Mississippi Association of Self-Insurers September 27, 2012

1. Reinventing Healthcare: A Success Story in Disease Management (No, Really…) Mississippi Association of Self-Insurers September 27, 2012

2. The Questions • There’s a lot of talk about “patient-centered care” and “re-inventing the health care system” as a means to improving quality and lowering costs, but what does that really mean? Are there real examples of success out there? • Given a successful example, what can we learn from it about the probable characteristics of a successful program?

3. Backstory: The Context of Change

4. Health Care Reform • Patient Protection and Affordable Care Act (PPACA): • Coverage Expansion (32 million) • Benefit mandates • Employer mandates • Market restructuring • Multiple new taxes, subsidies, and transfers • Price controls • Increased complexity • Unintended consequences • Trends accelerated and magnified by PPACA: • Medical care inflation • Shortages of physicians, nurses, and other clinical professionals • Changing roles of physicians • Merging roles of payors and providers • Expanded role of technology • Provider consolidation – scale now, operating economies later • The demographic tsunami

5. Too Few Doctors and Nurses • 40% of practicing physicians are older than 55. • About 1/3 of physicians could retire in the next ten years. • About 1/3 of nurses over 50 say they plan to retire in the next decade. • The graphs do not take into account the tectonic changes from health care reform. • They do optimistically assume: • A rise in utilization rates • A shift in work schedules • An increase in productivity • Modest growth in GME Sources:Michael J. Dill & Edward S. Salsberg. The Complexities of Physician Supply and Demand Projections Through 2025 ( AAMC November 2008). National Center For Health Workforce Analysis, Bureau of Health Professions, Health Resources and Services Administration. (2004).

6. Physicians in MS Market Source: Dartmouth Healthcare Atlas (2006).

7. What the Future Holds For Health Care • More patients • Fewer doctors • More mandates • Less money • More responsibility • Less flexibility • Price controls • More provider integration • Linkage of outcomes and reimbursement

8. Overview of Diabetes: the Economics and the Epidemic

9. What Do We Spend Our Healthcare Dollars On? 2002: Total diabetes cost = $138 billion 2007: Total diabetes cost = $174 billion > 26% increase in 5 years!

10. The Rapidly Changing Cost of Diabetes Diabetes-Related Expenditures (in Billions) in U.S.: 1997, 2002, and 2007 Number of Dollars (in billions) 1997 ($98 billion) 2002 ($132 billion) 2007 ($174 billion) By 2025, CDC estimates 50 million Americans will have diabetes at a total direct and indirect cost of $351 billion.

11. This Jet Is Expensive… • Costs $2.55 million • In 2002, you could have purchased 54,117 • In 2007, you could have purchased 68,235 (14,188 more!) • In 2002, 1 in 4 Medicare dollars was spent on a diabetic patient; by 2007 it was 1 in 3.

12. The United States of Diabetes • The annual health care costs in 2009 for a person with diagnosed diabetes averaged approximately $11,700 compared to an average of $4,400 for the remainder of the population, according to new data drawn from 10 million UnitedHealthcare members. The average cost climbs to $20,700 for a person with complications related to diabetes. • More than 50% of Americans could have diabetes or pre-diabetes by 2020at a cost of $3.35 trillion over the next decade. “The United States of Diabetes: Challenges and Opportunities in the Decade Ahead” United HealthGroup Center for Health Reform & Modernization, November 23, 2010

13. The Sky-Rocketing Prevalence of Diabetes Number (in Millions) of Persons Diagnosed with Diabetes in the U.S., 1980-2007 Number of Persons (in millions) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year

14. The Diabetes Epidemic Projected Growth in Prevalence of Diagnosed Diabetes (US)

15. Estimated lifetime risk of developing diabetes for individuals born in the United States in 2000 Narayan et al, JAMA, 2003

16. But How on Earth Did This Happen? And Why, Oh Fate, Why?

17. The Epidemiology of Diabetes “But wait a bit,” the Oysters cried “Before we have our chat. For some of us are out of breath, And all of us are fat.” - Lewis Carroll

18. 1994

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35. 1994 2000 1994 2000 No Data <4.5% 4.5-5.9% 6.0-7.4% 7.5-8.9% >9.0% No Data <14.0% 14.0-17.9% 18.0-21.9% 22.0-25.9% >26.0% Age-Adjusted Prevalence of Obesity and Diagnosed Diabetes Among U.S. Adults Aged 18 Years or older Obesity (BMI ≥30 kg/m2) 2010 Diabetes 2010 CDC’s Division of Diabetes Translation. National Diabetes Surveillance System available at http://www.cdc.gov/diabetes/statistics

36. Natural History: Pandemic • DM in 1897 – 2.8/100,000 prevalence • Since 1958 5-fold increase in prevalence of DM2 • 1991-2001, 49% increase in overall prevalence, 76% increase in age 30-39, 10-fold increase in pediatric DM2 • 1991-2001, 61% increase in obesity • DM2 in the developing world

40. Diabetes is very preventable! • With loss of 7% of body weight and 150 min/week of moderate exercise, diabetes can be prevented about 58% of the time • This was true for all subgroups – age, sex, race, etc. • Weight loss and exercise is twice as good at preventing diabetes as medicine

41. Bringing It Home – To You…

42. Background: Mississippi Historically,highest prevalences of diabetes, HTN, and obesity in U.S. Historically#1 CV mortality Very high in all CV and diabetes complications 52nd in U.S. inquality of carein diabetes Worst socioeconomic status in U.S. Very large at-risk population Very high in health disparities and poor access to care Half the averagenumber of providers per capita

43. Direct Costs of Diabetes • Group A includes several employers, all in South Mississippi. • Group B is one employer in Harrison County, Mississippi. • In each Group, 20% of patients represent ~ 80% of total medical costs. • In each Group, 10% of the patients represent ~ 70% of total medical costs.

44. Diabetes Costs – Selected Employers 87 employees, > 30%, had costs > $70,000 / year.

45. Diabetes Costs – Health System 25% of patients represent 80% of expenditures. Diabetes diagnoses appeared on claims representing less than 8% of total costs for the patients with diabetes.

46. Diabetes in Jackson Market Percent Prevalence Source: Center for Disease Control (2008).

47. Estimated Costs of Diabetes Diagnosed Diabetes in Jackson Market • Selected counties in central Mississippi. • CDC 2007 estimates of prevalence. • Estimated annual medical costs of diagnosed population based on UnitedHealthcare estimates of average annual medical costs among its 10.0 million members diagnosed with diabetes: $11,700. • Actual costs may be higher if significant part of population has complications: $20,700 / person / year.

48. What Ever Shall We Do?

49. Failure of the Status Quo • Diabetes can be effectively managed at a reasonable cost. • HbA1c predicts diagnosis and clinical status. • HbA1c levels correlate with acute and chronic medical costs. • The existing health care system does not provide adequate care for the disease, improve outcomes, or slow its growth. • According to the CDC, ~ 32% of diabetics have an A1c > 9.0 (severely out of control). • Only about 25% of patients with hypertension get control. • Only about 40% of diabetics have adequate cholesterol control. • These poor outcomes and uncontrolled growth are occurring despite: • Universally accepted and straightforward treatment protocols that are both clinically effective and cost effective when properly deployed. • Virtually all healthcare communities already have the resources necessary to manage the disease.

50. ADA Guideline for The Follow Up Visit for DM: 39 points in 15 minutes! (23 sec/item)