Health Care in the FutureHealth Care in the Future

Gloom, Doom and the Baby Boom Gloom, Doom and the Baby Boom Gloom, Doom and the Baby Boom Gloom, Doom and the Baby Boom

Raymond J. Gibbons, MD

Mayo Clinic

Raymond J. Gibbons, MD

Mayo Clinic

CP988919-1

Disclosure StatementDisclosure Statement

Research grants(significant)Research grants(significant)

Radiant MedicalRadiant Medical KAI PharmaceuticalsKAI Pharmaceuticals

TargeGenTargeGen

TherOxTherOx

King Pharmaceuticals King Pharmaceuticals

Raymond J. Gibbons, MDRaymond J. Gibbons, MD

Disclosure StatementDisclosure Statement

Consultant(modest)Consultant(modest)

Hawaii BiotechHawaii Biotech

Cardiovascular Clinical Cardiovascular Clinical Studies(WOMEN Study)Studies(WOMEN Study)

Consumers UnionConsumers Union

TIMI 37ATIMI 37A

Raymond J. Gibbons, MDRaymond J. Gibbons, MD

CP1279194-7

• Health care crisis

• Attention on imaging

• Quality

• Efficiency

• Health care crisis

• Attention on imaging

• Quality

• Efficiency

CP1279194-8

• Health care crisis

• Attention on imaging

• Quality

• Efficiency

• Health care crisis

• Attention on imaging

• Quality

• Efficiency

Health Care Costs:Health Care Costs:15-Year Cumulative Inflation15-Year Cumulative Inflation

Sources: AMA, Kaiser Family Foundation

100

120

140

160

180

200

220

240

260

280

300

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Health InsurancePremiums

MedicareConversionFactor ($/RRU)

US ConsumerPrice Index

1991 =100

Less Reimbursement forMedicare/Medicaid Services

Less Reimbursement forMedicare/Medicaid Services

CP1246692-2

Cost Shifting toNon-Medicare Patients

Cost Shifting toNon-Medicare Patients

Health Insurance Premiums Health Insurance Premiums

Employers Providing Insurance Employers Providing Insurance

Uninsured Uninsured

Demographics and CardiologyDemographics and Cardiology

CP941130-20

P(i,t) = P(i-l, t-l) – D(i,t) + I(i,t) – E(i,t)P(i,t) = P(i-l, t-l) – D(i,t) + I(i,t) – E(i,t)

Population Over 65Population Over 65

CP941130-21

0

10

20

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

%%

YearYear

U.S. Federal SpendingActual 2005

U.S. Federal SpendingActual 2005

Congressional Budget OfficeCongressional Budget OfficeCP1245974-1

All otherprograms

19.2%

Defense20%

Medicare/Medicaid20.8%

Interest7.4%

Othermandatory

11.6%

Social Security21%

CP1279194-13

Workers per Medicare Workers per Medicare RetireeRetiree

Health Care Financing AdministrationHealth Care Financing Administration

0

1

2

3

4

5

1960 1980 2000 2020 2040

0

2

4

6

8

10

12

14

16

18

20

1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003

CP1279194-19

AnnualAnnualgrowth growth

(%)(%)

AnnualAnnualgrowth growth

(%)(%)

Health Care SpendingHealth Care SpendingHealth Care SpendingHealth Care Spending

Congressional Budget OfficeCongressional Budget Office

PublicPublicPublicPublic

PrivatePrivatePrivatePrivateGDPGDPGDPGDP

CP1283309-6

Medicare and MedicaidMedicare and Medicaid

Congressional Budget OfficeCongressional Budget Office

0

5

10

15

20

25

1963 1970 1977 1984 1991 1998 2005 2012 2019 2026 2033 2040 2047

GDPGDP(%)(%)

GDPGDP(%)(%)

Total federal revenueTotal federal revenueTotal federal revenueTotal federal revenue

ActualActualActualActual ProjectionProjectionProjectionProjection

Part A Part A Trust Fund Trust Fund exhaustedexhausted

Part A Part A Trust Fund Trust Fund exhaustedexhausted

Foreign investors Foreign investors pull outpull out

Foreign investors Foreign investors pull outpull out

CP1279194-3

MedicareMedicare

“The degree of uncertainty about whether future sources will be adequate to meet our current statutory obligations to the coming generation of retirees is daunting.”

“The degree of uncertainty about whether future sources will be adequate to meet our current statutory obligations to the coming generation of retirees is daunting.”

Alan GreenspanChairman, Federal Reserve BankJanuary 25, 2004

Alan GreenspanChairman, Federal Reserve BankJanuary 25, 2004

CP1279194-2

MedicareMedicare

“The longer we wait, the more severe, the more draconian, the more difficult the adjustment is going to be… I think the right time to start is about 10 years ago.”

“The longer we wait, the more severe, the more draconian, the more difficult the adjustment is going to be… I think the right time to start is about 10 years ago.”

Ben BernankeChairman, Federal Reserve BankJanuary 18, 2007

Ben BernankeChairman, Federal Reserve BankJanuary 18, 2007

Medicare TrusteesMedicare Trustees

CP1279194-4

2007 Annual 2007 Annual ReportReport

The Hospital Insurance Trust Fund could be brought into balance with

• An immediate 122% increase in payroll tax (1.453.22%)

• An immediate 51% reduction in spending

• Some combination of the two

The Hospital Insurance Trust Fund could be brought into balance with

• An immediate 122% increase in payroll tax (1.453.22%)

• An immediate 51% reduction in spending

• Some combination of the two

• Little public discussion – “elephantin the corner”

• Required changes will increase

• Long overdue

• Further delay Number of uninsured Racial/ethnic disparitiesWage stagnation Commitment to education

• Threat to the country

• Little public discussion – “elephantin the corner”

• Required changes will increase

• Long overdue

• Further delay Number of uninsured Racial/ethnic disparitiesWage stagnation Commitment to education

• Threat to the country

Need for Change in Health CareNeed for Change in Health Care

CP1243922-1

CP1243922-2

InertiaStatus quo

Short-term effectsNecessity of

long-term change

CP1279194-9

• Health care crisis

• Attention on imaging

• Quality

• Efficiency

• Health care crisis

• Attention on imaging

• Quality

• Efficiency

““Blue Cross to require pre-approval Blue Cross to require pre-approval for scans;for scans;

MRI, other imaging costs up 20% in MRI, other imaging costs up 20% in year”year”

Boston GlobeBoston GlobeSeptember 6, 2005September 6, 2005

0

20

40

60

80

100

120

1993 1994 1995 1996 1997 1998 1999 2000 2001

CP1218939-2

Medicare Cardiac ProceduresMedicare Cardiac Procedures

Circ 113: 374, 2006Circ 113: 374, 2006

Rat

e/1,

000

Rat

e/1,

000

Stress imaging Stress imaging

Cardiac catheterizationCardiac catheterization

RevascularizationRevascularization

Acute MIAcute MI

Less reimbursement forMedicare services

Less reimbursement forMedicare services

CP1246692-3

“Make it up on volume”“Make it up on volume”

“Grow the business”Increases in procedures/tests

“Grow the business”Increases in procedures/tests

Thought/time per patient/procedure Thought/time per patient/procedure

Quality, efficiency and value Quality, efficiency and value

CP1279194-1

Deficit Reduction Act of Deficit Reduction Act of 20052005

• Good news: Elimination of 4.4% decrease in MD payment

• Bad news: Reduction in payments for imaging – 78465 decreased by $75

• Good news: Elimination of 4.4% decrease in MD payment

• Bad news: Reduction in payments for imaging – 78465 decreased by $75

House VersionHouse Version

CP1279194-5

SCHIP/MedicareSCHIP/Medicare

• Good news: Eliminates 9.9% decrease in 2008 and 5% decrease in 2009

• Bad news: In 2010, SGR replaced with new system with 6 separate targets – imaging – growth limited to GDP

• Unknown: “comparative effectiveness”

• Good news: Eliminates 9.9% decrease in 2008 and 5% decrease in 2009

• Bad news: In 2010, SGR replaced with new system with 6 separate targets – imaging – growth limited to GDP

• Unknown: “comparative effectiveness”

Imaging Stress Testing − MedicareImaging Stress Testing − Medicare

1.30 to 2.591.30 to 2.59 (53)(53)1.10 to <1.301.10 to <1.30 (36)(36)0.90 to <1.100.90 to <1.10 (64)(64)0.75 to <0.900.75 to <0.90 (53)(53)0.24 to <0.750.24 to <0.75 (100)(100)Not populatedNot populated

Ratio of rates of imaging stress Ratio of rates of imaging stress testing to the U.S. averagetesting to the U.S. average

by hospital referral region (1996)by hospital referral region (1996)

Ratio of rates of imaging stress Ratio of rates of imaging stress testing to the U.S. averagetesting to the U.S. average

by hospital referral region (1996)by hospital referral region (1996)

CP1279194-15Wennberg et al: The Dartmouth Atlas of Cardiovascular Health Care, 1999Wennberg et al: The Dartmouth Atlas of Cardiovascular Health Care, 1999