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Health Care Reform:What It Likely Will and
Will Not AccomplishTom Schlesinger, Ph.D.Executive Consultant
Gundersen Lutheran
Access Quality
Cost
What are the problems and how did health reform address
them?
Where you stand depends on where you fall…
LIBERAL CONSERVATIVE
ACCESSIn developed countries the access issue is all about having health insurance
ACCESS- Current
Until now, U.S. only developed country w/o near universal coverage
US has over 15% uninsured - 45.7 million peopleEqual to populations of New York, Ohio, Pennsylvania
1999 2000 2001 2002 2003 2004 2005 2006 2007 20080
10
20
30
40
50
60
70
American Health Care Insurance Coverage
Employment-based
Not Covered
Government Health Insurance
Perc
ent
QUALITY
QUALITY - Current
• Very uneven quality across the U.S.
• No relationship expenditures and quality• Limited transparency
• Current payment system incents expensive care rather than high quality, cost-effective care
QUALITY- Reform
• Transparency: • Public reporting of physician sites
• Quality and Patient experience
• Paying for Value• Pay for performance• Value Index
COST
COST-CurrentWhat Drives the Rate of Increase?
1. Widespread use of expensive tests and treatments, much of it of marginal value
a) Fee for Service reimbursement2. System incents high cost care not value3. American health care is very fragmented
Costs very concentrated in small group4. Rising prevalence of chronic disease, some
estimates put it at 75% of health care costs1. - Much of this due to lifestyle choices
COST- ReformFocused on Access
Cost Control severely greatly constrainedPilots and/or watered down.
• Prices->Reduced annual payment updates
• Benefits plans-> tax ‘cadillac’ health plans limited
COST- Reform
• Congress unable to cut spending• Payment Advisory Board • Cannot change benefits, ration care, raise taxes, premiums, or cost-sharing
• Lawsuits->State grants to pilot tort reform• Geographic Payment Inequity-> study
COST- Reform
• Insurance Markets -> Exchanges• Intent is to reduce cost and improve access
• Small business and individual
COST- Reform
• Marginal care driven by Fee for Service• U.S. health care providers fragmented->
• Accountable Care Organizations (ACO)• Umbrella organizations to provide systems/processes and skills
• Move from FFS to bundled/global pay• Quality and cost will be compared to historical performance
• Savings will be shared
Specialty Care
Inpatient Care
AncillaryCare
What does this mean?
• Payment system reform is necessary but not sufficient to reform the delivery system
But payment reform will drive delivery reform• We are not sure what might best bend the
cost curve and yet be acceptable to stakeholders
• The system is so fragmented, change will be slow
• More and stronger efforts at cost reform are not far in the future
Will this pass ‘constitutional muster’?• Is Congress over-reaching?
• Commerce clause• Does the mandate violate fundamental
individual rights as put forward in the Bill of Rights?
Discussion