Covering The Bases

1. Covering The Bases Bernard Pettingill, Ph.D.

2. Economic Damages - Bases • Life Expectancy / WLE • Continuation of Care Plan • Medical Inflation / Attendant Care • Presentation

3. Reasons for Cost Increases • New Technology • Waste, Inefficiency & Fraud • Medical R&D • Aging Population

4. Life Expectancy • Census Data - 2000 • Optimal Care - Based on L.E.

5. Categories of Need • Routine M.D. Visits • Therapies • ADL’s • Diagnostics • Orthopedic Equipment • Supplies • Attendant Care

6. Year to Year Changes in Medical Care Costs MEDICAL CARE 4.3%4.8%5.1%4.5%5.0%4.3% YEAR 200020012002200320042005

7. 1998 1999 2000 2001 2002 2003 2004 2005 2005 2005 2005 2005 2005 2005 7 6 5 4 3 2 1 4.2% 4.3% 4.4% 4.3% 4.2% 4.2% 4.3% 4.5% 4.7% 4.8% 4.8% 4.8% 4.9% 4.8% 3.4% 3.5% 3.5% 3.4% 3.5% 3.9% 3.8% 3.2% 3.0% 3.0% 2.8% 2.5% 2.5% 2.5% 6.3% 6.6% 6.8% 6.8% 6.1% 5.6% 5.3% MEDICAL CARE COMMODI-TIES, PRESCRIP-TIONS AND DRUGS HOSPITAL ROOM AND RELATED SERVICES ALLMEDICALCARE MEDICAL CARE SERVICES FROM YEAR TO YEAR # OF YEARS PROFESSIONAL SERVICES

8. Sample Case • White Female • Age 2.0 • Life Expectancy = 79.7 years • 24 Hour Nursing Care (HOME) • $30.50/Hour/LPN • Discount Factor = 4.5%

9. Models Model 1: Growth Rate = 3.4%Present Value = $14.36m Model 2: Growth Rate = Discount ratePresent Value = $21.08m Model 3: Growth Rate = 5.4% (25yr. Avg.)Present Value = $30.01m

10. Testimony - Economist • Long Version / Short Version • Question / Answer • Charts / ELMO / Overhead

11. Trial Charts • Recent Life Expectancy Tables • Medical Vs General Inflation • Sample - Goods / Services • 1940, 50, 60, 70, 80, 90’s

12. $25.0 MILLION

13. $28.0 MILLION

14. $51.6 MILLION

15. BERNARD F. PETTINGILL, PH.D. CONSULTING ECONOMIST PHONE(561) 622-0330CELL (561) 346-7828FAX (561) 624-2854TOLL FREE (800) 662-0330 #93 Sandbourne LaneP.G.A. NATIONALPALM BEACH GARDENS, FL 33418E-mail: biffpett@gate.net