Why Is Radical Change Necessary?

C. Bruce Malone, MD, President

Hospital Spending per Discharge, 2008

* 2007.** 2006.Source: OECD Health Data 2010 (Oct. 2010)

Adjusted for Differences in Cost of Living

Leading health care attorney tells TMA:“Hospitals are a Burning Platform”

Where are We Now?

U.S. is spending much more for older ages

Source: Fischbeck, Paul. “US-Europe Comparisons of Health Risk for Specific Gender-Age Groups.” Carnegie Mellon University; September, 2009. 

Health Care Costs by Age

Myths & Realities of Cost Savings

$2.6 Trillion in 2010

U.S. Health Care Costs = 5th Largest Economy in the World

Grew 2% Faster Than Overall Economy For 30 Years

$100 Billion Increase per Year

How Can We Save 1% = $26 Billion?

Myth 1: Insurance Company Profits

Total Profits of 5 Largest Insurers

$11.7 Billion

0.5% of Total U.S. Health Care Costs

Myth 2: Brand Name Drugs

Pharmaceutical Costs = 10% U.S. Health Care Spending = $260 Billion

From 2004 to 2009 Generics Go From 57% to 75% of All Drugs

Pharmaceutical Costs Increase 31%

Import Brand Name Drugs from Canada Saves $5 Billion = 0.2% All Health Care $$$

$250K Cap on Noneconomic Damages

$500K Cap on Punitive Damages

$11 Billion Savings with 1-Year Statute of Limitations

$5 Billion Savings from 40% Cut in Liability Premiums

$6 Billion Savings from Decreased Defensive Medicine Secondary to Training?

Myth 3: Medical Liability Reform

How Do We Tell In Advance Which Patients Will Cost Over $50,000?

Review of 20 Million Commercial Patients Only 255 Patients Consumed Over

$1 Million In 2010.

That’s 0.5% of All Costs

Myth 4: Expensive Patients

Billions of Wasted Dollars

Administration Costs 14% of US Health Care Costs

$360 Billion per Year

Half Borne by Payers

Half Borne by Doctors and Hospitals

Reality: The Cost of Billing

10% of Us Account for 64% of Health Care Spending

Most Have One or More of Seven Chronic Diseases

Reducing Avoidable Complications by 10% Saves $40 Billion a Year

More Savings Through Better Tertiary Prevention

Reality: The Cost of Chronic Care

Massive conversion to outpatient surgery

Dramatic drop in length of stay

Our Biggest Money Savers