1. D CEO Health Care Reform Discussion
October 6, 2010
D CEO Health Care Reform Discussion
Joel T. Allison, FACHE
President & CEO
Baylor Health Care System

2. The Patient Protection and Affordable Care Act

3. The Need for Health Reform
Current system not sustainable
Growing uninsured and uncompensated care costs
Increase in incidence of chronic disease
Payment systems not tied to value, quality
Healthcare lags behind other sectors in information technology

5. Expands coverage to 32 million uninsured (legal residents).
What the bill does
Insurance reforms
Expands coverage to 32 million uninsured (legal residents).
Subsidies for purchase of private insurance
New “marketplace” through exchanges.

6. What the bill does, cont’d.
Promotes prevention and wellness
Additional Medicare benefits
Public health fund
Addresses health care disparities
Allows health plans in exchanges to offer incentives to providers for activities that address disparities as part of quality initiatives

7. What the bill does NOT do
No expansion to include undocumented workers
No requirement that private insurance plans in state insurance exchanges pay Medicare or Medicaid rates.
Does not address access issues
No public option program

8. What the bill does NOT do, cont’d.
It does not cut Medicare or Medicaid benefits.
It did not permanently address the cuts that physicians are going to take.
It does not fix fundamental Medicare problems.
It does not solve states’ problems with Medicaid and states’ obligations.

9. Healthcare Reform Timeline
Sept. – Dec. 2010
2012
2014
2020
June 2010
2011
2013

10. What we can expect short-term
Increase in insurance premiums initially due to rising medical costs and adverse selection;
Pressure on small businesses to drop coverage;
More utilization of services due to pent-up demand;
New national high-risk health plan for those uninsured at least past 6 months;
Worse physician shortages, longer wait times; and
Potential hospital losses due to timing of cuts, delays in coverage for newly-insured.

11. What we can expect long-term
More insured patients/less uncompensated care;
Increase in health care workforce (jobs);
Evidenced-based medicine, improved quality, better patient outcomes;
Greater use of information technology;
More efficiency, lower costs; and
Healthier populations.

12. Clear Winners under Reform
Low-income people, especially those who are currently uninsured or have pre-existing conditions
People with chronic conditions or pre-existing conditions, especially in the individual insurance market
Small businesses that were considering health insurance but could not quite afford it
Worried parents who wanted to keep twenty-somethings on coverage

13. Clear Winners under Reform, cont’d.
Primary care physicians
Any physicians or providers with significant share of uncompensated care
Bio-pharmaceutical companies
Avoided government price negotiation and re-importation
Closed the doughnut hole with brands, especially biologics
Got 12-year exclusivity before Bio-Similars
Got new customers
Elderly not in Medical Advantage plans

14. Clear Losers under Reform
Tanning salons
Health insurers (although they get 32 million new customers for a business that had zero source of growth)
Wealthy people earning over a quarter million dollars a year, especially from investment income
Insurance brokers who don’t add value
Specialists who don’t see poor people

15. Clear Losers under Reform, cont’d.
30+ youngsters who “don’t need insurance”
Medical device manufacturers who have hidden from view until now
Seniors on Medicare Advantage
Hospitals with open doors that may be overwhelmed by volume of new patients paying below costs of service
States that did not want to expand coverage to low income people

16. In Summary
The health reform legislation isn’t perfect, but it is a start. Like most legislation, it needs work. Modifications are likely – repeal is not.
Reform will make it possible for anyone who wants health insurance and can afford it, to buy it and keep it.
Implementation has begun, and Congress will tweak. Medicare program must be fixed.
Health care delivery will change, and hopefully patients will get better, more cost-effective care.

17. The Good
More individuals will have coverage.
Did away with pre-existing condition exclusions
Emphasis on wellness and prevention
Pay for quality

18. The Bad
Not enough providers
Coverage does not mean access
Does not address undocumented workers

19. The Ugly
Process used to pass legislation
Rule-making

20. Wild Cards
2010 elections
Lawsuit challenges by state attorneys general
Real cost of reform
How many employers will drop coverage for employees?

21. Baylor’s Vision 2015
By 2015, Baylor Health Care System will:
1. Influence health care reform through patient-centered models of care
2. Fully implement clinical transformation to create an ideal experience for patients and caregivers
3. Continue to be a leader in medical education and research

22. Baylor’s Vision 2015
4. Continue to develop existing and build new clinical centers of excellence to serve all people and improve the health of the communities we serve
Diabetes Health and Wellness Institute
5. Demonstrate financial stewardship by maintaining a top bond rating (AA)
6. Become an Accountable Care Organization
7. Be routinely listed as one of the “Top 5” health care systems in the nation

23. “You can always count on Americans to do the right thing—after they’ve tried everything else.” Winston Churchill