Health Reform in the US: Implications of the Patient Protection and Affordable Care Act of Rob Janett

Transcription

1 Health Reform in the US: Implications of the Patient Protection and Affordable Care Act of 2010 Rob Janett

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4 Agenda Problems of the uninsured Health disparities International comparisons Uneven distribution of health insurance coverage in the US Major points of health reform The economics of reform Concluding remarks

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6 3.0 Diagnosis of Late-Stage Cancer Uninsured vs. Privately Insured Ratio of probability of diagnosis of late vs. early stage cancer, Uninsured/private insurance Equal likelihood between Uninsured and Insured Colorectal Cancer Lung Cancer Melanoma Breast Cancer NOTE: Odds ratios were adjusted for age, sex, race/ethnicity, facility type, region, and income and education on basis of postal code. They represent the odds of being diagnosed with stage III or state IV cancer vs. stage I cancer. Analysis based on cases occurring between SOURCE: Kaiser Family Foundation, based on Halpern MT et al, Association of insurance status and ethnicity with cancer stage at diagnosis for 12 cancer sites: a retrospective analysis." The Lancet Oncology. March 2008.

7 Barriers to Health Care Among Nonelderly Adults, by Insurance Status, 2008 Percent of adults (age 18 64) reporting: No Usual Source of Care 10% 10% 52% No Preventive Care 6% 6% 42% Went Without Needed Care Due to Cost* 4% 11% 24% Uninsured Medicaid/Other Public Employer/Other Private Could Not Afford Prescription Drug* 5% 13% 27% * In past 12 months. Respondents who said usual source of care was the emergency room were included among those not having a usual source of care. SOURCE: KCMU analysis of 2008 NHIS data.

8 Reported Consequences of Postponing or Forgoing Care for Low-Income Adults, % 51% 37% 14% Condition Got Worse Caused a Significant Amount of Pain Loss of Time at Work or Other Activities Caused a Disability Source: Kaiser Commission on Medicaid and the Uninsured analysis of the 2005 Kaiser Low-Income Coverage and Access Survey.

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11 Per Capita Total Current Health Care Expenditures, U.S. and Selected Countries, 2007 Australia Austria Belgium^ Canada Denmark Finland France Germany Greece Iceland* Ireland Italy Netherlands^ Norway Spain Sweden Switzerland^ United Kingdom United States $2,677 $2,626 $2,569 $2,578 $2,851 $3,172 $3,462 $3,362 $3,463 $3,319 $3,295 $3,180 $3,581 $3,715 $3,496 $3,527 $4,463 $4,417 $6,956 ^OECD estimate. $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 *Differences in methodology. Notes: Amounts in U.S.$ Purchasing Power Parity, see includes only countries over $2,500. OECD defines Total Current Expenditures on Health as the sum of expenditures on personal health care, preventive and public health services, and health administration and health insurance; it excludes investment. Source: Organisation for Economic Co-operation and Development. OECD Health Data 2009, from the SourceOECD Internet subscription database updated November Copyright OECD 2009, Data accessed on 11/13/2009.

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13 Health Insurance Coverage in Other Countries

14 The US is not winning the Health Olympics gold medal in life expectancy

15 Other performance deficits of the US healthcare system 15/19 in preventable deaths prior to age 75 death rate 40% higher than top countries (France, Japan, Spain) Last of 23 in infant mortality Enormous variability by region and state Low ranks for adults with health-related limitations in daily activities, children missing >11 days of school due to illness or injury Don Goldman, M.D. from IHI and Commonwealth Fund.

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17 Uninsured Rates Among Nonelderly by State, NH WA VT ME MT ND MN MA OR NY ID SD WI RI MI WY CT PA IA NJ NE OH NV IL IN DE CA UT WV CO KS MO KY VA MD NC DC TN OK AZ AR NM SC MS AL GA AK TX LA FL HI National Average = 17% <14% Uninsured (18 states & DC) 14 to 18% Uninsured (18 states) >18% Uninsured (14 states) SOURCE: Kaiser Commission on Medicaid and the Uninsured/Urban Institute analysis of 2008 and 2009 ASEC Supplements to the CPS., two-year pooled data.

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25 Major changes under PPACA Require citizens and legal aliens to have health coverage State insurance exchanges Premium support for low income indiv/fam Require business to offer health insurance New regulations of insurance industry Expand Medicaid to 133% of the federal poverty level

26 Individual Mandate Penalty for those without coverage Tax penalty to the greater of $695/person, or $2085/family, or up to 2.5% of household income Phased in 2014 to 2016

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28 Employer Requirements > 50 employees: offer health insurance or voucher to use in state health exchange >200 employees: automatically enroll all employees in health insurance plan (individuals can opt out) Tax penalties for companies that do not comply

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30 Expansion of Medicaid Expand Medicaid to all people under age 65 Children, pregnant women, parents, adults without dependent children Incomes up to 133% federal poverty level No coverage for undocumented aliens Federal government pays the costs of expansion from 2014 to 2017 Increase payment rates to primary care to 100% of Medicare fee scale in 2013 and 2014

31 Federal Poverty Limits 2010

32 Premium and cost sharing subsidies for individuals Individuals with incomes 133% to 400% of federal poverty level Sliding scale of subsidies based on income Effective 2014 Verification of income and citizenship status Small business tax credits, if employer contributes > 50% of premium cost

33 Tax changes Individual mandate Reduce deductions for health related expenses Increase Medicare A payroll deductions for individuals >$200K or families >$250K

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35 Tax on Cadillac Plans Excise tax on health plans with value >$10.2K/yr for individuals or >$27.5K for families

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37 Other tax changes Fees on pharmaceutical manufacturing Fees on the health insurance industry Excise tax on sales of taxable medical devices Limit deductibility of executive and employee compensation to $500K for health insurers 10% tax on tanning salons

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39 Health insurance exchanges State-based American Health Benefit Exchanges and Small Business Health Options Program (SHOP) Exchanges Benefit tiers Limit out of pocket payments on a sliding scale Regulation of operations of the exchanges

40 Private insurance regulation Temporary high risk pool for individuals with pre-existing conditions (starting in June 2010 and ending in 2014) Public reporting of health plan medical loss ratio and quality metrics Limit plan administrative costs to 15% for large group and to 20% for individual and small group coverage

41 Other private plan regulations Administrative simplification Provide dependent coverage up to age 26 (starting in September 2010)

42 Insurance market rules Prohibit lifetime and annual coverage caps Prohibit rescission of coverage except in cases of fraud Eliminate coverage waiting periods > 90 days Limit deductibles to $2k/yr for individuals and $4k for families Prohibit pre-existing condition exclusions For kids starting in 9/2010, others in 2014

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44 Medicare changes Reduce market basket updates for payments to hospitals, home health agencies, nursing homes, and hospices Independent Medicare Payment Advisory Board Changes in method of payment of Medicare disproportionate share (DSH) funds for hospitals that serve the poor Restructure payment to Medicare Advantage plans

45 Other Medicare changes for providers Allow providers to receive global payments as Accountable Care Organizations Reduce payments that would otherwise be made to hospitals for preventable readmissions Reduce payments to certain hospitals for hospital-acquired conditions by 1% 10% increase in primary care payments

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47 Medicare changes for beneficiaries Slowly close the donut hole in Medicare D (drug) coverage over time. Coverage of preventive services with no copayment

48 Wellness Grants to small employers to offer wellness programs Allow employers to offer employees rewards for participation in health programs or healthy behaviors

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50 Calorie disclosure Chain restaurants and vending machines to disclose nutritional content of each item sold

51 Comparative Effectiveness

52 Winners and losers Winners People with chronic conditions Small business owners and employees Accidental consultants Young 60-somethings Poor and uninsured Losers Generation Y The wealthy Those with Cadillac health plans Medicare Advantage enrollees The suntanned cast of Jersey Shore CBS Moneywatch 3/24/10

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54 Estimates of coverage, costs and savings Congressional Budget Office estimates Additional 32 million individuals covered Additional $938 billion in costs over ten years Savings (reduction of deficit) of $124 billion over ten years

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56 Medicare and Medicaid expected to rise rapidly as other programs (except Social Security) shrink

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58 Sources of $$ savings Reduced payments for Medicare managed care plans Reduce rate update factor for hospitals Increased rebates from drug companies for Medicaid Savings of $450 billion over next decade

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60 Supercharged crackdown on fraud & abuse Fraud = intentional deception; abuse = practices inconsistent with accepted standards $98 billion in 2009 Everywhere we look Estimated 3% of healthcare spending Center for Program Integrity

61 True long term savings Modernize delivery system Estimate that 30% of spending can be eliminated with no harm to patients $2300 per year per capita Productivity growth Health care can do what other industries do Savings are far larger than can be derived from payment reductions.

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64 Areas in which to save Reduce administrative expenses Currently estimated at 15% of health care spending! Eliminate care that is of no value Spending associated with medical error and quality gaps $30 billion for treatment of hospital acquired infections every year! Many are preventable.

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66 How to achieve savings Single payer or public option. Increased market competition. Use the leverage of federal health programs to change physician incentives and encourage more efficient care. Health information technology.

67 Compensation reform Bundled payments Accountable Care Organizations Pay for performance Investment in systems of care coordination and care transitions

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