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Healthcare Napkins All

Dan Roam
Dan Roam

This contains the entire 4-napkin health care series in one file. It makes more sense to read this one now than the others since it is the complete set all in one file.

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2009 © Digital Roam Inc.
Dan Roam                   dan@danroam.com   www.thebackofthenapkin.com
Napkin #1
Health care in America is a business
governed by a simple equation:




   I get sick.   My Doc fixes me.   My Doc gets paid.
                                                        3
In the last several years there’s been a shift
in the equation:




     Insurance jumped in between me and my doctor.
  Insurance now rations my treatment and health costs.
                                                         4
That happened because health care is
really two different businesses:




There’s the business      … and then there’s
of providing health…      the business of
                          providing payment.
                                               5
I’m in the middle.




             Me, my health, and my money
         sit in between these two businesses.
                                                6

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Healthcare Napkins All

  • 1. 2009 © Digital Roam Inc. Dan Roam dan@danroam.com www.thebackofthenapkin.com
  • 3. Health care in America is a business governed by a simple equation: I get sick. My Doc fixes me. My Doc gets paid. 3
  • 4. In the last several years there’s been a shift in the equation: Insurance jumped in between me and my doctor. Insurance now rations my treatment and health costs. 4
  • 5. That happened because health care is really two different businesses: There’s the business … and then there’s of providing health… the business of providing payment. 5
  • 6. I’m in the middle. Me, my health, and my money sit in between these two businesses. 6
  • 7. When I’m healthy, insurance loves me: I pay premiums that insurance collects, and they don’t have to pay anything back. 7
  • 8. When I’m sick, providers love me: Through my insurance, I pay Doctors, hospitals, and pharma for their products and services. 8
  • 9. These two businesses hate each other. (Ultimately, I’m the only source of money for both.) 9
  • 10. They have conflicting interests and fight over my money. (It’s a zero-sum game.) Providers like to prescribe Insurers charge more new and expensive (and allow less) to keep treatments to keep money money flowing in. flowing in. 10
  • 11. As the providers and insurers fight, my costs keep going up. (Bankrupting me and my employer.*) I’m the only one adding money INTO the equation, so I get squeezed. *more on this later. 11
  • 12. Now government steps into the picture: Government is worried: people and businesses are both too squeezed. 12
  • 13. Government thinks most of the changes are on the insurance side: Almost all legislation being debated impacts the insurance side of the equation. 13
  • 14. Next napkin: What health care reform is really about. (It isn’t health care.) 14
  • 15. 2009 © Digital Roam Inc. Dan Roam dan@danroam.com www.thebackofthenapkin.com
  • 17. Remember how all the reforms are focused on the insurance side? All the big changes the White House is demanding are directed towards the private insurance companies. 17
  • 18. The White House should call it what it is: If the White House wins, it will be the private insurance companies sitting on the outside looking in. 18
  • 19. Is that fair? The only value private insurers bring to the equation is to keep costs down for members. (And pay shareholders. Remember: this is a business.) 19
  • 20. Is that fair? YES. Without a doubt. Private insurers have failed miserably at keeping costs down. If they can’t manage member costs, why do they exist? 20
  • 21. Private insurers had a remarkably profitable 2008. (Yes, in the recession.) 2008: Detroit dies.Wall Street tanks. 9.5% unemployed. Private insurance does just fine. 21
  • 22. Is anybody else being asked to reform? Yes, but not so much: Me: Providers: Take better care of myself. Be more efficient. Try not to get sick. Order fewer procedures. Don’t get fired. (Ha!) Revamp malpractice. (how?) (Pharma is being asked to pay an $80 billion gift.) 22
  • 23. In the end, who will pay for any reform? Me. Assuming I’m presently employed and covered, I’m the only player putting money into the system. 23
  • 24. And where will the money I pay go? (There are 3 possibilities.) 1. Increase 2. Fund new 3. Fund a new profits for non-profit government Private Insurers. insurance insurance plan (no exchanges. profit allowed). Yes, it is that simple. 24
  • 25. Next napkin: What plans are really on the table? (And what is just hype?) 25
  • 26. 2009 © Digital Roam Inc. Dan Roam dan@danroam.com www.thebackofthenapkin.com
  • 28. Today, we have a purely business-driven insurance model. Today, health care in America is a profit- oriented business where costs are mainly controlled by restrictive private insurers. 28
  • 29. There are 3 options on the table: #1 is a less restrictive private model. The first option is less restrictive private insurance. Everyone must be covered by a private plan, and no one may be excluded because of pre-existing conditions. 29
  • 30. #2 is private insurance (like today) in competition with “co-ops”. Restrictive private insurance remains for those who want it. Others must buy insurance through private, non-profit co-ops (or ‘exchanges’). 30 2009 © Dan Roam THE BACK OF THE NAPKIN all rights reserved
  • 31. #3 is private insurance competing with government-managed insurance. Restrictive private insurance remains for those who want it. Others must buy insurance through a government managed program. (Like a really big Medicare.) 31 2009 © Dan Roam THE BACK OF THE NAPKIN all rights reserved
  • 32. Who is behind each? The conservatives didn’t The White House want any change, but they wanted this, but now know change is coming. knows it won’t get it. 32
  • 33. Which bills promote which? 33
  • 34. The private insurance industry doesn’t like any of these options (for good reason). Insuring everyone Competing with Government means insurers’ co-ops means loss prices will costs go up. of customers who undercut private can pay. prices. 34 2009 © Dan Roam THE BACK OF THE NAPKIN all rights reserved
  • 35. Insurance sees the first option as the least bad*, so they’ve poured money into sinking the others. * Then again, if they play this right, they could make $trillions! 35
  • 36. Coming on the 4th napkin: Business and politics aside, what do the options mean to me?
  • 37. 2009 © Digital Roam Inc. Dan Roam dan@danroam.com www.thebackofthenapkin.com
  • 39. Quick review: 3 insurance options are on the table: All 3 require universal coverage for all citizens. The difference is the amount of government-backed coverage. 39
  • 40. Note: when the debate started, there was a 4th, all-government option. Reps. Conyers (D-MI) and Kucinich (D-OH) proposed H.R. 676, an all-government national health insurance plan. 40
  • 41. This “single-payer” option has been removed from the debate. The White House has pulled support. H.R. 676 is effectively dead. 41
  • 42. At the end of the day, what do the 3 options mean to me? 42
  • 43. 1) If I’m presently employed and insured, all options will cost me more. Higher premiums Indirect taxes Direct taxes. as private insurers’ through loss of costs rise to cover untaxed more people. insurance benefit. 43
  • 44. So why reform? Because if we do nothing, it’s going to cost even more. People concerned that reforms will bankrupt the USA need to recognize that health costs are already bankrupting us. 44
  • 45. The additional costs are unknown. All I can choose is how my money will be taken from my pocket. I’ll pay higher I’ll lose a presently I’ll pay more private insurance untaxed employment direct taxes. premiums. benefit. 45
  • 46. 2) A key issue to debate is whether I will pay directly or through my employer. Switching the tax benefit to a tax credit will give the government an additional $250 Billion per year with no impact on my compensation. 46
  • 47. 3) In all cases, my actual health will at least not get worse. All plans let me All plans let me All plans will help keep my existing keep my existing more people be coverage. providers. covered. 47
  • 48. Although today’s debate is really insurance reform, there are issues on the other side: Although they’re not core to today’s insurance debate, we need to address cost-cutting options on the provider side. 48
  • 49. In the end, how we each decide to support reform will be guided by 3 questions: Should health be Change is coming; Will I be better a profit-driven how do I want to off shouting or business? pay for it? thinking? 49
  • 50. Dan Roam dan@danroam.com www.thebackofthenapkin.com
  • 51. Dan Roam is author of the international bestseller "The Back of the Napkin: Solving Problems and Selling Ideas with Pictures“, the ‘best innovation book of 2008’ according to Anthony Jones is a health care BusinessWeek and Fast Company. and life sciences marketing strategist and founder of Next Dan has helped leaders at Microsoft, Wal- Lifesciences. Over more than 20 Mart, and the United States Senate solve years, he has held senior complex problems through visual thinking. management positions at Scient, Dan and his whiteboard have been featured Deloitte Consulting and Reuters on CNN, MSNBC, ABC News, and NPR. as well consulted to several Fortune 1000 and emerging market companies. Dan Roam dan@danroam.com www.thebackofthenapkin.com C. Anthony Jones, M.D. www.digitalroam.typepad.com tony@nextlifesciences.com