Federal Issues Impacting Hospitals

1. Federal Issues Impacting Hospitals Promedica Health System Fall Symposium October 31, 2011

2. Presentation Overview • Some guiding principles • Affordable Care Act (ACA) 101 • Despite ACA, problems persist… • What’s ahead?

3. AHA’s Mission “…advance the health of individuals and communities…[through] organizations that are accountable to the community and committed to health improvement.”

4. 32 million more people with health coverage • Shared responsibility • Insurance reforms • Medicaid expansions • Tax credits • $12.9 billion prevention fund • Increases coverage of preventive services • No cost sharing for • recommended preventive • services • Annual Medicare wellness visits • Grants for workplace • wellness programs • Creates a national public health council with advisory • groups • HIT Medicare/ Medicaid Incentive programs • Expansion of broadband technology • Funding for HIT infrastructure • Pilot programs on payment bundling • Accountable Care Organizations • Center for Medicare and Medicaid Innovation (CMI) • Independent Payment Advisory Board (IPAB) • Administrative Simplification • Comparative effectiveness • Hospital Value-Based Purchasing (VBP) • Enhanced public reporting • Numerous provisions to reduce health disparities • National quality center

5. Health Reform What’s Missing? • Clinical Integration • Ethics in Patient Referral Act – Stark Laws • Anti-Kickback Law • Civil Monetary Penalty • Antitrust – Sherman Act • IRS Tax-Exempt Laws • Medical Liability Reform • Controlling/Reducing Costs • Comparative Effectiveness • Addressing Utilization • Physician self-referral • Patient/public demand • Physician Supply… primary care, residency slots • Wellness, prevention

6. Cost of Chronic Diseases Expected to Climb… 51% of spending for 45-64 is for chronic conditions; 56% for 65+. Source: Conway, P., Goodrich, K., Machlin, S., Sasse, B. and Cohen, J. , Patient-Centered Care Categorization of U.S. Health Care Expenditures. Health Services Research, no. doi: 10.1111/j.1475-6773.2010.01212.x

7. Accountable Care Organizations Existing Models of Service Primary Care Physicians Specialty Care Physicians Outpatient Hospital Care and ASCs Inpatient Hospital Acute Care Long Term Acute Hospital Care Inpatient Rehab Hospital Care Skilled Nursing Facility Care Home Health Care Post Acute Care Episode Bundling Acute Care Episode with PAC Bundling Acute Care Bundling Medical Home

8. Projected Budget DeficitSOURCE: White House Office of Management and Budget; GRAPHIC: Wilson Andrews, Jacqueline Kazil, Laura Stanton, Karen Yourish - The Washington Post

9. National health expenditures as % of GDP Sources: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group.

11. Cost-shifting is a real phenomenon…

12. Cost-shifting escalates by raising retirement age…

13. Bottom line for hospitals? Challenges…Vulnerabilities • Next year…2012 • Deficit reduction efforts continue… • Expiration of Bush-Obama tax cuts • …2013 • “Boehner rule”…for future debt limit extensions

14. The Big Issue Beyond 2012 • Fundamental questions: • What will Medicare and Social Security look like? • How big will the military be? • How much will the wealthy pay in taxes? • How will the country care for the sick and vulnerable (Medicaid)? • Payment reforms and hospital role?

15. Federal Issues Impacting Hospitals Promedica Health System Fall Symposium October 31, 2011 Kim Byas, Sr. Regional Executive kbyas@aha.org