Health Care Systems in the world

Goals of this module• After this module, participants should be able

to: – Describe the structure of the US health care

system.– Describe how the US health care system is

funded.– Discuss current and future challenges to the

structure and funding.– Find information regarding the health care system

Is this pertinent to ME?• Survival in “real world” practice

– “You eat what you kill…..”– Physicians need to understand the various

payment and care systems to be able to keep their practices solvent.

– Ignoring the “business of medicine” can be fatal to medical practices

Is this pertinent to ME?• The Ongoing/Impending Problems

– “Access”/”Rights”/”Justice”/”Fairness” All have very different meanings to different people. For example, is access to health care a “right”? Is it

given by the constitution? Is it a trans-national “human right”?

Need to be comfortable fielding a rational response These concepts are beyond the scope of the

module, but these terms are used to describe aspects or deficiencies in our system.

Is this pertinent to ME?• If you care about nothing else…..

− Federal & State governments face a nasty bill. − Ultimately, scarce tax revenue is allocated for a

variety of causes. − This tax revenue comes from us, the taxpayers.

A snapshot of some of the problems…

• Quality of care– U.S. residents receive about 50% of care that is

recommended1. Is this good? Acceptable?

• Individual expenditures– By 2025, average family premium will EQUAL median

income2

– This means 50% of Americans will spend EVERY dollar they

make on a health insurance policy. 1McGlynn EA, Asch SM, Adams J et al. The Quality of Health Care Delivered to Adults in the United States. NEngl J Med. 2003;348:2635-2645.

2Sager A, Socolar D. Data brief No. 8: Health costs absorb one-quarter of economic growth, 2000-2005. Boston, MA: Boston University School of Public Health, 2005

A snapshot of some of the problems…

• National expenditures– 16% of GNP is health care1

– 25% of economic growth between 2000-20051

1Sager A, Socolar D. Data brief No. 8: Health costs absorb one-quarter of economic growth, 2000-2005. Boston, MA: Boston University School of Public Health, 2005

40%

15%5%

10%

30%

BehavioralPatterns

Social Circumstance

GeneticPredisposition

"Shortfalls" in Health Care

Environmental Exposures

Leading Causes of Premature Deaths

McGinnis JM et al. The case for more active policy attention to health promotion. Health Affairs 2002:21(2);78-93. Project Hope

Actual Causes of US Death - 2000

435

400

8575

5543

29 20 17

0

50

100

150

200

250

300

350

400

450

500

Tobacco Poordiet/inactivity

Alcohol Microbialagents

Toxic agents Motor Vehicle Firearms Sexualbehavior

Illicit drug use

(Tho

usan

ds)

Mokdad AH, Marks JS, Stroup DF, Gerberding JL. Actual causes of death in the United States, 2000. JAMA. 2004;291:1238-1245.

Actual Causes of US Death - 2000

Leading causes of death

• How do physicians address these causes?• Do you expand office hours to see all of these

patients? • Maybe thinking outside of the ‘one-to-one”

clinical encounter is appropriate? Why or why not?

“The health care System”? – What it DOES…

One PerspectiveProvides services:

• Somatic – medical, dental

• Mental Health – counseling

• “Complementary/Alternative”

Another Perspective•Primary Care: disease PREVENTION & health promotion

− Vaccine administration, prenatal care

•Secondary Care: disease DETECTION

− Breast cancer, hypertension

•Tertiary Care: disease TREATMENT

− Pneumonia, major depression

The health care System – 5 Main Components

1. Education and Research: professional schools2. Suppliers : drugs, equipment3. Insurers:

− Government (Medicare, Medicaid, CHIP, VA)− Commercial, self-insured employers, Blue

Cross/Blue Shield (BC/BS)4. Payers: State agencies, BC/BS, commercial

insurers, “self-pay”5. Providers: (Next slide)

Steinwachs, D. The American Health Care System: Introduction to Health Policy (Class Notes, Unpublished). 2002.

The health care System – Provider Groups

• Preventive Care: Primary Care Providers (PCPs), state/city health departments

• Primary Care: M.D./D.O., P.A., C.R.N.P– Generalist-specialist continuum

some specialists provide primary care, some generalists provide advanced services - OB, colonoscopy

• Sub acute Care – Intermediate care, ambulatory surgical centers

Steinwachs, D. The American Health Care System: Introduction to Health Policy (Class Notes, Unpublished). 2002.

The health care System – Provider Groups

• Acute Care – Hospitals, “Urgent Care”• Auxiliary Services – Lab, pharmacists• Rehabilitation Services – Home Health Nursing,

Nursing Homes• Long-Term Care – Nursing Home, Assisted living• Integrated Care – Managed care organizations• Complementary/Alternative Medicine

Steinwachs, D. The American Health Care System: Introduction to Health Policy (Class Notes, Unpublished). 2002.

Public Health

health care

System

Environmental Health

Biostatistics Nutrition PhysicalFitness

Pharmacology

“Basic Sciences”

Inpatient Care

Cancer

“Disparities”

?

Relationship of “Public Health” to “health care System”

Health - Conceptual Framework

U.S. Department of Health and Human Services. Healthy People 2010. 2nd ed. With Understanding and Improving Health and Objectives for Improving Health. 2 vols. Washington, DC: U.S. Government Printing Office, November 2000.

With all that we spend, focus, and train on “health care”, how do we address the “health” part?

Government

Individual

3rd party payer

“Blue Cross/Blue Shield”

Employer-based coverage

“IBM”

health care entity

DoctorHospitalPharmacyAlternative med.Mental Health/Counseling

“Me

dic

aid

HM

O”

“In

div

idu

al c

ove

rag

e”

“Uninsured”

“Medicare”

A lot of money is exchanging hands. Who is accountable to the individual?

Health - Conceptual Framework

Kaiser Family Foundation, statehealthfacts.org - “Health Insurance Coverage of the Total Population, U.S. (2004)” - downloaded May 4, 2006

United States: Health Insurance Coverage of Total Population, U.S. (2004)

Kaiser Family Foundation, statehealthfacts.org - “Health Insurance Coverage of the Total Population, U.S. (2004)” - downloaded May 4, 2006

United States: Health Insurance Coverage of Total Population, U.S. (2004)

Employer-based coverage is the most common type of health insurance provider in the U.S.

This chart is a generalized overview, because there are many exceptions and overlaps: • People can be "dually-eligible” - Medicare-Medicaid patients (generally poor, elderly) • Federal employees who get government- purchased health care that is technically “employer-based.”

Employer-Based and Individual

• 53% - Employer-based, 5% individual-purchased– Dependants/spouses– Government employees included

• Most will have DIFFERENT plan in 2 years– Little incentive to care for individual’s long-term

health since will probably be insured by someone different in near future.

• Avg. monthly premium – geographic variation– Single - $~150.00– Family - $~280.00

“Update on Individual Health Coverage - Updated” (#7133-02), The Henry J. Kaiser Family Foundation, Aug 2004

Employer-Based and Individual• Tax policy favors employee-based benefit

– Companies that spend money in employee health benefits have incentive.

– They do not pay tax on the “profit” of the money spent on health care benefits.

• “Adverse selection”– People who know they are sick are more likely to

buy health insurance. – Makes insuring difficult– Leads individually-purchased health care to be

MUCH more expensive than what an individual would pay for a “group rating” employer based health care.

“Update on Individual Health Coverage - Updated” (#7133-02), The Henry J. Kaiser Family Foundation, Aug 2004

Medicare – “Elderly”

• 42 Million recipients – $325 Billion in 2003• Federally-funded• > 65 years old if “qualified”

– Disabled or in need of hemodialysis and eligible for social security

• 13% of Federal budget

“Medicare at a Glance,” (#1066-08), The Henry J. Kaiser Family Foundation, Sept 2005

Medicare – “Elderly”• Parts A, B, C, D

– A: Hospital and Skilled nursing care– B: Outpatient, Physician visits when medically

necessary– C: “Medicare Advantage” plans, approved by

Medicare but run by private companies. Provides A, B & D benefits.

– D: Drug plan. Voluntary and not automatic.

• Future: rising health care costs + aging population = situation for concern.

“Medicare at a Glance,” (#1066-08), The Henry J. Kaiser Family Foundation, Sept 2005

“Medicare at a Glance,” (#1066-08), The Henry J. Kaiser Family Foundation, Sept 2005

“Medicare at a Glance,” (#1066-08), The Henry J. Kaiser Family Foundation, Sept 2005

Increasing elderly population, decreasing numbers of workers to support them.

Medicaid – “Poor”• 52 million recipients - $266 Billion in 2003• Federal-State Partnership• Eligibility – varies by State. Generally poor +

children, parents of dependent children, pregnant women, disabled– “Dual eligible” with Medicare – chronically ill, long-

term care

• Covers most clinical services + Rx

“The Medicaid Program at a Glance,” (#7235), The Henry J. Kaiser Family Foundation, Jan 2005

Medicaid – “Poor”• May contract as “Medicaid HMO” with non-

government entity• Future – more cost limiting. • Possibilities:

– Prescription drug limits – Utilization review: evaluate services for medical

necessity– Prior review and authorization for referrals

“The Medicaid Program at a Glance,” (#7235), The Henry J. Kaiser Family Foundation, Jan 2005

“The Medicaid Program at a Glance,” (#7235), The Henry J. Kaiser Family Foundation, Jan 2005

The Uninsured• Over 45 million in 2004• Coverage = services. No coverage = no

services.• “But can’t they just buy insurance?” ??

– Employer size as predictor – Large firm – 98% offer coverage, small firm – 59%

– 8/10 come from working families– Price sensitive to premiums AND utilization

• When price goes up, people decreasingly use that resource. People get sicker and sicker before their medical problems are addressed.

“The Uninsured and Their Access to Health Care,” (#1420-05), The Henry J. Kaiser Family Foundation, Dec 2003

Most uninsured are in working families, but in jobs without benefits.“The Uninsured and Their Access to Health Care,” (#1420-05), The Henry J. Kaiser Family Foundation, Dec 2003

31

“The Uninsured and Their Access to Health Care,” (#1420-05), The Henry J. Kaiser Family Foundation, Dec 2003

Usually falls to the government to reimburse the provider, if they get reimbursed at all.

Leads to price sensitivity: The higher the cost, the less likely the service will be utilized.

“The Uninsured and Their Access to Health Care,” (#1420-05), The Henry J. Kaiser Family Foundation, Dec 2003

Anderson GF, Hussey PS, Frogner BK, Waters HR. Health spending in the United States and the rest of the industrialized world. Health Aff (Millwood ). 2005;24:903-914.

Per Capita Health Spending, 2002

Each year, the US spends roughly 2x the amount on health care as the next most spending country

Summary

• Health, itself, is not simply a function of health care, but rather a complex interplay of genetics, behavior, social circumstances, and environmental exposure.

• The structure and function of the U.S. health care system is tremendously complicated, with a myriad of stakeholders advocating policies in their self-interest.

• Physicians must acknowledge our society’s need for them to be leaders and agents for change in this complicated system.

Massachusetts Health Care Reform Plan

• Passed April 12, 2006• Aims to provide universal health care coverage to state

residents• Requires all adults to purchase health insurance

− Modeled on mandatory auto insurance law• Low cost options for health care

− Commonwealth Care Program Government subsidies provided to ensure affordability of insurance.

− Commonwealth Choice Plans offered by insurance companies, approved by the state, with

options for those that don’t qualify for Commonwealth Care.− MassHealth

Expansion of Medicaid to make more children eligible, raise enrollment caps for adults.

• Employers with 11 or more employees required to provide a group health plan and pay a fair share of monthly premiums, or pay yearly contribution per employee to the Health Safety Net Trust Fund.

Looking up Information on the health care system

• Different types of Information:− Background

− Gray literature

− Statistics

− Research and journal articles

− International health care resources

Background• Resources that offer descriptive and consumer level

information on various health care issues and topics• MedlinePlus Health System topics

− Explanations geared to consumers, links to further information and resources

− Topics such as how to find a doctor, home care, health fraud

• Medicaid/Medicare official sites− Explanations of different services

• KaiserEDU.org− From the non-profit Kaiser Family health care policy institute− Tutorials covering basics like Medicare/Medicaid− Emphasis on growing concerns and issues− Also includes topics like women’s health, long term care,

children’s insurance

Books• Good for explanations that integrate

interdisciplinary factors of the health care system (cultural, medical, historical)

• BU Electronic and print books− Search Amazon, Google Books and check the

catalog to see if BU owns the book− If BU does not own a book, try the Boston Library

Consortium Virtual Catalog or Interlibrary Loan− E-book “

Understanding Health Policy: a clinical approach”

Gray Literature• A lot of material concerning health care issues can be found outside of traditional scholarly resources like books or research articles.

• This type of information is often referred to as “gray literature” and is comprised of technical reports, reports from non-profits and government agencies (white papers).

•Because health care is currently such a prominent and controversial issue, you can expect to find a lot of gray literature about health care issues.

•Gray literature can also lead you to a lot of statistics

Finding Gray Literature• Policy Institutes/Think Tanks:

− National Health Policy Forum

− Commonwealth Foundation

− Kaiser Family Foundation

− Institute of Medicine

• Government

− US Dept. of Health and Human Services "Reference Collection," a wide-ranging set of links to online HHS statistics/databases, glossaries, reports, and more.

•Portals

− Duke Health Policy Gateway

Includes links regarding health industry, coverage, expenditure, and reform

Looking up Statistics – US Government

• AHRQ: Agency for health care research and quality− Includes MEPS (Medical Expenditure Panel Survey)

health care use, expenditures, sources of payment, and insurance coverage. Includes state information

• Massachusetts Health and Human Services− Researcher page for statistics on state programs and population.

• NCHS: National Center for Health Statistics− health care surveys and health insurance statistics− CDC HEALTH, United States, 2007

birth and death rates, infant mortality, life expectancy, morbidity and health status, risk factors, use of ambulatory and inpatient care, health personnel and facilities, financing of health care, health insurance and managed care, and other topics

Looking up Statistics – Other sources

• Dartmouth Atlas of Health Care• Massachusetts Health and Human Services

− Researcher page for statistics on state programs and population.• NCHS: National Center for Health Statistics

− health care surveys and health insurance statistics− CDC HEALTH, United States, 2007

birth and death rates, infant mortality, life expectancy, morbidity and health status, risk factors, use of ambulatory and inpatient care, health personnel and facilities, financing of health care, health insurance and managed care, and other topics

Research and Journal Articles• Databases

− Medline: PubMed In PubMed can search Health Services Queries (see next slide)

− Business Source Complete− Congressional Index

government legislation, hearings− Web of knowledge

databases covering different disciplines.

• Visit http://medlib.bu.edu/indexes/ for comprehensive list of databases

PubMed Health Services Queries• A search interface to find PubMed citations relating to health care quality or to health care costs• Use a search term of your own and narrow to one of the pre-defined areas:

− Appropriateness − Process assessment− Outcomes assessment− Costs − Economics− Qualitative research

• Search will publication types and studies appropriate to the specific areas

Healthy People 2010

• Pre-formulated PubMed searches based on objectives of a preventative health initiativeSome searches that could be helpful:

− Increase the proportion of persons with health insurance− Increase the proportion of persons who have a specific source of ongoing care.

• See DATA 2010 for data monitoring the progress of the Healthy People initiatives.

International Health Care• Global Health Facts

− From the Kaiser Family Foundation− Includes data and facts regarding health funding, financing, workforce and capacity

•WHO: World Health Organization− Global Health Reports− WHOSIS (Statistical Information System)

Includes data on health service coverage, health systems resources, and inequities

• Popline: International database on reproductive health

− Includes focus on demography, family planning, population law and policy

Resource ListsTo access most of the resources discussedIn this presentation, visit the library webpage

www.medlib.bu.edu

For a complete look at online resources, see E-resources: http://medlib.bu.edu/generic/elecres.cfm

For resources organized by subject (like Health Care System) see Subjects A-Z:http://medlib.bu.edu/webcollections/

INDIA …

Healthcare Destination to the World…

WITH THE INTEGRATION OF WORLD ECONOMIES…!

High quality treatment at a fraction of the cost,in comparison to western countries, makes India an ideal healthcare destination for highly specialized

medical care.

Over 25 years ago, we had set a bold aspiration for health in India

India was a signatory to the Alma-Ata declaration 1978, to attain

the global objective of

“Health for All by year 2000”

Escorts Heart Institute & Research Centre Ltd, New Delhi, INDIA

But we are far from achieving that vision

• Beds • Physicians • Nurses

• Per ’000 population, 2001*

• Per ’000 population, 2001*

• Per ’000 population, 2001*

1.5

1.5

4.3

7.4

• India

• Other low income countries (e.g., sub-Saharan Africa)

• Middle income countries (e.g., China, Brazil Thailand, South Africa, Korea)

• High income countries (e.g., US, Western Europe, Japan)

1.8

1.8

1.0

1.2***

0.5**

• World average 3.3 1.5 3.3

0.9

1.6

1.9

7.5

Escorts Heart Institute & Research Centre Ltd, New Delhi, INDIA

Inspite of improvement, India is still well behind other countries

Developingcountry average

Morbidity

India1990

India today

Developedcountry average

339274

256119

Life expectancy India1951

India today

Developingcountry average

DevelopedCountryaverage

• DALYs• Per ‘000 population

• Life expectancy at birth• Years

• Infant mortality• Deaths per ‘000 births

65 7837

63

Infant mortality

• India 1951

India today

Developingcountry average

DevelopedCountryaverage

56

146

70

Escorts Heart Institute & Research Centre Ltd, New Delhi, INDIA

This spend matches that of other developing countries as a percentage of GDP but is low on a per capita basis

6.7

6.5

5.7

5.2

2.7

Korea

Brazil

Thailand

India

China

Per cent, 2001*

720

453

349

143

94

Korea

Brazil

Thailand

China

India

US$, PPP, 2001*

Healthcare spend as % of GDP Healthcare spend per capita

* Most recent data available has been used (1997-2001)

Inspite of this scenario, there are Centres of Excellence spread all across India and to name a

few:

Apollo Hospitals

Escorts Heart Institute & Research Centre

Wockhardt Hospitals

Fortis Healthcare

Tata Memorial Cancer Hospital

Leelawati Hospital

Manipal Hospital

INDIAN HEALTHCARE CAPABILITY

Over 60,000 cardiac surgeries done per year with out comes at par with international standards

Multi organ transplants like Renal, Liver, Heart, Bone Marrow Transplants, are successfully performed at one tenth the cost.

Patients from over 55 countries treated at Indian Hospitals.

HIGH QUALITY HEALTHCARE AT A SIGNIFICANT COST ADVANTAGE

Centres of excellence providing specialty high quality treatments.

Some areas are:

Cardiology & Cardiac Surgery

Joint Replacement

Minimally Invasive Surgery & Therapeutic Endoscopy

Oncology

Pathology

India has the opportunity to provide the best of the Western & Eastern healthcare systems

Escorts Heart Institute & Research Centre Ltd, New Delhi, INDIA

Ayurveda recognized as an official healthcare system in Hungary.

Doctors in the west are increasingly prescribing Indian Systems of Medicine

More than 70% of the American population prefer a natural approach to health

Americans are said to spend around $ 25bn on non-traditional medical therapies and products *

India’s Gift to the World

Ayurveda

Yoga

Siddha

Source : Los Angeles Times * Economic times dated 25th July 2003

1.5 billion

Bangladesh

Nepal

Afghanistan

Pakistan

Sri Lanka

India has strong health infrastructure catering to 1.5 billion people

SAARC & Neighbouring

Countries

East Africa

CIS

Middle East

South East Asia

USA, Australia, New Zealand

UK Canada

PATIENTS FLOW IN INDIA FROM ACROSS THE WORLD

Escorts Heart Institute & Research Centre Ltd, New Delhi, INDIA

Medical Tourism

• A recent CII-McKinsey study on healthcare says Medical Tourism alone can contribute Rs. 5,000-10,000 crores additional revenue for tertiary hospitals by 2012, and will account for 3-5 per cent of the total healthcare delivery market.

• What India needs to do is to strengthen basic infrastructure like Airports, Power, Roads etc. to support these initiatives.

Medical Tourism

ESTIMATES

* Excludes investment in bed capacity to avoid double count with investment in secondary/tertiary beds

US $ in billions

13-20

7-9 0.5-0.7 0.5-0.7 22-30

Medical equipment could account for 20-30% of investment in Beds (Rs.20,000 to40,000 crore)

Investmentin secondary beds

Investmentin tertiary beds

Investmentin medical colleges*

Investmentin nursing schools

Investmentfor other health professionals(e.g., pharmacists,technicians,administrators)

Total investmentrequired

(Source: CII-McKinsey & Company Report 2002)

INVESTMENT REQUIRED TO BRIDGE THE GAP IN NEXT 10 YEARS

0.5-1

India needs at least 750,000 extra beds to meet the demand for inpatient treatment by 2012- opportunity in tertiary healthcare facilities.

India needs at least 1 million more qualified nurses and 500,000 more doctors by 2012 as compared to existing number.- opportunity in medical education.

To raise this infrastructure, total additional investment to the tune of US$ 25-30 billion is needed by 2012.

Government and international agencies will only be able to gear up US$ 7 billion and the rest of investment has to come from private sector.

Healthcare Infrastructure…..In Summation

MediCity Solution

Concept

To create a Johns Hopkins /

Mayo Clinic of the East. Start

research on incorporating the

strengths of traditional

medicine with allopathic

medicine to create newer

therapies

To create a Johns Hopkins /

Mayo Clinic of the East. Start

research on incorporating the

strengths of traditional

medicine with allopathic

medicine to create newer

therapies

1. To provide integrated tertiary care services spanning over 20 super specialities of the highest quality at competitive price.

2. To create core research facilities for in-house and shared research in medicine.

3. To create a new form of medicine by researching on traditional medicines and integrating with modern medicine

4. To exploit potential of global health by leveraging technology and hospitality services ( Medical tourism).

5. To leverage the strengths for value added services in research and development ,BPO etc.

6. To provide world class education and training.

Facilities Planned

1500 beds (350 critical care beds). 40 operation theatres. 18/20 super specialties (6/7 major like cardiology,neuro-

sciences, advance pediatrics, high end orthopedics, oncology, traumatology and 12/13 minor specialties.

R& D facilities (clinical and bio-technology) including vet labs. Hotels & serviced apartments and office facilities. Education facilities. Residential complexes. Extensive greenery plus parking – ground coverage – 30%. Intelligent city.

HEALTH CARE FOR ALL

Myths and Reality

THE PROBLEM OF THEUNINSURED

• 46 Million is 16% of the population.

• Indiana has 800,000 uninsured

• To get 46 million take all of Indiana, plus Texas, Florida, and Connecticut.

Uninsured Americans

CPS and NHIS Data

Who are the uninsured?

Employed54%

Children19%

Unemployed5%

*Out of labor force

22%

*Students>18, Homemakers,

Disabled, Early retirees

Source: Himmelstein & Woolhandler - Tabulation from CPS

Lack of Insurance Increases Mortality

• 18,000 excess deaths per year due to lack of health coverage

• People without insurance:- Receive less care and receive it later

- Have 25% higher mortality rates- Receive poorer care when they

are in hospitals• This is the fifth leading cause of death in the US• The safety net is full of holes

Care Without Coverage, Institute of Medicine, May 2002

Medical Bankruptcy in Indiana

• 2004 estimate: 55,000 bankruptcies

• Almost 28,000 related to medical costs

• Affecting 77,000 family members

• 75% had coverage at start of illness

• Average out of pocket medical expenses leading to bankruptcy - almost $12,000.

Himmelstein et al, Health Affairs 2/2/05

A Brief History

• Wage and price controls in WW II

• Truman pushes for National Health Insurance 1949. AMA opposes.

Red Baiting

“Would socialized medicine lead to socialization of other phases of life? Lenin thought so. He declared socialized medicine is the keystone to the arch of the socialist state.”

AMA Pamphlet 1949

A Brief History (continued)

• The birth of the Blues• The Great Society: Medicare

and Medicaid 1965• The Clinton Health Plan 1993• The death of the not-for-profit

Blues

Anthem (formerly Blue Cross)Now Wellpoint

• CEO Larry Glassock is in Indianapolis

• The highest paid executive in Indiana

• Bonus announced in 2003 was $42.5 Million

Indianapolis Star 4/7/04

Where Does the Money Come From?

And Where Does It Go?

Per Capita National Health Spending Reached $4,637 in 2000

$82 $105 $141 $202$341

$582

$1052

$1733

$2690

$3637

$4637

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

SOURCE: Centers for Medicare and Medicaid Services

US Versus Other Countries

$2,930

$2,820

$2,740

$2,520

$2,160

$2,080

$5,270U.S.

Canada

Germany

France

Sweden

U.K.

Japan

$ Per Capita

OECD, 2004 & Health Affairs 2002; 21(4): 99

2004 data Health Affairs 1/06: $1.9 trillion or $6,280 per capita

And Where Does It Go?

• The money is going to:

- Overhead

- Inefficiency

- Waste

- Profit

- And graft

Growth of Physicians, RNs & Administrators 1970-1998

0

500

1000

1500

2000

2500

1970 1975 1980 1985 1990 1998

AdministratorsRNsPhysicians

Bureau of Labor Statistics, NCHS

Percentage Growth

What Do Administrators Do? Cost Shifting.

• The $5 aspirin pill

• The $500 ER bill

• “Skimming the cream off the top”: Avoiding the costly, the very sick, and the uninsured

It’s called “GAMING THE SYSTEM” or “SURVIVOR”

What Are We Paying for?

• A Very Complex System• 7000+ private health plans

– An army of people to deny health insurance coverage and payments

– And an army of people to try to maximize and receive health insurance payments

– An army of people to determine who is eligible for what program

U.S. Overhead Spending

16.3%

19.9%

26.5%

0%

10%

20%

30%

Medicare Non-Profit Blues CommercialCarriers

Investor-OwnedBlues

International Journal of Health Services 2005; 35(1): 64-90

U.S. Overhead Spending

16.3%

19.9%

26.5%

3.1%

0%

10%

20%

30%

Medicare Non-Profit Blues CommercialCarriers

Investor-OwnedBlues

International Journal of Health Services 2005; 35(1): 64-90

Health Care Administration US and Canada

• US administrative spending = $399.4 Billion or 31% of total health care costs.

• Canada spends 17% on administrative overhead.

• Potential savings = $286 Billion, enough to cover the uninsured and then some.

Woolhandler et al. NEJM 349:768-75 8/21/2003, CBO, GAO

…. And Graft

“Investor ownership has been shown to compromise quality of care in hospitals, nursing homes, dialysis facilities, and HMO’s; for-profit hospitals are particularly costly. A wide array of investor-owned firms have defrauded Medicare and been implicated in other illegal activities.”

Journal of the American Medical Association, 8/13/03

Columbia/HCA

• Fined $1.7 Billion in 2003 for Medicare fraud, the largest fine in Medicare history.

• No one went to jail.

• CEO Richard Scott left with a $10 million severance package and over $300 million in stock.

Woolhandler, Canadian Medical Journal 6/8/04

And What Do We Get For All Our Money?

• The most expensive health care in the world, no doubt.

• The best health care in the world?

• How would you measure the best health care in the world?

*

Life Expectancy

78.178.5

79.4 79.7 79.9

81.5

77.1

70

75

80

U.S. U.K. Germany France Canada Italy Japan

US ranked 27th, right after Barbados; OECD, 2004, (2001 Data)

Infant Mortality per 1000 Births

5.2 54.7

4.3 4.1

3.1

6.8

0

1

2

3

4

5

6

7

8

U.S. Canada Australia Italy Germany France Japan

Ranked 36th, below Cuba and Taiwan OECD, 04

WHO Global Health Rankings

• Based on outcomes AND fair distribution of care

• At the top: #1. France, #2. Italy

• US ranks 37th, between Costa Rica and Slovenia

Bartlett and Steele, Critical Condition, 2004

Satisfaction with Health Systems in Ten Nations

• Harris Poll taken in US, Canada, UK, Germany, Australia, France, Sweden, Japan, Italy, and Holland.

• The U.S. had the lowest health care satisfaction rate (11 percent) of the 10 nations.

Blendon et al. Health Affairs, Summer 1990

How Can We Pay So Much and Get So Little?

Inpatient Days per Capita

1.0 1.01.1 1.1

1.2

0.7

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

U.S.

Canad

a

Austra

liaU.K

.

France

Switzer

land

OECD, 2004, (2001 Data)

% Finding Difficulty in Receiving Care

21

15 15 15

28

0

5

10

15

20

25

30

U.S. Canada New Zealand Australia U.K.

% f

ind

ing

it

dif

ficu

lt t

o g

et c

are

Commonwealth Fund Survey, 1998

Elderly as Percent of Total Population, 2000

Source: Health Affairs 2000; 19(3):192

12.1% 12.8%

15.9% 16.0% 16.4% 17.1%

12.5%

0%

5%

10%

15%

20%U

.S.

Aus

tral

ia

Can

ada

Fra

nce

U.K

.

Ger

man

y

Japa

n

Per

cent

of

Pop

ulat

ion

Old

er T

han

65

Tobacco Smokers

18.0

24.0

27.028.6

30.9

18.4

0

5

10

15

20

25

30

35

Canada U.S. Italy U.K. France Japan

% p

op

ula

tio

n s

mo

kin

g d

aily

OECD, 2004 (2002 Data, U.K is 2001)

MRI Units per Million People

2.74.2

5.58.6

10.4

35.3

8.2

0

5

10

15

20

25

30

35

40

France Canada Germany U.S. Denmark Italy Japan

OECD, 2004 (2002 Data, U.S., Canada, and Germany are 2001)

Renal Transplants

2931

35 3538

34

0

5

10

15

20

25

30

35

40

U.K. Australia U.S. Sweden Canada France

OECD, 2004 (2002 Data, Canada and Sweden are 2001)

The Health Care System Dinosaur Stumbles Toward the Tar Pit

Our non-system of illness care

Myths

• Our “system” is fine, it just needs adjustment

• There is a safety net

• We can’t afford to cover everyone

• We have the best health care system in the world

And the Myth of “Moral Hazard”

• “If you think health care is expensive now, just wait until it’s free.” PJ O’Roarke

• The “logic” of Health Savings Accounts

• The 80/20 rule

• Some things are best not left to the marketplace

Gladwell, The New Yorker, 8/29/05

Myth Versus Realty• Every other industrialized country has come

to the same conclusion, a national program to insure health care for all.

• We can learn from the Canadian experience:National health insurance (a “single payer”) Fee for service independent doctors just like our Medicare Not-for-profit independent hospitals

International Timeline of Universal Health CareGermany 1883Switzerland 1911New Zealand 1938Belgium 1945France 1945United Kingdom 1946Sweden 1947USA 1948*Greece 1961Japan 1961Canada 1966Denmark 1973Australia 1974Italy 1978Portugal 1979Spain 1986South Africa 1996

The Health Care We Get

• 1/3 are uninsured or underinsured

• HMOs deny care to millions more with expensive illnesses

• Death rates higher than other wealthy nations’

• Costs double Canada's, Germany's, or Sweden's - and rising faster

• Executives and investors making billions

• Destruction of the doctor/patient relationship

The Health Care We Want

• Guaranteed access

• Free choice of doctor

• High quality

• Affordability

• Trust and respect

We Have What it Takes

• Excellent hospitals, empty beds• Enough well-trained professionals• Superb research• Current spending is sufficient• Polls show the people are ready for change• Large and small business are calling for

change

Government Health Insurance for All, Even if Taxes Increase?

Oppose30%

Favor65%

No opinion5%

Pew Report, May 2005

No opinion 5%

Please indicate whether you support or oppose this policy: Universal Health Insurance

Oppose17%

Unsure8%

Strongly Favor52%

Somewhat favor23%

Harris Poll, Wall Street Journal October 20, 2005

Unsure 8%

Remember Columbia/HCA?

• Senate Majority Leader Dr. Bill Frist owns $25 million in HCA stock.

• HCA is the Frist family business.

Why Health Care for Every Person, Young or Old, Rich or Poor?

“The care of human life and happiness, and not their destruction, is the first and only legitimate object of good government.”

Thomas Jefferson

“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has. “

Margaret Mead

www.HCHP.info

PHYSICIANS FOR A NATIONAL HEALTH PROGRAM

29 EAST MADISONSUITE 602CHICAGO, IL 60602TEL: (312) 782-6006

WWW.PNHP.ORG

Gallup pole 3/04: More Americans worried “a great deal” about affordability and availability of health care than a terrorist attack, 60% vs. 42%.

WHAT ABOUT MALPRACTICE?

• Democrats propose limiting “frivolous suits” thru something like the panels we have here in Indiana. Good idea.

• Republicans favor putting caps on non-medical settlements like we have here in Indiana. Good idea.

WHAT ABOUT MALPRACTICE?

• Future medical payments themselves are about 25% of total payouts.

• Many suits are triggered by anger over bills for care received.

• Both of these factors would be taken care of by a single payer system.

WHAT ABOUT MALPRACTICE?

• Malpractice costs account for ~1% of total health care spending.

• The real answer is for doctors and lawyers to come together and face their common enemy: the insurance industry.