June 13, 2014
by Tim Schauer
Health Care in Texas
Assumptions, Structure
And Change
Historical Assumptions
1. People get sick and hurt
2. Health care is not a “Free Market”
3. We strive to be a civilized so...
#5 - Evolution of Health Care
• Change drivers:
– Cost of care – Health care inflation rolls on…
– Innovations – Science, ...
The People of Texas (74% Insured, 26% Uninsured)
County Government
State of Texas
US Government
Hospitals
(Public)
MDs
Cli...
#1 - Sick and Hurt
• All humans will get sick and/or hurt
at some point in their lifetimes.
• Risk management can be appro...
#2 - Not a “Free Market”
• No resale market
• No power to repossess for lack of payment
• Poorly informed consumer choices...
#3 - Civilized Society
• We want to live healthy, happy and safe
• We love children, the elderly and people
with disabilit...
#4 - Complexity
• Difficult for individuals and families when
they need care – rely on the experts (MDs)
• Uncompensated c...
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Health Care in Texas -- Assumptions, Structure & Change by Tim Schauer

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A look at five historical assumptions ...

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Health Care in Texas -- Assumptions, Structure & Change by Tim Schauer

  1. 1. June 13, 2014 by Tim Schauer Health Care in Texas Assumptions, Structure And Change
  2. 2. Historical Assumptions 1. People get sick and hurt 2. Health care is not a “Free Market” 3. We strive to be a civilized society 4. Complexity makes health care a difficult political issue 5. Health care is evolving
  3. 3. #5 - Evolution of Health Care • Change drivers: – Cost of care – Health care inflation rolls on… – Innovations – Science, R&D, Business models… – Expectations – Patients, Providers, Public… – Governance – Who is accountable??? – Laws – Major changes to the rules of the game: • M/M in 1965 • ERISA in 1974 • SSRA (PPS) in 1983 • COBRA in 1985 • EMTALA in 1986 • HIPAA in 1996 • BBA in 1997 • ACA in 2010
  4. 4. The People of Texas (74% Insured, 26% Uninsured) County Government State of Texas US Government Hospitals (Public) MDs Clinics Ancillary Services Taxes Hospitals (Private) Hospital District, CIHCP Med Schools HHSC Medicaid/CHIP DSHS, DADS, DARS, DFPS DSH and 1115 Waiver CMSDHHS Traditional Medicaid FMAP Match Star and Star+Plus ESI via small business ESI via big business (ERISA) Premiums Medicare (plus Advantage) DOL TDI Individual Insurance (FFE) *** All boxes of this color pay for health services via patient claims processing with some level of managed care strategies
  5. 5. #1 - Sick and Hurt • All humans will get sick and/or hurt at some point in their lifetimes. • Risk management can be approached in fundamentally two ways: • Wait for something to happen, respond; then figure out how to pay for it afterwards. • Plan for it, insure it (share the risk), and manage the response when it happens.
  6. 6. #2 - Not a “Free Market” • No resale market • No power to repossess for lack of payment • Poorly informed consumer choices – Little to no input on disease, ailment or injury – Who wants cheap health care? – Personal relationship with MDs – Price transparency challenges
  7. 7. #3 - Civilized Society • We want to live healthy, happy and safe • We love children, the elderly and people with disabilities (somewhat) • We want to cure disease and ease suffering • It is uncivilized to let people die in the streets
  8. 8. #4 - Complexity • Difficult for individuals and families when they need care – rely on the experts (MDs) • Uncompensated care – the uninsured – cause financial contortions for the system • R&D in medicine makes it difficult to keep up • Public health and wellness help prevention but do not eliminate #1 • Sound-bites are rarely correct or helpful in health policy discussions

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