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Why Is Radical Change Necessary?
C. Bruce Malone, MD, President
Hospital Spending per Discharge, 2008
* 2007.** 2006.Source: OECD Health Data 2010 (Oct. 2010)
Adjusted for Differences in Cost of Living
Leading health care attorney tells TMA:“Hospitals are a Burning Platform”
Where are We Now?
U.S. is spending much more for older ages
Source: Fischbeck, Paul. “US-Europe Comparisons of Health Risk for Specific Gender-Age Groups.” Carnegie Mellon University; September, 2009.
Health Care Costs by Age
Myths & Realities of Cost Savings
$2.6 Trillion in 2010
U.S. Health Care Costs = 5th Largest Economy in the World
Grew 2% Faster Than Overall Economy For 30 Years
$100 Billion Increase per Year
How Can We Save 1% = $26 Billion?
Myth 1: Insurance Company Profits
Total Profits of 5 Largest Insurers
$11.7 Billion
0.5% of Total U.S. Health Care Costs
Myth 2: Brand Name Drugs
Pharmaceutical Costs = 10% U.S. Health Care Spending = $260 Billion
From 2004 to 2009 Generics Go From 57% to 75% of All Drugs
Pharmaceutical Costs Increase 31%
Import Brand Name Drugs from Canada Saves $5 Billion = 0.2% All Health Care $$$
$250K Cap on Noneconomic Damages
$500K Cap on Punitive Damages
$11 Billion Savings with 1-Year Statute of Limitations
$5 Billion Savings from 40% Cut in Liability Premiums
$6 Billion Savings from Decreased Defensive Medicine Secondary to Training?
Myth 3: Medical Liability Reform
How Do We Tell In Advance Which Patients Will Cost Over $50,000?
Review of 20 Million Commercial Patients Only 255 Patients Consumed Over
$1 Million In 2010.
That’s 0.5% of All Costs
Myth 4: Expensive Patients
Billions of Wasted Dollars
Administration Costs 14% of US Health Care Costs
$360 Billion per Year
Half Borne by Payers
Half Borne by Doctors and Hospitals
Reality: The Cost of Billing
10% of Us Account for 64% of Health Care Spending
Most Have One or More of Seven Chronic Diseases
Reducing Avoidable Complications by 10% Saves $40 Billion a Year
More Savings Through Better Tertiary Prevention
Reality: The Cost of Chronic Care
Massive conversion to outpatient surgery
Dramatic drop in length of stay
Our Biggest Money Savers