Health Care Reform: Potential
Implications for Transplantation
Edward Y. Zavala, M.B.A.
Administrator, Vanderbilt Transplant Center
Vanderbilt University Medical Center
Adjunct Professor of Management
Vanderbilt Owen Graduate School of Management
Research Assistant Professor
Department of Surgery
Vanderbilt University
Nashville, Tennessee
What Does the Health Care Reform
Bill Attempt to Accomplish?
Cost
• Health care is currently around 17.5% of our GDP and forecast to grow to 25% by 2025
• Rate of growth in health care costs has outstripped other goods and services most every year for
the past 25 years
Access
• About 45 – 47 million uninsured
– 11 million have income below the Federal Poverty Line (FPL)
– 12 million have incomes in excess of 300% of the FPL ($66,000)
– 5 million have incomes in excess of 500% of the FPL ( $110,000)
– 10 million are not US citizens
– 25% are eligible for Medicaid but have not signed up
Quality
• Variability in utilization without demonstration of improved outcomes
Coverage Provisions
Health Care Reform Implementation
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
COVERAGE PROVISIONS
Insurance Reforms (Pre-existing conditions for children, no annual or lifetime limits, children on parents insurance until 26)
Medicaid Expansion
Insurance Reforms (Pre-existing conditions for adults, premium limits)
Individual Mandate
Private Insurance Reform
Positives for Transplant
Negatives for Transplant
• Improved access to
transplant evaluation and
listing
• Stronger “in-network”
provisions may limit access
to some transplant centers
• Reduced risk of nonadherence from loss of drug
coverage
• Elimination of high cost,
high choice plans
• Longer waits without
increase in organ supply
Medicaid Program
Positives for Transplant
Negatives for Transplant
• Improved “access” to
transplant
• Expansion in patients with
inadequate coverage
• Medicaid payments often do
not cover organ acquisition
costs
• Coverage for uninsured
patients in the post
transplant period
• Reduced organ loss to
medication non-adherence
Payment Constraint and
Quality Provisions
Health Care Reform Implementation
2010
2011
2012
2013
2014
2015
2016
2017
2018
COVERAGE PROVISIONS
Insurance Reforms (Pre-existing conditions for children, no annual or lifetime limits, children on parents insurance until 26)
Medicaid Expansion
Insurance Reforms (Pre-existing conditions for adults, premium limits)
Individual Mandate
PAYMENT CONSTRAINT PROVISIONS
CMS Hospital Behavioral Offset Relating to IPPS
Hospital Market Basket Reduction
Hospital Productivity Adjustments
Independent Payment advisory Board
Medical Device Tax
Medicare DSH Payment Reduction
Medicaid DSH Payment Reduction
QUALITY PROVISIONS
RULE MAKING  
RULE MAKING  
Hospital Value-Based Purchasing
Hospital Readmission Payment Reductions
RULE MAKING  
Hospital-Acquired Conditions Penalties
2019
Medicare
Positives for Transplant
Negatives for Transplant
•
Better drug coverage through
reduction in the donut hole
•
Shift to episode of care
reimbursement which is
already familiar in
transplantation
• Reimbursement reductions
for professional services by
independent medical board
•
Development of comparative
effectiveness research
• Reduction in
disproportionate share
payments
• Penalties for re-admissions
and hospital acquired
infections
Modeled Medicare Payment Components of
Reimbursement for Typical Teaching Hospital
Organ Acquisition
100%
75%
4%
9%
27%
4%
8%
DRG & Capital
6%
7%
12%
13%
26%
Teaching
5%
6%
9%
12%
DSH
9%
15%
7%
12%
29%
37%
39%
42%
50%
42%
53%
60%
61%
25%
57%
45%
42%
38%
39%
23%
0%
DRG weight =
Kidney,
$68K
Kid/Panc,
$118K
Pancreas,
$70K
Liver
w/MCC,
$148K
Liver w/o
MCC,
$100K
2.9736
5.0615
4.2752
10.1358
4.7569
Lung,
$148K
9.4543
Heart
w/MCC,
$291K
Heart w/o
MCC,
$174K
24.8548
11.7540
Delivery System Provisions
Health Care Reform Implementation
2010
2011
2012
2013
2014
2015
2016
2017
2018
COVERAGE PROVISIONS
Insurance Reforms (Pre-existing conditions for children, no annual or lifetime limits, children on parents insurance until 26)
Medicaid Expansion
Insurance Reforms (Pre-existing conditions for adults, premium limits)
Individual Mandate
PAYMENT CONSTRAINT PROVISIONS
CMS Hospital Behavioral Offset Relating to IPPS
Hospital Market Basket Reduction
Hospital Productivity Adjustments
Independent Payment advisory Board
Medical Device Tax
Medicare DSH Payment Reduction
Medicaid DSH Payment Reduction
QUALITY PROVISIONS
RULE MAKING  
RULE MAKING  
Hospital Value-Based Purchasing
Hospital Readmission Payment Reductions
RULE MAKING  
DELIVERY SYSTEM PROVISIONS
 
Accountable Care Organizations
RULE MAKING
Bundled Payments Pilot
Hospital-Acquired Conditions Penalties
2019
Transplant Impact
Health Care Reform Implementation
2010
2011
2012
2013
2014
2015
2016
2017
2018
COVERAGE PROVISIONS
Favorable
PAYMENT CONSTRAINT PROVISIONS
Unfavorable
QUALITY PROVISIONS
Within Our Control
DELIVERY SYSTEM PROVISIONS
To Be Determined – Value-Based Pricing and ACOs
2019
Strategic Readiness
Economic Repositioning
• Retreat
• Identify Opportunities for Cost Reduction
• Identify Opportunities for Revenue Optimization
• Establish Subcommittees
• Monitor Results
Strategic Readiness - continued
Economic Repositioning
• Costs/Inpatient Admission
• Inpatient Pharmacy Costs
Transplant Cost Review
Phase 3 Transplant Procedure Cost
TRANSPLANT COST REVIEW
Cost Tracking
ICU
COST
MED/SURG
COST
LABS
COST
RADIOLOGY
COST
O.R.
COST
PHARMACY
COST
ORGAN
ACQUISITION COST
BLOOD
TRANSFUSION
COST
OTHER
DEPT.
COST
PHASE 3
TRANSPLANT
COST
PATIENT ID
LOS
ICU
LOS
1
0
0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
2
0
0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
3
0
0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
4
0
0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
5
0
0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
6
0
0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
AVERAGES
0.00
0.00
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Strategic Readiness - continued
Economic Repositioning
• Medicare Cost Report Optimization
• Managed Care Contracts
Strategic Readiness - continued
Economic Repositioning
• Optimize Living Donor Processes to Increase
Transplantation Safely
– Web-Based Living Donor Application Process
Web-Based Living Donor Application
• Access Through VTC Website
• Goal: Screen Candidates More Efficiently
Results
• First 5 calendar year
quarters post
implementation:
 1200 donor self referrals
 801 (67%) web-based
referrals
 399 (33%) phone referrals
Results
Web-Based Application
•
A conservative estimate
of living donor
administrative staff time
saved with the
implementation of the
web application is 160
hours for the 801
candidates screened by
the web-based
application.
Documenting Value and Quality
• Quality of Life
• Patient Satisfaction
Health-Related Quality of Life
and Patient Satisfaction Program
Vanderbilt Transplant Center
•
•
•
•
•
•
Launched January, 2002
> 9,500 transplant candidates and recipients
> 4,000 longitudinal, multi-survey data points
Patient-reported outcomes
HRQOL and satisfaction as a quality measure
Research
Contact: Irene Feurer, Ph.D.
[email protected]
HRQOL Survey Battery and Assessment Schedule
(effective January, 2002)
Listed
Transplant
Physical and Mental HRQOL at Post-Transplant Year 1
A Patient-Reported Quality Benchmark
Dashed lines indicate targeted threshold
Validated Transplant-Specific
Patient Satisfaction Inventory
Determining the minimum target threshold
for the 13-item summary score
Mean = 34±5
Median = 36
25th %ile = 31
Feurer et al. Progress in Transplantation. 2007;17:121-128.
Distribution of Satisfaction Scores by Year
in relation to the minimum target threshold (31)
Examples of Item-Level Analysis
of Satisfaction Survey Data
Spend Time on Staff Development,
Retention and Internships
• Develop Opportunities for Education
• Develop Opportunities for Research Projects
• Support Staff Involvement in UNOS, NATCO,
ITNS, AST, ASTS, ISHLT, ATA, TFCA
• Send Staff to Transplant Meetings
• Graduate Student Internships – MBA, MHA,
MPH, etc.
Spend Time Planning and Thinking
•
•
•
•
Strategic Planning
Business Planning
Communication
Continuous Improvement and Re-enginneering of
Systems and Processes
Questions