Big Picture Economics

1. Big Picture Economics • The Health Care System is over-burdened • U.S. highest cost, lowest performance (Commonwealth Report, 2010 update, 7 countries) • We can’t sustain the cost curve, it will bankrupt us.* • System rewards Drs for doing more procedures*, but not for prevention. • As much as 1/3 of procedures may be unnecessary.* • 75% of health care costs spent on chronic disease * “The Truth about Getting Sick in America”, Dr. Timothy Johnson, ABC News Medical Correspondent. 2010

2. Health Care Costs Skyrocketing • Health Care 16% of GNP, could be 100% if met all existing needs w/ existing capabilities (increasing exponentially) • Insurance and 3rd party payer system makes sense for spreading high dollar infrequent risks – not for everyday care. Creates mentality of entitlement and abdication.

3. 3rd Party Payer System Fosters a Culture of Abuse, Drives up Costs$150 Bil, almost 10% of $1.7 Tril H/C (Managed Healthcare Executive) Med Providers • Duplication • Bill for un-performed • Up-coding, mis-coding • Misrepresent services • Claim covered when not (elective) • Unnecessary services and tests • Scams, Injury Mills • #1 White Collar crime Individual • Fake symptoms • Require most $$ • Extend recovery • Off-job claimed W/C • Doctor shopping • Run to Dr for everything attitude • higher level than required

4. National Trends2010 Kaiser Family Foundation Study (2009 data) Premiums are increasing, but pushing to employee paid portion, employers flattening, even with reductions About 1/3 of companies are reducing benefits and/or increasing portion of ins employee pays Deductibles are dramatically increasing Conventional plans replaced by HMO, PPO and recently HDHP/SO (High Deductible Health Plan) % of all employees with Health coverage flat at 60% Retiree health benefits continuing drop Small firms cover smaller % of workers and have higher deductibles but reducing benefits less Bottom line – Individuals/families are inundated with cost increases from all directions

5. Average Annual Worker and Employer Contributions to Premiums and Total Premiums for Family Coverage, 1999-2010 $5,791 $6,438* $7,061* Employee portion up 15%, employer down for 1st time $8,003* $9,068* $9,950* $10,880* $11,480* $12,106* $12,680* $13,375* $13,770* * Estimate is statistically different from estimate for the previous year shown (p<.05). Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2010.

6. Percentage of Covered Workers Enrolled in a Plan with a General Annual Deductible of $1,000 or More for Single Coverage, By Firm Size, 2006-2010 *Estimate is statistically different from estimate for the previous year shown (p<.05). Note: These estimates include workers enrolled in HDHP/SO and other plan types. Because we do not collect information on the attributes of conventional plans, to be conservative, we assumed that workers in conventional plans do not have a deductible of $1,000 or more. Because of the low enrollment in conventional plans, the impact of this assumption is minimal. Average general annual health plan deductibles for PPOs, POS plans, and HDHP/SOs are for in-network services. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2006-2010.

7. Percentage of Covered Workers Enrolled in a Plan with a General Annual Deductible of $2,000 or More for Single Coverage, By Firm Size, 2006-2010 *Estimate is statistically different from estimate for the previous year shown (p<.05). Note: These estimates include workers enrolled in HDHP/SO and other plan types. Because we do not collect information on the attributes of conventional plans, to be conservative, we assumed that workers in conventional plans do not have a deductible of $2,000 or more. Because of the low enrollment in conventional plans, the impact of this assumption is minimal. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2006-2010.

8. Who Pays for Health Care2009 Health Insurance Market Report – Utah Health Ins Division • 2/3 paid by Individuals • Ind and Self Funded • Uninsured indirectly • Government via taxes • Corp includes deductible, co-pays & employee portion of insurance

9. Allocation will be challenge of decade, maybe century • Dramatic progress • Source of Innovation • Attract best minds/ & talents • Socialist Dr flight lands here Treatments • Always based on $$ • Shifting from individual • decision to bureaucracies • If don’t take control, others will Costs Allocation • Losing dramatically • All $$ trends negative • Could be 100% GNP

10. Individual Economics Health Care costs are #1 cause of personal bankruptcy Largest household expenditure, > mortgage Costs increase dramatically with age, highest costs when most vulnerable The more government pays, the more allocation they determine. Treatment easily 1000 times prevention cost

11. Individual EconomicsEvery trend is against You Deductibles Self Ins Self Pay Co-Pays Retire H/C Exclusions Via Taxes Limits Wait Times Service Employee Portion

12. Some Pertinent Quotes Kathy Oswald, Senior VP Human Resources, Chrysler Corporation, stated, “Something I think people would find surprising is that the most expensive component of a Chrysler brand vehicle isn’t the steel or plastic, but the health care.” In his address to Summit participants, William D. Novelli, CEO of AARP, said, “Implemented correctly, health care reform with a focus on prevention, will provide the biggest return on investment this nation could ever have.” Ronald Loeppke, MD, MPH, Executive Vice President of Health and Productivity Strategy for Alere said, “The transformational opportunity for employers is to look beyond healthcare benefits as a cost to be managed and instead look to the health benefits of good health as an investment to be leveraged. Ultimately, a healthier, more productive workforce can help drive a healthier economy for the nation.” Senator, Tom Harkin of Iowa states, “Prevention and wellness should be the centerpiece of health care reform.”

13. Prevention is THE Solution, but will be patient-driven • The “system” is engrained, entrenched and embroiled • People who take responsibility for their own health • Whole generation who has abdicated care to Dr, $$ to Ins co • Screening will be mostly be self-paid since reimbursement is based on having symptoms • Most treatment will be non-medical, non-drug (but also usually inexpensive) WARNING - If you plan on insurance companies or medical services to prevent your “event” – YOU LOSE!

14. Prevention Action Plan Embrace the empowerment of self-responsibility Aggressively screen for early detection Schedule regular education/learning Focus on YOUR areas of highest risk Understand the primary dietary/lifestyle causes Make changes – getting help if you fail Allocate some monthly funds for prevention Set goals, then track/measure your progress

15. Classic CVD Prevention Books The China Study by T. Colin Campbell, Phd (on our American diet) Before the Heart Attacks by Robert Superko, MD Track your Plaque by William Davis, MD, Cholesterol Control Without Diet The NiacinSolutionby William B. Parsons Jr., MD Prevent and Reverse Heart Disease by Caldwell B. Esselstyn, Jr., MD (message of hope for people who have had heart attacks)

16. Broad-based Evidence & Support Prevention is also a priority supported by many MDs, NDs, Dieticians, Nutritionists, Patients, and Researchers. They are just ham-strung by the current system.

17. Examples of successful prevention Inoculations – polio, measles, small pox Screening – breast, colon & prostrate cancer Education – safety (accidents) The time is right for stroke, heart disease and cancer!