Colorado Health Care

2014 Legislative

Agenda

Senator Irene Aguilar, MD

IOM: Best Care at Lower Cost

9.8%

7.2%

27.5%

17%

13.7%

24.8%

INSTITUTE OF MEDICINE 2012: US Health Care Annual Waste

$ 765 Billion

Variations Among Academic Medical CentersUCLA Mass

General Mayo Clinic

CMS Inpatient Quality Score

81.5 85.9 90.4

Source: Elliot Fisher, Dartmouth Medical School

Care Delivery & Spending, last 6 months of life

Total Medicare Spending

$50,522 $40,181 $26,330

Hospital Days

Physician Visits19.2

52.1

17.7

42.2

12.9

23.9Specialist/ Primary Care Ratio

2.9 1.0 1.0

6

Senate Bill 16: Context

• EMTALA: Emergency Medical Treatment & Labor Act• CMS: Center for Medicaid and Medicare Services• Emergency Medical Care: ambulances, surgeons,

cardiologists, operating rooms, hospitalization • Facility Fee: Supplemental payment to support the

full spectrum of emergency medical careCost shifting inpatient costs to consumers of the EDMedicaid, Medicare & TriCare do not pay this to FSEDs

A tale of two business models Panorama Orthopedics, Golden, CO

First Choice Emergency Center

Arvada, CO

Market Principles and Health Care• Consumers bear the cost of what they consume

Only 20% of Coloradans have high deductible plans80% pay Copayment only for Emergency Care

• Consumers have transparent information and make an informed choice on the purchased serviceMost consumers do not recognize the difference

between urgent care and emergency care facilitiesInsurers do not have a choice – must pay emergency bills

• Limited financial or regulatory barriers that prevent new suppliers from entering the market

Cost of Insurance• Based on actuarial analysis of the health of the

population, the cost of the services provided and frequency of use

• Oregon Experiment: 40% more ER visits• Geographic Region 11: Higher costs of services

October 2012 – September 2013One Insurer’s Data

TOTAL CHARGES SERVICECHARGES

FACILITYFEES

$1,923,867. $ 243,859 $1,680,008

EMERGENCY or URGENT ?• 59% of visits were for non-emergency care:

Allergic reactions including dermatitis and Hives Headaches, Back Pain, Sciatica Viral Infections, Strep Throat, Nausea

• 16% of visits were for conditions that might have needed immediate access to specialists Require transfer by ambulance to a hospital

FSED Testimony on Patient VisitsAVERAGEMONTHLY

VISITS

PERCENT UNINSURED

AVERAGE MONTHLY

PAID VISITS

HOURS OF PROVIDER COVERAGE

400 25% 300 720

Freestanding Emergency Rooms

H O 2U 0S 0T 4ON

Freestanding Emergency Rooms

H O 2U 0S 1T 4ON

CO SPRINGS: Freestanding Emergency Room

ARVADA: Freestanding Emergency Room

Which would you choose?

Which would you choose?

Jaguar XFStarting Price: $46,975

Hyundai ElantraStarting Price: $17,200

Determinants of Health

2011 U.S.

Healthcare Spending:

$2.7 Trillion

Table 2: Estimate of ACA Effect, 2016

No Reform With ACA ACA Impact

ESI 2,630,000 2,600,000 -30,000

Small Firm ESI (1-50 employees) 560,000 540,000 -20,000

Other ESI 2,070,000 2,060,000 -10,000

Unreformed Non-group 340,000 60,000 -280,000

Reformed Non-group 0 620,000 620,000

Tax Credit Recipients 0 470,000 470,000

Non-Recipients 0 150,000 150,000

Public Insurance 550,000 710,000 160,000

Uninsured 860,000 400,000 -460,000

Total 4,390,000 4,390,000→ →

→

Source: Dr. Jonathan Gruber’s analysis for the Colorado Health Benefit Exchange, 2011

Dr. Jonathan Gruber 9/16/11

22%

39%

10%

29%

Figure 4. Share of Colorado population without health insurance coverage, alternative funding

programs, 2015-24.

Cooperative would put Colorado on sustainable path: Spending growing no

faster than the GSP

Savings grow by “bending the cost curve” by reducing administrative share and restraining drug price inflation