable to negative as our 2010 national gross debt as percent of gross domestic product (GDP) reached 91.6 percent--second only to Japan at 220.3 percent. It observed that our long term AAA credit rating might be in jeopardy as we approach the spending cap of $14.3 trillion, unless measures are taken to shore up our balance sheet.

The U.S. is among 19 of 127 sovereigns with an AAA rating. This means the cost of our borrowing is lower than if we were insolvent. Meanwhile, the debate between Representative Paul Ryan’s (R-WI) budget proposal and President Obama’s was waged fiercely last week. The Congressional Budget Office’s (CBO) analysis last week of the President’s fiscal year (FY) 2012 budget concluded it would result in deficits of $1.4 trillion in 2011 and $1.2 trillion in 2012, accounting for 9.5 percent and 7.4 percent of GDP compared to the 2010 deficit of 8.9 percent of GDP. Per CBO, the deficit under the President’s proposal would fall to 4.1 percent of GDP by 2015 but would generally rise thereafter. By contrast, Representative Ryan’s targeted annual deficit would fall to 2.8 percent of GDP by the end of the decade.

So what? These numbers get lost in the cloud for most Americans. We want jobs, low prices, easy credit, and assurance a doctor will see us if we’re sick or injured. That’s simple.

The significant role the health care industry plays in exacerbating the problem of our fiscal distress is widely acknowledged in policy and economic circles; the solution—lowering health costs—is neither understood nor politically palatable, especially in election cycles.

The fact is the health care industry is adequately funded; however, it does not spend its resources wisely due to its myriad of social, structural and political challenges. But IF we aligned incentives with desired results—better outcomes at lower costs built on individual responsibility for care and costs—we might get somewhere. In tandem, we would need a safety net for those incapable of handling their medical needs and rid the system of frivolous lawsuits while embracing an evidence-based standard of care to which providers are held accountable. We would need candid discussion about end of life care—28 percent of Medicare’s annual spend is in the last year of an enrollee’s life with cheaper, better alternatives available that do not compromise the dignity of the individuals as life end nears. And we would need intellectual honesty in recognizing that government plays a key role necessarily in assuring fairness in this huge and growing market that’s almost 18 percent of our GDP.

The staggering debt of the U.S. and government spending are likely the issues on which the 2012 election war will be waged. The contribution of health costs will be an element of the discussion. The health care industry should lead these discussions; we should provide concrete ways to reduce costs and set aside industry sector protectionism that runs rampant. We should be leading a public discussion about ways to engage consumers actively as part of the solution.

Hopefully, the economy will roar back to recovery, but without deliberate, comprehensive health cost containment that’s trans-sector in scope and significant in impact, we will likely not see our national balance sheet healthier. It’s achievable while improving health outcomes and patient experiences; but not without engaging the industry in an honest exercise of self-evaluation and transformation.

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

ACA implementation update

CMS announces new database to monitor insurance exchanges

Last week, the Centers for Medicare & Medicaid Services (CMS) announced it will develop the Health Insurance Assistance Database (HIAD) to monitor the development and operation of state health insurance exchanges. The system will “collect and maintain information on consumer inquiries and complaints regarding insurance issuers…[and] enable CCIIO [Center for Consumer Information and Insurance Oversight] to develop aggregate reports that will inform CMS and HHS [U.S. Department of Health and Human Services] about compliance issues.”

Note: Affordable Care Act (ACA) Section 1321(c) authorizes the HHS to ensure that states with exchanges are substantially enforcing the federal standards to be set for the exchanges and to set up exchanges in states that elect not to do so or are not substantially enforcing related provisions.

Ambulatory surgery update: Medicare Ambulatory Surgical Center VBP Program proposed

Last Monday, HHS submitted its plans for a value-based purchasing program (VBP) for ambulatory surgery centers (ASCs) pursuant to ACA Section 3006(f) as amended by section 101301(a). CMS recommends existing VBP programs (e.g. Medicare hospital VBP Model, Medicare quality demonstrations, Medicare Home Health Pay for Performance program) as the framework and, to the extent possible, aligning new ASC quality metrics (below) with existing Medicare quality reporting programs (e.g. Hospital Inpatient Quality Reporting Program, Physician Quality Reporting System [PQRS], and Hospital Outpatient Quality Data Reporting Program). CMS intends to propose regulations for calendar year 2012, implementing an ASC quality measure reporting program focused initially on ten measures:

• Patient burn
• Patient fall
• Wrong site, wrong side, wrong patient, wrong procedure, or wrong implant
• Appropriate timing of intravenous prophylactic antibiotic
• Appropriate hospital transfer and/or admission
• Appropriate surgical site hair removal
• Surgical site infection
• Medication administration variance
• Medication reconciliation
• Venous thromboembolism measures: outcome/assessment/prophylaxis

Note: Current law allows HHS to reduce payments for ASCs for failure to report quality measures; it cannot implement a VBP program that reduces ASC payments based on performance. Thus, implementation of a VBP pay for performance program requires federal legislative action. ASCs do not qualify for funding under the Medicare electronic health record (EHR) incentive program (per the Health Information Technology for Economic and Clinical Health [HITECH] Act) which provides incentive payments to eligible professionals, eligible hospitals, and critical access hospitals that are meaningful users of certified EHRs though the report acknowledges adoption of EHRs is important to ASC performance. CMS announced it was considering a Medicare ASC Compare website similar to other facilities’ Compare websites (e.g. hospitals, nursing homes, home health providers, and end-stage renal disease [ESRD] facilities) which would publicly disclose ASC quality performance. In 2008, 5,175 certified ASCs provided services to 3.3 million Medicare enrollees—an increase of 2.8 percent over 2007. Between 2003 and 2008, physicians and/or investors opened an average of 331 new facilities annually. On average, 59 ASCs closed or merged with other facilities in the same time period. (Source: HHS, Report to Congress: Medicare Ambulatory Surgical Center Value-Based Purchasing Implementation)

House Energy and Commerce Committee requests information from trade associations; Senators ask for CLASS Act details

Monday, Republican leaders of the House Energy and Commerce Committee asked industry groups like the AARP, American Hospital Association (AHA), and America’s Health Insurance Plans (AHIP) for details on their negotiations with the White House on health reform.

Separately, Tuesday, Republican Senators asked HHS Secretary Sebelius for premium, participation, or actuarial models of the Community Living Assistance Services and Supports (CLASS) Act created before health reform was passed.

Note: Pursuant to ACA Section 3204, the CLASS Act is a voluntary, federally administered, consumer-financed insurance plan for those “actively at work” who may pay a premium averaging $123 per month for five years (per CBO estimate) to cover disabilities they may experience in later life. The benefit will pay an average of at least $50 per day, $18,250 a year, with no lifetime limit.

Department of Labor study: “essential health benefits” widely variable in health plans

April 15, Department of Labor (DOL) submitted to HHS its analysis of employer-provided health benefits pursuant to ACA Section 1302 that requires that the HHS Secretary to define the “essential health benefits” for plans. The law requires the Secretary of Labor to “conduct a survey of employer-sponsored coverage to determine the benefits typically covered by employers,” and to report the results of the survey to HHS. Among findings compiled by the Bureau of Labor Statistics (BLS):

• Nearly all plan participants with emergency care coverage had limits on the service; median copayment was $100
• Only 27 percent of plans included diabetes care management
• Two-thirds of survey participants had maternity care coverage; three in five participants were covered for infertility treatments

Note: The Institute of Medicine (IOM) will make recommendations on what benefits should be required in exchange plans in September and HHS will begin to collect public comments on the issue in the fall.

Group health insurance market analysis concluded

ACA Section 1254 requires the HHS Secretary to conduct a study of the fully-insured and self-insured group health plan market defined as companies with more than 100 employees. The findings of the study completed last month are:

• In 2008, 27.2 percent of large plans were self-insured while 11.7 percent were funded through a mixture of insurance and self-insurance, resulting in 38.9 percent of large plans (5,000 employees or higher) having a self-insured component. In contrast, the majority of participants were in plans that were self-insured (34.7 percent) or mixed-funded (37.5 percent).
• The prevalence of self-insurance increases with plan size. For example, 26.8 percent of plans with 100-199 participants were mixed-funded or self-insured in 2008, compared with 76.4 percent of plans with 5,000 or more participants.
• Larger plans are also more likely to have a mixture of funding mechanisms, i.e., some plan components are self-insured whereas others are fully-insured. For example, 5.4 percent of plans with 100-199 participants were mixed-funded, compared with 43 percent of plans with 5,000 or more participants.
• Multi-employer and multiple-employer plans are more likely to self-insure than single-employer plans. In 2008, 64.4 percent of multiemployer or multiple employer plans were self-insured or mixed-funded, compared with 36.8 percent of single-employer plans. Sixteen percent of covered workers at employers with three to 199 workers were in a self-insured plan in 2010. In contrast, 93 percent of covered workers at employers with 5,000 or more workers were in a self-insured plan. Overall, 59 percent of covered workers were in a self-insured plan in 2010, up from 44 percent in 1999.
• Self-insurance varies by industry, with utilities firms having the highest percentage of mixed-funding or self-insurance.

Source: Deloitte Financial Advisory Services and Advanced Analytical Consulting Group, March 23, 2011. “Large Group Health Plans Study”. Available at http://aspe.hhs.gov/health/reports/2011/LGHPstudy/LGHPstudy2011.pdf.

Legislative update

CMS releases FY 2012 payment rule for acute inpatient and long term care hospitals; reduction of 0.5 percent proposed for hospitals

Tuesday, CMS released its FY 2012 proposed Medicare payment rule (including those related to ACA) for acute care inpatient hospitals and long-term care hospitals covering 751 Medicare Severity-Diagnosis Related Groups (MS-DRGs). The rule will impact approximately 3,400 acute care hospitals and 420 LTCHs. Changes are generally effective for hospital discharges occurring on or after October 1, 2011. Highlights include:

• Reduces payments by $498 million for acute care hospitals—0.5 percent payment reduction (Calculus: 1.5 percent hospital update based on a projected 2.8 percent increase for hospital cost inflation, reduced by a productivity adjustment of 1.2 percent and an additional 0.1 percent as required under ACA Section 3401, a 1.1 percent update due to litigation (Cape Cod Hospital vs. Sebelius), and a 3.15 reduction to adjust for document and coding errors.)
  Note: to receive the full 1.5 percent update, hospitals must submit quality data as required under law. Hospitals that do not participate in the voluntary Hospital Inpatient Quality Reporting (IQR) Program or do not meet program requirements could have updates of negative five percent, instead of 1.5 percent.
• For FY 2012, Medicare payments to long-term care hospitals (LTCH) would increase 1.9 percent to $95 million.
  Note: ACA Section 3106 also extends two year moratorium on bed increases to LTCHs and LTCH satellite facilities.

Long-term care hospitals quality reporting: new

Thursday, CMS announced new quality metrics to be used to assess the performance of long-term care hospitals:

Medicare Advantage bill would expand open enrollment

April 15, Representative Charles Gonzalez (D-TX) introduced H.R. 1580, a bill that would repeal ACA Section 3204(a), which eliminated the Medicare Advantage open enrollment period in the first three months of the year. Gonzalez introduced similar legislation at the end of the last congressional session.

Physician-owned hospitals: update

Section 6001 of ACA limits the development of new physician-owned hospitals (defined as specialty hospitals in which 45 percent of discharges are in one clinical category or 65 percent in two) and growth of those already operating. In Tyler TX, a lawsuit challenging the limits is pending in a federal district court. Two bills have been introduced to challenge limitations: Representative Sam Johnson’s (R-TX) bill would repeal Section 6001 as well as Section 10601, which exempts Medicare self-referrals for physician-owned hospitals; Representative Doc Hastings’ (R-WA) bill would repeal Section 6001 as well as Section 6002, which requires physicians to disclose ownership interests to patients. Per the Physician Hospitals of America, there are 277 physician-owned hospitals: 151 multi-specialty surgical hospitals, 68 general acute care, 23 orthopedic, 15 heart, 12 rehabilitation, five long-term acute, one children’s, one women’s, and one psychiatric hospital.

State watch

State-led health reform update

• Senate committees in both Oregon and Colorado approved bills that would establish a health insurance exchange. The Oregon bill would not give the exchange powers to negotiate rates, unlike the Massachusetts exchange.
• April 14, Oklahoma Governor Mary Fallin (R) announced the state will not accept the $54 million federal Early Innovator grant received February 16 to design an information technology infrastructure for its health insurance exchange. In lieu of an exchange, the state will create The Health Insurance Private Enterprise Network, aimed to “increase access to affordable, private, portable health insurance plans through a free market-based network that offers choice and competition to consumers.” The network will be governed by a board of primarily private sector members, chaired by the Insurance Commissioner, and will be funded through state or private resources. New Hampshire legislators also voted to return $660,000 received to set up its exchange.
• Georgia Governor Nathan Deal (R) signed into law a bill that will establish an interstate health care compact, an agreement between states to take state control of health care. Texas lawmakers are considering a similar bill, while Arizona Governor Jan Brewer vetoed similar legislation last week.
• Wednesday, Idaho Governor C.L. Otter (R) issued an executive order prohibiting state agencies from implementing ACA. The order states: “no executive branch department, agency, institution or employee of the state shall establish or amend any program or promulgate any rule to implement any provisions.”
• Guam is the first U.S. territory to apply for a waiver from the medical loss ratio (MLR) requirements. Guam is asking for 65 percent MLR through 2013 for the individual, small, and large group markets.
  Note: the MLR rule only provides requirements for the individual market. It is not clear whether HHS has authority to provide a waiver for all three markets
• April 18, Michigan announced two new plans for individuals with chronic conditions in the state’s high-risk insurance program. Plans are available May 1 and will provide the same coverage as the current plan. Premiums will be lower, but deductibles will be higher ($2,500 and $3,500) compared to the current plan ($1,000).
• In Florida, Medicaid spending per person increased 30 percent from 2001 to 2009—3.8 percent per year—while large-group insurance increased 112 percent. (Source: Florida Center for Fiscal and Economic Policy [FCFEP]).

Medicaid cost containment opportunities : Deloitte Center for Health Solutions’ brief

The U.S. Medicaid program covers 60.3 million: 16 percent are elderly, eight percent aged, 49 percent children, and 27 percent adults; 64 percent of total Medicaid spending ($252.6 billion in 2009) is for the aged and disabled, 22 percent for children, and 14 percent for adults.

ACA seeks to increase Medicaid enrollment by 16 million by requiring states to establish a uniform eligibility standard at 133 percent of the federal poverty level (FPL), and provides additional federal funding for new enrollees (defined as individuals older than 19 who are not eligible for Medicaid through the state plan or a waiver on March 23, 2010):

• 100 percent in 2014 through 2016,
• 95 percent for 2017,
• 94 percent for 2018,
• 93 percent for 2019, and
• 90 percent for 2020 and thereafter

States have previously received additional federal Medicaid funding: $87 billion was provided to states via the American Recovery and Reinvestment Act of 2009 (ARRA) stimulus bill, the enhanced federal match to states for Medicaid expenditures under ARRA ends July 1, 2011, and $16 billion to states via the FY 2011 budget.

Additionally, ACA requires that Medicaid payments for primary care services (provided by primary care physicians) be at least 100 percent of Medicare Part B rates in 2013 and 2014. States will receive 100 percent federal matching assistance for the amount that exceeds July 1, 2009 rates.

Concepts/programs implemented in states to reduce costs without changing enrollment or eligibility below 133 percent FPL:

Immediate opportunities: potential to provide return on investment (ROI) in 12 to 24 months allowable under ACA

1. ACA allows states to reduce enrollment for those non-disabled, non-pregnant adults who are above 133 percent FPL if the state has a budget deficit, although prior to June 30, 2011 this would mean the loss of the enhanced federal matching under ARRA. Coverage for these may be suspended, as they will be eligible for coverage through the health insurance exchange. Those with incomes between 133 and 400 percent FPL may be eligible for a coverage subsidy.
2. Reduce optional benefits which are covered at a state’s discretion (e.g. eyeglasses, physical therapy, prosthetics, or dentures). In 2008, $100 billion (40 percent) in Medicaid benefits spending was on optional benefits for all enrollees, with nearly 60 percent of this spending for long-term care services.
3. There is enormous fraud in skilled nursing and long-term acute care for Medicaid populations. Stepped up efforts to detect and collect is useful.
   Note: 43 percent of total long-term care costs in U.S. are paid by Medicaid programs. On February 2, 2011, CMS published a final rule that implements ACA Section 6402(h), which suspends Medicaid payments for services furnished by individuals under investigation for fraud.
4. E-prescribing: the costs associated with the majority of Medicaid enrollee health problems center around medication management—writing the right prescription for the right patient to avoid drug-drug interactions from inappropriate dosing. States that encourage and/or mandate e-prescribing for providers (especially primary care providers) see immediate benefit. In tandem with e-prescribing, a state should operate an aggressive formulary: in all likelihood, generics will be 77 to 80 percent of drugs used, and specialty pharmaceutical use will be linked to treatment plans that exhaust alternative therapeutics first.
5. Enhanced case management for post-acute care (hospital-to-home transition care coordination programs): avoidable readmissions for Medicaid enrollees discharged without appropriate follow-up and support is an exorbitant cost. Working with acute providers, especially intensivists and discharge planners, to align post-acute treatment plans and supervision with improved outcomes, reduced avoidable readmissions (40 to 70 percent of Medicaid admissions) and reduced costs. For the disabled, an enhanced case management program with incentives for improved health status/functional status/medication adherence linked to case manager compensation is worthwhile.
6. ACA provides states with incentives (new options and enhanced federal funding, some available for only a limited time) to increase non-institutionally based long-term care services through the Community First Choice Option (ACA Section 2401) and State Balancing Incentive Program (ACA Section 10202).
7. Effective as of July 1, 2011, prohibits Medicaid payment for services related to a health care-acquired condition (ACA Section 2702). CMS Office of the Actuary (OACT) concluded there will be savings to the Medicaid program of $2 million for FY 2011 ($1 million each for federal and state share), with an aggregate savings of $35 million for FYs 2011 through 2015 ($20 million federal and $15 million state share).
   
   Longer term opportunities: potential to provide positive ROI in 36 to 60 months
   
   
8. Medical home for chronic care: providing infrastructure support (clinical IT) and care team training (health coaches, nutritionists, counselors) to equip primary care practitioners to see larger panels of patients via group visits, mid-level practitioners and e-visits. Target is the chronically ill adults in the Medicaid program—goal to reduce progression of chronic disease and avoid acute events. Often requires expanded scope of practice legislation to certify advanced practice nurses and nurse practitioners to diagnose and dispense.
   Note: in some states, leveraging the retail clinic model may be a channel to a medical home model if the medical establishment is resistant. ACA Section 2703 allows for states to designate Medicaid enrollees with chronic conditions to a medical home. Medical homes yield a 1.2 percent to 0.4 percent change in national health spending. At least 30 states are testing Medicaid medical home pilots currently; North Carolina and Rhode Island programs appear the most developed to date. (Source: Hussey P. Perspectives: Controlling US Health Care Spending - Separating Promising from Unpromising Approaches. NEJM. 2009 November).
9. Evidence-based practices for specialty medicine: for Medicaid enrollees, managing the poor, frail elderly, disabled, and sicker adults and children requires adoption of evidence-based practice guidelines that direct step therapies toward lower cost, higher quality treatment plans (step therapies, diagnostic testing, behavioral therapies, etc.). Development of evidence-based practice guidelines for targeted high-cost Medicaid populations is a central feature for managing high-cost patients.
10. Bundled payments: ACA establishes a demonstration project (Section 2704), in up to eight states, to study the use of bundled payments for hospital and physician services under Medicaid. However, some states are already use bundled payments: Maryland developed bundled payments and capped hospitals' revenue (Source: Buntin J. Maryland's All-Payer Answer, Once dismissed as a relic, Maryland's all-payer rate setting system is getting a second look. Governing. 2011 March 22). Bundled payments yield -5.4 percent to -0.1 percent change in national health spending (Source: Hussey P. Perspectives: Controlling US Health Care Spending - Separating Promising from Unpromising Approaches. NEJM. 2009 November).

Source: Deloitte Center for Health Solutions. April 25, 2011. Issue Brief: “The 10 Major Medicaid Savings Opportunities under ACA”.

Provider update

NCQA plans July launch of ACO accreditation program

The National Committee for Quality Assurance (NCQA) will launch its accountable care organization (ACO) accreditation program in July, after a month-long usability pilot with ten provider organizations.

Update: Alzheimer’s diagnosis and treatment guidelines

Tuesday, the Alzheimer’s Association and National Institute on Aging released the first diagnostic criteria update for Alzheimer’s disease in 27 years. The guidelines divide the disease progression into three phases: Alzheimer’s dementia, mild cognitive impairment (MCI), and pre-symptomatic, the latter to be used exclusively for research purposes on Alzheimer’s biomarkers.

AMA launches AMAGINE physician portal

Tuesday, the American Medical Association’s (AMA) health information technology (IT) platform AMAGINE became available to physicians as a resource for health IT solutions and communication tools. Solutions include electronic prescribing, claims management, three electronic medical records systems, and clinical decision support.

Drug and devices

Drug industry consortium to develop policies for electronic labeling

Eleven trade organizations and 33 companies from sectors across the industry are forming a non-profit organization to inform the U.S. Food and Drug Administration (FDA) regulations on electronic product labeling. The industry consortium is expected to issue a report by August on how they would proceed, including possibly setting up a pilot to develop a comprehensive drug supply chain monitoring system. FDA is considering a rule to require electronic labels which could be distributed online (e.g. prescription drug and biologics instead of paper). Mark Paxton, Associate Vice President of the Pharmaceutical Research and Manufacturers Association of America (PhRMA) said at the recent Pharma Packaging and Labeling Conference that PhRMA supports electronic labeling.

Note: in 2015, a California law will take effect which requires manufacturers to serialize their products, which must pass an electronic pedigree. This law will become void if a federal law is passed.

BIO releases statement on House Judiciary Committee’s Patent Reform Bill

April 15, Biotechnology Industry Organization’s (BIO) statement opposing the America Invents Act, H.R. 1249, passed by the House Judiciary Committee: “The supplemental examination provision as passed by the Senate and originally included in the House bill would allow patent holders to seek a review of their issued patents at their own risk. The Goodlatte amendment undercuts this provision by creating disincentives for patent owners to use the new procedure by having the U.S. Patent and Trademark Office (PTO) act as quasi-investigative body.”

Quotable

“It’s time for medicine to reinvent itself—for researchers and clinicians to form a strategic partnership and to embrace the goal of exponentially increasing medicine’s value. Physicians need to become part of the solution in the U.S. health system. The system’s problems should not be addressed by politicians, who are virtually powerless to effect meaningful change in health care until physicians fix the way health care is delivered. How physicians care for patients has to become more reliable, more appropriate, and more transparent.”

 – Brook, R.H. April 20, 2011. “Health Services Research and Clinical Practice” Journal of the American Medical Association. 305; 15: 1590.

“Fixing healthcare entitlements will require a combination of less generosity and greater efficiency.”

 – Bloomberg Business Week. April 18 to 24, 2011.

“Mr. Obama is relying on the so far unidentified technocratic reforms of 15 so far unidentified geniuses who are supposed to give up medical practice or academic research for the privilege of a government salary. Since the board is not allowed by law to restrict treatments, ask seniors to pay more, or raise taxes or the retirement age, it can mean only one thing: arbitrarily paying less for the services seniors receive via fiat pricing.”

 – Wall Street Journal Editorial, “The Other Medicare Cutters,” April 20, 2011.

Fact file

• The number of cancer survivors increased from 9.8 million to 11.7 million from 2001 to 2007; 600,000 die annually from cancer. (Source: Centers for Disease Control and Prevention [CDC])
• U.S. companies cut workforce by 2.9 million from 2000 to 2010, while off-shoring added 2.4 million cuts. U.S. multinationals employ 21.1 million in U.S. and 10.3 million elsewhere. (Source: U.S. Department of Commerce)
• FDA Office of Criminal Investigation opened 72 cases of counterfeiting in FY 2010 in the U.S.—an all time high. (Source: FDA)
• An estimated 3.5 percent of adults in the U.S. identify as lesbian, gay, or bisexual and an estimated 0.3 percent of adults are transgender. (Source: Williams Institute, UCLA)
• Top one percent of taxpayers—those with salaries/income, capital gains and dividends above $380,000—paid 38 percent of total federal income tax in 2008; the top ten percent pay 69 percent. (Source: Internal Revenue Service [IRS])
• Cell phone only usage: 40 percent of adults living in poverty use only cell phones compared to 21 percent in higher income brackets. Rhode Island and New Jersey have the lowest cell phone-only use: 12.8 percent; Arkansas the highest: 35.2 percent. Forty-eight percent of adults age 18 to 30 are cell phone-only compared to 18 percent above 30. (Source: National Center for Health Statistics)
• Of the 40,000 men studied for 20 years who drank an average of one sugar-sweetened beverage daily, 16 percent had an increased risk of diabetes compared with those who didn't consume such drinks. (Source: de Koning, L., et al. “Low-carbohydrate diet scores and risk of type 2 diabetes in men.” American Journal of Clinical Nutrition, April 2011, 93; 4: 844-850)
• Approximately ten percent of physicians would “often or always” dismiss families from their practice if they refuse vaccines in the primary series; another five percent would “sometimes”. (Source: Kempe, A., et al. “Prevalence of Parental Concerns About Childhood Vaccines: The Experience of Primary Care Physicians.” American Journal of Preventive Medicine. May 2011. 40; 5: 548-555)
• Number of people treated in U.S. hospitals for illnesses and injuries from incorrectly taking medicines jumped 52 percent between 2004 and 2008—from 1.2 million to 1.9 million. (Source: “News and Numbers”, Agency for Healthcare Research and Quality [AHRQ], April 2011)
• In 2009, of the 210,000 Medicare Part B professionals who participated in CMS’ PQRS Incentive Program, 119,804 earned an incentive payment; of the 92,000 who took part in the Electronic Prescribing (eRx) program, 48,354 received payment. (Source: 2009 Physician Quality Reporting System and ePrescribing Experience Report)
• Prescription drug spending increased 2.3 percent in 2010 to $307.4 billion, down from 5.1 percent in 2009. Doctor office visits decreased 4.2 percent in 2010. (Source: IMS)
• Twenty-seven percent of primary care physicians use tablet computers (a rate five times higher than general population); 64 percent own a smart phone. (Source: AMA)
• Physician turnover increased to 6.1 percent in 2010 from 5.9 percent in 2009, the first increase since 2008. (Source: Annual Physician Retention Survey by Cejka Search and the American Medical Group Association)
• Hospital stays for uninsured patients average 3.8 days and $7,300 cost, and 4.7 days and $9,200 cost for insured patients. In 2008, uninsured made up 5.3 percent of community hospital stays. (Source: AHRQ)
• Median revenue growth for not-for profit hospitals decreased 6.5 percent in 2009 to 4.2 percent in 2010, the lowest in a decade. (Source: Moody’s)

National health reform: What now? National health reform is here. The health reform bills (HR3590 and HR4872) are now law and will trigger sweeping changes and disruptions – some rather quickly and some over many years. The industry is asking, “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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