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US Health Care System: Its impact on your future practice and patients. Nancy Cooper Coordinator, Health Policy Fellowship February 21, 2014. What’s the problem?. Medicine is the #1 industry in the US We have the best Technology Infrastructure Medical schools Physicians.

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us health care system its impact on your future practice and patients
US Health Care System:

Its impact on your future practice and patients

Nancy Cooper

Coordinator, Health Policy Fellowship

February 21, 2014

what s the problem
What’s the problem?
  • Medicine is the #1 industry in the US
  • We have the best
    • Technology
    • Infrastructure
    • Medical schools
    • Physicians
what s the problem cost
What’s the Problem? COST

“ We are trying to fill infinite need with finite resources”

Richard Lamm

Former Governor of Colorado

what s the problem cost1
What’s the Problem? COST
  • $2.6 Trillion in 2010 – over $8,400 per person
  • 5% of patients account for half total spending

Cohen and Uberoi. Differentials in the Concentration in the Level of Health Expenditures across Population Subgroups in the U.S., 2010. AHRQ/HHS. August 2013

CMS Office of the Actuary 2011 & Kaiser Family Foundation report, Health Care

the us government is an insurance company with a large army
“The US Government is an insurance company with a large army”

White House Office of Management and Budget 2010

slide7

Half of all children born after 2000 will live to be 100

One in three will develop Type II diabetes

The Lancet Oct 1, 2009 and National Diabetes Fact Sheet, Jan 26, 2011

what s the problem quality
What’s the Problem? QUALITY
  • Emphasize acute care over wellness and prevention
  • Fee for service payment

encourages quantity over quality

  • Health disparities among

racial and ethnic minorities

  • Outcomes are poorer than countries which spend much less
inefficient and expensive
Inefficient and Expensive

"In the United States today, we give you all the care you can afford, whether or not you need it, as opposed to all the care you need, whether or not you can afford it."

Arthur Kellerman, MD, MPH, Emory Medical School

slide10

Understanding the US Health Care System(s):

Evolution or Intelligent Design?

access to insurance equals access to care 250 million americans
Access to Insurance Equals Access to Care 250 Million Americans

50%

Private Insurance

Employer-based group insurance

or

Single policy

or

Out of Pocket

slide12

50% State and Federal Government Insurance

Medicare (elderly)

Medicaid (destitute)

Children’s Health Insurance Program (CHIP)

Veterans Affairs

Indian Health Service

Federal Employees Health Benefit Program

safety net for 60 m uninsured underinsured
Safety Net for 60 M Uninsured/Underinsured

Urban Institute: Health Care Spending Under Reform: Less Uncompensated Care and Lower Costs to Small Employers 1/2010

http://findahealthcenter.hrsa.gov/Search_HCC.aspx

  • Emergency rooms
  • Public hospitals
  • Federally Qualified Health Centers (FQHCs) 145 OR
  • Migrant worker health centers

$61 B per year in uncompensated care

private insurance group
Private InsuranceGroup

Employer-sponsored benefits cover 59%

  • Ave. cost around $15,745 family of four
    • Employee pays about $4,316
    • Tax-free benefit
  • Down side?
      • Lose your job, lose your insurance
      • Health care costs impact profits
  • Costs have risen 97% over the past ten years

Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2002–2012

private insurance individual
Private InsuranceIndividual
  • Individual policies for self and small employers
    • $15,000 for individual – after tax dollars
    • Harder to get: exclusions and higher prices for pre-existing conditions
  • States control insurance regulations
    • Mandates impact cost
    • Wide variation in benefits covered: 13 in ID and 70 in VA)
      • 28 services mandated in Oregon
    • Guaranteed issue – no exclusions in NY, NJ, ME, MA, VT
    • Community rated – everyone pays same rate in NY, NJ, ME, MA, VT

Kaiser Family Foundation 2012

http://www.cbs.state.or.us/ins/sehi/mandated_health_provisions.pdf

government insurance 1 2 trillion
Government Insurance$1.2 Trillion
  • Health and Human Services
    • Medicare (Entitlement >65)
    • Medicaid (Eligibility - poor)
    • CHIP (Eligibility – near poor kids)
    • Indian Health Service
  • Veterans Affairs/TriCare
  • Federal Employee Health Benefits Program (FEHBP)
health and human services
Health and Human Services

$880 billion budget

Medicare $524 B

Medicaid $243 B fed$

Total CMS $ 767 B

www.hhs.gov

Kaiser Family Foundation 3/17/11

medicare centers for medicare and medicaid services cms
Medicare Centers for Medicare and Medicaid Services (CMS)
  • Serves 47 million people over age 65
    • >1 million in AZ
  • Four Parts
    • Part A: Hospital costs
    • Part B: Physician Services
    • Part C: Medicare Advantage
    • Part D: Rx

www.hhs.cms.gov

Kaiser State Health Facts/Medicare/Oregon. Accessed 10/13

centers for medicare and medicaid services cms
Centers for Medicare and Medicaid Services (CMS)
  • Also pays $9B for Graduate Medical Education (GME)
    • – med school enrollment increasing but cap on federally-funded residency slots
happy birthday boomers
Happy Birthday Boomers!

"You’ve got . . . 10,000 new seniors, baby boomers, becoming eligible for the entitlement programs" . . . everyday for the next 18 years.

Rep. Cantor, R-VA

House Majority Leader

Representative Eric Cantor, April 27, 2011, PoliticFact, Richmond Times Dispatch 4/27/11

slide22

The Silver Tsunami

. . . Enrollment will increase from 47 million to approx 74 million – number of beneficiaries over age 80 will triple.

Congressional Budget Office 2/1/12

medicaid center for medicare and medicaid services cms
MedicaidCenter for Medicare and Medicaid Services (CMS)

3 out of 5 kids are born on Medicaid

  • Health care for 60 million eligible poor > 133% FPL
    • Pregnant women, children, moms
    • Medically needy (aged, blind, disabled) and nursing home care
    • 1.5 million in AZ (2010)
  • $343 billion per year –
    • 2/3 is federal match (FMAP)
    • 1/3 paid by states

Kaiser State Health Facts/2009 data

medicaid s fiscal challenges
Medicaid’s Fiscal Challenges

Takes up >25% of most state

budgets

Increases in unemployment = increases in eligibility (but decreased state revenue)

Fairly generous benefits (mental health, dental and vision) but access problems due to low reimbursement

politics affect policy
Politics Affect Policy
  • Separation of powers
  • Senate and House: Checks and balances
    • Reactive rather than proactive
    • Compromisethe key to passing policy
    • Congress is currently highly partisan
    • Change is slow and incremental
slide29

Even Congress Hates Congress

Approval rating: 9%

“It’s so bad sometimes I tell people I’m a lawyer,” Senator Lindsey Graham (R-S.C.). “I don’t want to be associated with a body that in the eyes of your fellow citizens seems to be dysfunctional.”

“We’re below sharks and contract killers,” added Rep. Trey Gowdy (R-S.C.).

Politico, October 26, 2011/January 2012

limited resources affect policy
Limited Resources Affect Policy

US Government Income and Outlay, based on historical tables from the White House Office of Management and Budget (Table 1.1). *2012 is estimated by OMB. http://www.whitehouse.gov/omb/budget/Historicals

change is painful and slow
Change is painful and slow

“I love change except for the part about doing things differently” anonymous

“There is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order.”

Machiavelli Rule of Reform

slide33
1. Will the health reform law require nearly all Americans to have health insurance by 2014 or else pay a fine?
  • Yes
  • No
  • Don’t know
slide34
2. Will the health reform law allow a government panel to make decisions about end-of-life care for people on Medicare?
  • Yes
  • No
  • Don’t know
3 will the health reform law cut benefits that were previously provided to all people on medicare
3. Will the health reform law cut benefits that were previously provided to all people on Medicare?
  • Yes
  • No
  • Don’t know
slide36

4. Will the health reform law expand the existing Medicaid program to cover low-income, uninsured adults regardless of whether they have children?

  • Yes
  • No
  • Don’t know
slide39

5. Will the health reform law provide financial help to low and moderate income Americans who don't get insurance through their jobs to help them purchase coverage?

  • Yes
  • No
  • Don’t know
slide40
6. Will the health reform law prohibit insurance companies from denying coverage because of a person's medical history or health condition?
  • Yes
  • No
  • Don’t know
slide41
7. Will the health reform law require all businesses, including small businesses, to provide health insurance for their employees?
  • Yes
  • No
  • Don’t know
slide42
8. Will the health reform law provide tax credits to small businesses that offer coverage to their employees?
  • Yes
  • No
  • Don’t know
slide43
9. Will the health reform law create a new government run insurance plan to be offered along with private plans?
  • Yes
  • No
  • Don’t know
slide44
10. Will the health reform law allow undocumented immigrants to receive financial help from the government to buy health insurance?
  • Yes
  • No
  • Don’t know
health care system before the aca
Health Care System: Before the ACA

Dual Eligibles

Retiree Benefits

Medicare

65

Health Care

“On Demand”

Employer- Provided Managed Care

Underinsured

Medicaid

Uninsured

Age

18

CHIP

Very Poor

Near Poor

Work. Poor

Middle Class

Upper-Mid Class

Very Rich

Income

Adam Sheingate, Professor, John Hopkins University Political Science Department, August 2012

health care system after aca
Health Care System: After ACA

Dual Eligibles

Retiree Benefits

Medicare

65

Health Care

“On Demand”

Employer- Provided Managed Care

HealthExchanges

MedicaidExpansion

Uninsured

Underinsured

Medicaid

Age

Circa 2012: Medicaid Exp.,

Health Exch.

18

CHIP

Very Poor

Near Poor

Work. Poor

Middle Class

Upper-Mid Class

Very Rich

Income

Adam Sheingate, Professor, John Hopkins University Political Science Department, August 2012

good news for the uninsured
Good News for the Uninsured
  • Cover up to 35 million more people
    • Individual Mandate (SCOTUS considers the fine a “tax”)
    • Employer Mandate
    • Insurance Regulation
      • Kids covered on parents policy to age 26
      • No exclusion for pre-existing conditions
    • Health Insurance Exchanges and subsidies
    • Changes to Medicaid
      • State can choose to include

adults > 137% of FPL

good news for seniors
Good News for Seniors

Fill in donut hole in Medicare Rx

Reduce Hospital readmissions

Reduce Medicare premiums

Increase Medicare preventive services

Increase access to

Medicaid services

Increase access and

quality for dual eligibles

carrots and sticks for providers
Carrots and Sticks for Providers
  • Accountable Care Organizations responsible for quality and costs; can earn “shared savings”
  • Incentive payments for Patient Centered Medical Home
  • $44,000 bonus payment for adoption and “meaningful use” of HIT
  • 10% bonus to primary care physicians and surgeons working in Health Profession Shortage Areas (HPSAs)
  • Cut reimbursement to Medicare providers
  • No payment for preventable readmissions
  • Reduce payment updates for hospitals, home health and SNFs
  • Value-based purchasing performance and quality
  • Bundled payment for an episode of care
  • Cut reimbursement to Medicare Advantage (MA) plans
  • Independent Payment Advisory Board to reduce rate of spending
get involved
Get Involved
  • Invite speakers on key issues
    • AOA Dept Gov. Relations
    • AACOM Dept Gov. Relations
    • Former HPF and TIPS Fellows
  • Educate yourself
    • Monitor, analyze and advocate for issues
  • Educate elected officials about key issues
  • Attend DO Day on the Hill – or Visit State Capitol
  • AACOM Health Policy Internship
  • Training in Policies Studies Program OGME II and III