Post on 27-Mar-2015
National Health Policy National Health Policy ConferenceConference
February 12, 2007February 12, 2007Washington, D.C.Washington, D.C.
Kim BelsheKim Belshe
Our Broken Our Broken Health Care Health Care
SystemSystem6.5 Million Uninsured6.5 Million Uninsured
20% of Population20% of PopulationSource: California Health Interview Survey, 2005
Emergency Departments ClosingEmergency Departments Closing
320
340
360
380
400
1990 1994 1998 2002 2006Source: Office of Statewide Health Planning and Development
The Hidden The Hidden TaxTax
Actual Cost of Medical CareActual Cost of Medical Care
UninsuredUninsured
Cost to Cost to InsuredInsured
10% of premium10% of premium
10% of premium10% of premium
Source: New America Foundation
Actual Cost of Medical CareActual Cost of Medical Care
UninsuredUninsured
Cost to Cost to InsuredInsured
17% of premium17% of premium
17% of premium17% of premium
Medi-Cal Medi-Cal UnderfundingUnderfunding
Source: Administration Analysis of “Cost Shift Hydraulic,” Dobson
The Hidden The Hidden TaxTax
Hidden TaxHidden Tax
Individuals: $455Individuals: $455
Families: $1,186Families: $1,186Source: New America Foundation
Drivers of Cost: Chronic DiseasesDrivers of Cost: Chronic Diseases
Source: Centers for Disease Control and Prevention, 2003, U.S. Data
$153$153 $151$151BILLION BILLION
Cancer & DiabetesCancer & Diabetes Smoking & Physical Smoking & Physical InactivityInactivity
Drivers of Cost: Drivers of Cost: Medical ErrorsMedical Errors
23,000 Deaths23,000 Deaths
Cost: >$4 BillionCost: >$4 Billion
Source: CA Department of Health Services
Fixing Our Broken SystemFixing Our Broken System
Reduce the hidden tax; Reduce the hidden tax; lower costslower costs
Coverage for all; support Coverage for all; support better carebetter care
Healthy CaliforniaHealthy California
Prevention / WellnessPrevention / Wellness
Shared Responsibility Shared Responsibility / Coverage for All / Coverage for All
AffordabilityAffordability
Governor’s Health Care InitiativeGovernor’s Health Care Initiative
Prevention / WellnessPrevention / Wellness
Governor’s Health Care InitiativeGovernor’s Health Care Initiative
Prevention & WellnessPrevention & WellnessHealthier State – Long Term AffordabilityHealthier State – Long Term Affordability
Offer consumers incentives and rewardsOffer consumers incentives and rewards
Promote diabetes prevention and Promote diabetes prevention and treatmenttreatment
Reduce medical errorsReduce medical errors
Reverse obesity trendsReverse obesity trends
Support tobacco cessationSupport tobacco cessation
Prevention / WellnessPrevention / Wellness
Shared Responsibility Shared Responsibility / Coverage for All / Coverage for All
Governor’s Health Care InitiativeGovernor’s Health Care Initiative
Shared BenefitShared Benefit
INDIVIDUALSAccess to
affordable coverageHealthier CA
GOVERNMENT Healthy, productive & economically
competitive state
Shared BenefitShared Benefit
INDIVIDUALSAccess to
affordable coverageHealthier CA
GOVERNMENT Healthy, productive & economically
competitive state
DOCTORS & HOSPITALS
Expanded insured pop
Fair compensation
Shared BenefitShared Benefit
INDIVIDUALSAccess to
affordable coverageHealthier CA
GOVERNMENT Healthy, productive & economically
competitive state
DOCTORS & HOSPITALS
Expanded insured pop
Fair compensation
Shared BenefitShared Benefit
HEALTH PLANS Expanded market
Fair compensation
INDIVIDUALSAccess to
affordable coverageHealthier CA
GOVERNMENT Healthy, productive & economically
competitive state
DOCTORS & HOSPITALS
Expanded insured pop
Fair compensation
Shared BenefitShared Benefit
HEALTH PLANS Expanded market
Fair compensation
EMPLOYERS
Affordable coverage
Healthy, productive workforce
INDIVIDUALSAccess to
affordable coverageHealthier CA
Fixing the Fixing the Broken Broken SystemSystem
Creating an efficient, Creating an efficient, competitive market dynamiccompetitive market dynamic
Payment SourcesPayment SourcesCommercial payer overpaymentCommercial payer overpayment
Medi-Cal/Uninsured UnderpaymentMedi-Cal/Uninsured Underpayment
Shared ResponsibilityShared Responsibility
INDIVIDUALS
Obtain Health Coverage
GOVERNMENT
INDIVIDUALSINDIVIDUALS
Must secure health coverage for Must secure health coverage for themselves and their childrenthemselves and their children
Assume greater personal Assume greater personal responsibility for health and responsibility for health and wellnesswellness
Contribute to paying for their Contribute to paying for their coveragecoverage
DO
CT
OR
S &
HO
SP
ITA
LS
Fixing the Broken System Fixing the Broken System
HEALTH PLANS
EM
PL
OY
ER
S
INDIVIDUALS
Obtain health coverage
Shared Responsibility Shared Responsibility GOVERNMENT
Promote a functional health care systemProvide access to affordable coverageFairly compensate Medi-Cal providers
INDIVIDUALS
GOVERNMENTGOVERNMENT Expand SCHIP/Medi-Cal for all children in families Expand SCHIP/Medi-Cal for all children in families
earning under $60Kearning under $60K
Subsidies to families between $20K-$50K provided Subsidies to families between $20K-$50K provided through new purchasing poolthrough new purchasing pool
County responsible for access for undocumentedCounty responsible for access for undocumented
Expand Medi-Cal to adults in povertyExpand Medi-Cal to adults in poverty
$4 billion increase in Medi-Cal reimbursement rates$4 billion increase in Medi-Cal reimbursement rates
DO
CT
OR
S &
HO
SP
ITA
LS
Fixing the Broken System Fixing the Broken System
HEALTH PLANS
EM
PL
OY
ER
S
Shared Responsibility Shared Responsibility
INDIVIDUALS
Obtain health coverage
DOCTORS & HOSPITALS
Provide affordable, quality care
Share cost savings
GOVERNMENT Promote functional market
Provide access to affordable coverageFairly compensate Medi-Cal providers
Redistribution to ProvidersRedistribution to Providers
$10 - $15 Billion$10 - $15 Billion
$3.5 Billion$3.5 Billion
New Funds to Providers
Coverage Dividend from Providers
GOVERNMENT
DOCTORS & HOSPITALSDOCTORS & HOSPITALS
2% fee on physician revenues – 2% fee on physician revenues – 4% on hospital revenues4% on hospital revenues
Participation in patient safety Participation in patient safety initiativesinitiatives
At least 85% of hospital payments At least 85% of hospital payments spent on patient carespent on patient care
IND
IVID
UA
LS
Fixing the Broken System Fixing the Broken System
HEALTH PLANS
EM
PL
OY
ER
S
Shared Responsibility Shared Responsibility
HEALTH PLANS Guarantee access to affordable coverage
DOCTORS & HOSPITALS
Provide affordable, quality care
Share cost savings
INDIVIDUALS
Obtain health coverage
GOVERNMENT Promote functional market
Provide access to affordable coverageFairly compensate Medi-Cal providers
GOVERNMENT
HEALTH PLANS
Guarantee coverage
Only base rates on age and geographic area in the individual market
85% of premiums dedicated to patient care
Offer “Healthy Actions” rewards and incentives within benefit packages
DO
CT
OR
S &
HO
SP
ITA
LS
Fixing the Broken System Fixing the Broken System
INDIVIDUALS
EM
PL
OY
ER
S
Shared Responsibility Shared Responsibility
EMPLOYERSSupport
employee access to affordable coverage
DOCTORS & HOSPITALS
Provide affordable, quality care
Share cost savings
GOVERNMENT Promote functional health care marketProvide access to affordable coverageFairly compensate Medi-Cal providers
INDIVIDUALS
Obtain health coverage
HEALTH PLANS Guarantee access to affordable coverage
Pass along savings
GOVERNMENT
EMPLOYERS
Offer federal Section125 plans to allow employees to make pre-tax contributions to coverage
Contribute to the cost of coverage – non-offering employers with 10 or more employees will contribute 4% of payroll
DO
CT
OR
S &
HO
SP
ITA
LS
Fixing the Broken System Fixing the Broken System
HEALTH PLANS
IND
IVID
UA
LS
Governor’s Health Care InitiativeGovernor’s Health Care Initiative
Prevention / WellnessPrevention / Wellness
Shared Responsibility Shared Responsibility / Coverage for All / Coverage for All
AffordabilityAffordability
Affordability: Short TermAffordability: Short TermReduce hidden taxReduce hidden taxTax breaks for individuals & businesses tied Tax breaks for individuals & businesses tied to purchase of health insuranceto purchase of health insuranceEnhance insurer & hospital efficiency by Enhance insurer & hospital efficiency by requiring 85% of premiums & hospital dollars requiring 85% of premiums & hospital dollars on patient careon patient careRemove regulatory barriersRemove regulatory barriersReduce regulatory red tapeReduce regulatory red tape
Affordability: Long-TermAffordability: Long-TermPromote prevention & wellnessPromote prevention & wellness
Accelerate adoption of health information technologyAccelerate adoption of health information technology
Tie Medi-Cal rate increases to performance measuresTie Medi-Cal rate increases to performance measures
Enhance health care quality & efficiency through Enhance health care quality & efficiency through transparency and performance measurestransparency and performance measures
Monitor & evaluate market function & costs and revise Monitor & evaluate market function & costs and revise as necessaryas necessary
FISCAL IMPACTFISCAL IMPACTPrevention$300Tax Incentive$900Counties$2,000Subsidized Coverage
$2,270Medi-Cal/HFPCoverage
$2,638Medi-Cal Rate Increase
$4,039
Other - $203Employer in lieu$1,000County and Other Redirect $2,000Physician/HospitalsRecapture$3,472Federal Funds$5,474
$12 Billion
Cost Fundingin millionsin millions
Federal Funding: $5.47 BillionFederal Funding: $5.47 Billion
$1.77 billion: Redirection of current federal funds $1.77 billion: Redirection of current federal funds used for programs for the uninsuredused for programs for the uninsured
$3.7 billion: New federal funds$3.7 billion: New federal funds
$3.45 billion: guaranteed under current federal $3.45 billion: guaranteed under current federal statute (match for Medi-Cal reimbursement, statute (match for Medi-Cal reimbursement, Healthy Families parental match)Healthy Families parental match)
$250 million: Discretionary funds via 1115 waiver$250 million: Discretionary funds via 1115 waiver
Federal RoleFederal Role
Medicaid funding – Medicaid funding – Rates; Parental Rates; Parental expansionexpansion
Section 1115 waiverSection 1115 waiverDeficit Reduction Act flexibilityDeficit Reduction Act flexibilityValue-driven health careValue-driven health careTax advantages – Tax advantages – HSAs, Section 125 planHSAs, Section 125 plan
Fixing Our Broken System:Fixing Our Broken System:Shared ResponsibilityShared Responsibility
Reduce the hidden tax; Reduce the hidden tax; lower costslower costs
Coverage for all; support Coverage for all; support better carebetter care
Healthy CaliforniaHealthy California