Health Care Reform Summer 2009


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Health Care Reform Summer 2009

  1. 1. Health Care Reform:Summer 2009<br />Glenn McLaurin<br />College Intern, Life/Health<br />
  2. 2. The Status Quo<br />
  3. 3. Cost Realities<br />2008 US Gross Domestic Product: $14.26 Trillion<br />2008 US health care costs: $2.4 trillion<br />2008 US health care spending: 17% of GDP<br />Number of uninsured Americans: 46 million<br />Percentage of bankruptcies caused by medical costs: 60%<br />
  4. 4. Who currently pays?<br />
  5. 5. Rising Costs<br />Predicted US health costs in 2017: $4.3 trillion<br />Total 2017 spending as part of GDP: 20%<br />Average annual growth rate for total US health costs through 2017: 7%<br />
  6. 6. Impact of Rising Costs on Health Insurance Coverage<br />“Since 1999, employment-based health insurance premiums have increased 120 percent, compared to cumulative inflation of 44 percent and cumulative wage growth of 29 percent”<br />Increase in average employee contribution to employer-provided plan since 2000: 120%<br />Percentage of all companies planning to stop coverage in 3-5 years: 19%<br />
  7. 7. High Price, Low Value<br />Highest levels of per capita Medicare spending: <br />Louisiana, Texas, California, Florida<br />Health determinant rankings: <br />Louisiana, Texas, Florida all in bottom five<br />
  8. 8. An International Perspective<br />Share of GDP spent on health care by US: 17%<br />Average share of GDP spent on health care by Germany, France, Canada: 9.96%<br />Insurance model: Mandate for universal, public<br />Share of GDP spent on health care by Switzerland: 10.9%<br />Insurance model: Mandate for universal, private <br />
  9. 9. An International Perspective<br />Adjusted for wealth, excess amount of annual health care spending in the US: $650 billion<br />Portion of $650 billion spent annually on outpatient care: 66%<br />Average annual inflation for cost of outpatient for past 20 years: 9%<br />
  10. 10. Approaches To reform<br />
  11. 11. Common Themes<br />Health Information Technology Infrastructure Expansion<br />Comparative Effectiveness Research<br />Value-Based Purchasing<br />Tort Reform<br />Community Wellness and Preventative Care Initiatives<br />
  12. 12. Health Information Technology Infrastructure Expansion<br />Universal access to records for all parties<br />Standardize and simplify administrative duties<br />Coordinate treatments, procedures, and prescriptions<br />Requires co-development of universal security and privacy protocols<br />
  13. 13. Comparative Effectiveness Research<br />“Conduct and synthesis of research comparing the benefits and harms of different interventions and strategies to prevent, diagnose, treat and monitor health conditions in “real world” settings” – HHS<br />Standardized treatment strategies<br />Limits subjectivity and overutilization in health care<br />
  14. 14. Value-Based Purchasing<br />Rewards quality and outcome of treatment, not quantity of ordered procedures<br />Combats wasteful and unnecessary spending<br />Should not create disincentives to treat sickly or elderly patients<br />
  15. 15. Tort Reform<br />“Defensive” medicine to prevent negligence suits adds unnecessary and costly treatment<br />Reform should protect doctors while ensuring accountability and patient safety<br />
  16. 16. Community Wellness and Preventative Care Initiatives<br />Preventable, chronic illnesses compose 85% of medical expenditures<br />Increased risk: <br />Poor diet<br />Sedentary lifestyle, <br />Tobacco consumption<br />Incentives for healthier behavior: <br />Greater discounts for preventative care <br />Pedestrian-accessible infrastructure<br />Support for tobacco cessation programs<br />
  17. 17. Politics of Reform<br />
  18. 18.
  19. 19. The Process<br />
  20. 20. Senate HELP Committee Composition<br />
  21. 21. Senate HELP Committee Proposal<br />
  22. 22. Senate Finance Committee Composition<br />
  23. 23. Senate Finance Committee Proposal<br />
  24. 24. House Tri-Committee Composition<br />Committee on Energy and Commerce<br />Chairman Henry Waxman (D-CA)<br />Committee on Ways and Means<br />Chairman Charles Rangel (D-NY)<br />Committee on Education and Labor<br />Chairman George Miller (D-CA)<br />
  25. 25. House Tri-Committee Proposal<br />
  26. 26. Key aspects of reform<br />
  27. 27. Mandates<br />Individual: Responsibility of citizens to carry public or private health insurance<br />Employer “Pay-or-play”: Provide coverage or face tax penalties<br />
  28. 28. Market Reforms <br />Require guaranteed issue, non-discrimination<br />Establish minimum benefits package<br />Offer public and private plans in Federal Health Exchange<br />Limit premium variation to few factors<br />Potentially: Tobacco use, family size, age, community rating<br />
  29. 29. Community Living Assistance Support and Services (CLASS) Act<br />Public voluntary long-term disability insurance<br />Automatic payroll deduction of $65/month<br />Benefit of $50/day into Life Independence Account<br />Only eligible after paying into system for five years<br />
  30. 30. Potential funding sources for reform<br />
  31. 31. Targets of Reform<br />Cost less than $1 Trillion over 10 years<br />Health insurance for 97% of American citizens<br />Reduce the growth in health care spending by 1.5%/year<br />
  32. 32. Impact on Medicare<br />Reduce funding and plan options for Medicare Advantage (MA) <br />Average cost of MA patient 14% higher than average Medicare patient<br />More than 40 plans available to average MA patient<br />Independent commission to set rates for reimbursement or redesign growth formula<br />Congress historically increases physician reimbursement against recommended reductions<br />
  33. 33. Increased Taxes<br />Proposed surtax on nation’s highest earners<br />Proposed “sin taxes” on soda<br />Proposed tax on value of “Cadillac plans”<br />High-value employer-provided health benefits<br />