David Lipscomb 6.23.09
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David Lipscomb 6.23.09






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    David Lipscomb 6.23.09 David Lipscomb 6.23.09 Presentation Transcript

    • Rationing or Reform?
      Rep. Jim Cooper speaks
      at David Lipscomb
      University on the topic
      “The Perils of Health Care
      Today & Tomorrow”
      June 22, 2009
    • I Choose Reform!
      Surprise, surprise
      I support the Healthy
      Americans Act
    • Rationing is a dirty word
      Street definition
      Some jerk saying “no” to my sick wife
      Standard definition
      Withholding needed medical care
      Doesn’t matter who the bad guy is: insurance company or government
      U.S. definition?
      No other nation spends so much, gets so little
      Slowing growth of health sector to 17+% GDP
    • Possible to reconcile these views?
      Only if people understand that 2/3 of America’s financial problems are due to overspending on medical care
      Only if government understands that people have a right to all the medical care they can afford, and enough care so that everyone can live up to their potential
      • What we have is a failure to communicate
    • How can we spend so much, and people still feel short-changed?
      Demand for medical care is unlimited, whether is helps us or not
      “More is better”
    • “…unalienable Rights… Life, Liberty and the pursuit of Happiness”
      Declaration of Independence, 1776
    • We don’t need to ration health care!
      We are wasting $700 billion annually
      We can slow spending without denying needed care
      McKinsey Global Institute – top private consultants
      Dartmouth Atlas of Health Care
      Peter Orszag at OMB and CBO
      Shannon Brownlee’s book “Overtreated”
      Even industry admits to $200 billion waste a year
      June 2009 White House Summit of industry leaders promises $2 trillion savings over ten years
    • Private Health Spending
    • Remember: Don’t use static analysis
      No one is thinking of reducing current $2.4 trillion to $1.7 trillion in annual spending
      We are talking of slowing the rate of growth of medical spending to the rate of inflation
      No more “inflation plus 2.5%”
      Slowing growth by even 1% avoids 2/3 of our entitlement solvency problems
      While allowing growth that other industries envy
      Every basis point (1/100th of 1%) matters
    • Current
      Americans Act
      Does this look like rationing to you?
      HAA Ten-Year Savings = $1.48 Trillion (4.5%)
      Lewin Group, Cost and Coverage Estimates for the “Healthy Americans Act,” Dec. 12, 2006
    • “What is federal government?A giant insurance company that is $56 trillion in the hole, with a side business in defense.”
      “And we are an insurance company that uses cash accounting. What is an insurance company that does that? It’s not an insurance company. It’s an accident waiting to happen.”
      - Peter Fisher, former Asst. Sec. of Treasury, now at Blackrock
    • Your choice: double taxes
      or cut benefits by 1/2
      Regular government is
      sacrificed to entitlements
    • The first Baby Boom retiree
    • Out-of-control
      medical costs
      of little value
      The Baby
      Boom problem
    • $56T
      Real National Debt
      And this does not count Medicaid!
    • Wrap your mind around it:
      One million seconds = 12 days
      One billion seconds = 32 years
      One trillion seconds = 32,000 years
      We almost need new words to describe these completely different quantities
    • Are we fiddling while Rome burns?
    • Back tomedicalCare
    • How to get healthy?
      40% behavior
      30% genetics
      15% social conditions
      10% remedial health care
      5% environment
      Steven A. Schroeder, M.D., We Can Do Better – Improving the Health of
      the American People, New England Journal of Medicine, 357:12, p. 1221,
      Sept. 20, 2007.
    • We don’t need to ration health care!
      • May need to ration health hazards
      • Reducing smoking, alcohol, sloth, and gluttony could save 900,000 deaths annually, or 40% of annual U.S. mortality
      Jeffrey Liebman and Richard Zechhauser, “Simple Humans, Complex Insurance, and Subtle Subsidies,” NBER Working Paper 14330, Sept. 2008, p. 15.
      Health insurance for all could save 20,000 lives a year
    • Still, many will oppose reform
      by claiming it is rationing.
      They will say anything to keep
      the profitable status quo,
      even if it sinks America
    • Some patients will oppose reform;Blame Game v. Responsibility
      Easier to blame someone else than to lose weight, exercise, make more money, and get a positive attitude
    • Medical industry will oppose reform$2.4 Trillion = $2.4 Trillion
      Health spending = Vested interests
      No one will admit they are wasting a single penny
    • What Is the Right Amount?
      This is why we disagree:
    • Take aCloserLook
    • We don’t have a health care system. We have a sickness care non-system.
      Dr. Jonathan Perlin,
      Chief Medical Officer, HCA
      We do need medical reform:
    • But status quo is still popular
      96% of voters have health insurance
      Don’t want to give up anything
      Afraid of change
      Not aware of own responsibility for health, or nation’s fiscal nightmare
    • Existing rationing we don’t notice
      Rationing by income level by insurance companies
      Rich can get experimental procedures, assisted living
      Bigger tax breaks to buy health insurance
      Rationing by poverty status by doctors
      2/3 physicians refuse to see most Medicaid patients
      Rationing of prevention/wellness care by insurance
      Rationing of U.S.-born physicians by medical schools
      Rationing of primary care physicians by med schools
      Rationing by racial and ethnic group by doctors
      Rationing by region by Medicare
      Miami = 3x Minneapolis; McAllen = 2x El Paso
    • We supported rationing in WWII,but not formedical caretoday
    • Don’t ignore price of care
      Has grown much faster than wages or inflation
      But our out-of-pocket spending is lower % of total
      Growing feeling that no family should have to spend more than 5% of income for care
      Equivalent housing number is 30%
      Is health so much less important than housing?
      How can U.S. spend 16+% of GDP on health while families will only spend 5%?
    • Paying full price for care is unfair?
      80% of people turn down traditional COBRA coverage – the only time you see full price
      Half of personal bankruptcies are due to health costs?
      Yes, but discharged medical expense was $3,600
      Yes, but entire episode of illness was only $11,500
      So people declare bankruptcy for less than the cost of a used car
    • Existing “reverse rationing”
      “Reverse rationing” ignores income levels
      Mayo Clinic, VA have best quality, lowest prices
      More people would go there if they could see quality and price more clearly – “Less is More”
      Middle-class has less risk of adverse drug event
      Less likely to be over-medicated
      Some Medicaid patients get better benefits
      Higher actuarial value than Blue Cross
      Meth burn patients get millions at Vanderbilt
    • What new rationing do you fear?
      Limits on doctor or hospital services?
      Doctors and hospitals slow work without more $$$?
      Hospitals eliminate more emergency rooms?
      “Comparative effectiveness” testing will reduce choice of meds or technology? But FDA doesn’t do this work
      New insurance networks may not want your doctor or hospital if they don’t measure up? Do you want a bad doctor?
      Limits on insurance options?
      Choices should increase if you can shop like a federal employee does
    • What ethical guidelines do you use?
      Your family’s needs?
      Your faith’s doctrines?
      Christianity opposes artificially-prolonged life?
      Devil says “How much better for us if all humans died in costly nursing homes amid doctors who lie and nurses who lie, promising life to the dying.” C.S. Lewis, The Screwtape Letters
      Catholic Church dislikes for-profit care?
      Jehovah’s Witnesses oppose many forms of care?
      Your country’s needs?
    • Right to health care v. Rationing
      “If criminals have the right to a lawyer, I think working Americans should have the right to a doctor… I am Harris Wofford and I believe there is nothing more fundamental than the right to see a doctor when you are sick.” 1990 Senate campaign ad
      Talk like this stops rationing
      But could obscure U.S. solvency problems until they are too big to fix?
    • Short history of U.S. medical care
      1912 – safe to go to doctor
      1932 - invention of health insurance
      1942 – employer-based insurance
      1953 - no more “natural” deaths
      1965 - Medicare and Medicaid
      1983 - DRGs
      1996 – SCHIP
      2009 – reformed American health care?
    • Conclusion:
      Rationing is unnecessary
      $700 billion in annual waste; often hurts health
      Reform is necessary
      Must reduce this annual waste; won’t hurt anyone
      Reform will still be attacked as rationing
      Disagreement over which spending is wasteful
      Can’t duck need to solve fiscal problems
      U.S. health spending is unsustainable
    • Guide to Health Care Reform
      Insurance Reform
    • The Kennedy Bill
      • $1+ trillion price tag
      • Subsidizes up to 500% of poverty
      • Income of $110,000 for family of four
      • New disability entitlement program
    • The Senate Finance Bill: $1.6 Trillion
    • Senate omits Medicaid reform?
      2nd Class medical care?
      Low reimbursement
      2/3 doctors shun patients
      States vary widely
      Dominates most state budgets
      Long-term care, end-of life issues ignored
    • Healthy Americans Act
      Covers everyone
      No new taxes
      Scored by CBO
      Fits Obama’s 8
      The perfect breed?
    • Other bills to come…?
    • Obama’s choice will matter most
    • Big issue is the tail: public option
      Tail must fit dog
      Must not wag dog
    • Some tails look ridiculous
    • Public option: no bullies allowed
      Need a level playing field
    • Schumer Option
      Fair competition between dogs
    • Conrad’s Co-op Option
    • Isn’t this
    • Key relationships in health care
      Tax subsidies
      Tax exemption
      Anti-trust exemption
      Managed care
      Utilization review
      Capitation payments