introduction to healthcare and public health in the us

Introduction to Healthcare and Public Health in the US

Financing Healthcare (Part 1)

Lecture b

This material (Comp1_Unit4b) was developed by Oregon Health and Science University, funded by the Department of Health and Human Services, Office of the National Coordinator for Health Information Technology under Award Number

[IU24OC000015)].

Financing Healthcare (Part 1)Learning Objectives

• Understand the importance of the healthcare industry in the US economy and the role of financial management in healthcare. (Lecture b)

• Describe models of health care financing in the US and in selected other countries. (Lecture c)

• Describe the history and role of the health insurance industry in financing healthcare in the United States, and Federal laws that have influenced the development of the industry. (Lecture a)

• Understand the differences among various types of private health insurance and describe the organization and structure of network-based managed care health insurance programs. (Lecture d)

• Understand the various roles played by government as policy maker, payer, provider, and regulator of healthcare. (Lecture d)

• Describe the organization and function of Medicare and Medicaid. (Lecture e)

2Health IT Workforce Curriculum Version 3.0/Spring 2012

Introduction to Healthcare and Public Health in the US Financing Healthcare

Lecture b

Lecture b Goals

• Health care spending – Economic impact and gross domestic product– Health care jobs

• The History of the US Health Insurance Industry• Historic legislation and factors contributing to the

current US system of insurance • Roles of government in health care

• Privately funded health care• Publically funded health care

– Role Important federal laws



Lecture b

Healthcare Financing & Expenditures

• Healthcare financing– the collection and pooling of funds used to pay for healthcare

services provided by a healthcare system, and– a mechanism of payment for these services

• Healthcare expenditures – represent the total value of the healthcare services delivered by

the healthcare system in a time period– Methods for examining spending include:

• Category of Service• Contributor• Payer



Lecture b

The US Healthcare Industry

US Healthcare– Fifth largest sector of the economy by sales– 14.3 million employees

• More than any other sector

– 10 of 20 fastest growing occupations• 3.2 million new jobs by 2018



Lecture b

Healthcare and the EconomyNational Healthcare Spending 2009

• Gross Domestic Product (GDP): $14.25T

• National Health Spending: $2.5T

– as percentage GDP: 17.6%

– projected spending %GDP (2019): 19.6%

• U.S. Population (Millions): 305M

• U.S. Per Capita Healthcare Costs: $8086



Lecture b

National Health Expenditures and Their Share of Gross Domestic Product, 1960-2009

4.1 Chart: Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2009; file nhegdp09.zip). (CMS, 2011, PD-US, CC BY-NC-SA 3.0)

7• Health IT Workforce

Curriculum Version 3.0/Spring 2012


Lecture b

$27.3 $74.8

$255.7

$724.0

$1,378.0$1,495.3

$1,637.0$1,772.2

$1,894.7$2,021.0

$2,152.1$2,283.5

$2,391.4$2,486.3

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

1960 1970 1980 1990 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

NHE as a Share of GDP

5.2% 7.2% 9.2% 12.5% 13.8% 14.5% 15.4% 15.9% 16.0% 16.0% 16.1% 16.2% 16.6% 17.6%

http://www.cms.hhs.gov/NationalHealthExpendData/

National Health Expenditures per Capita, Select Years 1960-2009

4.2 Chart: The Kaiser Family Foundation, Kaiser Fast Facts. Data Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2009; file nhegdp09.zip). Available at http://facts.kff.org/chart.aspx?ch=854. (KFF, CMS, 2011, PD-US, CC BY-NC-SA 3.0) .



Lecture b


http://facts.kff.org/chart.aspx?ch=854

Total Health Expenditure per Capita, Select Countries, 2008

4.3 Chart: The Kaiser Family Foundation, Kaiser Fast Facts. Data Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en (Accessed on 14 February 2011). Available at http://facts.kff.org/chart.aspx?ch=1952. (KFF, CMS, 2011, PD-US, CC BY-NC-SA 3.0) .

Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates. Numbers are PPP adjusted.



Lecture b


National Health Care Spending by Category of Service 2009

4.4 Table: Adapted from data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group. (CMS, nd., PD-US, CC BY-NC-SA 3.0).



Lecture b

Spending Category US$ (Billions)

Hospital Expenditures $759.1

Physician and Ancillary Clinical Expenditures $505.9

Nursing Care Facilities, Home Health Care, & Other Residential $327.9

Prescription Drug Expenditures $249.9

Dental & Other Professional Expenditures $169

Administration $163

Medical Equipment $78

Public Health Activity $77.3

Research, Structures, and Equipment $156.2

Total National Healthcare Expenditures $2486.3

2009 National Health Expenditures by Category (%)

4.5 Chart: 2009 National Health Expenditures by Category (%). Adapted from Centers for Medicare and Medicaid Services (CMS), Office of the Actuary . (CMS, nd., PD-US, CC BY-NC-SA 3.0).



Lecture b

National Healthcare Expenditures Distribution by Contributor 2009

4.6 Chart : US Healthcare Expenditures by Contributor (2009). (CMS, CHCF, 2011, PD-US).



Lecture b

US Healthcare Expenditures by Payer (2009)

Spending by Payer, 2009 US $ (Billions) Percentage of Spending

Out of Pocket 299.3 12.0%

Private Health Insurance 801.2 32.2%

Medicare 502.3 20.2%

Medicaid 373.9 15.0%

VA/DOD/CHIP/Other 276.1 11.1%

Public Health 77.2 3.1%

Investment (Research & Infrastructure)

156.2 6.3%

100.0%

4.7 Table: National Health Expenditures by Payer, 2009 . (CMS, nd., PD-US, CC BY-NC-SA 3.0)



Lecture b

National Health Expenditures by Payer, 2009

4.8 Chart: US Healthcare Expenditures by Payer (2009). (CMS, CHCF, 2011, PD-US).



Lecture b

Financing Healthcare (Part 1) Summary – Lecture b

• US Healthcare and the Economy– Highest healthcare costs in the world

– Healthcare cost represent almost one-fifth of GDP

– Healthcare jobs continue to grow

– Spending on services may be examined by• Category of service

• Source of contributions used to pay for services

• The insurance payer or plan



Lecture b

Financing Healthcare (Part 1)References – Lecture b

References• Centers for Medicare and Medicaid Services. National health expenditure data, Table 1: National health

expenditures aggregate, per capita amounts, percent distribution, and average annual percent growth, by source of funds—selected calendar years 1960–2009. https://www.cms.gov/NationalHealthExpendData/25_NHE_Fact_Sheet.asp . Updated January 13, 2011. Accessed April 13, 2011.

• StarkLaw.org. Stark law–information on penalties, legal practices, latest news and advice. http://www.starklaw.org. Accessed April 13, 2011.

• The Henry J Kaiser Family Foundation. U.S. health care costs explained. http://www.kaiseredu.org/Issue-Modules/US-Health-Care-Costs/Background-Brief.aspx. Updated March 2010. Accessed April 5, 2011.

• The Henry J Kaiser Family Foundation. Healthcare Costs: A Primer; available from: http://www.kff.org/insurance/ 7670.cfm Key information on health care costs. Last accessed March 22, 2011

• The Henry J Kaiser Family Foundation. Menlo Park, CA: 2010 US Healthcare Costs; available from: http://www.kaiseredu.org/index.asp Provides background information, links to key data and policy information on US healthcare costs. Last accessed March 22, 2011



Lecture b

https://www.cms.gov/NationalHealthExpendData/25_NHE_Fact_Sheet.asp

http://www.kff.org/insurance/%207670.cfm

http://www.kaiseredu.org/index.asp

Financing Healthcare (Part 1)References - Lecture b (continued)

Charts, Tables, Figures• 4.1 Chart: The Kaiser Family Foundation, Kaiser Fast Facts. Data source: Centers for Medicare and Medicaid Services, Office of the

Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2009; file nhegdp09.zip). Accessed 11 Dec 2011. (CMS, 2011, PD-US, CC BY-NC-SA 3.0).

• 4.2 Chart: The Kaiser Family Foundation, Kaiser Fast Facts. Data Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2009; file nhegdp09.zip). Accessed 11 Dec 2011. Available at http://facts.kff.org/chart.aspx?ch=854. (KFF, CMS, 2011, PD-US, CC BY-NC-SA 3.0).

• 4.3 Chart: The Kaiser Family Foundation, Kaiser Fast Facts. Data Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en. Accessed on 11 Dec 2011. Available at http://facts.kff.org/chart.aspx?ch=1952. (KFF, CMS, 2011, PD-US, CC BY-NC-SA 3.0). Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates. Numbers are PPP adjusted.

• 4.4 Table: Adapted from the National Health Care Spending by Category of Service 2009. Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/. Accessed on 11 Dec 2011. (see Historical; NHE summary including share of GDP, CY 1960-2009; file nhegdp09.zip). (CMS, nd., PD-US, CC BY-NC-SA 3.0).

• 4.5 Chart: 2009 National Health Expenditures by Category (%) Adapted from data source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ Accessed Dec 11, 2011. (see Historical; NHE summary including share of GDP, CY 1960-2009; file nhegdp09.zip). (CMS, nd., PD-US, CC BY-NC-SA 3.0).



Lecture b




Financing Healthcare (Part 1)References - Lecture b (continued)



Lecture b

Charts, Tables, Figures• 4.6 Chart: National Healthcare Expenditures Distribution by Contributor (2009), Data Source: Centers for Medicare and Medicaid

Services (CMS), Office of the Actuary. Retrieved 11 Dec 2011 from: http://www.chcf.org/~/media/MEDIA%20LIBRARY%20Files/PDF/H/PDF%20HealthCareCosts11.pdf. (CMS, CHCF, 2011, PD-US).

• 4.7 Table: National Health Expenditures by Payer, 2009 Data source: http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2009; file nhegdp09.zip). Accessed December 11, 2011 from: https://www.cms.gov/NationalHealthExpendData/25_NHE_Fact_Sheet.asp.

• 4.8 Chart: US Healthcare Expenditures by Payer. CMS, CHCF(2009). Data Source: Centers for Medicare and Medicaid Services (CMS), Office of the Actuary. https://www.cms.gov/NationalHealthExpendData/25_NHE_Fact_Sheet.asp. Retrieved Jan 2012 from: www.chcf.org/~/media/.../PDF/H/PDF%20HealthCareCosts11.pdf. (CMS, CHCF, 2011, PD-US).

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