1 financing health reform: many roads diverged in a yellow wood len nichols, ph.d. director, health...

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Financing Health Reform:

Many Roads Diverged in a Yellow Wood

Len Nichols, Ph.D. Director, Health Policy Program

New America Foundation

Alliance for Health ReformJuly 13, 2009

Washington, DC

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Scope • We will spend $2.5T in health system in 2009

– $873 federal

• Covering all Americans will cost $125-175B per year– $1T 1.6T over 10 years

• BIG picture Financing Sources

• Why financing choices and success of reform are linked

Financing Sources

• Tax increases

• Reducing tax expenditures

• “Captured” program savings from delivery system reforms

Virtuous Cycle of BIG Reform

Coverage Expansion

Payment Reforms

Re-Align Incentives

Reduce Cost Growth

Fiscal and Economic

Sustainability

Health CEOs for Health Reform

Patricia GabowDenver Health

Nick WolterBillings Clinic

Lloyd DeanCHW

Gary KaplanVirginia Mason

Bruce BodakenBlue Shield, CA

Ken FrazierMerck

Tony TersigniAscension Health

Scott ArmstrongGroup Health

Donna Katen-BahenskyU Wisconsin Hospital +

6www.newamerica.net/files/DeliverySystemWhitePaper.pdf