“There are some things even God doesn’t understand. That’s why He created politicians.”

1. “There are some things even God doesn’t understand. That’s why He created politicians.”

2. NPAG 2007 Hyatt Regency Chicago September 23, 2007 Reform U.S. Health Care … Or Else! Jeanne Scott talking-head-in-chief health-politics.com

4. Jeanne Scott’s Not Very Sophisticated Guide to the Politics of the United States of America Liberals Conservatives The Great “Unwashed” Middle • Unions • Hard working people who believe in bad luck • Rich People from Hollywood • Macrobiotics and Vegans • Pro Choice Advocates • And assorted left wing wackos, including but not limited to: hippie scum, tree-huggers, philanderers, reprobates, left leaning columnists, and outright communists. • Social Conservatives • Hard working people who don’t believe in bad luck • Rich People (Non-Hollywood) • Pro Life Advocates • And assorted right wing wackos, including but not limited to xenophobic talk show hosts and their followers and a small number of powerful members of the NRA who exercise disproportionate power • Markets fuel growth • Americans believe in fairness not equity • Inspire don’t conspire • Willingness to change and innovate • A Call for Sacrifice

5. Change: As Viewed By Each Liberals Conservatives The Great “Unwashed” Middle • Access is the priority • Cost control through wrestling for resources: top down budgeted and even price controls • Discounted FFS as payment • Hamster Care that is cheaper • Nothing wrong with the delivery system just need to get people access to it • Over-insurance is the problem • Increase HDHP • Expand Consumer engagement • Hamster care • Nothing wrong with the delivery system as long as consumers are willing to pay for it • Delivery system reform is the priority • Transparency of BOTH cost and quality • Value Purchasing to exploit the variation in cost and quality • Capitation/P4P/ Reimbursement Reform • Delivery system can and should be completely re-engineered

6. Rising Health Insurance Costs Changes in Health Insurance Premiums Compared to General Inflation and Average Employee Earnings Source: Kaiser Family Foundation

7. Outsourcing of Health Care ??? • Outsourcing is no longer limited to blue collar industrial and back-office white collar jobs • Software development and programming • Accounting and legal services • Health care claims processing (Northern Ireland, the Philippines) • And the latest new developments: • Medical transcription • Radiology and other telemedicine services • Sending patients to India and other Asian locations for surgeries and specialty services, (already an option under the British NHP) • Blue Cross-Blue Shield of South Carolina offering “overseas” option to members and marketing nationwide • Blue Shield of California, HealthNet offering “Mexican” HMOs

8. I took the above masthead from a web site -- Companion Global Healthcare – a subsidiary of Blue Cross-Blue Shield of South Carolina. • Companion Global Healthcare in the News: • Overseas Option for S.C. BlueCross Members Featured on NBC Nightly News - May 16, 2007 • Companion Global Healthcare, Doctors Care Reach Agreement for Aftercare Services - May 10, 2007 • BlueCross BlueShield of South Carolina and BlueChoice HealthPlan Pioneer Global Healthcare Alternative - February 8, 2007

10. “Rising medical costs are taking a toll on the auto industry’s bottom line and ultimately are threatening American manufacturers' ability to compete in the global marketplace. Congress needs to apply some serious medicine to address the nation's severe health care problems.” -- General Motors chairman and CEO G. Richard Wagoner Jr.

11. Health care insurance, once an employment benefit taken virtually for granted, has become a bed-rock issue in today’s American industrial labor-management environment. As the employee share of the cost has increased, people are starting to become more aware of the actual cost of health care – and increasingly are seeing the cost of health care insurance as a critical political issue – one upon which they will make a voting decision. A new study from the University of Michigan indicates that 27% of employers surveyed would like to eliminate health care coverage for their employees entirely. 85% said that the employee share will have to go up by 50% or more.

13. "I fear that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver." "Congress in the future will have to weigh the benefits of continued access, on current terms, to advances in medical technology against other fiscal initiatives." Alan Greenspan: November 25, 2005

15. Dire Warnings from the Comptroller General "I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan but our own fiscal irresponsibility." “[Boomers will] be eligible for Medicare in just three years and when those boomers start retiring en masse, then that will be a tsunami of spending that could swamp our ship of state if we don't get serious." "I'm going to show you some numbers…they’re all big and they’re all bad." David Walker, Comptroller General of the United States "You know the American people, I tell you, they are absolutely starved for two things: the truth, and leadership." "Any politician who tells you that we can solve our problem without reforming Social Security, Medicare, and Medicaid is not telling you the truth."

16. Gosh Darn All Those Pesky Uninsured People… 44.6 Million “officially” uninsured in 2006 (9.5M of which are children) 2007 Consumers Report Estimate: 60+ Million Underinsured 40% of Americans with no or in adequate health insurance…

17. Never Fear, the Answer is Simple: “ALL AMERICANS HAVE ACCESS TO HEALTH CARE. AFTER ALL, YOU JUST GO TO AN EMERGENCY ROOM!” - GEORGE W. BUSH, Cleveland, Ohio, August, 2007 • 29 Industrialized Nations, 28 With NHI • EMTALA-Driven Uncompensated Care/Emergency Room Crisis • 37th Ranking in World • 15.9% GDP • Movement Away From Employment-Based Coverage • The States Aren’t Waiting: Oregon, Maine, New Hampshire, California I, Maryland, Massachusetts, California II, Pennsylvania, Illinois, California III, Wisconsin, • Texas

19. S-CHIP REAUTHORIZATION DEBATE • This month, the Senate Finance Committee Approved 5-Year $60 Billion Increase to be Financed by 61¢ Tobacco Tax Increase • Pay-Go Rules Apply • Importantly, GOP Senators Hatch and Grassley Took the Lead In pushing This Through Democratic-Controlled Finance Committee • Would Fund Care for Children (but no additional adults) in Families Up to 400% of the Poverty-Level • (About $81,000) • House Version Calls for $50 Billion Mostly Financed Through a Smaller Tobacco Tax and Cuts in Payments to Medicare Advantage Plans • The White House Announced it Would Veto any Such Increase

20. Caring for the “uninsured” is estimated to cost $115 Billion in Transferred Costs to other Payers and Bad Debt… how many would that same $115 Billion cover in a better system?

21. Uninsured 46.8M (16%) Employer 153.7M (52%) This is How Americans Currently Get Their Healthcare Insurance Medicaid/ SCHIP 37.5M (13%) Dual Eligible 8.0M (3%) Medicare 31.9M (11%) TriCare 3.4M (1%) Private Non-Employer 9.5M (3%) Employer Retiree 3.3M (1%)

24. Per Capita Health Expenditures, U.S. and Selected Countries, 2003

25. Health Expenditures as a Share of GDP, U.S. and Selected Countries, 2003

26. Inflation-Adjusted Physician Income is Decreasing Across The Board SOURCE: Center For Studying Health System Change Community Tracking Study #15 June 2006

27. Not Getting the Right Care at the Right Time Quality Shortfalls: Getting it Right 50% of the Time Adults receive about half of recommended care 54.9% = Overall care 54.9% = Preventive care 53.5% = Acute care 56.1% = Chronic care Source: McGlynn EA, et al., “The Quality of Health Care Delivered to Adults in the United States,” New England Journal of Medicine, Vol. 348, No. 26, June 26, 2003, pp. 2635-2645

28. IRS Phone-in Tax Advice Phil Mickelson putting from 6 feet Overall healthcare Quality in U.S.(Rand Study 2003) Airline baggage handling Defects per million US Airline flight fatalities/US Industry Best of Class Shaq Free-throws Fair Reliability High Reliability 1 (69%) 2 (31%) 3 (7%) 4 (.6%) 5 (.002%) 6 (.00003%) ∑level (% Defects) Sources: Courtesy A. Milstein modified from C. Buck, GE; Dr. Sam Nussbaum, Wellpoint; & Mark Sollek, Premera Quality of Care Today: We are Worse than Shaq from the Line Reported October 30 that several hospitals have hired airline pilots to explain safety procedures and processes to their staff

29. International Obesity 2003 Percent of Population over 15 with BMI >30 Source: OECD, 2005

30. Obesity Drivers • We are eating more (duh!) • We are eating out more (In 1970 34% of the food budget was consumed outside the home in late 1990s it was 47%) • Everything is supersized at home and at McDonalds • We stopped smoking • We are all working too much especially women • We don’t exercise enough because we are all working too much • The only people who are exercising and eating right are people who were thin in the first place or bulimic celebrities or rich people who don’t work or French fashion models

31. Obesity is an Illness

32. The Future of Health Care Fat People Meet Skinny Benefits

33. Consumers insulated from the cost of care If they had to pay they would use it less If they had to pay they would take more responsibility Consumers should have the right to choose When consumers choose and pay the market is working The 5/55 Problem One day in an American hospital and consumers exceed maximum deductible, so Catastrophic coverage is a green light for esoterica Does it save money overall? Poor people with chronic illnesses will be disproportionately affected Consumer Responsibility:Arguments For and Against For Against

34. Across the board, HDHP consumers have more compliance problems Treatment compliance problems * Currently insured in employer-sponsored or self-purchased plan ** Currently enrolled in high deductible health plan

35. The Good, the Bad and the Ugly of Non-Compliance • The Good: Unnecessary care is foregone • The Bad: You don’t take the Lipitor and it hurts in the long run • The Ugly: You don’t take the asthma medication you go to the ER

36. Internet Information is ALWAYS Helpful

37. ELECTRONIC HEALTH RECORDS HAVE LIMITED EFFECT ON QUALITY OF CARE, STUDY FINDS • "In clinic visits in which doctors did use and didn't use electronic health records, we didn't find clear evidence that EHR use was associated with better quality." • "There's nothing magical about electronic health records. You need to have tools in place that take advantage of technology to show improvements in quality. You need to do additional work instead of just turning on the computer." -- Dr. Jeffrey Linder, at Boston’s Brigham and Women’s Hospital, study co-author

38. Voters View of Health CareWill Health Care Be a Political Issue in 2008? Surveys included open-ended and list-style questions about priorities for government to address, issues for candidates to discuss, most important problems facing the nation, and most important issue to your vote.

39. Thinking About the 2008 Presidential and Congressional Elections, Which Issues Do You Most Want to Hear About From the Candidates?

40. Four Scenarios for US Health Care 2007-2017 Tiering of Healthcare: “Tiers Я’ Us” Jeanne’s Odds: 3-2 Minor Delivery System Reform Disruptive Innovation: “Wal-Martization” of Health Care Jeanne’s Odds: 5-1 Bigger Government by Request: “Daughter of Single-Payer” Jeanne’s Odds: 2-1 Major Delivery System Reform Mostly or Almost Universal Health Care Jeanne’s Odds: 4-1

41. Scenario 1: Tiers Я’ Us • SUVing of health care • CDHC (Consumer-Directed Health Care) and HDHP (High-Deductible Health Plans) • Continued disparities and tiers • High end providers do well, low end suffers • Probability over 10 years: 40%

43. The Bush SOTU 2007 • Using Tax Policy to Address the Uninsured • Families buying individual insurance could deduct up to $15,000 of the costs, regardless of the cost to them • (thus encouraging people to buy low-cost, high-deductible coverage) • Families with employment-based insurance would be taxed on the value of that insurance in excess of $15,000 • Amounts would be indexed to inflation but not to increases in health costs

44. President Bush Puts His Eggs in the Health Savings Account Basket Expand Health/Medical Savings Accounts: Allow Individuals and Families to Set Aside as Much as $5,150 a Year, Tax Free Bush’s FY2007 Budget would increase the allowable amount to $10,300

45. Scenario 1: Tiers Я’ Us: Impact on Health Care System • Health Plans • Move toward HDHP and CDHC • Sell whatever anyone will buy • But always experience rate • Rising numbers of uninsured and underinsured • Providers • Well-heeled, well situated, well run providers continue to thrive and distance themselves from the pack on quality, safety, and service (one third) aided by P4P • Basket cases that deal with the poor and the lower middle class • A health system for the top third

48. Scenario 2: Bigger Government by Request • Baby-Boomer backlash against cost-shifting • Democrats run on shoring up and expanding Medicare for middle aged and elderly • Government regulates health care even more • Slowing innovation, reducing provider payment, and limiting profiteering • Probability over 10 years: 30%

49. Hillary-care; Giuliani-care; Obama-care; McCain-care; etc.; etc. Would-be, Wanna-be, Could-be, Might-be 2008 Presidents are falling over one another in proposing health plans for Americans

50. Democrats see this as “their” issue