Health Care Outlook for 2019

Health Care Outlook for 2019

Thank you very much. I am thrilled to be here today and talk about
what we’re seeing for 2019 and we’ll talk a little bit about 2018 first. Okay. Let’s see what we’re going to do. We’re going to take a little journey today
and we’re going to have some fun. I saw this great article in the Wall Street
Journal, 101 Ways to Live, Work and Goof Off More Ambitiously and one of them was, “Next
time you have a real meltdown, literally melt down. It’s very impressive.” These little quotes throughout and little
words of wisdom as we go through, we’re going to share those and also talk a lot about healthcare
of course, but we do have to have some fun as we’re doing this. I am particularly, I love lists. I am a list maker. At the end of every year I make lists and
so it’s a lot of fun. On the right hand side you can see some of
the things that are the more fun things and I snuck my dog in, I’m not sure everyone in
the room knows, but she’s up there and I dressed her up, which she of course didn’t like. I think she’s going to be a huge social influencer
but she’s of course not because she won’t wear her clothes. The other thing that I saw a lot this year,
the In and Out. I love In and Out lists. Washington Post does a great one every year,
Wall Street Journal had this one on furniture. Just when I got my house all done, now they’re
saying wicker is coming back. At Christmas time, I saw a million llamas
everywhere. I Still can’t exactly figure out what that
was and so those were some of the kind of things that I saw from the fun standpoint. Let’s talk a little bit more seriously but
before we do, I want to say we’re sharing today. we’re going to do this together. I’m doing it with Steve Grossbart and as you
advance in your career, you often have a chance to work with people that you worked with at
a previous employer or a previous relationship and so much I’m thrilled to be working with
Steven again and we’re going to share our insights today. Our stories for 2018. I went through some of the big magazines,
the societies and you’re going to see themes coming out of this. I loved doing the Harvard Business Review. The third best article was one on Excel, so
go Excel. Total cost of care, digital consumer big in
my space Healthcare Financial Management Association – total cost of care make sense as a digital
consumer, it’s new for finance people to be out in that area, so we’ll talk a little
bit about that. There are a lot of articles on reform, a lot
on social issues that we’re seeing and on mergers and acquisitions and so we’re going
to talk about those. Sarah. Okay, we are to our first poll question. In your opinion, we’d like to know what was
the top healthcare story in 2018? Your options are the midterm elections. Number two is Amazon, many articles have been
written discussing the company’s potential areas of expansion into healthcare including
pharmacy, logistics and providing an electronic health record. Option three is CMS regulations including
updates and changes to existing programs and new programs like bundled payment and the
new ACA model. Option four is consolidation and changing
business models, including mergers, acquisitions and new players entering the market such as
Google and Apple. And lastly, our 5th option is consumerism,
which includes the importance of involving patients in care and providing accurate billing
information. We’ll just give you a moment to get your votes
in there and they’re pouring in so far. Good. Do you have any words to expand on any of
those Bobbi while we just let people wrap up their votes? No, I think you did a great job, thanks. It will be interesting to see what people
think was their top story for the year. I’m going to go ahead and close that and we’ll
share the results. So, 17% reported the mid-term elections, 21%
reported Amazon, 14% reported CMS regulations, 38% our majority in this poll voted for consolidation
and changing business models and then 10% voted for consumerism. How does that line up with what you would
have expected? Did that line up with your top story for 2018? Yes. Yes, it does. I am a little more excited about consumerism
than what the poll is showing. The changing models, I think very important
and regulations, I just think we all hate regulation and so that doesn’t surprise me. You just need to click over on the arrow there. There we go. Okay, Google, this like I said my list. What was the top healthcare question on Google
last year? There were four options here about diet, about
disease, why am I always tired? Yeah, I want to do that too and the response
was, the one that was the highest on Google was “What is the Keto Diet?” So, now we know. Health Catalyst as a company, we have over
70 clients and we have this wonderful department that puts together stories of what our clients
are doing and really what we’re trying to do is drive to outcomes for people. Again, a lot of themes in here using risk
prediction models, using machine learning, using patterns, all the data that we have,
how are we going to use it to go forward to make improvements. We have data, but we need to make improvements
with it. This is a particular story, we have a lot
of stories out there. Customer success stories, you can get to them
on our web. I just think that it’s fun to be able to look
back at the end of the year and say, “What have our clients done?” And, we had stories in the operational area,
a lot in the clinical areas. Just so many different things that people
do with the data as they’re going through with it. So, that was fun to me. Now let’s get into the political arena. We all love that. There’re some facts we have on here, the Federal
exchange, the enrollment, it’s closed now. 8.4 million consumers signed up. It was 8.7 last year, so a slight drop. We also are in a time of high unemployment
and some states had expansion in Medicaid. Overall CMS was very pleased with this. They said they had resources to help with
the enrollment and get everybody signed up that they wanted to get signed up. We also had the midterm election and healthcare
was just a big part. 41% of the eligible voters said healthcare
was their key issue. The Democrats, the end result of that, Democrats
have control of the house. Republicans in the Senate. Democrats really focusing on some different
areas but on the right, I listed some areas where I saw that there were some common areas
between the two on drug pricing, transparency, the surprise billing in my state. I live in Arizona, as the first of January
no more surprise billing for the consumer coming into … You can’t just get a bill
out of nowhere if you were out of network, so it’s good. The other thing is the dish resolution. I all of a sudden realized by September 30th,
medic, we need to get a resolution that some regulation is passed is how we’re going to
resolve that issue. Steve. When we think about the midterms and what
it means to the Affordable Care Act, it’s not quite easy to come up with a clear pinpoint
answer. The day after the election
it’s some … According to some analysts, it cemented Obamacare’s legacy and showed
that the Democrats can actually win on healthcare. It also effectively ended Congress’s attempts
to repeal Obamacare with the Democratic House there can be no successful repeal of Obamacare. Yet, less than five weeks later, a federal
judge in Texas ruled that the entire healthcare law is unconstitutional because during the
tax reform initiative led by the Republicans on the hill, Congress voted to reduce the
penalty for not getting health insurance down to $0. The judge ruled that that effectively killed
the constitutionality of the law because the supreme court had ruled that the law was constitutional
because Congress had the taxing authority to do so. The following day lawyers who had been on
both sides of the Affordable Care Act battles were saying this reasoning was flawed. There’s very little legal experts who believe
this ruling will stand up and bottom line is if Congress wanted to kill the Affordable
Care Act, they needed to kill the Affordable Care Act not reduce the penalty down to $0. A new congress can come back and have the
penalty back so that the law is still intact and we’ll have to wait to see what the courts
do. In the meantime, three states had ballot proposals
Idaho, Nebraska and Utah to expand Medicaid and two other states Kansas and main both
elected new governors who will replace governors who had blocked state legislative attempts
to expand Medicaid. So, the expansion of Medicaid is a sure thing
probably in five of these states and we anticipate seeing an increase in Medicaid coverage up
to 76 million by next year. The expansion of Medicaid is going forth and
another thing that’s happening in many states, they’re also expanding state protections too
and state laws that make it easier for people to get affordable care. Another phenomenon that really came to fruition
over the past two years is the growing interest in Medicare for all. Some of you may recall back in 2016, Bernie
Sanders ran on it. Many of the new and progressive candidates
for Congress emphasized Medicare for all. If we look at this graphic on the slide, if
you look back to the first bar dates back to the era when Bill Clinton was president
and only 40% of the population supported some type of single payer healthcare system. At the time of the Affordable Care Act passage
2009, it was up to 46% and then six months before the November elections only 50% of
the population. And this is, again just as Bernie Sanders
was emphasizing and giving a focus on this. Only 50% believed in some type of single payer
system. June of 2017, September of 2017 it kind of
stuck at 53% and in that time or since the presidential election, it’s now at 59%, so
a big jump in end of 2017, early 2018 towards Americans being polled and voicing their support
for expanded single payer system. And, it’s most likely that in the House of
Representatives a Medicare for all will be introduced. I don’t know that it’s going to get the democratic
votes to pass and it certainly won’t get passed the Senate, but there’s certainly a growing
interest in this type of single payer system. Transparency was an area where, again there’s
agreement with both parties but what does it mean? It’s always a definition. There are two graphs there and if you’ll most
of the states are gray, so that means we get an F on transparency, both on the cost side
and on the quality side. A couple of states, California gets an A in
quality scores and Minnesota, making them available to the public in a way that’s usable
to the public. Another thing that happened in this area is
starting the first of the year, it should be 11.2019 hospitals have to post their prices
online. That’s currently a requirement in California. So when I lived there, we went through that
but again, prices … and this is from a hospital I got online. You can’t find it on everybody’s website but
I did find this on one website just as I got on to prepare for this. And again, listing just the prices with me
as a consumer, I wouldn’t know, do I need platelets? I don’t know if I need platelets. On the DRG side, you have to post the DRGs
and again this was done. This is live data that your average charge
that you’re going to have for that, that’s cesarean section with complications and without
complications so you can see the difference, so the public can see the difference. You do want to be in compliance, you do want
to review before you put it out there, what it means and understand that consumers are
going to be a little bit shocked and maybe confused. You may be even confusing consumers and I’ve
seen some … I’m sure everybody has seen some editorials lately as “Well, what was
this?” It is a step in the right direction. What the consumer really wants to know is,
“How much am I going to pay? Of course. Maryland has an interesting website where
the cost, it’s for a couple of procedures. They’ve gone very deeply into each hospital
and again, they show not just the hospital costs but what the total cost of that condition
might be and also some quality metrics about that condition for that individual hospital. It’s a good place, a good starting point of
what we need to do more of for consumers. Again, right now, if it were me. I’d be knowing this is out there, how is the
public going to respond to this and how do I need to prepare a response to all of this. Population, what’s going on with our population? The life expectancy 78.6 and women, we do
live a little longer. We’re up to 81.1 but this was a slight drop
from last year and last year it was 78.7. It is interesting when you look at the age
bands for this. Of course, the suicide, our drug crisis is
taking a toll on some of our younger population but for our older population, and this is
where we need to plan for the future. In 15 years, we’re going to have 80 million
more of beneficiaries. 10000 people join Medicare every day and our
birth rate is at the lowest it’s been in 30 years. And just a little graph over on the right
hand side showing the age groups of people over 65 years old. In 2016, it’s going to be 24% of the population. So as you’re planning ahead for your future
and, what do I need to build? Not as many beds. How can I serve this population? We have to acknowledge we’re having an aging
population and how do we really service them? Thanks for reminding me that I’m getting old
Bob, I really appreciate that. I am as well, so none of us are getting any
younger. A good thing about, I love consumerism probably
because I’m a finance person and so anything that’s in the marketing world is just something
that I love. I found this study from Bain & Company and
they are saying the Amazon effect, those bars with the red dots are what Amazon does that
excels Amazon into the strategy as far as growth. And so, there are things like saves time,
reduces effort, avoids the hassle. I mean, we’re assuming that the quality is
there and the cost there is … It’s just interesting to me, again, how can we imply
this to healthcare and how is the consumer going to be impacted by this. The graph on the right hand side says, “What
do consumers want when they’re making decisions?” and convenient, easy access. Now, if you follow the Amazon model, the article
goes on to state, “Gee overtime you will have a higher revenue growth.” 11% for those companies that matched up with
the Amazon model, their growth was much higher. We all know our patients, they’re very frustrated
with our billing process, 68% as a matter of fact. 30% of the patients are starting to rely on
retail clinics. The area that’s coming in to avoid the hassle. I just walk in the door and, so ahead of time. Again, what do you need to be doing? what
you need to just look at what you’re doing to get yourself in a space where your brand
will be recognized and you’ll be part of the patient preference so you’ll be picked. Just one thing where there was a company called
chewy, of course, they sell dog things and they are beating Amazon at their own game
because they have more variety and they also continue to … and they really focused on
what mattered to the pet owners not just a broader population but again segmentation,
which used to be a big thing when I was in school, segmenting the market. Steve. I was going to say I don’t even bother going
to my primary care physician for a flu vaccine. They don’t have the vaccine and it’s easier
to pick it up with the cold cuts at the grocery store. Some of what’s driving consumerism and some
of that angst among our population is just the continuing cost of healthcare and it’s
important to put things in context. We spend 18% of our gross domestic product
on healthcare compared to our peer nations in the world, we have far out-paced even the
next most expensive Switzerland, which is just over 12% of their gross domestic product. Then the other interesting thing is even though
we’re the leader, we’re number 6th when it comes to government healthcare spending. If you think about Medicaid, Medicare, tax
breaks that employers get for providing health insurance. We spend a lot of government dollars on healthcare
and interestingly our northern neighbors in Canada spend less of their taxpayers, they
spend less of their gross domestic product on government insurance than we do in America
and of course, we have the highest private healthcare spending as well. The frustration with price, the frustration
with the inefficiencies in our healthcare system are partly related to the high cost
that we pay and we’re also finding that our healthcare quality is falling behind other
industrial nations. Okay. How can we, again, get the consumer involved? Personalization and there’s a great YouTuber
out there and this teacher greets every one of his students within an individual handshake
when they come in the classroom. It was on the news and it was just to me,
a great way to really know how does somebody remember me? How do I get involved in my own healthcare? This whole personalization thing. There’s a thing called the Blue Button. It’s actually a government sponsored website
helping the consumer to download their own health records and telling you what organizations
you can go to download your health records. The whole thought is getting the consumer
more involved in their health care. How do we involve this emotional base? And one futurist that was talking about saying,
“Well gee, maybe we need to make everybody a member.” When I was at Kaiser, I used to count membership
and I know that Kaiser had a huge brand loyalty. It wasn’t unusual to find someone who had
been a Kaiser member for 45, 50 years and you just go, “Wow, I mean that’s loyalty
and somebody that really likes your brand and we all need to think about how we’re going
to do that in our own space.” Kaiser has moved very heavily into telehealth. Again, it is a different model so they could
do it and 78% of the consumers are interested in some sort of virtual healthcare services. Is that video? I don’t know if it’s video or if it’s just
online just talking or is it being able to talk to a consumer from the provider perspective. You can see Kaiser’s numbers $65 million prescriptions
are refilled online on an annual basis and they see 50% of their patients what they call
distantly. There’s change there, it’s coming and finally
CMS expanded for 2019. They expanded some regulations for telehealth
and virtual care. There are a discrete set of services that
you can now bill for virtual check-ins, remote evaluation and this interprofessional, the
consultation and I didn’t even know there was such a thing but there is an American
Telemedicine Association and they state that 34 states and the district of Columbia require
that private insurers cover telehealth the same as they cover in-person care. So, we’ll see if Dr. Cosgrove is right and
it is the year of telehealth in our industry. Again, thinking about what are you going to
do? I like to look and see what new roles are
out there. There’s a couple of new here Global Head of
Digital and Personalized Health Care Partnering, a good title. Chief Strategic Innovation Officer, Chief
Digital Officer. I saw one a Fortune 500 had a little blurb
and said there’s a Chief Storyteller, a Chief Flavor Officer that would be for me Chief
Flavor Officer serve the purpose and what these new titles do is elevate that area into
an area where you are acknowledging that your company is going to focus on that, so it’s
what your company values. I think all of our roles are evolving. The CIO having to get more into digital health,
talk about social, talk about … The CIOs are not just installing software anymore and
building software. They are really helping all of us use technology
to improve our services. I think this is a trend that’s going to continue
on a very fast pace. The whole person. This was just so much fun. We had Dr. Penny Wheeler attended our conference
that we put on every year and talked about what Allina is doing to connect patients to
their resources, so that they can meet their unique and as the word unique identified needs
in there, so the whole person care. There are some things that are sad about this,
our child poverty and it’s happened in the last five years, so we’re changing. We do have some positive things though. We have some states that have very good health
scores. There’s also a website out there, Healthy
People, it talks about goals that … and it really, it’s a good website because it
shows areas of disparity in the population and for different types of medical conditions. Again, there’s so much we have to do there,
so much we can talk about and so much that it will mean a lot for providers and payers
to do more work with their community so improving these social, what we call Social Determinants
Health SDOH. This slide is also related to Social Determinants
Health. It’s the ultimate end product of some of the
challenges we face in our country. Our life expectancy has declined and is now
among the lowest in amongst 17 high income and peer nations. If we look at a variation within our nation,
it’s dramatic. Big drivers for that are access to health
care, early childhood development, education, work conditions and the aging process and
so on. We could look at this across our nation. If you live on the upper east side of Manhattan,
your life expectancy is 10 years greater than people who live five miles north of you in
the south of Bronx. This was something that Don Berwick highlighted
at the Institute for Healthcare Improvement meeting last December. So life expectancy declines six months for
every minute you drive on the subway or two point three years for every mile you drive
and the opportunities for addressing this are challenging. To really get at social determinants there’s
so much and it’s so complex. Partnering with your community is critical
and Rush University Medical Center has done some exciting work and there’s a number of
innovative communities and health systems out there who are working to try to change
the equation in healthcare and I think we’re going to see more of this. When you think about it, we spend as a nation
782 billion dollars a year in healthcare. Healthcare industry employs 5.6 million people
and we hold investment portfolios of about 400 billion. Health systems have a tremendous potential
influence on the way our communities survive and support. Rush is actually saying it’s their job to
work towards improving life expectancy both in their community, both internal community,
their employees as well as external. There is a change hiring locally and developing
talent. They’ve increased their minimum wage up to,
I believe $22, which they say is the minimum for a sustainable income to support health. They’re turning to local resources in the
neighborhood where their hospital and medical center based. They’re buying locally. There was a trend years ago that we would
leverage our supply chain strength by negotiating aggressive contracts at a national level. Rush has decided whenever they can, they’re
going to buy locally, they’re going to invest locally and then their employees and staff
are investing a lot of energy and volunteer work in their communities and that collectively,
they believe will improve the quality of health and increased life expectancy in the neighborhoods
where they serve. Okay, one thing that’s exciting to me about
social determinants of health is the ability to tell stories at a personal level and I
think that’s what’s so powerful is we can change lives down at an individual family. And then, that to me, I think is a place we
all need to be thinking about is we do need to think broadly and then think about how
we can impact an individual. Believe it or not, I said I was going to give
you 101 facts, we’re halfway. We’re halfway to our facts here, so let’s
talk a little bit about the IT world. A little out of my space but I figure when
the New Yorker can have robots on their cover, this was their Thanksgiving cover, you know
that the robots are moving into our world. The consumer fair that’s in Las Vegas every
year was year or last week, I believe. If you’re anything lots of things get sent
out from that and they had a flying car of course, which is great. They also got into other type … Well, I
guess the flying car is not exactly a health related product, but I’ll make it one. Hearing aids, they got into hearing aids and
of course a lot of wearables and I thought, “Hearing aid, that’s something that yeah,
we should be able to improve, it shouldn’t be the same old hearing aid that we’ve had
before.” And then, my accounting association published
a paper about the robotic accounting department. Again, if it’s coming to the accounting department,
it’s coming to your department. About what are we doing now that’s very repetitive
that could be done in another way through machine learning and how is it going to impact
your area and thinking about how it’s going to impact your area and the change process
that you’re going to have to go through. Interoperability, when the new regs came out,
I got a lot of calls about, “Oh, aren’t you excited about measures and,” I said,
“Well, gee, the most important thing to me is interoperability. We’re going to have to show interoperability
in part of MACRA MIPs. 25% of your score for 2019 will be that you
can say, and you’re going to get various points for it. That you can say that you are promoting interoperability
and so, to me I thought, “Well, what does that mean? I’d love to say the word but what does it
really mean?” And so, what I thought was great is they’ve
actually given us some … CMS has given us some regs that describe this. What’s e-prescribing, What’s going through
the health information exchange, what are you putting from the provider to the patient
and what kind of public health, what records are you sharing with public health data, your
registry, different kind of surveillance reporting? That you need to be able to show that you’re
doing. I think again from the IT perspective this
is a world with a lot of changes. The merger world, all of these things that
happened in 2018. So yes, there were a lot of mergers. Advocate, Aurora, it actually started in 2017,
closed in 2018. All of these are not closed now but some of
them that are interesting to me. There was a couple called off that cultures
don’t mix. What they thought was going to work didn’t
work. Dignity Health, CHI Sometimes they will give
a new name. They have decided that did not close in 2018
at the end of the year. They wanted another month and they’re going
to give their new name CommonSpirit Health. ProMedica, HC ManorCare runs a lot of skilled
nursing facilities throughout the country. Again, as we’re going to new methods of payment,
some people are looking at the merger and acquisition route to fulfill that. Stanford Health, Good Samaritan Society again
a lot of … In Good Samaritan, a lot of sniff bids and one other sad fact for me is that
21 Hospitals closed in 2018. This is where we had the highest rating, this
new delivery and partnerships and some unexpected partners. And for Amazon, every time I read about Amazon,
it’s a new thing. Are they going to control our supply chain? They bought a pharmacy company last year,
Pill Pack. Are they going to enter into the insurance
market? Are they going to create an EMR? Are They going to? Are they going to just integrate, are they
going to provide clinics to people? It’s interesting on our side, on the health
side, we’ve hired a lot of people from the industry, these high tech industries but Google
has hired former executives of Geisinger in Cleveland Clinic to help them out. Google is also exploring partnerships with
Walgreens. I saw today Walgreens getting in and talking
to many other different types. The big CVS/Aetna the first one, this is going
to be combining 10000 stores, 1100 clinics and $22 million enrollees, so what does that
really mean? The executive officer said, “Well, we’re
going to create a plan that’s going to differentiate CVS in these patient journeys. Again, make them simpler, make them more personalized
while making care more accessible. Again, that fits a lot with what I was saying
we need to do in healthcare. That could be a very winning strategy for
him, only time will tell. And of course, on the bottom we still had
United Healthcare an insurance company buying physician practices and others were following
in the same line. Again, trying to control, they’re trying to
control the first input into the system. So, it’s exciting. Let’s switch tracks a little bit here and
talk about volumes. What’s going on? I got some utilization stats from the American
Hospital Association. Admits per thousand on the right continuing
to drop, leveled out a little bit in the past couple of years. I’m sure as we mentioned, the Medicare population
going in there. Admits were up less than a percent from 16
to 17. The days were flat, slight decreases in inpatient
surgeries and slight decreases in births, our outpatient volume was flat. If you look at that chat in the center, the
black and blue bars, the inpatient and outpatient in a hospital, the revenue is getting closer
together. It used to be hospitals were mainly inpatient
facilities and now they’re getting much that revenue gap is not as great as it was. And, over on the right hand side, I got that
chart from a real estate group showing the number of outpatient facilities that had been
opened across the years and you can see again, steady growth in that. AHA their future scan said 71% of the people
that responded, healthcare people that responded to the survey said they’re going to be acquiring
off-site facilities for outpatient care. Finance, stable, stable, stable, stable. Moody’s has this negative with glimmers of
stability, I like that. They are also saying 10% of the hospitals
are at risk for closure. You look at the Medicare margin, a Medicare
margin now 9.9% negative in 2017. You look at the growth of revenue over expenses
and unfortunately the expense growth is exceeding the revenue growth not good for our industry. What makes a high bond rating? A couple different things you need to think
about. Am I in any of these categories? Do I have a strong leading market position,
strong operating margins, good balance sheet metrics and growing market? Is my population growing in the area that
I serve or can I expand to get outside of that area? I just looked at some operating income from
information that I had and I don’t have operating percent on there but from year to year, most
of the large systems showed an increase. Cost, we need to be zealots on cost. When Steve put up that graph showing our cost
as a nation in healthcare and one of our great CFO at UPFC, he’s saying, “We need to be
zealots. We need to track and it needs to not just
be finance doing it. It needs to be the administrative team do
it.” Our healthcare spend is moderating. We were only up 3.9%. We’re still spending about $10000 per capita
per year and we’re not the only industry doing that. I saw a lot of things on … We all saw GM
coming out as the sedan car is not selling, they’re retooling and unfortunately doing
layoffs. Walgreens itself, they’re going to use a zero-based
budgeting approach to try to get a billion dollars out of their cost structure and they’re
trying to do this to reshape the organization because they want to drive growth, so it is
happening. Our CMS programs continue along much the same
way that they have. Most of these programs are value based and
they’ve been in place three, four, five years now. Not The MIPS but a lot of the hospital programs
have been in place for a while and you can see some results there on the re-admission. We’ve changed the payment structure and the
re-admission rates are going down. I know a lot of our clients are working on
re-admission and is that the right thing to do for the patient? Yes, it is. We do want to keep people out of the hospital
and get them back to their home as quickly as possible. And, I could add there. We don’t see any dramatic changes to these
value-based programs, they’re going to look a lot like they did last year. This year they’ll be virtually the same as
last year, so just keep doing the good work. Yes. The Medicare Advantage program it represents
right now 34% of the Medicare population but there’s a top seven insurers that have 76%
of the enrollment. It’s a margin of 2.6 They had a good increase
from CMS last year and CMS is going to let them … The insurance companies have a brighter
definition of benefits. You can offer dental in the past. Now they’re broadening that to you can offer
home care services, offer someone to help your loved one do the settings at home. Medicare, again Advantage growing. The accountable care space. Yup, it grew. This is where, if I probably made a mistake
last year. I think value based was just going to grow,
grow, grow and it is going to grow but not as rapidly as I said. You’ll see there is a little bit of leveling
off in the past couple of years but there’s still a thousand ACOs across the country and
there are still some large insurers. We know Medicare, we’ll talk a little bit
about Medicare in a second here. Medicare, they went back and forth on this
and now the HSS secretary actually said, “We need bold new payment models.” He wants the ACOs to take on real risk and
what he means by that is not just an upside. If you do well, you get something but he wants
an upside and a downside so that if you don’t do well, you have to pay back to the government
and that’s a little scary for everybody. I’m just always … and he felt that the payment
models that have been in place so far have had lackluster results. We’re also seeing the AHA future scan. We’ll see if this comes true. There were not a lot of health systems looking
to get into the own insurance market but there are a lot of health systems working closer
with self-funded employers. I think employers may be a market that we
need to get into a whole lot more and help out our employers control their cost. Pathways to success. That’s the new ACO model for CMS. I just love this, the final regs came out
December 21st and the letter of intent is due January 2nd to the 18th. I guess CMS thought none of us were going
to take off for Santa Clause or well the holidays and the actual application is due February
19th. That’s not giving you a sufficient time at
all and I’ve seen again, things come flying across in the past couple of days, you know,
“This can’t be so I don’t know if they’ll extend the deadline.” If they do extend the deadline that’s fine. That gives you a little more time but if this
is something that you think you want to do. You can see that these things are going to
move quickly. I would say you need to be preparing and thinking
about it and developing a strategy or a straw man or how you’re going to do this in your
organization. What does it really mean to have bundled payments? The five goals for this new CMS model. Accountability and competition, we mentioned
that. Continue of quality, integrity and well the
one I’m really am excited about is the beneficiary engagement. ACOs will now be able to talk directly to
the beneficiary and they’ll be able to offer a beneficiary some incentive for care. Just talking a little bit about two of our
large insurance companies. United Healthcare they have a nice value based
arrangement that’s right on their website same with Humana. They call their program the intersection of
health + care. What they’re seeing. Again, all of these are decreasing costs through
the ED and through hospital admissions. Episodes of Care Bundles, I love bundles. They’re Medicare payments and again this is
the one that started out voluntary, then it went to mandatory, then it went back to voluntary
and right now the new voluntary one is called BPCI Advanced, started October of 2018. There’s 1547 participants and it’s split between
… Those are actually split between the hospital and physician organizations that signed up
for this. Quality scores are part of it and they also
gave you an opt out rate. So you had the ability to sign up, get the
data but you could opt out in March 19. Again, you’d have to be able to analyze your
data and say, “Can I really make it in a bundle?” And again, a bundle, what that means is it’s
combining the part A and part B together and giving you one rate. The most common bundles that people signed
up for 53% signed up for major joint replacement, 45% CHF and 44% for sepsis. So there were a lot of responses to this,
a lot of people put their toe in the market and I think that’s a good thing to see. I’m going to start getting data, can I analyze
that data? Can I really? Do I have the care management? Do I have the rest of my organization aligned
with trying to deliver a bundle not just something of get the patient out of my hospital after
a short period of time. I thought it was really fun that Medtronic,
a great company. He sees a future, their CEO, where medical
technology companies accept more risk on how they get paid. He’s taking financial accountability for incomes. They have signed up for this anti-bacterial
sleeve, a deal with Aetna non-prompt and very, very few … They haven’t had to give a lot
of refunds, so they’re making, they’re doing what they say their product is supposed to
do and they’re willing to take risk on it. Risk is an area that was never my favorite
thing to do. Of course, I’m a finance person so I’m risk
averse but it’s out there. So, you’ve got to think about how much risk
can my organization take and what does that mean for us? How do we respond to that? So, your to do list coming out of this webinar
is to think about, do you need to update your plan based on the knowledge you now have and
think about how these changes are going to impact your organization. I think in the area of value-based care, we’re
going to see ACOs continue, bundles are going to continue, risk-based contracts are going
to probably be the fastest growing part of the equation. This is going to add to your data burden. You cannot get into these various arrangements
if you don’t have the analytical capability. So learn how to analyze claims data. This is a big Achilles heel for most health
systems, claims data and understanding and forecasting the impacts of risk is the greatest
challenge and build your capacity, integrate claims data with clinical data because for
those of us who are on the providers’ side of the equation, we are here ultimately to
leverage the clinical care we provide to reduce the cost of those claims. Plan for data, new types of data and develop
the metrics that support your business as you move into these new areas to venture. Collaborating with community partners. The Social Determinants of Health are important. Continue to think how you can work effectively
relations with employers for example, relations with your community and your volunteers and
charitable organizations in your towns and cities. And then finally, in terms of the Affordable
Care Act, we’ve spent the last two years wondering if it’s going to stay or go. It looks like for now it’s going to be business
as usual. We can expect health and human services to
chip away at provisions of the Affordable Care Act but nothing major can happen without
an act of Congress. The only wildcard here is the supreme court
alone can disrupt the Affordable Care Act before 2020 election and it’s impossible to
predict what’s going to happen. It will be interesting to see if the court
is with its stronger conservative majority is going to fundamentally change a rule and
unconstitutional or adhere to the precedents that the court’s already set up, but that
one that I don’t think either Bobbi nor I are willing to venture a guess or predict
on that one. Sarah. All right, we’ve got our next poll question
for you here. Given everything we’ve talked about today. In your opinion, what will be the top healthcare
story in 2019? So your first option is the Affordable Care
Act as Steve mentioned there are lots of proposed changes that could affect the reach and scope
of that. Your second option is big market share gains
in new care-delivery models. Your third option is CMS regulations including
updates and changes to existing programs and new programs like the bundled payment and
the new ACO model. Your fourth option is consolidation and changing
business models including mergers, acquisitions, new players entering the market such as Google,
Apple and the ever mentioned Amazon and the 5th option is consumerism, which includes
that importance of involving patients in care and providing accurate billing information. We’ll give you just a few moments here to
go ahead and respond to that poll. We are nearing the end of the presentation,
so if you have any questions that are top of mind, this is a good opportunity for you
to submit those before we dive into the Q&A session here in just a moment. Okay, we’re going to go ahead and close that
poll and share the results. 9% reported the Affordable Care Act, 21% reported
big market share gains in new care-delivery models, 8% reported CMS regulations, 47% the
majority in this poll reported consolidation and changing business models aligning with
what we saw earlier and then 14% reported consumerism. That’s great. I think this is great. I’m glad consumerism is on there and those
changing models. They kind of interact. I mean, I know you’re probably thinking when
I put this together there’s some of these that overlap each other, we know that, but
we just wanted to get your opinion on what’s going to be happening in 2019. Steve, any comments? I find it interesting. We’re expecting something that we don’t expect. Consolidation and changing business models
those are rapidly developing and a year ago we weren’t talking about Amazon and Berkshire
Hathaway and but no one really … I guess we were hearing hints that Aetna and CVS might
Merge but these are surprising and will continue, no doubt. Yes, I just wish I could see everybody and
get a read on your body language. Anyway, 2019 will be the year of, it looks
like changing models but from a fun standpoint. There was an NPR article, a news article that
came on in the end and I’m not a tarot card reader and so … but this was the card a
Six of Swords I think it is and what it means is we’re moving toward change. And of course, I love when I say this, you
could say this about anything but I thought, “Well it actually is true, we are moving
toward change.” The color of the year for 2019, just some
fun facts for you, it’s living coral, the food. That’s a combination of lettuce and celery
or something like that. The moon, I think we’re going to see a ton
of stuff about the moon. Maybe I’m just this month. It’s been on the cover of every magazine. We’re having a red mood or something this
month then I think we’re coming up to some anniversaries of things that happened on the
moon and we also had China go to the moon, so I’m putting moon in there. Then this year take a chance of what are you
going to do this year? I will read an article on robots in healthcare,
I will look and see what artificial intelligence can do for me, I’ll make sure that consumers
know the price of what they’re going to pay when they come to my organization. I’ll make sure that they want to come to my
organization. That I’ve met the preferences that meet my
market. Any thoughts for you, what you’re going to
do this year? I’m going to take a deeper look at how to
be involved in the community and how to help our clients be involved in the community with
our analytic tools and so on. I’m now a little worried about those robots
as well. I have enough trouble with my iPhone, so I’m
going to read up on those and I can only count up to two. Okay, Sarah I will turn it back to you. Okay, we have one final poll question for
you all before we dive into the Q&A. Well, today’s topic was an educational webinar
focused on healthcare trends and predictions for the future. Some attendees would like to know more about
Health Catalyst’s products and professional services. If you would like to learn more, please answer
this poll question and we’re going to just go ahead and leave that poll question open
for a moment as we start to dive into the questions. This is a question that came in fairly early
on when you were sharing the chart of, you know, showing the country and how the majority
had scored an F on that transparency and quality scale. Jocelyn was wondering if you could remember
who judges that, who is the ones compiling those score? Yeah, below the slide there was a source there
and I think they’re called Center for Transparency of Health. There is an organization that measures that. They do it every year. You can get on, they have on their website
and they have a very nice, they rank each state and go through in a lot more detailed
than obviously what I could show. Okay, perfect. Our next question comes from Lauren and she
provides a little context here. First she says, “With all the conversations
stressing the need for cost reduction and cost control, we seem to overlook the government
policies that impact the social determinants of health. If we don’t talk about the health consequences
of the Farm Bill, corporate responsibility or with agencies like the FDA, EPA, USDA that
have authority to make changes, we will never be able to control costs. We need to focus on reducing the need for
health services not just how we can make things cheaper. Do you think this will become a focus in 2019?” My first responses is, I hope so. I think it needs to be a focus. I do see a growing number of health systems
looking at the communities they’re serving in and looking to see how they can more effectively
support that community, understanding that those are also the people who seek healthcare
services, also their employees and I think there’s certainly conversations about how
we can … collaborating with our community can actually improve healthcare of the nation
and by the time they come to our hospitals so much can’t be undone. And, what I’ve seen from our clients is a
lot is taking place. It’s easier on the state level generally to
get involved in the state level. Just a client yesterday and they had a lot
of contacts with the state Medicaid and not as … it was harder for them to work with
Medicare but on the state they were very active getting involved with different programs failure
to thrive and really being able to make a change. We’ll see. I agree with Steve, I’d like to see it happen. I see a lot happening at the state level as
well. All right. Our next question comes from Aby and she asks,
“How does the number of hospital closures from last year, that 21 number you shared,
compare to previous years, does it suggest any sort of trends?” It’s usually around that number and I certainly
can go look it up, but it does suggest a trend in the rural areas. There are more closing in the rural areas,
which is … It’s a little sad. One of the forecasts you’ve cited was a 10%
reduction in hospitals in the next 12 months? Yeah, that came from-
That’s a 300 plus. Yes. They said they’re at risk of closure so again,
there could be more consolidation. What’s happened with several hospitals, they
didn’t close. They closed their inpatient beds but they
kept the outpatient facility open and that could be happening a lot too. All right. Our next question comes from Tom and I’m going
to try and paraphrase it a little bit. He mentions CVS and Aetna in that merger. I think he’s asking, “Is this consumerism
led by retail integration? Is that kind of how you would classify that?” Well, CVS is the main partner there. I just think it’s a new way to think of how
are we going to provide. “I am both the insurer and I am I’m providing
the care, how do we do that?” And, we’ve had several – Mountain C.A.R.E
and we have Kaiser in that same kind of model on a different kind of scale. This is going to be geographically very large,
so any comments Steven? Okay. All right and I do want to call out, we’re
one minute out from the top of the hour. Bobbi and Steve have both agreed to stay on
a little bit long to answer our remaining questions. So, we’re just going to keep chugging along
here. Our next question comes from Didi, who asks,
“Where do you see pharmacists who are no longer just considered as pill dispensers
playing a role in the healthcare industry?” Particularly on the care management side,
on the social determinants of health? Again, I was just at a place yesterday, the
head of the enterprise, again one of these new titles, Enterprise Care Management was
a pharmacist. And, we’re seeing increasing role in retail
pharmacy providing care counseling and support, helping monitoring medications, following
up with physicians. We don’t always know what our patients are
receiving. Retail pharmacists often do because many people
use the same pharmacy again and again. I do see that role in helping and supporting
the care management of particularly the elderly patients to be significant. Great. Our next question comes from Bernie, who is
asking, “What new solutions specifically will Health Catalyst provide as a result of
these emerging trends?” We’re doing a lot of work in the artificial
intelligence area. I think we’ll probably be having some webinars
on that in the future and we have a lot even on our website about that now
you can go out. So yes, we will be doing a lot there. We’re continuing to refine our population
health. We’re continuing to look at a diabetes, just
those conditions where the heavy bundles were, we’re doing a lot of work on orthopedics,
continue to do work on sepsis. So any other things that you’re-
Increased focus on ambulatory or community-based quality is going to evolve as well. All right. Our next question comes from Keith, who says,
“If I understood the chart dealing with Medicare reimbursement at hospitals, which
seemed to indicate a 10% shortfall. How is that sustainable from the hospital’s
point of view?” It’s sustainable because we’re fortunate that
our commercial payers have been … their rates again might be 300% of Medicare and
so they are paying us more and how long will that continue? And, I’ve been saying that for a long time. How long is the commercial payer going to
continue to accept that burden? In the past, I’ve seen a lot of hospitals
focus on trying to get to a break even for Medicare but it’s getting harder and harder,
so I don’t know how you feel Steve. It makes a compelling point for reducing waste
among all your patients who … but definitely for your Medicare patients there’s a tremendous
amount of waste in healthcare and you’re not being reimbursed for this. I mean estimates as much as 40% of the work
that’s done in the hospital is some form of waste an unnecessary X-Ray, an unnecessary
MRI, duplicating a test that occurred already in the community and so on. All right. Your next question comes from Matthew, who
says, “We provide data to delivery systems but they report that data especially from
plans, it’s difficult to obtain. The plans are the logjam, any thoughts about
HHS helping that issue or other players helping force the plans to open up access?” I don’t see anything from HHS. They are focused on transparency, so that
should be an area that they, but I don’t see anything from HHS on the short-term. On the short-term, I do see just the providers
and payers working closer together and trying to create a more collaborative spirit and
companies … I will give a plug for Health Catalyst, we can ingest that data and help
you use it. It’s not always easy data to do but we can
ingest it and help you use it. One important thing is when you’re negotiating
with a payer for some sort of risk-based agreement, a contract, getting the data, understanding
the data and negotiating terms around how that data is going to arrive at the front
end is very important. That’s true. The health plans are not that hesitant to
put it in a risk contract, but we have to know how to use that data and they have to
provide us with the data we need. It’s a part of that negotiation and discussion. Okay, looks like we have about three more
questions. So Denise asks, “How are consumers being
included in creating changes for more accessible, affordable healthcare?” She says, “Et cetera,” and then she added
an addendum of, “How is the voice of the customer being included?” I have seen some of our clients include them
on councils. That’s a good thing about the federal government
if under the federally qualified health centers the board has to be made up … 51% of the
board has to be made up of people that are receiving the services. I have seen various organizations take various
steps to do that. I said this whole beneficiary involvement
for the new pathways for success will open up areas for us to explore more with the patients,
I think. All right. Our second to last question, it looks like
it comes from Claire. She said, “Beyond the traditional Social
Determinants of Health housing and transportation, what other psychosocial needs are top priorities
for providers this year?” I’m hearing loneliness. I was going to say loneliness. Loneliness is a big one. And, that’s sometimes impeding the work that
you might want to do remotely because the consumer wants to come in and see face to
face. They want to talk to the front office person
and if you ever go into a doctor’s office, there is always a person there that wants
to talk to people, so yeah. All right. Our last question comes from Russell, who
asks, “What other macro trends societal or global do you predict will have a major
impact on healthcare? I’m assuming over this next year.” I went light on the IT side because it’s not
particularly my area of expertise, so I think they are going to … and I also went light
on any kind of drug, new drugs that are coming out those kind of things. FDA, I didn’t dig into the FDA approval list
or anything like that, which might be a place where there could be something. It’s almost a year because we’re not in an
election year. I think we’re going to continue a lot on the
policy side. Just same old, same old but you have to be
ready to move faster than you’ve moved and Steve, I don’t know if you have. I would agree with you Bobbi, I don’t have
anything to add. Okay. All right. Well, that wraps up our Q&A for today. We want to thank Bobbi and Steve for taking
the time to present.

2 thoughts on “Health Care Outlook for 2019

  1. Nice guidance of Health care system. Nicely informed, predicted. We are healthcare wholesalers based in Arizona, visit us to know more :

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