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Employers’ Stake in Health Reform. Len M. Nichols, Ph.D. Center for Health Policy Research and Ethics Virginia Health Care Conference Richmond, VA June 6, 2013. Fiscal Cliff? US to Default???? . Family Premium / Median Income. Manufacturing Institute

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employers stake in health reform

Employers’ Stake in Health Reform

Len M. Nichols, Ph.D.

Center for Health Policy Research and Ethics

Virginia Health Care Conference

Richmond, VA

June 6, 2013


Manufacturing Institute

of the National Association of Manufacturers

two roads to fiscal balance
Two Roads to Fiscal Balance




incentive alignment is multi dimensional
Incentive Alignment Is Multi-Dimensional



Decision Support

Wellness &

Cost Sharing



innovation center portfolio
Innovation Center Portfolio

ACO Suite:

    • Shared Savings Program
    • Pioneer ACO Model
    • Advance Payment ACO Model
    • Accelerated and Learning Development Sessions

Primary Care Suite

    • Comprehensive Primary Care Initiative (CPCI)
    • Federally Qualified Health Center Advanced Primary Care Practice Demonstration
    • Multi-Payer Advanced Primary Care Practice (MAPCP) Demonstration
    • Independence at Home
    • Medicaid Health Home State Plan Option

Bundled Payment Suite

  • Bundled Payment for Care Improvement

Dual Eligible Suite:

  • State Demonstration to Integrate care for Dual Eligible Individuals
  • Financial Alignment to Support State Efforts to Integrate Care
  • Demonstration to Reduce Avoidable Hospitalizations of Nursing Facility Residents
  • Medicaid Health Home State Plan Option

Diffusion and Scale Suite:

  • Partnership for Patients
  • Million Hearts Campaign
  • Innovation Advisors Program
  • Care Innovations Summit

Healthcare Innovation Challenge

Rapid Cycle Evaluation and Research

Learning and Diffusion

the budget world is skeptical
The Budget World is Skeptical
  • Results less than hype/hope so far
    • ACO takeup, bundling, PGP + CABG demo in 1990s
  • New ACO/PCMH results to date:
    • AQC, CalPERS-Blue Shield-Hill-Dignity
    • PCPCC vs. AHRQ/Mathematica review
  • Reality that PCMH is zero sum vs. specialists and hospitals
  • No one’s market share is “enough”
  • Not clear we are willing to do multi-payer reform
comparing va us
Comparing VA /US

Sources: AHRQ premiums, CMS/OACT spending

comparing virginia to us
Comparing Virginia to US

Premium Paid OOP by Employees

> 50 workers < 50

Sources: AHRQ premium, Census income data

hospital charge variation in va
Hospital Charge Variation in VA

SOURCE: CMS MEDPAR charge data, 2011.

choices employers face
Choices Employers Face:



in general when is collaboration wise
In general, when is Collaboration wise?

When economies of scale from necessary investment are large relative to any one player

When no one knows exactly how to improve

When incentives have to be fundamentally changed to support necessary improvements

When basic level of trust exists, or can be cobbled together and maintained with incentives and DATA

what leaders are saying
What LEADERS are saying…

“David Howes, President and CEO of Martin’s Point Health Care, summed up our challenge eloquently, ‘The age of competing for market share by controlling access to data is over. Transparent all-payer data should be made widely available and competition should be based solely on performance’.

Testimony of Elizabeth Mitchell CEO, Maine Health Management Coalition and Foundation and Board Chair, Network for Regional Healthcare Improvement to the Subcommittee on Health, Committee on Energy and Commerce U.S. House of Representatives February 14, 2013

what can must communities do
What Can/Must Communities Do?

Employers > Plans

Grand Junction, Rochester,

Portland Maine…


With All


virginia health innovation center
Virginia Health Innovation Center

Created on 2010 recommendation of Virginia Health Reform Initiative Advisory Council

501c3, housed at state Chamber of Commerce

Seed money from stakeholder associations

Surveyed state, found over 350 “examples”

6 task forces creating proposals for funding

Led by private actors in cooperation with state

stuff to collaborate on
Stuff to collaborate on

Analytic database construction (HIE + APCD)

Quality measures

Patient acuity adjusters


Diagnostic and treatment protocols

Risk sharing contract parameters

stuff to compete on
Stuff to compete on

Patient Experience and (risk adjusted) Outcomes

Total Cost (of care plus absentee/presenteeism)

Quality execution

Continuous learning

what you need to succeed
What You Need to Succeed

Change your attitude about who owns data

Change all attitudes about collaboration

Arrange for state-action immunity from anti-trust

Your crow-bar, at least for a while

Medicaid expansion to smooth the way

Vivid memory of the consequences of failure