Colorado Health Care 2014 Legislative Agenda Senator Irene Aguilar, MD

IOM: Best Care at Lower Cost 9.8% 7.2% 27.5% 17% 13.7% 24.8% INSTITUTE OF MEDICINE 2012: US Health Care Annual Waste $ 765 Billion

Variations Among Academic Medical Centers UCLAMass General Mayo Clinic CMS Inpatient Quality Score Source: Elliot Fisher, Dartmouth Medical School Care Delivery & Spending, last 6 months of life Total Medicare Spending $50,522$40,181$26,330 Hospital Days Physician Visits Specialist/ Primary Care Ratio

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Senate Bill 16: Context EMTALA: Emergency Medical Treatment & Labor Act CMS: Center for Medicaid and Medicare Services Emergency Medical Care: ambulances, surgeons, cardiologists, operating rooms, hospitalization Facility Fee: Supplemental payment to support the full spectrum of emergency medical care  Cost shifting inpatient costs to consumers of the ED  Medicaid, Medicare & TriCare do not pay this to FSEDs

A tale of two business models Panorama Orthopedics, Golden, CO First Choice Emergency Center Arvada, CO

Market Principles and Health Care Consumers bear the cost of what they consume  Only 20% of Coloradans have high deductible plans  80% pay Copayment only for Emergency Care Consumers have transparent information and make an informed choice on the purchased service  Most consumers do not recognize the difference between urgent care and emergency care facilities  Insurers do not have a choice – must pay emergency bills Limited financial or regulatory barriers that prevent new suppliers from entering the market

Cost of Insurance Based on actuarial analysis of the health of the population, the cost of the services provided and frequency of use Oregon Experiment: 40% more ER visits Geographic Region 11: Higher costs of services October 2012 – September 2013 One Insurer’s Data TOTAL CHARGESSERVICE CHARGES FACILITY FEES $1,923,867.$ 243,859$1,680,008

EMERGENCY or URGENT ? 59% of visits were for non-emergency care:  Allergic reactions including dermatitis and Hives  Headaches, Back Pain, Sciatica  Viral Infections, Strep Throat, Nausea 16% of visits were for conditions that might have needed immediate access to specialists  Require transfer by ambulance to a hospital FSED Testimony on Patient Visits AVERAGE MONTHLY VISITS PERCENT UNINSURED AVERAGE MONTHLY PAID VISITS HOURS OF PROVIDER COVERAGE 40025%300720

Freestanding Emergency Rooms H O 2 U 0 S 0 T 4 O N

Freestanding Emergency Rooms H O 2 U 0 S 1 T 4 O N

CO SPRINGS: Freestanding Emergency Room

ARVADA: Freestanding Emergency Room

Which would you choose?

Jaguar XF Starting Price: $46,975 Hyundai Elantra Starting Price: $17,200

Determinants of Health 2011 U.S. Healthcare Spending: $2.7 Trillion

Table 2: Estimate of ACA Effect, 2016 No ReformWith ACAACA Impact ESI2,630,0002,600,000-30,000 Small Firm ESI (1-50 employees)560,000540,000-20,000 Other ESI2,070,0002,060,000-10,000 Unreformed Non-group340,00060, ,000 Reformed Non-group0620,000 Tax Credit Recipients0470,000 Non-Recipients0150,000 Public Insurance550,000710,000160,000 Uninsured860,000400, ,000 Total4,390,000 → → → Source: Dr. Jonathan Gruber’s analysis for the Colorado Health Benefit Exchange, 2011

Dr. Jonathan Gruber 9/16/11 22% 39% 10% 29%

Figure 4. Share of Colorado population without health insurance coverage, alternative funding programs,

Cooperative would put Colorado on sustainable path: Spending growing no faster than the GSP Savings grow by “bending the cost curve” by reducing administrative share and restraining drug price inflation