Observations on the Argument Over Health Care Policy

1. Who Makes HC Policy?

a. State differences – access, price and coverage

b. Individuals affected –

i. 17M buy insurance

ii. 29M don’t have insurance

iii. MCare & Medicaid not affected – State expansion of Medicaid, but higher rates of inflation in Red States

2. Hospital Closures & Medicaid Expansion

a. ACA improving health care?

i. Hospitals closed in States rejecting Medicaid

1. States expanding Medicaid – lower and falling hospital closures

2. ACA – improved hospital financial performance w/lower probability of closure for rural markets and counties w/large amt of uninsured

3. Supreme Court left Medicaid expansion to the States

4. Hospital closure leads to loss of well-paying and skilled jobs

3. Wall Street – Another Option for Paying For Health Care Benefits

a. Sell wealth management to individuals

i. Lower cost method to gain new customers

ii. Morgan Stanley, Goldman, Fidelity, Charles Schwab, E*Trade, Amazon/JPMorgan/Berkshire Hathaway

iii. Wall St has the analytics to redeploy investment dollars to benefits

iv. Same as insurance brokers?

v. TPA/PBM – middleman model to transactional model

4. Geography Matters – John Wennberg, MD

a. Dartmouth Atlas of Health Care – cost of living, site of care, volume of services delivered, hospital/MD salaries

b. Example –

i. SF Chronicle reports cost in No. CA 30% > So. Ca d/t UC Berkeley Petris Center on Health Care Markets and Consumer Welfare

ii. Primary reasons -- D/t consolidation in hospitals, insurance and MD practices b/w 2010-2016 (adj for higher cost of living and wages)

iii. Result – mergers/acquisitions in health care = HP+PBMs, MD practices, Plans, Pharmacies lead to higher costs

iv. Marketplace competition, technology, telehealth, international competition, competitor ads leverage cost differences

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