5th Annual World Health Care Congress

A stupendous array of health care expertise is gathered in Washington, D.C., supplemented by the health care policy advisors for U.S. Presidential candidates Sen. Barack Obama, Sen. Hillary Clinton and Sen. John McCain. It's the World Health Care Congress, and as you might expect, George C. Halvorson is there.

From the press release about this morning's panel:

-- Hear the Presidential candidates' platforms for health care reform

-- Compare proposals to address universal coverage and the fiscal
stability of Medicare

-- Reactor panelists provide an in-depth critique by evaluating the
economic and social impact of Democratic and Republican proposals

Panelists:
-- U.S. Rep. Jim Cooper (D-TN), Health Care Policy Advisor to Sen. Barack
Obama

-- Chris Jennings, Health Care Policy Advisor to Sen. Hillary Clinton,
former Senior Health Care Advisor to President Clinton.

-- Thomas Miller, resident fellow, American Enterprise Institute for
Public Policy Research, Health Care Policy Advisor to Sen. John McCain

-- George Shutlz, former U.S. Secretary of State, Labor and Treasury, co-
author "Putting Our House In Order: A Guide to Social Security and
Health Care Reform"

-- George Halvorson, Chairman and CEO, Kaiser Foundation Health Plans and
Hospitals

Health care reform, universal coverage, Medicare woes, and a solid analysis of the positions taken by our current crop of Presidential candidates should make for a fascinating (and hopefully productive) gathering.

The listing above covers on the first panel of the day for this event, in addition to those listed above there is an extensive roll call of movers and shakers in the Health Care scene in attendance who will be combining their expertise:

• Michael Leavitt, Secretary, U.S. Department of Health and Human Services
• James Hagedorn, CEO, Scotts Miracle-Gro Company
• Delos (Toby) Cosgrove, MD CEO, Cleveland Clinic
• Denis Cortese, CEO, Mayo Clinic
• Greg Tullman, CEO, Allscripts
• George Halvorson, Chairman and CEO, Kaiser Foundation Health Plans and Hospitals
• Mack Banner, CEO, Bumrungrad International (Thailand)
• Sam Nussbaum, Executive Vice President and Chief Medical Officer, Wellpoint
• Thomas Miller, health care policy advisor to Sen. John McCain
• Prof. Hans Rosling, MD, PhD Professor of International Health, Karolinska Institutet (Sweden)
• Michael Howe, CEO, MinuteClinic
• Paul Speranza, Chairman, U.S. Chamber of Commerce, Vice Chairman and General Counsel, Wegmans Food Markets
  

Best of all, in my opinion, is the fact that you can stream MP3 audio podcasts of the featured speakers here. Look for Mr. Halvorson's podcast, "Reforming the Delivery of Care to Impact 85% of Total Health Care Costs." It just went live!

Today, I would like to close with a quote about the event:

"This is the largest gathering of health care providers, thinkers and experts anywhere in this world."
—Lee Scott, President & CEO, Wal-Mart Stores, Inc.

Let us hope this massive array of talent and expertise can help us find our way down this complex and emotionally charged path to effective health care reform!

SOURCE: "5th Annual World Health Care Congress Kicks off April 21 With Obama, Clinton, McCain Health Care Policy Advisor Presidential Health Care Agenda Forum" 04/21/08
SOURCE: "5th Annual World Health Care Congress- Podcasts"
photo: Screencap of WHCC Website

Health Care, Pharmaceuticals and Investments

Do you remember the piece I wrote a few days ago about health care costs doubling by 2017? Well, today I am going to revisit that topic by sharing with you an article by Brian Lawler I found on the investment website The Motley Fool.

Why would I share an article on investing here, you might ask? Because it provides a window into some of the economic forces that are driving the health care industry. Lawler references the Centers for Medicare and Medicaid Services (CMS) forecast which shows aging baby boomers creating one of the largest demographic shifts on record. As these boomers begin reaching the age where they will be relying on Medicare/Medicaid, and the attendant prescription drug plans, the pharmaceutical companies will be raking in larger and larger profits. Or will they?

While this forecast for increased prescription-drug spending might be a positive omen for the pharmaceuticals industry, the reality is that if health-care spending does jump to a fifth of GDP, there will be a lot of pushback from government and private health-care payers. For example, as we're seeing now, the leading presidential candidates are agitating to allow prescription-drug importation from less-costly developed countries, or to give Medicare and Medicaid more direct negotiating power over drug prices.

Nonetheless, there are strong demographic trends favoring the pharma industry. With the large dividends that many large-cap drugmakers like GlaxoSmithKline (NYSE: GSK) pay out and the relatively recession-proof nature of the pharma industry, investors should keep a keen eye on the sector in the coming years.

As the citizens of the U.S. push for reform in our health care system, it would be wise to keep in mind that economics and political lobbies are a very large factor in what decisions and legislation actually pass. A quick scan of the dollar amounts donated by pharmaceutical companies and their lobbyists to the current batch of presidential hopefuls speaks volumes about the industry's influence.

I would love to hear some input from anyone with an investment background on this issue. Please leave us a comment if you have views you would like to share.

SOURCE: "Medicare, Health Care, and Megabucks" 02/28/08
photo courtesy of holding.me, used under this Creative Commons license

Health Care 2017: One Dollar Out of Every Five

Twenty cents out of every dollar. One dollar out of every five. Twenty dollars out of every hundred. No matter which way you view it, health costs will almost double by the year 2017. (See the Health Affairs Report.) While impressively large, those figures assume even more magnitude when you realize that they represent a rise to 20% of our nation's gross domestic product.

Aliza Marcus at Bloomberg reports that the increase in spending on health care will be primarily fueled by an aging population -- primarily Baby Boomers -- as they seek treatment and care for chronic ailments such as diabetes and high blood pressure. When you combine this with the projected increases in pharmaceuticals and medical technology it paints a fairly grim financial portrait.

As the baby boomers, born between 1946 and 1964, begin turning 65 and qualify for Medicare coverage, the program's share of the national health bill will rise to 21 percent in 2017, or $884 billion, from 19 percent in 2006, according to the study.

The Washington Post reports the forecast of total health care spending to be $4.3 trillion by 2017, almost double the amount spent in 2007. They also note that while overall spending will increase, the amount spent on private health care will actually shrink while public spending accelerates.

The Wall Street Journal's Health Blog points out some of the efforts being made to slow Medicare spending on Capitol Hill. According to their health care blogger, Jacob Goldstein, the Democrats have tabled the idea of reducing payments made to privately operated Medicare plans, which have a higher out of pocket cost for the federal government than traditional ones.

Kevin Freking of the Associated Press takes a look on the other side of the aisle where President Bush proposes slowing the cost of Medicare by freezing reimbursement rates for the next three years to health care providers such as hospitals, home health centers, and nursing homes. In addition, Bush proposes requiring wealthier Medicare beneficiaries to pay higher premiums on prescription medications.

All in all, it looks like the rate of health care spending will continue to outstrip growth in the gross domestic product. It is hardly surprising that this is recognized as a crisis by most experts and, increasingly, by the public at large.

SOURCE: "Health Spending Projections Through 2017: The Baby-Boom Generation Is Coming To Medicare" 02/26/08
SOURCE: "Health Costs Will Rise to 20% of Economy by 2017, U.S. Says " 02/26/08
SOURCE: "WASHINGTON IN BRIEF: Big Jump Forecast In Health Spending" 02/26/08
SOURCE: "Feds’ Health Spending to Double in a Decade" 02/26/08
SOURCE: "Spending on Health to Rise Dramatically" 02/26/08
photo courtesy of tracy_olson, used under this Creative Commons license

The Medicare K-O: A Cost and Budget One-Two Punch

Eileen Alt Powell of the Associated Press brings us info on the study released Tuesday by the Center for Retirement Research at Boston College. The study that holds ominous news for future retirees as well as others who reply on Medicare:

The government currently estimates an individual's costs for Medicare premiums, co-payments and other cost-sharing at about $3,800 a year for a single person and $7,600 for a couple. Add to that $500 per person for dental care, eye glasses, hearing aids and other items not covered by Medicare.

To cover such costs in the decades most baby boomers and Generation Xers will live after quitting their jobs, an individual needs to go into retirement with some $102,000 earmarked just for health care coverage, the center estimated. A couple needs about $206,000.

Baby boomers come from the generation born between 1946 and 1964; Gen Xers were born between 1965 and 1974.

$102,000 just for health care coverage? For many people, that is a truly daunting number. The study goes on to graph these expenses against the average savings balance of approximately $60,000 in most households approaching retirement. That is the first punch to the gut.

To complicate matters even more, let us turn our eyes towards Medical News Today, where Robert M. Hayes, President of the Medicare Rights Center, issues a warning about the effect of President Bush's budget cuts on Medicare. Those budget cuts deliver the second part of "the old one-two:"

The proposals to tie Medicare payments to hospitals, doctors and other health care providers to measures of quality and efficiency are worthy of consideration but are completely unworkable in the context of the drastic, across-the-board payment cuts included in the President's budget. Paradoxically, the President's budget allows insurance companies to continue to bilk Medicare, even though the Medicare Payment Advisory Commission has concluded that these private Medicare health plans are overpaid.

Measurements and standards are extremely important if we are to get a grip on the out of control state of health care costs, but Hayes' point is worth considering. How do we implement new standards of practice with no money to implement them? How do we manage to afford standards if we continue to overpay for the services we have?

SOURCE: "Health Costs Loom Large for Retirees" 02/18/08
SOURCE: "President Bush Puts Health Of Americans With Medicare In Jeopardy While Overpaying Medicare Private Insurers" 02/18/08
photo courtesy of Andre Malerba: AMPhoto, used under this Creative Commons license

The Two Trillion Dollar Health Care Bill

The nation's health care bill for 2006 has just been released in the current issue of Health Affairs. While the rate of growth has slowed the total still comes to a record high of $2.1 trillion dollars!

According to analysts, medical expenditures increased 6.7% in 2006 -- slightly higher than the 6.5% increase in 2005 and double the rate of inflation. The increase in health care spending has been as much as four times the inflation rate in recent years.

Prescription drug sales climbed more than average, jumping $16 billion in 2006, 8.5% higher than in 2005. Approximately half of that increase is due to the Medicare Part D prescription drug plan, which covers many people who had no prior prescription coverage.

NPR's Joanne Silberner addresses the ramifications in her report on Morning Edition today (which you can listen to online):

Health care consultant Bob Lasziewski says it's like a ship sinking at a reduced rate from how it was sinking before. "Health care is still increasing at twice the rate of inflation," he says. "Five years ago, it was four times the rate of inflation."

But twice the rate of inflation is still unsustainable, he says, especially given what he sees for the future: doctors and hospitals joining together to resist insurers' cost cutting, and baby boomers continuing to age.

Paul Ginsburg, president of the Center for Studying Health Systems Change, warns that if an economic downturn occurs the cost of health care will take an even larger portion of paychecks as wages decline. In addition he sees the national obesity epidemic and changes in the health care marketplace as worrisome issues that could exacerbate the situation further.

The increase in prescription drug spending was part of an overall increase of $62 billion in Medicare expenditures, which topped $400 billion in 2006, up a staggering 18.7% from 2005. Steven Reinberg of U.S. News and World Report examines the situation:

Dr. Sidney M. Wolfe, director of the Health Research Group of Public Citizen, said he thinks the significant increase in expenditures in the Medicare drug program was due to the law that prohibits the government from negotiating prices with the drug companies, as well as a great deal of waste in administering the program.

"If you have a segment of health care completely out of control as in prescription drug prices for Medicare -- it's a strong argument why there should have been price controls and negotiated prices," Wolfe said.

In 2006, the U.S. population reached 300 million people. With medical spending at $2.1 trillion, that's $7000 for every man, woman, child, and undocumented worker in the country.

The burden of over 50 million uninsured Americans is distributed largely to insured Americans through higher insurance bills, higher medical bills, and higher taxes. When the cost of the uninsured is added, the average cost for insured Americans is $8500. Medical spending per insured American now averages $25,000 a year for a family of three. Clearly something needs to be done to restrain the growth in those numbers and/or get better care for such substantial outlays.

SOURCE: "Nation's Health Care Bill Hits All-Time High" 01/08/08
SOURCE: "Medicare Drug Plan Fuels Health-Care Spending: But Medicaid spending slowed for first time since its inception in 1965 " 01/08/08
SOURCE: "National Health Spending In 2006: A Year Of Change For Prescription Drugs " Jan/Feb Issue, 2008
photo courtesy of AMagill, used under this Creative Commons license