FACT VERSUS FICTION:

KEY ISSUES IN HEALTH

REFORM

August 20, 2009

National Press Club
 Introductory Remarks
Susan Dentzer, Editor-in-
Chief,
Health Affairs
Health Affairs gratefully acknowledges
the generosity
of the following organizations
for support of this conference:

Picture 4
 Our premise:

A serious health reform effort

warrants a serious national

discussion .
“Protester,” New Hampshire Health Care Event, August 2009
C. Everett
Koop, MD
Former Surgeon
General
Richard
Carmona, MD,
MPH
-17th Surgeon General of
the United States of
America
-Vice Chairman Canyon
Ranch
-CEO Canyon Ranch Health
 David Colby, PhD
Vice President, Research
Robert Wood Johnson Foundation
 Fear of “government
takeover”
Roll Call, Aug. 13, 2009, 10:29 a.m.
AFTON, Iowa — “Peggy Erskine used a
half-day of her vacation time to give Sen.
Chuck Grassley (R) a piece of her mind
on health care reform; and she wasn’t
alone.
“Erskine, a 61-year-old factory worker,
was one of about 2,000 people who
showed up Wednesday at one of four of
Grassley’s town-hall meetings across
central Iowa farm country.
“And like many of her counterparts,
Erskine had a message for the Iowa
Republican, a key health care negotiator:
Stop President Barack Obama and
Congressional Democrats from enacting
their health care plans.”
 Fear of “government takeover”

Roll Call, Aug. 13, 2009, 10:29 a.m.

AFTON, Iowa – Peggy Erskine

“When 9/11 happened, I was very

terrified. But I honestly am more
terrified now. Then, I thought my
government was going to protect me,
and now I’m afraid of my government.

“We have the car industry [being] taken over, the banks were taken over,
and now I feel our health care. And I think we have — we’re leaning toward
socialism, and that scares me to death,” Erskine told Grassley to
enthusiastic applause from most of the 300 who packed the
Methodist church in Afton, after the large turnout forced the event to move
from the town’s small City Hall.”
 Panel #1
What exactly is the
role of the U.S. Len Nichols, PhD
government today in Director, Health Policy
New America Foundation
paying for and/or
providing health
care?

Gail Wilensky, PhD

Senior Fellow, Project HOPE
Former Administrator,
How might this change Health Care Financing
Administration
under leading health (now CMS), 1990-92

reform bills now in

Congress?
Len Nichols, PhD
Director, Health Policy
Program
New America Foundation
 Overview
Role of Government in a
Free Society

Health Care Roles of

Government
Research
Regulation
Delivery
Financing
New America Foundation ♦ Health Policy Program
Roles for Government in a Free
Society
Public Goods

Externalities

Promote Competitive Markets

Redistribution of Market Rewards

Macroeconomic stabilization
New America Foundation ♦ Health Policy Program
Public Goods In Health
Knowledge  Research +
Dissemination
National Institutes of Health
$30B
Agency for Health Research and Quality
$372m, $50m for comparative
effectiveness
Center for Disease Control
$9B, $1.4B for terrorism, $1.9B
infectious diseases
Health Information Infrastructure
New America Foundation ♦ Health Policy Program
Externalities in Health
Public Safety Regulation
Food and Drug Administration
Professional licensure

Second hand smoke laws

States and locales regulate restaurants
etc.
Federal law governs interstate
transportation
New America Foundation ♦ Health Policy Program
 Promoting Competition in
Health Markets
Insurance Market Regulation
McCarran-Ferguson Act (1944)

Antitrust enforcement
HMO Act (1973)
Medicare Advantage Plans
(1982)
Medicare Modernization Act
New America Foundation ♦ Health Policy Program
 Redistribution of Access
to Health Through
Government
Direct Provision
Veterans Administration ($39B, 5m patients)
Indian Health Service ($3.3B, 1.9m eligible)
State and local public hospitals
1,111 hospitals, 23% of total, 15% of beds
(Non-profit 60% of hospitals, 67% of beds)
Grants to community health
centers
($2B federal, $500m S&L, 18m patients)
Insurance for poor, disabled,
New America Foundation ♦ Health Policy Program
 Medicare and Medicaid
(2007)
Medicare Medicaid +
SCHIP
$418B $340B

Federal share of Medicaid

$192

Total federal public

New America Foundation ♦ Health Policy Program
 Historical Health
Spending
Table 1: Historical
Health Spending 1960 2007
Health Spending/GDP 5% 16%
Out of Pocket
Spending/Health Spending 47% 12%
Private Health
Insurance/Health Spending 21% 35%
All Private
Spending/Health Spending 75% 54%
All Public
Spending/Health Spending 25% 46%

Source: CMS Office of the Actuary, National Health Expenditures Historical

New America Foundation ♦ Health Policy Program Tables
Personal Care Spending by
Payer
Other
11% Medicare
22%

Out of Pocket
14%

Medicaid/SCHIP
17%

Private Health
Insurance
36%
Source: CMS Office of the Actuary, National Health Expenditures Historical Tables, 2007.
New America Foundation ♦ Health Policy Program
 Who Pays for Hospital
Care?
Other
14% Medicare
28%
Out of Pocket
3%

Private Health Medicaid/

Insurance SCHIP
38% 17%

Source: CMS Office of the Actuary, National Health Expenditures Historical Tables, 2007.
New America Foundation ♦ Health Policy Program
 Who Pays for Doctors
Visits?
Other
13% Medicare
20%

Out of Pocket
10%
Medicaid/SCHIP
7%

Private Health
Insurance
50%

Source: CMS Office of the Actuary, National Health Expenditures Historical Tables, 2007.
 Public Payment Rates

2/3 of Hospitals have

negative Medicare margins

Medicaid pays differently

and less than Medicare

Both pay less than private

payers to hospitals and
physicians
 Who are the Uninsured?
Uninsured Percent of
Rate Uninsured
<100% FPL 35% 36.5%
100-199% FPL 29% 28.8%
200-299% FPL 18% 16.5%
300-399% FPL 10% 7.8%
400+% FPL 4.9% 10.3%

Source: Kaiser Family Foundation Analysis of CPS Data, 2007.

 Cost of Health Insurance

Percent of
Income to
Cost / Purchase
Value in Health
2008 Insurance
Price of a
Family Policy $12,680
200% FPL (family
of 3) $35,200 36.02%
Source: Kaiser Family Foundation/HRET Analysis of Employer Benefits; Department of HHS Poverty Guidelines.

300% FPL (family

 Contact Information

Len Nichols, Ph.D.

Director, Health Policy Program
New America Foundation
(202) 986-2700
Nichols@newamerica.net

New America Foundation ♦ Health Policy Program

 Gail Wilensky, PhD
Senior Fellow, Project HOPE
and
former Administrator, Health
Care Financing Administration
How Will the Role
of Gov’t Change in
Healthcare Reform?
 Hard Question to
Answer!
• Don’t know the specifics of reform
-- The focus seems to have changed:
Health care reform has become health
insurance reform
• Which bill?
House bill? President’s “proposal?”
Senate HELP bill? Senate Finance bill?
 Need to Distinguish
the
Level and Branch of
Not always more gov’t Gov’t
-- Some changes are state to federal

-- Some changes are legislative branch

to executive branch
But clearly more gov’t regulation
 Some Changes Seem
Clear
(assuming any legislation is
passed)
• increased spending on healthcare by Federal
gov’t

-- Increased subsidies for low income population

-- Increased federal spending on Medicaid
• Total cost is unclear
$1 trillion? $900 billion? $600 billion???
• Savings from Medicare also unclear
 Insurance
• Increased insurance role for Federal gov’t
-- More federal regulation of insurance
individual/small group requirements
consumer protections
-- Insurance exchange?
unclear if Federal, regional or state gov’t?
-- Public plan???
CMS style agency to operate/manage
Public plan now less likely but not dead
 Other Federal
Gov’t Changes
•“MedPAC on steroids,” or “IMAC”?
-- Major shift of power from legislative
branch to executive branch

•Individual mandate
Who enforces? Penalty?
•“Pay or play”
Minimum benefit?; tax penalty?

All represent new or shifting roles for gov’t

 Bottom Line
(assuming legislation is passed)

• Significant in gov’t spending

• in gov’t power – especially

at Federal level

•Significant in people insured

But health care reform?

Spending slowed?? Outcomes

improved??
 Fear of “Medicare
Politico,
McGrane &
Massacre”
By Victoria
Chris Frates,
8/12/09
“Frustrated older
Americans are packing
the town halls on
health care. They are
incredibly passionate
about their Medicare
benefits.
“Polls show senior
citizens largely
disapprove of health
care reform ideas so
far.
Source:
“And http://www.politico.com/news/stories/0809/26027.html#ixzz0Ods4P7g1
of course, they
vote — in larger
 Fear of “Medicare
Politico, by Victoria
Massacre”?
McGrane & Chris Frates,
8/12/09
“ At his Tuesday [8/11/09]
town hall event in New
Hampshire, President Barack
Obama made a point to reach
out to seniors, noting the
low support in polls for
his health care proposals.
“’We are not talking about
cutting Medicare benefits,’
Obama said, trying to
assuage the audience.
“But Obama is talking about
hundreds of billions in
savings from Medicare —
cuts supporters say will
trim fat from the program —
including slashing $156
 Panel #2
C. Eugene Steuerle, PhD,
Vice President,

“What are the Peter G. Peterson Foundation

implications of
slowing the rate Darrell G. Kirch, MD,
of growth in President and CEO,
Association of American
Medicare spending Medical Colleges

and what if any

impact would this Maulik Joshi, Dr.P.H.,

have on President, Health Research

and Educational Trust and

beneficiaries?” Senior Vice President of

Research, American
Hospital Association
Let’s Talk Like Adults
About
Health Reform &
Medicare Spending
C. Eugene Steuerle

Vice President, Peter G. Peterson

Foundation
Former Deputy Assistant Secretary of the
Treasury for Tax
Analysis
Former Senior Fellow, the Urban Institute

To Receive Gene’s column,

e-mail Steuerle@comcast.net
 Fiction
Congress should keep its
hands off Medicare

Fact
Medicare & health
spending are
unsustainable
Source: Congressional Budget Office
 Fiction
2009 will see real
Medicare reform

Fact
Today’s Medicare debate
is a minor prelude
Source: Gene Steuerle and Tim Roeper based on A Preliminary Analysis of the 44
President’s Budget and Update of CBO’s Budget and Economic Outlook CBO (March 2009)
 Fiction
You can’t reform Medicare
by itself

Fact
Medicare is like the line
in football: it leads
Source: Congressional Budget Office
 Fiction
Medicare shouldn’t regulate
prices & services

Facts
Medicare already sets prices &
limits services
Favoring specialization over
primary care
Favoring chronic care over
cures
 Fiction
Reform should avoid
creating any “losers”

Fact
The only policy with no
“losers” is the status
quo
 Average Health Costs Per
Household
2008
Average Costs $
21,000
Paid Through:
Taxes (& Deficits) $ 12,000
Other $ 9,000
Approximate Tax Rate to Support
Medicare Alone:
1975 2%
1990 4%
2010 7%
 Maulik Joshi, PhD
President, Health Research and
Educational Trust and
SVP of Research, American
Hospital Association
Bending the Cost Curve
Maulik Joshi, Dr.P.H.
Senior Vice President of Research, AHA
President, Health Research & Educational Trust
Phone: 312-422-2622
Email: mjoshi@aha.org
 AHA Commitment
Shared Responsibility: Contribute
$155 billion in savings over 10
years
Lower payment rates
Less money to care for the uninsured
(DSH payments) LINKED to expansion in
coverage
Reduction in readmissions

Implement Hospitals in Pursuit of

Excellence (HPOE) campaign to
 Hospitals in Pursuit
of Excellence (HPOE)
Pledge
Immediate Initiatives:
• Reduce surgical infections and
complications
• Reduce central line-associated blood
stream infections (CLABSI)
• Reduce methicillin-resistant
Staphylococcus aureus (MRSA)
• Reduce clostridium difficile infections
(c diff)
• Reduce ventilator-associated pneumonia
(VAP)
• Reduce catheter-associated urinary tract
infections
 Hospitals in Pursuit of
Excellence (HPOE)
Pledge
Longer-term Initiatives
•Improving Care Coordination – Focus in
particular on the discharge process and care
transitions.

•Implementing Health Information Technology (HIT)

– Focus on leadership and clinical strategies to
effectively implement HIT.

•Preventing Patient Falls – Further the

implementation of effective fall prevention
programs and use of fall risk assessment tools.

•Improving Perinatal Care – Promote best

 Need to Test and Learn

•Voluntary Demonstration
Projects

•Bundled Payments

•Accountable Care Organizations

 Impact
Impact on Beneficiaries
Improved quality of care –
preventing infections, avoidable
readmissions

Impact on Healthcare System

More efficient
Reducing the rate of cost growth
Darrell G. Kirch, MD
President and CEO
Association of American
Medical Colleges
Panel #3
 HR 3200, SEC. 1233:
ADVANCE CARE PLANNING
CONSULTATION.
“The term ‘advance care planning consultation’ means
a consultation between the individual and a
practitioner… Such
consultation shall include the following:
‘‘(A) An explanation by the practitioner of advance
care planning, including key questions and
considerations, important steps, and suggested people
to talk to.
‘‘(B) An explanation by the practitioner of advance
directives, including living wills and durable powers
of attorney, and their uses.
‘‘(C) An explanation by the practitioner of the
role and responsibilities of a health care proxy.
‘‘(D) The provision by the practitioner of a list
of national and State-specific resources to assist
consumers and their families with advance care
planning, including the national toll-free hotline, the
advance care planning clearinghouses, and State legal
service organizations (including those funded through
 HR 3200, SEC. 1233:
ADVANCE CARE PLANNING
CONSULTATION.
‘‘(II) the information needed for an individual
or legal surrogate to make informed decisions
regarding the completion of such an
order; and (III) the identification of resources that
an individual may use to determine the requirements
of the State in which such individual resides so that
the treatment wishes of that individual will be
carried out if the individual is unable to
communicate those wishes, including requirements
regarding the designation of a surrogate decision
maker (also known as a health
care proxy).
‘‘(ii) The Secretary shall limit the requirement
for explanations under clause (i) to consultations
furnished in a State—
‘‘(I) in which all legal barriers have been
addressed for enabling orders for life sustaining
treatment to constitute a set of medical orders
respected across all care settings; and
 “Death panels”?
ABC News, Kate Snow,
August 10, 2009

“At a health care town

hall with Obama hosted
by the AARP, a man
said, ‘This is being
read as saying, ‘every
five years, you’ll be
told how you can
die’.”
 Panel #3
Christine Cassel, MD
“End of life issues and
President,
why it might or might not American Board
be important to address of Internal Medicine
them in health reform
through HR 3200’ proposal
Diane Meier, MD
to pay practitioners Center for Palliative Care
under Medicare to Mt. Sinai School of Medicine
conduct advance-planning
consultations with
patients.” 
Jerald Winakur, MD,
Center for Medical
Humanities and Ethics,
University of Texas
Health Science Center
at San Antonio
Christine Cassel, MD
President
American Board of Internal
Medicine
 Patient Centered?
What Do Patients with
Serious Illness Want?
Pain and symptom control
Avoid painful prolongation of the
dying process
Achieve a sense of control and
dignity
Relieve burdens on family
Strengthen relationships with
loved ones
Singer et al. JAMA 1999;281(2):163-168.
 And What They Get: Suffering in U.S.
Hospitals
National Data on the Experience of
Advanced Illness
in 5 Tertiary Care Teaching Hospitals
9,000 patients with life-threatening
illness, 50% died within six months of
entry
Half of patients had moderate-severe pain
>50% of last three days of life.
38% of those who died spent >10 days in
ICU, in coma, or on a ventilator.
 Patient Centered?
What Do Family Caregivers
Want?
Study of 475 family members 1-2
years after bereavement
•Loved one’s wishes honored
•Inclusion in decision processes
•Support/assistance at home
•Practical help (transportation, medicines,
equipment)
•Personal care needs (bathing, feeding, toileting)
•Honest information
•24/7 access
•To be listened to
•Privacy
•To be remembered and contacted after the death

Tolle et al. Oregon report card.1999 www.ohsu.edu/ethics

 And What They Get: Family
Satisfaction with Hospitals
as the Last Place of Care
2000 Mortality follow-back
survey, n=1578 decedents
•Not enough contact with MD: 78%
•Not enough emotional support (patient): 51%
•Not enough information about what to expect
with the the
dying process: 50%
•Not enough emotional support (family): 38%
•Not enough help with pain: 19%
 Medicare Spending by Sector
in
Last Two Years of Life

Source: The Dartmouth Atlas of Health Care 2008

Available at: http://www.dartmouthatlas.org/atlases/2008_Chronic_Care_Atlas.pdf
 Association between cost and quality
of death in the final week of life
(adjusted P = .006)

Zhang, B. et al. Arch Intern Med 2009;169:480-488. Copyright restrictions

may apply.
 Advance Directive
Advance health care directives, also
known as advance directives or advance
decisions, are instructions given by
individuals specifying what actions
should be taken for their health in the
event that they are no longer able to
make decisions due to illness or
incapacity.

A living will is one form of advance

directive, leaving instructions for
treatment. Another form authorizes a
specific type of power of attorney or
health care proxy, where someone is
 Medical Care Received in the
Last Week of Life
by End-of-Life Discussion

Copyright restrictions Wright, A. A. et al. JAMA 2008;300:1665-1673.

may apply.
 Policy – House Tri-
Committee Bill
Provides Medicare coverage for
voluntary Advance Care Planning
Consultations at least every five
years.

Requires quality measures in PQRI

on end-of-life care and advanced
care planning.

Other legislative proposals not

 Diane E. Meier, MD
Director, Center to Advance
Palliative Care
Mount Sinai School of Medicine
A Tale of Two Patients:
Elaine G. and Judy F.

Diane E. Meier, MD
Professor
Mount Sinai School of
Medicine
August 20, 2009
Elaine G., 82 year old
nursing home resident
with dementia and
recurrent pneumonia
Business as usual
Multiple admissions for
recurrent pneumonia
No prior evidence of her wishes
Prolonged critical care
Hospital complications
Pain
 Judy F., 65 year old with
metastatic lung cancer
seeking guidance
Diagnosed age 59
No smoking history
Given prognosis of 6-12 months
With expert oncologist, lived 6
years
Sought palliative care as symptoms
worsened for pain, insomnia,
fatigue, questions about the future
and what to expect
Received simultaneous palliative
and cancer care for a year
When cancer Rx no longer helpful,
Conceptual Shift for Palliative Care
Medicare
Life Prolonging Care Hospice Old
Benefit

Life Prolonging New

Hospice Care

Be
Care

re
av
Palliative Care

em
en
t
Dx Death
Implications and Lessons:
Match the Care to the
Patient’s
We don’t know who is Needs
at the end of
life until weeks-days before death
Advance care planning necessary from
point of diagnosis of advanced
progressive illness regardless of
prognosis- not at “end of life”
Non hospice palliative care
appropriate whenever symptom,
function, and family burden
regardless of prognosis, and in
combination with all other
appropriate life prolonging treatment
Hospice when life prolonging
 Art Buchwald, Whose Humor Poked the
Powerful, Dies at 81
By RICHARD SEVERO
Published: January 19, 2007, New York
Times
As he continued to write his column,
he found material in his own
survival. “So far things are going my
way,” he wrote in March. “I am known
in the hospice as The Man Who
Wouldn’t Die. How long they allow me
to stay here is another problem. I
don’t know where I’d go now, or if
people would still want to see me if
Life is pleasant. Death
is peaceful. It's the
transition that's
troublesome.

Isaac Asimov
US science fiction novelist & scholar (1920 -
1992)
Although the world is
full of suffering, it
is also full of the
overcoming of it.
Helen Keller
Optimism, 1903
In loving memory
 Jerald Winakur, MD
Center for Medical Humanities
and Ethics
University of Texas Health
Science Center at San Antonio
 MEMORY LESSONS:
A GERIATRICIAN’S
TALE
JERALD WINAKUR, M.D., F.A.C.P., C.M.D.
The Center for Medical Humanities and Ethics
The University of Texas Health Science
Center at San Antonio
 AMERICA’S AGING
SOCIETY

--Over 65: 72 million people,

20% of our populace in the next
23 years

--Over 85: 18 million by 2050

--Only 20% are fully mobile

--50% have some degree of

 The “State of Collapse” in
America’s Primary
Care/Geriatric Workforce
--50% decline in students choosing primary
care as a career since the late nineties

--20% decline in the number of certified

geriatricians practicing in the last 10
years

--7000 geriatricians in America today

 The “State of Collapse”
in America’s Primary
Care/Geriatric Workforce

--300 new geriatricians entering the

workforce yearly does not replace those
retiring

--Only 2% of residents in training choose

Geriatrics as a career

--2008: only one geriatrician per 8000

patients

--Current deficit of 14,000 geriatricians

will grow to 34,000 by 2030
A HELPFUL WEBSITE:

texaslivingwills.org
by Craig Klugman, PhD
 Health Affairs gratefully
acknowledges the generosity
of the following organizations
for support of this conference:

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The End