CODE RED: HEALTH CARE IN CRITICAL CONDITION

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CODE RED HEALTH CARE IN CRITICAL CONDITION

• THE HEALTH INSURANCE PERSPECTIVE

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Questions we will try to answer

• Is health care a right or a privilege?
• Whats wrong with the current system?
• Why is health insurance so complicated?
• Why is health insurance so expensive?
• Where do we go from here and how can we fix it?

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A right or a privilege?

• Police
• Fire
• Education
• Health care (??)
• Our answer would probably be that every American
  have the right to basic health care but our
  actions have been different!

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Our present health care system?

• Its really not a system at all!
• Competing and overlapping services
• Fragmented medical information
• Mis-aligned incentives (patients, providers,
  insurers)
• Insurers (government and private) dont talk to
  each other

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Silos of health coverage!

• Physical health (medical-surgical)
• Behavioral health (mental, drug, alcohol)
• Pharmacy
• Dental
• Vision
• Long term care
• Workers compensation
• Short and long term disability

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Carves up the U.S. population arbitrarily!

• Employed with coverage
• Employed with no coverage
• Unemployed
• Medicare 65
• Medicare with end stage renal disease
• Medical with disability
• Medicaid - Temporary Aid to Need Families
• Medicaid - General Assistance
• Medicaid Aged, Blind, and Disabled
• SCHIP State Childrens Health Insurance Plan

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Doesnt meet the needs!

• Access to the proper care at the right time is a
  real problem
• It rewards the treatment of illness not the
  prevention of disease or the improvement of
  health status!

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Why is health care so complicated?
Mrs. Richardsons new health insurance plan
featured a simplified preferred provider
selection process.
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Why is health care so complicated?

• To begin to understand this question, lets first
  look at some
• basic definitions

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Types of health insurance plans

• HMO Gatekeeper, network only (except for
  emergencies)
• POS Gatekeeper, network with the option to go
  out of network (with higher )
• PPO No gatekeeper, greater discounts in network
• Indemnity No gatekeeper, no network, go
  anywhere (highest )

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Health insurance companies

• Blue Cross/Blue Shield
• Independence Blue Cross
• Horizon BCBSNJ
• Aetna
• UnitedHealth Group
• CIGNA
• Keystone Mercy Health Plan (Medicaid only)
• Union plans

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Medicare

• Medicare covers the elderly, disabled, and
  patients with end stage renal disease
• Part A Hospital
• Part B Outpatient and physician
• Part C Medicare Advantage Plans
  
  (complete replacement)
• Part D Prescription drugs

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Medical Assistance

• Medical Assistance (Medicaid)
• State and federally-supported
• Various categories
• Aged, Blind, and Disabled
• Temporary Aid to Needy Families
• General Assistance
• Starts at federal poverty level of approximately
  22,000
• Also includes long term nursing home care
  (largest increase)

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SCHIP

• State Childrens Health Insurance Plan
• Coverage for children whose family Federal
  Poverty Level does not exceed 36,000
• Waiting list in Pennsylvania
• Needs full funding

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Payment

• Deductible 1st dollar patient pay
• Co-insurance 1st dollar sharing ()
• Co-payment dollar patient pay per unit of
  service
• Capitation pre-paid, population, defined
  services, over time
• Fee-for-service payment per service

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Why is health care so expensive?
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Drivers of health care costs

• Unavailable or inappropriate access to care
• New technology
• Uninsured or underinsured
• Educated consumers
• Entitlement mentality
• Aging of the population
• Illegal residents
• Lobbyist activity
• Advertising (Rx, health plans, hospitals)
• Federal and state mandates
• Provider consolidation
• Insurance company administrative costs and
  redundancy

• Reliance on paper (no electronic medical record)
• Excessive profits of insurance plans, drug
  companies and medical providers
• Executive compensation
• Under-funding of Medicare and Medicaid
• Physician over or under supply
• Physician specialization
• Hospital redundancy of services
• Litigious culture
• End of life care

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• So where do we go from here?
• and can we fix it?

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Plan

• Develop a universal health insurance plan that
• Covers all basic adult and pediatric health care
  needs
• Includes behavioral health, dental, and pharmacy
• Everyone must purchase
• Focuses on preventive services
• Contains meaningful patient financial
  responsibility

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Plan (cont.)

• Mirrors Medicare and Federal Employee Plan (FEP)
  coverage
• Incents people with chronic diseases to
  participate in disease management programs
• Pays physicians and hospitals based on quality
  and effectiveness

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Plan (cont.)

• The government administers this health care plan
  and private insurance companies may sell
  competing plans
• Provide everyone with the option of purchasing
  their plan from the government, or from a private
  company
• All health plan providers must offer the same
  basic coverage but private companies can enhance
  benefits
• This promotes open competition and free market
  capitalism

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Plan (cont.)

• All health plan providers must offer the same
  basic coverage but private companies can enhance
  benefits
• This promotes open competition and free market
  capitalism

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Plan (cont.)

• Transition from employer-based coverage to
  personally-owned health coverage
• Transition over five years
• Ultimately take the employer out of the health
  plan selection business
• You own your plan!

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Plan (cont.)

• Transition to a universal virtual electronic
  medical record
• Similar to our banking and financial industry,
  make medical record information accessible to all
  who need to see it (confidentiality concerns?)

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Plan (cont.)

• Restore regional health systems agency planning
• Institute a rational health resource planning
  approach that focuses on hospital services and
  other ancillary providers
• Not everything needs to be around the corner!
• Each regional HASs representation should be made
  up of community, physician, and industry experts

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Plan (cont.)

• Require all citizens to purchase health
  insurance. Provide a voucher or subsidy for those
  who cannot afford coverage
• It is critically important that EVERYONE
  participate!
• An insurance model works best when everyone is
  included
• Tax returns document income eligibility

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Plan (cont.)

• Eliminate the pre-existing condition restriction
• Everyone should be covered from day one!

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Plan (cont.)

• If necessary, levy a flat percentage tax on all
  earnings
• Someone will have to pay for this!
• Index the tax every two years to health care
  spending (up and down)
• Over time, health spending should moderate

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Reference

• Morsell, William. (January 2009). Code Red,
  Health Care in Critical Condition. Holy Family
  University