How To Talk To Business About Health Care Reform

1. How To Talk To Business About Health Care Reform November 3. 2007

2. Major Concepts • We have no system coordinating access, cost containment or financing of services and care • Most health care costs are fixed • Few using it at any one time but all of us want it be there • We are already paying the whole bill which is more than enough to assure us all coverage for comprehensive care

3. The American health care system is neither healthy, caring, nor a system… Walter Cronkite

4. The Basics • Rising health care costs are the root of most of the problems in health care • Most costs arefixed whether health care is used or not • Other countries cover everyone, have more services, higher quality and live longer yet spend far less than we do • We are already paying thewhole bill • You can’t hold down costs without a system!

5. National Health Spending:Per Person Actual Projected Per capita expenditures Source: Centers for Medicare & Medicaid Services

6. National Health Spendingas a share of Gross Domestic Product Projected Actual Percentage GDP Source: Centers for Medicare & Medicaid Services

7. Japan Has a $1400 competitive advantage on every car they sell $/Car Source: Modern Healthcare 10/24/05: 14

8. Where is the money going?

9. U.S. Health Expenditures 2004 $1.9 trillion 30% Source: Centers for Medicare&Medicaid Services

10. U.S. Health Expenditures 2004 70% spent on services & infrastructure Source: Centers for Medicare&Medicaid Services 30%

11. Health Care Infrastructure:Enough to serve all Americans 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 Source: National Center for Health Statistics

12. Most of the money is spent on a few people in any one year 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

13. Important Question: • Whose responsibility should it be to pay for the health care services we all expect to be there should we need them?

15. 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 • It is much more cost effective to invest in only what we need.

16. How do wePAYfor health care?

17. 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)

18. If you were in an insurance company CEO, who would you want to insure? 73% Percent of health Care Expenditures 13% 6% 4% 0% 0% 0% 1% 1% 2% Source:Agency for Healthcare Research and Quality MEPS, 1999

19. Most of the money is spent on a few people in any one year 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

20. If you were in an insurance company CEO, who would you want to insure? 73% 80% uses less than $1000 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

21. Administration is the Fastest Growing job in Health Care Source: Bureau of Labor Statistics and NCHS

22. 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

23. Health Insurance Costs Keep Rising

24. Fewer Firms Are Offering Insurance…

25. 47 MillionUninsured

26. THE COST OF CARE CREATES HEALTH PROBLEMS AS WELL AS FINANCIAL PROBLEMS • In nearly 3 in 10 (29%) households, someone skips a medical treatment, cuts pills, or does not fill a prescription because of cost • Nearly 1 out of 4 (23%) Americans have problems paying medical bills • More than 1 in 5 (21%) Americans had an overdue medical bill at the time of a 2004 survey • 1 million people experience medical bankruptcy each year Health Care Costs Survey, USA Today/Kaiser Family Foundation/Harvard School of Public Health, August 2005; D. Himmelstein et al, Health Affairs, 2005

27. 18,314 Die Every Year Due to Lack of Health Insurance • More than six times the number of soldiers killed in Iraq • Equal to a 747 jet crash every week • More than 6 times the number who died on September 11th Source: Care Without Coverage;Institute of Medicine,2002

28. 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

29. 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

30. Do we really have the best health care in the world?

31. We spend twice as much on health care as other nations do $ Per person OECD, 2006. Data for Japan is an estimate

32. US Health Costs Rise Faster than Other Countries’ Costs Source: Health United States 2005, Natl. Center for Health Statistics

33. We pay higher taxes OECD, 2006 & Health Affairs 2002; 21(4): 99

34. 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

35. We are one of the Youngest Populations in the Industrialized World OECD, 2006 (2003 Data)

36. Fewer Americans Smoke Compared with Other Nations OECD, 2006 (2003 Data)

37. We Drink Less Alcohol OECD, 2006 (2003 Data)

38. But… We Don’t Live as Long OECD, 2006 (2003 Data)

39. More Babies Diein the U.S. in the first year of life OECD, 2006 Data are for 2004 or more recent year available

40. Our Quality is Not the Best in the world Survival Rates for 5 Countries Source: Health Affairs Vol 23:#3 , 2004

41. Continuity of Care Commonwealth Fund Survey, 1998

42. How hard is it to get care? Commonwealth Fund Survey, 1998

43. We Do an Average Number of Bone Marrow Transplantsper million people OECD, 2006 (2003 Data)

44. We Do More Heart Transplantsper million people OECD, 2006 (2003 Data)

45. We are Average in Number of Renal Transplants (2001/2002) Transplants/million population OECD, 2004

46. 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

47. We Do Fewer Hip Replacements Procedures per 100,000 population 197 Source: OECD 2006 Data are for 2004 or most recent year available

48. Other Industrialized Countries • Availability of expensive technology • Rising drug costs • Have similar demographics • Similar levels of service Why are their costs so much lower?

49. 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

50. Fundamental Features of a True Health Care System • Everyone included • Public Financing • Clear accountability • Public Stewardship • Budget Process