Rx for Successful SEIU Strategy for Health Care

1. Rx for Successful SEIU Strategy for Health Care SERVICE EMPLOYEES INTERNATIONAL UNION November 30, 2007 Chris Jennings, Jennings Policy Strategies, Inc.

2. Outline • The Return of Health Debate: Issues that Frame SEIU Priorities • Health Care Strategies for • Cost Containment • Coverage • Long-Term Care/Re-Balancing

3. The Health Care Debate Today • Health care is now a leading issue for Americans • Health care is the most important domestic issue to Americans • One of top priorities overall, second only to the war in Iraq Source: Kaiser Family Foundation, March 2007

4. Why? Cost…Costs Drive the Concern and the Debate • Cost to Families:Premiums reached an average of $11,480 annually for family coverage in 2006 (87% increase since 2000) • Cost to Businesses:Fewer firms offering coverage (especially small business); CEOs cite health care as largest cost pressure on corporate America • Cost to Government, Now and into Future:Medicare and Medicaid spending threaten to devour large portions of budget • Cost to Nation:Health care costs to hit $4.0 billion by 2015, or 20% of GDP

5. Current System Shifts -- Not Contains -- Costs Uninsured  Insured Government Businesses Businesses Workers …and adverse selection gaming between insurers and patients

6. Not All Cost ChallengesUniformly Harmful to SEIU 74.8 Million Medicare Beneficiaries 36.4 Million Source: KFF, 2005; Census

7. …Because Biggest Cost Driver are Those With Chronic Disease Who Need Care Overall • The 10% of patients that suffer from chronic disease account for 75% of the nation’s health care spending • Studies show that virtually ALL of the spending growth in Medicare over the last 15 years resulted from increased spending on people with multiple, chronic conditions • The number of chronically ill expected to DOUBLE by 2020 Medicaid Source: Thorpe K. Health Affairs, 2006; Gillespie, J., et al, February 2003; Johns Hopkins, Partnership for Solutions, 2006

8. Budget Deficit Constrains AgendaDeficit, Dollars in Billions, FY 2000-8 $86 B -$278 B* ($192 B)* Source: CBO, March 21, 2007 * Assumes extension of tax cuts

9. Nonetheless, Reform PressuresExceed 1993-’94 • Greater recognition that health costs are threat to competitiveness and economic growth • Broader pool of business validators supporting • Traditional stakeholders as well as “strange bedfellows” embracing comprehensive reform • Emerging consensus that quality/value issues can bring stakeholders together • Stronger and more bipartisan relationships on Committees

10. Three Priority Issues and Possible Strategies • Cost containment: Rising costs force need to be a constructive player • Coverage: Initiatives should be framed to meet SEIU priorities -- WINNING • Long-Term Care Rebalancing Agenda:Ensuring that LTC is central component of reform must be a priority

11. Cost Containment Strategy • SEIU needs to inoculate itself from being perceived solely as a spender • SEIU needs to be associated with politically-viable modernization initiatives that can achieve savings and credibility • Failure to do so undermines credibility for opposing cost-shifting policies that hurt • SEIU particularly well-positioned to support modernization reforms

12. Possible Cost Containment Agenda • Value-purchasing, e.g. P4P • HIT/e-Prescribing • Comparative effectiveness • Chronic care management • Biogenerics and other pharmaceutical cost containment initiatives • Targeted DSH and HMO overpayments

13. Coverage Strategy • Number one priority because: • Helps with organizing and securing affordable care for members • Reduces pressure on compensation negotiations • Creates demand for SEIU-provided services • SEIU needs to continue to make health care significant part of Presidential and Congressional 2008 debate • Needs to ensure that priority SEIU provisions are incorporated without excessive micro-management of policy

14. Coverage Strategy • Strong messaging about consequences of inaction needs to be developed and implemented • Candidates must be put on defense about flawed policy; champions must not always be defending • Messaging about why this is a sympathetic working Americans issue must effectively be delivered

15. Coverage Policy Strategy • Debate around covering ALL vs. covering SOME must be won by stressing that policies for incremental, individual market, high cost-share reforms will harm workforce • Macro debate between extending or rolling back tax cuts must be won • Policies that promote quality through improved workforce should be better integrated and promoted • Policies that promote affordability for workers need to be highlighted • Detailed policy advocacy should be minimized

16. Long-Term Care Environment • Long-term care agenda is largely invisible and needs to resurface • Democrats already being charged as “big spending tax hikers” • Promotion of unrealistic policies is ticket to nowhere • Little appetite for costly program add-ons, but increasing interest in transition policies

17. Long-Term Care Policy Strategy • Get long-term care/rebalancing agenda on table through strategic policy positioning in 2008: • Target committees of jurisdiction to advocate for potentially achievable policy • Develop and implement integrated financing strategy with ongoing health reform debate • Lay foundation for strong state advocacy to be financed by health reform state savings

18. Long-Term Care Policy Strategy • Ensure introduction of – and movement on – bipartisan rebalancing legislation in Finance Committee • Give states the authority to provide home and community-based services at same level of institutional care • Provide grants to expand public authorities and provider registries • Utilize grassroots and messaging strategy to up-lift the policy and strategy