A brief overview of the costs associated with preventive care costs and the Affordable Care Act (ACA)

1. Cost of Prevention:
Overview of the Impact of the Affordable Care Act

2. Cost of Prevention
Agenda
 Brief History of Health Care Reform
 Impacts on Big Business
 Impacts on Small Business
 Europe and Health Care
 Impact on Debt

3. Cost of Prevention
Brief History of Health Care Reform
Party Platform 1912-Health Insurance for Industry
“Socialized Medicine”
Committee on Economic Security
Social Security Act of 1937

4. Cost of Prevention
Brief History of Health Care Reform
“The Great Society”
Medicare / Medicaid added to Social
Security Act July 1965
CHIP- Medicare / Medicaid Improvement
Prescription Reform for Seniors - Medicare / Medicaid
Improvement

5. Cost of Prevention
Brief History of Health Care Reform
3 Prong Strategy:
 Improve Technology
 Prevention of Chronic Diseases
 Market Structure to increase competition

6. Cost of Prevention
Fortune 500 Healthcare
 These organizations are central to the country’s economy
 Provide coverage for millions employees and millions of dependents and retirees
 Large companies rely on competitive bidding
 Firms have developed explicit strategies to promote the shift to managed care
 Influential models for other purchasers of health care( Small and medium-size
employers, as well as public purchasers)
 Current Healthcare cost is 7% of Total Revenues for Fortune 500 Companies

7. Cost of Prevention
Effects of Affordable Care Act on Fortune 500 Companies
 Companies are holding off on hiring permanent workers
 They are hiring in temporary workers via temp agencies
 Companies are unsure how much Obama Care is going cost per each employee
 Healthcare forecasted to rise by 10 over the next couple of years
 Rising healthcare cost slows down hiring and
is some cases results in layoffs

8. Cost of Prevention
Strategies for Lower Healthcare Costs
Fortune 500 Companies
 Companies are investing in workplace wellness programs
 Programs reduced personal healthcare costs, most commonly
because of fitness center discounts and free preventative screenings
 Employers who invest in wellness programs see increased employee
retention, attendance, and productivity
 Improved health has proven to be a win-win for each party involved, as
the best way to reduce rising health care costs

9. Cost of Prevention
Background
 Essential backbone to the American economy
 Increased 123%, from $5,700 in 1999 to $ 12,700 in 2009
(U.S. Dept of Health and Human Services)
 Affordable Health Care Act seeks to address problems for
small businesses
 Still does not require small businesses to provide health
care coverage

10. Cost of Prevention
Benefits
Health Care Tax Credit Preventative Care
 Must meet requirements 69 million workers reporting
 Currently 35%, In 2014 missed days due to illness each
increases to 50% year (U.S. Dept. of Health and Human Services)
Exchanges
 Increased buying power Healthier Employees =
 Pooling power Healthier Business
 No limits on insurance  Increased Productivity and
Efficiency of employee work
 Lower premiums and
coverage costs

11. Cost of Prevention
Benefits Cont’d
 Employer Wellness Programs
 Establish a core set of interventions to increase
employee health
Costs
 Maintenance of the business wellness programs for the
employees
 Should be weighed against benefits


12. Cost of Prevention
World Rankings
 USA spends 16.2% of GDP on health care, which equals
$7,410 per capita
 USA ranks 37th in overall health system performance and
overall efficiency (according to the WHO)
 Nearly 50 million people are uninsured in the United
States

13. Cost of Prevention
European Healthcare
 According to WHO, France, Italy, San
Marino, Andorra, Malta comprise the top 5 best health
care systems in terms of performance and efficiency
 Health Insurance in most EU countries is not a choice, it
is mandatory by law!!
 “Le Santé d’abord” philosophy

14. Cost of Prevention
German Healthcare System
 Germany only spends 11.3% of GDP, $4,129 per capita
 Everyone is required by law to have a health insurance plan
 You can choose between: 1) Allgemeine or Ersatz Krankenkasse or 2)
Private Krankenkasse
 Employer and Employee split the cost (employee portion
automatically gets taken out of paycheck)
 Higher quotes for privately insured employees but better perks

15. Cost of Prevention
Future Impacts
$174 billion $210 billion
Diabetes CVD
High Blood Pressure
$93.5 billion
$147 billion

16. Cost of Prevention
500,000,000 FY 2010
750,000,000 FY 2011
1,000,000,000 FY 2012
1,250,000,000 FY 2013
1,500,000,000 FY 2014
2,000,000,000 FY 2015 and each FY thereafter

17. Cost of Prevention

18. Questions