LDI Wellbeing Approach Class "Will Wellbeing Costs Cover American Producing?" A Perspective from Detroit.

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Framework develops rural essential care and gains territorial healing centers ... consideration is conveyed by regional standards as a house industry. Human conduct is not effortlessly designed ...
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LDI Health Policy Seminar "Will Health Costs Bury American Manufacturing?" A View from Detroit Mark A. Kelley, M.D. Chief Henry Ford Medical Group

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Henry Ford and Detroit - 1915

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Henry Ford and Detroit - 1915 Explosive development in auto generation 1913-15 300,000 autos yearly = 1/3 of the world\'s creation Recruited representatives from migrants and the South Large new plant on edges of town Highland Park – first significant sequential construction system

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Henry Ford\'s "Modern Approach" to Health Care Employed full-time doctors, some enrolled from the East Full doctor\'s facility administer to altered cost ($5/day = day by day wage); no protection Latest innovation – clinic composed by Ford engineers

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The Auto Industry Labor Movement Brief History 1930-1940 UAW established in 1930s by Walter Reuther After common distress, work sorted out in Big Three (Ford toward the end in 1941) Major issues; working conditions, time-based compensations

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The Auto Industry Labor Movement Brief History 1941-1950 Post war blast, rural extension, national roadway framework American auto ruled; rural living

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The 1950\'s – Labor\'s Heyday 1950 : GM gifts annuities and programmed wage modification 1955 : Ford consents to unemployment advantages 1956 : UAW makes medical coverage organization – Health Alliance Plan (HAP) Mid 1950s : Major strikes in steel, coal industry

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Henry Ford Hospital – 1950s Regional scholarly restorative focus, backing of Ford family Ranked #6 doctor\'s facility in the country Major national preparing focus "Go-To" place in Michigan

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Troubles in the Motor City 1965-1975 Urban uproars disable Detroit Invincible picture of vehicle industry harmed Racial polarization Massive populace movement to rural areas "Athens of the Midwest" broke

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Troubles in the Motor City 1965-1975 1973: Oil emergency requests fuel productive autos 1970s: American auto quality vacillates Honda, Toyota pick up business sector decent footing, by means of expense and quality

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Henry Ford Hospital Becomes a System "White flight" to rural areas cracks the city foundation Hospital recognized as arranging zone for National Guard Launches first "satellite" to pull in rural patients

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The 1980s: Save the Industry! Government bailout of Chrysler Corporation Focus on quality ("Job #1" at Ford) Young and alarmed workforce ("children of post war America") More collaborating with work and administration

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Big Three Approach to Health Care – 1980-90s Predictable expenses without work strife HMO prepayment appealing for: Population-based aversion Community-based premium Little cost to representatives Arms length association with social insurance, aside from in the working environment This technique, energized by oversaw rivalry worldview, functioned admirably—for some time

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HFHS Response 1980-99 Suburban rivalry HMO (HAP) obtained for access to UAW System develops rural essential care and secures local doctor\'s facilities Integrated conveyance framework as survival procedure

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OOPS!! Wellbeing Costs Are Out of Control (Again)

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GDP per Capita to % GDP Spent on Health Care: OECD Countries Source: Anderson, Health Affairs 22:2003

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Failure of Employer-Based Health Insurance Demand for decision vanquished HMO procedure Cannot confine supplier choice; social insurance conveyance divided Liability danger of limiting access Populations don\'t cost $$; high hazard patients represent 80% of costs Inability to check innovation development Source: Enthoven, Health Affairs, Spring 2003

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The Big Three\'s Health Crisis in 2003 Flat HMO premiums in 1990s impelled impermanent benefits Rebound of twofold digit premium expansion Unique issues: Aging workforce (normal age 45) Lifetime wellbeing scope past Medicare Higher actuarial danger workforce None of these issues are shared by universal contenders!

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18.2% 17.7% 18.0% 14.0% 13.5% 13.2% 13.0% 12.0% 11.7% 11.0% 10.4% 10.0% 9.0% 8.1% 8.0% 6.5% 5.7% 3.2% 2.1% 3.0% - 0.4% - 0.5% - 2.0% 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Premium Inflation is Significant HMO Premium versus HMO Cost Increases 1988 - 2006 Annual premium expands MD I/P Rx 1999 2000 2001E 2002E 2003E 2004E 2005E 2006E Source: Salomon Smith Barney Research gauges in view of information from CMS, Milliman USA, AAHP, KPMG.

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Big Three Pays $900 More for Health Care per Vehicle Reasons: Rich post-retirement advantages for maturing workforce Workers resign well before age 65 First $ scope for most hourly laborers No national arrangement on innovation or medications

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Big Three\'s Challenges Reflect Those of the Nation Big Three couldn\'t anticipate or control: enhanced future innovation and drug store multiplication American human services consumerism Big Three ought to have anticipated impacts of: the child of post war America workforce life time social insurance advantages rich drug store advantages These are the exceptionally same issues confronting Medicare!

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The Auto Industry\'s Position on Health Care - 2003 The business case for quality functioned admirably for the Big Three producers – medicinal services ought to take after! Certainties: There is waste in social insurance, uneven quality, little institutionalization Health watch over quality and cost Health consideration is conveyed locally as a bungalow industry Human conduct is not effectively built

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USA Health Expenditures Annual Percentage Growth Source: Levit, Health Affairs 21:2002

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Hospital Days/Capita 2000

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MD Visits/Capita 2000

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CT Scanners per Million Pop., 2000

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Angioplasties/100,000 1999

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Pharmaceutical Costs per Capita-2000 Source: Anderson, Health Affairs 22:2003

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2. Social insurance costs an excessive amount of and suppliers drive the inflation Facts: UAW contracts are excessively rich Hospital and drug store costs have commanded expansion U.S. specialists procure moderately the same western partners Utilization of wellbeing administrations same as other western countries

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UAW Public Position on Health Care Etiology of issue: Administrative expenses of private protection For benefit segments of the business "Restorative weapons contest" Solution: National health care coverage and approach Positions: Support drug store advantage Oppose wellbeing vouchers/characterized commitments Support solid CON handle Source: UAW site 2003

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You be the Quarterback #1 What might be your prompt medicinal services technique on the off chance that you were: The UAW the Big Three

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Features of 2003 UAW Contract UAW Gains: 2-3% wage increment (past COLA) most recent two years of agreement Expanded therapeutic scope; retirees secured Pension increments for future retirees Unionize suppliers

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Features of 2003 UAW Contract Company Gains: Bonuses rather than compensation builds (saves the base) No expansions for current retirees Permission to offer/close plants Tighter remedy control

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UAW Medical Benefits – Contract History 1993: Fully paid advantages, no new co-pays 1996: Drug co-pay up from $3 to $5. new individuals must enlist in HMO for a long time 1999: Expanded preventive consideration; compulsory HMO enlistment for a long time 2003: Expanded preventive consideration; three level medication co-pay; $10 office co-pay; HMO prerequisite dropped Source: Detroit Free Press 9/19/2003

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Henry Ford Health System\'s Perspective Financial Crisis 1998-2001 in view of capitation and level premiums Stability with twofold digit premium ascent Dilemma of owning a HMO Autos need to beat wellbeing expansion (by one means or another) Changing Delivery Tactics HMO worldview constrained Kaiser mindset Move to PPO permits equalization of AMC and conveyance framework AMC can\'t make due on capitation – no edge

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Henry Ford Health System\'s Perspective Politics Underfunded, inadequately oversaw Medicaid Failing security net in Detroit Auto industry controls innovation through CON Recent enactment for HFHS rural doctor\'s facility

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Henry Ford Health System\'s Perspective Patients Clueless about advantages (aside from drug store) Insurance scope always moving Two salaries normal Quality No advancement in paying for quality (in spite of Leapfrog) Early examinations about unending sickness administration Autos view medicinal services as a HR issue

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You be the Quarterback #2 As the auto organization executive accountable for social insurance, what is your long haul methodology to take care of the human services issue?

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What are the Options for the Big Three? Lessen Health Care Costs Curb social insurance innovation multiplication Local: CON, HMOs as slow down strategies National: No footing aside from in Medicare Push more cost choices to workers PPO\'s versus shut system Higher co-pays (ERs) Tiered drug store advantages Other moves – troublesome with national stage Reduce authoritative costs/waste Chronic infection administration May see significant bosses adjust

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Health Care\'s "Shut Box" . Representative Health $$ Health Providers Company Govt

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What are the Options for the Big Three? Entryway for National Health System/More Medicare Benefits Strong accentuation on solutions Aggressive methodology constrained by: Lack of political will in Washington Threat of expanded duties Other Tactics: Leverage neighborhood providers– just works in one industry town Hit UAW contract harder Restrict future advantages

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What are the Options for the Big Three? Doomsday Scenario: Move fabricating seaward Developing nations have lower costs (for everything) American interest for low value favors seaward Detroit confronts same emergency as Boston and NYC did in 1900s Irony: For Toyota, "seaward" is American South

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HFHS Long Range Tactics Work to Curbs Costs when Possible Chronic infection administration (perhaps) Educate patients about buying decisions Re-engineer hone (like assembling) To enhance access Reduce revamp (quality and correspondence) Use elective techniques (open

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