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Francis J. Crosson, MD Senior Fellow Kaiser Permanente Institute for Health Policy

Public Policy and Reimbursement Reform- the Problem of FFS Payment Cornell University’s International Health Care Conference May 11, 2010. Francis J. Crosson, MD Senior Fellow Kaiser Permanente Institute for Health Policy. Agenda. Health Care costs in the United States – macro trends

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Francis J. Crosson, MD Senior Fellow Kaiser Permanente Institute for Health Policy

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  1. Public Policy and Reimbursement Reform- the Problem of FFS PaymentCornell University’s International Health Care ConferenceMay 11, 2010 Francis J. Crosson, MD Senior Fellow Kaiser Permanente Institute for Health Policy

  2. Agenda • Health Care costs in the United States – macro trends • The need to change the payment structure

  3. Cost – National Health Spending National health spending in the U.S. is significantly higher than the average rate of other industrialized countries. Average Spending on Healthper capita ($US PPP) Total Expenditures on Healthas percent of GDP Data: OECD Health Data 2005 and 2006. Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006 3

  4. Health Care in the U.S. – a Snapshot

  5. Cost – Health Insurance Premiums Increases in the cost of health coverage continue to exceed the overall rate of inflation and the increase in workers’ earnings. Cumulative Changes in Health Insurance Premiums, Overall Inflation, and Workers’ Earnings 2000-2006

  6. Continued Growth in the Use of Physician Services per Beneficiary, 1999-2003 Source: MedPAC analysis of claims for 100% of Medicare beneficiaries for all 12 months of each year.

  7. The Cause High health care costs in the U.S are largely due to the combination of new expensive technology combined with fee-for-service payment to physicians and hospitals, in the absence of a global budget for health care.

  8. The Solution • Change payments to physicians and hospitals to create incentives for the appropriate use of resources. • Change the structure of care delivery to create health care systems capable of succeeding with these new payment methodologies.

  9. Medicare Will Lead • Care coordination payments • Bundled payments to physicians and hospitals • Shared savings/global payments to Accountable Care Organizations

  10. Medicare Can Lead

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