Health Care Reform: What It Likely Will and Will Not Accomplish Tom Schlesinger, Ph.D. Executive Consultant Gundersen Lutheran

Access Quality Cost What are the problems and how did health reform address them?

Where you stand depends on where you fall… LIBERAL CONSERVATIVE

ACCESS In developed countries the access issue is all about having health insurance

ACCESS- Current Until now, U.S. only developed country w/o near universal coverage US has over 15% uninsured million people Equal to populations of New York, Ohio, Pennsylvania

Access- Reform …not a government takeover Poverty: expand Medicaid eligibility Affordability: subsidies to small businesses and individuals Small Group Market: establish insurance exchange (No public option) Insurance Reforms Pre-existing conditions, lifetime limits

QUALITY

QUALITY - Current Very uneven quality across the U.S. No relationship expenditures and quality Limited transparency Current payment system incents expensive care rather than high quality, cost-effective care

QUALITY- Reform Transparency: P ublic reporting of physician sites Quality and Patient experience Paying for Value Pay for performance Value Index

COST

COST-Current What Drives the Rate of Increase? 1.Widespread use of expensive tests and treatments, much of it of marginal value a)Fee for Service reimbursement 2.System incents high cost care not value 3.American health care is very fragmented Costs very concentrated in small group 4.Rising prevalence of chronic disease, some estimates put it at 75% of health care costs 1.- Much of this due to lifestyle choices

COST- Reform Focused on Access Cost Control severely greatly constrained Pilots and/or watered down. Prices->Reduced annual payment updates Benefits plans-> tax cadillac health plans limited

COST- Reform Congress unable to cut spending Payment Advisory Board Cannot change benefits, ration care, raise taxes, premiums, or cost-sharing Lawsuits->State grants to pilot tort reform Geographic Payment Inequity-> study

COST- Reform Insurance Markets -> Exchanges Intent is to reduce cost and improve access Small business and individual

COST- Reform Marginal care driven by Fee for Service U.S. health care providers fragmented-> Accountable Care Organizations (ACO) Umbrella organizations to provide systems/processes and skills Move from FFS to bundled/global pay Quality and cost will be compared to historical performance Savings will be shared

Specialty Care Inpatient Care Ancillary Care

What does this mean? Payment system reform is necessary but not sufficient to reform the delivery system But payment reform will drive delivery reform We are not sure what might best bend the cost curve and yet be acceptable to stakeholders The system is so fragmented, change will be slow More and stronger efforts at cost reform are not far in the future

Will this pass constitutional muster? Is Congress over-reaching? Commerce clause Does the mandate violate fundamental individual rights as put forward in the Bill of Rights?

Discussion