OUTLINE OF HEALTH CARE PLAN RICHARD R. SCHNEIDER, MD F.A.C.P., F.A.C.C.

Health Care Plan Medical Provider Value Score Medical Provider Value Score By Richard R. Schneider, MD By Richard R. Schneider, MD Value = Outcome score X severity of illness score Value = Outcome score X severity of illness score Average cost per patient Average cost per patient

HEALTHCARE COSTS 1. $ 2.2 Trillion per year total million Americans equals > $7000 per person 3. Recent estimate by Price Waterhouse more than One Trillion Dollars wasted every year 4. 31% Overhead 5. Massive over utilization of resources

What We Get for Our Money 54% correct diagnosis and treatment (Rand corporation, New England Journal of Medicine) 54% correct diagnosis and treatment (Rand corporation, New England Journal of Medicine) Huge numbers of medical errors Huge numbers of medical errors 47 million uninsured at any given time 47 million uninsured at any given time 75 million uninsured during any given year 75 million uninsured during any given year

Solving the Problem Republicans want a “market based solution” Republicans want a “market based solution” Democrats want Universal affordable coverage Democrats want Universal affordable coverage Everyone wants more for their money Everyone wants more for their money

Creating a “Medical Marketplace” The market for medical care today simply does not exist. One must be created. The market for medical care today simply does not exist. One must be created. Markets require knowing what you’re getting and how much it costs. Markets require knowing what you’re getting and how much it costs. To know what you’re getting: Must Measure severity of illness adjusted outcomes. To know what you’re getting: Must Measure severity of illness adjusted outcomes. To know what your paying: Must measure resource expenditure to achieve those outcomes. To know what your paying: Must measure resource expenditure to achieve those outcomes. Grade “A” providers: Excellent outcomes/low cost per patient. Grade “A” providers: Excellent outcomes/low cost per patient. Grade “B” providers: Good outcomes/average cost per patient Grade “B” providers: Good outcomes/average cost per patient Grade “C” providers: Poor outcomes/high cost per patient Grade “C” providers: Poor outcomes/high cost per patient Must maintain “fee for service” payment schedule for doctors. Pay “A” providers 10% higher reimbursements. Pay “C” providers 10% lower reimbursements. Must maintain “fee for service” payment schedule for doctors. Pay “A” providers 10% higher reimbursements. Pay “C” providers 10% lower reimbursements. “Report cards” must be made public so patients can chose the best doctors. (Similar to recent recommendations by The Institute of Medicine.) “Report cards” must be made public so patients can chose the best doctors. (Similar to recent recommendations by The Institute of Medicine.) Doctors must have easy and rapid appeals process to correct mistakes in their “report cards” Doctors must have easy and rapid appeals process to correct mistakes in their “report cards”

Accurate Quality Measurement Accurate outcome measures can be obtained by simply using the same statistical tools that have been used for decades to perform clinical trials of medications and procedures. These analytic techniques are scalable to large numbers of physicians using powerful modern computer technologies. Accurate outcome measures can be obtained by simply using the same statistical tools that have been used for decades to perform clinical trials of medications and procedures. These analytic techniques are scalable to large numbers of physicians using powerful modern computer technologies. Only outcome measures are meaningful; “process” measures are meaningless because they do not correlate with better patient outcomes. Only outcome measures are meaningful; “process” measures are meaningless because they do not correlate with better patient outcomes. Outcome measures are only scientifically and mathematically accurate if they take into account initial severity of illness. Outcome measures are only scientifically and mathematically accurate if they take into account initial severity of illness. Quality and cost measurements must use uniform criteria and adequate sample sizes and be performed by an unbiased organization. Hospitals and insurance companies or HMO’s are not unbiased. Only the Federal Government can be trusted. Quality and cost measurements must use uniform criteria and adequate sample sizes and be performed by an unbiased organization. Hospitals and insurance companies or HMO’s are not unbiased. Only the Federal Government can be trusted. Physician Associations and Congress need to work together to devise methodology and quality criteria. Physician Associations and Congress need to work together to devise methodology and quality criteria. Which is more important, to measure the performance statistics for thousands of professional athletes or hundreds of thousands of professional physicians? Which is more important, to measure the performance statistics for thousands of professional athletes or hundreds of thousands of professional physicians?

Medicare for All “We hold these truths to be self evident…the right to life, …” “We hold these truths to be self evident…the right to life, …” When these words were written doctors could do little to prolong life. When these words were written doctors could do little to prolong life. In the 21 st Century, if one doesn’t have access to healthcare, one doesn’t have the right to life. In the 21 st Century, if one doesn’t have access to healthcare, one doesn’t have the right to life. Denying healthcare to anyone is simply Un-American. This is a self evident truth and is not debatable. Period. Denying healthcare to anyone is simply Un-American. This is a self evident truth and is not debatable. Period. Recent opinion polls indicate a majority of the public and of physicians are in favor of more government involvement in healthcare. Recent opinion polls indicate a majority of the public and of physicians are in favor of more government involvement in healthcare.

Universal Coverage Expand “fee for service” Medicare to cover all Americans. Expand “fee for service” Medicare to cover all Americans. Medicare to measure severity of illness adjusted outcomes and resource utilization for all providers. Medicare to measure severity of illness adjusted outcomes and resource utilization for all providers. Resource utilization includes: cost of medications, testing costs, cost of hospitalizations, surgeries and other procedures, etc. Resource utilization includes: cost of medications, testing costs, cost of hospitalizations, surgeries and other procedures, etc. Outcomes measurement includes severity of illness adjusted mortality, morbidity, and measurements of clinical improvement. Outcomes measurement includes severity of illness adjusted mortality, morbidity, and measurements of clinical improvement.

Benefits to Whistleblowers Government will track quality of care for all doctors. Government will track quality of care for all doctors. Whistleblowers will not be needed to report poor quality care. Good doctors should not have to be courageous to protect their patients. Whistleblowers will not be needed to report poor quality care. Good doctors should not have to be courageous to protect their patients. The excellent quality of care provided by many whistleblower physicians will be documented and available to be used in their defense. The excellent quality of care provided by many whistleblower physicians will be documented and available to be used in their defense. High quality low cost doctors will generate more revenue for their practices or institutions and will therefore gain in power and influence over low quality high cost doctors. High quality low cost doctors will generate more revenue for their practices or institutions and will therefore gain in power and influence over low quality high cost doctors.

Economic Savings Reduce overhead from 31% to 16% saving > $300 billion/ year. Reduce overhead from 31% to 16% saving > $300 billion/ year. Reduce resource utilization by 15% saving > $300 billion/year. Reduce resource utilization by 15% saving > $300 billion/year. Massive reduction in episodes of malpractice with associated dramatic reduction in malpractice premiums. Massive reduction in episodes of malpractice with associated dramatic reduction in malpractice premiums. Redirect part of economic savings into Medicare funding to pay for universal coverage and increased reimbursements for doctors. Redirect part of economic savings into Medicare funding to pay for universal coverage and increased reimbursements for doctors.

Benefits for Doctors and Hospitals All physician services are fee for service. All physician services are fee for service. 47 Million new “paying customers”. No need to provide “free care”. No bad debt to write off. 47 Million new “paying customers”. No need to provide “free care”. No bad debt to write off. Patients free to chose any doctor including specialists without “gate keepers”. Patients free to chose any doctor including specialists without “gate keepers”. Doctors will regain professional autonomy. The interests of doctors and patients will be realigned. Doctors will regain professional autonomy. The interests of doctors and patients will be realigned. Treatments and tests not subject to excessive scrutiny and denials. Treatments and tests not subject to excessive scrutiny and denials. Greater financial and job security for doctors in addition to higher incomes. Greater financial and job security for doctors in addition to higher incomes.

Benefits to Business Decreased labor costs due to absence of expenditures for health insurance. Decreased labor costs due to absence of expenditures for health insurance. Employment decisions will be based on ability to do the job not on age or health status. Employment decisions will be based on ability to do the job not on age or health status. Healthier more mobile work force will improve overall productivity. Healthier more mobile work force will improve overall productivity. Overall increase in profits. Overall increase in profits. Overall increase in economic prosperity will increase demand for all goods and services. Overall increase in economic prosperity will increase demand for all goods and services.