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Health Care ReformHealth Care Reform
April 28 & 29, 2010April 28 & 29, 2010
Jack A. Lenhart, M.D.Medical Director, Valley Preferred
Jack A. Lenhart, M.D.Medical Director, Valley Preferred
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Health Care ReformHealth Care ReformWhy we needed health care reform?■ Problems of cost, quality, safety and the
uninsured■ The United States spends substantially more per
person on health care than any other country■ In 2005, the last year for which comparison
statistics are available, the United States spent $6,401 per person
■ The next highest spending was in Norway - $4,364 and Switzerland - $4,177
Why we needed health care reform?■ Problems of cost, quality, safety and the
uninsured■ The United States spends substantially more per
person on health care than any other country■ In 2005, the last year for which comparison
statistics are available, the United States spent $6,401 per person
■ The next highest spending was in Norway - $4,364 and Switzerland - $4,177
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Health Care Reform(continued)
Health Care Reform(continued)
■ Overall, United States health care expenditures are 2.4 times the average of all developed countries
■ Yet, health outcomes for United States patients whether measured by life expectancy, disease specific mortality rates or other variables are unimpressive
■ Mediocre outcomes + high cost = poor value
■ Overall, United States health care expenditures are 2.4 times the average of all developed countries
■ Yet, health outcomes for United States patients whether measured by life expectancy, disease specific mortality rates or other variables are unimpressive
■ Mediocre outcomes + high cost = poor value
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1942 Stabilization Act1942 Stabilization Act■ Congress limited the wage increases that could be
offered by firms, but permitted the adoption of employee insurance plans
■ Health benefit packages become a major means of securing workers
■ 1949 – National Labor Relations Board rules that the term “wages” included insurance benefits
■ 1954 – Internal Revenue code made employer contributions to employee health plans exempt from employee taxable income
■ Congress limited the wage increases that could be offered by firms, but permitted the adoption of employee insurance plans
■ Health benefit packages become a major means of securing workers
■ 1949 – National Labor Relations Board rules that the term “wages” included insurance benefits
■ 1954 – Internal Revenue code made employer contributions to employee health plans exempt from employee taxable income
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Medical Cost InflationMedical Cost InflationThe forces of third-party payment, and usual andcustomary reimbursement, Cost plus HospitalPayments
■ Hospitals paid costs plus – no incentive to deliver efficient care
■ Physician earned more by charging more for procedures, surgeries and hospital care
■ Patients were insulated from the costs, paid by employer insurance / tax free benefit
The forces of third-party payment, and usual andcustomary reimbursement, Cost plus HospitalPayments
■ Hospitals paid costs plus – no incentive to deliver efficient care
■ Physician earned more by charging more for procedures, surgeries and hospital care
■ Patients were insulated from the costs, paid by employer insurance / tax free benefit
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Not office visits
U.S.
3.8 per capita
OECD average
6.8 per capita
Not over hospitalization 121/1000 163/1000
High tech 3x as many MRI scanners as OECD average
Procedures: Coronary re-vascularization (per 100,000)
579 245
Drugs: Pharmaceutical spending per capita
$752 $383
End Result of those Forces Leads to Over Utilization
End Result of those Forces Leads to Over Utilization
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Not office visits
U.S.
3.8 per capita
OECD average
6.8 per capita
Not over hospitalization 121/1000 163/1000
High tech 3x as many MRI scanners as OECD average
Procedures: Coronary re-vascularization (per 100,000)
579 245
Drugs: Pharmaceutical spending per capita
$752 $383
End Result of those Forces Leads to Over Utilization
End Result of those Forces Leads to Over Utilization
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Physician Factors – Intervention BiasPhysician Factors – Intervention Bias
■ Culture – thoroughness not prudence is rewarded – imperative to do everything for patient regardless of cost or effect or others
■ Fee-for-service payments misalign incentives
■ Explosion of physician ability to intervene
■ Medical malpractice and defensive medicine
■ Culture – thoroughness not prudence is rewarded – imperative to do everything for patient regardless of cost or effect or others
■ Fee-for-service payments misalign incentives
■ Explosion of physician ability to intervene
■ Medical malpractice and defensive medicine
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Patient FactorsPatient Factors
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Patient FactorsPatient Factors■ United States culture embraces technologic fixes
for problem ● Doing more tests and receiving more
treatments; intervention provides better care■ Direct-to-consumer marketing very successful in
driving patient requests for new and more costly medicines
■ Third-party payment has largely shielded patient and family decisions from the true cost of health care
■ United States culture embraces technologic fixes for problem
● Doing more tests and receiving more treatments; intervention provides better care
■ Direct-to-consumer marketing very successful in driving patient requests for new and more costly medicines
■ Third-party payment has largely shielded patient and family decisions from the true cost of health care
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Health Care Reform Is there any way out of this mess?
Health Care Reform Is there any way out of this mess?
■ Find a way for basic insurance for all with emphasis on wellness and prevention
■ Allow cost to effect patient and family decision-making; at least in high tech expensive care with marginal benefit (value based insurance design)
■ Develop Employer Cultures of Wellness■ Change hospital and physician re-imbursement from paying
for volume to paying for value – Pay For Performance Accountable Care Organizations
■ Alter physician compensation to encourage primary care – Patient-Centered Medical Home
■ Take malpractice out of the courts – compensation system for physician and hospital error
■ Find a way for basic insurance for all with emphasis on wellness and prevention
■ Allow cost to effect patient and family decision-making; at least in high tech expensive care with marginal benefit (value based insurance design)
■ Develop Employer Cultures of Wellness■ Change hospital and physician re-imbursement from paying
for volume to paying for value – Pay For Performance Accountable Care Organizations
■ Alter physician compensation to encourage primary care – Patient-Centered Medical Home
■ Take malpractice out of the courts – compensation system for physician and hospital error
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Employer-Based Culture of WellnessEmployer-Based Culture of Wellness
■ Keep the well healthy■ Keep those with chronic illness (Diabetes,
Vascular diseases, Hypertension, Hyperlipidemia) from getting worse
■ Encourage employees to evaluate their own health risks
■ A culture that encourages employee to take responsibility for their own health
■ Keep the well healthy■ Keep those with chronic illness (Diabetes,
Vascular diseases, Hypertension, Hyperlipidemia) from getting worse
■ Encourage employees to evaluate their own health risks
■ A culture that encourages employee to take responsibility for their own health
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Health Care Reform Is there any way out of this mess?
Health Care Reform Is there any way out of this mess?
■ Find a way for basic insurance for all with emphasis on wellness and prevention
■ Allow cost to effect patient and family decision-making; at least in high tech expensive care with marginal benefit (value based insurance design)
■ Develop Employer Cultures of Wellness■ Change hospital and physician reimbursement from paying
for volume to paying for value – Pay For Performance Accountable Care Organizations
■ Alter physician compensation to encourage primary care – Patient-Centered Medical Home
■ Take malpractice out of the courts – compensation system for physician and hospital error
■ Find a way for basic insurance for all with emphasis on wellness and prevention
■ Allow cost to effect patient and family decision-making; at least in high tech expensive care with marginal benefit (value based insurance design)
■ Develop Employer Cultures of Wellness■ Change hospital and physician reimbursement from paying
for volume to paying for value – Pay For Performance Accountable Care Organizations
■ Alter physician compensation to encourage primary care – Patient-Centered Medical Home
■ Take malpractice out of the courts – compensation system for physician and hospital error
![Page 15: Health Care Reform April 28 & 29, 2010 Jack A. Lenhart, M.D. Medical Director, Valley Preferred Jack A. Lenhart, M.D. Medical Director, Valley Preferred](https://reader030.vdocuments.us/reader030/viewer/2022032604/56649e665503460f94b60afc/html5/thumbnails/15.jpg)
Health Care Reform Is there any way out of this mess?
Health Care Reform Is there any way out of this mess?
■ Find a way for basic insurance for all with emphasis on wellness and prevention
■ Allow cost to effect patient and family decision-making; at least in high tech expensive care with marginal benefit (value based insurance design)
■ Develop Employer Cultures of Wellness■ Change hospital and physician re-imbursement from paying
for volume to paying for value – Pay For Performance Accountable Care Organizations
■ Alter physician compensation to encourage primary care – Patient-Centered Medical Home
■ Take malpractice out of the courts – compensation system for physician and hospital error
■ Find a way for basic insurance for all with emphasis on wellness and prevention
■ Allow cost to effect patient and family decision-making; at least in high tech expensive care with marginal benefit (value based insurance design)
■ Develop Employer Cultures of Wellness■ Change hospital and physician re-imbursement from paying
for volume to paying for value – Pay For Performance Accountable Care Organizations
■ Alter physician compensation to encourage primary care – Patient-Centered Medical Home
■ Take malpractice out of the courts – compensation system for physician and hospital error
![Page 16: Health Care Reform April 28 & 29, 2010 Jack A. Lenhart, M.D. Medical Director, Valley Preferred Jack A. Lenhart, M.D. Medical Director, Valley Preferred](https://reader030.vdocuments.us/reader030/viewer/2022032604/56649e665503460f94b60afc/html5/thumbnails/16.jpg)
Patient-Centered Medical HomePatient-Centered Medical Home
■ Team concept■ Wellness focus■ Improved access (virtual visits, e-mail, etc.)■ Care coordination■ Goals of care
■ Team concept■ Wellness focus■ Improved access (virtual visits, e-mail, etc.)■ Care coordination■ Goals of care
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Health Care Reform Is there any way out of this mess?
Health Care Reform Is there any way out of this mess?
■ Find a way for basic insurance for all with emphasis on wellness and prevention
■ Allow cost to effect patient and family decision-making; at least in high tech expensive care with marginal benefit (value based insurance design)
■ Develop Employer Cultures of Wellness■ Change hospital and physician re-imbursement from paying for
volume to paying for value – Pay For Performance Accountable Care Organizations
■ Alter physician compensation to encourage primary care – Patient Centered Medical Home
■ Take malpractice out of the courts– compensation system for physician and hospital error
■ Find a way for basic insurance for all with emphasis on wellness and prevention
■ Allow cost to effect patient and family decision-making; at least in high tech expensive care with marginal benefit (value based insurance design)
■ Develop Employer Cultures of Wellness■ Change hospital and physician re-imbursement from paying for
volume to paying for value – Pay For Performance Accountable Care Organizations
■ Alter physician compensation to encourage primary care – Patient Centered Medical Home
■ Take malpractice out of the courts– compensation system for physician and hospital error
![Page 18: Health Care Reform April 28 & 29, 2010 Jack A. Lenhart, M.D. Medical Director, Valley Preferred Jack A. Lenhart, M.D. Medical Director, Valley Preferred](https://reader030.vdocuments.us/reader030/viewer/2022032604/56649e665503460f94b60afc/html5/thumbnails/18.jpg)