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How to Talk To Business about Health care reform. Deborah Richter, MD. Goals of your talk. Change their perception to view healthcare as a public good rather an itemized purchase in the marketplace To understand that we can’t fix anything without a healthcare system

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goals of your talk
Goals of your talk
  • Change their perception to view healthcare as a public good rather an itemized purchase in the marketplace
  • To understand that we can’t fix anything without a healthcare system
  • To understand we are paying the whole bill anyway
  • If you get these points across, the business case for single payer is much easier
the business perspective
The Business Perspective
  • They are paying too much for healthcare
  • The reason costs are so high is people are using too much care
  • The uninsured are not their responsibility
  • They don’t trust the government
what business does understand
What Business Does Understand
  • Systems
  • Budgets
  • Fixed Costs
  • Efficiency
overview
Overview
  • Review of the problems
  • Why we are in this mess
  • What we can do about it
u s health expenditures 2009
U.S. Health Expenditures 2009

$2.5 trillion

30%

Source: Health Affairs Jan/Feb 2009

national health spending as a share of gross domestic product
National Health Spendingas a share of Gross Domestic Product

Projected

Actual

Percentage

GDP

Source: Centers for Medicare & Medicaid Services

slide10

Japan Has a $1400 competitive advantage

on every car they sell

$/Car

Source: Modern Healthcare 10/24/05: 14

18 314 die every year due to lack of health insurance
18,314 Die Every Year Due to Lack of Health Insurance

Source: Care Without Coverage;Institute of Medicine,2002

major concepts
Major Concepts
  • Few people are using healthcare at any one time
  • Most costs are fixed
  • We are already paying the whole bill
  • We don’t have a health care system so we can’t fix anything
national health spending per person
National Health Spending:Per Person

Actual

Projected

Per capita

expenditures

Source: Centers for Medicare & Medicaid Services

national health spending per person1
National Health Spending:Per Person

Actual

Projected

Per capita

expenditures

Source: Centers for Medicare & Medicaid Services

slide19

JOE

Is he the problem?

the 80 20 rule most people use very little healthcare
The 80/20 rule: Most people use very little healthcare

73%

80% uses less than $1400

of care per year

Percent

of

health

Care

Expenditures

13%

6%

4%

0% 0% 0%

1% 1% 2%

Source:Agency for Healthcare Research and Quality

MEPS, 1999

few are using most of the healthcare
Few are using most of the healthcare

73%

20% use 86% of the care

Percent

of

health

Care

Expenditures

13%

6%

4%

0% 0% 0%

1% 1% 2%

Source:Agency for Healthcare Research and Quality

MEPS, 1999

u s health expenditures
U.S. Health Expenditures

70% spent

on services

&

infrastructure

Source: Health Affairs Jan/Feb 2009

30%

slide24

Health Care Infrastructure:

As of 2004, the U.S. had:

  • 13.5 million health care jobs
  • 7,228 hospitals with a total of

955,768 staffed beds

  • 210,939 physician’s offices
  • 70,589 nursing homes
  • 19,006 home care agencies
  • 121,172 dentist’s offices
  • 3 million administrative jobs

Source: National Center for Health Statistics&

Bureau of Labor Statistics

the implications of fixed costs
The Implications of Fixed costs
  • The cost of the infrastructure is there whether or not it is used (nurse, hospital)
  • Trying to save money by keeping patients out of the hospital is like trying to save money on schools by keeping kids home for the day
question
Question:
  • Whose responsibility should it be to pay for the health care services we all expect to be there should we need them?
health care financing
Health Care Financing
  • We have no state or national healthcare policy
  • We finance health care services on a wing and a prayer (no dedicated funds)
  • Financing of health care amounts to a shell game… no payer wants to pay the fixed costs of health care
  • When that fails we ask the public to step in (risk shift)
if you were an insurance company ceo who would you want to insure
If you were an insurance company CEO, who would you want to insure?

73%

AVOID THESE PEOPLE

Percent

of

health

Care

Expenditures

13%

6%

4%

0% 0% 0%

1% 1% 2%

Source:Agency for Healthcare Research and Quality

MEPS, 1999

slide31

Administration is the Fastest Growing job in Health Care

Source: Bureau of Labor Statistics and NCHS

one third of health spending is consumed by administration
One-Third of Health Spending is Consumed by Administration

Administrative

Costs

($2000 per person)

Clinical

Care

31%

69%

Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004

slide33

Individual health insurance

Taxes for Medicare and Medicaid

Lower wages

Out of pocket

Private employers pay for health insurance

Property taxes

Higher prices for goods

Health insurance for public employees

In the End Individual Households Pay for All of Health Care

INDIVIDUAL

HOUSEHOLDS

most of healthcare is already publicly financed
Most of Healthcare is already publicly financed

Individuals

20%

Taxpayers

60%

{Medicare, Medicaid.

Public employees,

tax subsidies}

20%

Private

employers

Source: NEJM 1999; 340:109; Health Affairs 2000; 19(3):150

health care overspending
Health Care Overspending

McKinsey Global Institute Dec 2008

$650 billion- the amount overspent on health care compared with other industrialized nations with no discernable benefit to population health.

we spend twice as much on health care as other nations do
We spend twice as much on health care as other nations do

$ Per person

OECD, 2006.

Data for Japan is an estimate

us health costs rise faster than other countries costs
US Health Costs Rise Faster than Other Countries’ Costs

Source: Health United States 2005, Natl. Center for Health Statistics

we pay higher taxes
We pay higher taxes

OECD, 2006 & Health Affairs 2002; 21(4): 99

out of pocket costs are higher
Out of Pocket Costs are Higher

$/per capita

Source: OECD 2006

Data are for 2004 or for most recent year available

Figures adjusted for purchasing power parity

we drink less alcohol
We Drink Less Alcohol

OECD, 2006 (2003 Data)

but we don t live as long
But… We Don’t Live as Long

OECD, 2006 (2003 Data)

more babies die in the u s in the first year of life
More Babies Diein the U.S. in the first year of life

OECD, 2006

Data are for 2004 or more recent year available

slide46

Our Quality is Not the Best in the world

Survival Rates for 5 Countries

Source: Health Affairs Vol 23:#3 , 2004

we do an average number of bone marrow transplants per million people
We Do an Average Number of Bone Marrow Transplantsper million people

OECD, 2006 (2003 Data)

we are average in number of renal transplants 2001 2002
We are Average in Number of Renal Transplants (2001/2002)

Transplants/million population

OECD, 2004

we are average in the number of mri units
We are Average in the Number of MRI Units

MRIs/ million population

Source: OECD, 2005

Note: data are for 2004 ,or most recent year available

we do fewer hip replacements
We Do Fewer Hip Replacements

Procedures per 100,000 population

197

Source: OECD 2006

Data are for 2004 or most recent year available

other industrialized countries
Other Industrialized Countries
  • Availability of expensive technology
  • Rising drug costs
  • Have similar demographics
  • Similar levels of service

Why are their costs so much lower?

why costs are so much lower in other countries
Why costs are so much lower in other countries
  • Administrative simplicity
  • Negotiated prices
  • More primary care and prevention
  • Health planning
  • Global budgets

They have a system

fundamental features of a true health care system
Fundamental Features of a True Health Care System
  • Everyone included
  • Public Financing
  • Clear accountability
  • Public Stewardship
  • Budget Process
business thinking applied to healthcare reform
Business thinking applied to healthcare reform
  • What is the overall goal? (Preserve, restore and maintain health)
  • How much do we need? (McKinsey says $650 excess spending)
  • How get more for your money?(administrative savings ,formularies, negotiating prices, more primary care and prevention)
  • How would you collect money?
  • How to control overall costs?-(Budget process,
  • Who is in charge?-How to fix when things go wrong-accountability
investment model
Investment Model
  • Healthcare is regarded as a public good with investment in needed services for the whole population
  • The costs of these shared services are spread across the whole population
  • Pools money and pays for health care directly
single payer health care systems
Single Payer Health Care Systems
  • Sweden, Norway, Denmark, Canada, Finland, Iceland, Australia, and Taiwan all have single payer financing
  • Single publicly financed risk pool that pays for health care directly from a fund ear-marked for health care
  • Everyone has access to privately delivered, publicly financed health care services
  • Public can buy health insurance for services not covered by public plan.
slide59

Physicians for a National Health Program

Vermont Health Care for All

Deborah Richter, MD

802-371-7764

PO Box 1467

Montpelier, VT 05601

www.vthca.org

[email protected]

pros and cons of a true health care system
Pros and cons of a true health care system

PROS

  • Everyone Covered
  • Better benefits
  • Effective Cost Containment
  • Fairer financing
  • Stability of financing of services
  • Coverage not linked to employment

CONS

  • Problems are aired in public
  • Some will pay more than they are now
  • Cost containment measures may cut availability of some services
slide65

“If done right, health care in America could be dramatically better with true single-payer coverage.”

-Ben Brewer, WSJ, April 18, 2006

  • “[single-payer] is an idea that\'s so easy to slam politically yet so sensible for business that only Republicans can sell it! …it may take a Republican President to bless the socialization of health spending we need.”
  • -Matt Miller, Fortune, April 18, 2006

CNBC / MSN Money

  • “Think, as a small business, how you could benefit from a single-payer system: you wouldn’t lose potential employees to larger firms that offer more attractive health benefits; health insurance costs would cease to be a line item in your budget. A serious illness befalling you or an employee wouldn’t be a company-wide financial crisis. You might even save money.”
  • -Joseph Antony, CNBC / MSN Money, Winter 2003
private insurers high overhead
Private Insurers’ High Overhead

International Journal of Health Services 2005; 35(1): 64-90

obstacles
Obstacles
  • Profit
  • Politics
  • Paranoia
  • Perception

Universal healthcare system

how to talk to business about health care reform1

How To Talk To Business About Health Care Reform

February 7, 2009

Deborah Richter, MD

goals of your talk1
Goals of your talk
  • Change their perception to view healthcare as a public good rather an itemized purchase in the marketplace
  • To understand that we can’t fix anything without a healthcare system
  • To understand we are paying the whole bill anyway
  • If you get these points across, the business case for single payer is much easier
the business perspective1
The Business Perspective
  • They are paying too much for healthcare
  • The reason costs are so high is people are using too much care
  • The uninsured are not their responsibility
  • They don’t trust the government
what business does understand1
What Business Does Understand
  • Systems
  • Budgets
  • Fixed Costs
  • Efficiency
overview1
Overview
  • Review of the problems
  • Why we are in this mess
  • What we can do about it
u s health expenditures 2007
U.S. Health Expenditures 2007

$2.2 trillion

30%

Source: Health Affairs Jan/Feb 2009

national health spending as a share of gross domestic product1
National Health Spendingas a share of Gross Domestic Product

Projected

Actual

Percentage

GDP

Source: Centers for Medicare & Medicaid Services

slide81

Japan Has a $1400 competitive advantage

on every car they sell

$/Car

Source: Modern Healthcare 10/24/05: 14

18 314 die every year due to lack of health insurance1
18,314 Die Every Year Due to Lack of Health Insurance

Source: Care Without Coverage;Institute of Medicine,2002

major concepts1
Major Concepts
  • Few people are using healthcare at any one time
  • Most costs are fixed
  • We are already paying the whole bill
  • We don’t have a health care system so we can’t fix anything
national health spending per person2
National Health Spending:Per Person

Actual

Projected

Per capita

expenditures

Source: Centers for Medicare & Medicaid Services

national health spending per person3
National Health Spending:Per Person

Actual

Projected

Per capita

expenditures

Source: Centers for Medicare & Medicaid Services

slide90

JOE

Is he the problem?

the 80 20 rule most people use very little healthcare1
The 80/20 rule: Most people use very little healthcare

73%

80% uses less than $1400

of care per year

Percent

of

health

Care

Expenditures

13%

6%

4%

0% 0% 0%

1% 1% 2%

Source:Agency for Healthcare Research and Quality

MEPS, 1999

few are using most of the healthcare1
Few are using most of the healthcare

73%

20% use 86% of the care

Percent

of

health

Care

Expenditures

13%

6%

4%

0% 0% 0%

1% 1% 2%

Source:Agency for Healthcare Research and Quality

MEPS, 1999

u s health expenditures 20071
U.S. Health Expenditures 2007

70% spent

on services

&

infrastructure

Source: Health Affairs Jan/Feb 2009

30%

slide95

Health Care Infrastructure:

As of 2004, the U.S. had:

  • 13.5 million health care jobs
  • 7,228 hospitals with a total of

955,768 staffed beds

  • 210,939 physician’s offices
  • 70,589 nursing homes
  • 19,006 home care agencies
  • 121,172 dentist’s offices
  • 3 million administrative jobs

Source: National Center for Health Statistics&

Bureau of Labor Statistics

the implications of fixed costs1
The Implications of Fixed costs
  • The cost of the infrastructure is there whether or not it is used (nurse, hospital)
  • Trying to save money by keeping patients out of the hospital is like trying to save money on schools by keeping kids home for the day
question1
Question:
  • Whose responsibility should it be to pay for the health care services we all expect to be there should we need them?
health care financing1
Health Care Financing
  • We have no state or national healthcare policy
  • We finance health care services on a wing and a prayer (no dedicated funds)
  • Financing of health care amounts to a shell game… no payer wants to pay the fixed costs of health care
  • When that fails we ask the public to step in (risk shift)
if you were an insurance company ceo who would you want to insure1
If you were an insurance company CEO, who would you want to insure?

73%

AVOID THESE PEOPLE

Percent

of

health

Care

Expenditures

13%

6%

4%

0% 0% 0%

1% 1% 2%

Source:Agency for Healthcare Research and Quality

MEPS, 1999

slide102

Administration is the Fastest Growing job in Health Care

Source: Bureau of Labor Statistics and NCHS

one third of health spending is consumed by administration1
One-Third of Health Spending is Consumed by Administration

Administrative

Costs

($2000 per person)

Clinical

Care

31%

69%

Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004

slide104

Individual health insurance

Taxes for Medicare and Medicaid

Lower wages

Out of pocket

Private employers pay for health insurance

Property taxes

Higher prices for goods

Health insurance for public employees

In the End Individual Households Pay for All of Health Care

INDIVIDUAL

HOUSEHOLDS

most of healthcare is already publicly financed1
Most of Healthcare is already publicly financed

Individuals

20%

Taxpayers

60%

{Medicare, Medicaid.

Public employees,

tax subsidies}

20%

Private

employers

Source: NEJM 1999; 340:109; Health Affairs 2000; 19(3):150

health care overspending1
Health Care Overspending

McKinsey Global Institute Dec 2008

$650 billion- the amount overspent on health care compared with other industrialized nations with no discernable benefit to population health.

we spend twice as much on health care as other nations do1
We spend twice as much on health care as other nations do

$ Per person

OECD, 2006.

Data for Japan is an estimate

us health costs rise faster than other countries costs1
US Health Costs Rise Faster than Other Countries’ Costs

Source: Health United States 2005, Natl. Center for Health Statistics

we pay higher taxes1
We pay higher taxes

OECD, 2006 & Health Affairs 2002; 21(4): 99

out of pocket costs are higher1
Out of Pocket Costs are Higher

$/per capita

Source: OECD 2006

Data are for 2004 or for most recent year available

Figures adjusted for purchasing power parity

we drink less alcohol1
We Drink Less Alcohol

OECD, 2006 (2003 Data)

but we don t live as long1
But… We Don’t Live as Long

OECD, 2006 (2003 Data)

more babies die in the u s in the first year of life1
More Babies Diein the U.S. in the first year of life

OECD, 2006

Data are for 2004 or more recent year available

slide117

Our Quality is Not the Best in the world

Survival Rates for 5 Countries

Source: Health Affairs Vol 23:#3 , 2004

we do an average number of bone marrow transplants per million people1
We Do an Average Number of Bone Marrow Transplantsper million people

OECD, 2006 (2003 Data)

we are average in number of renal transplants 2001 20021
We are Average in Number of Renal Transplants (2001/2002)

Transplants/million population

OECD, 2004

we are average in the number of mri units1
We are Average in the Number of MRI Units

MRIs/ million population

Source: OECD, 2005

Note: data are for 2004 ,or most recent year available

we do fewer hip replacements1
We Do Fewer Hip Replacements

Procedures per 100,000 population

197

Source: OECD 2006

Data are for 2004 or most recent year available

other industrialized countries1
Other Industrialized Countries
  • Availability of expensive technology
  • Rising drug costs
  • Have similar demographics
  • Similar levels of service

Why are their costs so much lower?

why costs are so much lower in other countries1
Why costs are so much lower in other countries
  • Administrative simplicity
  • Negotiated prices
  • More primary care and prevention
  • Health planning
  • Global budgets

They have a system

fundamental features of a true health care system1
Fundamental Features of a True Health Care System
  • Everyone included
  • Public Financing
  • Clear accountability
  • Public Stewardship
  • Budget Process
business thinking applied to healthcare reform1
Business thinking applied to healthcare reform
  • What is the overall goal? (Preserve, restore and maintain health)
  • How much do we need? (McKinsey says $650 excess spending)
  • How get more for your money?(administrative savings ,formularies, negotiating prices, more primary care and prevention)
  • How would you collect money?
  • How to control overall costs?-(Budget process,
  • Who is in charge?-How to fix when things go wrong-accountability
investment model1
Investment Model
  • Healthcare is regarded as a public good with investment in needed services for the whole population
  • The costs of these shared services are spread across the whole population
  • Pools money and pays for health care directly
single payer health care systems1
Single Payer Health Care Systems
  • Sweden, Norway, Denmark, Canada, Finland, Iceland, Australia, and Taiwan all have single payer financing
  • Single publicly financed risk pool that pays for health care directly from a fund ear-marked for health care
  • Everyone has access to privately delivered, publicly financed health care services
  • Public can buy health insurance for services not covered by public plan.
slide130

Physicians for a National Health Program

Vermont Health Care for All

Deborah Richter, MD

802-371-7764

PO Box 1467

Montpelier, VT 05601

www.vthca.org

[email protected]

pros and cons of a true health care system1
Pros and cons of a true health care system

PROS

  • Everyone Covered
  • Better benefits
  • Effective Cost Containment
  • Fairer financing
  • Stability of financing of services
  • Coverage not linked to employment

CONS

  • Problems are aired in public
  • Some will pay more than they are now
  • Cost containment measures may cut availability of some services
slide136

“If done right, health care in America could be dramatically better with true single-payer coverage.”

-Ben Brewer, WSJ, April 18, 2006

  • “[single-payer] is an idea that\'s so easy to slam politically yet so sensible for business that only Republicans can sell it! …it may take a Republican President to bless the socialization of health spending we need.”
  • -Matt Miller, Fortune, April 18, 2006

CNBC / MSN Money

  • “Think, as a small business, how you could benefit from a single-payer system: you wouldn’t lose potential employees to larger firms that offer more attractive health benefits; health insurance costs would cease to be a line item in your budget. A serious illness befalling you or an employee wouldn’t be a company-wide financial crisis. You might even save money.”
  • -Joseph Antony, CNBC / MSN Money, Winter 2003
private insurers high overhead1
Private Insurers’ High Overhead

International Journal of Health Services 2005; 35(1): 64-90

obstacles1
Obstacles
  • Profit
  • Politics
  • Paranoia
  • Perception

Universal healthcare system

how to talk to business about health care reform2

How To Talk To Business About Health Care Reform

February 7, 2009

Deborah Richter, MD

goals of your talk2
Goals of your talk
  • Change their perception to view healthcare as a public good rather an itemized purchase in the marketplace
  • To understand that we can’t fix anything without a healthcare system
  • To understand we are paying the whole bill anyway
  • If you get these points across, the business case for single payer is much easier
the business perspective2
The Business Perspective
  • They are paying too much for healthcare
  • The reason costs are so high is people are using too much care
  • The uninsured are not their responsibility
  • They don’t trust the government
what business does understand2
What Business Does Understand
  • Systems
  • Budgets
  • Fixed Costs
  • Efficiency
overview2
Overview
  • Review of the problems
  • Why we are in this mess
  • What we can do about it
u s health expenditures 20072
U.S. Health Expenditures 2007

$2.2 trillion

30%

Source: Health Affairs Jan/Feb 2009

national health spending as a share of gross domestic product2
National Health Spendingas a share of Gross Domestic Product

Projected

Actual

Percentage

GDP

Source: Centers for Medicare & Medicaid Services

slide152

Japan Has a $1400 competitive advantage

on every car they sell

$/Car

Source: Modern Healthcare 10/24/05: 14

18 314 die every year due to lack of health insurance2
18,314 Die Every Year Due to Lack of Health Insurance

Source: Care Without Coverage;Institute of Medicine,2002

major concepts2
Major Concepts
  • Few people are using healthcare at any one time
  • Most costs are fixed
  • We are already paying the whole bill
  • We don’t have a health care system so we can’t fix anything
national health spending per person4
National Health Spending:Per Person

Actual

Projected

Per capita

expenditures

Source: Centers for Medicare & Medicaid Services

national health spending per person5
National Health Spending:Per Person

Actual

Projected

Per capita

expenditures

Source: Centers for Medicare & Medicaid Services

slide161

JOE

Is he the problem?

the 80 20 rule most people use very little healthcare2
The 80/20 rule: Most people use very little healthcare

73%

80% uses less than $1400

of care per year

Percent

of

health

Care

Expenditures

13%

6%

4%

0% 0% 0%

1% 1% 2%

Source:Agency for Healthcare Research and Quality

MEPS, 1999

few are using most of the healthcare2
Few are using most of the healthcare

73%

20% use 86% of the care

Percent

of

health

Care

Expenditures

13%

6%

4%

0% 0% 0%

1% 1% 2%

Source:Agency for Healthcare Research and Quality

MEPS, 1999

u s health expenditures 20073
U.S. Health Expenditures 2007

70% spent

on services

&

infrastructure

Source: Health Affairs Jan/Feb 2009

30%

slide166

Health Care Infrastructure:

As of 2004, the U.S. had:

  • 13.5 million health care jobs
  • 7,228 hospitals with a total of

955,768 staffed beds

  • 210,939 physician’s offices
  • 70,589 nursing homes
  • 19,006 home care agencies
  • 121,172 dentist’s offices
  • 3 million administrative jobs

Source: National Center for Health Statistics&

Bureau of Labor Statistics

the implications of fixed costs2
The Implications of Fixed costs
  • The cost of the infrastructure is there whether or not it is used (nurse, hospital)
  • Trying to save money by keeping patients out of the hospital is like trying to save money on schools by keeping kids home for the day
question2
Question:
  • Whose responsibility should it be to pay for the health care services we all expect to be there should we need them?
health care financing2
Health Care Financing
  • We have no state or national healthcare policy
  • We finance health care services on a wing and a prayer (no dedicated funds)
  • Financing of health care amounts to a shell game… no payer wants to pay the fixed costs of health care
  • When that fails we ask the public to step in (risk shift)
if you were an insurance company ceo who would you want to insure2
If you were an insurance company CEO, who would you want to insure?

73%

AVOID THESE PEOPLE

Percent

of

health

Care

Expenditures

13%

6%

4%

0% 0% 0%

1% 1% 2%

Source:Agency for Healthcare Research and Quality

MEPS, 1999

slide173

Administration is the Fastest Growing job in Health Care

Source: Bureau of Labor Statistics and NCHS

one third of health spending is consumed by administration2
One-Third of Health Spending is Consumed by Administration

Administrative

Costs

($2000 per person)

Clinical

Care

31%

69%

Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004

slide175

Individual health insurance

Taxes for Medicare and Medicaid

Lower wages

Out of pocket

Private employers pay for health insurance

Property taxes

Higher prices for goods

Health insurance for public employees

In the End Individual Households Pay for All of Health Care

INDIVIDUAL

HOUSEHOLDS

most of healthcare is already publicly financed2
Most of Healthcare is already publicly financed

Individuals

20%

Taxpayers

60%

{Medicare, Medicaid.

Public employees,

tax subsidies}

20%

Private

employers

Source: NEJM 1999; 340:109; Health Affairs 2000; 19(3):150

health care overspending2
Health Care Overspending

McKinsey Global Institute Dec 2008

$650 billion- the amount overspent on health care compared with other industrialized nations with no discernable benefit to population health.

we spend twice as much on health care as other nations do2
We spend twice as much on health care as other nations do

$ Per person

OECD, 2006.

Data for Japan is an estimate

us health costs rise faster than other countries costs2
US Health Costs Rise Faster than Other Countries’ Costs

Source: Health United States 2005, Natl. Center for Health Statistics

we pay higher taxes2
We pay higher taxes

OECD, 2006 & Health Affairs 2002; 21(4): 99

out of pocket costs are higher2
Out of Pocket Costs are Higher

$/per capita

Source: OECD 2006

Data are for 2004 or for most recent year available

Figures adjusted for purchasing power parity

we drink less alcohol2
We Drink Less Alcohol

OECD, 2006 (2003 Data)

but we don t live as long2
But… We Don’t Live as Long

OECD, 2006 (2003 Data)

more babies die in the u s in the first year of life2
More Babies Diein the U.S. in the first year of life

OECD, 2006

Data are for 2004 or more recent year available

slide188

Our Quality is Not the Best in the world

Survival Rates for 5 Countries

Source: Health Affairs Vol 23:#3 , 2004

we do an average number of bone marrow transplants per million people2
We Do an Average Number of Bone Marrow Transplantsper million people

OECD, 2006 (2003 Data)

we are average in number of renal transplants 2001 20022
We are Average in Number of Renal Transplants (2001/2002)

Transplants/million population

OECD, 2004

we are average in the number of mri units2
We are Average in the Number of MRI Units

MRIs/ million population

Source: OECD, 2005

Note: data are for 2004 ,or most recent year available

we do fewer hip replacements2
We Do Fewer Hip Replacements

Procedures per 100,000 population

197

Source: OECD 2006

Data are for 2004 or most recent year available

other industrialized countries2
Other Industrialized Countries
  • Availability of expensive technology
  • Rising drug costs
  • Have similar demographics
  • Similar levels of service

Why are their costs so much lower?

why costs are so much lower in other countries2
Why costs are so much lower in other countries
  • Administrative simplicity
  • Negotiated prices
  • More primary care and prevention
  • Health planning
  • Global budgets

They have a system

fundamental features of a true health care system2
Fundamental Features of a True Health Care System
  • Everyone included
  • Public Financing
  • Clear accountability
  • Public Stewardship
  • Budget Process
business thinking applied to healthcare reform2
Business thinking applied to healthcare reform
  • What is the overall goal? (Preserve, restore and maintain health)
  • How much do we need? (McKinsey says $650 excess spending)
  • How get more for your money?(administrative savings ,formularies, negotiating prices, more primary care and prevention)
  • How would you collect money?
  • How to control overall costs?-(Budget process,
  • Who is in charge?-How to fix when things go wrong-accountability
investment model2
Investment Model
  • Healthcare is regarded as a public good with investment in needed services for the whole population
  • The costs of these shared services are spread across the whole population
  • Pools money and pays for health care directly
single payer health care systems2
Single Payer Health Care Systems
  • Sweden, Norway, Denmark, Canada, Finland, Iceland, Australia, and Taiwan all have single payer financing
  • Single publicly financed risk pool that pays for health care directly from a fund ear-marked for health care
  • Everyone has access to privately delivered, publicly financed health care services
  • Public can buy health insurance for services not covered by public plan.
slide201

Physicians for a National Health Program

Vermont Health Care for All

Deborah Richter, MD

802-371-7764

PO Box 1467

Montpelier, VT 05601

www.vthca.org

[email protected]

pros and cons of a true health care system2
Pros and cons of a true health care system

PROS

  • Everyone Covered
  • Better benefits
  • Effective Cost Containment
  • Fairer financing
  • Stability of financing of services
  • Coverage not linked to employment

CONS

  • Problems are aired in public
  • Some will pay more than they are now
  • Cost containment measures may cut availability of some services
slide207

“If done right, health care in America could be dramatically better with true single-payer coverage.”

-Ben Brewer, WSJ, April 18, 2006

  • “[single-payer] is an idea that\'s so easy to slam politically yet so sensible for business that only Republicans can sell it! …it may take a Republican President to bless the socialization of health spending we need.”
  • -Matt Miller, Fortune, April 18, 2006

CNBC / MSN Money

  • “Think, as a small business, how you could benefit from a single-payer system: you wouldn’t lose potential employees to larger firms that offer more attractive health benefits; health insurance costs would cease to be a line item in your budget. A serious illness befalling you or an employee wouldn’t be a company-wide financial crisis. You might even save money.”
  • -Joseph Antony, CNBC / MSN Money, Winter 2003
private insurers high overhead2
Private Insurers’ High Overhead

International Journal of Health Services 2005; 35(1): 64-90

obstacles2
Obstacles
  • Profit
  • Politics
  • Paranoia
  • Perception

Universal healthcare system

how to talk to business about health care reform3

How To Talk To Business About Health Care Reform

February 7, 2009

Deborah Richter, MD

how to talk to business about health care reform4

How To Talk To Business About Health Care Reform

February 7, 2009

Deborah Richter, MD

goals of your talk3
Goals of your talk
  • Change their perception to view healthcare as a public good rather an itemized purchase in the marketplace
  • To understand that we can’t fix anything without a healthcare system
  • To understand we are paying the whole bill anyway
  • If you get these points across, the business case for single payer is much easier
the business perspective3
The Business Perspective
  • They are paying too much for healthcare
  • The reason costs are so high is people are using too much care
  • The uninsured are not their responsibility
  • They don’t trust the government
what business does understand3
What Business Does Understand
  • Systems
  • Budgets
  • Fixed Costs
  • Efficiency
overview3
Overview
  • Review of the problems
  • Why we are in this mess
  • What we can do about it
u s health expenditures 20074
U.S. Health Expenditures 2007

$2.2 trillion

30%

Source: Health Affairs Jan/Feb 2009

national health spending as a share of gross domestic product3
National Health Spendingas a share of Gross Domestic Product

Projected

Actual

Percentage

GDP

Source: Centers for Medicare & Medicaid Services

slide224

Japan Has a $1400 competitive advantage

on every car they sell

$/Car

Source: Modern Healthcare 10/24/05: 14

18 314 die every year due to lack of health insurance3
18,314 Die Every Year Due to Lack of Health Insurance

Source: Care Without Coverage;Institute of Medicine,2002

major concepts3
Major Concepts
  • Few people are using healthcare at any one time
  • Most costs are fixed
  • We are already paying the whole bill
  • We don’t have a health care system so we can’t fix anything
national health spending per person6
National Health Spending:Per Person

Actual

Projected

Per capita

expenditures

Source: Centers for Medicare & Medicaid Services

national health spending per person7
National Health Spending:Per Person

Actual

Projected

Per capita

expenditures

Source: Centers for Medicare & Medicaid Services

slide233

JOE

Is he the problem?

the 80 20 rule most people use very little healthcare3
The 80/20 rule: Most people use very little healthcare

73%

80% uses less than $1400

of care per year

Percent

of

health

Care

Expenditures

13%

6%

4%

0% 0% 0%

1% 1% 2%

Source:Agency for Healthcare Research and Quality

MEPS, 1999

few are using most of the healthcare3
Few are using most of the healthcare

73%

20% use 86% of the care

Percent

of

health

Care

Expenditures

13%

6%

4%

0% 0% 0%

1% 1% 2%

Source:Agency for Healthcare Research and Quality

MEPS, 1999

u s health expenditures 20075
U.S. Health Expenditures 2007

70% spent

on services

&

infrastructure

Source: Health Affairs Jan/Feb 2009

30%

slide238

Health Care Infrastructure:

As of 2004, the U.S. had:

  • 13.5 million health care jobs
  • 7,228 hospitals with a total of

955,768 staffed beds

  • 210,939 physician’s offices
  • 70,589 nursing homes
  • 19,006 home care agencies
  • 121,172 dentist’s offices
  • 3 million administrative jobs

Source: National Center for Health Statistics&

Bureau of Labor Statistics

the implications of fixed costs3
The Implications of Fixed costs
  • The cost of the infrastructure is there whether or not it is used (nurse, hospital)
  • Trying to save money by keeping patients out of the hospital is like trying to save money on schools by keeping kids home for the day
question3
Question:
  • Whose responsibility should it be to pay for the health care services we all expect to be there should we need them?
health care financing3
Health Care Financing
  • We have no state or national healthcare policy
  • We finance health care services on a wing and a prayer (no dedicated funds)
  • Financing of health care amounts to a shell game… no payer wants to pay the fixed costs of health care
  • When that fails we ask the public to step in (risk shift)
if you were an insurance company ceo who would you want to insure3
If you were an insurance company CEO, who would you want to insure?

73%

AVOID THESE PEOPLE

Percent

of

health

Care

Expenditures

13%

6%

4%

0% 0% 0%

1% 1% 2%

Source:Agency for Healthcare Research and Quality

MEPS, 1999

slide245

Administration is the Fastest Growing job in Health Care

Source: Bureau of Labor Statistics and NCHS

one third of health spending is consumed by administration3
One-Third of Health Spending is Consumed by Administration

Administrative

Costs

($2000 per person)

Clinical

Care

31%

69%

Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004

slide247

Individual health insurance

Taxes for Medicare and Medicaid

Lower wages

Out of pocket

Private employers pay for health insurance

Property taxes

Higher prices for goods

Health insurance for public employees

In the End Individual Households Pay for All of Health Care

INDIVIDUAL

HOUSEHOLDS

most of healthcare is already publicly financed3
Most of Healthcare is already publicly financed

Individuals

20%

Taxpayers

60%

{Medicare, Medicaid.

Public employees,

tax subsidies}

20%

Private

employers

Source: NEJM 1999; 340:109; Health Affairs 2000; 19(3):150

health care overspending3
Health Care Overspending

McKinsey Global Institute Dec 2008

$650 billion- the amount overspent on health care compared with other industrialized nations with no discernable benefit to population health.

we spend twice as much on health care as other nations do3
We spend twice as much on health care as other nations do

$ Per person

OECD, 2006.

Data for Japan is an estimate

us health costs rise faster than other countries costs3
US Health Costs Rise Faster than Other Countries’ Costs

Source: Health United States 2005, Natl. Center for Health Statistics

we pay higher taxes3
We pay higher taxes

OECD, 2006 & Health Affairs 2002; 21(4): 99

out of pocket costs are higher3
Out of Pocket Costs are Higher

$/per capita

Source: OECD 2006

Data are for 2004 or for most recent year available

Figures adjusted for purchasing power parity

we drink less alcohol3
We Drink Less Alcohol

OECD, 2006 (2003 Data)

but we don t live as long3
But… We Don’t Live as Long

OECD, 2006 (2003 Data)

more babies die in the u s in the first year of life3
More Babies Diein the U.S. in the first year of life

OECD, 2006

Data are for 2004 or more recent year available

slide260

Our Quality is Not the Best in the world

Survival Rates for 5 Countries

Source: Health Affairs Vol 23:#3 , 2004

we do an average number of bone marrow transplants per million people3
We Do an Average Number of Bone Marrow Transplantsper million people

OECD, 2006 (2003 Data)

we are average in number of renal transplants 2001 20023
We are Average in Number of Renal Transplants (2001/2002)

Transplants/million population

OECD, 2004

we are average in the number of mri units3
We are Average in the Number of MRI Units

MRIs/ million population

Source: OECD, 2005

Note: data are for 2004 ,or most recent year available

we do fewer hip replacements3
We Do Fewer Hip Replacements

Procedures per 100,000 population

197

Source: OECD 2006

Data are for 2004 or most recent year available

other industrialized countries3
Other Industrialized Countries
  • Availability of expensive technology
  • Rising drug costs
  • Have similar demographics
  • Similar levels of service

Why are their costs so much lower?

why costs are so much lower in other countries3
Why costs are so much lower in other countries
  • Administrative simplicity
  • Negotiated prices
  • More primary care and prevention
  • Health planning
  • Global budgets

They have a system

fundamental features of a true health care system3
Fundamental Features of a True Health Care System
  • Everyone included
  • Public Financing
  • Clear accountability
  • Public Stewardship
  • Budget Process
business thinking applied to healthcare reform3
Business thinking applied to healthcare reform
  • What is the overall goal? (Preserve, restore and maintain health)
  • How much do we need? (McKinsey says $650 excess spending)
  • How get more for your money?(administrative savings ,formularies, negotiating prices, more primary care and prevention)
  • How would you collect money?
  • How to control overall costs?-(Budget process,
  • Who is in charge?-How to fix when things go wrong-accountability
investment model3
Investment Model
  • Healthcare is regarded as a public good with investment in needed services for the whole population
  • The costs of these shared services are spread across the whole population
  • Pools money and pays for health care directly
single payer health care systems3
Single Payer Health Care Systems
  • Sweden, Norway, Denmark, Canada, Finland, Iceland, Australia, and Taiwan all have single payer financing
  • Single publicly financed risk pool that pays for health care directly from a fund ear-marked for health care
  • Everyone has access to privately delivered, publicly financed health care services
  • Public can buy health insurance for services not covered by public plan.
slide273

Physicians for a National Health Program

Vermont Health Care for All

Deborah Richter, MD

802-371-7764

PO Box 1467

Montpelier, VT 05601

www.vthca.org

[email protected]

pros and cons of a true health care system3
Pros and cons of a true health care system

PROS

  • Everyone Covered
  • Better benefits
  • Effective Cost Containment
  • Fairer financing
  • Stability of financing of services
  • Coverage not linked to employment

CONS

  • Problems are aired in public
  • Some will pay more than they are now
  • Cost containment measures may cut availability of some services
slide279

“If done right, health care in America could be dramatically better with true single-payer coverage.”

-Ben Brewer, WSJ, April 18, 2006

  • “[single-payer] is an idea that\'s so easy to slam politically yet so sensible for business that only Republicans can sell it! …it may take a Republican President to bless the socialization of health spending we need.”
  • -Matt Miller, Fortune, April 18, 2006

CNBC / MSN Money

  • “Think, as a small business, how you could benefit from a single-payer system: you wouldn’t lose potential employees to larger firms that offer more attractive health benefits; health insurance costs would cease to be a line item in your budget. A serious illness befalling you or an employee wouldn’t be a company-wide financial crisis. You might even save money.”
  • -Joseph Antony, CNBC / MSN Money, Winter 2003
private insurers high overhead3
Private Insurers’ High Overhead

International Journal of Health Services 2005; 35(1): 64-90

obstacles3
Obstacles
  • Profit
  • Politics
  • Paranoia
  • Perception

Universal healthcare system

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