 planning and marketing and a comparative course on the American and French health care systems. He has a PhD in health services administration, research and policy from the University of Minnesota and a master of public health in hospital administration from the American University of Barout and his native Lebanon. Please join me in welcoming Dr. Amir Casey along the way down. Hello. Can you all hear me? Can you hear me now? A little better? Great. I want to start by thanking the League of Women Voters for the invitation for today. I agree. No? How about now? I want to thank them again. Very good. I want to thank all the members of the League that are here today, members of the general public that are here too and also thank my students, Trinity students who are here in the audience today. Our students are great. They never miss a chance for knowledge. They're so thirsty for knowledge. Anywhere there is a symposium, there is a talk, you'll find them there. Plus it doesn't hurt that I give them extra credit. Now, before we get started and talk about healthcare reform, I want to tell you a short story that a few months ago I was working on this presentation, on a similar presentation to this and I was working at home and my five-year-old son came to me and said, Daddy, what are you working on? I said, I'm preparing some slides and his face just lit up. He's like, show me the slides. So I showed him the slides and he was very disappointed. Where are the slides and the swings and the monkey bar? So he was expecting something totally different than this. So I'm hoping that you guys will be a little bit less disappointed with the slides and you'll get to enjoy them. So obviously the topic of healthcare reform is a very controversial topic. It's an emotionally charged topic and it's a political topic. However, I don't think anyone is here today to hear a political commentary. I think there are enough 24-hour news networks that will do that for you. So my plan for today is to be as objective as possible, as factual as possible and as apolitical as possible. Having said that, I might make some political statements but I will warn you before I make the political statements. I will let you know that now I'm going to be political. I'm going to talk about problems that plague our healthcare system. Talk a little bit about the healthcare law itself. Talk about some of the problems that it solves and some of the problems that it was never designed to solve or that it will try to solve but maybe will not be able to solve. And then we'll talk about going forward, what's going to happen after the Supreme Court decision. But before we do that, I would like to start by sharing a story with you about four typical Americans. And the four typical Americans, we're going to call them Jim, Mabel, Jose and Donald. Now, we're going to assume for the sake of the story that all four of them are going to have a car crash. And they're going to spend five days in the hospital. So let's start with Jim. What's going to happen with Jim? And we're saying that they all survived the crash and did well afterwards. But they spent five days at the hospital. So what's going to happen with Jim? Now, Jim is an executive at a large company. He works at a large company and he has a very generous insurance plan that covers all of his healthcare needs. So after his five days at the hospital, Jim is going to receive a bill that says your responsibility for this stay is basically zero, nothing. So Jim is very happy. He's very satisfied with the healthcare services that he's receiving. Now, let's look at Mabel. Mabel is 70. She's retired. And she's covered by Medicare. After five days stay at the hospital, she's going to receive a bill for about $1,000. However, she has additional insurance that she's bought on the private market, just like many people on Medicare. And therefore, we can say that Mabel is also happy and satisfied. Now, things get a little bit more interesting with Jose. Jose works for a small company that does not provide any kind of coverage for him. So he just like 12 million other Americans have to go in the private market and buy health insurance on his own. Now, for Jose, the system works against him as much as it works for him because in the last few years, he's seen his premiums go up and his benefits go down. Now, after the five-day hospital stay, Jose is probably going to get the bill for more than $10,000 for that five-day hospital stay. And obviously, if he can't afford it, Jose might file for medical bankruptcy. Things get a little bit more bleak with Dana. Now, Dana is a single mom. She works as a waitress and she doesn't have insurance. She's one of those people that are poor but not poor enough to qualify for our public program for the poor, which is Medicaid. So, as a result of her five-day hospital stay, Dana probably will receive a bill for more than $25,000. Now, her hospital, if it's a public hospital, might absorb some of that cost. But the majority of the cost, at least on paper, will be hers to pay. And she might also have to file for medical bankruptcy. So, the issue here and the main problem in our healthcare system is that while some people are happy, some people are satisfied with the healthcare coverage that they have, others are not. Others are actually one car accident away or one bad gene away from medical bankruptcy. So, we'll start talking about cost, start talking about problems. And the first problem that we'll talk about is always money. So, the first problem that we have in our healthcare system has been cost. Healthcare is taking more and more from the family budget. On average, the family health insurance premium is about $15,000 per year. Now, that number has increased 9% between 2010 and 2011. So, obviously, healthcare is not affordable for average families. Not only is healthcare taking more and more from the family budget, it's also taking more and more from the federal budget. Now, how do we compare against other countries in terms of how much we spend on healthcare per person in this country? So, this is a comparison of versus other countries, France, the UK, Japan and Canada. And this is how much we spend per person. And as you can see, we spend almost twice as much per person on healthcare as other countries. Now, how do we do as a percentage of our economy? As a percentage of our gross domestic product, we spend about 17.9% of our gross domestic product on healthcare, whereas France, the distant second, spends about 11.8%. Now, one might argue here that this is not necessarily a bad thing, right? That we are a country that values healthcare and therefore we want to spend more on it. Who cares about those other losers, right? We are a country that have different sets of values and we value healthcare. Why is spending more on healthcare a big deal? Well, to address this issue, we have to look at how much we've spent on healthcare over time and how much do we expect to spend on it within the next 50 years if nothing changes in our healthcare system. So let's take a look at how much we spent in 1952. In 1952, we spent 5 cents out of every dollar on healthcare. Today, as I just said, we spent 17.9% out of every dollar on healthcare. If nothing is done and everything keeps going the way it's going, in 50 years we'll be spending 40 cents out of every dollar in this country on healthcare. Now, every dollar that goes to healthcare is a dollar that we take away from something else. So it's a dollar that we can't spend on fire departments and police departments and education and national defense and museums and art and roads and bridges. And that is why this is a big deal. Spending more as a percentage of our economy on healthcare is an important issue because it means that we are taking away resources from other services that are needed by society. Now, there are no signs that this spending is going down. Actually, there are all kind of alarming signs that the spending is likely to increase at a higher rate. And the reason for that is the baby boomers. Or one of the reasons is the baby boomers. Starting from January 1st of 2011, there are 7,000 baby boomers that turn 65 every single day in this country. People are talking about a boomer's tsunami. Now, why is the boomer's tsunami a big deal? It is a big deal because when people turn 65, they spend twice as much on healthcare and use twice as many healthcare resources as people under 65. So that is another sign that our costs are going to keep going up. Enough with costs. Let's talk about coverage. Coverage is another problem that we have in our healthcare system. And here we have several issues. We have issues with pre-existing conditions, issues with lifetime limits. We have the uninsured and the underinsured. As you all know, before the passage of the Healthcare Reform Act, insurance companies put provisions in place that allowed them to exclude people who have pre-existing conditions such as asthma, cancer, diabetes and heart disease. So when these people got sick and they were not insured, they were not allowed to buy insurance in the private market. Another provision that the insurance companies had in place was a limit, a dollar limit on coverage. So when the member of a certain plan reached that limit, either per year or per lifetime, their coverage stopped, which is a huge problem for people who have chronic conditions. And obviously the big problem in our country is the problem with uninsured. Now last time I checked, the number was at 50.2 million people. That's one in seven Americans are uninsured. Here again, how do we compare to other rich countries on coverage? How do we cover people compared to other countries? Well, we're the only rich country in the world that does not provide 100% coverage to its citizens. So we leave about 20% of our population uncovered. Why is the problem of the uninsured an important problem to all of us? Especially those of us that are insured. Why is this our problem to other than it being a human issue? It's also an economic issue. And here I want to show with you the vicious circle of the uninsured. So what happens with the uninsured and we'll start with the top of the circle there is people who are uninsured can't afford to go to the doctor. So they tend to delay their care. And what was six months ago a straightforward minor problem is now a major problem. So where are they going to seek care? They're going to go to the emergency room at the hospital. When they go to the emergency room, they can't pay for it. And for the time being the hospital will absorb some of that cost. But eventually the hospital will pass some of that cost to insurers. Now the insurance companies, they're not going to absorb that cost out of the goodness of their hearts. They're going to try to pass it to someone else. And most likely they will pass it to their enrollees, to the members, to those of us who have health insurance. As these rates keep on going up and up more and more people can't afford insurance and then people will become uninsured again. And the vicious circle goes on and on. Do you want to play that game again? No. Okay. Now the problem with the uninsured, another issue with the uninsured is that we have used the 50 million number or the 45 million number in a very political way and we haven't defined who are really the uninsured. First of all, why do we have uninsured people in this country? Don't we have a public program that covers poor people? Yes, we do. However, there are people that are poor but not poor enough for Medicaid and that's why they are uninsured. However, that tells only part of the story. If we really look at the number, we see that 43% of the uninsured, that's 23 million people actually can afford insurance but don't buy insurance out of their own choice. The rest of them are people who are poor but not poor enough and therefore can't afford insurance. Who are examples of people who don't buy insurance but can afford it? They're what we call them, the young invincible. They're young people who think they're healthy enough and don't need health insurance. However, when one of them has their motorcycle accident or their skateboarding accident, they're going to end up in the ER. Again, who's going to pay for it? Indirectly, people who are insured and taxpayers. Another problem is the problem of the underinsured. Remember I started with a story of one of the four and his name is Jose. We said he has insurance but his plan is not enough to cover all of his health care needs. We call Jose an underinsured. An underinsured technical definition is someone who spends more than 10% of their income on health care services. Some of the characteristics of the underinsured is that half of them do not see the doctor when they're sick. 75% of medical-related bankruptcies happen to people that are underinsured and 45% of them have difficulty paying their medical bills. If you really think about it, the underinsured share a lot of characteristics with the uninsured people actually tend to behave like the uninsured. Now the really alarming trend about the underinsured is that the last count shows that we have 25 million people who are underinsured in this country. We had only 16 million in 2003. So that's an increase in only nine years from 16 to 25 million, which is a huge increase. The third major category of problems in the country is related to quality. Now when it comes to quality, we look at several things. We look at technical quality. We look at patient satisfaction. We look at medical error, which are mistakes that happen in hospitals, and we look at life expectancy. Let's talk a little bit first about medical errors. This is the cover of Reader's Digest from 2003. Now every time I show this, the women in the audience think I'm going to talk about Richard Gere. The men think I'm going to talk about the second topic there. But no, we're going to talk about hospital mistakes. And the latest estimates suggest that around 44,000 to 98,000 people in this country die because of medical errors, which is a high number. Now here we don't have a lot of international comparisons on how other countries do. We actually tend to be one of the best countries in counting medical errors. In some way, some world doesn't mean that we commit more errors than other countries. Moving on, how about life expectancy at birth? And how about other quality measures? In 2000, the World Health Organization, which is the highest authority on healthcare in the world, published a report comparing all the countries in the world on a composite score of quality. So they were comparing all the countries on how they do on something called quality, which is a variety of different outcomes and measures. In that study, the US ranked 37th in the world on quality. Now let me ask you something. If healthcare was an Olympic sport, would we tolerate being 37th in the world if our basketball team was 37, or our swimmers were 37th in the world? Heck, even our soccer team, men's soccer team, is better than 37. So how can we tolerate that when it comes to healthcare? That's an important question. To make things even worse, guess who came in first? France. France is number one, and you thought they were already arrogant. Now they're even more arrogant. They're number one in the world on healthcare. Another thing that we look at is life expectancy at birth. And life expectancy at birth is if we take a baby born in the United States today, how many years will they expect to live? And here again, we don't compare very favorably with other countries. And here, a difference in a few months makes a big deal. So our life expectancy at birth is about 78 years compared to, say, France or Japan or Canada who have higher life expectancy. So let me get this straight. We spend twice as much as any other country on healthcare. We leave 20% of our population uncovered. And what else? We don't have good quality outcomes. So we're looking at a triple-headed monster. Cost, coverage, and quality. We have big problems in our healthcare system. And typically, when we have big problems, Uncle Sam has to intervene. And Uncle Sam did in 2010 and passed the healthcare reform law. Now again, when you talk about healthcare reform, it's very hard not to be political. The politics are just part of it. And here, I'm going to make a statement that may sound like a political statement, but actually is a factual statement. Before we passed healthcare reform, before Congress passed healthcare reform in 2010, there was a small state in our country in 2006 that passed universal coverage. And that state is the state of Massachusetts. Now, regardless of what Governor Romney would say or would not say, the two healthcare laws are mirror images of each other. Now to his credit, Governor Romney would argue that states should choose their own healthcare reform rather than the federal government deciding how healthcare reform is going to be at the national level. However, if we really look at them, we can compare the provisions of the Massachusetts law with the provisions of the Obamacare law. You will see that they're almost exactly the same. So this gives us a great opportunity to see what has happened in Massachusetts since they passed it in 2006. The latest studies show us that insurance rates or the uninsured rates have remained very low. Self-reported health status is actually going up. Emergency room visits have decreased. Hospital stays have decreased. However, they still have two major problems. The first is cost and the other is access. Now here I'd like to make a distinction between coverage and access because they're two different things. Coverage is having health insurance. Access is whether you can find a doctor when you need it. And they found that to be harder than they expected in Massachusetts because of the increase in the number of their uninsured and the limited number of doctors that they had, there had been delays in getting care. So while they had some successes, they're still facing problems with cost and access. Let's go back to the national law. The national law was signed by President Obama on March 23, 2010. And it's been called several names. It's the Affordable Care Act. It's Obamacare. Those of us that work in healthcare like to call it pipaka, it just sounds way much cooler and it makes us sound like we know what we're talking about. So you're gonna hear me say pipaka this, pipaka that, okay, now you know what pipaka means. And it was a big deal. Now, those of you who were watching the press conference live on national TV would remember that Vice President Biden dropped the F-bomb on national television. In a way, he was right because this was a big deal. It was the most radical change in our healthcare system since the passage of Medicare and Medicaid in the mid-1960s. Now, the law itself is about 2,400 pages. Show of hands. How many people in the audience have read the whole law? Well, I have to say that I have read it. So what does this mean? First of all, it means that I need to get a life. And it means that unless you're planning to read the whole law yourself, this is your best bet at understanding what's in that law. So please stay with me, okay? Now, President Obama made a lot of superhero promises when the law was passed. He said that you won't have to worry about going broke if you get sick. He also said that we'll bring the costs of healthcare under control and that we will do all of this while reducing the federal deficits. A lot of people, obviously, are skeptical. In fact, Americans are split in half over their support of the healthcare law, more or less along party lines. Some of them like it, some of them don't. Okay? So 50% support is 50% don't. What's in the law itself? The law will be implemented over two phases. The first phase is actually currently in place, it's currently being implemented. So let's talk about the first phase first and then we'll talk about the second phase. What's in the first phase? One of the first provisions that are already in place, remember we talked earlier about dollar limits on coverage? This has been eliminated. So insurance companies cannot put limits per year or per lifetime on coverage, which is great news for people who have chronic conditions. No sick children can be denied coverage now, which is great news for children who are born with birth defects. Again, that's a good thing. Young adults covered under their parents' plans till age 26. Now previously when young people turned 19, they had to get off their parents' plans. Now they can stay on their parents' plans till age 26. Now I know what some of you are thinking. No, they don't have to move in back with you. They can still be living on their own, whether they're single or married, whether they go to college or work, they can still be covered under their parents' plans. In addition, the law has created what is called temporary high-risk pools to cover pre-existing conditions. It's a horrible name for a good thing, the high-risk pools. What it will provide is it provides funds that will cover people who have pre-existing conditions till 2014. In 2014, the insurance companies will have to accept them in their plans. Now in terms of Medicare beneficiaries, the law gives Medicare beneficiaries who fall in the donut hole a 50% discount on their brand name drops. Now the donut hole is a very technical term used to describe that stage in which Medicare beneficiaries spend between $2,400 and $4,800 per year. During that period in time, they have to cover their own prescription drugs. So the law eliminates that and will fill the donut hole by 2019. It already started to do that. In addition, insurance companies will have to provide preventative services free of charge. So people can receive blood tests for high blood pressure and diabetes. They can receive cancer screening, vaccinations, flu shots at no charge. Again, it sounds like a good thing. Now for small businesses that want to provide coverage for their employees, they will be given tax credit, which will be great news for Hossay's employer. Remember Hossay earlier on? We talked about his employer, small employer, less than 25 employees and cannot provide the coverage. In this case, the employer will be provided incentives, tax incentives to provide that coverage. So that was the first phase which will end in a couple years. However, the real beef of the law will start in 2014. In 2014, insurance companies cannot anymore charge the sick more than the healthy and therefore cannot exclude people who have pre-existing conditions. Which will be a very important thing for people who have those chronic conditions. However, very closely tied to that is the individual mandate. Now as you all know, the individual mandate has been one of the most controversial aspects of the law. And no one likes to be told to buy something or to do something or to pay for something. However, my personal opinion is that the law itself won't be effective without the individual mandate. So the fact that the Supreme Court decided that the individual mandate is constitutional is a good thing for the law itself because otherwise there was no way for it to work. And why is that the case? The case is since we have prevented insurance companies from excluding people with pre-existing conditions if we didn't have the mandate, then the healthy would wait, will free ride, wait till they get sick and then buy insurance. Well, it doesn't work that way. People can't buy home insurance when their houses are on fire. So if you really think about it, the individual mandate is the spinach that you must eat in order to enjoy our dessert, which is a functioning non-group insurance market. It's a necessary part of the law and without it the law would not be very effective. Now what will happen to people who decide not to buy health insurance? They're going to have to pay tax penalties. The penalties are mild at the beginning, about $95 per year or 1% of income will become a little bit more significant in 2016. However, people who can't afford to pay, who can't afford to buy insurance and can't afford to pay the penalty will also be given health from the government. There's also no provision in there that says that people who don't pay the penalty are going to have IRS agents knocking at their doors or putting liens on their properties or holes on their bank account. There's none of that in the health care law at least. Now, one very important aspect of the law is that Medicaid will be expanded to cover people who make less than $14,000 per year. Now I want you to keep that in mind because we're going to revisit it later when we talk about the Supreme Court decision. For now, at least the way the original act was written, it was designed to cover people who are poor but not poor enough for Medicaid. So this is great news for our friend Donna. Remember the single mom, the waitress who didn't have insurance? She will be covered under this, which will be good news for her. Another less known aspect of the law is what we call the private health exchanges. Now the private health exchanges will be very similar to what they did in Massachusetts when they created something called the connector. One way to explain the private health exchanges is to imagine a virtual mega mall where insurance companies will come and compete and provide fair, straightforward information that is easy to understand in plain English and they're competing against each other providing information to their consumers. So it's a setting, a website, a marketplace where the insurance companies will come together and provide some good information, fair playing field, and lots of choices which will result in competitive rates. The insurance companies that decide to charge higher rates will be driven out of business. Alert, I'm going to make a political statement. There is nothing more Republican than this idea of exchanges. So this idea is a very conservative idea of encouraging private insurance competition and let the best companies win. Another important provision of the law that will take place in the second phase is that the government will provide tax credits to individuals and families to offset the cost of private insurance. Now this will be for people who earn between $14,000 and $43,000 per year. They will be given tax credit that will allow them to buy insurance through the exchanges. How about large companies? We've talked about small companies being given tax credits to provide insurance. How about large companies? Large companies, those that have more than 50 employees will have to provide insurance to all of their employees or face a penalty of $2,000 per employee. Now obviously not everyone is happy with that and the CEOs of the large companies are complaining about that provision. Another main provision of the law is what we call the Cadillac tax. Now the Cadillac tax is not a tax on vehicles but rather is a surcharge on insurance companies that provide very generous insurance plans. And this will be a great source of revenue for the federal government because traditionally these employers have provided very generous benefits to their employees as a way of evading paying taxes on them. So this will provide a good source of revenue for the government by putting that charge on the generous insurance plans. As a result of the healthcare law an additional 32 million Americans will become covered by 2019. Moreover, the Affordable Care Act will reduce the number of under-insured where we talked about people who have insurance but can't afford to pay for all of their healthcare services. This study came out last year and suggested the number of under-insured will be reduced by as much as 70%. Now how is this going to happen? How are we going to cover more people and reduce the number of under-insured? A lot of things that we just discussed. People will be covered till age 26. Young people will be covered till age 26. People will receive tax credits. There will be Medicaid expansion and then there will be exchanges. So it's a variety of provisions that will come together and provide coverage for the uninsured and better coverage for the under-insured. One of my favorite shows on TV is called Mythbusters because they take some of those myths and they look at them and they try to determine whether it's myth or reality. And here we'd like to look at some of the things that have been said about the healthcare reform law and see whether they're myth or reality. First one, this will be the end of employer-provided insurance. It's a government takeover of insurance and insurance premiums will rise through the roof. Now to do this we have to look for an objective source of information. And typically when people look for an objective source of information and these kind of things, they look to the Congressional Budget Office which is a non-partisan scientific group that provides estimates. So what does the CBO tell us about the first one? The CBO actually says that employer-provided insurance will fall but only by 2%. It has been falling on its own at a 10% rate in the last ten years. So that small fall in private insurance and employer-provided insurance is negligible. So we can safely say that that myth has been busted. The second one, it's a government takeover of insurance. We don't need the CBO to tell us that this is very far from the truth. We have just discussed how private insurance companies are salivating over these 32 million new people that are insured. So private insurance companies are going to see the biggest growth in their history. So this is very far from a government takeover of insurance. This is actually growth of private insurance and this one is busted. Now how about insurance premiums? A lot of people are worried that insurance premiums are going to rise. Again, the CBO estimates suggest that the premiums are either going to stay the same or actually going to fall anywhere between 14 and 20%. So we can also say that this one has been busted. Cost of the bill. Obviously everyone is wondering how much does this cost? The bill will cost around $900 billion over 10 years. And remember here, they took great care of keeping the number under a trillion. They didn't want to go over the trillion. They kept it just there. But the real question is who is going to pay for it? Again, the CBO here tells us that the bill will pay for itself. I know, it sounds too good to be true. But according to the estimates, the revenue is going to come from a variety of sources. These sources include reduction and overpayment to insurance companies. Taxes on insurance companies, medical device companies and pharmaceutical companies. Because these three types of companies are going to benefit from the additional number of insured people. So they're going to receive taxes. The bill also will be funded through reductions in payments for hospitals and doctors. Now I work in healthcare administration. Obviously a lot of people in that industry are not happy with the reductions in payments for doctors and hospitals. A lot of people would argue that that might reduce quality of care. Medicare payments have been decreasing for doctors and for hospitals, have been decreasing steadily in the last 30 years. And we have no evidence to suggest that that has affected quality. Who else is going to pay for it? A tax on tanning salons. So if you're into that, next time you go to the tanning salon you're going to have to pay an extra 10%. Sorry. Let's go back to our four Americans. What's going to happen to them? First, Jim. Remember Jim is an executive at a large company. Basically nothing is going to happen to Jim. He's going to keep his employer provided insurance. His premiums might stay the same. And he'll remain happy. How about Mabel? The Medicare enrollee. Well for Mabel nothing much is going to happen in terms of her benefits except that the donut hole is going to be filled. So she won't have to pay for prescription drugs during that point in time when the coverage stops. The biggest beneficiaries here are Jose and Don. Jose is probably going to be able to get coverage either through his employer, since he works for a small employer so the employer will have incentives to provide the coverage, or he might go out in the exchanges and buy coverage from the private market. What will happen to Donna? Now the way the act was passed, and here we're talking before the Supreme Court decision, Donna would also have been covered under Medicaid expansion, because she makes less than $14,000 per year so she would be on Medicaid. However, as I will discuss in a few minutes, what will happen to Donna will actually depend on which state she lives. Before we get into that, let's talk about some of the problems that the law did not solve, or was not designed to solve. These include increasing costs, shortage of doctors, especially family doctors, undocumented immigrants, as well as lifestyle choices. Before the passage of the healthcare act, as I discussed, we were expecting healthcare costs to keep on increasing at an increasing rate. Now what will the act do to reduce costs? The act actually put in place a variety of pilot programs, because no one really knows how to reduce costs. So there's going to be a variety of pilot programs that will test several ways of reducing costs. One of them is called comparative effectiveness research, which basically means that there's going to be people doing research and looking at treatments that have similar outcomes and trying to determine which treatment has better outcomes and is cheaper, and try to standardize these treatments across hospitals and doctors. There's also going to be a push to pay hospitals and doctors in a different way. Now the way our healthcare system has been designed, we pay hospitals and doctors on a fee-for-service basis, which means we pay them for service, which has encouraged overuse. The new ways of paying hospitals and doctors will not be on a fee-for-service, but rather for patients. So it will be a global payment. So hospitals and doctors will start forming large systems that control the whole life of the patient, because they're going to get one payment for that patient. We refer to that as bundle payment. Another change that will happen that might reduce costs is that hospitals and doctors are going to get paid for quality rather than quantity. So they will be pushed to publicly publish their outcomes, and will be compensated according to their outcomes rather than according to the number of services that they provide. So all of these things will be in place. Some of them will work, and some of them will not. However, we are not sure on the effect of the act on costs. Now costs were increasing anyways as we said, but no one is certain about whether costs will slow down at some point in time or not. The other major problem that we have is that of primary care physician shortages. We're expecting to have around a deficit of 45,000 doctors, and that includes family doctors, general practitioners, OBGYNs, and pediatricians. Now the bad news here is that there won't be enough primary care physicians to take care of everyone, especially the additional people who are going to become insured. Now that's the bad news. So what's the good news? There's really no good news, but I have to make up something. So the good news is we have till 2019 to figure it out. And one of the things that we'll probably do is replace primary care physicians with nurse practitioners and physician assistants, and that is happening too. The other major problem that the act did not address, because it's very political, is that of undocumented immigrants. Illegal immigrants will not be affected by the act and will not be covered by any Medicaid expansion, and we can all bet money that they're still going to seek care at the ER and not be able to afford it. A recent study has shown that the number of undocumented immigrants will only increase. Now the difference here is that prior to the act there were funds provided to hospitals to provide that care. After the act these funds might be limited or might dry up, so the problem of the undocumented immigrants will likely become more significant as a result of the act rather than less significant. So that's another weakness of the act, but as we all know the whole issue was very political and therefore was not addressed. The other problem that the act does not address is that of lifestyle. As we all know around 1 in 3 Americans are obese and 17% of children and adolescents are also obese. Unless we do something about this our life expectancy is always going to be lower than other rich countries. So this is something that the act does not address because it relates to personal choice. So unless people start exercising, eating healthier, etc., etc., we're not going to see effects on some of our quality outcomes. So that's something that the act did not address in total. There were some provisions to encourage prevention, but when it comes to personal choice it was not addressed. Now what is the assessment of the general of the act itself? I like to think of myself as neither a pessimist nor an optimist, but rather a realist. So how does the healthcare in general, how does the healthcare act do? And this is a personal opinion. The healthcare act is a good but not perfect legislation. It is a step in the right direction, but it does not and will not address all of our healthcare needs. Going forward. So what happened in that day in June when the Supreme Court decided on the healthcare reform act? So before we go forward we'll go back backward a little bit and look at the Supreme Court decision. So on June 28, 2012 the Supreme Court took two very important votes. The first vote decided that Congress can impose the individual mandate under its power to lay and collect taxes. And that declared that the individual mandate was constitutional. So that was the first vote. However, the second vote was as important and even more controversial. And the second vote said that Medicaid expansion is actually unconstitutional because it coerces the states under the threat of losing funding for their existing Medicaid program. So what this means is that Medicaid expansion is going to be left up to the states themselves. States who decide to expand Medicaid to take the federal money and expand Medicaid will be allowed to do it. Those that don't won't have to. Now here we have to remember that Medicaid expansion was going to be funded 100% through federal money till 2016 and then 93% federal money, 7% state money from 2016 and beyond. What this means is that a lot of states are not going to provide coverage. So going back to Donna, will she get coverage or not under Medicaid expansion? Well, it depends on which state she lives in. These are the states in red are the states that sued the federal government when the Healthcare Reform Act was passed. And these are likely to be the states that will decide not to take the federal funds and expand their Medicaid programs. If you look at these states, 26 of them, ironically, some of these states are exactly the ones that need help for their Medicaid programs. Texas for example would have added 1.7 million people to Medicaid. Florida would have added around 950,000 people. Mississippi would have added 350,000 people under Medicaid. So if Donna lives in Minnesota, for example, she'll be fine and she'll be covered by Medicaid. If she lives in Georgia, not the case. Also here, a political statement. If you look at the states that decided not to take the federal funds, almost all of them has Republican governors. So more than a healthcare issue, it's also a political issue. So the states that decide to take the money that were for this will take the money and go forward with it. Others probably will take a wait-and-see approach and try to see what's going to happen in the future. Try to predict the outcomes of the election. Now when it comes to prediction, it's obviously very hard. However, we'll try to see what's going to happen depending on the outcomes of the next big day, which is coming up on November 6th. So the next big day, if President Obama is re-elected, then we will expect the healthcare law to be implemented as is except for Medicaid expansion. The Medicaid expansion has been ruled unconstitutional and then it will be up to the states to implement that or not. Which in my opinion will severely limit the effectiveness of the act in covering the people that it was designed to cover. However, if Governor Romney is the elected president, one of the things that he has about to do, the first thing that he has about to do is to repeal PIPACA and to replace PIPACA. Now the Romney plan on healthcare lacks a little bit on the specifics, but the gist of it is that was not a political statement. The gist of it is that it will leave it up to the states to decide on their own reform. So the Romney plan for healthcare would be each state will customize its healthcare reform according to the needs of its residents. And the federal government will play a role of making sure that the competition is fair and there is a level playing field. So that's what we're looking at in terms of outcomes and what will happen to the healthcare law. One more thing to talk about here is Congressman Ryan's Medicare plan. Congressman Ryan's Medicare plan will cap spending on Medicare. It will not affect people who are already on Medicare but rather will affect people that will turn 65 in 2023. It will provide vouchers for Medicare enrollees and they will take these vouchers and either decide to buy a traditional Medicare plan or go on the private insurance market and buy a private plan. However, one thing that has been unfairly reported about the Ryan plan was that it will end Medicare as we know it. The Ryan plan will not end Medicare as we know it and that is a fact because the traditional Medicare plan will still be available as an option. Now the opponents of the plan have talked about what could happen under the Ryan Medicare plan and one of the scenarios that could happen under that plan where people are given vouchers, are given a certain amount of money and they can either go buy the traditional plan or buy a private plan. If they decide to buy an expensive plan they have to pay for the difference. If they buy a cheaper plan they can keep the difference. So what people have said, or at least the opponents have said, is that under this plan people who are very sick, seniors that are very sick will likely stick with the traditional Medicare plan because they want to keep a relationship with their provider. So what will happen is that the healthiest seniors are more likely to leave traditional plans and go and buy less expensive, more generous private plans. When this happens the rates in the traditional Medicare plan are likely to increase and when the rates increase the reimbursements are probably going to go down and possibly doctors are going to leave the traditional Medicare plan and start accepting patients who are only under the private plan. So that's one of the criticisms of the Ryan Medicare plan. However to be fair we have to say that it will not end Medicare as we know it. The argument here is very similar to the argument under the exchanges in the reform act is that when you have private insurance and public insurance competing the rates are going to be competitive and the enrollees are going to benefit from it. So in summary our healthcare system is plagued with problems in quality, problems with cost and problems with coverage. So we're at the crossroads now. Either we go forward with new solutions or we stay stuck in the past with solutions that haven't worked for us. Thank you. Now we're going to take questions. There's a microphone set up there and I encourage people who have questions to walk up to the microphone and ask the questions please. We are going to ask like we do at candidate forums that you line up, you ask one question and then you don't ask another question until everybody who wants to ask a question has had a chance to. I think they're asking you to use the microphone please. In Texas if I understand it the public hospitals and maybe even the private hospitals have been talking about maybe talking directly to the federal government about the Medicaid problem and getting the Medicaid dollars directly to the hospitals if I understand that anywhere close. Do you have any information and any feel for that process? There has been some talk about that however in my opinion that is very unlikely to happen. Any Medicaid expansion or any funds have to go through the state by design of the Medicaid program. So unless the state itself and the state legislature decides to accept the Medicaid funds my opinion that the hospitals and the providers will not have access to those funds. I'm Arlis Olson. I heard on Bill Moyer some nun that was saying that the Ryan plan would cut Medicaid. I don't remember the exact figures but it was a lot something that she said each church would have to put in $10,000 a year to make up the difference in Medicaid cuts under Ryan plan for 10 years I believe she said. Do you know anything about it cutting Medicaid? No if anything Medicaid as we discussed will be expanded. So Medicaid will be expanded to cover people who earn $40,000 or less. Now in terms of the benefits that will be provided there will be the typical Medicaid benefits that are provided. But maybe she was talking about what will happen because of the Supreme Court decision which left it up to the state to decide whether to take up the Medicaid funds or not. So under the Ryan plan with Medicaid the Ryan plan focuses mainly on Medicare and does not address Medicaid in that much depth to my knowledge. You mentioned under PPACA that Donut Hall will be closed. When will that happen? The Donut Hall will start to be closed in the next few years and it won't be completely closed till 2019. So there will be funds coming in to cover part of it but it won't be totally closed till the last year of the implementation of the act. Hello my name is Teresa Varianne I'm an educator and a nurse. Could you talk a little bit about how the healthcare reform will affect those of us who produce healthcare professionals? Yes very good question. We've talked about the shortage of providers and in the talk I focused only on the shortage of primary care doctors but obviously those of you who are in the field will know that there is a shortage of nurses and other kinds of providers. So how will the healthcare law affect those? I have to say that the law doesn't go that far in terms of providing training or providing incentives for people to go into nursing and into primary care. When it comes to, for example, primary care doctors the law will provide some loan forgiveness and provide some tuition assistance for people who decide to go into specialty such as primary care family medicine and general medicine and it will also increase reimbursement, Medicare reimbursement by 10% for doctors that are in that specialty. However, experts who have looked at that have decided that these are only sweeteners that will not solve the big problem which is the shortage we've talked about. So the shortage of doctors and of nurses will be addressed through a few provisions but these don't come close to solving the whole problem and that's why we expect to see more and more people or more and more services being provided by nurse practitioners and physician assistants in the next few years. This morning on the Diane Reem Show on NPR there was a gentleman that called in complaining that with the new healthcare law it made it impossible for his business to expand. They had an idea to bring manufacturing back into the United States and it would require them hiring 65 new employees in the United States for his small company but they looked at the paperwork and decided that because of the new healthcare plan that it made it unaffordable for them to do that and I was just wondering how you respond to that. If he's planning to add 65 employees that probably means that he's over the 50 employee limit so he'll be treated as a large employer and in that case I would say that what he's saying has some truth in it because then he will be forced to provide coverage for all of his employees or face a penalty of $2,000 for employees. So there is some truth in that and that it will affect those large companies that previously did not provide any coverage for their employees. Well the response which I didn't quite understand I thought you might explain said that ultimately it would be the employees though that would be taking on that cost not the employer. Is that correct? Well if he doesn't provide that coverage and pays the penalty the employees will at least have an option and go to the exchanges and buy their own insurance and might also receive tax credits to do that. So whereas in the past companies did not provide insurance and that was the end of it now at least if the company does not provide that they will pay the penalty but the penalty will help fund the tax credits and the exchanges. This is just a comment regarding Medicare here in Bear County. The Patient Institute which is an organization to help people perverse the healthcare system in conjunction with Bear County Medical Society have done a data collection of all the physicians in Bear County who are and who are not taking new patients. So if you are a new person of Medicare age looking for a physician you could find it by going to the Bear County Medical Society website or to the Patient Institute website online. Thank you for that comment and it's a very important issue because a lot of doctors over the last few years have decided to stop taking Medicare patients and Medicaid patients and go for patients who have private insurance or are paying out of pocket directly out of pocket. So I would say that this kind of data will be very beneficial. Hi, earlier you made a statement about companies that do provide insurance not with the change not being likely to drop insurance for their employees. Like I guess it was Jim and his example with his case. I'm thinking about the cost for my health insurance and it's certainly more like the position of Jim's and if my company was to drop that insurance paying the $2,000 penalty would be a win for them. How isn't that an incentive for them to say go to the exchange? You're right, for the employer that will be much cheaper to pay the penalty than to provide the coverage. However, what I was arguing was that the companies who already provide the coverage see a benefit for their employees and see it as a way to attract talent to their company. So these companies that understand it that way will likely not drop the coverage because they will be at a disadvantage in attracting talent. So it's a competitive market. Now if that were to happen again then Jim, prior to PIPACA would probably have to go and buy insurance on his own in the private insurance market after PIPACA will actually have better options through the exchanges will more likely be able to get better competitive rates. Some companies that currently provide insurance require their employees to pay part of the cost of the insurance. Will the PIPACA require a company to pay all of the cost of the insurance or can they still require employees to pay part of the cost? There won't be any changes in terms of how the employer provided insurance is provided. So the employees will still have to contribute to their private insurance for their employers. Do we have any other questions? Well I want to thank you for being a great audience today and hope that you found the lecture to be beneficial. If there are any additional questions I'll be happy to take them in private. Thank you. I would also like to ask you or acknowledge to you even though she asked to remain anonymous Sharon Bartling and Evelyn Bonavida who helped to put this program together this evening I think their efforts were certainly well worth it and we appreciate Dr. Cayese's information.