JOINT TASK FORCE ON HEALTH CARE COST REVIEW (Senate Bill 419)

Transcription

1 May 11 th, 2018 JOINT TASK FORCE ON HEALTH CARE COST REVIEW (Senate Bill 419) 1

2 AGENDA 8:30-8:35 AM Welcome and Opening Remarks 8:35-9:30 AM Multi-stakeholder Approaches to Address Total Cost of Care 9:35-9:50 AM Summary of States Approaches to Cost Containment & Reform 9:50-10:00 AM BREAK 10:00-11:45 AM Task Force Discussion 11:50-11:55 AM Public Comment Opportunity 2

3 Today s Objectives 1. Based on the information about Maryland, assess the potential impact and feasibility of a rate-setting model in Oregon (policy strategy #1 on matrix) 2. Based on cost containment and payment reform approaches in other states, evaluate alternative policy strategies that may help Oregon achieve similar policy goals (policy strategies #2-7 on matrix) 3. Discuss and confirm next steps for remaining meetings (3 in total) Develop and review policy proposals and recommendations (June 15 th ) Draft outline of report (July 13 th ) Finalize recommendations and report (August 17 th ) 3

4 ROADMAP Timeline November Draft Charter Background on SB 419 Solicit Input and Member Orientation December Historical overview of hospital rate setting Examine Maryland Model January Ongoing examination of Maryland model February No meeting (2018 session) March Oregon hospital financials Health care spending & pricing April Other states payment reform models (MA, PA, VT) May Total Cost of Care Task Force Discussion June-August Develop Policy Recs Draft & Finalize Report September 2018 Finalize and submit report to Oregon legislature Examine other states history with rate-setting Task Force Discussion 4

5 NOV RECAP Legislative history and intent of Senate Bill 419 (2017) Limit growth of health care expenditures in Oregon Address cost drivers in Oregon, with initial focus on hospital costs Assess potential impact and feasibility of the Maryland Model Consider and evaluate alternatives to accomplish goals in SB 419 Identified initial focus of the Task Force -- examine Maryland s hospital-rate setting model as well as investigate the state s more recent All-payer model Identified the types of data, information and reports task force members need 5

6 DEC RECAP Background and rationale for hospital rate setting in Maryland Impact of Maryland s Health Services Cost Review Commission on hospitals, health plans and providers Advantages and disadvantages of hospital rate-setting based on Maryland s more than four decades worth of experience Comparisons between Maryland and Oregon in terms of health care expenditures, types of hospitals, insurance market, demographics, and coverage 6

7 JAN RECAP Impact of Maryland s Health Services Cost Review Commission (HSCRC)- Commissioner and Research Perspectives Maryland s HSCRC - Medicaid Agency and Commission staff perspectives Description of development and operation of Maryland s all-payer rate setting it evolved from 1970s to present day, from rate-setting to all-payer global budget model Maryland has reduced per capita growth in hospital revenues for all payers, most recently under a global payment system Global budget transforms hospital payment, shifts volume-driven to value-driven Maryland has eliminated cost-shifting among private and public payers Key aspects of hospital global budget calculations, monitoring, and updates 7

8 MARCH 2018 RECAP Learned about Oregon s health care spending relative to other states: lower on utilization, higher on prices Key health care cost drivers including provider consolidation, new and costly treatments, consumers lack responsiveness to price (1) vertical integration: hospitals buying/partnering w/physician & ambulatory services, (2) horizontal integration - hospitals joining systems Competitive insurance market in Oregon Price variation among Oregon hospitals for services Federal and state hospital classifications: DRGs, Types A-C, Critical Access Hospitals Hospital financials in Oregon for DRG, Type A and B hospitals including recent trends around net revenue, operating expense & margin ( ) and payer mix 8

9 APRIL 2018 RECAP Massachusetts, Pennsylvania & Vermont Policies adopted and implemented by Vermont, Massachusetts, and Pennsylvania designed to reduce the growth of health care expenditures Opportunities and challenges with: Establishing models of accountable care organizations Creating multi-payer and all-payer approaches to transform health care payment Key factors to consider in establishing a statewide benchmark to cap the annual rate of growth. Brief exploration of how policies from the other states may help Oregon expand upon successful elements of its CCO model. 9

10 APRIL 2018 RECAP (cont.) Members observations at the end of the meeting: How best to build on the success of Oregon s CCOs with respect to what s complementary from the other states that may help Oregon extend successful elements of the CCO model. Establishing a statewide cap on the annual rate in health care costs in Oregon may allow the state to work towards an affordable system. Creating a statewide benchmark is an interesting approach in working towards a total cost of care model. A total cost of care model may collectively engage health systems, hospitals, and payers in Oregon and support efforts to transition away from FFS to a value-based payment system across both payers and provider types. Important to leverage existing infrastructure to works towards a more financially sustainable health care system. 10

11 MEDICARE 11

12 Source: Senior Health Insurance Benefits Assistance, DCBS. (2018) 12

13 Source: Senior Health Insurance Benefits Assistance, DCBS. (2018) 13

14 Medicare Advantage - Plan Types Health maintenance organizations (HMOs) and Local preferred provider organizations (PPOs) contract w/provider networks to deliver Medicare benefits. Nationally - HMOs account for the majority (63%) of total Medicare Advantage enrollment in 2017; local PPOs account for 26% of all Medicare Advantage enrollees Regional PPOs provide rural beneficiaries greater access to Medicare Advantage Plans Special Needs Plans (SNPs) are restricted to beneficiaries who are dually eligible for Medicaid or live in long-term care institutions Group Plans sponsored by unions and employers for retirees Medicare pays insurer a fixed amount per enrollee; employer/union pays for additional benefits Source: Medicare Payment Advisory Commission (MedPAC). Report to the Congress: Medicare Payment Policy, March

15 Original Medicare Fee for service model with bundled payments: Health services are bundled into groups known as Diagnostic Related Groups (DRGs) Reimbursement = (Base Rate) * (DRG multiplier) Reimbursement algorithm varies by setting (inpatient/outpatient) Certain hospital types are exempt from the DRG system and are paid on a cost basis (Type A & B hospitals) Multiple incentives, add-ons, performance and penalty mechanisms Sources: Source: Oregon Health Authority, Office of Health Analytics. Presentation March 9, 2018 to Joint Task Force. Senior Health Insurance Benefits Assistance, DCBS. (2018) 15

16 Payments to Medicare Advantage Plans Medicare pays Medicare Advantage plans a capitated (per enrollee) amount to provide all Part A and B benefits Medicare pays private plans a risk-adjusted per-person predetermined rate rather than a per-service rate Federal Medicare payments to MA plans are enrollee-specific, based on a plan s payment rate and an enrollee s risk score Risk scores account for differences in expected medical expenditures and are based in part on diagnoses that providers code. Medicare makes a separate payment to plans for providing prescription drug benefits under Medicare Part D Providers may charge different co-pay and deductible amounts, and can set rules about provider networks, referrals and out-of-network coverage Providers may contract with other providers on FFS or capitation basis Sources: Oregon Health Authority, Office of Health Analytics. Presentation March 9, 2018 to Joint Task Force. Kaiser Family Foundation. Medicare Advantage Fact Sheet (October 2017). Medicare Payment Advisory Commission (MedPAC). Report to the Congress: Medicare Payment Policy, March

17 Payments by Medicare (cont.) Nationally, MedPAC estimates 2018 payments to MA plans will average 101 percent of FFS spending; ranging 95% to 115% of traditional Medicare costs. Most claims in FFS Medicare are paid using procedure codes, which offer little incentive for providers to record more diagnosis codes than necessary to justify ordering a procedure. Goal for Medicare Advantage is to impose fiscal pressure on all providers of care to improve efficiency and reduce Medicare program costs and beneficiary premiums MA plans have a financial incentive to ensure that their providers record all possible diagnoses because higher enrollee risk scores result in higher payments to the plan (MedPAC 2018) Sources: Kaiser Family Foundation. Medicare Advantage Fact Sheet (October 2017). Medicare Payment Advisory Commission (MedPAC). Report to the Congress: Medicare Payment Policy, March

18 Medicare in Oregon 449,586 of the 816,139 Medicare covered lives in Oregon are Original Medicare (55% as of November 2017) compared to Medicare Advantage (44%) 22 stand-alone Medicare prescription drug plans 75 Medicare health-only or health & drug plans 38 companies offer Medicare Supplement policies (Medigap) Source: Senior Health Insurance Benefits Assistance, DCBS. (2018) 18

19 Medicare in Oregon 22 stand-alone Medicare prescription drug plans 75 Medicare health-only or health & drug plans 38 companies offer Medicare Supplement policies (Medigap) ~74,821 Dual Eligible Beneficiaries (*March 2018 OHP enrollment) Source: Centers for Medicare and Medicaid Services, Monthly Enrollment by State (April 2018). OHA Monthly Medicaid Population Report by Eligibility Group for Physical Health Plan, March

20 10 MA Carriers in Oregon cover >75% of All Medicare Beneficiaries Insurers (Organizations) Plan Types Enrollees Regence Blue Cross Blue Shield of Oregon Local PPO/HMO/HCPP 60,890 Moda Health Plan, Inc. Local PPO/HMO/HCPP 60,740 Altrio Health Plans PACE/Local PPO/HMO/HCPP 35,297 UnitedHealthcare Insurance Company Local PPO/HMO 28,527 Providence Health Local PPO/HMO/HCPP 22,534 PacificSource Community Health Plans Local PPO/HMO 22,279 Sierra Health and Life Insurance Company, Inc. Local PPO/HMO/HCPP 18,798 Kaiser Foundation Health Plan of the Northwest HMO 18,558 AETNA Life Insurance Company Local PPO/HMO 17,111 Total 284,734 Source: Centers for Medicare and Medicaid Services. Enrollment for April

21 Summary of States Approaches to Cost Containment & Reform 21

22 Payment Model and Scale Care Delivery Redesign Financial/Quality Targets Population Health Infrastructure Federal Feasibility Maryland: All-Payer Global Budgets for Hospitals ( ) State determines the total, all-payer revenue target (global budget) for each hospital to decouple revenue from volume and incentivize prevention Hospitals receive fixed global budgets (GBRs) to shift from volume to value-based payments All-payer model: Medicare, Medicaid managed care, and commercial payers (including Medicare Advantage) Hospitals transition from fee-for-service to fixed global budgets Funding for enhanced care management initiatives Funding for quality improvements Limit hospital per capita annual revenue growth to 3.58% Annual quality/value-based adjustments Generate $330 million in Medicare hospital savings over five-year period Reduce readmissions to Medicare national average Reduce hospital acquired conditions by 30% over five-year period (65 preventable complications) Other quality improvement targets (e.g. HCAHPS) Address population health: chronic conditions, deaths from opioid use, and senior health and quality of life (Total Cost of Care, ) Support physicians and other providers who work with high-need Medicare patients through Care Redesign program Health Services Cost Review Commission (40 FTE includes economists, statisticians, accountants, legal, staff, & other; $14.1 million annual budget, 100% from assessments) Robust data collection, reporting, and analytics Federal Medicare Waiver (1977) Participant in the CMS Innovation Center State determines federal Medicare payment amounts to hospitals Source: Maryland Health Services Cost Review Commission (HSCRC) presentation to SB 419 Task Force, January 19,

23 Payment Model and Scale Care Delivery Redesign Financial/Quality Targets Massachusetts: Health Care Cost Growth Benchmark ( ) Sets statewide target to control the growth of total health care expenditures across all payers (public and private); sets target to the state s long-term economic growth rate Health care cost growth benchmark for is 3.6% (actual is 3.55%) All-payer model includes Medicare, Medicaid and commercial payers Strengthens market functioning and system transparency Promotes efficient, high-quality delivery systems with aligned incentives Health Policy Commission promotes triple aim and innovative care delivery Certifies providers as patient-centered medical homes (PCMHs) and accountable care organizations in MA Fosters value-based payment Promotes collaboration and sustained community engagement around whole-person care Enhances transparency of system performance for providers, payers, patients, employers, and state agencies Reduce unnecessary hospital utilization, avoidable emergency department and readmission rates Increase use of APMs by commercial HMO and PPO provider types Total projected savings is $4.67 billion Reduce unnecessary hospital utilization, avoidable ED and readmission rates (per 1,000 individuals) Population Health Lower avoidable health care utilization At-risk adults without a doctor visit (see HPB performance Dashboard for list of metrics, pgs of 2017 Cost Trends Report) Health Policy Commission manages all-payer claims database (FTE ~60 staff, $8.5 million annual budget, fee-based) Infrastructure Collects additional provider and health plan data Robust data collection, reporting and analytics Federal Feasibility No federal participation Sources: Seltz, David (April 20, 2018). Introduction to the Health Policy Commission. Presentation to the Oregon Joint Task Force on Health Care Cost Review. Massachusetts Health Policy Commission (March 2018) Annual Health Care Cost Trends Report. 23

24 Payment Model and Scale Care Delivery Redesign Financial/Quality Targets Population Health Infrastructure Federal Feasibility Pennsylvania Rural Health Model ( ) Rural hospitals receive global budgets for all inpatient and outpatient services to provide for predictable and stable cash flows Global budgets to cover 90% of each hospital s revenue by year 2 30 hospitals will participate by year 3 (45% of all rural PA hospitals) Payers include Medicare FFS, Medicaid managed care, and commercial payers (including Medicare Advantage) Hospitals to redesign their delivery systems based on local health needs Hospitals are to build partnerships with other providers through care coordination and referral patterns to promote population health Hospitals may reduce excess beds, change service delivery lines, or transition operations to outpatient centers State to review hospital plans to ensure access and quality Estimated $35 million in Medicare savings Limit rural hospital cost per capita annualized growth rate to 3.38% across all participating payers Increase access to primary and specialty services Reduce deaths related to substance use disorder (SUD) and improve access to opioid treatment Improve chronic disease management and preventive screenings in target areas: cancer, cardiovascular disease, and obesity/diabetes Short-term: Department of Health to provide end-to-end assistance at no cost Long-term: Rural Health Redesign Center to provide technical assistance including data analytics, quality assurance, and other forms of technical assistance (requires enabling legislation) Participant in the CMS Innovation Center State determines federal Medicare payment amounts for participating rural hospitals Source: Hughes, L. (April 20, 2018). Pennsylvania s Rural Health Model Accelerating Health Care Innovation in Pennsylvania. April 2018 Presentation to the Oregon Joint Task Force on Health Care Cost Review. 24

25 Payment Model and Scale Care Delivery Redesign Financial/Quality Targets Population Health Infrastructure Federal Feasibility Vermont: All-Payer Accountable Care Organization (ACO) Model ( ) ACOs designed to incentivize value and quality using single-payment structure ACOs receive fixed prospective payments for hospitals; remaining providers on FFS or APMs Payers include Medicare FFS, Medicaid, and commercial payers By 2022, 70% of all all-payer beneficiaries and 90% of Medicare beneficiaries enrolled in ACO ACOs to provide a coordinated, system-wide, and integrated reform approach to address Triple Aim through 2022 Enhance care coordination Foster collaboration among community-based providers Transition from volume-driven fee-for-service payment to a value-based prospective model Limit cost growth target to no more than 3.5% in aggregate across all payers (excludes prescription drugs, dental, long-term care) Medicare growth target % below national average Statewide health outcomes and quality of care targets Improve access to primary care Reduce deaths due to suicide and drug overdose Reduce prevalence and morbidity of chronic disease Improve access to primary care Reduce deaths due to suicide and drug overdose Reduce prevalence and morbidity of chronic disease Independent Green Mountain Care Board has regulatory authority including payment and provider rate-setting Existing all-payer claims database, augmented with additional administrative and clinical data sources Participant in the CMS Innovation Center CMS investment of up to $17 million during first two performance years Complementary Medicaid 1115 Waiver (renewal) Sources: Backus, B., Costa, M. (April 20 th, 2018). The Vermont All-Payer Accountable Care Organization Model Agreement. Presentation to the 25 Joint Taskforce on Health Care Cost Review. Green Mountain Care Board,, All-payer Model One Page Summary

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27 Promote cost containment Support payment reform Address price variation among payers and providers Offers multi-payer approach (public & private) Potential advantages in Oregon Potential disadvantages in Oregon VERMONT: All-Payer Accountable Care Organization (ACO) Model Gradual transition from fee-for-service to capitation/aco model Moderate cost containment and cost growth Use of specified goals, trend factors Inpatient and outpatient focus with hospitals and primary providers Early stages with gradual roll-out and adoption Aligns prospective payments across payers through ACOs Flexibility to use alternative payment models (APMs) and non-traditional health services Leverages the role of managed care in Vermont Limited to enrolled members/capitated lives Aligns payment models across several payers Limited, initially, to public payers (Medicare and Medicaid) Gradual participation of commercial payers to establish allpayer model Expansion of CCOs to Medicare and commercial members Expand ACO model like Vermont to reduce health care spending Transition from volume (FFS) to value-based payment Allow leverage of Oregon s existing CCO infrastructure Vermont is significantly different than Oregon (size, single dominant commercial payer) Vermont s experience of failed single-payer Potentially less Medicare funding Administration of policy oversight Limited ability to pay for services outside of ACO model MASSACHUSETTS: Health Care Cost Growth Benchmark Policy-driven; targets total cost of care Minimal through establishing growth target benchmark Benchmark applies to all types of expenditures and provider types Works towards establishing targets for APMs Health Policy Commission (HPC) promotes payment reform through research, public reporting, and promoting investments in new care models Establishes a uniform goal with a single target growth rate for everyone Benchmark may reduce price variation among providers and payers over time Comprehensive, all-payer Enhanced oversight Quicker movement to APMs Lacking strong enforcement to align payers Builds on Oregon s successful 3.4% rate of growth in Medicaid w/ccos Offers flexibility and a market-oriented solution Accountability by state through reporting, committees, and public hearings Mechanism to review and approve hospital budgets Promotes public accountability with minimal penalties Creates a fixed, stable, predictable rate of spending Administrative complexity of HPC; funding needs Feasibility of establishing a new agency Limited enforcement Incomplete measurement of results State as an outlier; questionable long-term ability to stay below annual growth target PENNSYLVANIA: Global Budgets for Rural Hospitals Focus is on rural hospital viability and use of incentives to promote cost containment Long-term strategy geared towards achieving all-payer approach to sustainable financing of rural hospitals Effective model for payment reform Promising model in its initial stages Innovation may drive payment reform through use of global budgets Payment reform offers stable funding and incentives Conceptually through use of global budgets Increases investments in population health; potential to lower utilization and decrease profits Multi-payer except for Medicare; incremental phase-in of commercial payers Voluntary model with use of global budgets among commercial and public payers (Medicaid) Moves away from fee-for-service reimbursement model; stable funding and rural health access Focus on rural hospitals may align with well w/oregon s A & B hospitals Offers unique rural health strategies Promotes rural health redesign with CCOs Potential support among payers and providers Incentivizes hospitals to invest in prevention & reduce volume Voluntary basis may be difficult for payment changes Limited usefulness without Medicare participation May not result in system-wide savings Unknown if rural hospitals in Oregon would embrace this payment model 27 Applicability of global budget to non-rural hospitals (e.g. DRGs)

28 Member Feedback Key Themes Promote Cost-containment Gradual transition from fee-for-service to capitation via accountable care organizations (ACO model) Reduce cost growth, address ability to contain costs, and establish targets for total cost of care Use of specified goals, spending targets, and trend factors Inpatient and outpatient focus among hospitals and primary care providers Use of benchmark applied to all types of health care expenditures and provider types Support Payment Reform Align prospective payments across payers through ACOs Flexibility to use alternative payment models (APMs) and targets including supporting non-traditional health services Address Price Variation Among Payers and Providers Align payment models across public and private payers to reduce price variations among provider types, services and locations 28

29 Member Feedback Key Themes Offers Multi-payer Approach (public and private) Comprehensive, all-payer is more effective Accelerate adoption and spread of APMs across payers Potential Advantages in Oregon Create a fixed, stable, predictable rate of spending/growth Build on Oregon s successful 3.4 percent rate of growth in Medicaid and the coordinated care model Flexible and market-oriented solution Mechanism(s) to review and approve hospital budgets Promote accountability through reporting, transparency, and public hearings Potential Disadvantages in Oregon Applicability to Oregon s unique health care environment Administration complexities Limited enforcement Limited data available to assess outcomes 29

30 Rate-Setting Design Considerations States that adopt rate-setting systems have to consider a number of design questions: 1. Scope: all-payer versus partial-payer whether rate-setting would be limited to private insurers or also include Medicare and Medicaid? 2. Services: whether to apply rate-setting to inpatient services, or also regulate outpatient and physician services? 3. Governance: who in the state would have the authority to oversee and manage the system, and how should it be funded? 4. Payment Structure: how to set payment methods per unit (paying for episodes vs. individual services) compared to payment rates (capping total annual revenue per hospital or revenue per admission) 5. Innovation: how to ensure the system supports payment innovations (e.g., use of incentives to pay higher rates in return for quality metrics/outcomes) 6. Transition Period: how to establish base rate(s), inflation factor, adjustments among hospital, annual updates Sommers, A., White, C., & Ginsburg, P. (2012). Addressing Hospital Pricing Leverage Through Regulation: State Rate Setting. National Institute for Health Care Reform Policy Review, 9 (May).

31 TASK FORCE DISCUSSION 31

32 Guidelines for Today s Discussion We will spend 10 minutes reviewing each policy strategy (7 strategies in total) Members will be asked to share their thoughts on each policy strategy (i.e., matrix homework assignment) Staff will capture the discussion using flip charts Chair Smith will invite members to elaborate on their responses for each policy strategy Dot Exercise (10-15 minutes) Staff will prepare written summary before the next meeting (June 15 th )

33 POLICY GOALS POLICY STRATEGIES Address Hospital Cost Drivers Promote Cost Containment Decrease Annual Expenditure Growth Reduce Price Variation Address Affordability Support Payment Reform Reduce Complexity Hospital Rate-Setting (MD) Establish and approve rates for costs of inpatient services Standardize basis of payment for services Global Budgets for Hospitals (MD and PA) Transition rural hospitals from costbased reimbursement to global budgets Incentivize prevention and population health Accountable Care Organizations (VT) Expand CCO model to Medicare enrollees (traditional/medicare Advantage) Align payment and incentives across payers 33

34 POLICY GOALS POLICY STRATEGIES Address Hospital Cost Drivers Promote Cost Containment Decrease Annual Expenditure Growth Reduce Price Variation Address Affordability Support Payment Reform Reduce Complexity Hospital Rate-Setting (MD) Establish and approve rates for costs of inpatient services Standardize basis of payment for services Global Budgets for Hospitals (MD and PA) Transition rural hospitals from costbased reimbursement to global budgets Incentivize prevention and population health Accountable Care Organizations (VT) Expand CCO model to Medicare enrollees (traditional/medicare Advantage) Align payment and incentives across payers 34

35 POLICY GOALS POLICY STRATEGIES Address Hospital Cost Drivers Promote Cost Containment Decrease Annual Expenditure Growth Reduce Price Variation Address Affordability Support Payment Reform Reduce Complexity Accountable Care Organizations (VT) Expand CCO model to Medicare enrollees (traditional/medicare Advantage) Align payment and incentives across payers Multi-payer/All-payer Participation (MD, PA & VT) Align and standardize payment models across Medicaid, Medicare, commercial (e.g., PEBB/OEBB), employersponsored plans 35

36 POLICY STRATEGIES Address Hospital Cost Drivers Promote Cost Containment Decrease Annual Expenditure Growth POLICY GOALS Reduce Price Variation Address Affordability Support Payment Reform Reduce Complexity Annual Growth Target & State Benchmark (MA & VT) Establish single target growth rate for all payers and providers Fixed, stable, and predictable rate of spending Allow market flexibility to meet benchmark(s) Create penalties and/or incentives for outliers Regulatory vs. Market-Based (MD, MA, PA, & VT) Public utility and ratesetting model with regulatory authority Independent authority to review rates; monitor and strengthen market functioning Public Reporting &Transparency (MD & MD) Create tools to increase visibility into cost and utilization data Statewide reporting and analysis of quality and cost across providers, health plans, and payers 36

37 POLICY STRATEGIES Address Hospital Cost Drivers Promote Cost Containment Decrease Annual Expenditure Growth POLICY GOALS Reduce Price Variation Address Affordability Support Payment Reform Reduce Complexity Annual Growth Target & State Benchmark (MA & VT) Establish single target growth rate for all payers and providers Fixed, stable, and predictable rate of spending Allow market flexibility to meet benchmark(s) Create penalties and/or incentives for outliers Regulatory vs. Market-Based (MD, MA, PA, & VT) Public utility and ratesetting model with regulatory authority Independent authority to review rates; monitor and strengthen market functioning Public Reporting &Transparency (MD & MD) Create tools to increase visibility into cost and utilization data Statewide reporting and analysis of quality and cost across providers, health plans, and payers 37

38 POLICY STRATEGIES Address Hospital Cost Drivers Promote Cost Containment Decrease Annual Expenditure Growth POLICY GOALS Reduce Price Variation Address Affordability Support Payment Reform Reduce Complexity Annual Growth Target & State Benchmark (MA & VT) Establish single target growth rate for all payers and providers Fixed, stable, and predictable rate of spending Allow market flexibility to meet benchmark(s) Create penalties and/or incentives for outliers Regulatory vs. Market-Based (MD, MA, PA, & VT) Public utility and ratesetting model with regulatory authority Independent authority to review rates; monitor and strengthen market functioning Public Reporting &Transparency (MD & MD) Create tools to increase visibility into cost and utilization data Statewide reporting and analysis of quality and cost across providers, health plans, and payers 38

39 Member Feedback Jesse O Brien, OSPIRG (OLIS) Establish a policy framework to enable Oregon to move in that direction incrementally instead of all at once, and that would allow the state to be flexible in implementing new payment and health care delivery models while holding the health care industry accountable for achieving a sustainable rate of health care cost growth. Formation of a Health Care Cost Commission similar to the one in Massachusetts. Empowering the Cost Commission to study and recommend a set of implementation and enforcement tools, subject to Legislative approval.

40 Guidelines for Dot Exercise 10 Minutes for Exercise Vote on all seven policy strategies Two dots per policy strategy (use no more 14 dots total) Vote with the dots that best communications your perspective and position on each policy strategy Green dot Yes, this concept supports Oregon s goals Red dot No, this concept does not support Oregon s goals Yellow Dot I am neutral on this concept Blue Dot I need more information before I can form an opinion

41 Next Steps LPRO staff to develop straw proposals based on feedback and guidance shared by members Remaining meetings June 15 th Develop recommendations July 13 th Create report outline and key content August 17 th Finalize recommendations and adopt report

42 PUBLIC COMMENT 42

43 Payment System Basics Bundling of services increases Capitation Cost-based payment Hospital not at-risk Services the hospital is at risk for across these different Bases of Payment 43

44 Payment System Basics (continued) Bundling of services increases Capitation Strength of cost containment incentives increases Provider more risk Payer less risk Services the hospital is at risk for across these different Bases of Payment 44