Health Care Reform Memo: January 17, 2012
Deloitte Center for Health Solutions publication
The health care reform memos are issued on a weekly basis, highlighting news from the previous week's activities in the administration and implications for the C-suite and various stakeholder groups.
My take: health reform: use your words wisely
From Paul Keckley, Executive Director, Deloitte Center for Health Solutions
In the 1952 Florida Senate race, George Smathers campaigned against incumbent Claude Pepper in the democratic primary, using this characterization attributed by journalists of the day as key to his win:
"Are you aware that the candidate is known all over Washington as a shameless extrovert? Not only that, but this man is reliably reported to have practiced nepotism with his sister-in-law... He matriculated with co-eds at the University, and it is an established fact that before his marriage he habitually practiced celibacy."
Words are powerful. Most of the time, they’re used innocently and with purposeful intent; sometimes they’re used to avoid discussion or reinforce unfortunate stereotypes.
These days, there’s unprecedented attention to health reform. As in religion and politics, health care is deeply personal and opinions strongly held. As we enter the 2012 election cycle, rhetoric about health care will amp up. Often, a general conversation about health care is shortcut by the use of loaded terms that evoke visceral reaction:
“Rationing”, “cookbook medicine”, “government takeover”, death panels”, “entitlements”, and others: the lexicon of loaded health care terms is thick.
I wonder… if “managed care” is spoken, do audiences imagine its antonym “un-managed care”? I wonder… when “evidence-based medicine” is pronounced, is “opinion-based medicine” juxtaposed? I wonder when we use “personalized medicine”, if “impersonalized medicine" is imagined, and so on.
Everyone’s inclined to use loaded words. They’re easier to use than to explain. But as Campaign 2012 unfolds, and arguments for and against health reform become more frequent, perhaps a rule of thumb for those of us in the industry should be avoidance of the use of loaded terms and patience in explaining ideas with those we serve and seek to influence.
Smathers won the primary and the Senate seat, serving three terms in the Senate until 1969. Pepper served in the Senate from 1936 until his defeat in 1951, then served the Miami area as its member of Congress from 1963 until his death at 89 in 1989. The 1952 race is epic as much for its rhetoric as its result.
Loaded words matter. In health care, loaded words can divide or confuse, facilitate discussion or end debate, encourage understanding and study, or reinforce bias and misinformation.
They should be used cautiously on all sides of the health reform debate so that issues are addressed objectively and solutions discussed with a goal of doing what is right. It’s too important to do otherwise.
Paul Keckley, Ph.D., Executive Director, Deloitte Center for Health Solutions
January 24: budget talks start again, SGR, payroll tax key agenda items
The joint House-Senate conference panel tasked with identifying a Medicare sustainable growth rate (SGR) "doc fix" and payroll tax bill extension will meet for the first time Tuesday, January 24. Chairman Dave Camp (R-MI) will lead the conferees that include seven senators and 13 House members.
Constitutional challenges update: briefs filed for, against ACA
Last week, additional briefs were filed with the Supreme Court including:
Administration: January 6, lawyers from the Department of Justice and Office of the Solicitor General submitted a brief affirming that Congress had the authority under the commerce clause of the U.S. Constitution to enact, as part of a broader reform package, a mandate that requires nonexempt individuals to obtain health insurance or pay a financial penalty (U.S. Department of Health and Human Services [HHS] v. Florida, U.S., No. 11-398, brief filed 1/6/12). In essence, the brief concludes that the authority for enactment of the individual mandate is already granted to Congress as part of its taxing and spending responsibility, since the mandate functions as a tax and is revenue-raising.
State legislators: In a brief filed Thursday, the Working Group of State Legislators for Health Reform and the Constitutional Accountability Center argue that Congress has the constitutional authority to implement national health reform: “…the minimum coverage provision, which is part of the means of effecting reform of the national health care industry, does not infringe upon any constitutionally guaranteed rights… There is no constitutional right to freeload that is infringed by the individual responsibility aspect of the minimum coverage provision.”
Hospitals: In its brief filed Friday, the trade groups assert that the individual mandate is constitutional and essential to the rest of the health care law. “The health care uninsured Americans obtain has real costs. Their decision to obtain care, and how to pay for it, is economic activity with massive economic effects, including the imposition of billions in annual costs on the national economy…To suggest that Congress would force all Americans to buy a particular make of vehicle, or buy a pound of broccoli every week, or sleep at particular times, or any of the rest of the pundits’ parade of fantastical hypotheticals, is to abandon all faith in representative democracy” (American Hospital Association, the National Association of Public Hospitals and Health Systems, the Federation of American Hospitals, the Catholic Health Association of the United States, the National Association of Children’s Hospitals the Association of American Medical Colleges).
Democratic Attorneys General: Friday, 13 Democratic attorneys general filed an amicus brief with the Supreme Court arguing that Congress has the right to enact the individual mandate in the health care reform law. The central arguments of the brief focus in three areas: whether the federal government can act on issues where states cannot act alone, whether the mandate is justified under the Commerce Clause because it is essential to the proper functioning of the Patient Protection and Affordable Care Act (ACA), and whether the states have sovereignty under the act to implement parts of the law. “The health care problems that the act tries to address have been an albatross on our citizens for decades and requires a federal solution”.
American Center for Law and Justice: ACLJ Center and Justice (ACLJ) and Susan Seven-Sky, the plaintiffs from a former unsuccessful lawsuit against the ACA, argue that the individual mandate requirement to buy insurance violates their religious freedoms.
Cancer interests: the American Cancer Society, American Cancer Society Cancer Action Network, American Diabetes Association, and American Heart Association joint brief argues that the individual mandate should be upheld to protect access for patients with life-threatening diseases.
Update: health insurance exchanges
- HHS has awarded 28 states and the District of Columbia exchange establishment grants, including three in 2011: TN, NE, KY.
- Seven states have not initiated any legislative activity to establish an exchange.
- Eleven states—CA, CO, CT, HI, IL, MD, NV, OR, VT, WA, WV—enacted laws in 2011 to establish health insurance exchanges.
- Four states—MS, ND, VA, WY—enacted legislation signaling intent to establish their exchanges.
- Exchange legislation was introduced in 2011 that is pending in three states—ME, OH, WI.
- Governors in eight states—AL, AR, GA, IN, MN, MO, MT, RI—are considering alternatives to establishing exchanges through non-legislative means, i.e., executive orders.
- Governors in four states—FL, LA, SC, SD*—have notified HHS they do not intend to establish an exchange (*SD Governor announced Friday, January 13 the state would not implement an exchange).
- NM Governor vetoed legislation passed by its legislature to enact an exchange and created an Office of Health Reform to advise.
GOP leaders challenge essential benefits notification by bulletin rather than as a proposed rule
In a letter to HHS Secretary Kathleen Sebelius Friday, the Republican chairs and ranking members of the five health care committees challenged her authority to provide essential benefits guidance via a bulletin rather than as a proposed rule accompanied by cost implications. The letter alleges HHS actively promoted their proposal by hosting conference calls with lobbyists and media three hours before making the bulletin accessible to Congress, choosing Friday afternoon of a holiday weekend to limit Congressional review/flack.
Study: elimination of individual mandate results in 25 percent premium increase
Insurance premiums will increase up to 25 percent if ACA is implemented without an individual mandate per analysis by the Urban Institute. The study notes that without the individual mandate, 40-42 million would remain uninsured as opposed to 26 million with the mandate; private coverage would fall 11 million—four million fewer people than estimated by the Congressional Budget Office (CBO), individual premiums in the health benefit exchanges would increase by 10-25 percent depending on their participation in the health exchanges, and increase uncompensated care would increase by $20 billion.
CO-OP grant awards expected soon: CCIIO
Per a Center for Consumer Information and Insurance Oversight (CCIIO) announcement Friday, the initial applicants for ACA’s Consumer Operated and Oriented Plan (CO-OP) Program will be announced in the next few weeks. The $3.4 billion CO-OP funding will be awarded for two purposes: for startup costs to be repaid in five years, and for solvency funds to be paid back over 15 years.
Background: Per Section 1322, ACA calls for the funding of as many as 51 CO-OPs to compete primarily in the individual and small business market when the state exchanges are operational in 2014. Funding for the program was cut from $6 billion allocated in the ACA as part of year-end budget negotiations: $2.2 billion as a result of the Budget Control Act of 2011 agreement in August 2011 and an additional $400 million in the omnibus appropriations bill at the end of last year.
Proposed change in DSH payment calculations helps hospitals offset costs for inadequately insured patients
Friday, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule that would allow hospitals to included care that isn’t covered fully by insurance (patients who have inadequate coverage, or those who reached or exceeded annual insurance caps) toward their disproportionate share (DSH) calculations. DSH payment calculations are determined by federal law, and payments are made available to hospitals that treat a higher-than-average percentage of uninsured. The proposed rule changes the definition of what constitutes an uninsured person, allowing providers to count the unpaid cost of services provided to individuals who have third-party coverage, but whose coverage does not extend to the specific services the patients received. The rule, however, disallows providers to count unpaid co-pays and deductibles from their DSH calculations.
MedPAC recommendation for E&M codes: “pay based on what is done, not where”
Thursday, the Medicare Payment Advisory Commission (MedPAC) approved draft recommendations to reduce pay for evaluation and maintenance (E/M) services provided in outpatient departments to equal pay rates for those same services provided in doctor offices, to be phased in over three years. The effort is intended to standardize payments for a variety of health services based on what is done, not where. In response, hospitals argue that it unfairly penalizes their community mission responsibilities that require higher fixed costs. The proposed change would save $6.8 billion over ten years, primarily in cuts to hospitals. Public hospitals would be hit hardest, absorbing 70 percent of the cuts from the policy change.
Medicare eligibility age increase to 67 would save $148 billion, would increase Medicaid costs $35 billion
Thursday, the CBO released its analysis of the impact of increasing the Medicare eligibility age to 67. It concluded savings to Medicare would be $148 billion from 2012 through 2021, offset partially by increased Medicaid spending ($35 billion). Per CBO, by 2035, Medicare's net spending would be 5 percent below current levels with the increase consuming 4.7 percent of the gross domestic product vs. 5 percent under current law.
Note: the CBO modeled raises Medicare's current eligibility age of 65 to 67 by two months every year, starting in 2014 for people who were born in 1949, until age 67 is reached in 2027 for those born in 1960. Of the 5.4 million people who would be affected in 2021, about 5 percent would become uninsured, 50 percent would obtain private insurance, and the remaining 45 percent (2.3 million in 2021) would either receive coverage through Medicaid, Medicare because they would qualify for disability benefits, health insurance exchanges implemented under the ACA, or in the nongroup market, CBO said in the report. (Source: Raising the Ages of Eligibility for Medicare and Social Security, January 10, 2012, CBO)
White House announces plan to streamline departments, desire to improve effectiveness and efficiency of government
Friday, the President announced his intent to consolidate six departments in the executive branch of government to save $3 billion over ten years. They include the U.S. Department of Commerce, the office of the U.S. Trade Representative, and others focused on business. In his comments, the president also opened the door to consolidation in other areas of government to improve the efficiency and effectiveness of government programs.
Note: HHS includes 12 operating divisions (e.g., Agency for Healthcare Research and Quality, the National Institutes of Health, CMS, etc.) and 17 staff divisions (e.g., Office of the National Coordinator for Health Information Technology, Office of the Inspector General, etc.).
Staff changes in White House health policy team; core leadership worked together in Clinton administration
Monday, President Obama named Jack Lew his new Chief of Staff, leaving the Office of Management and Budget (OMB) to step into the role vacated by Bill Daly. Leading health policy efforts with Lew will be Nancy-Ann DeParle as White House Deputy Chief of Staff, and Jeanne Lambrew, Deputy Assistant to the President for Health Policy. The three worked together on health policy in the Clinton administration.
Managed care option for dual eligibles proposed
Thursday, the Association for Community Affiliated Plans (ACAP) released a paper recommending a managed care model to accommodate dual eligibles—9.2 million individuals representing 36 percent of total Medicare spending and 39 percent of total Medicaid spending—$230 billion annual costs. Currently a federal demonstration program, Very Integrated Program (VIP) would be expanded to every state using full capitation with quality measures from the Program of All Inclusive Care for the Elderly (PACE), created by Congress in 1997. Similar to PACE, VIP would be a separate program, with a single set of requirements regarding eligibility, application procedures, administrative requirements, services, payment, participant rights, quality assurance, and marketing requirements, according to the paper. States would be required to maintain a one-year continuous eligibility period for dual eligibles, similar to requirements for low-income children and pregnant women enrolled in Medicaid. Participating health plans would be required to cover all Medicaid benefits as well as all Medicare benefits, in addition to coordination services between the two programs. To generate sufficient enrollment, VIP would automatically enroll eligible individuals who would have an opt-out option. (Source: “A New State Plan Option to Integrate Care and Financing for Persons Dually Eligible for Medicare and Medicaid”, HHS.gov)
State waivers for insurance coverage rule out next week
A final rule detailing how states may design alternatives to various coverage requirements in ACA (Medicaid, uninsured)—state innovation waivers—is expected next week. It was sent to OMB last week for approval. States can get waivers from certain provisions starting in 2017 as long as they demonstrate achievement in coverage and cost milestones.
Washington: three of ten carriers serving Washington's Healthy Options program for 700,000 Medicaid enrollees decided not to bid on the 2012 contract due to contract stipulations requiring disallowing plans to limit their enrollment. The three covered 60,850 Medicaid enrollees as of December 2011. Seven plans have bid on the Medicaid contract.
California: January 5, Gov. Jerry Brown (D) proposed his FY 2012-2013 budget that cuts $842 million from the state Medicaid program (Medi-Cal) and $64 million from the Children's Health Insurance Program (CHIP) plan to reduce the $9.2 billion budget gap. Medi-Cal cuts would be achieved by merging the dual eligible programs into Medi-Cal program, and implementing managed care models for both dual eligibles and Medi-Cal. In the CHIP plan—Healthy Families—expenditures would be cut 27.5 percent by aligning Healthy Families reimbursement rates with Medi-Cal rates.
Ohio: Last Wednesday, the Governor’s Office of Health Transformation announced changes to the state’s Medicaid and dual eligible programs: for the state’s Medicaid program serving 1.6 million, it is working with Catalyst for Payment Reform (CPR), a nonprofit organization that organizes employers to change provider incentives from volume to performance using a managed care model. In January, the state will start the process of bidding out new contracts for managed care organizations that administer Medicaid benefits, the office said; contracts with CPR model language will take effect next year.
Note: In 2011, Ohio spent $14 billion to provide coverage to 2.1 million Medicaid patients—higher than care than 36 other states.
New York: Prescriptions for oxycodone, a widely prescribed narcotic painkiller, increased 82 percent from 2007 to 2010 per a report issued by the State Office of the Attorney General. 22.5 million prescriptions for all types of narcotic painkillers were written in 2010—36 percent more than 2007. Prescriptions written for hydrocodone, another painkiller, increased 17 percent in the same period with highest increases in Staten Island and Suffolk County.
South Dakota: Gov. Dennis Daugaard (R) announced Friday the state would not pass legislation this year to set up a health insurance exchange, citing the elections and the Supreme Court review of ACA as reasons for proceeding cautiously. “There is too much uncertainty for me to recommend legislation to create an exchange at this time,” said Daugaard. “The president’s health law could be struck down by the U.S. Supreme Court this summer, and if the Republicans win the presidency and the U.S. Senate, many parts of the law could be repealed in 2013.”
The Illinois Health Information Exchange (HIE) announced it will spend $7.5 million for a technology platform to provide clinical information to more than 50,000 health care providers, payers, and state agencies serving 13 million patients. Illinois’s HIE received $18.8 million over four years to develop the HIE. Illinois will implement phase 1 of its exchange in April 2012.
CMS: health care spending up 3.9 percent in 2010 to 17.9 percent of U.S. GDP
Monday, CMS actuaries released the National Health Expenditure (NHE) data concluding total U.S. health care spending increased 3.9 percent in 2010 to $2.6 trillion—an increase of 0.1 percent from 3.8 percent in 2009.
Since the downturn began in 2007, the U.S. GDP increased 6.5 percent to $14.88 trillion while health expenditures increased 12.9 percent to $2.59 trillion.
In the period 2007 to 2010, the federal government’s share of spending increased to 29 percent from 23 percent contrasted to declines as a percentage of total by state and local health spending governments (17.5 percent to 16 percent in 2010), private businesses (23 percent to 21 percent in 2010), and households (29 percent to 28 percent in 2010).
Some key indicators from the NHE analysis released last week:
|Indicators||Percent expenditure||Total (in billions) of expenditures||Observation|
|Household spending*||29.1%||28%||$668.9||$725.5||Households: comprised 28% of total U.S. health care spending in 2010, down from 28.3% in 2009. Out-of-pocket spending: increased 1.8% in 2010, compared to the increase of 0.2% from 2009.
Increased 8.5% since downturn
|Prescription drugs and durable medical equipment (DME)||10.3%||10.0%||$236.2||$259.1||Retail prescription drug: increased 1.2% in 2010, down from a 5.1% growth rate in 2009—slowest growth rate for prescription drug spending recorded in the NHE were due to decreased consumption, fewer new drugs, increased use of generic medications, loss of brand name patent protection, and increased Medicaid prescription drug rebates.
Increased 9.7% since downturn
|1.5%||1.5%||$34.3||$37.7||DME total drug spending: increased 7.3% in 2010 up from a 0.8% increase in in 2009.
Increased 9.9% since downturn
|Spending by the federal government (Medicare, Medicaid)||23%||28.6%||$529.8||$742.7||Federal government: accounted for 29% of U.S. health care spending in 2010 up from 27.4% in 2009, due to increased federal matching funds for Medicaid programs under American Recovery & Reinvestment Act (ARRA) that expired June 30, 2011.
Increased 40% since downturn
|18.8%||20.2%||$432.3||$524.6||Medicare: spending increased 5% in 2010 vs. 7% increase in 2009, driven primarily by increased enrollment in Medicare Advantage Part C).
Increased 22% since downturn
|14.2%||15.4%||$326.4||$401.4||Medicaid: total Medicaid spending increased 7.2% in 2010 to $401.4 billion, slowing from 8.9% in 2009, driven primarily by slower growth in enrollment. Federal Medicaid expenditures increased 8.9%.
Increased 23% since downturn
|State and local government||6.1%||5%||$140.5||$131.9||Medicaid: state Medicaid spending increased 3.9% in 2010 compared to the 9.9% decrease in 2009.
Decreased 6% since downturn
|17.5%||16%||$403.0||$421.1||State and local health agencies and departments: accounted for 16.2% of total U.S. health care spending decreasing from 16.4% in 2009.
Increased 4% since downturn
|Providers||30.1%||31.4%||$692.5||$814||Hospitals: accounted for 31% of 2010 total health care spending. In 2010 spending increased 4.9% compared to growth of 6.4% in 2009.
Increased 16% since downturn
|20.1%||19.9%||$461.8||$515.5||Physician and clinical services: spending accounted for 19.9% of U.S. total health care spending in 2010—down by 3.3% due to a less severe flu season in 2010 than in 2009, and lower utilization.
Increased 11% since downturn
|Commercial health plans||33.7%||32.7%||$776.2||$848.7||Total commercial health insurance premiums: decreased from 2.6% in 2009 to 2.4% in 2010. Premiums exceeded medical costs by $11.3 billion (8.4%) in 2010.
Increased 9% since downturn
|Employers||22.8%||20.6%||$523.5||$534.5||Private employers direct payments: continue its decelerating growth rate changing from 2.6% in 2009 to 2.4% in 2010.
Increased 2% since downturn
Source: CMS, “National Health Expenditures data,” released January 9, 2012
*Does not include expenses for supervisory care (care for others) or certain out of pocket expenses not captured by NHE (See March 2011 Deloitte Center for Health Solutions analysis “The Hidden Costs of U.S. Health Care for Consumer”). When added, U.S. health care expenditures were $2.83 trillion, $363 billion higher than NHE (14.7 percent higher for households).
Device industry-FDA negotiate user fees
Sunday, the U.S. Food and Drug Administration (FDA) submitted its recommended medical device user fee agreement to Congress for approval. In the past several weeks, agency officials have been in negotiation with manufacturers affirming improved performance in their review processes and the need for high user fees to offset possible appropriations cuts by Congress. According to minutes of a December 6 meeting, FDA and industry negotiators are considering an increase in the third year of the five-year program, provided the agency meets performance goals for the first two years.
Background: user fee agreements with pharmaceutical, generic and biosimilar drug manufacturers were already in place in advance of the January 15 deadline, leaving the medical device agreement the last remaining to be resolved. Medical device manufacturers and FDA differ on how much companies should pay to have their devices regulated and what promises the FDA will make in terms of review times and other benchmarks the industry is seeking. These industry agreements must be authorized by Congress before the previous arrangements expire in September 2012. Hearings begin next month with markups expected this spring.
European downgrades impact industry costs of capital
Friday’s announcement by Standard & Poor’s (S&P) that it downgraded the credit ratings of nine European countries, including France, may impact costs of capital and operating costs of European Union (EU)-based device and bio-pharma manufacturers per industry sources. Many of the EU economies face solvency challenges already: the downgrade is the result of S&P’s concern about mounting debt in the region. The S&P action left intact the AAA rating of Germany, the region’s largest economy and headquarters to many biopharma and device companies, along with Finland, the Netherlands, and Luxembourg. However, the problems associated with the 17 country Euro currency challenge are impacted directly by the downgrade.
Hospital adverse events hurt 1 in 7 patients; most go unreported
A report released January 6 by the Office of the Inspector General that examined discharges at 34 U.S. hospitals concluded that 13.5 percent of hospitalized Medicare patients experienced adverse events during their stay resulting in extended hospitalization and added cost. Major preventable errors were hospital-acquired infections, bedsores, excessive bleeding caused by blood thinners, and medication errors. Hospital staff members did not report 86 percent of adverse events to hospital incident reporting systems due to “staff misperceptions” about what constitutes patient harm. (Source: “Hospital Incident Reporting Systems Do Not Capture Most Patient Harm”, Daniel R. Levinson, Inspector General January 2012 OEI-06-09-00091)
Part C Medicare Advantage payment accuracy for high-risk beneficiaries adjusted 1 percent
Tuesday, the U.S. Government Accountability Office (GAO) released a report, finding “the effect of CMS's revised community model on payment accuracy varied for high-risk groups studied... compared with the current community model, the revised community model slightly reduced the accuracy of Medicare Advantage (MA) payment adjustments for beneficiaries with multiple chronic conditions by $164, or about 1 percent of average actual expenditures. In response, CMS commented that the GAO should assess the overall accuracy of the current risk adjustment model. (Source: GAO, “Medicare Advantage: Changes Improved Accuracy of Risk Adjustment for Certain Beneficiaries,” January 9, 2012)
“Amici Curiae are 103 economists who have studied, researched, and participated in the national policy discussion relating to the health care markets. Amici include Nobel laureates, former senior government officials, and faculty from research universities around the country. Amici support the need for reform but believe that the Affordable Care Act (“ACA” or the “Act”) will likely exacerbate, rather than constrain, the inflation in health care costs that poses a serious long-term challenge to the U.S. economy…
The individual mandate cannot be severed from the rest of the Affordable Care Act because Congress would not have intended the economic effects of the Act without the mandate. Specifically, numerous provisions of the Act impose significant costs on healthcare market participants, primarily health insurance companies. Congress would not have imposed such costs without the countervailing benefits provided by the individual mandate, not just as a matter of politics, but because such an imposition would undermine the central goal of the Act to make health care more affordable. As a result, the ACA fails the severability test of whether the Act would function in a “manner consistent with the intent of Congress” absent the individual mandate.”
— Brief from 103 economists filed with the U.S. Supreme Court January 6, 2012 supporting the concept of severability—that the entire law is invalidated if the individual mandate is unconstitutional
- New data for 2010: health costs increased 3.9 percent in 2010 ($2.6 trillion, $8,042 per capita, 17.9 percent of U.S. gross domestic product) vs. 3.8 percent in 2009 “as the weak economy prompted people to cut back on medical care”. (Source: CMS)
- Medicare spending, the federal program for older Americans, grew 5 percent in 2010, down from 7 percent in 2009. Growth in spending on private insurance slowed increased 2.4 percent, out of pocket increased 1.8 percent. (Source: CMS, NHE data)
- 1.6 million American live in nursing homes; 24 percent of people admitted to a nursing home or skilled nursing facility patients are re-admitted to an acute hospital within 30 days of discharge, costing $4 billion/year. (Source: Mor, et al “The Revolving Door of Rehospitalization from skilled nursing facilities” Health Affairs 2010: 29:57-64)
- Dual eligible readmissions to hospitals: of 1,571,920 hospital admissions by the nine million dual eligibles in 2005, 72 percent were from nursing homes, representing 85 percent of total costs of avoidable readmissions to hospitals. (Source: CMS)
- Employment is health care for 2011: net increase of 314,700 jobs—20 percent of all new jobs created in the U.S. Hospitals—89,100 jobs vs. 37,300 jobs hospitals created in 2010. (Source: Bureau of Labor Statistics)
- Medicare long-term unfunded liabilities: $36 trillion. (Source: Medicare Trustees 2011 Report to Congress)
- Medicare pays physicians 81 percent of average rate paid by commercial plans; a third of primary care doctors limit the number of new Medicare patients they see (source: American Medical Association), the number of doctors refusing to take part in Medicare has doubled since 2004. (Source: American Academy of Family Physicians)
- November 2011 Federal Reserve data: consumer borrowing increased $20.7 billion to $2.477 trillion, an annual rate of 10 percent for year to date November. Revolving credit increased at an annual rate of 8-1/2 percent and nonrevolving credit increased at an annual rate of 10-3/4 percent. (Source: Federal Reserve “Consumer Credit Report January 10, 2012)
- 1 percent of the U.S. population accounted for 22 percent of total health care costs in 2009. (Source: Agency for Healthcare Research and Quality)
- Obesity rate in the U.S. decreased from 26.6 percent in 2010 to 26.1 percent in 2011. (Source: Gallup-Healthways Well-Being Index)
- 40 percent of Americans claim to know “very little or do not understand” the impact of the ACA—unchanged since April 2011. (Source: Kaiser Family Foundation, Kaiser Health Tracking Poll: Public Opinion on Health Care Issues, December 2011)
- The U.S. Broadband mHealth Market (including downloadable mobile software application sold through a major app store and through an Internet browser) earned $230 million in revenues in 2010; estimated to reach $392 million in 2015. (Source: Frost & Sullivan, “Analysis of the U.S. Broadband mHealth Applications Market,” December 21, 2011)
National health reform: What now?
National health reform is here. The health reform bills (HR3590 and HR4872) are now law and will trigger sweeping changes and disruptions – some rather quickly and some over many years. The industry is asking, “What now?” At Deloitte, we continue to explore and debate the key questions facing the industry, and we look forward to helping our clients find and implement the right answers for their organizations. To learn more, visit www.deloitte.com/us/healthreform/whatnow today.
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