How to Talk To Business about Health care reform
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HOW TO TALK TO BUSINESS ABOUT HEALTH CARE REFORM Deborah Richter, MD
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How to Talk To Business about Health care reform. Deborah Richter, MD. Goals of your talk. Change their perception to view healthcare as a public good rather an itemized purchase in the marketplace To understand that we can’t fix anything without a healthcare system - PowerPoint PPT Presentation
Transcript of How to Talk To Business about Health care reform
HOW TO TALK TO BUSINESS ABOUT HEALTH CARE
REFORMDeborah Richter, MD
Goals of your talk Change their perception to view healthcare
as a public good rather an itemized purchase in the marketplace
To understand that we can’t fix anything without a healthcare system
To understand we are paying the whole bill anyway
If you get these points across, the business case for single payer is much easier
The Business Perspective They are paying too much for healthcare The reason costs are so high is people are
using too much care The uninsured are not their responsibility They don’t trust the government
What Business Does Understand
Systems Budgets Fixed Costs Efficiency
THE AMERICAN HEALTH CARE CRISIS
Deborah Richter, MD
Overview
Review of the problems
Why we are in this mess
What we can do about it
THE AMERICAN HEALTH CARE SYSTEM IS NEITHER HEALTHY,
CARING, NOR A SYSTEM… Walter Cronkite
$2.5 trillion
Source: Health Affairs Jan/Feb 200930%
U.S. Health Expenditures 2009
Source: Centers for Medicare & Medicaid Services
ProjectedActual
PercentageGDP
National Health Spendingas a share of Gross Domestic Product
5.27.2
9.1
12.8 13.815.4 15.9 16.0
20.0
1960 1970 1980 1990 2000 2002 2004 2006 2015
$1,500$1,309
$1,040
$449 $419
$207$97
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
GM Ford Chrysler BMW Mercedes Toyota (US) Toyota(Japan)
$/Car
Source: Modern Healthcare 10/24/05: 14
Japan Has a $1400 competitive advantage on every car they sell
Health Insurance Costs Keep Rising
Fewer Firms Are Offering Insurance…
46 MillionUninsured
Source: Care Without Coverage;Institute of Medicine,2002
18,314 Die Every Year Due to Lack of Health
Insurance
Major Concepts
1. Few people are using healthcare at any one time
2. Most costs are fixed
3. We are already paying the whole bill
4. We don’t have a health care system so we can’t fix anything
Source: Centers for Medicare & Medicaid Services
ProjectedActual
National Health Spending:Per Person
$3,604$3,910 $4,257$4,729
$5,485$6,280
$7,129$8,090
$9,173$10,339
$11,660
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Per capitaexpenditures
Source: Centers for Medicare & Medicaid Services
ProjectedActual
National Health Spending:Per Person
$3,604$3,910$4,257$4,729
$5,485$6,280
$7,129$8,090
$9,173$10,339
$11,660
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Per capitaexpenditures
What are the costs?
JOE
Is he the problem?
Source:Agency for Healthcare Research and QualityMEPS, 1999
Percentof health CareExpenditures
1% 1% 2% 4% 6%13%
73%
0% 0% 0%
80% uses less than $1400 of care per year
The 80/20 rule: Most people use very little healthcare
Source:Agency for Healthcare Research and QualityMEPS, 1999
Percentof health CareExpenditures
1% 1% 2% 4% 6%13%
73%
0% 0% 0%
20% use 86% of the care
Few are using most of the healthcare
Source: Health Affairs Jan/Feb 2009
70% spent on services &infrastructure
30%
U.S. Health Expenditures
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
3 million administrative jobs
Source: National Center for Health Statistics&Bureau of Labor Statistics
Health Care Infrastructure:
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
Question: Whose responsibility should it be to pay
for the health care services we all expect to be there should we need them?
How do we PAY
for health care?
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)
Source:Agency for Healthcare Research and QualityMEPS, 1999
Percentof health CareExpenditures
1% 1% 2% 4% 6%13%
73%
0% 0% 0%
AVOID THESE PEOPLE
If you were an insurance company CEO, who would you
want to insure?
Administration is the Fastest Growing job in Health Care
Source: Bureau of Labor Statistics and NCHS
69%31%Clinical
Care
Administrative Costs
Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004
($2000 per person)
One-Third of Health Spending is Consumed by Administration
Lower wages
Private employers
pay for health insurance Higher prices
for goods
Out of pocket
Individual health insuranceTaxes for
Medicare and Medicaid
Property taxes
Health insurance for public employees
INDIVIDUALHOUSEHOLDS
In the End Individual Households Pay for All of Health Care
Source: NEJM 1999; 340:109; Health Affairs 2000; 19(3):150
Most of Healthcare is already publicly financed
60%20%
20%
Taxpayers
Private employers
Individuals
{Medicare, Medicaid.Public employees,tax subsidies}
Do we really have the best health care in the
world?
Health Care Overspending $650 billion- the amount overspent on
health care compared with other industrialized nations with no discernable benefit to population health.
McKinsey Global Institute Dec 2008
We spend twice as much on health care as other nations do
OECD, 2006. Data for Japan is an estimate
$ Per person
US Health Costs Rise Faster than Other Countries’ Costs
Source: Health United States 2005, Natl. Center for Health Statistics
We pay higher taxes
OECD, 2006 & Health Affairs 2002; 21(4): 99
Out of Pocket Costs are Higher
$/per capita
Source: OECD 2006Data are for 2004 or for most recent year availableFigures adjusted for purchasing power parity
We are one of the Youngest Populations in the Industrialized World
OECD, 2006 (2003 Data)
Fewer Americans Smoke Compared with Other Nations
OECD, 2006 (2003 Data)
We Drink Less Alcohol
OECD, 2006 (2003 Data)
But… We Don’t Live as Long
OECD, 2006 (2003 Data)
More Babies Diein the U.S. in the first year of life
OECD, 2006Data are for 2004 or more recent year available
Australia Canada England N.Z. U.S.Breast Cancer 2nd 4th worst 3rd bestColorectal Cancer 2nd 3rd worst best 4thCervical Cancer best 3rd worst 4th 2ndChildhood Leukemia worst best 3rd 4th 2ndKidney Transplant 2nd best 3rd 3rd worstLiver Transplant 2nd best worst * 3rdNon-Hodgkin’s Lymphoma
best 4th worst 2nd 3rdAMI, ages 20-84 best worst NA 2nd NAStroke, ages 20-84 2nd best NA worst NA
Source: Health Affairs Vol 23:#3 , 2004
Our Quality is Not the Best in the world Survival Rates for 5 Countries
We Do an Average Number of Bone Marrow Transplants
per million people
OECD, 2006 (2003 Data)
We Do More Heart Transplantsper million people
OECD, 2006 (2003 Data)
We are Average in Number of Renal Transplants (2001/2002)
OECD, 2004
Transplants/million population
We are Average in the Number of MRI Units
Source: OECD, 2005Note: data are for 2004 ,or most recent year available
MRIs/ million population
We Do Fewer Hip Replacements
Procedures per 100,000 population
Source: OECD 2006Data are for 2004 or most recent year available
197
Other Industrialized Countries
Availability of expensive technology
Rising drug costs Have similar demographics Similar levels of service
Why are their costs so much lower?
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
Everyone included
Clear accountabilityPublic StewardshipBudget Process
Public Financing
Fundamental Features of a True Health Care System
Business thinking applied to healthcare reform
1. What is the overall goal? (Preserve, restore and maintain health)
2. How much do we need? (McKinsey says $650 excess spending)
3. How get more for your money?(administrative savings ,formularies, negotiating prices, more primary care and prevention)
4. How would you collect money?5. How to control overall costs?-(Budget process,6. Who is in charge?-How to fix when things go
wrong-accountability
Investment Model Healthcare is regarded as a public good
with investment in needed services for the whole population
The costs of these shared services are spread across the whole population
Pools money and pays for health care directly
Single Payer Health Care Systems
Sweden, Norway, Denmark, Canada, Finland, Iceland, Australia, and Taiwan all have single payer financing
Single publicly financed risk pool that pays for health care directly from a fund ear-marked for health care
Everyone has access to privately delivered, publicly financed health care services
Public can buy health insurance for services not covered by public plan.
Deborah Richter, MD802-371-7764PO Box 1467
Montpelier, VT 05601 www.vthca.org
ADDITIONAL SLIDES
Pros and cons of a true health care system
PROS Everyone Covered Better benefits Effective Cost
Containment Fairer financing Stability of
financing of services
Coverage not linked to employment
CONS Problems are aired in
public Some will pay more
than they are now Cost containment
measures may cut availability of some services
“If done right, health care in America could be dramatically better with true single-payer coverage.”
-Ben Brewer, WSJ, April 18, 2006
“[single-payer] is an idea that's so easy to slam politically yet so sensible for business that only Republicans can sell it! …it may take a Republican President to bless the socialization of health spending we need.”
-Matt Miller, Fortune, April 18, 2006
“Think, as a small business, how you could benefit from a single-payer system: you wouldn’t lose potential employees to larger firms that offer more attractive health benefits; health insurance costs would cease to be a line item in your budget. A serious illness befalling you or an employee wouldn’t be a company-wide financial crisis. You might even save money.”
-Joseph Antony, CNBC / MSN Money, Winter 2003
CNBC / MSN Money
Why have incremental reforms proven so ineffective in practice?
Private Insurers’ High Overhead
International Journal of Health Services 2005; 35(1): 64-90
Obstacles
Profit Politics Paranoia Perception
Universal healthcare system
HOW TO TALK TO BUSINESS ABOUT HEALTH CARE REFORM
February 7, 2009Deborah Richter, MD
Goals of your talk Change their perception to view healthcare
as a public good rather an itemized purchase in the marketplace
To understand that we can’t fix anything without a healthcare system
To understand we are paying the whole bill anyway
If you get these points across, the business case for single payer is much easier
The Business Perspective They are paying too much for healthcare The reason costs are so high is people are
using too much care The uninsured are not their responsibility They don’t trust the government
What Business Does Understand
Systems Budgets Fixed Costs Efficiency
THE AMERICAN HEALTH CARE CRISIS
Deborah Richter, MD
Overview
Review of the problems
Why we are in this mess
What we can do about it
THE AMERICAN HEALTH CARE SYSTEM IS NEITHER HEALTHY,
CARING, NOR A SYSTEM… Walter Cronkite
$2.2 trillion
Source: Health Affairs Jan/Feb 200930%
U.S. Health Expenditures 2007
Source: Centers for Medicare & Medicaid Services
ProjectedActual
PercentageGDP
National Health Spendingas a share of Gross Domestic Product
5.27.2
9.1
12.8 13.815.4 15.9 16.0
20.0
1960 1970 1980 1990 2000 2002 2004 2006 2015
$1,500$1,309
$1,040
$449 $419
$207$97
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
GM Ford Chrysler BMW Mercedes Toyota (US) Toyota(Japan)
$/Car
Source: Modern Healthcare 10/24/05: 14
Japan Has a $1400 competitive advantage on every car they sell
Health Insurance Costs Keep Rising
Fewer Firms Are Offering Insurance…
46 MillionUninsured
Source: Care Without Coverage;Institute of Medicine,2002
18,314 Die Every Year Due to Lack of Health
Insurance
Major Concepts
1. Few people are using healthcare at any one time
2. Most costs are fixed
3. We are already paying the whole bill
4. We don’t have a health care system so we can’t fix anything
Source: Centers for Medicare & Medicaid Services
ProjectedActual
National Health Spending:Per Person
$3,604$3,910 $4,257$4,729
$5,485$6,280
$7,129$8,090
$9,173$10,339
$11,660
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Per capitaexpenditures
Source: Centers for Medicare & Medicaid Services
ProjectedActual
National Health Spending:Per Person
$3,604$3,910$4,257$4,729
$5,485$6,280
$7,129$8,090
$9,173$10,339
$11,660
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Per capitaexpenditures
What are the costs?
JOE
Is he the problem?
Source:Agency for Healthcare Research and QualityMEPS, 1999
Percentof health CareExpenditures
1% 1% 2% 4% 6%13%
73%
0% 0% 0%
80% uses less than $1400 of care per year
The 80/20 rule: Most people use very little healthcare
Source:Agency for Healthcare Research and QualityMEPS, 1999
Percentof health CareExpenditures
1% 1% 2% 4% 6%13%
73%
0% 0% 0%
20% use 86% of the care
Few are using most of the healthcare
Source: Health Affairs Jan/Feb 2009
70% spent on services &infrastructure
30%
U.S. Health Expenditures 2007
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
3 million administrative jobs
Source: National Center for Health Statistics&Bureau of Labor Statistics
Health Care Infrastructure:
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
Question: Whose responsibility should it be to pay
for the health care services we all expect to be there should we need them?
How do we PAY
for health care?
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)
Source:Agency for Healthcare Research and QualityMEPS, 1999
Percentof health CareExpenditures
1% 1% 2% 4% 6%13%
73%
0% 0% 0%
AVOID THESE PEOPLE
If you were an insurance company CEO, who would you
want to insure?
Administration is the Fastest Growing job in Health Care
Source: Bureau of Labor Statistics and NCHS
69%31%Clinical
Care
Administrative Costs
Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004
($2000 per person)
One-Third of Health Spending is Consumed by Administration
Lower wages
Private employers
pay for health insurance Higher prices
for goods
Out of pocket
Individual health insuranceTaxes for
Medicare and Medicaid
Property taxes
Health insurance for public employees
INDIVIDUALHOUSEHOLDS
In the End Individual Households Pay for All of Health Care
Source: NEJM 1999; 340:109; Health Affairs 2000; 19(3):150
Most of Healthcare is already publicly financed
60%20%
20%
Taxpayers
Private employers
Individuals
{Medicare, Medicaid.Public employees,tax subsidies}
Do we really have the best health care in the
world?
Health Care Overspending $650 billion- the amount overspent on
health care compared with other industrialized nations with no discernable benefit to population health.
McKinsey Global Institute Dec 2008
We spend twice as much on health care as other nations do
OECD, 2006. Data for Japan is an estimate
$ Per person
US Health Costs Rise Faster than Other Countries’ Costs
Source: Health United States 2005, Natl. Center for Health Statistics
We pay higher taxes
OECD, 2006 & Health Affairs 2002; 21(4): 99
Out of Pocket Costs are Higher
$/per capita
Source: OECD 2006Data are for 2004 or for most recent year availableFigures adjusted for purchasing power parity
We are one of the Youngest Populations in the Industrialized World
OECD, 2006 (2003 Data)
Fewer Americans Smoke Compared with Other Nations
OECD, 2006 (2003 Data)
We Drink Less Alcohol
OECD, 2006 (2003 Data)
But… We Don’t Live as Long
OECD, 2006 (2003 Data)
More Babies Diein the U.S. in the first year of life
OECD, 2006Data are for 2004 or more recent year available
Australia Canada England N.Z. U.S.Breast Cancer 2nd 4th worst 3rd bestColorectal Cancer 2nd 3rd worst best 4thCervical Cancer best 3rd worst 4th 2ndChildhood Leukemia worst best 3rd 4th 2ndKidney Transplant 2nd best 3rd 3rd worstLiver Transplant 2nd best worst * 3rdNon-Hodgkin’s Lymphoma
best 4th worst 2nd 3rdAMI, ages 20-84 best worst NA 2nd NAStroke, ages 20-84 2nd best NA worst NA
Source: Health Affairs Vol 23:#3 , 2004
Our Quality is Not the Best in the world Survival Rates for 5 Countries
We Do an Average Number of Bone Marrow Transplants
per million people
OECD, 2006 (2003 Data)
We Do More Heart Transplantsper million people
OECD, 2006 (2003 Data)
We are Average in Number of Renal
Transplants (2001/2002)
OECD, 2004
Transplants/million population
We are Average in the Number of MRI Units
Source: OECD, 2005Note: data are for 2004 ,or most recent year available
MRIs/ million population
We Do Fewer Hip Replacements
Procedures per 100,000 population
Source: OECD 2006Data are for 2004 or most recent year available
197
Other Industrialized Countries
Availability of expensive technology
Rising drug costs Have similar demographics Similar levels of service
Why are their costs so much lower?
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
Everyone included
Clear accountabilityPublic StewardshipBudget Process
Public Financing
Fundamental Features of a True Health Care System
Business thinking applied to healthcare reform
1. What is the overall goal? (Preserve, restore and maintain health)
2. How much do we need? (McKinsey says $650 excess spending)
3. How get more for your money?(administrative savings ,formularies, negotiating prices, more primary care and prevention)
4. How would you collect money?5. How to control overall costs?-(Budget
process,6. Who is in charge?-How to fix when things
go wrong-accountability
Investment Model Healthcare is regarded as a public good
with investment in needed services for the whole population
The costs of these shared services are spread across the whole population
Pools money and pays for health care directly
Single Payer Health Care Systems
Sweden, Norway, Denmark, Canada, Finland, Iceland, Australia, and Taiwan all have single payer financing
Single publicly financed risk pool that pays for health care directly from a fund ear-marked for health care
Everyone has access to privately delivered, publicly financed health care services
Public can buy health insurance for services not covered by public plan.
Deborah Richter, MD802-371-7764PO Box 1467
Montpelier, VT 05601 www.vthca.org
ADDITIONAL SLIDES
Pros and cons of a true health care system
PROS Everyone Covered Better benefits Effective Cost
Containment Fairer financing Stability of
financing of services
Coverage not linked to employment
CONS Problems are aired in
public Some will pay more
than they are now Cost containment
measures may cut availability of some services
“If done right, health care in America could be dramatically better with true single-payer coverage.”
-Ben Brewer, WSJ, April 18, 2006
“[single-payer] is an idea that's so easy to slam politically yet so sensible for business that only Republicans can sell it! …it may take a Republican President to bless the socialization of health spending we need.”
-Matt Miller, Fortune, April 18, 2006
“Think, as a small business, how you could benefit from a single-payer system: you wouldn’t lose potential employees to larger firms that offer more attractive health benefits; health insurance costs would cease to be a line item in your budget. A serious illness befalling you or an employee wouldn’t be a company-wide financial crisis. You might even save money.”
-Joseph Antony, CNBC / MSN Money, Winter 2003
CNBC / MSN Money
Why have incremental reforms proven so
ineffective in practice?
Private Insurers’ High Overhead
International Journal of Health Services 2005; 35(1): 64-90
Obstacles
Profit Politics Paranoia Perception
Universal healthcare system
HOW TO TALK TO BUSINESS ABOUT HEALTH CARE REFORM
February 7, 2009Deborah Richter, MD
Goals of your talk Change their perception to view healthcare
as a public good rather an itemized purchase in the marketplace
To understand that we can’t fix anything without a healthcare system
To understand we are paying the whole bill anyway
If you get these points across, the business case for single payer is much easier
The Business Perspective They are paying too much for healthcare The reason costs are so high is people are
using too much care The uninsured are not their responsibility They don’t trust the government
What Business Does Understand
Systems Budgets Fixed Costs Efficiency
THE AMERICAN HEALTH CARE CRISIS
Deborah Richter, MD
Overview
Review of the problems
Why we are in this mess
What we can do about it
THE AMERICAN HEALTH CARE SYSTEM IS NEITHER HEALTHY,
CARING, NOR A SYSTEM… Walter Cronkite
$2.2 trillion
Source: Health Affairs Jan/Feb 200930%
U.S. Health Expenditures 2007
Source: Centers for Medicare & Medicaid Services
ProjectedActual
PercentageGDP
National Health Spendingas a share of Gross Domestic Product
5.27.2
9.1
12.8 13.815.4 15.9 16.0
20.0
1960 1970 1980 1990 2000 2002 2004 2006 2015
$1,500$1,309
$1,040
$449 $419
$207$97
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
GM Ford Chrysler BMW Mercedes Toyota (US) Toyota(Japan)
$/Car
Source: Modern Healthcare 10/24/05: 14
Japan Has a $1400 competitive advantage on every car they sell
Health Insurance Costs Keep Rising
Fewer Firms Are Offering Insurance…
46 MillionUninsured
Source: Care Without Coverage;Institute of Medicine,2002
18,314 Die Every Year Due to Lack of Health
Insurance
Major Concepts
1. Few people are using healthcare at any one time
2. Most costs are fixed
3. We are already paying the whole bill
4. We don’t have a health care system so we can’t fix anything
Source: Centers for Medicare & Medicaid Services
ProjectedActual
National Health Spending:Per Person
$3,604$3,910 $4,257$4,729
$5,485$6,280
$7,129$8,090
$9,173$10,339
$11,660
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Per capitaexpenditures
Source: Centers for Medicare & Medicaid Services
ProjectedActual
National Health Spending:Per Person
$3,604$3,910$4,257$4,729
$5,485$6,280
$7,129$8,090
$9,173$10,339
$11,660
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Per capitaexpenditures
What are the costs?
JOE
Is he the problem?
Source:Agency for Healthcare Research and QualityMEPS, 1999
Percentof health CareExpenditures
1% 1% 2% 4% 6%13%
73%
0% 0% 0%
80% uses less than $1400 of care per year
The 80/20 rule: Most people use very little healthcare
Source:Agency for Healthcare Research and QualityMEPS, 1999
Percentof health CareExpenditures
1% 1% 2% 4% 6%13%
73%
0% 0% 0%
20% use 86% of the care
Few are using most of the healthcare
Source: Health Affairs Jan/Feb 2009
70% spent on services &infrastructure
30%
U.S. Health Expenditures 2007
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
3 million administrative jobs
Source: National Center for Health Statistics&Bureau of Labor Statistics
Health Care Infrastructure:
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
Question: Whose responsibility should it be to pay
for the health care services we all expect to be there should we need them?
How do we PAY
for health care?
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)
Source:Agency for Healthcare Research and QualityMEPS, 1999
Percentof health CareExpenditures
1% 1% 2% 4% 6%13%
73%
0% 0% 0%
AVOID THESE PEOPLE
If you were an insurance company CEO, who would you
want to insure?
Administration is the Fastest Growing job in Health Care
Source: Bureau of Labor Statistics and NCHS
69%31%Clinical
Care
Administrative Costs
Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004
($2000 per person)
One-Third of Health Spending is Consumed by
Administration
Lower wages
Private employers
pay for health insurance Higher prices
for goods
Out of pocket
Individual health insuranceTaxes for
Medicare and Medicaid
Property taxes
Health insurance for public employees
INDIVIDUALHOUSEHOLDS
In the End Individual Households Pay for All of Health Care
Source: NEJM 1999; 340:109; Health Affairs 2000; 19(3):150
Most of Healthcare is already publicly financed
60%20%
20%
Taxpayers
Private employers
Individuals
{Medicare, Medicaid.Public employees,tax subsidies}
Do we really have the best health care in the
world?
Health Care Overspending $650 billion- the amount overspent on
health care compared with other industrialized nations with no discernable benefit to population health.
McKinsey Global Institute Dec 2008
We spend twice as much on health care as other
nations do
OECD, 2006. Data for Japan is an estimate
$ Per person
US Health Costs Rise Faster than Other Countries’ Costs
Source: Health United States 2005, Natl. Center for Health Statistics
We pay higher taxes
OECD, 2006 & Health Affairs 2002; 21(4): 99
Out of Pocket Costs are Higher
$/per capita
Source: OECD 2006Data are for 2004 or for most recent year availableFigures adjusted for purchasing power parity
We are one of the Youngest Populations in the Industrialized World
OECD, 2006 (2003 Data)
Fewer Americans Smoke Compared with Other
Nations
OECD, 2006 (2003 Data)
We Drink Less Alcohol
OECD, 2006 (2003 Data)
But… We Don’t Live as Long
OECD, 2006 (2003 Data)
More Babies Diein the U.S. in the first
year of life
OECD, 2006Data are for 2004 or more recent year available
Australia Canada England N.Z. U.S.Breast Cancer 2nd 4th worst 3rd bestColorectal Cancer 2nd 3rd worst best 4thCervical Cancer best 3rd worst 4th 2ndChildhood Leukemia worst best 3rd 4th 2ndKidney Transplant 2nd best 3rd 3rd worstLiver Transplant 2nd best worst * 3rdNon-Hodgkin’s Lymphoma
best 4th worst 2nd 3rdAMI, ages 20-84 best worst NA 2nd NAStroke, ages 20-84 2nd best NA worst NA
Source: Health Affairs Vol 23:#3 , 2004
Our Quality is Not the Best in the world Survival Rates for 5 Countries
We Do an Average Number of Bone Marrow
Transplantsper million people
OECD, 2006 (2003 Data)
We Do More Heart Transplantsper million people
OECD, 2006 (2003 Data)
We are Average in Number of Renal
Transplants (2001/2002)
OECD, 2004
Transplants/million population
We are Average in the Number of MRI Units
Source: OECD, 2005Note: data are for 2004 ,or most recent year available
MRIs/ million population
We Do Fewer Hip Replacements
Procedures per 100,000 population
Source: OECD 2006Data are for 2004 or most recent year available
197
Other Industrialized Countries
Availability of expensive technology
Rising drug costs Have similar demographics Similar levels of service
Why are their costs so much lower?
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
Everyone included
Clear accountabilityPublic StewardshipBudget Process
Public Financing
Fundamental Features of a True Health Care System
Business thinking applied to healthcare reform
1. What is the overall goal? (Preserve, restore and maintain health)
2. How much do we need? (McKinsey says $650 excess spending)
3. How get more for your money?(administrative savings ,formularies, negotiating prices, more primary care and prevention)
4. How would you collect money?5. How to control overall costs?-(Budget
process,6. Who is in charge?-How to fix when things
go wrong-accountability
Investment Model Healthcare is regarded as a public good
with investment in needed services for the whole population
The costs of these shared services are spread across the whole population
Pools money and pays for health care directly
Single Payer Health Care Systems
Sweden, Norway, Denmark, Canada, Finland, Iceland, Australia, and Taiwan all have single payer financing
Single publicly financed risk pool that pays for health care directly from a fund ear-marked for health care
Everyone has access to privately delivered, publicly financed health care services
Public can buy health insurance for services not covered by public plan.
Deborah Richter, MD802-371-7764PO Box 1467
Montpelier, VT 05601 www.vthca.org
ADDITIONAL SLIDES
Pros and cons of a true health care system
PROS Everyone Covered Better benefits Effective Cost
Containment Fairer financing Stability of
financing of services
Coverage not linked to employment
CONS Problems are aired in
public Some will pay more
than they are now Cost containment
measures may cut availability of some services
“If done right, health care in America could be dramatically better with true single-payer coverage.”
-Ben Brewer, WSJ, April 18, 2006
“[single-payer] is an idea that's so easy to slam politically yet so sensible for business that only Republicans can sell it! …it may take a Republican President to bless the socialization of health spending we need.”
-Matt Miller, Fortune, April 18, 2006
“Think, as a small business, how you could benefit from a single-payer system: you wouldn’t lose potential employees to larger firms that offer more attractive health benefits; health insurance costs would cease to be a line item in your budget. A serious illness befalling you or an employee wouldn’t be a company-wide financial crisis. You might even save money.”
-Joseph Antony, CNBC / MSN Money, Winter 2003
CNBC / MSN Money
Why have incremental reforms proven so
ineffective in practice?
Private Insurers’ High Overhead
International Journal of Health Services 2005; 35(1): 64-90
Obstacles
Profit Politics Paranoia Perception
Universal healthcare system
HOW TO TALK TO BUSINESS ABOUT HEALTH CARE REFORM
February 7, 2009Deborah Richter, MD
HOW TO TALK TO BUSINESS ABOUT HEALTH CARE REFORM
February 7, 2009Deborah Richter, MD
Goals of your talk Change their perception to view healthcare
as a public good rather an itemized purchase in the marketplace
To understand that we can’t fix anything without a healthcare system
To understand we are paying the whole bill anyway
If you get these points across, the business case for single payer is much easier
The Business Perspective They are paying too much for healthcare The reason costs are so high is people are
using too much care The uninsured are not their responsibility They don’t trust the government
What Business Does Understand
Systems Budgets Fixed Costs Efficiency
THE AMERICAN HEALTH CARE CRISIS
Deborah Richter, MD
Overview
Review of the problems
Why we are in this mess
What we can do about it
THE AMERICAN HEALTH CARE SYSTEM IS NEITHER HEALTHY,
CARING, NOR A SYSTEM… Walter Cronkite
$2.2 trillion
Source: Health Affairs Jan/Feb 200930%
U.S. Health Expenditures 2007
Source: Centers for Medicare & Medicaid Services
ProjectedActual
PercentageGDP
National Health Spendingas a share of Gross Domestic Product
5.27.2
9.1
12.8 13.815.4 15.9 16.0
20.0
1960 1970 1980 1990 2000 2002 2004 2006 2015
$1,500$1,309
$1,040
$449 $419
$207$97
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
GM Ford Chrysler BMW Mercedes Toyota (US) Toyota(Japan)
$/Car
Source: Modern Healthcare 10/24/05: 14
Japan Has a $1400 competitive advantage on every car they sell
Health Insurance Costs Keep Rising
Fewer Firms Are Offering Insurance…
46 MillionUninsured
Source: Care Without Coverage;Institute of Medicine,2002
18,314 Die Every Year Due to Lack of Health
Insurance
Major Concepts
1. Few people are using healthcare at any one time
2. Most costs are fixed
3. We are already paying the whole bill
4. We don’t have a health care system so we can’t fix anything
Source: Centers for Medicare & Medicaid Services
ProjectedActual
National Health Spending:Per Person
$3,604$3,910 $4,257$4,729
$5,485$6,280
$7,129$8,090
$9,173$10,339
$11,660
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Per capitaexpenditures
Source: Centers for Medicare & Medicaid Services
ProjectedActual
National Health Spending:Per Person
$3,604$3,910$4,257$4,729
$5,485$6,280
$7,129$8,090
$9,173$10,339
$11,660
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Per capitaexpenditures
What are the costs?
JOE
Is he the problem?
Source:Agency for Healthcare Research and QualityMEPS, 1999
Percentof health CareExpenditures
1% 1% 2% 4% 6%13%
73%
0% 0% 0%
80% uses less than $1400 of care per year
The 80/20 rule: Most people use very little healthcare
Source:Agency for Healthcare Research and QualityMEPS, 1999
Percentof health CareExpenditures
1% 1% 2% 4% 6%13%
73%
0% 0% 0%
20% use 86% of the care
Few are using most of the healthcare
Source: Health Affairs Jan/Feb 2009
70% spent on services &infrastructure
30%
U.S. Health Expenditures 2007
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
3 million administrative jobs
Source: National Center for Health Statistics&Bureau of Labor Statistics
Health Care Infrastructure:
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
Question: Whose responsibility should it be to pay
for the health care services we all expect to be there should we need them?
How do we PAY
for health care?
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)
Source:Agency for Healthcare Research and QualityMEPS, 1999
Percentof health CareExpenditures
1% 1% 2% 4% 6%13%
73%
0% 0% 0%
AVOID THESE PEOPLE
If you were an insurance company CEO, who would you
want to insure?
Administration is the Fastest Growing job in Health Care
Source: Bureau of Labor Statistics and NCHS
69%31%Clinical
Care
Administrative Costs
Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004
($2000 per person)
One-Third of Health Spending is Consumed by Administration
Lower wages
Private employers
pay for health insurance Higher prices
for goods
Out of pocket
Individual health insuranceTaxes for
Medicare and Medicaid
Property taxes
Health insurance for public employees
INDIVIDUALHOUSEHOLDS
In the End Individual Households Pay for All of Health Care
Source: NEJM 1999; 340:109; Health Affairs 2000; 19(3):150
Most of Healthcare is already publicly financed
60%20%
20%
Taxpayers
Private employers
Individuals
{Medicare, Medicaid.Public employees,tax subsidies}
Do we really have the best health care in the
world?
Health Care Overspending $650 billion- the amount overspent on
health care compared with other industrialized nations with no discernable benefit to population health.
McKinsey Global Institute Dec 2008
We spend twice as much on health care as other nations do
OECD, 2006. Data for Japan is an estimate
$ Per person
US Health Costs Rise Faster than Other Countries’ Costs
Source: Health United States 2005, Natl. Center for Health Statistics
We pay higher taxes
OECD, 2006 & Health Affairs 2002; 21(4): 99
Out of Pocket Costs are Higher
$/per capita
Source: OECD 2006Data are for 2004 or for most recent year availableFigures adjusted for purchasing power parity
We are one of the Youngest Populations in the Industrialized World
OECD, 2006 (2003 Data)
Fewer Americans Smoke Compared with Other Nations
OECD, 2006 (2003 Data)
We Drink Less Alcohol
OECD, 2006 (2003 Data)
But… We Don’t Live as Long
OECD, 2006 (2003 Data)
More Babies Diein the U.S. in the first year of life
OECD, 2006Data are for 2004 or more recent year available
Australia Canada England N.Z. U.S.Breast Cancer 2nd 4th worst 3rd bestColorectal Cancer 2nd 3rd worst best 4thCervical Cancer best 3rd worst 4th 2ndChildhood Leukemia worst best 3rd 4th 2ndKidney Transplant 2nd best 3rd 3rd worstLiver Transplant 2nd best worst * 3rdNon-Hodgkin’s Lymphoma
best 4th worst 2nd 3rdAMI, ages 20-84 best worst NA 2nd NAStroke, ages 20-84 2nd best NA worst NA
Source: Health Affairs Vol 23:#3 , 2004
Our Quality is Not the Best in the world Survival Rates for 5 Countries
We Do an Average Number of Bone Marrow Transplants
per million people
OECD, 2006 (2003 Data)
We Do More Heart Transplantsper million people
OECD, 2006 (2003 Data)
We are Average in Number of Renal Transplants (2001/2002)
OECD, 2004
Transplants/million population
We are Average in the Number of MRI Units
Source: OECD, 2005Note: data are for 2004 ,or most recent year available
MRIs/ million population
We Do Fewer Hip Replacements
Procedures per 100,000 population
Source: OECD 2006Data are for 2004 or most recent year available
197
Other Industrialized Countries
Availability of expensive technology
Rising drug costs Have similar demographics Similar levels of service
Why are their costs so much lower?
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
Everyone included
Clear accountabilityPublic StewardshipBudget Process
Public Financing
Fundamental Features of a True Health Care System
Business thinking applied to healthcare reform
1. What is the overall goal? (Preserve, restore and maintain health)
2. How much do we need? (McKinsey says $650 excess spending)
3. How get more for your money?(administrative savings ,formularies, negotiating prices, more primary care and prevention)
4. How would you collect money?5. How to control overall costs?-(Budget process,6. Who is in charge?-How to fix when things go
wrong-accountability
Investment Model Healthcare is regarded as a public good
with investment in needed services for the whole population
The costs of these shared services are spread across the whole population
Pools money and pays for health care directly
Single Payer Health Care Systems
Sweden, Norway, Denmark, Canada, Finland, Iceland, Australia, and Taiwan all have single payer financing
Single publicly financed risk pool that pays for health care directly from a fund ear-marked for health care
Everyone has access to privately delivered, publicly financed health care services
Public can buy health insurance for services not covered by public plan.
Deborah Richter, MD802-371-7764PO Box 1467
Montpelier, VT 05601 www.vthca.org
ADDITIONAL SLIDES
Pros and cons of a true health care system
PROS Everyone Covered Better benefits Effective Cost
Containment Fairer financing Stability of
financing of services
Coverage not linked to employment
CONS Problems are aired in
public Some will pay more
than they are now Cost containment
measures may cut availability of some services
“If done right, health care in America could be dramatically better with true single-payer coverage.”
-Ben Brewer, WSJ, April 18, 2006
“[single-payer] is an idea that's so easy to slam politically yet so sensible for business that only Republicans can sell it! …it may take a Republican President to bless the socialization of health spending we need.”
-Matt Miller, Fortune, April 18, 2006
“Think, as a small business, how you could benefit from a single-payer system: you wouldn’t lose potential employees to larger firms that offer more attractive health benefits; health insurance costs would cease to be a line item in your budget. A serious illness befalling you or an employee wouldn’t be a company-wide financial crisis. You might even save money.”
-Joseph Antony, CNBC / MSN Money, Winter 2003
CNBC / MSN Money
Why have incremental reforms proven so ineffective in practice?
Private Insurers’ High Overhead
International Journal of Health Services 2005; 35(1): 64-90
Obstacles
Profit Politics Paranoia Perception
Universal healthcare system
