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“Can’t Anyone Here Play This Game?” Broken Politics, Broken Health Care, Broken Promises

“Can’t Anyone Here Play This Game?” Broken Politics, Broken Health Care, Broken Promises. Bob Doherty, SVP, Governmental Affairs and Public Policy American College of Physicians Alaska chapter May 11, 2012.

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“Can’t Anyone Here Play This Game?” Broken Politics, Broken Health Care, Broken Promises

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  1. “Can’t Anyone Here Play This Game?”Broken Politics, Broken Health Care, Broken Promises Bob Doherty, SVP, Governmental Affairs and Public Policy American College of Physicians Alaska chapter May 11, 2012

  2. “It may be best, at this point, to simply quote Casey Stengel's infamous yelp of frustration about the 1962 Mets: ‘Can't anybody here play this game?’ If the '62 Mets were the worst team in major league history, it's also fair to wonder whether any Congress has ever been more dysfunctional, with less cause, than this one.” Michael Hirsch, The Atlantic, November 21, 2011 www.theatlantic.com/politics/archive/2011/11/the-supercommittee-and-a-neverending-cycle-of- dysfunction/248800/

  3. “The level of dysfunction that has characterized the 112th Congress may be unparalleled,” wrote Roll Call, Capitol Hill’s hometown newspaper. Worst ever? • “The level of dysfunction that has characterized the 112th Congress may be unparalleled” Roll Call, Capitol Hill’s hometown newspaper • “Congress ends 2011 with record-low 11% approval” Gallup

  4. Why does it matter? • Our broken politics is making it impossible for Washington to find common ground on the challenges facing U.S. health care: poor and uneven access, unsustainable health costs, and a dysfunctional payment system

  5. Why must health care be reformed? • Millions lack access to health insurance • Costs are rising faster than we can afford

  6. Who are the uninsured? • 47 million persons, mostly in working families • Why are they uninsured? • They are low-income (but growing number of middle class) • They are younger • They have pre-existing conditions • Their employers don’t offer coverage, they don’t qualify for public ones, and they can’t afford individual insurance

  7. Why does it matter? • Uninsured more likely to live sicker and die younger • Less likely to get needed preventive services • Less likely to keep up with prescriptions • More likely to wait for treatment until advanced stage of illness • And we all pay for them: uncompensated care and cost-shifting to the insured and public safety net programs

  8. ApplyingtheIOMmethodologyto morerecent censusestimatesofthe numberofuninsured Percent uninsured withinage group Age U.S. population (millions) Totaldeaths : Uninsured excessdeaths ). 2001 2002 2003 2004 2005 2006 Total: 2000 21,000 23,00 Dorn, UninsuredandDyingBecauseofIt:UpdatingtheInstituteofMedicineAnalysisontheImpactofUninsuranceonMortality, Urban Institute, 2008 3

  9. What is going on with health care costs? • Despite recent slow-down, costs are rising faster than individuals, businesses and government can afford • Where the money goes • Why health costs threaten U.S. fiscal health

  10. Hospital&PhysicianSectorsAccountedforMore than70PercentofPrivatePremiumGrowth OverPastFiveYears $120 $100 $80 $60 3%ofnet change $3.1 4%ofnet change $4.0 9%ofnet change $9.5 14%ofnet change $15.4 2006to2010Change($Billions) 26%ofnet change $28.0 45%ofnet change $108.5 97percentofchangeinpremiums $40 wasduetogrowthininsurers’ spendingforhealthcareservices $48.3 $20 $0 HospitalCare Physician& ClinicalServices Prescription Drugs&DME Dental&Other Professional HomeHealth& OtherLTC NetCostof HealthInsurance TotalChangein Premiums Services Facilities& Services 2006-2010 20.3% 13.2% 14.5% 14.3% 20.5% 3.1% 14.7% %Change Source:NIHCMFoundationanalysisofdatafromtheNationalHealthExpenditureAccounts.

  11. U.S.PaysPhysiciansMoreForSameProcedures EspeciallyPrivatePayersandSpecialtyCare PrimaryCare-OfficeVisitFees SpecialtyCare–HipReplacement 133 $140 $120 $4,500 $4,000 129 3,996 104 $3,500 $3,000 $100 $80 $60 $40 $2,500 $2,000 $1,500 66 2,160 60 1,943 59 1,634 46 45 1,340 1,251 34 34 32 1,046 $1,000 674 1,181 $20 $0 $500 $0 652 PublicPayers PrivatePayers PublicPayers PrivatePayers Australia Canada France Germany UK US Australia Canada France Germany UK US NIHCMFoundationdepictionofdatafromLaugesenMJandGliedSA.“HigherFeesPaidtoUSPhysiciansDriveHigher SpendingforPhysicianServicesComparedtoOtherCountries.”HealthAffairs,30(9):1647-56.September2011.

  12. U.S.PaysMoreforHospitalServices CompositeIndex,29InpatientServices ComparativePriceLevels,HospitalServices,2007 UnitedStates Italy Australia 164 140 123 France Sweden Canada Finland Portugal 121 114 113 U.S.hospital prices64% higherthan OECDaverage 98 85 Israel 62 Slovenia Korea 59 57 OECDAverage 0 20 40 60 80 100 120 140 160 180 NIHCMFoundationdepictionofdatafromKoechlinF,LorenzoniLandSchreyerP.“ComparingPriceLevelsofHospital ServicesAcrossCountries.”OECDHealthWorkingPapersNo.53,July2010.

  13. Concentration of Health Care Spending in the U.S. Population, 2009 Percent of Total Health Care Spending (≥$51,951) (≥$17,402) (≥$9,570) (≥$6,343) (≥$4,586) (≥$851) (<$851) Note: Dollar amounts in parentheses are the annual expenses per person in each percentile. Population is the civilian noninstitutionalized population, including those without any health care spending. Health care spending is total payments from all sources (including direct payments from individuals and families, private insurance, Medicare, Medicaid, and miscellaneous other sources) to hospitals, physicians, other providers (including dental care), and pharmacies; health insurance premiums are not included. Source: Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey (MEPS), Household Component, 2009.

  14. Gap Between Revenue and Spending (Percent of GDP) Avg. Historical Spending (1970-2010): 20.8% Avg. Historical Revenues (1970-2010): 18.0% Note: Estimates based on CRFB Realistic Baseline. 15

  15. ABeneficiaryLifetimePerspective: Payroll Contributions < Expected Benefits $400,000 $357,000 $357,000 MedicareExpectedBenefits,Lifetime MedicarePayrollTaxes,Lifetime $350,000 $300,000 $250,000 $188,000 Female $200,000 Male $170,000 $150,000 $119,000 $100,000 $60,000 $60,000 $50,000 $0 Single,AverageWage Single,AverageWage One-EarnerCouple, One-EarnerWageCouple,AverageWage Two-EarnerCouple, Two-EarnerCouple,AverageWage Average AverageWages Source:SteuerleCEandRennaneS."SocialSecurityandMedicareTaxesandBenefitsOveraLifetime.”Washington,DC:TheUrban Institute.June2011.

  16. “Can’t anyone here play this game? • Polarization has made it impossible to reach a consensus on ACA’s future • Constitutional or unconstitutional? • Repeal it? • Replace it? • Continue it? • Improve it? • But first, let’s remember what it really does

  17. What does the ACA do about access and cost? 2700 pages in four bullets • Provides HI coverage to nearly all legal residents • Improves Medicare benefits • Begins to address workforce shortages • Pilots new ways of paying and delivering care

  18. The ACA at age 2 • 2.5 million young adults on parents’ plans • 50,000 adults enrolled in Pre-existing Conditions Insurance Plans • No child can be turned down or charged more for a pre-existing condition

  19. The ACA at age 2 • No-cost preventive/screening tests and risk assessment • Reduced prescription drug costs for seniors who fall into Medicare coverage gap • 50% discount on brand name drugs • Coverage gap phased out by 2020

  20. The ACA at age 2 • National Health Services Corps • Tripling of field strength: 10,000 clinicians serving 10.5 million patients, $900 million awarded to fourth year medical students • Redistribution of GME slots to primary care • Grants for primary care training programs • Training in community-based health centers • 10% Medicare primary care bonus (2011-15) • Medicaid PC pay parity (2013-14)

  21. The ACA at age 2 • Patient-centered Outcomes Research Institute • Comparative effectiveness research • Voluntary programs to organize care and pay for care differently • Center for Innovation • $10 billion in dedicated funding

  22. What is the CMS Innovation Center? Website: http://innovations.cms.gov/

  23. The Innovation Center: Comprehensive Primary Care Initiative (CPCi) http://innovations.cms.gov/initiatives/cpci/index.html

  24. In Brief: What is an Accountable Care Organization (ACO)?

  25. Because of the ACA, in just 20 months more months • 93% of all U.S. residents will have HI coverage • 16 million newly insured thru Medicaid • 16 million newly insured through subsidized private insurance • Guaranteed issue, renewability, modified community rating, essential benefits, no annual or lifetime coverage limits for all persons, without regard to pre-existing conditions Sources: www.healthcare.gov, Congressional Budget Office http://cbo.gov/sites/default/files/cbofiles/attachments/03-13-Coverage%20Estimates.pdf

  26. . . . just a (mere) two decades since ACP called for it! “A nationwide program is needed to assure access to health care for all Americans, and we recommend that developing such a program be adopted as a policy goal for the nation. The College believes that health insurance coverage for all persons is needed to minimize financial barriers and assure access to appropriate health care services.” Ginsburg, et al, American College of Physicians, Position Paper, Annals of Internal Medicine, May 1, 1990 www.annals.org/search?fulltext=ACP+universal+health+insurance&submit=yes&x=15&y=9

  27. Post-Reform: Projected Percent of Adults Ages 19–64 Uninsured by State What will be the ACA’s impact on coverage? 2009–2010 2019 (estimated) WA WA NH NH MT MT ME ND ME ND VT VT OR MN OR MN MA MA ID ID WI WI SD SD NY NY WY MI WY MI RI RI IA IA PA PA CT CT NE NE NJ NJ NV NV OH OH IN IN IL IL DE UT DE UT CO CA CO WV CA WV MD MD KS VA MO KS VA MO DC KY DC KY NC NC TN TN OK AZ OK AZ AR SC AR SC NM NM GA GA AL MS AL MS TX TX LA LA FL FL AK AK HI HI 23% or more 8%–13.9% 19%–22.9% 14%–18.9% Less than 8% Data:U.S. Census Bureau, 2010–11 Current Population Survey ASEC Supplement; estimates for 2019 by Jonathan Gruber and Ian Perry of MIT using the Gruber Microsimulation Model for The Commonwealth Fund. 28 Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.

  28. What might SCOTUS do? • Overturn individual insurance requirement (and related provisions), keep rest? • Overturn Medicaid expansion, keep rest? • Overturn individual insurance requirement and Medicaid expansion, keep rest? • Overturn entire law? • Affirm entire law?

  29. What happens if SCOTUS overturns the entire law? CHAOS !

  30. CHAOS ! • Health exchanges (in many states) likely will come to a halt • Reversal of rules on coverage for young adults, ban on discrimination against children with pre-existing conditions, ban on lifetime limits on coverage, medical loss ratio • How will insurers and employers react?

  31. CHAOS ! • No legal authority for: • No cost preventive services (Medicare, private insurers) • Medicare Part D drug discount • Medicare 10% primary care bonus • Center for Medicare and Medicaid Innovation (ACOs, Comprehensive Primary Care Initiative) • Redistribution of GME slots to primary care • Patient-Centered Outcomes Research Institute • National Health Services Corps (mandatory funds), Title VII primary care grants, other workforce programs

  32. What will this Congress do if the law is overturned? Most likely, nothing “All the king’s horses, and all the king’s men, couldn’t put Humpty back together again.”

  33. “Can’t anyone here play this game?” • The federal budget • Congress brought the country to the brink of default over increasing the debt ceiling • Budget Control Act of 2011 mandated $900 billion in discretionary spending cuts, enforced by caps, and $1.2 trillion in additional cuts

  34. Sequestration! • Failure of Congress’ “Super-Committee” will result in $1.2 trillion in savings being achieved through across-the-board cuts: • Cuts annual funding for non-exempt domestic discretionary programs by 7.8 percent (in 2013) to 5.5 percent (in 2021) • Cuts annual funding for defense programs by 10.0 percent (in 2013) to 8.5 percent (in 2021)

  35. CQ Today,Monday, November 28, 2011 How the Automatic Cuts Will Work 1 DETERMINE THE SIZE OF CUTS Evenly split each year’s cut between defense and non-defenseaccounts Total “triggered”cut $1.2trillion Distribute remaining $984 billion E Evenly among FY 2013-21 DefenseNon-defense $54.7billion*$54.7billion Subtract 18 percent in debt service savings $109.3 billion peryear 2 ALLOCATE CUTS ACROSS DEFENSE AND NON-DEFENSEACCOUNTS Discretionary Accounts DiscretionaryAccounts Mandatory Accounts all years Fiscal 2013 Fiscal 2014-2021 After exempting certain programs, Apply uniform percentage cuts to all accounts to achieve the required savings. apply a uniform percentage cut to all accounts to achieve the required savings. Medicare cuts cannot exceed 2 percent. Lower the statutory cap on total discretion- ary spending by the amount necessary to achieve the required savings Exemptions include: •SocialSecurity•Medicaid •Civilian and military retirement •Low-income assistance

  36. Sequestration means: • Across-the-board cuts in: • Public health and safety (CDC, FDA) • Health care access (HSRA, NHSC) • Research (NIH, AHRQ) • Physician workforce (HRSA, NHSC, AHRQ)

  37. On top of deep cuts . . . • 40 states decreased funding for programs to protect public health and safety • Since 2008, more than 49,000 state and local public health department jobs have been lost • Federal funds for state and local preparedness have declined by 38 percent from fiscal year (FY) 2005 to 2012 (adjusted for inflation)

  38. Even though Medicaid is exempted from sequestration . . . • Deep cuts at state level = reduced access for the poor • 18 states eliminated, reduced, or restricted benefits • 39 states restricted payments to physicians and other providers in FY 2011, and 46 states plan to do so in FY 2012 • Five states in FY 2011 and 14 states in FY 2012 increased copayments or imposed new copayments

  39. ACP’s alternative: • Sequestration cuts “should not stand” • Instead, a fiscally-and-socially- responsible framework to achieve hundreds of billions in savings • By addressing the real health care cost-drivers • While funding critical health programs

  40. ACP’s alternative: • Repeal the Medicare Sustainable Growth Rate (SGR) formula and transition to patient-centered payment models • Reduce the costs of defensive medicine • Promote high-value, cost-conscious care • Make structural entitlement reforms • Reform federal tax policy to encourage consumers to consider cost of health benefits

  41. “Can’t anyone here play this game?” • The SGR debacle: • Congress once again enacted a short-term “patch” • Despite promising that last year was going to be different!

  42. Promises, promises . . . “Unless we begin the process of developing a long-term solution, we will once again be faced with the unwanted choice of extending a fundamentally broken payment system or jeopardizing access to care for Medicare beneficiaries. We cannot let either happen.” House Energy and Commerce Committee, March 28, 2011 letter to physician membership organizations, including ACP

  43. So what happened? • Medicine answered the call by offering proposals to end the SGR and transition to new models • Urged that SGR repeal and payment reform be included in a comprehensive deficit deal • Congress passed two extensions, one through 2/29/12, and another through 12/31/12 • Will result in another scheduled cut of 27% on 1/1/13!

  44. Health care and the 2012 elections • Elections likely to increase polarization and confrontation • Voters should ask three essential questions of the candidates, Republicans and Democrats

  45. Questions for Republicans • If the ACA is repealed, would you keep any of its programs? Which ones? • How would you increase access to health insurance, address the shortage of primary care physicians, and reduce costs? • If states should be responsible instead of federal government, how would you address unequal resources and the considerable variation among states in the percent of residents with HI? www.acponline.org/advocacy/events/state_of_healthcare/republican12.pdf

  46. Leave it to the states? • 5% of MA residents were uninsured (lowest) compared to 25% in TX (highest) • WY: only 42.4% of employers offered HI(lowest) compared to 87.4% in HI (highest) • MS: more than 20% live in poverty (highest) compared to 7.1% in NH (lowest) Kaiser Family Foundationwww.statehealthfacts.org/comparecat.jsp?cat=3&rgn=6&rgn=1 Census Bureau, www.census.gov/hhes/www/poverty/data/incpovhlth/2010/tables.html

  47. Questions for President Obama and Democrats • What changes would make in the ACA to address concerns it gives too much control to government, and doesn’t do enough costs? • What policies would you advocate to reform Medicare and Medicaid and reduce entitlements spending? • What policies would you support to reduce the costs of defensive medicine? www.acponline.org/advocacy/events/state_of_healthcare/democratic12.pdf

  48. The elections and ACP’s priorities www.acponline.org/advocacy/election_2012/

  49. New resource for members! At a glance summaries of ACP policies, www.acponline.org/advocacy/where_we_stand/policy/

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