1. Health Care Reform:Summer 2009 Glenn McLaurin College Intern, Life/Health

2. The Status Quo

3. Cost Realities 2008 US Gross Domestic Product: $14.26 Trillion 2008 US health care costs: $2.4 trillion 2008 US health care spending: 17% of GDP Number of uninsured Americans: 46 million Percentage of bankruptcies caused by medical costs: 60%

4. Who currently pays?

5. Rising Costs Predicted US health costs in 2017: $4.3 trillion Total 2017 spending as part of GDP: 20% Average annual growth rate for total US health costs through 2017: 7%

6. Impact of Rising Costs on Health Insurance Coverage “Since 1999, employment-based health insurance premiums have increased 120 percent, compared to cumulative inflation of 44 percent and cumulative wage growth of 29 percent” Increase in average employee contribution to employer-provided plan since 2000: 120% Percentage of all companies planning to stop coverage in 3-5 years: 19%

7. High Price, Low Value Highest levels of per capita Medicare spending: Louisiana, Texas, California, Florida Health determinant rankings: Louisiana, Texas, Florida all in bottom five

8. An International Perspective Share of GDP spent on health care by US: 17% Average share of GDP spent on health care by Germany, France, Canada: 9.96% Insurance model: Mandate for universal, public Share of GDP spent on health care by Switzerland: 10.9% Insurance model: Mandate for universal, private

9. An International Perspective Adjusted for wealth, excess amount of annual health care spending in the US: $650 billion Portion of $650 billion spent annually on outpatient care: 66% Average annual inflation for cost of outpatient for past 20 years: 9%

10. Approaches To reform

11. Common Themes Health Information Technology Infrastructure Expansion Comparative Effectiveness Research Value-Based Purchasing Tort Reform Community Wellness and Preventative Care Initiatives

12. Health Information Technology Infrastructure Expansion Universal access to records for all parties Standardize and simplify administrative duties Coordinate treatments, procedures, and prescriptions Requires co-development of universal security and privacy protocols

13. Comparative Effectiveness Research “Conduct and synthesis of research comparing the benefits and harms of different interventions and strategies to prevent, diagnose, treat and monitor health conditions in “real world” settings” – HHS Standardized treatment strategies Limits subjectivity and overutilization in health care

14. Value-Based Purchasing Rewards quality and outcome of treatment, not quantity of ordered procedures Combats wasteful and unnecessary spending Should not create disincentives to treat sickly or elderly patients

15. Tort Reform “Defensive” medicine to prevent negligence suits adds unnecessary and costly treatment Reform should protect doctors while ensuring accountability and patient safety

16. Community Wellness and Preventative Care Initiatives Preventable, chronic illnesses compose 85% of medical expenditures Increased risk: Poor diet Sedentary lifestyle, Tobacco consumption Incentives for healthier behavior: Greater discounts for preventative care Pedestrian-accessible infrastructure Support for tobacco cessation programs

17. Politics of Reform

19. The Process

20. Senate HELP Committee Composition

21. Senate HELP Committee Proposal

22. Senate Finance Committee Composition

23. Senate Finance Committee Proposal

24. House Tri-Committee Composition Committee on Energy and Commerce Chairman Henry Waxman (D-CA) Committee on Ways and Means Chairman Charles Rangel (D-NY) Committee on Education and Labor Chairman George Miller (D-CA)

25. House Tri-Committee Proposal

26. Key aspects of reform

27. Mandates Individual: Responsibility of citizens to carry public or private health insurance Employer “Pay-or-play”: Provide coverage or face tax penalties

28. Market Reforms Require guaranteed issue, non-discrimination Establish minimum benefits package Offer public and private plans in Federal Health Exchange Limit premium variation to few factors Potentially: Tobacco use, family size, age, community rating

29. Community Living Assistance Support and Services (CLASS) Act Public voluntary long-term disability insurance Automatic payroll deduction of $65/month Benefit of $50/day into Life Independence Account Only eligible after paying into system for five years

30. Potential funding sources for reform

31. Targets of Reform Cost less than $1 Trillion over 10 years Health insurance for 97% of American citizens Reduce the growth in health care spending by 1.5%/year

32. Impact on Medicare Reduce funding and plan options for Medicare Advantage (MA) Average cost of MA patient 14% higher than average Medicare patient More than 40 plans available to average MA patient Independent commission to set rates for reimbursement or redesign growth formula Congress historically increases physician reimbursement against recommended reductions

33. Increased Taxes Proposed surtax on nation’s highest earners Proposed “sin taxes” on soda Proposed tax on value of “Cadillac plans” High-value employer-provided health benefits