Understanding obamacare will there be limits on medical treatment
This presentation is the property of its rightful owner.
Sponsored Links
1 / 77

Understanding Obamacare– Will There Be Limits on Medical Treatment? PowerPoint PPT Presentation


  • 53 Views
  • Uploaded on
  • Presentation posted in: General

Understanding Obamacare– Will There Be Limits on Medical Treatment?. Burke J. Balch, J.D. Robert Powell Center for Medical Ethics October 19, 2013. Two Questions. 1. Should the federal government limit what private citizens are allowed to spend on health care

Download Presentation

Understanding Obamacare– Will There Be Limits on Medical Treatment?

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Understanding obamacare will there be limits on medical treatment

Understanding Obamacare– Will There Be Limits on Medical Treatment?

Burke J. Balch, J.D.

Robert Powell Center for Medical Ethics

October 19, 2013


Two questions

Two Questions

  • 1. Should the federal government

    • limit what private citizens

    • are allowed to spend on health care

    • to save the lives of their family?

  • 2. Should the federal government

    • limit how much life-saving medical treatment

    • doctors are allowed to give their patients?


Fundamental issue

Fundamental Issue

  • Obamacare based on erroneous assumption: that in order to provide an adequate health care safety net, especially for previously uninsured

  • Government must enforce limits on all health care spending/ including what private citizens and their employers spend to save lives and foster health


This talk will

This talk will

  • 1. Describe 4 ways Obamacare limits what we’re allowed to spend to save the lives of our family members and what treatment doctors can provide

  • 2. Argue that America can afford unrationed health care

  • 3. Show how we can both provide an adequate health safety net and avoid government-imposed rationing


1 40 tax on excess benefit health insurance

1. 40% Tax on “Excess Benefit” Health Insurance

  • If health insurance employers provide has a value of more than $8500 for an individual or $23,000 for a family, the “excess” value is taxed at 40%

  • The limits increase by general but not medical inflation


Understanding inflation

Understanding Inflation

  • CPI is an AVERAGE

  • Price rise/decline of individual categories of goods & services varies


Understanding inflation1

Understanding Inflation

  • Compare classroom grades: if average is C+, some get A’s and some get D’s

  • Primarily because HC is labor-intensive, medical inflation consistently higher than average inflation across all sectors

  • Since 1990, on average, annual Medical Inflation 3.3% higher than CPI


Medical vs average inflation

Medical vs. Average Inflation


Compounding annually gap grows wider and wider

Compounding annually, gap grows wider and wider


Politico article september 30 2013

Politico article(September 30, 2013 )

  • “[The level at which taxes kick in will] be linked to the increase in the consumer price index, but medical inflation pretty much always rises faster than that . . . .

    • David Nather, “How Obamacare affects businesses—large and small” (September 30, 2013), http://www.politico.com/story/2013/09/how-obamacare-affects-businesses-large-and-small-97460.html


Politico article september 30 20131

Politico article(September 30, 2013 )

  • “Think of the Cadillac tax as the slow-moving car in the right lane, chugging along at 45 miles per hour. It may be pretty far in the distance, but if you’re . . . moving along at a reasonable clip in the same lane – say, 60 miles an hour—and you don’t slow down, you’re going to run smack into it.”


Politico article september 30 20132

Politico article(September 30, 2013 )

  • Although the excess benefits tax does not apply until 2018, the Politico article reports, “Towers Watson found that more than six out of 10 employers said the fear of triggering [it] would influence their health care benefit strategies in 2014 and 2015. . . .


Politico article september 30 20133

Politico article(September 30, 2013 )

  • “For one thing, the thresholds were set in 2010, and even though the law has a method for raising them if there’s a lot of growth in health care spending, employers are still concerned that they’ll get busted for offering fairly standard plans.”


2 medicare limits

2. Medicare Limits

  • $ 555 billion cut from Medicare over 10 years

  • But will the government allow senior citizens to make up the difference from their own funds?


2 medicare limits1

2. Medicare Limits

  • BEFORE:

    • Older Americans permitted to add their own money, if they chose, on top of the governmental payment, in order to get insurance plans less likely to ration.

    • (Known as Medicare Advantage private-fee-for-service plans.)


2 medicare limits2

2. Medicare Limits

  • UNDER NEW HEALTH LAW:

    • HHS given standardless discretion to reject any Medicare Advantage plan.

    • HHS can limit or eliminate ability to add own money to obtain health insurance less likely to ration seniors’ health care.


3 exchange limits on what people can pay for insurance

3. Exchange Limits on What People Can Pay for Insurance

  • New state-based insurance “exchanges”

  • At first, individuals & small business employees

  • Later, all employees


3 exchange limits on what people can pay for insurance1

3. Exchange Limits on What People Can Pay for Insurance

  • Government officials will exclude health insurers

  • Whose plans inside or outside the exchange

  • Allow private citizens to spend whatever gov’t officials think is an “excessive or unjustified” amount on their own health insurance


4 independent payment advisory board

4. Independent Payment Advisory Board

  • Present public focus is on impact on Medicare


4 independent payment advisory board1

4. Independent Payment Advisory Board

  • LITTLE ATTENTION TO MUCH MORE FAR-REACHING ROLE IN RATIONING:


4 independent payment advisory board2

4. Independent Payment Advisory Board

  • IPAB directed to make recommendations every 2 years, starting in 2015

  • “to slow the growth in national health expenditures” – i.e., nongovernmental spending

  • Below the rate of medical inflation


Ipab must limit hc spending growth to the lesser of

IPAB Must Limit HC Spending Growth to the LESSER OF:


5 independent payment advisory board

5. Independent Payment Advisory Board

  • The recommendations are to include those that federal Department of Health and Human Services “can implement administratively”


How will hhs enforce limits

How will HHS enforce limits?

  • HHS empowered to impose “quality measures” on hospitals, doctors, & other health care providers

  • One uniform standard of care specifying under what circumstances treatment can – and cannot – be given


Enforcement

Enforcement

  • Physicians who give treatment not permitted by “quality” measures disqualified from contracting with “qualified” insurance plans


What if ipab members not named

What if IPAB members not named?

  • Republican leaders have said will not name members they’re authorized to; may resist confirmation of Presidential appointees

  • BUT law provides that HHS given duty and authority to substitute if IPAB doesn’t


4 independent payment advisory board3

4. Independent Payment Advisory Board

  • IPAB

    • Push private HC spending below med. inflation

    • Recommendations every 2 years

  • HHS

    • Imposes “quality” standards

    • Doctors must comply or lose insurance

    • contracts

  • Patients

    • Can’t get HC exceeding standards


New health care law s routes to rationing

New Health Care Law’sRoutes to Rationing

  • 1. 40% Tax on “Excess Benefits”

  • 2. Medicare Limits

  • 3. Exchange Limits on What People Can Choose to Pay for Insurance

  • 4. Independent Payment Advisory Board & “quality and efficiency” standards


Can america afford unrationed health care

CAN America AFFORD Unrationed Health Care?


The paradox

The Paradox

  • Appearance:

  • HC spending eats up ability to pay for other goods and services (ultimately unsustainable)

  • Reality:

  • Rising productivity in other goods and services is freeing up resources to use to save lives and preserve health


Understanding obamacare will there be limits on medical treatment

**The HC, food, clothing & shoes, housing, and combination charts are versions, derived from updated data, based on Figure 4.3 in Sherry Glied, Chronic Condition: Why Health Reform Fails (Cambridge MA & London: Harvard Univ. Press, 1997), p.103.

Data Source: (CEA 1991, 2011.) Available at http://origin.www.gpoaccess.gov/eop/tables09.html


Understanding obamacare will there be limits on medical treatment

Food, Clothing & Shelter Combined as a % of the Family Budget


Understanding obamacare will there be limits on medical treatment

What the Family Spends on 1. Essentials and 2. Essentials & Healthcare Combined


Understanding obamacare will there be limits on medical treatment

American Health Expenditures and

Per Capita Gross Domestic Product

2040

2009

1960

30%

17.6%

82.4%

70%

94.7%

5.3%

76 % Increase for Non-Health Expenditures

279 % Increase for Non-Health Expenditures

Health Expenditures

Non-Health Expenditures

Sources: available on request to [email protected]


Sherry glied

Sherry Glied

  • Former Assistant Secretary for Planning and Evaluation

  • Department of Health and Human Services in Obama Administration

  • Chronic Condition: Why Health Care Reform Fails (1997)


Glied is not a lone

Glied Is Not Alone . . .

  • William J. Baumol, “Do Health Care Costs Matter?” The New Republic, Nov. 22, 1993, Professor of Economics at New York and Princeton Universities

  • David F. Bradford, Professor of Economics and Public Affairs, Princeton University Woodrow Wilson School of Public and International Affairs

  • Edward Wolff, Professor of Economics, New York University

  • Eli Ginzberg, A. Barton Hepburn Professor of Economics, Columbia University

  • Joseph P. Newhouse, John D. MacArthur Professor of Health Policy and Management, Harvard University


Conclusions

Conclusions

  • NOT that American health care system is ideally efficient and can’t be improved

  • BUT if improvements are made in cost-effectiveness, we shouldn’t necessarily expect growth in health care spending to abate – we might just get more and better health care


Bottom line

Bottom Line:

  • As long as American productivity keeps increasing (in the long term), America can afford to continue to increase the resources used to save lives and preserve health

  • Real problem: providing safety net for those whose incomes are not average, and its implications for government budgets


The real problems

The Real Problems

  • REAL: Distribution of income increases not equal

    • Those with less-than-average income increases have genuine difficulty coping with health care cost increases

    • Number of uninsured rises among low income

    • GOVERNMENT ACTS TO HELP: Medicaid, CHIP, now PPACA

      But government does not benefit equally with private sector from productivity increases in areas other than health care – the productivity increases that reduce the resources needed and free up resources for health care


Understanding obamacare will there be limits on medical treatment

What the Family Spends on 1. Essentials and 2. Healthcare Combined


Understanding obamacare will there be limits on medical treatment

PRIVATE SECTOR SPENDING- GDP

GOVT. SPENDING- FEDERAL BUDGET

17.6 % (spent on H.C) 2011

23% (spent on H.C) 2011

15.1% tax rate to fund the Federal Budget

51% growth in economy by 2040

51% growth in government 2040

30% (spent on H.C) 2040

30% (spent on H.C.) 2040

H.C. Deficit – 7%


Understanding private sector cost shifting

Understanding Private Sector Cost-Shifting

  • Faced with unsustainable health care cost increases, government actors tend to avoid unpopular benefit cuts, and focus on limiting the reimbursement rate for health care providers

  • Many health care providers assert they are then forced to charge higher rates to privately insured patients to make up for what they lose on governmentally insured patients (and on the uninsured EMTALA requires hospital emergency rooms to serve)


Understanding obamacare will there be limits on medical treatment

Hospital Cost Shifting- The Hidden Tax (as of 2009)

Payment to Cost Ratio

Cost= Payments

134.1%

Private Payers

36.6%

Medicare

39.4%

Medicaid 15.9%

Percent of Hospital Costs

Uncompensated Care 6.1%

Source: American Hospital Association and Avalere Health, Avalere Health analysis of 2009 American Hospital Association Annual Survey data, for community hospitals, Trendwatch Chartbook 2011, Trends Affecting Hospitals and Health Systems, March 2011, Tables 4.5-4.6 at http://www.aha.org/research/reports/tw/chartbook/ch4.shtml


Understanding obamacare will there be limits on medical treatment

Hospital Cost Shifting- The Hidden Tax (as of 2009)

Payment to Cost Ratio

130.3%

Private Payers

36.6%

Medicare

39.4%

Medicaid 15.9%

Percent of Hospital Costs

Uncompensated Care 6.1%

Source: American Hospital Association and Avalere Health, Avalere Health analysis of 2009 American Hospital Association Annual Survey data, for community hospitals, Trendwatch Chartbook 2011, Trends Affecting Hospitals and Health Systems, March 2011, Tables 4.5-4.6 at http://www.aha.org/research/reports/tw/chartbook/ch4.shtml


Private sector cost shifting as a solution

Private Sector Cost-Shifting as a Solution

  • Key advantage of private sector cost-shifting is that it can grow proportionately with the resources the private sector allocates to health care

  • I.e., yields a % of what is actually spent on health care


Private sector cost shifting as a solution1

Private Sector Cost-Shifting as a Solution

  • Regardless of extent to which it presently occurs

  • Provides a basis for understanding feasibility of providing for those with low incomes without governmentally imposed restraints on growing allocation of private resources to health care


Proposed solution cost shifting at the level of the insurer

Proposed solution: cost-shifting at the level of the insurer


To make easier to understand

To make easier to understand

  • Begin with abstract, but unrealistic, approach --- to make the concept clear

  • Move to more complex, but practical, concrete plan


Problem with cost shifting by providers

Problem with Cost-Shifting by Providers

  • Suburban hospital with low number of uninsured, Medicaid patients

  • Inner city hospital with low number of privately insured, high number of uninsured and Medicaid patients

  • SOLUTION: cost-shifting among insurers instead of providers


Proposed solution cost shifting at the level of the insurer1

Proposed Solution:Cost-Shifting at the Level of the Insurer

  • Analogy of high-risk pools for automobile insurance in many states

  • Could require health insurers to offer (sliding scale) discounted health insurance to those unable to afford in proportion to insurer’s market share

  • Insurers pass along costs of subsidizing insurance in premiums for all -- private sector cost-shifting


Understanding obamacare will there be limits on medical treatment

PRIVATE SECTOR SPENDING- GDP

GOVT. SPENDING- FEDERAL BUDGET

17.6 % (spent on H.C) 2011

23% (spent on H.C) 2011

15.1% tax rate to fund the Federal Budget

51% growth in economy by 2040

51% growth in government 2040

30% (spent on H.C) 2040

30% (spent on H.C.) 2040

H.C. Deficit – 7%


Understanding obamacare will there be limits on medical treatment

17.6 % (spent on H.C) 2011

15.1 % Taxes

Amount for Health Care

Private Sector Spending GDP

Government Expenses

15.1% tax rate to fund the Federal Budget

30% (spent on H.C) 2040

15.1% Taxes

Amount for Health Care

Government Expenses

Private Sector Spending GDP


More realistic approach

More realistic approach


Proposed solution cost shifting at the level of the insurer2

Proposed Solution:Cost-Shifting at the Level of the Insurer

  • Require health insurers to offer (sliding-scale) discounted health insurance to those unable to afford in proportion to share of market

  • Provide sliding-scale vouchers based on existing levels of government funding for health care (e.g., Medicaid, CHIP)

  • Insurers pass along additionalcosts in premiums for all


Understanding obamacare will there be limits on medical treatment

17.6 % (spent on H.C) 2011

X dollar Amount for HC 

15.5% Taxes

Government Expenses

Private Sector Spending GDP

Total Amount for Health Care

30% (spent on H.C) 2040

Same X dollar Amount for HC 

15.5% Taxes

Government Expenses

Private Sector Spending GDP

Total Amount for Health Care


How employers decide

How Employers Decide

  • Health insurance too costly – can go bankrupt

  • Health insurance too meager – can lose workers to competitors

  • Balance costs and benefits


The virtuous use of the free market

The Virtuous Use of the Free Market

  • When cost of insuring those who cannot afford it passed on to those who can

  • Employers unconsiously factor in their share of subsidizing those who can’t afford insurance in their cost/benefit balancing


Advantages

ADVANTAGES

  • Funding is tied to what people who can afford to do so themselves choose to pay for health insurance rather than being tied to government budgets. This:

    • Keeps health care costs to what people collectively, through individual decisions, decide they can afford to pay

    • Does not limit health care below what people, through such decisions, are willing and able to pay


Consequence

Consequence

  • America wouldn’t spend more than it can afford on health care

  • America WOULD spend AS MUCH as it COULD afford on health care

  • Physicians would not be artificially constrained by government limits on what treatment they, in their medical judgment, provide their patients


Conclusion

CONCLUSION

  • We CAN afford health care without rationing!

  • We CAN provide help for those who themselves cannot afford to pay for adequate health insurance without rationing care for all!

  • There IS an alternative to Obamacare


For documentation further info

For Documentation & Further Info:

  • FOR COPY OF SLIDES

    • Send email with subject “NY Health Care PowerPoint”

    • To: [email protected]

  • For documentation :

    • 1. www.nrlc.org

    • 2. Click on Issues

    • 3. On drop-down list:

      • 4. Click on “Euthanasia/Assisting Suicide” for:

        • Healthcare rationing [Obamacare]

        • Involuntary euthanasia by providers


Conclusion1

Conclusion

  • Soberly face reality of government limits on what treatment you will be allowed, especially from about 2016 on

  • Challenge for both those on the political left and political right

  • On the right –

    • Emphasis is on using more competition to reduce HC spending

    • How does this square with allowing free market to allocate resources where people choose to put them?

  • On the left –

    • Emphasis is on government limits on what people spend on HC

    • How does this square with better HC for all, including those with low income?


Can health care spending be limited without rationing

Can health care spending be limited without rationing?


The claim that greater efficiency will avert rationing

The Claim that Greater Efficiency Will Avert Rationing

  • “Dartmouth Atlas” – compares what different hospitals spend per patient on those in last months or years of life

  • Claim: some hospitals spend much less with same outcome (death), so we can limit payments to the level of the most efficient hospitals without harm


The claim that greater efficiency will avert rationing1

The Claim that Greater Efficiency Will Avert Rationing

  • “Dartmouth Atlas” – compares what different hospitals spend per patient on those in last months or years of life

  • Claim: some hospitals spend much less with same outcome (death), so we can limit payments to the level of the most efficient hospitals without harm


Ny times article 12 22 09

NY Times article 12/22/09

  • The Obama Administration’s former director of the Office of Management and Budget, Peter Orzag, attacked the fact that the Ronald Reagan University of California at Los Angelos [UCLA] Medical Center spends more than Rochester, Minnesota's Mayo Clinic.


Ny times article 12 22 091

NY Times article 12/22/09

  • Orzag: "One of them costs twice as much as the other, and I can tell you that we have no idea what we’re getting in exchange for the extra $25,000 a year at U.C.L.A. Medical. We can no longer afford an overall health care system in which the thought is more is always better, because it’s not."


Ny times article 12 22 092

NY Times article 12/22/09

  • BUT: “[T]he hospital that spent the most on heart failure patients had one-third fewer deaths after six months of an initial hospital stay.”

  • Difference between looking forward and looking back


Another n y times article 6 14 2010

ANOTHER N.Y. Times article 6/14/2010

  • “The atlas’s hospital rankings do not take into account care that prolongs or improves lives. If one hospital spends a lot on five patients and manages to keep four of them alive, while another spends less on each but all five die, the hospital that saved patients could rank lower because Dartmouth compares only costs before death.”


Are we getting more for our money

Are We Getting More for Our Money?

Life Expectancy

The 2012 CDC report (relying on the latest data from 2010) says Americans are living longer than ever now – 78.7 years.


Are we getting more for our

Are We Getting More for Our $?

Cancer Survival Rates

According to the American Cancer Society in a 2009 report the number of cancer deaths has steadily declined in the United States over the past 15 years, saving a possible 650,000 lives.

The cancer death rate (the #2 cause of death) fell by 19.2 percent for men and 11.4 percent for women between 1990 and 2005.


  • Login