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Health Care Reform Memo: March 5, 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: comparison shopping: the future of consumerism in health care

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

Comparison shopping is as American as baseball and apple pie. Our economy is dependent on consumer spending: 70 percent of our gross domestic product (GDP) is driven by consumer purchases, thus merchandisers of goods and services sold in the U.S. use a variety of tools to compare and contrast their wares to competing offerings to make the sale.

The maturation of online shopping tools and social media has made comparison buying easier and mass customization of the shopping experience accessible. The travel, automotive, fashion, publishing, personal computer, appliance, and life insurance industries are among many at the epicenter of direct-to-consumer web-enabled comparison buying that is transforming their industries at warp speed.

By contrast, comparison buying by consumers in health care is modest at best. To many, especially physicians, the notion of “consumerism” and “comparison shopping” evokes a visceral reaction: they’re “patients” not “consumers” many would say. And throughout the system, comparison shopping is still an evolving strategy.

Hospitals compare their satisfaction and quality ratings cautiously. More often than not, a hospital’s marketing director promotes a hospital ranking rather than compare performance with a local competitor side-by-side using verifiable measures (i.e., observed to expected mortality, hospital acquired infections, prices for uncomplicated services and so on). And after all, because there are 700 “top 100” hospitals, choosing which list to use in branding is a less risky than head-to-head positioning, especially since physicians, not consumers, drive revenues.

 Health insurance plans, likewise, are cautious about head-to-head comparisons among peers. The commercial health insurance industry has been at the forefront of providing quality and safety measures for providing comparisons between physicians and hospitals to its enrollees for more than a decade. But comparisons of health insurance plans are not readily available or easily understood—perhaps the reason the Affordable Care Act (ACA) requires online tools and standard language to assist consumers in comparison shopping for insurance. And like hospitals, local plans often use the same physicians as “network” making clinical differentiation more difficult.

Drug manufacturers, likewise, guardedly engage comparison shopping, spending almost $5 billion annually in direct-to-consumer (DTC) advertising, but investing the lion’s share of its marketing in Business to Prescriber (BTP) efforts—sales reps that call on physicians and trade advertising in medical journals densely compacted with scientific results and on-label guidance. Its focus on comparison shopping by prescribers between competing brands is delicate—most studies historically vary in inclusion criteria useful for head-to-head comparison, and most randomized trials are a comparison to a placebo rather than a competing brand. And its efforts to stimulate comparison shopping by consumers is evolving: at the end of TV ads, “consult your doctor” remains the norm, though some consumers pursue alternative channels.

And the medical device industry might be the least prone to BTC comparison shopping: purchasers of medical devices from the industry’s 6,000 manufacturers are physicians, hospitals, and other providers who generally “shop” among options directly or through group purchasing organizations (GPOs) to which they belong, passing through device costs in premiums or reimbursement virtually invisible to patients (consumers). And because contractual terms are guarded secrets in most instances, prices paid for devices are rarely accessible to patients or known by actual users.

As I read the ACA and follow guidance, rules, and draft legislation related to its implementation, I am struck by its alignment with transparency and comparison shopping for consumers. Seems to me, in at least four major elements of the law, comparison shopping is explicitly envisioned or, at a minimum, the groundwork laid:

Access to information about which drugs and treatment options work best: the Patient-Centered Outcome Research Institute (PCORI) per Section 6301 of ACA is tasked with implementing the U.S. comparative effectiveness research program—a set of tools to equip prescribers, providers, and consumers to know which treatments and compounds work best, comparing the strength of evidence for each regardless of cost. Notably, PCORI has two standing committees: a methodology committee to assure its methods are precise and rigorous, and a communications committee to assure its work is useful to comparison shopping by consumers. In September 2011, the Center for Health Solutions released an Issue Brief: Comparative Effectiveness Research in the United States: Update and Implications, contrasting comparative effectiveness research (CER) efforts in the UK, Canada, Germany, and Australia. Though the approaches in each varied differently, a common thread in all is transparency—making sure that citizens have access to information on which decisions may be made easily and objectively. (See attached Appendix for Summary Table)

Access to information about which insurance plans meet individual and employer needs best: provisions in ACA around the implementation of health insurance exchanges (HIX) by 2014 require states to invest in web-based tools for individuals and small employers to conduct comparison shopping easily. And to the industry’s credit, it already provides report cards about its performance that feature side-by-side comparisons. But ACA goes further by standardizing coverage and language to make comparison easier for individuals.

Access to information about which hospitals and physicians work together to get the best results in managing health: ACA promotes clinical integration and care coordination between physicians, hospitals, allied health professionals, and long-term care providers. It encourages participation in medical homes, accountable care organizations (ACOs), and bundled payments, and it penalizes providers who have higher than expected hospital readmissions, higher utilization, and higher costs than otherwise expected.

Access to information about physician performance: ACA tightens conflicts of interest disclosures around physician ownership of technologies or facilities they use. It changes the rule in the Physician Quality Reporting System (PQRS) from awarding physicians for reporting to rewarding physician performance. And it suggests that core competencies necessary to optimal performance may have more to do with use of information technologies and lifelong learning than traditional medical education and continuing medical education (CME) credits. Thus the emphasis on meaningful use and penalties starting 2015 for failure to adopt.

Since 2008, we have surveyed more than 20,000 health consumers in the U.S. (Deloitte Center for Health Solutions consumer survey research is available online) Relative to consumer shopping in health care based on these surveys and our forecasts of insurance coverage and household discretionary spending, three conclusions are supported by strong and compelling data:

  1. Consumers believe the health care industry should be more transparent and enable comparison shopping.
  2. Consumers believe health care is complicated and complex, but not incomprehensible. They want tools.
  3. Consumers are actively shopping in health care.

Regrettably, many in the industry shy away from engaging individuals as consumers. It is more comfortable perhaps “treating patients” than offering solutions to consumers.

They are neither patient nor patients, they are consumers, and they will shop. No corner of this industry gets a pass. How we address consumer demand for comparison shopping will in large measure determine the system’s winners and losers.

Paul Keckely

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

Implementation update

IPAB update: HHS Secretary says it may not be fully operational until 2018 or 2019; House committee votes to repeal

Tuesday, the U.S. Department of Health and Human Services (HHS) Secretary Sebelius testified to the House Committee on Ways and Means that the Independent Payment Advisory Board (IPAB) may not be fully operational or able to make Medicare cost containment recommendations until 2018 or 2019 because Medicare spending had been lower than originally projected.

Wednesday, the House Energy and Commerce Committee Health Subcommittee approved (17-5) legislation to repeal the Independent Payment Advisory Board (IPAB). The full House could vote on the bill in March.

Background: ACA Sections 3403 and 10320 established IPAB as a 15-member board that will make recommendations to Congress on how to reduce the rate of growth in Medicare costs without adversely impacting coverage or quality starting January 1, 2014. IPAB's recommendations will take effect unless Congress passes legislation to achieve the same level of spending. Opponents of IPAB include the American Medical Association (AMA), American Osteopathic Association (AOA), Healthcare Leadership Council (HLC), the International Franchise Association (IFA), the National Association for the Self-Employed, the National Association of Manufacturers (NAM), the National Retail Federation (NRF), and the U.S. Chamber of Commerce.

PCORI stakeholder meeting report: research funding underway

Background: ACA Section 6301 established PCORI to support CER and equip consumers with information helpful in their clinical decisions. In 2012, it will spend $122 million of its $160 million operating budget on research grants and issue its first annual report April 2, 2012.

Monday, it hosted its second stakeholder meeting, National Patient and Stakeholder Dialogue, with participants representing several industry groups (American Nurses Association [ANA], National Business Group on Health [NBGH], AMA, Pharmaceutical Research and Manufacturers Association [PhRMA], American Academy of Family Physicians [AAFP], et al) and patient advocacy groups (e.g., American Cancer Society [ACS], National Alliance on Mental Illness [NAMI], Autism Speaks, National Alliance for Hispanic Health).

Note: in 2013, the PCORI operating budget will increase to $390 million as health plans start payments of $1 per beneficiary. The PCORI methodology committee will issue its first report in late May or early June. The Board of Governors of PCORI will hold a public meeting today, 8:45 am-5:00 pm at the Intercontinental Harbor Court, Baltimore, 550 Light Street, Baltimore, MD 21202.

Ways and Means Chairman asks DOT about $111 billion cost for HIX subsidies

Friday, House Ways and Means Committee Chairman Dave Camps (R-MI) sent a letter to U.S. Department of Treasury (DOT) Secretary Timothy Geithner asking for clarity around President Obama’s FY 2013 budget request that included an additional $111 billion (30 percent increase over previous projections for HIX subsidies per ACA Section 1413).

FDA to hold public hearing on guidance for bio-similars May 11, 2012

The U.S. Food and Drug Administration (FDA) will hold a public hearing on May 11, 2012 to get input on recently issued draft guidance relating to the development of bio-similar products per the Biologics Price Competition and Innovation (BPCI) Act of 2009, included in ACA. The BPCI Act established an abbreviated licensure pathway for biological products that are bio-similar to, or interchangeable with, a reference product. FDA will consider public input in the finalized guidance. FDA is also seeking public input on topics for future policies regarding bio-similars. Those who want to present at the public hearing must register by April 11, 2012. Electronic or written comments related to the guidance will be accepted until May 1, 2012.

Legislative update

Ways and Means hearing: MA growth questioned

November 11, the Government Accountability Office (GAO) reported that enrollment in Medicare Advantage (MA) increased 9 percent in 2011 and premiums decreased from $28 to $24/month. Tuesday, in the House Ways and Means Committee, GOP leaders questioned HHS Secretary Sebelius about the veracity of the report, suggesting enrollment growth was the result of the Centers for Medicare & Medicaid Services’ (CMS’) decision to award bonuses to 80 percent of MA plans as a way to offset cuts, and not due to good policy.

Sebelius responded that the law (ACA) reduces MA overpayments $206 billion/ten years which she said had profit margins 13 percent higher than traditional fee-for-service (FFS) Medicare. She reported that, to date, only 4 percent of scheduled cuts had been made.

Note: Secretary Sebelius is scheduled to testify at a Senate Appropriations Labor-HHS subcommittee hearing on the HHS budget request at 10 a.m. Wednesday, March 7.

Snowe retirement means changes in Senate Commerce, Finance Committee succession

Tuesday, Senator Olympia Snowe (R-ME) announced retirement, bringing changes in leadership succession in two key committees with health oversight: she was a ranking member of the Senate Committee on Commerce, Science, and Transportation (Commerce Committee) and a senior member of the Committee on Finance (Finance Committee).

Note: the Commerce Committee and Finance Committee play important roles in oversight of ACA: the Senate Commerce Committee, chaired by Senator Jay Rockefeller (D-WV), has jurisdiction over issues related to interstate commerce, consumer protections, science, and technology and provides oversight on ACA insurance market reforms per Section 1001 and 1201 such as the medical loss ratio (MLR). The Finance Committee, chaired by Senator Max Baucus (D-MT), addresses issues related to health programs under the Social Security Act, including Medicare, Medicaid, and the Children's Health Insurance Program (CHIP). September 16, 2009, Senator Baucus, introduced the America’s Healthy Future Act, a bill crafted after a bipartisan group of senators met over the summer to discuss health reform. The bill was passed on October 13, 2009. November 18, 2009, Senate Majority Leader Harry Reid (D-NV) introduced legislation that combined the Senate Finance and the previously introduced Senate Health Education Labor and Pensions (HELP) Committee health care bill into one piece of legislation titled “the Patient Protection and Affordable Care Act (PPACA).” PPACA, later amended by the Health Care Education and Reconciliation Act (HCERA), was passed by the Senate on December 24, 2009 and the House on March 21, 2010, becoming the law, now known as the ACA, March 23, 2010.

Senate defeats the Respect for Rights of Conscience Act of 2011

Thursday, the U.S. Senate voted against the Respect for Rights of Conscience Act of 2011 (51-48), that would have allowed an employer to opt out of the requirement to provide health care coverage for certain services on moral grounds, including but not limited to contraception. The bill was introduced by Senator Roy Blunt (R-MO), along with 37 Republican co-sponsors, in August 2011. Senate Majority Leader Harry Reid (D-NV) called the vote after recent concerns regarding the ACA requirement that plans provide coverage for all U.S. Preventive Services Task Force (USPSTF) recommended preventive services, including contraceptives, per ACA Section 1001.

Note: per the Congressional Research Service (CRS), employers could be fined a $100 tax per day per employee for not complying with the coverage requirements.

Expanding role of pharmacists: FDA consideration of behind the counter fulfillment, ACO participation as providers

Tuesday, the FDA launched a public dialog on the possibility of allowing certain prescriptions drugs to be dispensed by pharmacists requiring either pharmacist intervention or use of a diagnostic tool.

Under the approach, certain products that require an initial prescription could be made available without a prescription with a condition of safe use for refills, or be approved as a nonprescription product with some type of pharmacist intervention as their condition of safe use. The agency is also considering whether the same drug product could be simultaneously available as both a prescription and nonprescription product with conditions of safe use.

FDA said the new paradigm could help patients better adhere to medications because they would not need to see a physician for refills, while reducing the time and attention that health care providers spend on these refill visits. In addition, this new pathway may result in the development of new diagnostics for use by patients and pharmacists, the agency said. Consumers could use new technologies to self-screen for a particular disease or condition and determine whether a particular medication is appropriate for them, according to FDA.

Also last week, the American Pharmacists Association (APhA) intensified its legislative efforts to be recognized as a provider in ACOs. Per Section 3022’s Medicare Shared Savings Program (ACO rules), pharmacists could be either paid a fee for each service or for a set of services provided, per ACO beneficiary or potentially as a contracted at-risk member of the ACO. APhA CEO Thomas Menighan said one way that an at-risk contract might work could be expecting pharmacists to return a certain percentage of savings to the ACO, and then have pharmacists paid based on that percentage.

Note: the Office of the Surgeon General released a report in December stating, “pharmacists may be the only health professionals (who manage diseases through medications and provide other patient care services) who are not recognized in national health policy as health care providers or practitioners.” The report recommended legislation to recognize and compensate pharmacists as providers. Provider recognition would allow for direct CMS billing as opposed to billing the ACO separately for pharmacist services.

State update

OIG to states: “pay attention to excluded providers in managed Medicaid networks”

HHS Office of Inspector General (OIG) found that four of 12 Medicaid managed care networks had 11 “excluded providers” that were receiving Medicaid payments even though they were banned from the program for fraudulent and noncompliant issues (e.g., suspended licenses). Four of these providers were paid $40,306 in 2009; the remaining seven providers received no payments during their review. HHS OIG suggested, “…CMS periodically remind States of their obligation to ensure that no excluded providers receive Medicaid payments.” (Source: HHS, OIG, “Excluded Providers in Medicaid Managed Care Entities,” February 2012)

State round-up

  • Alabama Governor Robert Bentley (R) requested HHS approval to lower the income eligibility threshold for the state’s CHIP, ALL Kids, from 300 percent of the federal poverty level (FPL) to 200 percent due to budget shortfalls. The change is expected to reduce CHIP coverage by more than 15,000 from the current 84,000, saving $8.5 million in costs. The federal government funds 78 percent of the program’s cost. Note: last year, Alabama was awarded $55 million as a bonus for the success of ALL Kids. The state was one of 15 to receive a performance bonus last year.
  • Monday, Idaho House voted (55-12) to create the Federal Health Care Reform Oversight Committee with five members from both the House and Senate to oversee ACA implementation.
  • February 23, Maine legislators passed a budget for the state’s Department of Health and Human Services which provides $150 million for the department through June 30, 2012.
  • North Carolina is exploring “pregnancy medical homes” which would provide at-risk individuals a case manager from the North Carolina Public Health Department to coordinate care during the pregnancy.
  • Friday, New Hampshire became the first state to receive ACA funding under Section 10202 ($26.5 million over three years) to keep individuals out of institutions and living in their communities. Note: ACA Section 10202, the Balancing Incentive Program, provides $3 billion to states to create incentives for keeping individuals in the community.

Industry update

AMA objects to CMS assessment of physician role in overprescribing; calls for health plans to provide data

The AMA sent a letter to CMS Friday challenging its determination that Part D sponsors (physicians, allied health professionals who write prescriptions) have adequately developed drug utilization review programs after recent documentation of over-prescribing of pain medications. The AMA wrote: “Part D sponsors are not in a position to evaluate medication overutilization. The only information they have is the various claims that are submitted for prescription coverage. Sponsors do not know diagnoses and they do not know about any other services the patient is receiving that do not involve Part D coverage. We acknowledge that there are instances where multiple prescribers and pharmacies are writing and dispensing medications to the same patient and unaware that the patient is receiving the same drug or similar drugs from other sources. The best way to address that information gap is for the plans to share the information with the other prescribers so that these prescribers can reconcile the patient’s multiple medications and ensure the beneficiary is getting appropriate care.”

FDA announces new label requirements for statins

Tuesday, the FDA announced plans to require statin drugs to include diabetic risks under the “warnings and precautions” section on drug labels intended to better inform patients in their decision to continue taking statins. The new labels will also include information about potential memory loss or confusion in the adverse reaction section.

Note: statins are prescribed to over 20 million Americans annually for heart disease, costing $14 billion in 2011.

District Judge rules that new FDA tobacco warning labels violate First Amendment rights of companies

Wednesday, D.C. District Judge Richard Leon ruled that the mandatory and graphic tobacco warning labels used by the FDA violate tobacco companies’ First Amendment rights under the U.S. Constitution. The ruling follows a preliminary injunction issued in November which prohibited the FDA from enforcing the labels set to go into effect September 2012. FDA planned to require all cigarette packs to be printed with images of graphic nature, such as an autopsied cadaver or sore-ridden mouths and lungs, in addition to the large print warning label. The labels were established under the 2009 Tobacco Control Act.

Note: the ruling over the labels is split as a district court in Kentucky found the labels constitutional. Oral arguments are set for April 10, 2012.

GAO recommends CMS set up a systematic review of QIS standards in nursing homes

Friday, Senators Chuck Grassley (R-IA) and Herb Kohl (D-WI) released a GAO report recommending CMS increase its monitoring of each state’s implementation of the Quality Indicator Survey (QIS) in nursing homes. Currently CMS is unable to routinely monitor the states’ implementation or systematically compile and share information regarding all nursing homes. CMS is planning on creating a more systematic process, but does not currently have a timeframe to finish this. GAO has recommended CMS develop a routine monitoring system to find how closely the QIS objectives are being met to improve the quality of nursing homes. HHS supports this recommendation.

Note: CMS is responsible for ensuring nursing homes meet federal quality standards in order to receive federal funding.

Report: dental coverage in the U.S.

Wednesday, Senator Bernie Sanders (I-VT) released findings that over 47 million Americans live in areas where it is difficult to access dental care. Additional findings:

  • 130 million are without dental insurance
  •  17 million children see a dentist less than once per year
  • 45 percent of Americans age two or older saw a dentist in the last 12 months

(Source: Senator Bernie Sanders, “Dental Crisis in America: The Need to Expand Access,” February 29, 2012)

Note: emergency room (ER) visits for dental issues increased 16 percent to 830,590 visits from 2006 to 2009. In 2009, 56 percent of Medicaid-enrolled children did not receive dental care. Research suggests that increasing coverage for dental services would reduce hospitalizations for dental issues. (Source: “A Costly Dental Destination: Hospital Care Means States Pay Dearly,” Pew Center on the States)

Study: advanced EMR Systems reduce cost, improve quality

Wednesday, results of a HIMSS Analytics–The Advisory Board study of hospitals in Stages 6/7 of electronic health record (EHR) adoption were released concluding that “the use of advanced electronic medical records (EMR) systems results in improved clinical quality, patient safety and operational efficiencies.” Among findings:

  • “With regard to general safety measures, the vast majority of respondents targeted their EMR implementations to reduce Adverse Drug Effects (ADE) (94 percent) and other safety indicators (91 percent).”
  •  “All respondent hospitals indicated having realized and documented at least one core measure benefit and one safety measure benefit from EMR implementation. More than three-quarters (79 percent) of the respondent hospitals reported multiple core measure and/or safety benefits. The most commonly reported benefits were again ADE reduction (73 percent), improvements in other patient safety indicators (58 percent), and improvements in VTE (55 percent) and CHF (48 percent) metrics."

Source: “EMR Benefits and Benefit Realization Methods of Stage 6 and 7 Hospitals,” HIMSS Analytics, February 29, 2012

Study: medical home results inconclusive

In the Agency for Healthcare Research and Quality (AHRQ)-funded systematic review of 498 published or disseminated reports from January 2000 to September 2010, researchers found sparse evidence of a medical home’s effectiveness in reducing costs or improving health outcomes due to data inconsistency. Its conclusion: “Although the PCMH is a promising innovation, rigorous quantitative evaluations and comprehensive implementation analyses are needed to assess effectiveness and refine the model to meet stakeholders’ needs. Findings from future evaluations will help guide the substantial efforts practices and payers invest to adopt the PCMH with the goal of achieving the triple aim outcomes.” (Source: Peikes et al, “Early Evaluations of the Medical Home: Building on a Promising Start,” American Journal of Managed Care, Volume 18: February 2012, Number 2)

CMS uses text messaging to help Medicaid- and CHIP-eligible mothers manage care for their babies

Tuesday, CMS announced its partnership with Text4Baby to promote enrollment in Medicaid and CHIP to provide pregnant women and mothers free text messages related to their baby’s health care.

Note: in 2011, Medicaid and CHIP covered 43.5 million children. CMS awarded $90 million in Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) funding through grants to states, tribes, nonprofit groups, schools, health care providers, and others to conduct activities to promote enrollment.

Study: MA enrollees have lower readmission rates compared to FFS enrollees

Hospital readmission rates were 13-20 percent lower for MA compared to the Medicare FFS when risk adjusted. (Source: Lemieux et al, “Hospital Readmission Rates in Medicare Advantage Plans,” American Journal of Managed Care, Volume 18: February 2012, Number 2)

Notes: HHS has a goal to decrease hospital readmission 20 percent by 2013; 70 percent of Medicaid enrollees receive some or all of their care through managed care.

Study: reducing price variation in employer coverage could save $36 billion annually

Thomson Reuters analysts studied price variation for 300 “shoppable” procedures (high-volume procedures that consumers would plan for and schedule in advance) and modeled cost savings from reducing prices for the targeted services that were above the median to the median price, after removing high-cost outliers. The reduction in prices reduced overall medical spending by 3.5 percent, saving $36 billion for the 108 million Americans under age 65 who receive employer-sponsored insurance.

Note: system waste could cost $1.6 trillion by 2020. Current waste in the U.S. health care system is estimated to be up to $850 billion including: unwarranted use ($250-325), fraud and abuse ($125-175), administrative efficiencies ($100-150), provider inefficiency and errors ($75-100), lack of care coordination ($25-50), and preventable conditions ($25-50). (Source: Bobbie Coluni, Thompson Reuters, “Save $36 Billion in U.S. Healthcare Spending Through Price Transparency,” February 2012)

AAMC approves updates to MCAT test

Last month, the Association of American Medical Colleges (AAMC) approved updates to the Medical College Admission Test (MCAT) used for medical school admission in the U.S. The test will consist of four sections; the first three will remain science-based, while the last section has been updated to include readings and questions on ethics and cross-cultural studies, and the essay portion will be removed. The changes are a part of an effort by medical colleges to assess communication skills of incoming medical students.

Note: the new section will add approximately 90 minutes to the test, making the total test time 6.5 hours. The changes will go into effect for students entering in fall 2015.

PhRMA, BIO urge FDA to revise drug labeling

Representatives from PhRMA, the Biotechnology Industry Organization (BIO), and several individual drug companies sent comments to the FDA regarding its recent proposal to establish timeframes for implementing changes to drug product labeling. Their comments urged that the National Library of Medicine’s DailyMed site be the “primary authoritative source for product information available to health care providers and patients.”


“Similar static is beginning to surface elsewhere as health plans have begun buying medical providers, and some providers have started making insurer-style moves, with some considering direct approaches to employers and even seeking to launch their own health plans.”

Mathews, “Insurer battles physician group,” The Wall Street Journal, February 29, 2012

“[The Conversation Project and the Institute for Healthcare Improvement have set] a simple and transformative goal: to have every citizen's end-of-life wishes expressed and respected.…The first place for these hard conversations is not in medical offices with doctors, who are often uncomfortable with and untrained in initiating them, and it’s certainly not in emergency rooms or intensive care units. It’s at the kitchen table. There we can talk about not only the treatments we want and don’t want, about `extreme measures’ and comfort, but also about the values, hopes, and desires for our last days. We can share our wishes with the people who matter and who may end up speaking for us.” Twenty-five percent of Medicare expenses are for the 5 percent in the last year of their life; 70 percent of people want to die at home; 70 percent die in hospitals.

— Conversation Project with Institute for Healthcare Improvement, “Die the Way You Want to,” Harvard Business Review, January-February 2012; among “List of Audacious Ideas”

“If a young man wrecks his Porsche and has not had the foresight to obtain insurance, we may commiserate but society feels no obligation to repair his car. But health care is different. If a man is struck down by a heart attack in the street, Americans will care for him whether or not he has insurance…We must, therefore, mandate that all households have health insurance.”

— Stuart Butler, Distinguished Fellow, Heritage Foundation, 1989 lecture “Assuring Affordable Health Care for All Americans.” Note: in subsequent papers, Dr. Butler has clarified his position referring to catastrophic insurance coverage requirement for all.

“Physician autonomy is not equivalent to the liberty to treat patients however physicians want but fundamentally rooted in the effort to promote patient’s best interests. By moving away from the constraints of fee for service reimbursement that pays only for specific interventions but not for the new ways of delivering care, and by providing new information on what interventions work and for which types of patients, the ACA provides a framework for enhanced physician autonomy. This does not mean that all physicians benefit equally, or that it will not require physicians to change the way they have been practicing. Indeed, the enhancement of physician autonomy will require more collaboration. But such changes are all in the service of better realizing the chief goal of physician autonomy: the best interests of all patients.”

— Emanuel & Pearson, “Physician Autonomy and Health Care Reform,” JAMA 307:4 (January 25, 2012)

Fact file

  • Delaying ICD-10 by one year will cost from $475 million to more than $4 billion. (Source: Edifecs, “Industry Reaction to Potential Delay of ICD-10,” February 27, 2012)
  • 72 percent of Americans find the individual mandate unconstitutional compared to 20 percent who find it constitutional. (Source: Jeffrey M. Jones, “Americans Divided on Repeal of 2010 Healthcare Law,” Gallup, February 27, 2012)
  • The U.S. would save $29.8 billion over five years, $158 billion over ten, and $611.7 billion by 2030 if U.S. obesity rates decline by 5 percent. Obesity rates are projected to increase from 32 percent to 51-52 percent for men and from 35 percent to 45-52 percent for women by 2030. (Source: Jeffery Levi, Laura M. Segal, & Rebecca Salay, Trust for America’s Health, “Bending the Obesity Cost Curve,” January 2012)
  • The number of drugs approved for every $1 billion spent on R&D has decreased by half every nine years since 1950. (Source: Nature Reviews Drug Discovery, “Diagnosing the decline in pharmaceutical R&D efficiency,” March 2012)
  • 80 percent of adults believe written end-of-life wishes important; 24 percent have done it. (Source: “Final Chapter: Californians' Attitudes and Experiences with Death and Dying,” California HealthCare Foundation, February 2012)
  • An online rating is available for one in six physicians practicing in the U.S. (Source: The Journal of Medical Internet Research, “A Changing Landscape of Physician Quality Reporting: Analysis of Patients’ Online Ratings of Their Physicians Over a 5-Year Period,” February 2012)
  • Medical identity theft prosecutions (a person fraudulently obtains prescription medications by using another person’s identity): 3,600 cases reported to the Federal Trade Commission in 2009, 12,000 between 2007 and 2009. Hot spots: Los Angeles, NYC, Miami. (Source: CMS)
  • Annual savings from preventable hospital admissions: $4.2 billion. (Source: Commonwealth Fund 2011)
  • 85 percent increase in imaging studies for Medicare enrollees 2000-2009. (Source: MedPAC)
  • 8.6 percent of Medicare FFS claims paid in error in FY 2011. (Source: CMS)
  • Ratio of private payer rates to hospital costs increased from 116 percent in 2000 to 134 percent in 2009. (Source: AHA)
  • 8 percent of ER visits are for non-urgent problems that could be treated less expensively in a doctor's office or clinic. (Source: U.S. Centers for Disease Control and Prevention)
  • Eliminating the individual mandate would reduce the number of people gaining coverage from 27 million to 15 million, a decrease of about 12.5 million people. (Source: RAND)
National health reform: What now?




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 today.

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