Welcome to the Illinois Health Matters Blog

Welcome to the Illinois Health Matters Blog. Our blog discusses various topics around how health care reform is affecting the people of Illinois. We present a variety of different perspectives from health care experts, both from our state, and nationally. For more information please visit IllinoisHealthMatters.org.

Monday, October 15, 2012

Healthcare by the Numbers

In the United States in 2012:
  • Annual health care costs: $2.7 trillion
  • Percent of healthcare costs linked to individual behaviors: 70%
  • Cost of tobacco, alcohol, soda, illicit drugs, unsafe sex, sedentary lifestyle, etc: $1.89 trillion.
The numbers tell a story—of how much money we can save on medical spending if as a society, we find ways to change individuals’ risky health behaviors.

Fee for service reimbursements to doctors:

  • 5 minute cardiac stent: $1500
  • 45 minute behavioral counseling: $15
Current reimbursements favor intervention, not prevention. We pay big bucks for sick care not health care.

Average annual salary:

  • Interventional cardiologist: $320K
  • Family physician: $168K
  • Nutritionist: $53K
  • Athletic trainer: $45K
We need to fairly reimburse the care that will keep people well. We need less high tech and more high touch interventions to empower people to change their lifestyles. We need more athletic trainers, yoga instructors, exercise physiologists, nutritionists, and dietitians, working together with the medical team to promote healthy behaviors. As a society, we need to make healthy choices easy choices.Simplify food labeling.Subsidize fruits and veggies instead of commodities like corn. Ensure the creation of bike trails and city parks.

“We don’t need to spend ourselves into poverty on health care,” cautioned a speaker in the documentary film Escape Fire. “We just need to do it differently.”


We need to reimburse health and wellness instead of more-more-more medical care. We need to pay fee for value instead of fee for service.

If health care inflation applied to the rest of the economy from the 1950s to today, food costs would be:

  • A dozen eggs: $55.
  • A gallon of milk: $48.
We can’t afford the status quo in the way we spend our healthcare dollars. We need to value health, and shift from desperate medical interventions to stave off death to gentle lifestyle changes to promote health. Together, we can pay for the powerful, simple, low tech low cost interventions that motivate patients to change their risky health behaviors, and stop the runaway inflation of our medical costs.

By Dr. Kohar Jones 
This post originally appeared on the Doctors for America blog

Tuesday, October 9, 2012

Affordable Care Act ("Obamacare"): Things Businesses Should Know

Either as an individual or the owner of a small business, you may be affected by the Affordable Care Act tax provisions. The Affordable Care Act (also known as Obamacare) was signed into law by President Obama on March 23, 2010, and recently survived a challenge in the United States Supreme Court. While the main focus of the Affordable Care Act is health reform legislation, there are several tax provisions that will take effect as different parts of the legislation are implemented. The following is an outline of some of the important tax-related consequences of the Affordable Care Act that have already been implemented and some information for what you can expect as the legislation is fully rolled out between now and 2014.

In addition to making sweeping changes to the U.S. health care system, the health care reform legislation added a number of new taxes and made various other revenue-increasing changes to the Code to help finance health care reform.

One of the provisions that were enacted in 2010 was the Small Business Health Insurance Tax Credit. For tax years from 2010 through 2013, the maximum credit is 35% of health insurance premiums paid by small business employers. A small employer is one that has fewer than 25 full-time equivalent employees, pays an average wage of less than $50,000 a year, and pays at least half of the employee’s health insurance premiums. The credit is scheduled to increase to 50% for small business employers after 2013. However, in tax years that begin after 2013, an employer must participate in an insurance exchange in order to claim the credit, and other modifications and restrictions on the credit apply.

In 2011, insurance companies were required to prove they spent at least 80% of the premium payments on medical services, rather than on things like advertising and executive salaries. Those that didn’t were required to provide rebates to policyholders. You may have seen letters, or even rebate checks, hitting your mailboxes recently stipulating to these facts. These rebates may be taxable income to you if you previously received a tax benefit from a deduction for the insurance premiums paid. Your tax advisor should be consulted.

In 2012, employers are required to disclose the aggregate cost of applicable employer-sponsored coverage on an employee’s annual Form W-2. Reporting is for informational purposes only. However, for 2012 Forms W-2 (and W-2s issued in later years, unless and until further guidance is issued), an employer is not subject to reporting for any calendar year if the employer was required to file fewer than 250 Forms W-2 for the preceding year.

Upcoming changes in 2013 include an increase in the deduction for medical expenses. Under prior law, medical expenses had to exceed 7.5% of adjusted gross income in order to be deductible for regular tax purposes, and 10% of adjusted gross income for Alternative Minimum Tax (AMT). The Affordable Care Act increases the regular tax limitation to 10% of adjusted gross income for those who are under the age of 65, bringing it in line with the AMT limitation.

The Medicare Surtax will also kick-in in 2013. For single taxpayers making more than $200,000 and married filing jointly taxpayers making more than $250,000, an additional 3.8% Medicare tax on dividends, capital gains, and rental and royalty income will apply. The KOS Bottom Line Bulletin September 2012 edition included an article titled “Get Ready for the Medicare Surtax in 2013.” To read this article, click here or go to the KOS website at www.koscpa.com/announcements.

If you contribute to a Flexible Savings Plan that your employer provides, beginning in 2013 the amount you may contribute annually to that plan will be limited to $2,500. This is down from the $5,000 prior limitation and will be adjusted annually for inflation.

In 2014, the state-run health exchanges will be set up and the penalties for individuals who do not purchase insurance will kick-in. The penalty will increase over the three year period from 2014 to 2017 as follows:

2014 – The greater of $95 or 1% of income.
2015 – $325 or 2% of income.
2016 – $695 or 2.5% of income

Businesses with 50 or more workers will be subject to a $2,000 per worker penalty if they don’t offer health insurance. Those that do receive a tax credit of 50% of the premium cost.

Nearly all businesses will have to make changes in order to comply with the Affordable Care Act. Do you have questions about how this act affects you? As an employer, are you aware of what changes you need to make? If so, you should attend our breakfast seminar on November 14 titled “What Does the Affordable Healthcare Act (AKA “Obamacare”) Mean for Employers?” This FREE program takes place from 8:30 until 10:30 a.m. at the KOS office at 1101 Lake Cook Road, Suite C in Deerfield, Illinois. To reserve a space, contact Kelly Wallaert at 847.580.4100 or kwallaert@koscpa.com.

Christie Butcher, CPA, MST
Manager, KOS Public Accountants

(This article was originally posted on the Kessler Orlean Silver website here)


Friday, October 5, 2012

The Seven Things We Learned From Escape Fire

 
We hope you make time to see the documentary, Escape Fire, which premiered tonight in cities across the US. Thank you to those of who joined us for the Chicago screening and lively discussion afterwards.

For those of you who haven’t seen it, the film tackles the American healthcare system, a subject that carries with it decades of debate and misinformation.

Recent media attention has focused on partisan politics, rather than what is broken in the system and how best to move forward. There is wide agreement that something has to be done, but until now there hasn’t been a unbiased lens to view the problem. Escape Fire finally provides that lens. The film “seeks to explore possibilities to create a sustainable system for the future and to dispel misinformation in order to create a clear and comprehensive look at healthcare in America."


Below are the seven things or “big ideas” about the American health care system captured by this film. Many of these things you may have already heard about or experienced yourself; however, seeing them packaged in 90 minutes of intense storytelling through the eyes of patients, providers, the military and business leaders makes the messages hit home loud and clear.


After you see the movie, tell us what you think. What did you learn about health and healthcare? What new questions came up for you as you watched? What changes in attitude or behavior are being sparked and inspired by the film? What can you do now or in the future to make a difference in your own health and healthcare as well as the health and healthcare of those around you? Drop us a line at info@illinoishealthmatters.org and let us know!

Barbara Otto, CEO

Health & Disability Advocates


Seven Things


1. PAYING MORE, GETTING LESS


The average per capita cost of healthcare in the developed world is $3,000. In the U.S., it’s around $8,000. As a country, we spend about $2.7 trillion on healthcare annually, and about one-third of healthcare costs, roughly $700 billion, do not improve health outcomes. In fact, for the first time in the history of our country, life expectancy is going down for many disadvantaged Americans. The high price of healthcare affects all of us, even if we’re already covered by health insurance. As costs spiral out of control, individuals are the ones who make up the difference, be it through higher premiums or taxes. The first step in changing the system is understanding that the current model is unsustainable.



2. TREATING THE WHOLE PERSON

Most doctors only have time for quick fixes, for putting Band-Aids on the problem. We need the healthcare system to provide incentives for leading healthier lifestyles, changing our diets, and being open to holistic methods of healing that can address the body and the mind — in other words, the whole person.


3. PREVENTING DISEASE

Roughly 75% of healthcare spending goes to treating preventable diseases. That’s a lot of unnecessary money and a lot of unnecessary illnesses. For too long, the American healthcare system has emphasized tests, screening, and awareness of disease. While these practices
might lead to earlier detection, they’re no match for true disease prevention. We don’t have to wait for disease to set in to live healthier lives. If we can make fresh food as cheap as processed food, and if we can live more active lives, we can curb disease before it ever has a chance to strike. But we need support: from our workplaces, from our communities, and from our healthcare system.


4. OVERMEDICATION

We spend $300 billion on pharmaceutical drugs. That’s almost as much as the rest of the world’s medicine spending combined. Prescription drugs play a vital role in helping patients who need them; however, too many drugs are being marketed to patients who don’t need them, leading to situations where the drug has the potential to do more harm than good. The military recognizes the problem, and they’re trying to wean soldiers off their drugs by putting more emphasis on alternative approaches: physical therapy, exercise, yoga, and meditation. They are preaching patient-centered care that better meets the needs of injured veterans.



5. OVERTREATMENT

For patients, “more” doesn’t necessarily mean “better.” When it comes to our health, recent studies show that “more” can actually mean “worse.” The reason? Any time we go into a hospital, we take on risk. Medical errors do happen. Harmful drug interactions do occur, especially when so many doctors and nurses are giving you care. A recent study showed that as many as 187,000 people a year
die from medical error or hospital-related illness. If that were an official cause of death, it would be the third largest killer in the U.S.


6. AN ENTRENCHED SYSTEM

Pharmaceutical companies, medical device manufacturers, hospitals, and insurance companies are profiting from our declining health. Some of the $2.7 trillion dollars we spend on healthcare every year goes to supporting lobbyists and politicians in Washington who maintain business as usual. To get back on track, we need to remember that healthcare is about more than just making money. It’s about making Americans healthier.


7. REIMBURSEMENT

“When you reward physicians for doing procedures instead of talking to patients, that’s what they’re going to do - procedures.”
- Dr. Leslie Cho, Cardiologist, Cleveland Clinic 


In general, the system rewards higher-tech, higher-cost procedures over low-cost, high-touch treatments. Primary care physicians aren’t paid to have long conversations about nutritional counseling or exercise regimens. Most alternative therapies aren’t covered. We need to shift payment to reward everyone in the system for providing the right kind of care rather than more of the wrong kind of care. If we can start reimbursing doctors and hospitals to keep patients healthy or, better yet, keep Americans from ever becoming patients, then we’ll see a rapid change in the way we give care.

[These "Seven Things" were adapted from the Escape Fire Screening & Discussion Guide. You can use this guide to hold your own screening - at your workplace, in your community, in your schools or at home.]