Panel, Conference Presentation
2015 CA Summit - Fostering Innovation to Improve Health Care
- The transition from volume-based to value-based payment models is projected to occur over the next six to ten years, driven by MACRA and consumer demand, though significant cultural resistance from providers is expected to slow adoption.
- If hospital consolidation in Northern California creates monopolies, government intervention including rate regulation will likely be necessary to control costs, which are already 30% higher in the region due to unit prices and performance issues.
- A demographic shift from 50 million to 84 million Americans over age 65 between 2010 and 2050 will precipitate a tsunami of demand, making neurodegenerative diseases like Alzheimer's the primary cost factor, potentially reaching $1.5 trillion in total treatment costs.
- Shortages of primary care physicians, exacerbated by a fee schedule that pays specialists 300% more than primary care, will require a major political overhaul and new residency funding models to address distribution gaps in rural and low-reimbursement areas like the Central Valley.
- Medi-Cal reimbursement rates at 60% of Medicare levels will likely continue to deter provider participation in affluent areas and limit access for vulnerable populations, creating a funding gap of $6 billion to $8 billion that a $1.2 billion tobacco tax increase cannot fill.
- Hepatitis C treatments costing $150,000 per patient and high-cost pharmaceutical innovations like Sovaldi will trigger debates on social responsibility, potential profit caps, and the risk of rationing care similar to models seen in other nations.
- By 2016, approximately 90% of California hospitals are projected to be covered under single plans, while ACO models from major insurers will expand to the Covered California exchange by 2017 to integrate tech innovation.
- Regulatory frameworks for clinical trials, stem cell treatments, and drug approvals will require international harmonization modeled after the EU or Japan to manage R&D costs exceeding $2 billion and accelerate global approval processes.
- The healthcare workforce will face critical shortages in clinical trial managers, nurses, and social workers, necessitating certification programs, increased demand for bilingual managers, and the integration of non-traditional sectors like Silicon Valley firms such as IBM and Qualcomm.
- End-of-life costs will drive a shift toward palliative care and "right-to-die" legislation, as current systems fail to cover long-term care for dementia and encourage expensive ICU interventions in the final six months of life.
- Consumer demand for efficiency will intensify if healthcare rates continue to rise without improvement, likely forcing the government to impose rate setting and demanding transparency through a statewide health information exchange where patient data follows the individual.
- A $2 per pack tobacco tax increase is expected to generate $1.2 billion and reduce future costs related to addiction, but it faces significant opposition and remains insufficient to fully bridge the gap between Medi-Cal and Medicare reimbursement rates.