South Metro Denver Chamber of Commerce Healthcare Taskforce

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South Metro Denver Chamber of Commerce Healthcare
Taskforce

• Healthcare Reform
• A Proposal from the
• Business Community

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Outline

• Healthcare in America a Broken System
• Why should business be involved in this
  discussion?
• Why should the So Metro Chamber be involved?
• Background on the Chamber Task Force
• Healthcare Reform in Colorado the 208
  Commission
• The South Metro Denver Chamber Taskforce Proposal
• Next Steps
• Questions/Discussion

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We need to Kill the Myth that the US has the
best healthcare system in the World

• Quality We have Islands of Excellence in the
  midst of a Sea of Mediocrity. The US is
• 29th in Infant Mortality
• 24th in Womens Health
• 31st in Life Expectancy
• 37th in Outcomes (Below Costa Rica but ahead of
  Slovenia)
• If the US were 37th in Olympic Medal Count, how
  long would the American public tolerate that?
• Cost GM spends more on healthcare than on steel
• Starbucks spends more on healthcare than on
  coffee
• Tom Daschle, US Health/Human Services
  Secretary Designee, Speaking at the Colorado
  Healthcare Summit, 12/5/2008

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Some Alarming Metrics

• 47 million un-/underinsured in the US
• Estimated 770,000 in Colorado
• 30 40 of every healthcare dollar has nothing
  to do with actual healthcare
• 1 out of every 7 employed people in the US
  economy works in some aspect of healthcare
• 1.7 million jobs have been added in healthcare
  since 2001, yet there are shortages of
  physicians, nurses and others who actually
  deliver healthcare

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US Healthcare got a D grade from the
Commonwealth Fund in 2006

• Based on 37 measures including outcomes, quality
  of care, access to care and efficiency, etc.
• Relative to other nations, the report says the US
  has
• Among the lowest life expectancy at both birth
  and age 60
• An infant mortality rate of 7 per 1,000, versus
  2.7 in top 3
• Only 49 of adults receiving recommended
  preventive and screening tests for their age and
  sex
• Administrative costs 3X higher than other
  countries
• GDP costs of 16 versus 10 in other countries
• Colorado ranks 22nd in this report (average)

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The results in Colorado mirror the nation

• Colorado Health Foundation Health Report Card
  (Denver Post, 10-18-07) gave the following
  grades
• A minus - Senior Citizens
• B - Adults
• B minus - Colorado Residents for obesity, smoking
  and high blood pressure.
• B minus - Adolescents
• C minus- Infants and Children for health
  insurance coverage, access to medical care, and
  vaccinations

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US Healthcare First, but not Best
Source World Health Organization (WHO)
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Cost Trend a Personal View
Source KFF/HRET 2006 Employer Health Benefits
Survey
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Cost Spend

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How did business get involved?

• Healthcare provided by employers started out as
• Temporary response to post-WWII wage/price
  controls
• Optional, part of an overall compensation package
• Was considered a nice-to-have, a benefit
• Employees used to say, You cant eat (or pay the
  rent) with healthcare benefits
• But now employer-sponsored healthcare has become
• Essentially universal (has led to portability
  issues)
• A right, an entitlement, a given, an automatic

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Business is significantly and adversely impacted

• Costs are growing at 2-5x the inflation rate
• gt16 of the GDP and accelerating
• Business viability and competitiveness suffering
• Costing employers more in both dollars and time
• Employees are frustrated with their employers
  plans
• Employers and managers are intimately involved
  with healthcare discussions and decisions
• All governmental budgets severely strained,
  looking to businesses to pick up even more of the
  tab

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Business must be involved in solutions

• The major stakeholders in healthcare are
• Consumers (employees, dependents, unions)
• Providers (e.g., physicians, hospitals, pharma,
  diagnostics, etc.)
• Payers (insurance companies, state/federal
  government agencies)
• Employers
• In todays healthcare reform discussions, the
  first 3 stakeholders are typically involved, but
  not the 4th
• Most reform plans are PFBO Paid For By Others
• The Others are typically employers
• If youre not at the table then you are
  probably on the menu

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Why this task force?

• The South Metro Denver Chamber of Commerce
  represents a cross-section of business and
  consumers
• Small/medium business owners
• Large employers
• Insurance companies and insurance plans
• Providers hospitals, physicians, surgeons
• Government (through elected officials,
  appointees)
• Businesses involved directly or indirectly with
  healthcare
• The Chamber has a history of getting things done

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The South Metro Chamber Task Force

• Started 4 years ago
• Upwards of 100 people involved at various times
• Viewpoints covered the entire ideological/experien
  ce spectrum
• The task force met at least monthly for over 4
  years
• In early 2007 the 208 Commission provided an
  audience and a target for our efforts
• We have continued our efforts independently from
  the 208 Commission process

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Business Priorities for Health Care Reform
Cost, Quality, Access, Individual Responsibility

• Access for All Colorado Residents
• Individuals must be accountable for Lifestyle
  Choices, Treatment and Cost Decisions
• Employers should be separated from making Health
  Care Decisions for employees
• Increased access and better quality can be
  achieved with dollars already being spent
• Free Market Dynamics are the best means to reduce
  Cost and increase Quality
• Transparency and Portability
• Appropriate Regulatory oversight of Quality

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Elements of Reform
ACCESS
PERSONAL ACCOUNTABILITY
FREE MARKET
Employer Mandate
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The 208 Commission an example of the Health
Care Reform discussion

• Chartered by legislature, approved by two
  administrations
• Bi-Partisan group of 27 commissioners
• Impressive credentials/healthcare backgrounds
• Very limited involvement from business,
  especially SMB
• 31 plans received and reviewed
• 11 semi-finalists (including the South Metro
  Chambers)
• 4 Finalists Selected and modeled for cost none
  of them were from business sector
• 5th, Hybrid Proposal was developed

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Common elements of 208 Commission finalist plans

• All plans were heavily PFBO Paid For By Others
• They focused primarily on payment, not on costs
• Focus is on access for the un-/under-insured (do
  they care?)
• Funded by tax increases and/or employer mandates
• Cost control through mandate only
• No Free-Market Forces or Competitive Factors
• Essentially NO individual responsibility/payment
  factors
• Limited attention to Quality and Transparency
• Limited focus on lifestyle and preventative issues

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Many elements are not consistent with Business
Priorities

• Employer mandates and limiting available plans
  frustrates Free Market Dynamics
• No direct relationship between health care costs
  and personal lifestyle decisions
• Little substance or funding mechanism for
  preventative and wellness initiatives
• No effective mechanisms for cost containment and
  risk sharing of catastrophic care
• Cost and Quality addressed through mandate, not
  by the market

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South Metro Denver Proposal

• The current system is fundamentally flawed and
  needs significant reform at all levels
• Merely tweaking the existing system will lead
  to more of the same
• There must be appropriate attention to
• Cost
• Quality
• Access
• Outcomes
• Individual choice and accountability

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Mike Leavitt, Former Secretary of Health and
Human Services

• We need a uniquely American approach to health
  care, based on a free, competitive marketplace
  to make private health insurance affordable for
  all Americans.
• we need to empower the states to organize the
  marketplace states are much more fiscally
  responsible than the federal government.
• - Editorial, Reforming health care, The
  Washington Times, July 9, 2007.

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Cost Business Perspective

• There is already plenty of money in the system
• By contrast, with the PFBO approach
• Three of the final 208 Commission plans had costs
  ranging from 595 Million to 1.2 Billion
• A single-payer proposal claimed no cost increase,
  but required a 6 employer tax
• The Obama plan would cost from 150 Billion to
  250 Billion per year

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Business Priorities for Health Care Reform

• Access for all Colorado residents
• Individuals must be accountable for Lifestyle
  Choices, Treatment and Cost Decisions
• Employers should be separated from making Health
  Care Decisions for employees
• Free Market Dynamics are the best means to reduce
  Cost and increase Quality
• Transparency
• Appropriate Regulatory oversight of Quality

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Our proposal accomplishes the following

• Incorporates six guiding principles
• Improves access for all Colorado Residents
• Increases use of health information technology
• Improves care coordination
• Increases transparency (both cost and quality)
• Reduces administrative costs
• Requires Individual Accountability

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Six Guiding Principles for an Effective
Healthcare System

• These guiding principles form a foundational
  framework against which any potential reform plan
  should be assessed
• The fundamental player in healthcare transactions
  is the individual. He/she needs to be
  responsible for healthcare outcomes.
• The fundamental relationship is between the
  individual and his/her healthcare provider
• Anything that facilitates or streamlines this
  relationship is to be encouraged ?
• Anything that frustrates or hinders this
  relationship is to be discouraged ?

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Six Guiding Principles, cont.

• Healthcare services should be provided to an
  individual with limited and efficient outside
  intervention, and with maximum transparency
• The goal should be increased value for all
  participants.

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Six Guiding Principles, cont.

• There should be no automatic connection between
  healthcare and employment.
• Movement towards an individual-based system will
  reduce dependency on third parties such as
  employers, government and payers, and increase
  personal responsibility for costs and portability
  of insurance.

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Cost/Value Initiatives

• Inherent inefficiencies (confusing exchanges of
  information between/across episodes of care)
• Adopt more information technology and automation
• Evidence-based medicine and quality measures
• Set up, promote, and utilize data clearinghouses
  that aggregate treatment, diagnostic data, and
  outcome data
• The consumer does not manage the process
• Promote the creation and proliferation of
  processes, institutions and entities that help
  healthcare consumers evaluate quality measure
  systems and transparency
• There is currently no incentive for healthy
  lifestyle/ choices
• Provide incentives for preventative/good health
  initiatives and lifestyles

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Payment Initiatives

• 3 Tier payment system
• Catastrophic conditions with high costs (over
  100K). Funded by re-insurance pool from
  maintenance policy premiums.
• Middle Tier Accidents/illnesses without a major
  cost. Funded by individual/personal policies
  (indemnity coverage).
• Preventative promotes good health, treats
  conditions at an early stage prior to development
  of costlier problems. Funded by subset of
  maintenance policy premiums.
• Cherry-picking, exclusion/up-rating for
  hereditary and pre-existing conditions not
  allowed, but lifestyle choices may affect cost

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Benefits of this Proposal

• Comprehensive addresses both cost and
  payment/access side of equation
• Decrease costs, increase quality, and provide
  better value
• Unleash power and benefits of competition
• Bring consumer into the picture front and
  center
• Improve health of consumers
• Reduce strain on business governmental budgets
• Improve physician patient relationship
• New era of transparency and information sharing

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Role of Business

• The business community needs to get and stay
  involved in healthcare reform
• We are not proposing removing businesses
  entirely, just reducing the automatic/mandated
  role
• Businesses should strive to stay competitive in
  the labor pool, by competitive/free-market
  principles, not by government fiat
• Other stakeholders individuals, providers,
  insurance are not excluded in fact their roles
  are clarified and more focused

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Next Steps

• Participate in, rather than kill reform
• Get involved
• Engage Business Groups across the state
• Use connections to lobby the Legislature and
  other regulatory processes
• Be at the table (to avoid being on the menu)
• Support turning this proposal into Legislation

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Presentations/PR/Exposure by Healthcare Task Force

• 208 Commission Proposal Submission
• Republican Business Coalition
• Littleton Optimists Club
• Applewood Business Association
• NFIB State Leadership Board
• CMS Annual Retreat, Vail
• Medical Marketing Group
• Denver Business Journal
• KNUS Radio
• Chamber Leadership Retreat
• Chamber Board of Directors
• Chamber Expo Seminar
• Chamber membership meetings

• Andrew Romanoff, Speaker of the House
• Joe Rice, House District 38
• David Ballmer, House Minority Whip
• Spencer Swalm, House District 37
• Sean Mitchell, Senate District 23
• Governor Bill Ritter
• Cody Belzley, Governor Ritters Office
• Bill Lindsay, 208 Commission Chairman
• Jeff Lane, Senator Salazars Chief of Staff

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Key Contributors to Final Proposal

• Paul Archer, business owner, current task force
  co-chair
• Leo Tokar, VP Kaiser Permanente, current task
  force co-chair
• David Crane, CEO of a Denver-area hospital,
  former task force chair
• David Laverty, Business Consultant, former task
  force chair
• Neil Ayervais, healthcare attorney
• Penny Baldwin, insurance expert/patient advocate
• Jeff Burns, business owner
• Marion Jenkins, business owner, healthcare focus
• Allan Kortz, MD, former surgeon, healthcare
  consultant
• Julie Taylor, COO of a Denver-area hospital
• Brian Vogt, Former SMDCC President, State Cabinet
  Officer

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Many other taskforce contributors
Andrea Chase Andy Nemechek Anna Gibson Barbara
Dice Barron Becker Beth Tribelhorn Betty Ann
Habig Bill Shepherd Bill Smith Brenda Woolsey
Carol Meredith Chris Strom Christina Moorcroft
Cindy Fox Craig Carpenter Craig Keyes Craig
Pierce Cyd Szymanski Dave Christopherson David
Murray
Denny O'Malley Dick Baumbusch Dona Cairns Donna
Keslin Eloise May Gerry Myers Gwen Balk Harvey
Wagner Jane Kercher Jay Murray Jeremy
Pittman Jerry McElroy Joe Burns John Liese John
Millard Jon Shell Julie Askew Julie Lonborg Kelly
Lennon Ken Preuss
Kevin Glodava Kim Geiger Lawrence Wood Leigh
Begland Lin Merage Lisa Hunsicker Margot Adam
Langstaff Mari Lynn Glidden Mark Greenberg Mary
Ann Littler Mary Ellen Boyle Matt Dudzik Matt
Hardinger Maureen Clarry Melanie Barnard Michael
Hite Mike Campo Mike Savone Pam Melchior Paul
Andrews Ralph Taylor
Rich Behr Rick Jory Scott Thoemke Sheila
Gehlmann Sherry Larkin Shirley Lewis Spencer
Swalm Stace Lind Steve Roper Sue Hayes Sue
Rosser Sue Savage Susan Beckman Tammy
Garcia Terry Beal Terry Camp Thomas
Fawell Valerie Zanon Wayne Fletcher Wendy Woods
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Questions/Further Discussion

• Paul Archer, Automated Business Products
• parcher_at_abpcopy.com 720.283.6771
• Leo Tokar, Kaiser Permanente
• Leo.tokar_at_kp.org 303-344-7242
• Neil Ayervais, Alperstein and Covell
• nea_at_alpersteincovell.com 303.894.8191
• Jeff Burns, Computer Skills Group
• jeffburns_at_csg-colorado.com 303.794.0694
• Marion Jenkins, QSE Technologies
• marion.jenkins_at_qsetech.com 303.283.8400