1. How To Talk To Business About Health Care Reform November 3. 2007

2. Major Concepts  We have no system coordinating access, cost containment or financing of services and care  Most health care costs are fixed  Few using it at any one time but all of us want it be there  We are already paying the whole bill which is more than enough to assure us all coverage for comprehensive care

3. The American health care system is neither healthy, caring, nor a system… Walter Cronkite

4. The Basics  Rising health care costs are the root of most of the problems in health care  Most costs are fixed whether health care is used or not  Other countries cover everyone, have more services, higher quality and live longer yet spend far less than we do  We are already paying the whole bill  You can’t hold down costs without a system !

5. Source: Centers for Medicare & Medicaid Services ProjectedActual Per capita expenditures National Health Spending: Per Person

6. Source: Centers for Medicare & Medicaid Services Projected Actual Percentage GDP National Health Spending as a share of Gross Domestic Product

7. $/Car Source: Modern Healthcare 10/24/05: 14 Japan Has a $1400 competitive advantage on every car they sell

8. Where is the money going?

9. $1.9 trillion Source: Centers for Medicare&Medicaid Services 30% U.S. Health Expenditures 2004

10. Source: Centers for Medicare&Medicaid Services 70% spent on services & infrastructure 30% U.S. Health Expenditures 2004

11. As of 2004, the U.S. had:  13.5 million health care jobs  7,228 hospitals with a total of  955,768 staffed beds  210,939 physician’s offices  70,589 nursing homes  19,006 home care agencies  121,172 dentist’s offices Source: National Center for Health Statistics Health Care Infrastructure : Enough to serve all Americans

12. Source:Agency for Healthcare Research and Quality MEPS, 1999 Percent of health Care Expenditures 1% 1% 2% 4% 6% 13% 73% 0% 0% 0% 20% use 86% of the care Most of the money is spent on a few people in any one year

13. Important Question: Whose responsibility should it be to pay for the health care services we all expect to be there should we need them?

15.  The cost of the infrastructure is there whether or not it is used (nurse, hospital)  Trying to save money by keeping patients out of the hospital is like trying to save money on schools by keeping kids home for the day  It is much more cost effective to invest in only what we need. The Implications of Fixed costs

16. How do we PAY for health care?

17.  We have no state or national healthcare policy  We finance health care services on a wing and a prayer (no dedicated funds)  Financing of health care amounts to a shell game… no payer wants to pay the fixed costs of health care  When that fails we ask the public to step in (risk shift) Health Care Financing

18. Source:Agency for Healthcare Research and Quality MEPS, 1999 Percent of health Care Expenditures 1% 1% 2% 4% 6% 13% 73% 0% 0% 0% If you were in an insurance company CEO, who would you want to insure?

19. Source:Agency for Healthcare Research and Quality MEPS, 1999 Percent of health Care Expenditures 1% 1% 2% 4% 6% 13% 73% 0% 0% 0% 20% use 86% of the care Most of the money is spent on a few people in any one year

20. Source:Agency for Healthcare Research and Quality MEPS, 1999 Percent of health Care Expenditures 1% 1% 2% 4% 6% 13% 73% 0% 0% 0% 80% uses less than $1000 of care per year If you were in an insurance company CEO, who would you want to insure?

21. Administration is the Fastest Growing job in Health Care Source: Bureau of Labor Statistics and NCHS

22. 69% 31% Clinical Care Administrative Costs Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004 ($2000 per person) One-Third of Health Spending is Consumed by Administration

23. Health Insurance Costs Keep Rising

24. Fewer Firms Are Offering Insurance…

25. 47 Million Uninsured

26. THE COST OF CARE CREATES HEALTH PROBLEMS AS WELL AS FINANCIAL PROBLEMS  In nearly 3 in 10 (29%) households, someone skips a medical treatment, cuts pills, or does not fill a prescription because of cost  Nearly 1 out of 4 (23%) Americans have problems paying medical bills  More than 1 in 5 (21%) Americans had an overdue medical bill at the time of a 2004 survey  1 million people experience medical bankruptcy each year Health Care Costs Survey, USA Today/Kaiser Family Foundation/Harvard School of Public Health, August 2005; D. Himmelstein et al, Health Affairs, 2005

27. Source: Care Without Coverage;Institute of Medicine,2002  More than six times the number of soldiers killed in Iraq  Equal to a 747 jet crash every week  More than 6 times the number who died on September 11th 18,314 Die Every Year Due to Lack of Health Insurance

28. Source: NEJM 1999; 340:109; Health Affairs 2000; 19(3):150 60% 20% Taxpayers Private employers Individuals { Medicare, Medicaid. Public employees, tax subsidies} Most of Healthcare is already publicly financed

29. Lower wages Private employers pay for health insurance Higher prices for goods Out of pocket Individual health insurance Taxes for Medicare and Medicaid Property taxesHealth insurance for public employees INDIVIDUAL HOUSEHOLDS In the End Individual Households Pay for All of Health Care

30. Do we really have the best health care in the world?

31. OECD, 2006. Data for Japan is an estimate $ Per person We spend twice as much on health care as other nations do

32. US Health Costs Rise Faster than Other Countries’ Costs Source: Health United States 2005, Natl. Center for Health Statistics

33. We pay higher taxes OECD, 2006 & Health Affairs 2002; 21(4): 99

34. $/per capita Source: OECD 2006 Data are for 2004 or for most recent year available Figures adjusted for purchasing power parity Out of Pocket Costs are Higher

35. We are one of the Youngest Populations in the Industrialized World OECD, 2006 (2003 Data)

36. Fewer Americans Smoke Compared with Other Nations OECD, 2006 (2003 Data)

37. We Drink Less Alcohol OECD, 2006 (2003 Data)

38. But… We Don’t Live as Long OECD, 2006 (2003 Data)

39. OECD, 2006 Data are for 2004 or more recent year available More Babies Die in the U.S. in the first year of life

40. AustraliaCanadaEnglandN.Z.U.S. Breast Cancer 2nd4thworst3rdbest Colorectal Cancer 2nd3rdworstbest4th Cervical Cancer best3rdworst4th2nd Childhood Leukemia worstbest3rd4th2nd Kidney Transplant 2ndbest3rd worst Liver Transplant 2ndbestworst *3rd Non-Hodgkin’s Lymphoma best4thworst2nd3rd AMI, ages 20-84 bestworstNA2ndNA Stroke, ages 20-84 2ndbestNAworstNA Source: Health Affairs Vol 23:#3, 2004 Our Quality is Not the Best in the world Survival Rates for 5 Countries

41. Continuity of Care Commonwealth Fund Survey, 1998

42. How hard is it to get care? Commonwealth Fund Survey, 1998

43. We Do an Average Number of Bone Marrow Transplants per million people OECD, 2006 (2003 Data)

44. We Do More Heart Transplants per million people OECD, 2006 (2003 Data)

45. OECD, 2004 Transplants/million population We are Average in Number of Renal Transplants (2001/2002)

46. Source: OECD, 2005 Note: data are for 2004,or most recent year available MRIs/ million population We are Average in the Number of MRI Units

47. Procedures per 100,000 population Source: OECD 2006 Data are for 2004 or most recent year available 197 We Do Fewer Hip Replacements

48.  Availability of expensive technology  Rising drug costs  Have similar demographics  Similar levels of service Why are their costs so much lower? Other Industrialized Countries

49.  Administrative simplicity  Negotiated prices  More primary care and prevention  Health planning  Global budgets They have a system Why costs are so much lower in other countries

50.  Everyone included  Clear accountability  Public Stewardship  Budget Process  Public Financing Fundamental Features of a True Health Care System

51.  Healthcare is regarded as a public good with investment in needed services for the whole population  The costs of these shared services are spread across the whole population  Pools money and pays for health care directly Investment Model

52.  Sweden, Norway, Denmark, Canada, Finland, Iceland, Australia, and Taiwan all have single payer financing  Single publicly financed risk pool that pays for health care directly from a fund ear-marked for health care  Everyone has access to privately delivered, publicly financed health care services  Public can buy health insurance for services not covered by public plan. Single Payer Health Care Systems

53. Medicare Medicaid Payroll Tax Income Tax Single-Payer Health Care Fund $$$ Financing Single-Payer Negotiated formulary with physicians, global budget for hospitals, increased primary and preventive care, reduction in unnecessary high-tech interventions, bulk purchasing of drugs and medical supplies = long term cost control.

54. US National Health Insurance Act

55. A National Health Program  Universal - covers everyone  Comprehensive - all needed care, no co-pays  Single, public payer  No investor-owned HMOs, hospitals, etc.  Improved health planning  Public accountability for quality and cost, but minimal bureaucracy

56. SOME IMPLICATIONS OF MEDICARE FOR ALL  The same coverage for everyone: No means testing; coverage would not depend on income, employment or age  Medicaid would no be longer needed  Hundreds of billions of dollars in administrative costs would be saved  Costs would be controlled through capital planning and quality reviews conducted through the single insurer

57. NHI will save $5000 per capita by 2024

58. How Might It Be Paid For? One Example :

59. “ Would you prefer the current system or Universal Health Insurance…” Washington Post/ABC News Poll, 10/20/03

60. Obstacles  Profit  Politics  Paranoia  Perception Universal healthcare system

61. Pros and cons of a true health care system PROS Everyone Covered Better benefits Effective Cost Containment Fairer financing Stability of financing of services Coverage not linked to employment CONS Problems are aired in public Some will pay more than they are now Cost containment measures may cut availability of some services

62. Deborah Richter, MD 802-371-7764 PO Box 1467 Montpelier, VT 05601 www.vthca.org DrDebVt@sover.net

63. Additional Slides

64. Hospital Coverage for All : Why ?  Hospital care accounts for 1/3 of total health spending  Hospital administrative costs account for the largest share of administrative costs  It is the biggest worry people have when they lack insurance  We are already paying the whole bill

65. Why is this politically feasible? It does something for everyone It cuts premiums for everyone It is easy to explain People realize we are already paying the whole bill anyway

66. “If done right, health care in America could be dramatically better with true single-payer coverage.” - Ben Brewer, WSJ, April 18, 2006 “[single-payer] is an idea that's so easy to slam politically yet so sensible for business that only Republicans can sell it! …it may take a Republican President to bless the socialization of health spending we need.” -Matt Miller, Fortune, April 18, 2006 “Think, as a small business, how you could benefit from a single-payer system: you wouldn’t lose potential employees to larger firms that offer more attractive health benefits; health insurance costs would cease to be a line item in your budget. A serious illness befalling you or an employee wouldn’t be a company- wide financial crisis. You might even save money.” -Joseph Antony, CNBC / MSN Money, Winter 2003 CNBC / MSN Money

67. Half of Americans Live Where Population Is Too Low for Competition Source: NEJM 1993;328:148 A town’s only hospital will not compete with itself

69. Variation in Medicare Spending: Some Regions Already Spend at Canadian Level

72. The oft-repeated canard that doctors are fleeing Canada in droves is not supported by the data.

74. Institute of Medicine, WSJ - June 15, 2006

75. How do we know this will work? Every single other industrialized country in the world has some form of NHI –EVERY ONE Not a single one has gone to that system, found it to be worse, and switched back –NONE

76. Why have incremental reforms proven so ineffective in practice?

77. Uninsurance and Underinsurance are Structural Features of Commercial Health Care

78. Billing and Insurance Costs Account For More Than 20% of All Health Care Costs BIR = Billing- and insurance-related costs; profit and marketing costs not included Source: James G. Kahn et al, The Cost of Health Insurance Administration in California: Estimates for Insurers, Physicians, and Hospitals, Health Affairs, 2005

81. Private Insurers’ High Overhead International Journal of Health Services 2005; 35(1): 64-90

82. Economies of Scale Saves Money

83. THE MAJORITY OF AMERICANS HAVE PRIVATE INSURANCE … Total Population Private health insurance - Employer-provided - Individual Public health insurance Medicare Medicaid Uninsured Million % 288 100.0% 174 60.5 % 160 55.6% 14 4.9% 72 25.0% 41 14.2% 31 10.8% 42 14.6% Source: National Center for Health Statistics, 2003

84. THE MAJORITY OF AMERICANS HAVE PRIVATE INSURANCE … Source: National Center for Health Statistics, 2003 Private Insurance 60% Medicare 14% Medicaid 11% Uninsured 15%

85. … BUT IT PAYS MUCH LESS THAN HALF THE COST 2004 Personal Health Expenditures Private Funds Private health insurance - Self-funded plans - Insurance company plans Out-of-pockets payments Other private funds Public Funds* Medicare Medicaid Other public expenditures $ Billion % $ 1,753 100% $ 965 54% $ 658 37% $340 19% $318 18% $ 236 13% $ 70 4% $ 789 46% $ 309 18% $ 293 17% $ 187 11% * Does not include tax subsidy for private insurance. See Woolhandler & Himmelstein, HealthAffairs 2002 Source: Centers for Medicare and Medicaid Services, 2006

86. v2 ways to save money financing care- we could make it easy and just get rid of the sick people Or …just pay for the care that the majority of us need right now