Reform US Healthcare

―There are some things even God doesn’t understand. That’s why He created politicians.‖ NPAG 2007 Hyatt Regency Chicago September 23, 2007 Reform U.S. Health Care … Or Else! talking-head-in-chief health-politics.com Jeanne Scott Jeanne Scott’s Not Very Sophisticated Guide to the Politics of the United States of America Liberals • Unions •Hard working people who believe in bad luck • Rich People from Hollywood •Macrobiotics and Vegans The Great ―Unwashed‖ Middle •Markets fuel growth •Americans believe in fairness not equity •Inspire don’t conspire •Willingness to change and innovate •A Call for Sacrifice Conservatives • Social Conservatives •Hard working people who don’t believe in bad luck •Rich People (NonHollywood) •Pro Life Advocates •Pro Choice Advocates •And assorted left wing wackos, including but not limited to: hippie scum, treehuggers, philanderers, reprobates, left leaning columnists, and outright communists. •And assorted right wing wackos, including but not limited to xenophobic talk show hosts and their followers and a small number of powerful members of the NRA who exercise disproportionate power Change: As Viewed By Each Liberals • Access is the priority The Great ―Unwashed‖ Middle •Delivery system reform is the priority Conservatives •Over-insurance is the problem • Cost control through wrestling for resources: top down budgeted and even price controls •Discounted FFS as payment •Hamster Care that is cheaper •Nothing wrong with the delivery system just need to get people access to it •Increase HDHP • Expand Consumer engagement •Hamster care •Nothing wrong with the delivery system as long as consumers are willing to pay for it •Transparency of BOTH cost and quality •Value Purchasing to exploit the variation in cost and quality •Capitation/P4P/ Reimbursement Reform •Delivery system can and should be completely reengineered Rising Health Insurance Costs 20 18 16 14 12 10 8 6 4 2 0 Changes in Health Insurance Premiums Compared to General Inflation and Average Employee Earnings Premiums Inflation Earnings 19 88 19 89 19 90 19 93 19 96 19 99 20 00 20 01 20 02 20 03 20 04 Source: Kaiser Family Foundation 20 05 20 06 Outsourcing of Health Care ??? • Outsourcing is no longer limited to blue collar industrial and back-office white collar jobs • Software development and programming • Accounting and legal services • Health care claims processing (Northern Ireland, the Philippines) • And the latest new developments: – Medical transcription – Radiology and other telemedicine services – Sending patients to India and other Asian locations for surgeries and specialty services, (already an option under the British NHP) – Blue Cross-Blue Shield of South Carolina offering ―overseas‖ option to members and marketing nationwide – Blue Shield of California, HealthNet offering ―Mexican‖ HMOs I took the above masthead from a web site -Companion Global Healthcare – a subsidiary of Blue Cross-Blue Shield of South Carolina. •Companion Global Healthcare in the News: •Overseas Option for S.C. BlueCross Members Featured on NBC Nightly News - May 16, 2007 •Companion Global Healthcare, Doctors Care Reach Agreement for Aftercare Services - May 10, 2007 •BlueCross BlueShield of South Carolina and BlueChoice HealthPlan Pioneer Global Healthcare Alternative - February 8, 2007 ―Rising medical costs are taking a toll on the auto industry’s bottom line and ultimately are threatening American manufacturers' ability to compete in the global marketplace. Congress needs to apply some serious medicine to address the nation's severe health care problems.‖ -- General Motors chairman and CEO G. Richard Wagoner Jr. Michigan indicates that 27% of employers surveyed wouldAs theto eliminate health like employee share of the care coverage cost has increased, people for their employees entirely. 85% are starting thebecome more said that to employee share will have to aware of the actual cost go up by 50% or more. Health care insurance, once an employment benefit taken virtually for granted, has become a bed-rock issue in today’s University of A new study from the American industrial labor-management environment. of health care – and increasingly are seeing the cost of health care insurance as a critical political issue – one upon which they will make a voting decision. "I fear that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver." "Congress in the future will Alan Greenspan: November 25, 2005 have to weigh the benefits of continued access, on current terms, to advances in medical technology against other fiscal initiatives." Dire Warnings from the Comptroller General "I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan but our own fiscal irresponsibility." "I'm going to show you some numbers…they’re all big and they’re all bad." David Walker, Comptroller General of the United States ―[Boomers will] be eligible for Medicare in just three years and when those boomers start retiring en masse, then that will be a tsunami of spending that could swamp our ship of state if we don't get serious." "You know the American people, I tell you, they are absolutely starved for two things: the truth, and leadership." "Any politician who tells you that we can solve our problem without reforming Social Security, Medicare, and Medicaid is not telling you the truth." Gosh Darn All Those Pesky Uninsured People… 44.6 Million ―officially‖ uninsured in 2006 (9.5M of which are children) 2007 Consumers Report Estimate: 60+ Million Underinsured 40% of Americans with no or in adequate health insurance… Never Fear, the Answer is Simple: ―ALL AMERICANS HAVE ACCESS TO HEALTH CARE. AFTER ALL, YOU JUST GO TO AN EMERGENCY ROOM!‖ - GEORGE W. BUSH, Cleveland, Ohio, August, 2007 • The States Aren’t Waiting: • Texas – 29 Industrialized Nations, 28 With NHI – EMTALA-Driven Uncompensated Care/Emergency Room Crisis – 37th Ranking in World – 15.9% GDP – Movement Away From Employment-Based Coverage Oregon, Maine, New Hampshire, California I, Maryland, Massachusetts, California II, Pennsylvania, Illinois, California III, Wisconsin, S-CHIP REAUTHORIZATION DEBATE •This month, the Senate Finance Committee Approved 5-Year $60 Billion Increase to be Financed by 61¢ Tobacco Tax Increase –Pay-Go Rules Apply –Importantly, GOP Senators Hatch and Grassley Took the Lead In pushing This Through Democratic-Controlled Finance Committee •Would Fund Care for Children (but no additional adults) in Families Up to 400% of the Poverty-Level –(About $81,000) •House Version Calls for $50 Billion Mostly Financed Through a Smaller Tobacco Tax and Cuts in Payments to Medicare Advantage Plans •The White House Announced it Would Veto any Such Increase Caring for the ―uninsured‖ is estimated to cost $115 Billion in Transferred Costs to other Payers and Bad Debt… how many would that same $115 Billion cover in a better system? Uninsured 46.8M (16%) Employer 153.7M (52%) Medicaid/ SCHIP 37.5M (13%) Dual Eligible 8.0M (3%) Medicare 31.9M (11%) TriCare 3.4M (1%) Private Employer Non-Employer Retiree 9.5M 3.3M (3%) (1%) This is How Americans Currently Get Their Healthcare Insurance Per Capita Health Expenditures, U.S. and Selected Countries, 2003 Health Expenditures as a Share of GDP, U.S. and Selected Countries, 2003 Inflation-Adjusted Physician Income is Decreasing Across The Board SOURCE: Center For Studying Health System Change Community Tracking Study #15 June 2006 Quality Shortfalls: Getting it Right 50% of the Time Adherence to Quality Indicators Breast Cancer Prenatal Care Low Back Pain Coronary Artery Disease Hypertension Congestive Heart Failure Depression Orthopedic Conditions Colorectal Cancer Asthma Benign Prostatic Hyperplasia Hyperlipidemia Diabetes Mellitus Headache Urinary Tract Infection Ulcers Hip Fracture Alcohol Dependence 0% 75.7% 73.0% 68.5% 68.0% 64.7% 63.9% 57.7% 57.2% 53.9% 53.5% 53.0% 48.6% 45.4% 45.2% 40.7% 32.7% 22.8% 10.5% 20% 40% 60% 80% 100% Adults receive about half of recommended care 54.9% = Overall care 54.9% = Preventive care 53.5% = Acute care 56.1% = Chronic care Not Getting the Right Care at the Right Time Percentage of Recommended Care Received Source: McGlynn EA, et al., ―The Quality of Health Care Delivered to Adults in the United States,‖ New England Journal of Medicine, Vol. 348, No. 26, June 26, 2003, pp. 2635-2645 Quality of Care Today: We are Worse than Shaq from the Line 1,000,000 IRS Phone-in Tax Advice 100,000 Phil Mickelson putting from 6 feet Defects per million 10,000 Overall healthcare Quality in U.S. (Rand Study 2003) Airline baggage handling US Airline flight fatalities/ US Industry Best of Class High Reliability 1,000 100 Shaq Free-throws 10 Fair Reliability 1 ∑ Sources: Courtesy A. Milstein modified from C. Buck, GE; Dr. Sam Nussbaum, Wellpoint; & Mark Sollek, Premera Reported October 30 that several hospitals have hired airline pilots to explain safety procedures and processes to their staff International Obesity 2003 Percent of Population over 15 with BMI >30 United States United Kingdom Hungary Canada Germany Iceland Poland Netherlands France Italy Switzerland Korea BMI >30 0 5 10 15 20 25 30 35 Source: OECD, 2005 Obesity Drivers • We are eating more (duh!) • We are eating out more (In 1970 34% of the food budget was consumed outside the home in late 1990s it was 47%) • Everything is supersized at home and at McDonalds • We stopped smoking • We are all working too much especially women • We don’t exercise enough because we are all working too much • The only people who are exercising and eating right are people who were thin in the first place or bulimic celebrities or rich people who don’t work or French fashion models Obesity is an Illness The Future of Health Care Fat People Meet Skinny Benefits Consumer Responsibility: Arguments For and Against • • • • • For Consumers insulated from the cost of care If they had to pay they would use it less If they had to pay they would take more responsibility Consumers should have the right to choose When consumers choose and pay the market is working Against • The 5/55 Problem • One day in an American hospital and consumers exceed maximum deductible, so • Catastrophic coverage is a green light for esoterica • Does it save money overall? • Poor people with chronic illnesses will be disproportionately affected Across the board, HDHP consumers have more compliance problems Treatment compliance problems All Privately Insured* % Had a specific medical problem but did not visit a doctor Took a medication less often than I should have Did not fill a prescription Did not receive a medical treatment or follow up recommended by a doctor Did not get a physical or annual check-up Took a lower dose of a prescription than my doctor recommended * Currently insured in employer-sponsored or self-purchased plan ** Currently enrolled in high deductible health plan All HDHP** % 17 14 15 17 19 15 33 29 28 28 25 19 The Good, the Bad and the Ugly of Non-Compliance • The Good: Unnecessary care is foregone • The Bad: You don’t take the Lipitor and it hurts in the long run • The Ugly: You don’t take the asthma medication you go to the ER Internet Information is ALWAYS Helpful ELECTRONIC HEALTH RECORDS HAVE LIMITED EFFECT ON QUALITY OF CARE, STUDY FINDS • "In clinic visits in which doctors did use and didn't use electronic health records, we didn't find clear evidence that EHR use was associated with better quality." • "There's nothing magical about electronic health records. You need to have tools in place that take advantage of technology to show improvements in quality. You need to do additional work instead of just turning on the computer." -- Dr. Jeffrey Linder, at Boston’s Brigham and Women’s Hospital, study co-author Voters View of Health Care Will Health Care Be a Political Issue in 2008? Dates 6/811 NBC/ WSJ Iraq 5/31 -6/5 KFF 5/18 -23 CBS/ NYT Iraq 4/2629 NPR 4/2326 Gallup 4/2023 Harris 4/2023 NBC/ WSJ Iraq 4/1315 Gallup/ USA Today Iraq 4/912 CBS 3/9-4/1 Org. DIAGEO #1 Issue Iraq Iraq Iraq Iraq Iraq Iraq Health Care Rank 2 2 5 2 2 2 2 3 3 2 Surveys included open-ended and list-style questions about priorities for government to address, issues for candidates to discuss, most important problems facing the nation, and most important issue to your vote. Thinking About the 2008 Presidential and Congressional Elections, Which Issues Do You Most Want to Hear About From the Candidates? Four Scenarios for US Health Care 2007-2017 Tiering of Healthcare: ―Tiers Я’ Us‖ Minor Delivery System Reform Jeanne’s Odds: 3-2 Disruptive Innovation: ―Wal-Martization‖ of Health Care Jeanne’s Odds: 5-1 Major Delivery System Reform Bigger Government by Request: ―Daughter of Single-Payer‖ Jeanne’s Odds: 2-1 Mostly or Almost Universal Health Care Jeanne’s Odds: 4-1 Scenario 1: Tiers Я’ Us • SUVing of health care • CDHC (Consumer-Directed Health Care) and HDHP (High-Deductible Health Plans) • Continued disparities and tiers • High end providers do well, low end suffers • Probability over 10 years: 40% The Bush SOTU 2007 • Using Tax Policy to Address the Uninsured – Families buying individual insurance could deduct up to $15,000 of the costs, regardless of the cost to them – Families with employment-based insurance would be taxed on the value of that insurance in excess of $15,000 – Amounts would be indexed to inflation but not to increases in health costs • (thus encouraging people to buy low-cost, highdeductible coverage) President Bush Puts His Eggs in the Health Savings Account Basket Expand Health/Medical Savings Accounts: Allow Individuals and Families to Set Aside as Much as $5,150 a Year, Tax Free Bush’s FY2007 Budget would increase the allowable amount to $10,300 Scenario 1: Tiers Я’ Us: Impact on Health Care System • Health Plans – – – – Move toward HDHP and CDHC Sell whatever anyone will buy But always experience rate Rising numbers of uninsured and underinsured • Providers – Well-heeled, well situated, well run providers continue to thrive and distance themselves from the pack on quality, safety, and service (one third) aided by P4P – Basket cases that deal with the poor and the lower middle class – A health system for the top third Scenario 2: Bigger Government by Request • Baby-Boomer backlash against costshifting • Democrats run on shoring up and expanding Medicare for middle aged and elderly • Government regulates health care even more • Slowing innovation, reducing provider payment, and limiting profiteering • Probability over 10 years: 30% Hillary-care; Giuliani-care; Obamacare; McCain-care; etc.; etc. Would-be, Wanna-be, Could-be, Might-be 2008 Presidents are falling over one another in proposing health plans for Americans Democrats see this as ―their‖ issue What the Democrats are Saying… • Hillary Clinton: – Require employers who do not purchase private health insurance for their employees to pay into a pool for a Medicare-for-all-type plan – Emphasize computerized medical record-keeping – Implement ―purchasing initiatives‖ to reduce drug prices – Emphasize prevention of disease – Reform the private insurance market by prohibiting insurers from declining coverage based on pre-existing conditions (―guaranteed issue‖) – Reduce national health care spending by $120 billion/year – Universal coverage wouldn’t be achievable until near the end of her second term ―I’m battle-scarred but ready to take on the issue.‖ What the Democrats are Saying… • Barack Obama: ―The public will judge my presidency by what I do for healthcare.‖ – Promises to deliver ―universal‖ healthcare by the end of his first term – Employer Mandate: ―Play or Pay,‖ provide employee health insurance or pay a tax – No individual mandate (unlike other Democrats and ―Romney as Governor‖ and Schwarzenegger) – Creates a National Health Insurance Exchange to monitor insurance companies in offering the coverage. In essence, Obama's plan retains the private insurance system but injects additional money into the system to pay for the expanded coverage – Expand S-CHIP and require all children to be covered – Allow states to continue to experiment with health care reform initiatives – Reduce costs through computerized records, reimportation of drugs and greater use of generics, emphasizing prevention – Raise taxes on those making more than $250,000/year to pay for the estimated $50-65 billion cost What the Democrats are Saying… • John Edwards: ―Any politicians who say they can provide universal health care and other promises while ending the federal deficit are not being honest.‖ – Medicare+ plan for all Americans, but not necessarily a ―singlepayer‖ plan; that will be decided by giving everyone a choice – Promote competition between private insurers and government – ―Pay or play‖ system for employers, provide employee health insurance or pay a tax – Establish ―regional purchasing pools‖ to enable consumers to bargain for lower premiums – Require insurers to pay out at least 85% of premium income in benefits, i.e., ―minimum loss ratio‖ – ―Cost containment‖ (hmm, does this mean more regulation?) – Will raise taxes on those making more than $200,000/year to pay for the estimated $90-120 billion cost of his plan What the Democrats are Saying… • Bill Richardson: ―The cornerstone of my plan will be to allow all Americans to buy the same coverage as Congress.‖ – Expand Medicare, allowing those 55 and older to ―buy in‖ – Allow working families to buy coverage through FEHBP (the same plan as Congress) – Impose an ―individual mandate‖ – Mandate that private insurers accept all (―guaranteed issue‖) – Refundable health insurance tax credits to all based on income – Streamline existing regulatory system and expand health I.T. – Establish a ―cooperative relationship" between individuals, businesses and states "catalyzed by the government" – ―Heroes Health Cards‖ for military veterans to improve their care – Cap interest payments on credit card medical debt – No need to raise taxes, his plan will be financed through savings by ―getting out of Iraq‖ and reducing military spending. What the Democrats are Saying… • Christopher Dodd – Create a ―Health Care General Fund‖ (HCGF) with employers having a a ―play or pay‖ mandate, exempting employers of 10 or fewer employees – Individual mandate, for those without employer health insurance, buying from HCGF at a price based upon their income – Expand Medicaid and cover all children up to 300% of poverty level – Encourage ―chronic disease management‖ using clinical information technology – Allow nurses to unionize even if they have supervisory responsibilities (Senator from Connecticut): What the Democrats are Saying… Joe Biden Senator from Delaware – Expand health insurance for children and relieve families and businesses of catastrophic health care expenses – Support states pursuing alternatives and experimenting with ―universal‖ coverage plans – Use the experience of these states to develop a national universal health system What the Democrats are Saying… • Dennis Kucinich (Congressman from Ohio): – Sponsor of HR 676 that would establish a single-payer universal health care plan for all Americans called the United States National Health Insurance Plan completely funded by taxes and run by the government But a few Republicans are also talking health care… But one can’t run… The Gubernator Gov. Arnold Schwarzenegger (R. Calif.) • employers with 10 or more employees would have to offer health insurance for workers or pay a fee of 4% of payroll to a state pool that would help workers purchase coverage, with the amount that they pay based on income • employees could pay for health insurance with pretax income • health insurers would be required to sell policies to all state residents, regardless of whether they have medical conditions • residents who refuse to obtain health insurance could face reductions in their state income tax refunds or have their wages garnished • Medi-Cal, the state Medicaid program, would be extended to all adults with annual incomes of as much as 100% of the federal poverty level and to children -- regardless of their immigration status -- in households with annual incomes of as much as 300% of the federal poverty level • additional subsidies would be available to help state residents with annual incomes of as much as 250% of the federal poverty level purchase health insurance The Gubernator • the proposal would increase by $4 billion reimbursements to health care providers under Medi-Cal • physicians would have to pay 2% of their revenues • hospitals would have to pay 4% of their revenue to help cover the cost of the program • the proposal would be financed in part with about $5 billion in federal matching funds that the state will receive as a result of restructured health care programs and with state funds currently used for charity care The Romney When He Was Governor Plan: Individual Mandate ―Healthcare for Everyone‖ • employers, most of whom already offer insurance, would be ―encouraged‖ to continue doing so voluntarily; Romney vetoed a Democratic proposal to ―tax‖ employers not offering health insurance • individuals who don't have insurance would have to sign on to one of two insurance pools – Commonwealth Care through which people of moderate income and small businesses could buy insurance from private insurers at a special rate. It would not be subsidized by the state. – Safety Net Care for residents with incomes up to 300% of the federal poverty level, which is $28,700 for a single person. Policies would have no annual deductible and would be subsidized by the state, with policyholders paying 1.3% to 5.8% of their income, or $2.30 to $32.31 a week, for an individual plan. • individuals who do not get insurance from their jobs or buy it through one of the programs would lose their personal tax exemption of $3,300 — worth about $175 for an average taxpayer — face withholding of their income tax refund, or if they get medical care, their wages could be garnished for payment The Romney as Presidential Candidate Plan: • Disavow mandate in his original Massachusetts plan • No mandates, individual or employer • • • • Phase-out employment-based insurance, all insurance should be individual Tax-incentives to encourage transition Encourage high-deductible, low cost insurance and encourage people to use less healthcare, thus reducing costs Allow the states greater freedom to experiment with alternative private sector initiatives, eliminating many insurance regulations that ―raise‖ costs, allow cross-state sales of health insurance The health care system requires a "paradigm shift" toward the individual health insurance market. Currently, about 17 million residents have individual health insurance, compared with about 175 million who have employer-sponsored coverage. Giuliani said that he opposes proposals to require all residents to obtain health insurance because government subsidies would be required for those who could not afford a policy, which in turn would drive up costs. • • • Phase-Out the U.S. ―Employment-Based‖ Health Care System Families eligible for $15,000 tax credit to buy individual health insurance Allow families to keep the difference of they buy less expensive plans Release Health Care Insurance from State Regulations and Mandates and Allow Cross-Border Purchases All Purchases of Health Insurance Would be TaxDeductible, Regardless of Whether They Were Purchased Through and Employer or Individually Block grants to states to encourage innovation, reduce health costs, enroll eligible uninsured and address ―adverse selection‖ issues Increase price and quality transparency Reform medical liability system Expand Health Savings Accounts Invest in Health I.T. to reduce errors and improve efficiency Rudy Giuliani • • • • • • • (former Governor of Arkansas) Mike Huckabee • Keep health care in the private sector • Improve private sector delivery system to rein in costs • Tax breaks and paid days off for employees who engage in ―healthy behavior‖ Sam Brownback Senator from Kansas •Establish price transparency throughout health system so that consumers, not government can make the decision (hmm, what about quality) •Insure ―freedom of choice‖ in health coverage so consumers can choose health coverage that is right for them, even across state lines •Create a lifetime electronic medical record, giving consumers control over its use to insure privacy Tom Tancredo (Congressman from Colorado) Photo taken from his official campaign web site • Enforce immigration laws and funnel savings into health care (exactly what ―savings‖ are these, Congressman?) • Provide access to lower cost insurance by establishing ―association health plans‖ for non-group covered citizens and legal immigrants • Provide national relief to the states to help cover the unemployed citizens and legal aliens (are we getting a message here Congressman about illegal immigration?) Not yet heard from: • Former Tennessee Senator, television and movie actor Fred Thompson has made no statements (as of August 15, 2007) on health care • Texas Congressman Ron Paul (a physician) has nothing on his web site on health care (www.ronpaul2008.com) • California Congressman Duncan Hunter has nothing on his web site on health care (www.gohunter2008.com) Already Out • Former Wisconsin Governor and Secretary of Health and Human Services Tommy Thompson (the other ―Thompson‖ who based on his DHHS tenure may really have had something to say. Tommy, we hardly knew ya’) Scenario 2: Bigger Government by Request: Impact on the Health Care System • Health Plans – Plans become more regulated – Delegated to becoming back-office processors – Transaction supporters not market makers • Providers – Hospitals are secure but under-funded for major capital initiatives – Top tier institutions make it on philanthropy and differentiated care for the affluent elite – Only cost-reducing technologies are rewarded – P4P: You gotta perform to avoid a pay cut Scenario 3: Disruptive Innovation • Cheapo plans proliferate (high deductibles and retail primary care) forcing cheaper delivery models to emerge • New disruptive competitors emerge at a lower price point, e.g., Revolution Health, Wal-Mart, Kaiser Lite • Almost as good, and a lot cheaper • Probability over 10 years: 10% March 2007 Issue Feature Article ―BENEFITS‖ Going the Distance for Health Savings. Could overseas travel for lower-cost surgeries become an option in employer-sponsored health plans? Have Surgery. Go Sightseeing. By PAUL B. BROWN Published: March 24, 2007 WOULD you be willing to have non-urgent medical procedures done overseas, if you could recover in a fine hotel and your employer not only picked up all the costs, but actually paid you for having the work done outside the United States? You may be faced with that decision, if HR Magazine is right in its prediction that ―medical tourism‖ will become one of the benefits corporations will be offering soon. Medical tourism, or medical travel as it is also called, involves traveling to “respected medical facilities” in countries like India, Thailand or Singapore to have non-life-threatening medical procedures done, Betty Liddick writes. “It also often involves recuperation at a resort, or tourist destination, all for less than what treatment alone would cost in the United States.” The price is obviously the appeal to employers. According to examples cited in the article “Going the Distance for Health Savings,” the cost of sending a worker overseas for procedures like removing a gallbladder can be at least 50 percent less than that of having the work done in the United States, even if the employer pays for the worker to spend recovery time in a fine hotel. To encourage employees to go overseas, some companies are willing to give employees a percentage of what is saved in medical costs. The crucial question about medical tourism, which Ms. Liddick describes as a “small but growing health care trend,” is, of course, whether the quality of care is equal to what could be received at home. “No one knows the answer to that,” said one expert quoted in the article. “Frankly, we’re not in a position to meaningfully evaluate and compare American hospitals, let alone offshore ones.” Scenario 3: Disruptive Innovation Impact on the Health Care System • Health Plans – Health Plan HDHP grow enormously – New competitors in ambulatory space allow cheaper alternatives – Contract with India for the high-tech stuff – Outpatient alternatives grow from Minute Clinics to outpatient surgery chains to federally funded safety net community clinics – Hospitals are either struggling as government (under)funded geriatric ICUs or thriving as body repair shops for affluent baby-boomers – Primary Care becomes the ultimate P4P: it’s all retail • Providers Scenario 4: ―Mostly‖ Universal Health Care • Mandatory universal individual insurance is passed • National policy commitment to restructure health care financing and delivery • True managed health care • Focus on public health and prevention • Probability over ten years: 20% Scenario 4: Universal Health Care Impact on the Health Care System • Health Plans – Health plans as active agents for health delivery transformation – Sources of innovation in DSM and new reimbursement models – Get smart or get out – Chronic Care management done right: innovation in community based chronic care – New reimbursement systems ―Daughter of Capitation‖ force market leaders into fundamental clinical system redesign – Acute care is evidence-based and standardized – Innovation concentrated in designated centers of excellence – P4P means better payment and earns the provider the right to serve • Providers Four Scenarios for US Health Care 2007-2017 Tiering of Healthcare: ―Tiers Я’ Us‖ Minor Delivery System Reform Jeanne’s Odds: 3-2 Disruptive Innovation: ―Wal-Martization‖ of Health Care Jeanne’s Odds: 5-1 Major Delivery System Reform Bigger Government by Request: ―Daughter of Single-Payer‖ Jeanne’s Odds: 2-1 Mostly or Almost Universal Health Care Jeanne’s Odds: 4-1 Issues and Impacts • High end patients and providers will always do well • How bad will it be for the rest of us? • True cost reducing technologies will always have appeal • True clinical breakthroughs that are radically better than existing modalities and therapies will always be rewarded • Healthcare is a superior good and will take a larger share of national wealth • But who pays for what and how will be central difficult questions for business, government, and households around the world forever • Transforming for good: It’s all about Information and Incentives Issues and Impacts • No matter what, we will need better value measures and more transparency of measures • Value based purchasing and P4P will become more prevalent and have a powerful influence on providers and vendors • Consumers will become more engaged in value decisions but we cannot rely on them absolutely • The systems of health care need to be continuously improved to deliver greater value • Will require clinical skills, process skills, use of cutting edge technology and big-time capabilities • Most of all, it will require vision, values and leadership There’s Not Much We Have to Change…. Except……… • Our values • Our Strategic Focus: From Pimp My Ride to Primary Care and Prevention • Our Reimbursement System • Our Delivery System • Our Individual and Collective Behavior • Our Expectations Jeanne Scott www.health-politics.com (703) 371-4894