Healthcare Secrets(The truth behind healthcare payments and the ACA)

April 2013April 2013

EEffective CCost BBased MManagement

Charles BernierCharles Bernier

Healthcare Payments• A recent Time magazine exposé detailed the

inconsistencies in our healthcare system.

• Charges for care have little bearing on the actual costs.

• At most Hospitals, the “Charge Master” sets the charge levels.

• Very few people pay the full charge, but discounts vary widely by payer.

• Medicare pays on a totally different basis than other payers.

Preview of the Future

Final Thoughts• In 1989, the Heritage Foundation, a conservative think

tank, released a publication titled "A National Health System for America”.

• The ideas in this publication regarding National HealthCare and the Individual Mandate were being promoted by Senator Bob Dole.

• This was the basis for the Patient Protection Affordable Care Act (PPACA) signed into law by President Obama.

• The underlying basis of process was to expand coverage through tax reform to cover the costs.

Final Thoughts• In 2009 only 51% of Americans filed tax returns and

this increased to 54% in 2011. How do you get the rest of the Americans to file returns because there is tax income to be achieved here.

• The solution, the Individual Mandate with supporting subsidies. American's are required to purchase coverage and to obtain their subsidies, they must file a tax return.

• Problem solved - the increase in tax income from those failing to file will file the gap.

• Justice Roberts confirmed this process with his ruling that PPACA was a tax.

Final Thoughts

“In January 2009, the Centers for Medicare and Medicaid Services projected that expenditures would reach 19.8 percent of gross domestic product in 2017. This year, the projection for 2017 is down to 18.4 percent of GDP. That difference amounts to a whopping $280 billion. In other words, relative to the projections issued three years earlier, today’s forecasts suggest health savings of $3,500 per family of four by 2017.”

Slower Growth in Health Costs Saves U.S. Billions – BloomsbergBy Perter Orszag