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New Public Relations Campaign

“HEALTHCARE REFORM RULES UPDATE” Sponsored by Nebraska Association of Health Underwriters Quarry Oaks Golf Club September 28, 2010 Jesse A Patton LUTCF, HIA, MHP, FAHM, HIPAAA, EHBA. New Public Relations Campaign.

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New Public Relations Campaign

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  1. “HEALTHCARE REFORM RULES UPDATE”Sponsored by Nebraska Association of Health UnderwritersQuarry Oaks Golf ClubSeptember 28, 2010Jesse A Patton LUTCF, HIA, MHP, FAHM, HIPAAA, EHBA

  2. New Public Relations Campaign • $125 million public outreach effort called the Health Information Center to be co-chaired by former Senate Majority Leader Tom Daschle and Senator Ted Kennedy’s widow Victoria Kennedy • The president of the Center will be Andrew Grossman, who previously founded Wal-Mart Watch, a labor-backed group to challenge the world’s largest retailer • White House Communications Director Anita Dunn is a consultant, working with the group on a daily basis

  3. International Comparison of Spending on Health, 1980–2007 Average spending on healthper capita ($US PPP) Total expenditures on healthas percent of GDP 16% $7,290 8% $2,454 Note: $US PPP = purchasing power parity. Source: Organization for Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009).

  4. Overall Ranking Note: * Estimate. Expenditures shown in $US PPP (purchasing power parity). Source: Calculated by The Commonwealth Fund based on 2007 International Health Policy Survey; 2008 International Health Policy Survey of Sicker Adults; 2009 International Health Policy Survey of Primary Care Physicians; Commonwealth Fund Commission on a High Performance Health System National Scorecard; and Organization for Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009).

  5. National Health Expenditures per Capita and Their Share of Gross Domestic Product, 1960-2008 5.2% 7.2% 9.1% 12.3% 13.5% 13.5% 13.6% 14.3% 15.1% 15.6% 15.6% 15.7% 15.8% 15.9% 16.2% Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2008; file nhegdp08.zip).

  6. Annual Percentage Change in National Spending for Selected Health Services, 1998-2008 Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health Expenditures by type of service and source of funds, CY 1960-2008; file nhe2008.zip).

  7. U.S. Rx Spending • United States represents 5% of the world’s population • United States population consumes 52% of the prescription drugs in the world • Consumer 7% of the worlds fruits & vegetables

  8. Cumulative Changes in Health Insurance Premiums, Inflation, and Workers’ Earnings, 1999-2009 Note: Due to a change in methods, the cumulative changes in the average family premium are somewhat different from those reported in previous versions of the Kaiser/HRET Survey of Employer-Sponsored Health Benefits. See the Survey Design and Methods Section for more information, available at http://www.kff.org/insurance/7936/index.cfm. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009. Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 1999-2009; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 1999-2009 (April to April).

  9. Average Health Insurance Premiums and Worker Contributions for Family Coverage, 1999-2009 $13,375 131% Premium Increase $5,791 128% Worker Contribution Increase Note: The average worker contribution and the average employer contribution may not add to the average total premium due to rounding. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009.

  10. Average Annual Health Insurance Premiums and Worker Contributions for Family Coverage, 2005-2010 $1,284Worker Contribution Increase $13,770 27% $10,880 47% 20% Note: The average worker contribution and the average employer contribution may not add to the average total premium due to rounding. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005-2010.

  11. Employee Employer Total State Contribution Contribution 2008 Figures • Idaho $2,562 $8,275 $10,837 • Iowa $2,524 $8,423 $10,947 • Hawaii $2,597 $8,477 $11,044 • Oklahoma $3,619 $7,434 $11,053 • Alabama $3,265 $7,854 $11,119 17. Nebraska $3,173 $8,475 $11,648 51. Massachusetts $3,363 $10,425 $13,788

  12. Exhibit 1. Employer Coverage Continues to Be Major Source of Coverage for Employees of Larger Firms Percent of firms offering health benefits Data: Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits, 2000 and 2009 Annual Surveys.

  13. Mercer Management Journal 18, “The Case for Consumerism in Health Care” Constraining Medical Costs Determinants of Health Status Access to Care 10% Lifestyle Choices 50% Genetics 20% Environment 20%

  14. Obesity-Healthcare Spending 2018 • United States is expected to spend $344 billion on costs attributable to Obesity in 2018 • Obesity related expenditures will account for 21% of direct healthcare spending 2018 • Current trends continue, 103 million American adults will be obese in 2018 Source: The future of Cost of Obesity, www.americashealthrankings.com/2009/spotlight.aspx

  15. Higher Medication Adherence Associated with Lower Total Health Care Costs Diabetes Costs 10000 P< 0.05 $55 9000 8000 $165 $285 7000 $404 Rx $ Average expenditures per patient per year ($) 6000 Medical $ $763 5000 4000 $6,959 $6,237 $8,812 $5,887 $3,808 3000 2000 1000 0 % 1-19% 20-39% 40-59 60-79% 80-100% Adherence level (% Days supply/1 year) Sokol MC, McGuigan KA, Verbrugge RR, Epstein RS. Impact of medication adherence on hospitalization risk and healthcare cost. Medical Care. 2005;43:521-530.

  16. Higher Medication Adherence Associated with Lower Hospitalization Rate Diabetes Hospitalization Risk 35 30 30* 25 Risk (%) 26* 25* 20 20* 15 10 13 5 0 40-59 60-79 1-19 20-39 80-100 Adherence level (%) *Indicates that outcome is significantly higher than outcome for 80-100% adherence group (P<0.05). Differences were tested for medical cost and hospitalization risk. Sokol MC, McGuigan KA, Verbrugge RR, Epstein RS. Impact of medication adherence on hospitalization risk and healthcare cost. Medical Care. 2005;43:521-530.

  17. Distance to Provider Farthest Distance From a Provider for any American is 107 Miles

  18. Mc Donald’s

  19. Overall Approach & Objective • Require most U.S. citizens to have health insurance • Create American Health Benefit Exchanges with cost sharing credits • Expand Medicaid • Impose new regulations on Health Plans • Require Employers to pay penalties if employees get tax credits

  20. Current Status “We have to pass the bill so that you can find out what is in it” …. Speaker Nancy Pelosi On March 21, the House passed HR 3590, the bill passed by the Senate on December 24, 2009, with a 219-213 vote. Signed into law on March 23. The House and Senate have also passed a reconciliation bill, HR 4872, with a packages of “fixes” to the Senate bill President Obama signed the reconciliation bill.

  21. CBO Estimates • $940 Billion over Ten Years • Cover 32 million of the Uninsured • Reduce Deficit by over $124 Billion during this time period

  22. Awareness of CBO Estimate of Effect on Deficit Has the independent Congressional Budget Office said the health reform law will increase or decrease the federal budget deficit over the next ten years, or is it not expected to have much impact? Decrease the deficit Increase the deficit Not expected to have much impact Don’t know/ Refused Note: Question wording abbreviated. Source: Kaiser Family Foundation Health Tracking Poll (conducted April 9-14, 2010)

  23. Estimated Cost Increase Due to PPACA-related Plan Changes 43 43 Source: Mercer, Health Care Reform – Sizing up the Challenge, 2010.

  24. Emergency Room Care • More than 325,000 patients per hour or more than 119 million annually, seek care in the ED. • From 1993 through 2006, the compound annual growth rate of ED visits was 3.6% and that number continues to climb. • Since 2000, the number of EDs and hospital beds has decreased either due to facility closures or eliminated services (i.e., Deaconess Hospital in Cincinnati, OH and St. Vincent's Hospital in New York, NY). • Just 13% of ED patient visits result in inpatient admissions, with hospitals reporting that currently an increased number of their inpatient admissions are coming through their EDs

  25. Financial Impact on Hospital • ED actually has a positive influence on hospitals' financial performance • Though EDs lost an average of $84 on each patient treated and discharged • Patients admitted to the hospital from the ED generated an average profit of $1,220 per admission—thereby covering any losses generated by patients who were discharged

  26. Confused – Implementation overload!! DON’T PANIC YET!! Don’t memorize this! We are at the End of the beginning—7 to 10 years of rule making and changes.

  27. Reform Timeline 2010 2011 2012 2013 2014 2015 2016 2017 Temporary High Risk Pool Program Temporary Reinsurance Program For Early Retirees Immediate Reforms: • No Lifetime Limits • Restricted Annual Limits • Restrictions on Rescission • First Dollar Coverage of Preventive Services • Extended Dependent Coverage • Internal/External Review • No Pre-Existing Conditions for Children • Disclosure of Justifications for Premium Increases Medical Loss Ratios with Rebates/Rate Reform/Data Collection Exchanges Subsidies Individual/Employer Mandates Market Reforms • Guaranteed Issue • No Pre-Existing Condition Exclusions for Adults • Rating Rules • Essential Benefits Plan • No Annual Limits for Essential Benefits Co-Op Plans & Multistate Plans Risk Adjustment Individual Market Reinsurance Program & Risk Corridors 2010 2011 2013 2014 2015 2016 2017 2012

  28. Implementation Be forewarned, NAIC, CMS, DOL , Dept Treasury and DHHS will need to issue guidance after enactment on many issues which will impact our understanding of these measures. There are some questions you have today that cannot be answered.

  29. New Offices Open 4/19/10 • HHS secretary’s office now has an Office of Consumer Information and Insurance Oversight that will oversee implementation of the PPACA private insurance provisions • Office of the Director. • Office of Oversight. • Office of Insurance Programs. • Office of Consumer Support. • Office of Health Insurance Exchanges

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