Presented by: Aisha Price Hicklen MANA 5334 October 31, 2007

1. Presented by: Aisha Price Hicklen MANA 5334 October 31, 2007

2. The Cure • Dr. David Gratzer, Canadian-born physician • Senior fellow at the Manhattan Institute for Policy Research • Blames America’s current health care “crisis” on its reliance on outdated economic factors • IRS tax ruling 1943- “biggest event to shape American health insurance” • Tax exemption gave rise to 3rd party payers & employer-based health coverage

3. America the Beautiful • Rapid progression of modern medicine began in 1941 with penicillin • Now the leader in medical technology, surgery, drug interventions and diagnostic measures • Live longer healthier lives, but at what cost???

4. The Cure • Dick Cheney’s Heart • 4 heart attacks (the first at age 37) • Quadruple bypass in 1988 • Angioplasty in 2000 • Pacemaker implanted 2001 • Cost between $20-$25,000 • 50 times the average cost of health care in 1950 • Example of the extreme rise of costs in America

5. Employer-based Coverage • Over-insured Americans • Accustomed to paying little to no out-of-pocket expenses for basic medical care • No incentive to make educated, cost-cutting choices which further drives up costs • Health care in America = “shopping with someone else’s credit card”

6. Health Savings Accounts (HSAs) • Consumer-driven; give patients choice • Low-cost, high deductible coverage for “catastrophic” events • Tax-free savings account to cover basic out-of-pocket medical expenses • Roll over funds each year • Create financial incentive to be more responsible and cut costs • Example: John Mackey, founder/CEO of Whole Foods • Deposit $300-$1800/year into employee accounts

7. Health Savings Accounts (HSAs) • Gratzer’s Steps Towards Building a Healthcare Market • Make HSAs popular to create more choice • Use politicians to promote consumer-driven health care & local governments to provide option to employees • Free HSAs • Raise annual contribution amount • Allow flexibility in deductibles within plans & among consumers • Government deregulation to provide more choice and promote competition • > 100,000 pages of Medicare regulations; state regulations; malpractice law; insurance regulations; certificates of need; public health reporting requirements; etc.

8. The Uninsured in America • Myth of the 46 million • Many Americans uninsured by choice • 16% earn >$75,000 annually • 1/3 earn at least $50,000 annually • 1 in 4 lack coverage because of high costs associated with state regulations • Health care costs about $1,587/year compared to $2,484/year expense of the insured • Bottom Line: Medical attention is readily available for those who need it.

9. Make Health Insurance Affordable HSAs Increase annual contribution Tool for long-term savings Interstate Insurance Option Freedom to choose low-regulation state to purchase coverage ↑ choice=↑ competition among carriers Tax Reform Necessary to reduce premiums by 30% Block Funding to States by Federal Government States given freedom to design own coverage options for uninsured The Uninsured in AmericaAlternatives to Healthcare

10. Medicaid Concerns • Loosened Eligibility Requirements • Fraud & abuse • TennCare ( covers 1.3 million of state’s 5.8 million population) • ↑ prescription costs • Slow Reform efforts due to aggressive litigation • Cut Physician Reimbursement to Control Costs • States use of “creative accounting”

11. Medicaid Reform • Make private insurance more attractive • Reserve Medicaid for the needy • Provide HSAs & interstate insurance options • Block Grant Funding to States by Federal Government • Leave Medicaid regulations to the state • Inspires accountability and innovation • Provide Financial Incentives for Recipients to Cut Costs • Example: Gov. Mark Sanford of S. Carolina proposes “health dollars”

12. Medicare Concerns • Inadequate • Elderly potentially pay large out of pocket expenses • Inefficient • Many over insured for the services covered (but not necessarily services needed) • Inequitable • Geographic variations in spending • Insolvent • #1 problem; will consume 25% of federal income tax revenues by 2030 • Unfunded liability over next 75 years is $68.3 trillion

13. Choice, Competition & Light (Federal) Regulation Federal Employee Health Benefits Program (FEHBP) Measuring stick for reform Choice of over 240 plans (HMOs, PPOs, HSAs, fee-for-service) Federal government’s role limited to paying the bill Benefits of an FEHBP-like program Contain costs without controlling price Combine a fragmented system (Part A, B, C, D) Modest increases in retirement age (over the years) Flexible Premiums Medicare Reform

14. Prescription Drug Concerns • High costs associated with consumers not directly paying for drugs • Overregulated FDA • Limited follow up process on drugs post approval

15. Prescription Drug Reform • Reform FDA approval process • 1. Create an independent office designed to monitor negligent employee actions • 2. Outsource non-government analyzers • Free up FDA time & money • Create a competitive market for non-government analyzers • 3. Implement “post-approval surveillance” to improve drug safety • Gather information from physicians at point of care and from real world settings (drug companies, insurance agencies, etc.) • Win-win-win for patients, drug companies & the FDA

16. Canadian-style health care Complete government funded No co-payments No deductibles No insurance forms to complete Hospitals and physicians government funded Low administrative costs Most medical visits, diagnostic tests, & surgical procedures are covered if deemed “medically necessary” So What’s the Problem???? National Health Care

17. The Problem Extremely long waits for care Overcrowded hospitals and ERs Increasing demand As result of no fees for services Many cost cutting measures Intentional shortages of clinics, physicians, restricted access to specialists; capped physician income; hospital bed closures; denial of critical services “The Cure” Trend towards private health care clinics & diagnostic facilities Travel abroad (to America) for medical care Americans are leaders in medical innovation and technology “O Canada”

18. The Cure~ Capitalism • Decentralize decision making • Price control by increasing choice • Increase competition • Among insurance agencies, physicians, & prescription drug analyzers • Budget caps • “block grants” for Medicaid and Medicare