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Putting It All Together: The Moving Pieces of the Health Care Puzzle

Putting It All Together: The Moving Pieces of the Health Care Puzzle Vermont Health Care Reform in Context Presented to the Vermont Legislature Friday, February 18 Room 11 Hunt Blair, Bea Grause, Church Hindes, Glenn McRae, and Mary Val Palumbo. Vermont Health Care Reform in Context.

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Putting It All Together: The Moving Pieces of the Health Care Puzzle

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  1. Putting It All Together: The Moving Pieces of the Health Care Puzzle Vermont Health Care Reform in Context Presented to the Vermont Legislature Friday, February 18 Room 11 Hunt Blair, Bea Grause, Church Hindes, Glenn McRae, and Mary Val Palumbo

  2. Vermont Health Care Reform in Context Just understanding the names & acronyms can be daunting… STEEEP - Vermont Blueprint - HIT - HRAP - IOM - State Health Plan - Coalition 21 - IMPACT - RHIO - V3C - IHI February 18, 2005 - 2

  3. Vermont Health Care Reform in Context Every system is perfectly designed to achieve exactly the results it gets. Don Berwick’s First Law of Improvement February 18, 2005 - 3

  4. Vermont Health Care Reform in Context Health Care is Not Monolithic It’s not THE HEALTH CARE SYSTEM It’s M A N Y MANY MANY HEALTH CARE SYSTEMS February 18, 2005 - 4

  5. Vermont Health Care Reform in Context Actually, it’s Many Overlapping Systems It’s MANY M A N Y MANY MANY MANY HEALTH CARE SYSTEMS February 18, 2005 - 5

  6. Vermont Health Care Reform in Context So what are these systems? • Health care delivery systems • Health care financing systems • Health care information systems But even those categories are too broad… February 18, 2005 - 6

  7. Vermont Health Care Reform in Context Within those sub-system categories, Health Care Delivery, Financing, and Information Systems can be organized as: • Stand alone systems • Vertically or Horizontally integrated networks of care • Less formal alliances, partnerships, or loose affiliations They can be for-profit, not-for-profit, or most often, a hybrid of the two. Critically, whatever the structure, their interests are not necessarily aligned. February 18, 2005 - 7

  8. Vermont Health Care Reform in Context All that said, even we policy wonks persist in calling it “the health care system,” because it often simulates a system. That paradox is the heart of the challenge we face. It's sometimes difficult to figure out how and where to connect the dots. Or whether and where to disconnect them. That is because Health Care is an an amalgam of accidental and intentional design, with parts that are intricately enmeshed and intertwined. February 18, 2005 - 8

  9. Vermont Health Care Reform in Context Centralized Decentralized Distributed February 18, 2005 - 9

  10. Vermont Health Care Reform in Context In many, many areas... the parts and sub-systems work together... Of course, there are also many areas where system structure, entrenched interests, as well as personal and institutional bias, lead to... ...challenges. February 18, 2005 - 10

  11. Vermont Health Care Reform in Context So How to Start? Going back to Don Berwick’s observation, what we have here is largely… A design problem Provoking the obvious question: who designed what we have now? February 18, 2005 - 11

  12. Vermont Health Care Reform in Context How Did We Get Here? Strictly speaking, they weren’t all “accidents” of history, but there are some key dates, key transition points, that influence why our health care systems look the way they do in VT: • 1861-1876: Louis Pasteur • 1932: Committee on Cost of Medical Care • 1965-1966: Medicare and Medicaid • 1979: Certificate of Need law adopted • 1986: transition of control from fed.’s to the states February 18, 2005 - 12

  13. Vermont Health Care Reform in Context Regulatory Restraints -- Most health care players—particularly providers and insurers—are not free to do as they please. -- Depending on state where located and player type, they will fall somewhere along a “regulatory continuum”: • laissez faire model (private, free market) • self-regulating model (private players set own rules) • limited public control model (such as C.O.N.) • public utility model (public tightly controls the private system) • public service model (public owns the system) -- Regardless of location, virtually all providers are subject to the primary federal health care regulatory agency—the Centers for Medicare and Medicaid Services (“CMS”, formerly “HCFA”) February 18, 2005 - 13

  14. Vermont Health Care Reform in Context “Layers” of Regulatory restraints Regulatory programs stem from concern for the size, power, economic impact and vital nature of health care services: - Federallevel: - State level: Medicare conditions of participation Licensure Medicare payment restrictions Certificate of Need Medicare compliance enforcement Rate Setting & Budget Controls Controls on Medicaid waivers Professional Practice boards HIPAA (privacy protection), etc. Medicaid payment restrictions Mandated Benefit laws “Rule 10” for Managed Care, etc. - Health Care Industry level *: Accrediting, credentialing, certification, JCAHO (the “Joint Commission”), AAMC, HEDIS, NCQA etc. * Self-imposed February 18, 2005 - 14

  15. Vermont Health Care Reform in Context How does the U.S. design compare to other models around the world? February 18, 2005 - 15

  16. Vermont Health Care Reform in Context The continuum of the five basic health care system paradigms… 1. Private 2. Pluralistic 3. National Health Insurance 4. National Health Service 5. Socialized Health Service …and their distinguishing characteristics: February 18, 2005 - 16

  17. Vermont Health Care Reform in Context Fortunately, we are at an historic moment… People are looking beyond their own institutions and systems. Providers, advocates, payers, business… All are undergoing – or at least starting to consider – sweeping paradigm shifts. February 18, 2005 - 17

  18. Vermont Health Care Reform in Context The Quest for Alignment Health care reform tops nearly everyone’s short list of policy priorities. Vermont is awash in a wide array of initiatives directed at studying, improving, and/or transforming the state’s health care financing and delivery systems. February 18, 2005 - 18

  19. Vermont Health Care Reform in Context These come in several forms… • Legislative-mandated studies and Agency directives carrying forward from previous sessions • Public/private partnerships & initiatives • Provider and professional association initiatives • Federal and multi-state initiatives, projects, and alliances February 18, 2005 - 19

  20. Vermont Health Care Reform in Context with several recurring themes… • Improving quality of care • Improving health care delivery and health care financing “systems” • Implementing Health Information Technologies • Chronic disease management • Patient case management • And of course, containing costs February 18, 2005 - 20

  21. Vermont Health Care Reform in Context A wide array of studies mandated during the 2004 session are complete or are nearing completion, including : • The developmental and mental health services provider system, • Small business insurance plans, • Expanding use of 340B pharmacy programs, • Mental Health reform • Sustainable health care policy options, • Medical malpractice, and • Worker’s Comp. February 18, 2005 - 21

  22. Vermont Health Care Reform in Context Act 53, 2003’s “Certificate of Need Reform” Bill put into motion creation of: • A new State Health Plan (by the Department of Health), • A Health Resource Allocation Plan (by BISHCA), • Community Needs Assessments (with a four year horizon), and • Annual Community Reports for hospital service areas (by Vermont’s 14 licensed acute care hospitals). February 18, 2005 - 22

  23. Vermont Health Care Reform in Context The Health Resource Allocation Plan (or HRAP), is due July 1, 2005 and will: • Contain a “statement of principles…to be used in allocating resources.” • Identify the current supply and distribution of health care services, resources, workforce, technology, and institutions. • Provide recommendations for the appropriate supply and distribution of resources, programs, and services. February 18, 2005 - 23

  24. Vermont Health Care Reform in Context In addition to the HRAP, BISHCA was already responsible for: • Producing (since 1997) an annual Health Care Expenditure Analysis, • Regulating and providing reports on the health insurance market, • Ruling on annual Hospital Budgets and capital expenditure applications -Certificates of Need (C.O.N.) with the Public Oversight Commission. February 18, 2005 - 24

  25. Vermont Health Care Reform in Context The State Health Plan, also mandated by Act 53, is due in January, 2005 and “shall:” • Include health promotion, health protection, nutrition, and disease prevention priorities for the state, • Identify available human resources, as well as those needed to achieve the state’s health goals and planning required to meet those needs, • Identify geographic parts of the state needing additional resources in order to improve the health of the population, • All in sufficient detail to guide development of the HRAP. February 18, 2005 - 25

  26. Vermont Health Care Reform in Context Information System Information System Information System External forces Eg: federal policy, mass culture, media, local business, corporate policy. Public Health Sector (And other Government) Health Care Sector Individual Health Care Providers Family Community Sector Vermont Model for HealthA system for lifelong prevention and care February 18, 2005 - 26

  27. Vermont Health Care Reform in Context The Vermont Department of Health’s planning efforts, tied to federal funding requirements and statute, also includes: • Healthy Vermonters 2010: Goals & objectives for continuing to improve the health of Vermonters • Rural Health Plan(due to be updated in 2005) • State Oral Health Plan(due in early 2005) • State EMS and Bioterrorism/All Hazards planning, as well as multiple disease-specific planning efforts, surveillance and other public health programs. February 18, 2005 - 27

  28. Vermont Health Care Reform in Context The Department of Health is also the lead agency in the Vermont Blueprint for Health, a public/private partnership for Improving Chronic Illness Care. Partners include: insurers, academic medical centers, Schools of Medicine & Nursing, VAHHS, VMS, VPQHC, OVHA, BISHCA, DAIL, and consumers. After the break, we’ll be hearing a lot more about both the Blueprint… February 18, 2005 - 28

  29. Vermont Health Care Reform in Context Many Vermont organizations and reform efforts identifying the HRAP, Blueprint and Coalition21 have adopted what are known as the IOM Aims: The IOM Aims state run system should be: • S safe • T timely • E efficient • E effective • E equitable • P patient-centered February 18, 2005 - 29

  30. Vermont Health Care Reform in Context The Vermont Association of Hospitals & Health Systems’ is working toward the IOM Aims with the IHI IMPACT Project. IMPACT brings together all of Vermont’s acute care hospitals in a national program run by the Institute for Healthcare Improvement (IHI), to work with Vermont providers, health insurers, and other Blueprint partners in a rigorous, collaborative process designed to create breakthrough improvements. February 18, 2005 - 30

  31. Vermont Health Care Reform in Context Coalition 21 principles also embrace the IOM Aims • Universal access to essential health care services. • Coverage for care that is comprehensive and continuous. • Continuous improvement of health care quality and safety. • Health care financing that is sufficient, equitable, fair and sustainable. • Built-in accountability for quality, cost, access and participation. • Engagement of all Vermonters in healthy lifestyles and informed use of the system. February 18, 2005 - 31

  32. Vermont Health Care Reform in Context • Health Information Technology (HIT) issues and opportunities cut across all of these initiatives and involve all of the stakeholder groups, including providers, insurers, and Medicaid. • HIT includes everything from practice management, chronic disease management, billing, and claims processing systems to Electronic Medical Records. February 18, 2005 - 32

  33. Vermont Health Care Reform in Context VT health care stakeholders are fully committed to implementing comprehensive HIT. We all see it as a Critical Component to systems change. But it requires a huge investment of capital and human resources, a high degree of trust and cooperation, and broad consensus on system design. There’s no quick and easy fix… February 18, 2005 - 33

  34. Vermont Health Care Reform in Context Consider this “Clinical Connectivity” map from the Massachusetts Health Data Consortium: February 18, 2005 - 34

  35. Vermont Health Care Reform in Context • Of course even if the systems are improved, someone needs to do the work. • For the last several years, the Human Resources Investment Council’s Health Workforce Development Partnership Committee has been examining challenges we face in the health work force. February 18, 2005 - 35

  36. Vermont Health Care Reform in Context At the Office of Nursing Workforce, Research, Planning and Development (located in the College of Nursing and Health Sciences at the University of Vermont), research into the nursing shortage has informed additional areas of study. We’re now compiling workforce data on LNAs, Medical Lab staff, respiratory therapists, radiation technologists, pharmacists and pharmacy techs. February 18, 2005 - 36

  37. Vermont Health Care Reform in Context Our aging society Highly skilled nurses needed in a variety of settings A decade of declining nursing school enrollment Why do we have a nursing shortage? February 18, 2005 - 37

  38. Vermont Health Care Reform in Context Age of RN’s Working in VT February 18, 2005 - 38

  39. Vermont Health Care Reform in Context Age 65 yrs. + in VT. February 18, 2005 - 39

  40. Vermont Health Care Reform in Context RN FTE’s in Vermont February 18, 2005 - 40

  41. Vermont Health Care Reform in Context Steady Increase in Vermont RN Graduates By 2006, graduation of RN’s predicted to increase by 74% from 1999. However, a nursing faculty shortage threatens this progress. February 18, 2005 - 41

  42. Vermont Health Care Reform in Context # RN FTE’s 50% increased grads 100% increased grads 34% change in FTE’s Vermont Projected RN FTE’s, Projected Demand for RN’s, Effect of Increasing Nurse Graduates by 50% and 100% 6,737 7,000 ????????? 6,500 6,167 6,030 6,000 Projection by Bureau of Labor Statistics 5,500 5,529 5,292 5,471 5,000 2003 Statewide RN Vacancies: 12% Hospital 12% Home Health 19% LTC 4,563 4,998 4,500 4,424 RN FTE’s 4,526 4,324 4,000 3,500 3,000 RN FTE’s Years 2005 2010 2015 2020 Source: 2002 National Council of State Boards of Nursing – Nursing Workforce Supply Projection Tool February 18, 2005 - 42

  43. Vermont Health Care Reform in Context Systems…history…planning efforts and collaboration…workforce… All important, but… What About Rising Health Care Costs? February 18, 2005 - 43

  44. Vermont Health Care Reform in Context Vermont resident spending on health care has grown from: $1.3 Billion in 1991 to $2.8 Billion in 2002 February 18, 2005 - 44

  45. Vermont Health Care Reform in Context Spending Distribution by Provider Category, 2002 February 18, 2005 - 45

  46. Vermont Health Care Reform in Context A wealth of information on where the $’s go… MORE BISHCA $’s here www.bishca.state.vt.us February 18, 2005 - 46

  47. Vermont Health Care Reform in Context We want to “control costs” and yet… Health Care spending isn’t all bad: Health Care spending is jobs. Health Care spending is health. With these “costs” we extend lives, we have better outcomes, and we improve the quality of life. February 18, 2005 - 47

  48. Vermont Health Care Reform in Context Two (of many) Reform Paradigms Define the Benefit Plan (what’s covered) $ Delivered in a System that looks like… $ Paid by Mechanism X Mechanisms X, Y, Z Define the Financing System (how it’s paid) $ Define the Benefit Plan (what’s covered) $ Delivered in a System that looks like… vs. February 18, 2005 - 48

  49. Vermont Health Care Reform in Context The Goal: A more rational design. Wellness focused, patient centered, with tools for consumers and providers to manage health care collectively, supported by information technology. Over time: remove perverse incentives, improve quality and outcomes, and create a system that can be a model for the nation. February 18, 2005 - 49

  50. Vermont Health Care Reform in Context The Vision: A sustainable healthcare system that provides access to quality health care services to all Vermonters The Strategy: Alignment of State efforts State & Federal Collaboration Investment in Systems Change Aligning Payment to Design Goals February 18, 2005 - 50

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