ihc -- health reform: what it means and what's next
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Presentation given by Grace-Marie Turner on patient-centered health care and the impact of ObamaCareTRANSCRIPT
Health Reform: What it means and what’s next?
IHC Leaders ConferenceScottsdale, AZ
March 23, 2012Grace-Marie Turner
Galen Institute
Americans satisfied with own care
82% - Their health care is good to excellent
45% - U.S. has world’s best health system
51% - Major problems, needs major changes
18% - System in crisis, needs major overhaul
Robert J. Blendon, Sc.D., Drew E. Altman, Ph.D., John M. Benson, M.A., Mollyann Brodie, Ph.D., Tami Buhr, A.M., Claudia Deane, M.A., and Sasha Buscho, B.A., "Voters and Health Reform in the 2008 Presidential Election," The New England Journal of Medicine, November 6, 2008, at http://content.nejm.org/cgi/content/full/359/19/2050.
Early benefits of the law
–Allowing “children” up to age 26 on parent’s policies
–New coverage for uninsured with health risks
–Coverage for pre-existing conditions–$250 for seniors with high drug costs–“Free” preventive care–No annual or lifetime limits on coverage
Key pillars of the new law
Strict federal regulation of health insurance
Mandates on individuals, states, employers
$500 billion in new taxes and penalties
$575 billion in cuts to Medicare32 million more to get health coverage
–16 million through Medicaid expansion–16 million through federally subsidized
private insurance
23 million remain uninsured in 2019
Why does the health law remain so unpopular?
Higher costs…Insurance rising 9% to $15,000/yr. in 2011
Foster: “False more so than true” that law will lower costs for taxpayers
Latest CBO cost estimate: $1.76 trillion
Gruber: Premiums up to 30% higher than without the law
Congressional Budget Office and the Joint Committee on Taxation, “An Analysis of Health Insurance Premiums Under the Patient Protection and Affordable Care Act,” November 30, 2009, www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf. Chief Medicare Actuary on President's health care claims: "I would say false, more so than true,“ House Budget Committee, January 26, 2011, http://www.youtube.com/watch?v=XC9rhGWJA2w. “2011 Employer Health Benefits Survey,” Kaiser Family Foundation/Health Research & Educational Trust, September 27, 2011, http://www.kff.org/insurance/092311nr.cfm.
“If you like your health insurance…”
51 to 80% of Americans will lose current coverage, according to Obama admin. estimates
CBO: Up to 20 million could lose job-based plans
Up to 80 million will be forced to change policies
Child-only policies vanish in 17 states
35 million more will move from job-based insurance to taxpayer-subsidized exchanges
Rules, rules, rules…
States to decide contents of Minimum Essential Benefits
States say they need more details with exchange rules
Medical Loss Ratio rules and exemptions teed up
Opportunities aheadThis is not settled policy
States resist, will try to reshape policy
This law must be changed, likely significantly
The American people want private insurance, and they want to be in charge of choices.
The goals:
Freedom. Innovation. Access.
Health care in 2012
Legislation: Challenges to the law – CLASS and IPAB
Regulation: 11,000+ pages so far
Legal: U.S. Supreme Court decision
Political: 2012 campaigns and elections
What we need from reform
A more diverse, dynamic, information- based approval system to pave the way for personalized health coverage and medicine
The 2012 debate provides an opportunity to reshape public policy in numerous ways
Starting a fresh conversation
Engaging patients as partners in managing health costs and getting the best value for health care dollars
Source: Mercer's National Survey of Employer-Sponsored Health Plans; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April) 1990-2009; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey (April to April) 1990-2009.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
8.1%
11.2%
14.7%
10.1%
7.5%
6.1% 6.1% 6.1% 6.3%5.5% 5.6%
9.0%
Total health benefit cost increases per employee
Sources: AHIP Center for Policy and Research, U.S. Census Bureau.
Percentage of Covered Workers Enrolled in a Plan with a General Annual Deductible of $1,000 or More
for Single Coverage, By Firm Size, 2006-2011
* Estimate is statistically different from estimate for the previous year shown (p<.05).
Note: These estimates include workers enrolled in HDHP/SO and other plan types. Because we do not collect information on the attributes of conventional plans, to be conservative, we assumed that workers in conventional plans do not have a deductible of $1,000 or more. Because of the low enrollment in conventional plans, the impact of this assumption is minimal. Average general annual health plan deductibles for PPOs, POS plans, and HDHP/SOs are for in-network services.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2006-2011.
Among Firms Offering Health Benefits, Percentage That Offer an HDHP, by Firm Size, 2005-2011
* Estimate is statistically different from estimate for previous year shown (p<.05).
‡ The 2011 estimate includes 1.8% of all firms offering health benefits that offer both an HDHP/HRA and an HSA-qualified HDHP. The comparable percentages for previous years are: 2005 [0.3%], 2006 [0.4%], 2007 [0.2%], 2008 [0.3%], 2009 [<0.1%], and 2010 [0.3%].
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005-2011.
6% 7%
12% *
16%
20%
28% *
1% 1%2%
3% *4% 5%
3%3%
5% *7% *
10%12% *
0%
10%
20%
30%
40%
50%
2006 2007 2008 2009 2010 2011
All Small Firms (3-199 Workers)All Large Firms (200 or More Workers)All Firms
Percentage of Covered Workers Enrolled in a Plan with a General Annual Deductible of $2,000 or More for
Single Coverage, By Firm Size, 2006-2011
* Estimate is statistically different from estimate for the previous year shown (p<.05).
Note: These estimates include workers enrolled in HDHP/SO and other plan types. Because we do not collect information on the attributes of conventional plans, to be conservative, we assumed that workers in conventional plans do not have a deductible of $2,000 or more. Because of the low enrollment in conventional plans, the impact of this assumption is minimal.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2006-2011.
Misconception Truth
“Shifts costs to employees”Members pay an average of $35 less per year out of pocket vs. traditional plans
“CDHC doesn’t save $$” Cumulative savings were 26% by the fifth year
“People will avoid care”
8-10% higher use of preventive care
96% same or better care compliance
21% more likely to use disease management programs
14% better compliance with EB recommended care
“People don’t understand or like the plans” 83% satisfied with service (vs. 82% traditional plans)
Dispelling CDHC Misconceptions
Source: 2010 Fifth Annual Cigna Choice Fund Experience Study
Source: 2010 Fifth Annual Cigna Choice Fund Experience Study
New Incentives McKinsey & Co. says CDHC plans increase
consumer awareness of cost and value. In this 2005 study, consumers were:
20% more likely to comply with treatments for chronic conditions 25% more likely to engage in healthy behaviors30% more likely to get annual physicals50% more likely to seek less expensive care
“If I catch an issue early, I’ll save money in the long run.”
McKinsey & Company. “Consumer-Directed Health Plan Report – Early Evidence is Promising.” June 2005. Available online at http://mckinsey.com/clientservice/payorprovider/Health_Plan_Report.asp.
Common themes
Focus on:
Personal responsibility by recipients
Better coordination of care
Incentives for patient participation
Data collection and outcomes reports
Wellness and prevention services
Greater focus on disease management
CDHC plans are moderating costs
Consumer-directed health plans show that realigning incentives can help employers and consumers save money while boosting prevention and wellness
It’s important for these options to be protected under the new health law
Caution Ahead
No instant success
Political criticism, resistanceSome employees “do not appreciate the long-term potential these savings accounts hold and remain mired in the old 'use it or lose it' mentality of flexible spending accounts."
Towers Perrin
http://www.towersperrin.com/tp/jsp/masterbrand_webcache_html.jsp?webc=HR_Services/United_States/Press_Releases/2007/20070522/2007_05_22.htm&selected=press
Some realities
A global move toward consumerism
Doctor/patient relationship
Decentralized decision-making
Value of private enterprise and competition
Who said this?“You should never try to tell people what they ought to do because all of their circumstances are different.
“But if you give them very good timely information, they are going to make their own decisions in ways, in general, that are going to be better for them and better for the system as a whole.”
― Ron Kirby, transportation planning coordinator for the Metropolitan Washington Council of Governments
Ashley Halsey III and Ed O’Keefe, “Earthquake illustrates colossal challenge of evacuating Washington, D.C.” The Washington Post, August 24, 2011.
What we know for sure
CHOICE: Americans value innovation, diversity and choice to accommodate different needs of 300 million people
FOCUS ON THE PATIENT: They want doctors and patients, not government, to make health care decisions
VALUE IN HEALTH SPENDING: To realize the promise of personalized medicine and achieve overall cost saving, we must allow more choice and competition
The future?The global move toward consumerism is real, driven by greater patient demand for more control over decisions.
Health overhaul is law and will fundamentally change the U.S. health sector. But I believe choice, innovation, and expanded access will continue to drive reform.
