Health Care Reform

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Health Care Reform South Dakota Business
Leadership Summit September 2, 2009
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Health Care Reform Debate
Dominates Headlines
You cant pick up a paper or turn on the TV
without hearing about national health system
reform
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Put Patients First
The South Dakota State Medical Association
(SDSMA) is an organization representing doctors
and their patients

• Our mission is to preserve the art and science of
  medicine and promote the betterment of public
  health
• Our vision is to help doctors help patients
• SDSMA believes that any health system reform must
  put the needs of patients first

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Issues Driving the Debate
Theres too much happy talk. Its time to start
thrashing out decisions on the tough
issues. Sen. Jay
Rockefeller (D, W.V.)

• Cost our nation spends 2.4 trillion per year
  on health care -- 4.4 trillion by 2018
• Quality
• Value a reflection of cost and quality, but
  also a term that must recognize individual needs
  and preferences.

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Guiding Principles
Almost all agree that the health system is
broken. Heres how SDSMA would fix it

• Health reform should make insurance simple
• Health reform should cover everyone even the
  sick
• Reform should make it easy to get information on
  quality
• Reform should help employers offer better
  protection for workers
• Reform should reward great care, not procedures
• Reform must let doctors be doctors
• Health reform should give you freedom to choose

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Health Care Reform Legislation
Four of the five congressional committees with
jurisdiction over health care reform have passed
legislation

• House Energy and Commerce
• House Education and Labor
• House Ways and Means
• Senate Health, Education, Labor and Pension
  Committee

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Provisions of Major
Health Care Reform Proposals

• Individual mandate
• Health Insurance Exchange and, in House bill, new
  public health insurance option
• Premium and cost-sharing credits
• Require employers to provide coverage or pay an
  annual fee (credits and exceptions for small
  employers)
• Senate Finance - gt 500,000 in payroll contribute
  50 of premium or pay
• Senate HELP Contribute 60 or pay 750/FTE
  exempt if 25 or fewer employees
• House Contribute 72.5 individual/65 family or
  pay 8 of payroll exempt if payroll lt 500,000
  graduated from 2-6 500,000 to 750,000
• Premium subsidies to employers (full credit of
  50 if 10 or fewer employees) and individuals up
  to 400 FPL
• New insurance regulations
• Medicaid expansion to all individuals up to 133
  FPL (150 in Senate)

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Senate Finance Committee
The next big step is to see whether or not the
Senate Finance Committee will come up with a bill
as well

• Town hall meetings during August recess have been
  disrupted by angry protests
• Support is dropping in the polls

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Gang of Six
If there is any hope of passing a bipartisan
health care bill in the Senate, it may well lie
with a key group of senators

• Mike Enzi (R) Wyoming
• Chuck Grassley (R) - Iowa
• Olympia Snowe (R) - Maine
• Max Baucus (D) Montana
• Jeff Bingaman (D) New Mexico
• Kent Conrad (D) North Dakota

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What They Want

• Mike Enzi (R) No taxes
• Chuck Grassley (R) No public option
• Olympia Snowe (R) Cost controls
• Max Baucus (D) No taxes, public option
• Jeff Bingaman (D) Public option
• Kent Conrad (D) No public option

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A Scaled-Back Bill?
If President Obama and congressional leaders are
forced to go back to the drawing board, the
biggest challenge is the divisions within the
Democratic party

• Centrists are arguing to remove controversial
  elements and reduce the price tag
• Liberals are saying they wont support a bill
  without a public option

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A Slimmed-Down Bill
The likely provisions (and challenges) of a
scaled-back bill

• Would leave some uninsureds out -- most likely
  cover children and possibly their parents
• Might also expand Medicaid to low-income people
• May have to get rid of provisions that do not
  affect federal spending such as wellness programs
  and more preventive care
• Making an individual mandate work requires
  subsidizing people who could not buy insurance on
  their own cutting back could end support of
  insurance companies

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Most Common Fears

• Government will come between patients and doctors
• Health reform will take away good coverage from
  your job
• Comparing treatments will lead to rationing
• A government takeover will lead to a system like
  England or Canada
• Health reform is too costly and will raise taxes
  or even bankrupt the country

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SDSMAs Vision For Health Care Reform

• Expanding coverage by requiring individuals to
  have coverage and providing tax credits or
  vouchers (not premium assistance) for those who
  cant afford coverage
• Ending barriers to coverage for people with
  pre-existing medical conditions
• Making greater investments in wellness and
  prevention
• Improving care coordination by promoting medical
  homes
• Improving the efficiency and quality of health
  care by investing in EHRs
• Reducing inappropriate health spending through
  evidence-based medicine not arbitrary payment
  limits
• Repealing Medicares sustainable growth rate
  (SGR) funding mechanism

The SDSMA Supports
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Protect What Works, Fix Whats Broken

• Implementing a single-payer plan or public health
  insurance plan that would compete with private
  plans
• Expanding the current Medicare program or linking
  payment rates for any public plan to Medicares
  flawed physician payment formula (SGR)
• Continuing the current Medicare payment formula
  and failing to include a long-term Medicare
  payment fix for medical services

The SDSMA Opposes
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Essential Elements Not in
Current Proposals

• Repeal the SGR and provide adequate Medicare and
  Medicaid reimbursement based on the cost of
  providing care and adjusted annually for medical
  inflation
• Enact medical liability reforms that will lead to
  a reduction in defensive medicine

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Fix Medicare Reimbursement

• Medicare payment rates currently penalize SD for
  its efficient, high quality care 
• Doctors in SD are paid among the lowest in the
  country (only 3 states lower Alabama, Arkansas
  and North Dakota)
• Example
• Procedure pays 12,800 in CA and 9,180 in SD
• Hospitals and doctors should be rewarded for
  providing high quality, low cost care

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Fix Medicare Reimbursement
Practice Costs vs. Medicare Reimbursement
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Fix Medicare Reimbursement
Physicians vs. Other Providers 20042009
Medicare Payment Updates
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Medical Liability Reform

• Defensive medicine is defined as providing
  medical services that are not expected to benefit
  the patient but that are undertaken to minimize
  the risk of a subsequent lawsuit
• According to a national study, liability reforms
  could reduce defensive medicine practices,
  leading to a 5 to 9 percent reduction in medical
  expenditures
• If these estimates were applied to total U.S.
  healthcare spending, defensive medicine costs
  would total between 120 billion and 216 billion
  per year
• Add to this the cost of defending malpractice
  cases, paying compensation, and covering
  additional administrative costs (a total of 29.4
  billion)
• Thus, the average American family pays an
  additional 2,000 to 2,500 per year in health
  care costs simply to cover the costs of defensive
  medicine

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Addressing Fears
We fully understand why some people are
apprehensive about reform Any change is scary.
But we also see firsthand the devastating effects
of our broken health care system. SDSMA Values.
Ethics. Advocacy
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