“Iron Triangle of Health Policy” - PowerPoint

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					 Health Care Reform:
We’re Still Waiting for It

 Walter Tsou, MD, MPH
   PNHP California
   Los Angeles, CA
     July 17, 2010
Outline of Talk
    A Brief Health Policy 101
    Health Care Reform
    Lessons for America
“Iron Triangle of Health Policy”

                     Access to Care

         Cost Containment             Quality of Care
Looking at Costs
Health Care Costs at $2.6 Tr in 2010 and almost
doubles in 9 years. Total for Decade? $34 Trillion!!
                                                                                              $ 4 ,4 8 3
 $4,500                                                                             $ 4 ,2 0 5
                                                                            $ 3 ,9 4 5
 $4,000                                                            $ 3 ,7 0 0
                                                          $ 3 ,4 7 1
 $3,500                                          $ 3 ,2 2 5
                                        $ 3 ,0 6 9
                               $ 2 ,8 9 3
 $3,000               $ 2 ,7 2 6
             $ 2 ,5 7 0





            2010        2
                       11        3
                                12        4
                                         13        5
                                                  14        6
                                                           15        7
                                                                    16        8
                                                                             17           9
                                                                                         18    10

Source: Projected from Health Spending Projections, Health Affairs, March 2010
US spends far more than other countries

on health care per capita


                                                                 OECD, Health Expenditures per capita, 1998

Looking at Quality
2009 National Healthcare Quality
       “We find that health
        care quality in
        America is

Agency for Healthcare Quality and Research, March 2010
Looking at Access
    46.3 Million
Source: US Census, 2009
Rex Morgan, MD on Personal
45,000 Adult Deaths Annually Due to
Lack of health insurance

NY Times, Sept. 18, 2009
Health Care Reform: Which Direction?
No domestic issue is more divided than
health care
Major Stakes for Both Parties
      Democrats                  Republicans
       – Signature Issue for       – Plan is too big
         Obama                     – Government takeover
                                   – It will influence the
                                     midterm election and
                                     maybe the presidency

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Government or the “free market”?
    Government is the             Government is the
     answer                         problem
    Private insurance cannot      Private insurance
     be trusted                     “works” for 160
                                    million Americans
Choosing a pathway for reform?
      Government                 Private
       – Expand Medicare for       – Require everyone to
         everyone                    buy private insurance
                                   – Insurers must be
The greatest lobbying effort in history

 June 29, 2009
 $1.2 Billion Spent on Health Care Lobbying!

Center for Public Integrity, March 26, 2010
Health Care Reform: Which Direction?
What are the key elements of reform?
   You will keep your insurance, whether you like it or not
   You will be required to have private health insurance or pay a fine
   There will be subsidies for the poor.
   There will be a state insurance exchange which will be open to
    small businesses, self employed, and those not offered employer
    sponsored insurance starting in 2014
   Changes to Medicare
   CLASS act - voluntary purchase long term care insurance?
   New regulations on insurers
   Immigrants are restricted or banned
You will be required to buy private
health insurance or pay a fine
    Bronze (60% of the cost of care)
    Silver (70% of the cost of care)
    Gold (80% of the cost of care)
    Platinum (90% of the cost of care)

    The better the plan, the more it costs
    We don’t know the price (several thousand)
How much is the fine?
      The greater of:
       – 2014 - $95 or 1% of income
       – 2015 - $350 or 2% of income
       – 2016 - $650 or 2.5% of income ($2,085 max)
“I am poor, how can I afford this?”
    Medicaid up to 133% of poverty paid by
     the federal govt up to 2017
    Sliding scale cost sharing of 94 - 70% from
     133% - 400% of poverty
    $5 billion put in state run high risk pools for
     those with preexisting conditions
This is too confusing, who can help me?
    Pick employer plan for those employed
    Self employed, small businesses, uninsured
     can go to a state insurance exchange
     beginning in 2014
    Very poor get on Medicaid
Mass Connector, family of three, cheapest plan
 Enormous Price Increases

Marketwatch, Feb 19, 2010
LA Times, April 13, 2010
New insurance regulations
      No exclusions for preexisting conditions
      No medical underwriting
      No recissions
      No lifetime caps on claims
      Children can stay on plan until age 26
      Must pay 80% of income toward claims if small plan, 85%
       if large plan
      Insurers disclose payment policies, ratings
Some Republican ideas
    Purchase of private insurance
    Health Savings Accounts sold in exchanges
    State demonstrations on malpractice reform
    Restrictions on abortion
How to pay for it?
      Employer sponsored insurance
      Tax “Cadillac” insurance plans after 2018?
      Medicare income tax increased to 2.35%
       – > $200K have to pay on investment income also (3.8%)
      Employers > 50 workers fined if workers get insurance
       through the insurance exchange
      Fees on drug and insurance industry
      Cuts to Medicare and Medicare Advantage
      Independent Payment Advisory Board
                           Source of Insurance Coverage Pre-Reform and
                           Under Affordable Care Act, 2019
                                                                                                              23 M (8%)
                                                                                        24 M (9%)             Uninsured
                               54 M                                                  (Private Plans)
                                                                                  16 M (6%)
   16 M (6%)                Uninsured
                                                      162 M                         Other                                        159 M
     Other                                            (57%)                                                                      (56%)
                                                                                10 M (4%)
  15 M (5%)                                            ESI                                                                        ESI

                                                                                       51 M
              35 M                                                                    (18%)
             (12%)                                                                   Medicaid
                                     Pre-Reform                                                            Affordable Care Act

                                               Among 282 million people under age 65
* Employees whose employers provide coverage through the exchange are shown as covered by their employers (5 million), thus about 29
million people would be enrolled through plans in the exchange. Note: ESI is Employer-Sponsored Insurance.
Source: S. R. Collins, K. Davis, J. L. Nicholson, S. D. Rustgi, and R. Nuzum, The Health Insurance Provisions of the Affordable Care Act:
Implications for Coverage, Affordability, and Costs, The Commonwealth Fund, (forthcoming).
   Health Care Will Become Even More

NY Times, April 23, 2010
 Major Sources of Cost, Savings and Revenues Compared with Projected
 Spending, Net Cumulative Effect on Federal Deficit, 2010–2019

Dollars in billions                                                                          CBO estimate of
                                                                                        Affordable Care Act of 2010
 Total Net Impact on Federal Deficit, 2010–2019                                                       –$143
  Gross Cost of Coverage Provisions                                                                    $938
  Offsetting Revenues from Individual Mandate, Employers,                                             –$117
   and Wage Effects
   Savings from Payment and System Reforms                                                            –$511
         Productivity      updates/provider payment changes                                           –160
         Medicare Advantage           reform                                                          –204
         Other    improvements and savings                                                            –147
   Education System Savings                                                                            –$19
   Total Revenues                                                                                     –$432
Note: Totals do not reflect net impact on deficit due to rounding.
Source: Congressional Budget Office, Letter to the Honorable Nancy Pelosi, Mar. 20, 2010.
 We have the Most
 Expensive Health Care
 System in the World

 By far . . .

 Yet we have lower life
 expectancy than half of
 the world

National Geographic, OECD Health Data 2009
Jobless Recovery in a Global Economy?
    Why would we hire Americans when we
     have the most expensive health care per
     capita in the world?
    Other countries that provide universal
     health care have either single payer or the
     insurers act as a single payer
    A country that does not produce things will
     soon be a second class country
What Does It Mean When a Nation
Stops Making Things Here?
Jobs, jobs, jobs . . . Health care are
    Employer sponsored insurance is a cost for
     every employer
    In a global economy, jobs follow
Dramatic Loss of Jobs That May Never

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US Bureau of Labor Statistics
2010 US Debt - $13.2 Trillion!
91% of GDP

        Gross Debt

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    Debt as % GDP
 Canada is First of G-7 Countries to
 Recover from Recession

Bloomberg News, July 9, 2010
Why US Manufacturers Move Overseas?

        United States                     Taiwan
         – $7,300 per capita on             – $800 per capita on
           health care in 2007                health care in 2007
         – Administrative                   – Administrative
           overhead 31% *                     overhead 1.6% *
         – Per capita income                – Per capita income
           $46,000                            $30,100

* Sources: NEJM, August 21, 2003, Bureau of NHI, Taiwan
Information technology
    Congress has $19 Billion in the economic
     stimulus bill
    Can we do health IT with such a
     dysfunctional fragmented system?
Health IT works when the health system
works (Taiwan)

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Frontline, April 2008
How Tough Are Our Choices?
      Bankrupt Private Health Insurers?
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      Bankrupt America?
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David Walker, former US Comptroller

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60 Minutes, March 4, 2007
Making a decision on a tough choice
    Well, if you put it that way . . . . The choice
     is clear
    We must control health care costs . . .
       – For the sake of American jobs
       – For the sake of our national deficit
       – For our kids future
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C-SPAN, June 10, 2010
Overall Impressions
      Incredibly complex
      Many good, bad, and ugly stuff
      Embraces the principle of insurance reform
      A strong prevention and public health agenda
      Many will have difficulty affording this
      My prediction: It will achieve mediocre, expensive health
       care for some people, but may prevent illness in others
      For those who want quality, affordable health care for all,
       “No rest for the weary”

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