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Leading on Change, Leading on Health

John August, Executive Director

Union Delegate Conference, March 23, 2012

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The Legacy We Want to Achieve

Union Coalition legacy statement

What Consumers Value in a Health Plan

Base: All Qualified Respondents Under Age 65 (n=2140)

“Assume for a moment you were faced with the decision of purchasing your own health insurance plan foryou and/or your family. On the next few screens, we will be showing you possible features and benefitsof health insurance plans. Given that you will have to make some tradeoffs in deciding which plan topurchase, for each one, please indicate which feature/benefit you would prefer the most and which you

would prefer the least.”

SOURCE: Strategic Health Perspectives 2010 Consumers Survey

Low monthly premiumsUnrestricted access to medical technologies

Coverage for dependentsKeeping my current doctor

Low co-pay costs for generic drugsReasonable co-pays for brand name drugs

Direct access to all specialistsDirect access to leading specialists in my area

Unrestricted access to cutting edge medical devicesUnrestricted access to cutting edge drugs

Access to all brand-name drugs at low cost sharingChoice of hospitals

Coverage for a wide selection of brand name durgsAccess to prestigious institutions (e.g., Mayo)

Relative importance of features/benefits

Health Plan Industry Trends

Health care reform has increased the number of entities seeking to reposition with newrelationships both within and outside their traditional domain.

Realignment and Integration - Realigning business model to control costs

HealthCare Partners acquires Talbert Medical Group

Humana purchased Concentra(a multi-state outpatient care provider)

Diversification - Expand into new lines of business

United rebranded health care servicesand technology as Optum

Aetna acquired Medicity(a health technology company)

Consolidation - Maintain access to capital and leverage economies of scales

United acquired Principal’s health plan business

HealthSpring acquired Bravo Health(a Medicare Advantage health plan)

Confidential - For Internal Use Only

Current Hospital Economics (per Camden Group)

Commercial Cost Shift Ends?

Consultants and Investment Banks Touting Valueof KP Style Integration

Where We Are Today

We spend twice as much on health care as other countries.

Not what Garfield imagined:

Where We Stand

1 France 2 Italy 3 San Marino 4 Andorra 5 Malta 6 Singapore 7 Spain 8 Oman 9 Austria 10 Japan 11 Norway 12 Portugal

13 Monaco

14 Greece

15 Iceland 16 Luxembourg 17 Netherlands 18 United Kingdom 19 Ireland 20 Switzerland 21 Belgium

22 Colombia

23 Sweden

24 Cyprus

25 Germany

26 Saudi Arabia

Health Care System PerformanceWorld Health Organization, 2000

27 United Arab Emirates

28 Israel

29 Morocco

30 Canada31 Finland 32 Australia 33 Chile 34 Denmark 35 Dominica 36 Costa Rica 37 United States of America38 Slovenia39 Cuba40 Brunei

The New Normal

Jobs are not coming back

Federal Debt 1946-2011

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It boils down to two words –

Frontline leadership

Our Challenge

Leading on change, leading on health

For our patients and members, our communities, our union movement, our families, ourselves….

Frontline Leadership

Frontline Leadership

To create a public face for our unions to show our commitment to leading on public health and shared prosperity.

Our Goal

Total Health: Advice from the first physician

“Eating alone will not keep man well; he must also take exercise, for food and exercise work together to produce health.”

– Hippocrates, 460 BC – 370 BC

What It Will Take to Win

A culture of engagement, learning, accountability and change….

Our Stark Choice

The choice is stark: chop or improve.

“If we permit chopping, I assure you that the chopping block will get very full – first with cuts to the most voiceless and poorest of us, but, soon after, to more and more of us. Fewer health insurance benefits, declining access, more out-of-pocket burdens, and growing delays.

If we don’t improve, the cynics win.”

- Don Berwick, past administrator, Centers for Medicare and Medicaid Services

Chop or Improve?

We know from documented experience that the best way to create value is through an engaged workforce and continuous improvement.

Taking the waste, cost, errors, and inefficiencies out of the system can only be done at the front line, by a respected and secure workforce.

Our Response

1. Improve quality, service, safety and efficiency while preserving best place to work

2. Grow KP to protect our model of care, our unions and our jobs

3. Improve the health of our workforce

4. Improve the health of our communities