Health Care Reform 2009 – implications for you and your patients December 1, 2009

The punch line: Probably will expand access to most medical services But does not address other system flaws Therefore, either a bow to “reality”, or an historic missed opportunity A mish-mash of “demonstration” projects and pilots to improve quality Costs (to you, as taxpayer and as purchaser) will rise faster than they otherwise would have So surely no “bending of the cost curve” Revenues (for the public part) are uncertain Physician payments will decline in real terms – maybe specialists more than generalists Hospital payments will too Possible silver lining – doctors and hospitals may innovate just to preserve something close to what they have

Access – but to what? “Insurance” to cover basic medical services Paid for via same fee-for-service mechanism Without much regard for “value”

Is it “insurance”? Does it matter? Insurance protects vs. uncommon or catastrophic events Health plans also cover routine and non- emergency expenses Result – “moral hazard”, over-utilization, consumer not engaged in care decisions Some coverage of common expenses is a good thing – e.g. effective prevention; medications for chronic conditions that delay or prevent complications

Any efforts to control cost? New Medicare Advisory Board »“independent” »Charge: reduce “excess cost growth” »But... Can’t raise premiums, cut benefits, or reduce eligibility “Patient centered outcomes research” »See current screening mammography debate What does “cost control” mean, exactly? »One time savings vs. changing the slope of the curve

HR 3590 – key provisions 2074 pages Individual mandate to purchase insurance Guaranteed coverage Insurance Exchanges Community Insurance (“Public”) Option with state opt- out No federal funds (via public option, or via premium subsidies) for abortion Continuation of some quality initiatives – Core Measures, reducing so-called “hospital-acquired conditions”, reducing readmissions Pilots for Accountable Care Organizations, bundled payments, home-based primary care “Someone should do something about malpractice reform” Some wellness stuff Basic long-term care coverage for home services

HR 3590: The numbers Estimated cost $848B through 2019 Coverage for 31 million citizens Most provisions start in 2014 Reduces deficit by $130B New taxes »Medicare payroll tax increase for those with income > $200/250K »Cosmetic surgery »Tax on high cost insurance policies Medicare payment cuts »Hospitals -- $192B »Medicare Advantage -- $118B »Disproportionate Share payments -- $42B »DME ***NO permanent fix to SGR formula