Foundation for Health Care Quality (As Prepared)

May 14, 2012

Good afternoon, and thank you Terry and Steve for the kind introduction.

Thank you for having me.

I�m a great admirer of this Foundation. You are working as I am to address this state and country�s health care crisis.

Your work to improve outcomes of patients with heart disease through the Clinical Outcomes Assessment Program is admired all over the country.

So too with the work you�ve done � with the support of my Life Sciences Discovery Fund � to improve surgical outcomes across the board through SCOAP. It�s improving patient safety and saving at least $67 million in health-care costs in Washington by reducing unnecessary surgeries and complications.

We are facing a health care crisis that is hurting families, businesses and government.

This afternoon, I�d like to discuss the problem briefly, talk with you a little about our past efforts and then talk about our reform foundation for the future.

First, the problem�

The money we spend on health care is approaching 20 percent of GDP. It is one of the biggest challenges to our global competitiveness.

Think about that for a minute. Our costs are already almost twice that of other developed countries.

If any other cost was cornering nearly a quarter of our GDP we�d see it as a crisis and we would be dealing with it. But instead, with health care, we are feuding, finger pointing, and we have turned it into the political hot potato of the day.

Our state government health care costs alone have doubled over a decade, to $5 billion a year. Health care, as a share of the state general fund, has grown from 22 percent in 2000 to more than 30 percent now.

That�s money that should be going to education preparing our kids for an incredibly competitive world economy.

Dr. Don Berwick (former Obama Medicaid/Medicare director) said it best: �We need to start at scale � we have no more time for pilot projects!�

For example, we already know there is too much waste in the health care system.

Dr. Berwick estimates the waste, in 2011, for the whole country at $500 billion to $1.3 trillion.

If you apply these estimates to our state, it means the waste here is $10 billion to $25 billion per year. To put that in perspective, our state budget is about $32 billion.

Think of the money that this waste pulls from our struggling education system!

When I first became Governor, a very important book had a profound influence on me � �The Epidemic of Care.� Unfortunately, it is still very relevant.

A major finding ran through the book like a red thread! Way too much care is given with little or no regard to whether it works.

For example: 135 doctors were asked how they would treat one specific condition for a specific patient. Those doctors came up with 82 different treatments.

That happened for a lot of reasons. Maybe the doc was working from information provided by a drug salesman. Maybe his or her training and information was old.

In a more recent finding, the U.S. Office of Inspector General last year reviewed the hospital records of 785 patients. The Office found 293 errors.

The hospitals reported only 40 of those errors. And they reported just two of 18 errors that led to permanent disability or death. Finally, hospitals investigated only 28 of the 293 errors.

We can do better in this state and this country and we must!

Here are our goals for Washington State:

  1. Increased access;

  2. Affordability by reducing the variability, underuse, overuse, and misuse of health care � in short the waste!

  3. Quality care through evidenced-based best practices.



We can talk about health-care access, affordability, and quality as separate subjects. But when we talk about solutions we must understand these three are one. They are inseparable.


Early in my first term I launched a Blue Ribbon Commission to guide our approach to health care in the state. And the three focus areas I just talked about came out of that commission � which by the way has been imitated by other states.


Let me share with you some of what we have done.


On the access front, I tried to tackle kid�s access right off. The first thing I did as governor was to meet with my top advisors and before the day was out I had made my first decision as governor.


Every child deserves health care and we set that goal and went to work. Today, more than 97 percent of Washington children have health coverage.


We�ve moved from 45th in the nation to 16th for children being fully vaccinated before entering kindergarten.


(Oh, and by the way, did everybody here today get their whooping cough booster?)


We now have mental health coverage parity knowing that mental health and physical health together represent the whole person.


On the affordability front, we have a state-sponsored pharmaceutical drug card in which uninsured people can get much cheaper prescriptions.


Our Medicaid costs right now are half the national average due to great work by the Health Care Authority and Doug Porter. We�ve done stellar work shifting to generic pharmaceuticals, for example.


And Steve is leading some very heavy lifting. We have a state goal to bend the cost curve for families, business and government. We are working on ways to reduce overall health-care cost growth from the national eight percent to four percent.


And on the quality front we created the first of its-kind state-based Health Technology Assessment Program. After six years and in-depth independent review, it is now seen as a leading program for quality, evidence-based decisions, and its work informs and benefits everybody.


We�re helping taxpayers avoid unnecessary expenses big and small � like an upright MRI, when there�s no evidence that it�s any better than a regular MRI, the efficacy of Vitamin D tests and joint replacements under certain conditions.


We are a leader in providing long-term care in home and community based settings rather than institutional settings.


There is absolutely no reason an 80-year-old woman should live in an expensive institution just because she needs a little help during the day, like with medications or help dressing. It�s a far greater quality of life for her and far better for the state�s pocketbook.


We believe health information technology is critical to quality care. Our Medicaid Electronic Health Record Incentive Program is among those frequently held out as a model to other states, with the number of practices participating in the program exceeding even larger states such as New York.


And then we have the new Bree collaborative, which Steve has already explained.


I have great confidence that this collaborative will reduce unnecessary variation and increase quality care, cut costs, and, especially, scale up good innovation across the system.


One of the first things the Bree Collaborative will tackle is obstetric practices. I strongly support making this a priority.


Our Medicaid program pays for about 1 in 2 births in Washington � half!


So obviously we�re very interested in the tremendous variability in the use of inductions, C-sections, and vaginal births. For example, the elective C-section rate at Yakima Valley and Othello are less than 3 percent and going down, while some hospitals are at more than 20 percent and even over 30 percent. This variance reflects poor performance, and it must be stopped.


As I move closer to the end of my term, I can say I took on our health care crisis with every tool I had, and created new tools.

I�m proud of all we�ve accomplished together.


But I also can say our challenge remains. It didn�t help that the Great Recession parked itself right in the middle of my time in office.


But folks, there is no getting around that we have a national problem, and I do believe that our federal government has a critical responsibility.


It is why we are investing in and preparing for implementation of federal health care reform as well as Washington State reform.
This year we were among the first states to authorize the Health Benefits Exchange�an open marketplace for competitive insurance. We could be the second state to receive level 2 funding which takes us through 2014.


This has been done through bi-partisan legislation.


And under ACA we are providing coverage for over 800 residents with pre-existing conditions, coverage for 52,000 young adults up to age 26, a prohibition on insurers from charging women more than they charge men, and offering relief for 100,000 seniors by closing the donut hole.


We are preparing for and expecting over 300,000 new enrollees into the Medicaid program beginning in 2014.


Through these hard times we have struggled to maintain our Basic Health Plan for working families who have no other option for health care, and Disability Lifeline for those who literally have nothing.


Today our state-only funded Basic Health Plan and Disability Lifeline are eligible for federal match dollars. These programs could not have survived without this federal assistance.


We are now planning for the federal basic health plan. This provision of the ACA was secured by Senator Cantwell. We are now proposing this federal BHP to be a bridge between Medicaid and the Exchange.


The Urban Institute just labeled this program in the ACA as reform�s �best kept secret.�


But so much rides on the next few months.


The U.S. Supreme Court is expected to rule on the Affordable Care Act sometime in June.


Aside from the ACA, we are continuing health care reform the Washington way.


Last year as chair of the National Governors Association, I brokered an agreement with HHS, OMB and the White House to allow states to tackle the dual eligible population and share savings.


They represent only 5percent of the population but 50 percent of our costs. For Washington State these are the most expensive and at-risk populations that we serve. We estimate about 115,000 individuals.


We secured a planning grant and we have now applied for an implementation grant to allow us to integrate care for those eligible for both Medicaid and Medicare. Our plan is to integrate mental, physical and long-term care.


Lastly, we have a proposal into HHS for a global waiver to allow Washington State to get away from fee for service. Consistent with our emphasis on evidence-based medicine, we are proposing to pay for value not volume. In other words, we want to pay for patient outcomes not individual appointments for services.


We are also asking to spend more to address prevention and wellness so we can save treatment dollars.


I expect that the Foundation, The Alliance, our medical and hospital associations, state government and the Bree Collaborative will focus on scaling up their work. I look forward to the results. The time has come for big, bold steps to ensure accessible, affordable, quality health care in Washington State.
Our patients need it, our businesses must have it, our taxpayers demand it, and our future depends on it. And we are not letting up.


So there�s the story of my almost 8 years dealing with our state�s health care crisis.


The challenge is clear � we have made some really good progress but there is still much to do. Whoever my successor is, I want to leave him the platform and tools to keep moving forward.


I hope you all will join me and continue to lead the way on the important work of continued health care reform.


Thank you.