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Creating New Opportunities Under Obama Health Care Reform

Clearly identifies the root cause of skyrocketing health cost and what companies and employees can do to reduce cost of health care.

You will learn proven strategies used successfully to reduce company health cost for over 20 years.

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Creating New Opportunities Under Obama Health Care Reform

  1. 1. Creating New Opportunities Under Obama Health Care Reform Contact Don Barker Health Service Review [email_address] 800-573-0009
  2. 2. What are insurance carriers doing to lower costs?
  3. 3. What are insurance carriers doing to lower costs? Health insurance increases every year! Current cost control strategies are defective Nothing!
  4. 4. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2000-2008. Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 2000-2008; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 2000-2008 (April to April). Health Insurance Premiums Workers’ Earnings Overall Inflation What Are Health Insurance Carriers Doing? Cumulative Changes in Health Insurance Premiums, Inflation, and Workers’ Earnings, 1999-2008
  5. 5. Agenda <ul><li>What Drives Health Care Cost? </li></ul><ul><li>The Deterioration of the Quality of Life </li></ul><ul><li>Common Procedure Cost Comparisons </li></ul><ul><li>The Impact of Ignorance </li></ul><ul><li>Case Studies </li></ul><ul><li>Balancing the Health Care Equation </li></ul><ul><li>Getting Effective Cost Control </li></ul>The objective of this presentation is to show some key strategies to control and reduce costs that politicians, employers and employees should be focusing on.
  6. 6. What Drives Health Care Cost? Roland Sturm, Health Affairs 2002;21:245-253
  7. 7. “ Obesity related diseases account for nearly 10% of all US medical spending, an estimated $147B last year.” Obese people cost 42% more than normal people annually. What Drives Health Care Cost? Obesity: Sources: Centers for Disease Control, Health Affairs, rand Corporation American Obesity Association James Histon, Ed Yozwick Post/Gazette, Reuters Ed Blazina, Pittsburg Post Gazette Sunday August 2, 2009
  8. 8. Each year 300,000 people die of obesity related diseases What Drives Health Care Cost? Obesity: <ul><li>Linked with: </li></ul><ul><ul><li>diabetes </li></ul></ul><ul><ul><li>heart disease </li></ul></ul><ul><ul><li>hypertension </li></ul></ul><ul><ul><li>sleep apnea </li></ul></ul><ul><ul><li>gallbladder disease </li></ul></ul><ul><ul><li>some types of cancer </li></ul></ul><ul><ul><li>osteoarthritis </li></ul></ul><ul><ul><li>knee & hip replacement </li></ul></ul>
  9. 9. What Drives Health Care Cost? Source: Center for Disease Control Smoking: Smoking causes $96B in total annual medical expenditures and $97B from lost productivity. Center for Disease Control Each year 443,000 people die of smoking related diseases
  10. 10. June 2005, Forbes “Fixing Hospitals,” Robert Langreth What Drives Health Care Cost? Quality: “ Shoddy quality control plagues American medicine, killing at least a hundred thousand people every year and running up an estimated $500 billion a year in avoidable medical costs, or 30% of all health care spending” . (Could your company survive with 30% waste?)
  11. 11. 195,000 people die in hospitals every year from preventable medical events HealthGrades study of 37 Million patient records in 2001, 2002, 2003 &quot;The equivalent of 390 jumbo jets full of people are dying each year due to likely preventable, in-hospital medical events, making this one of the leading killers in the U.S.&quot; Dr. Samantha Collier, VP of Medical Affairs, HealthGrades What Drives Health Care Cost? Quality:
  12. 12. Is the U.S. Health System Really the Best? Why aren’t politicians focusing on fixing this?
  13. 13. Deterioration of Quality of Life This is where the major costs are
  14. 14. Progression of Heart Disease This is the progression of heart disease and treatment cost. The opportunity for a good quality of life is greatly improved by early intervention. Early intervention comes from early detection, and results in better quality of life for the patient and their family. The byproduct is lower cost.
  15. 15. Progression of Diabetes Over the course of about 3.5 years this man went from a treatable disease to amputation, a nursing home and drastically reduced quality of life. Early interventions were either not given, or not adhered to, and cost skyrocketed.
  16. 16. Common Procedure Cost Comparison Educate patients to shop high quality, lower cost facilities Delphi of Florida, Inc., 2008 Facility payment range $5,165 to $16,966 Facility payment range $479 to $3,528 Facility payment range $425 to $3,900 56 locations 71 locations 43 locations C-Section Colonoscopy MRI
  17. 17. Impact of Ignorance Delphi of Florida, Inc., 2008 An educated consumer makes better choices for their health, and for their out of pocket cost and the health plan wins. Assume 1 in 5 people get an MRI per year x 1000 x 45 = $45,000 Patients directed to lower cost facility: assume avg. cost of $1,000 per MRI If range is $425 to $3,900, then the average = $1,737.50 225 people = 45 MRI’s per year $1,737.50 45 = $78,187.50 100 employees = 225 people in plan
  18. 18. Impact of Ignorance Total knee replacement is a procedure used by many as a cost metric. It is a discrete procedure with few, if any, comorbidities.
  19. 19. Impact of Ignorance The best physicians have fewer complications, lower mortality rate, spend less time in the OR and have a lower Length of Stay.
  20. 20. Effective Cost Control You all want it, but how do you get it? (There is a company achieving this. This performance chart is from an actual client.)
  21. 21. Health Service Review (HSR) Mission   To maximize the quality of life for employees while saving substantial health care and productivity costs associated with sick employees. In other words, enable the building of healthy businesses through healthy people.
  22. 22. HSR Case Study 1 A patient goes into a hospital for three hours and the cost is three years wages! Total charge for installation of Defibrillator – Pacemaker $135,000 Surgery (labor) $ 39,000 Device (parts) $ 96,000 Actual cost of Defibrillator – Pacemaker $ 24,000 Markup was 4x to $ 96,000 HSR negotiated savings of $ 80,000
  23. 23. HSR Case Study 2 51 day admission Six months later, 44 day admission for bipolar and suicidal 44 day partial hospitalization savings $119,000 51 day residential care program savings $ 48,000 HSR negotiated savings of $167,000 Out of network (OON) treatment for anorexia. Woman 5’ 6” and weighed 77 pounds
  24. 24. HSR Case Study 3 Four hospitals in the same county were asked to provide cost of ten outpatient procedures. This was then averaged. As can be seen, there is a big difference between lowest and highest.
  25. 26. Effective Cost Control We all want it, but how do you get it? <ul><li>Philosophy of “Get it right the first time” means improved outcomes and reduced cost </li></ul><ul><li>Case Management (CM) ROI = 30:1. </li></ul><ul><li>$1 spent on CM at HSR typically saves $30. </li></ul><ul><li>Strong Systems, Strong People, Great Results </li></ul>
  26. 27. Effective Cost Control Contact Don Barker Health Service Review [email_address] 800-573-0009