Teaching Project Management to Healthcare Professionals: A Much
Why does healthcare cost so much?
description
Transcript of Why does healthcare cost so much?
Why does healthcare cost so much?Understanding the real cost drivers and why
Americans pay so much more for care
Presented by: Michigan Consumers for Healthcare
www.healthreformtruth.com
U.S. Healthcare costs are out of control in comparison to the world
Source: International Federation of Health Plans, CHRT graphic
It’s because we are obese, right?
• Or older?
• Or because of lawyers?
• Or because of the poor?
• Or because we spend more on technology?
Americans are surprisingly healthy!• America is healthier
than peer nations in 7 out of the top 10 disease classifications!
– Institute of Medicine study
• Lower relative disease prevalence saves the U.S. $70 billion in medical costs annually
It must be because we are older?
JapanMedian Age: 45.8Per capita spending: $3,035
USAMedian Age: 37.2Per capita spending: $8,233
It must be because of the lawyers!• Litigation costs and
malpractice insurance account for 1 to 1.5 percent of total medical costs. -Towers Perrin study
• As healthcare costs have doubled, medical liability costs have stayed fairly constant.
But our technology is more advanced and expensive, right?
• All modern healthcare systems have access to the very same pharmaceuticals, medical devices, surgical procedures and imaging equipment.
• Profits drive the use of imaging equipment
The poor are to blame, right?
The bottom 50% of Americans account for only 2.7% of healthcare spending
21.0%
So why is believing in myths bad?• It allows the real drivers
of high costs to shift the blame
• It takes pressure off politicians to act
• It will ultimately lead to fiscal crisis
So what are the real drivers?
Unit Prices and Administrative Costs!
What do we get for $140 billion?
Example: Surgeon fee for hip replacement
U.S. Hospital spending is 3 times the global average
Source: OECO Health Data, 2011
So who’s on my side
• Policymakers engage in blame shifting to avoid making tough decisions
• Unlike in other countries, policymakers create few leverage points to control costs for consumers
Examples of policymakers punting
• Medicare Part D was prohibited by Congress from negotiating on behalf of the recipients for lower rates. The results: billions in unnecessary out of pocket costs!
• Medicare physician services are supposed to be capped. Every year Congress succumbs to AMA pressure and overrides the caps.
Balance billing practice continues
• ACA requires that health plans pay something for out-of-network
• But ACA allows hospitals to “balance bill” anything the insurance doesn’t pay.
Why no public option?
• The House passed version of the ACA would have created a public option to compete with private insurance
• Reimbursement rates would be capped at Medicare plus 10%
Challenges ahead for consumers
• How do we message (or counter-message) on cost drivers?
• How to we create a unified consumer policy agenda around cost drivers?
• How do we move policymakers to act?
What You Can Do
Join MCH’s email list, find us on Twitter @MIChealthcare or http://Facebook.com/consumersforhealthcare
Visit us on the web at www.consumersforhealthcare.org
Or find a navigator to assist you in getting enrolled atwww.EnrollMichigan.com
www.healthreformtruth.com