Health Reform and its Implications for Wisconsin Hospitals, Physicians and Patients Wisconsin Chapter of ACHE December 11, 2009

So how are things going in Washington D.C.?

Wisconsin Attributes 1. Low rate of uninsured (#2 nationally) 2. High access to coverage (98%) 4. High levels of physician/hospital integration 5. Robust adoption of HIT, especially EHR 3. Balanced medical liability system 6. Ranked #1 in Nation for quality (AHRQ) 7. Low per capita Medicare spending Wisconsin is a high “value” state

“If we could make the rest of the nation practice the way that Green Bay does, we would have higher quality and significantly lower costs,” - Peter Orszag Obama Administration Budget Chief

WI hospitals and MDs are paid much less per Medicare patient than other areas The “Value over Volume” movement Health Care Quality Coalition created to fight for VALUE based payment in Congress

Issues to Watch 1. The Public Plan 2. Coverage Expansion 3. How to Pay for It 4. Physician Payment-SGR What Will Happen?

“Negotiated” rates pegged to Medicare? 1. The Public Plan Public insurance plan for some currently uninsured and/or vulnerable insured … Small groups Individuals Early retirees Everyone? Who Will It Cover? Provider Payment Other Details State Opt In? State Opt Out? Trigger? Co-Ops?

1. The Public Plan “Some say a ‘public option’ is needed to compete with commercial plans … the truth is there can be no real competition if a public option pays for services based on artificially low Medicare rates. Such an approach will undermine WI’s nine provider-sponsored health plans.”

1. The Public Plan Could cost over $1 billion annually in lost revenue…

Or What? Employer/Individual Mandate - 8% payroll tax on employers dropping coverage - 2.5% tax on individuals What’s the Coverage? - Feds will dictate plan design and “essential benefits” - Obtained through a new Insurance Exchange - Public Plan slated to be available through Exchange 2. Coverage Expansion

Expanded Medicaid Eligibility Mandatory eligibility increased to 150% FPL Feds will pay 100% of cost first two years, 91% thereafter Impact on Wisconsin? - Eligibility already increased to 200%-300% FPL - Unclear if WI will receive higher federal payments Coverage Does Not Equal Access Bills fall far short of addressing current and future physician shortages

3. How to Pay for It House Bill and Senate Bills = About $1 trillion over 10 years Medicare provider payment cuts Eliminating “Fraud and Abuse” Tax Increases “Soft Savings”

Medicare Cuts in Play - $425-$500 billion 3. How to Pay for It AHA agreed to $155 billion with conditions Does not include $250 billion in scheduled physician payment cuts (SGR) $120 billion Medicare Advantage cuts - Annual update reductions - Readmission savings - Wisconsin impact - $2.5 billion/10 yrs

And the sausage factory is cranking out the usual baloney…

What Will Happen???? Hard to predict, but today it looks like … Extensive health insurance reforms/mandates $155 billion in hospital Medicare cuts over 10 years Modest recognition of “Value” Place setter for physician payment geographic “fix” “Bundling” pilots and other payment reforms Individual and employer mandate to buy insurance, premium subsidies, and insurance exchanges A Public Plan of some form will be a key issue

Likely Impact on Wisconsin What Will Happen? Minimal expansion of Medicaid eligibility, if any Possible reduction in uncompensated care due to decrease in uninsured Reduced payment from Medicare Payment reforms will support closer hospital-physician integration

Do You Support President Obama’s Health Reform Plan? Independents Likely Voters April 2009 Yes 57%-29% Yes 53%-30% Reform Politics What do voters think?

Reform Politics Independents Likely Voters April 2009 Yes 57%-29% Do You Support President Obama’s Health Reform Plan? Yes 53%-30% Likely Voters Today No 54%-42% Independents No 62%-36% 14% Undecided4% Undecided 17% Undecided2% Undecided

- “We’re not going to be bound by timelines” - Senator Majority Leader Harry Reid, 11/3/09 In the Senate When Will Something Happen? - Longer process, could be January or later In the House - Need majority +10 (60 votes) - Spkr. Pelosi says they will lose seats to pass - Lost almost 40 votes first time around Conference Committee

Prediction 1. Bill will pass 2. Difficult for either party to declare VICTORY 4. Battle will be fought again next November 5. Many “fixes” in our future 3. Long on coverage expansion, short on cost containment

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