Sean M.

McGuire
HEALTHCARE REFORM:
Whats Really Happening
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SEAN McGUIRE,
Principal + Founder

OBJECTIVES
What are the key problems of the current system?
Why some people feel reform is needed.
How did the legislation evolve over time?
Why ongoing monitoring is important
What are the key provisions of the new law?
How will it impact YOU?
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IMPACT: YOU + YOUR HEALTH
IMPACT = DIFFERENT FOR EVERYONE

INDIRECT COSTS & CONSEQUENCES
Uncertainty is a cost

FINANCIAL IMPACT?
How do these things affect your employer?
How are your customers, clients and friends impacted?
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Health care COSTS are TOO HIGH.
Too many people are UNINSURED or
UNDERINSURED.
KEY PROBLEMS
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US HEALTHCARE
The main driver of healthcare spending
and industry leader.
Composed of four components covering
hospitalization, outpatient, prescription
drugs
10,000 Americans Eligible for it everyday
MEDICARE
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lederally run program admlnlsLered aL Lhe sLaLe
level.

1argeLed Lowards low-lncome lndlvlduals, however,
slgnlcanL poruon goes Lo long-Lerm care.

8elmburses lower Lhan Medlcare and prlvaLe
lnsurance.

Lxpanded under Lhe Aordable Care AcL.
MEDICAID
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! Nearly one-third of US health care spending is on
administration of our complex system.

! Huge regional variation in spending:
! Minneapolis: $3,341 per Medicare enrollee
! Miami: $8,414 per Medicare enrollee

! Average health outcomes do not vary by region.
! Actually a trend for more spending ! worse outcome
From: Dartmouth Atlas of Health Care: http://www.dartmouthatlas.org
! U.S. ranks #19 in preventable mortality
From: Nolte E, McKee M.Health Affairs 2008;27:58-71

SPENDING ! QUALITY CARE
$ INSURANCE
LEGISLATIVE PROCESS
ACA Legislative Process =
(The Congressional Version of March Madness)
WC8klC8CL SPC81ACLS LACuL nA1lCn:
We are faclng a serlous shorLage of healLhcare
provlders ln Lhe nexL decade.
uocLors are opung ouL of Medlcare.
8C8LLM nC1 AuLCuA1LL? Auu8LSSLu:
1he CovernmenL has noL provlded more Lo
hosplLals Lo Lraln physlclans and oLher
provlders. All wlll be needed ln Lhls new
normal.

ON THE BUBBLE
In order for the law to pass they had to be
vague in legislative language giving the
federal bureaucracy an unprecedented
amount of authority to implement and
write critical parts of the law.

1,693 times they give the executive
branch authority to set up a new program
or execute a deliverable. (Estimated
120,000 new FTEs needed).

EXHIBIT A: WHY THIS MATTERS
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Ambulatory patient services

Emergency services

Hospitalizations

Maternity and newborn care

Mental health and substance
use disorder services,
behavioral health




Prescription drugs

Rehabilitative and habilitative
services and devices

Laboratory services

Preventive and wellness
services and chronic disease
management

Pediatric services, including
oral and vision care
ESSENTIAL BENEFITS
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" FEDERAL LAWSUITS: Due to contraceptive
mandate and others coming soon
" ADDED COSTS: Rate shock for certain young
and healthy individuals.
" FIGHTS over Future Essential Benefits

THE AFTERMATH
" LARGE PROVIDER NETWORKS -
CCnCLCMC8A1LS: Accountable Care
Organizations
" RE-ADMISSION + OTHER PENALTIES

" How will this IMPACT INDEPENDENT
PROFESSIONALS?
HEALTHCARE CONSOLIDATION

# IS THIS TOO MUCH
GOVERNMENT?
# CAN WE AFFORD IT?
THE CONTROVERSY
Currently, MORE THAN HALF of health care
spending in the U.S. is from government
sources.
After the new law takes effect:
The government will have a greater role in regulating private
insurance.
About 15 million people will be added to Medicaid
About 15 million people will buy insurance through a private
insurance exchange.
About 160 million people were predicted to remain covered by
employer-based private insurance.

TOO MUCH GOVERNMENT?
LACK OF AWARENESS = SERIOUS PROBLEM
The amount of Americans who actually
believe the Affordable Care Act is the law is
less than you think.

The MORE PEOPLE LEARN about the law the
LESS THEY FAVOR IT.

EVERYBODY has to have health insurance in
2014.

FACT
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ACA: The Bigfoot of American Law

# CAN WE AFFORD IT?

# IS THIS TOO MUCH
GOVERNMENT?
THE CONTROVERSY
Exchanges = Clearing House FIVE
AGENCIES OF GOVERNMENT.

Thousands of NEW FEDERAL
GOVERNMENT EMPLOYEES needed
to implement 10,000 pages of
regulations and counting.
INDIRECT COSTS
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MEDICAL INDUSTRY:
Compensation Changes + New
Administrative Burdens
Employer Mandate DELAY:
Cost = $12 Billion. (The amount they
estimated the taxes would be the first year).
INDIRECT COSTS
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Originally, CBO said the deficit will be
reduced over 10 years.
Deficit spending has slowed, but we still
lose $845 Billion as a government (after
sequester) and recent updates indicate
higher costs.
UNCERTAINTY: Long-range forecasts and
funding comes from reduced Medicare
growth and new taxes.
COLLECTIVE COSTS
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!"# %"&' ()*+, -+'+ ./+01 20 3445
^ INSURANCE PREMIUMS
j TAKE HOME PAY.

^ 1AxLS/lLLS: non-Compllance
(Individuals + Businesses)
NEW COSTS
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WHO WILL PAY?
IRS Official: We are on target for all
deliverables August, 2013 Ways and Means
hearing.
Almost 20 New Taxes
Tax on Health Insurers.
Tax on Medical Devices.
Tax on Pharmaceutical Industry.
Tax to fund exchanges the first year
Flexible spending accounts will be limited to
$2500 annually.
NEW TAXES
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NEW MEDICARE TAXES
^ MEDICARE PAYROLL: 1.45% => 2.35%
Individuals > $200,000
Couples > $250,000
UNEARNED INCOME:
Income Brackets > 3.8+%
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TAX POLICY EVER to put the concept of
PASSIVE INCOME = REVENUE SOURCE
NEW TAXES
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THE 49ER: Purposefully trimming workforce to
not be qualified as a large employer.
(Remember, 50 is the magic number)

THE ROARING 20s: Reduction of employee
hours to fewer than 30 (usually 28).

* Popular among restaurants, service industries, and
other employers with a lower wage and younger
workforce.
EMPLOYER STRATEGIES
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MAIN STREET: The employer establishes a
Private Marketplace where employees can
choose from a variety of health insurance
options and services.

OLD FAITHFUL: Maintains coverage no matter
what!
EMPLOYER STRATEGIES
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EMERGING CONCEPT as a reaction to
strained healthcare workforces.
Companies/Individuals PAY CASH FOR
ACCESS to healthcare professionals.
Concierge Medicine could become more
prevalent and cash pay industry will
surface.
DIRECT PRIMARY CARE
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Essentially Primary Care the Way Supposed
to be delivered through team-based care.

Run with a physician as manager and
includes other healthcare professionals,
pharmacists, social workers and others.

GOAL: To manage primary care and the
person over time.
TEAM BASED CARE
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The ACA is bringing sweeping change to
our healthcare delivery system.
Few truly know the details of how
providers will be paid differently.
Major link to quality in the future, but this
is not as easy as one would think.

KNOWN KNOWNS
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If they fail to enroll young and healthy
then you could see pre-existing by cost if
people cannot afford it. Subsidy
structure flawed and needs revision.
How healthcare providers will be able to
handle impact of this law on their profit
margins. (Lost productivity, new costs,
lower reimbursement creates new
challenges).

KNOWN UNKNOWNS
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RURAL PROVIDER IMPACT:
How do we staff rural and urban under-
served areas moving forward?
PHYSICIANS REACTION:
How will physicians react as new
administrative challenges deplete morale
and compensation goes down?

UNKNOWN UNKNOWNS
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3 LEGS OF HEALTH POLICY:

ACCESS
QUALITY
COST
BOTTOM LINE:
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FOCUS: Changing the system to reduce
overhead and fraud in the healthcare
system
ADDED FOCUS: PREVENTION
First dollar coverage is nice but has a cost

Millions of Americans will have ACCESS TO
HEALTHCARE COVERAGE in 2014
THE GOOD
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WAIT TIME: Less face time with your doctor
due to additional administrative burdens.
QUALITY: Universal coverage DOES NOT
GUARANTEE quality care. Workforce
shortages will persist if not addressed.
CHOICE OF PROVIDER: may be limited by
provider choice due to lower reimbursement
rates.
THE BAD:
Access Concerns
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Authority given to executive branch to
define ambiguity and implement fines.
Hidden fines + penalties will be
detrimental to some companies.

BE PROACTIVE, NOT REACTIVE with
regulators.
THE WORSE:
Unknown Unknowns
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Chronic disease management and changing
health behavior
Medications result in new diagnoses.
Example: Side effect of schizophrenia
medications is diabetes and weight gain.

Creative solutions for this problem and
others at the State level are desirable and
possible in 2017, maybe sooner.
THE UGLY:
National Obstacles
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CANADA:
- Single Payer System
- Regional Policy
- Low Administrative Costs
- Less Bureaucracy
- Easier Access to Prescription Drugs

" Comparative Studies Are Essential
" Average health outcomes vary by region
" Regional Variations Could Be Controlled
WHAT WE CAN LEARN
E.D. BELLIS HEALTHCARE
CONSULTING
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PREPARING:
- Business owners
- Executives
- Healthcare providers

with synthesized
information on healthcare
reform + providing ongoing
regulatory management
during the entire Affordable
Care Act implementation.
Grab your smart phone
Go to http://presentnow.me
Enter the code obamacare


NEWSLETTER
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SEAN McGUIRE.
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