Live blogging from HME Business Summit: Buckle your seat belts
Professor Larry Van Horn, a self-professed "bitter evil little man," on the future of Medicare.
Van Horn just asked attendees in the room to raise their hands if they would have voted for healthcare reform. A few hands. How many would not have voted for reform? A lot of hands.
Health care is 17.5% of our GDP. Van Horn says: "When health care becomes 22%, it crowds out national defense. That should freak you out a little bit. The Canadians will be coming."
The current Medicare trustees report states we are $37 trillion short on our current obligations. Van Horn says, "Medicare is everything...We're in a boat load of hurt. This is what we need to address, because we can't afford it."
The average Medicare beneficiary is contributing $9,443 (based on the average wage for a male in each of the 42 years he would have paid). "What does that get you? A quarter of a knee? ($9,443) is a tiny number to what this program is expending. You can't have this much money coming in and this much money going out."
Van Horn's estimate is that healthcare reform will be a $1.36 trillion spend in the next 10 years.
Van Horn says: "I've got physicians across the United States that are ditching Medicare."
Van Horn is a proponent of taxing health plans. He says: "All of our compensation in the form of health benefits is tax exempt. Let's say it's 30%. The value of that tax exemption we get for buying tax benefits is in excess of $250 billion per year. It's the single biggest deduction in the United States. It makes us all consume too much health insurance. (If we taxed health benefits), we'd be done. Easy. The math of this is profoundly simple. There's not political will to do that, though."
Healthcare reform will result in an increase in access (or perceived access). But Van Horn says he's not sure there's an ability to meet the increase in demand.
Van Horn raises an interesting analogy between health insurance and car insurance. He says lifestyle choices represent 40% of a person's health status. Yet people who make bad lifestyle choices like refusing to participate in a company-sponsored health and wellness program aren't penalized in the form of paying more for their health insurance. When people make bad lifestyle choices like getting a speeding ticket, they get points on their driver's record and their car insurance premiums go up. Van Horn says, "Seeing a relationship between my actions would be beneficial and everything we do keeps moving away from that."
Van Horn says, "The market is moving more toward increased consumer price sharing."
Van Horn on dealing with Medicare reimbursement: "Right now our providers are uncomfortable talking about costs. Cost is the game. The CEO of our medical center came out two years ago and told 800 people, 'We at the medical center have to be able to operate profitably on Medicare reimbursement alone.' They're trying to get themselves dialed in to meet that structure."