The Future of Healthcare in America
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Transcript of The Future of Healthcare in America
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The Future of Healthcare in The Future of Healthcare in AmericaAmerica
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MedicareMedicareMedicareMedicare
• Financing–Financial resources of government are
limited
• Obligations of an insured–$30,000 spell of illness
–$18,000 will be paid by Medicare
–$12,000 will be patient’s responsibility
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MedicareMedicareMedicareMedicare
• Growing role of supplemental insurance–Depended upon to pick up the
difference
–Gaps here as well & growing • Pharmaceuticals
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MedicareMedicareMedicareMedicare
– Upcoding– Phantom billing– Bogus billing– Unnecessary
services– Double billing or
unbundling– Pharmacy fraud
– Laboratory fraud–Mental health fraud– Kickbacks– Home health fraud–Managed care
fraud
• Fraud & abuse concerns
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MedicaidMedicaidMedicaidMedicaid
• Uncertainty as how far federal mandate for coverage will be extended
• Will variations among states be narrowed
• Will added funding be available
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Managed CareManaged CareManaged CareManaged Care
• How far will federal & state officials go in enacting patients’ bill of rights
• What will happen to costs as access to care is mandated by law
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Private Health InsurancePrivate Health InsurancePrivate Health InsurancePrivate Health Insurance
• Limited understanding of Americans regarding the impact of health care costs on other insurance coverage– i.e. hospital, physician, &
pharmaceutical costs impact several insurance costs
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Private Health InsurancePrivate Health InsurancePrivate Health InsurancePrivate Health Insurance
• Other insurance coverage (cont.)
–General liability coverage• BI component
–WCN coverage• Part A medical expenses & rehabilitation
costs• Part B employer liability BI
–Auto coverage• Medical payments
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Private Health InsurancePrivate Health InsurancePrivate Health InsurancePrivate Health Insurance
• Failure to understand & appreciate the importance of alternative forms of insurance to protect welfare of persons in old age–50+ years = 63M people
–65+ years = 34M people
–Those who are 50+ years control $800B in disposable income = 1/2 of total disposable income of all Americans
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Private Health InsurancePrivate Health InsurancePrivate Health InsurancePrivate Health Insurance
• Welfare of persons in old age (cont.)
–90M seniors are projected by 2010
–By 2030, proportion of seniors will be 22% of the population
–Between 1990 & 2020, nursing home utilization will double
–Today 64% of persons over 85 need nursing home care
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Private Health InsurancePrivate Health InsurancePrivate Health InsurancePrivate Health Insurance
• Welfare of persons in old age (cont.)
–Probability of needing nursing home care grows as person ages• Age 55 = 10% chance• Age 65 = 40% chance• Age 75 = 60% chance
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Misconceptions Regarding Misconceptions Regarding Available ResourcesAvailable Resources
Misconceptions Regarding Misconceptions Regarding Available ResourcesAvailable Resources
• Medicare will cover use–Less than 5% of $65B spent on long
term care is paid by Medicare• Now up to 100 days & only after hospital
stay + 50 day lifetime for longer than anticipated LTC stay
• Medicare Supplements will pay the difference–Coverage not addressed by Medicare is
similarly uncovered by supplements
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Misconceptions Regarding Misconceptions Regarding Available ResourcesAvailable Resources
Misconceptions Regarding Misconceptions Regarding Available ResourcesAvailable Resources
• Medicaid can be relied upon–Only if you “spend down” to poverty
level• You can keep your home, your care, and
$2,000 in assets
• My family will care for me–Seldom is this realistic
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Misconceptions Regarding Misconceptions Regarding Available ResourcesAvailable Resources
Misconceptions Regarding Misconceptions Regarding Available ResourcesAvailable Resources
• I’ll use my personal assets–Very few people can self insure to that
level or extent
• Denial of possibility of a future problem is the most significant challenge faced today
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Additional FactsAdditional FactsAdditional FactsAdditional Facts
• 34% of persons entering a long term care facility today will be there from 1 to 5 years–21% will be there 5+ years
–Average LTC facility stay is 2½ years
• Average annual cost = $40,000
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Cost of LTC InsuranceCost of LTC InsuranceCost of LTC InsuranceCost of LTC Insurance
• Premiums–50 year old subscriber will pay
approximately $600/year
–For couple from 50 years to 75 years:$1,200/year x 25 years = $30,000 in premiums
• If one spouse is admitted to LTC facility for one year = $40,000 cost
• Will have saved equivalent premiums paid by end of 8th month
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Eligibility for LTCEligibility for LTCEligibility for LTCEligibility for LTC• Necessity of human assistance for 2
or more activities of daily living (ADL)–Dressing
–Toileting
–Continence
–Transferring (in & out of chair or bed)
–Eating
• Cognitive impairment
• Injury or sickness
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Tort ReformTort ReformTort ReformTort Reform
• Malpractice–Limits on liability exposure for non-
economic damages
• Limits on lawyers fees
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Disability Compensation LawsDisability Compensation LawsDisability Compensation LawsDisability Compensation Laws
• Currently we have WCN, LTD, & STD
• Confusing & fraught with cost shifting
• Are we headed for 24 hour coverage?
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Disability Compensation LawsDisability Compensation LawsDisability Compensation LawsDisability Compensation Laws
• Disaffection with current system is a function of:–Soaring cost of benefits• Medical costs = 40% of total WCN costs
–Significant increase in litigation costs
–Fragmentation of the system
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What are the solutions to these What are the solutions to these issues?issues?
What are the solutions to these What are the solutions to these issues?issues?