Health Reform 2.0

1. Health Reform 2.0 PNHP meeting May 22, 2010

4. Impact of Health Reform on:The Uninsured • # of uninsured reduced from 46 million today to ~23 million in 2019. • Safety net hospital funding through Medicare cut by $36 billion through 2019. • Community health centers receive extra $1 billion annually

8. Impact of Health Reform on:The Underinsured • If you like your current coverage you can keep it. • If you don’t like your current job-based coverage, you HAVE to keep it. • Policies required to cover at least 60% of expected health costs – e.g. $2,000 deductible + 20% co-insurance for next $15,000 of care.

9. Massachusetts Policies Available through the exchange to a 56 yo with income > $32,000 • $5000 annually in premiums • $2000 deductible • 20% coinsurance for next $15,000

10. Crimes and Punishments in Massachusetts

13. Impact of Health Reform on:Medical Bankruptcy • No change for 75% of medically bankruptcy filers who have insurance. • Up to 50% reduction among the 25% of the medically bankruptcy who were uninsured in 2007 but will gain coverage under reform. • Maximum expected reduction in medical bankruptcies = 12.5%.

20. Despite high overhead HMOs prosper by cherry-picking Especially in Medicare, where cherry-picking is already illegal

23. Impact of Health Reform on:Administrative Costs • IRS cost to enforce mandate - $5-10 bil • Running insurance exchanges - ~4% of premiums (based on Massachusetts) • Insurance overhead - ~13% of new premium revenues = $42 bil • Cap on insurance overhead - ???? • Standardized claim forms - ????

26. Role Played by Health Industry in Health Reform • Insurance donations to Dems & Repubs + ads in favoring AND opposing • Pharma - >$100 million on ads supporting reform • Senate framework written by Liz Fowler, former VP of Public Policy for Wellpoint/Anthem

27. Impact of Health Reform on:Health Care Costs - 1 • Expanded Medicaid - $434 bil. • Subsidies for private coverage - $358 bil. • Small employer tax credits - $37 bil. • Temporary high risk pools, subsidy for retirees <65, etc – ~$10 bil. All figures reflect spending through 2019

28. Impact of Health Reform on:Health Care Costs – 2 (savings) • Decreased Medicare Advantage/HMO overpayment - $136 bil. • Decreased Medicare (DSH) payment to safety net hospitals - $36 bil. • Decreased Medicare fee-for-service payments to doctors/hospitals - $196 bil. • Other Medicare/Medicaid cuts - $87 bil. All figures reflect spending through 2019

29. Impact of Health Reform on:Cost Control Provisions • Insurance exchanges • Health information technology • Comparative effectiveness research • Fraud and abuse prosecution/recovery • Alternatives to F-F-S (experiments) • Coverage of preventive services • Tax on “Cadillac” coverage • Malpractice reform (experiments) • Medicare advisory board

30. Health Reform Bill:Proven Cost Control Provisions

31. Hospital Computing and the Cost and Quality of Care • Data sources: • Computerization – HIMSS surveys 2003-2007 • Quality – Medicare/Dartmouth Atlas • Costs – Medicare cost reports • Data available for ~4,000 U.S. hospitals

32. Conclusions • Computerization NOT associated with lower costs of care. • Computerization NOT associated with lower administrative costs. • Computerization associated with slightly better quality scores - ? Real improvement vs. more documentation.