National Health Insurance:National Health Insurance:Has Its Time Come?Has Its Time Come?

Walter Tsou, MD, MPH Physicians for a National Health Program

NASW-PA

October 17, 2005

Two Questions?Two Questions?

What is the health policy of the United States of America?

How much will the US spend this year for health care?

““Iron Triangle of Health Policy”Iron Triangle of Health Policy”““Iron Triangle of Health Policy”Iron Triangle of Health Policy”

Access to Care

Cost Containment Quality of Care

Looking at CostsLooking at Costs

Health Care Costs at $1.9 Tr in 2005 and almost Health Care Costs at $1.9 Tr in 2005 and almost doubles in 9 years. Total for Decade? $27 Trillion!!doubles in 9 years. Total for Decade? $27 Trillion!!

Source: Projected from Natl Health Expenditures, Health Affairs, Feb. 23, 2005

$1,937$2,078

$2,230$2,391

$2,564$2,749

$2,946$3,156

$3,381$3,586

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Year

He

alt

h C

are

Co

sts (

in b

illi

on

s $

)

2005 06 07 08 1009 11 12 13 2014

National Health Expenditures (NHE) Share of Gross Domestic National Health Expenditures (NHE) Share of Gross Domestic Product (GDP) and Private and Public Shares of NHEProduct (GDP) and Private and Public Shares of NHE

0

10

20

30

40

50

60

70

80

90

100

1965 1970 1980 1990 1993 2000 2003 2006 2009 2014

Sh

are

of N

HE

(p

erce

nt)

0

2

4

6

8

10

12

14

16

18

20

Sh

are

of G

DP

(p

erce

nt)

Source: Heffler, et al. 2005. U.S. Health Spending Projections For 2004-2014. Health Affairs, web-exclusive: w5-74 – w5-85.

Public

Private funds

Public funds

Private insurance is covering lessPrivate insurance is covering less

Source: Sept. 23, 2004, AP

People under 65 with catastrophic health People under 65 with catastrophic health costs despite health insurance, 2004costs despite health insurance, 2004

Source: Families USA, Sept 2004

Our Current Health System is Absurdly InefficientOur Current Health System is Absurdly Inefficient

26%24% 23% 23%

20%18%

16%

3% 1%

0%

10%

20%

30%

Aetna/U.S. HC

Wellpoint

Foundation

Oxford

United HC

Humana

Pacificare

Medicare

Canada

Overhead and Profit as a Percent of Premiums

Growth of Physicians and AdministratorsGrowth of Physicians and Administrators1970-19981970-1998

Source: Bureau of Labor Statistics & NCHS

0%

500%

1000%

1500%

2000%

2500%

1970 1975 1980 1985 1990 1995

Gro

wth

sin

ce 1

970

Administrators Physicians

US spends far more than other countries US spends far more than other countries on health careon health care

$0$500

$1,000$1,500$2,000$2,500$3,000$3,500$4,000$4,500

Turke

yM

exico

Pola

nd

Hungary

Kore

aC

zech

Spain

Gre

ece

Portu

gal

New

Findla

nd

Unite

dIre

land

Sw

eden

Japan

Italy

Austria

France

Belg

ium

Austra

liaIce

land

Denm

ark

Norw

ay

Neth

erla

nds

Luxe

mbourg

Canada

Germ

any

Sw

itzerla

nd

U.S

.

OECD, Health Expenditures per capita, 1998

U.S. Public Spending Per Capita for HealthU.S. Public Spending Per Capita for Healthis Greater than Total Spending in Other Nationsis Greater than Total Spending in Other Nations

Note: Public includes benefit costs for govt. employees & tax subsidy for private insuranceSource: NEJM 1999; 340:109; Health Aff 2000; 19(3):150

$1,450

$1,780

$1,820

$2,120

$2,250

$2,400

$1,530$2,740

$0 $1,000 $2,000 $3,000 $4,000 $5,000

U.K.

Japan

Sweden

France

Canada

Germany

U.S.

$ Per Capita

Total Spending U.S. Public U.S. Private

Looking at QualityLooking at Quality

Primary Care Physicians: Patients Can't Get Primary Care Physicians: Patients Can't Get Quality Mental Health ServicesQuality Mental Health Services

How often can you obtain high quality mental health services for your patients?

Sometimes29%

Never/rarely20%

Frequently19%

Always/Almost always32%

Source: Center for Studying Health System Change, 1997 - survey of 5,160 primary care physiciansNote - Data shown are for inpatient care; responses regarding outpatient care were similar

Life Expectancy For Women, 1999Life Expectancy For Women, 1999

Source: OECD, 1999 & NCHS

82

80.7

82.5

79.8

81.6 81.7

79.4

77

78

79

80

81

82

83

U.S.

U.K.

GERM

ANY

ITALY

CANADA

SWEDEN

FRANCE

YE

AR

S

Life Expectancy For Men, 1999Life Expectancy For Men, 1999

Source: OECD, 1999 & NCHS

74.7 75 75 75.3

76.376.7

73.9

70

71

72

73

74

75

76

77

78

U.S.

GERMANY

FRANCE UK

ITALY

CANADA

SWEDEN

YE

AR

S

US Health Expenditures vs Female Life US Health Expenditures vs Female Life Expectancy by country-not a good deal!Expectancy by country-not a good deal!

Life - Expectancy

Health Expenditure

Source: OECD 2004

Looking at AccessLooking at Access

45.8 MillionUninsured

Source: US Census, 2004

Growing number of uninsured in PAGrowing number of uninsured in PA

10,724,000 insured (88%) 1,454,000 uninsured over one year (12%)

Number of uninsured is actually worse Number of uninsured is actually worse than census statisticsthan census statistics

Pennsylvania uninsured at any given time - 2,820,000 or 27.4% of the state’s population

United States uninsured at any given time - 85,216,000 or 33.3%

Source: Families USA, Sept 2004

Looking at MalpracticeLooking at Malpractice

Rex Morgan, MD on MalpracticeRex Morgan, MD on Malpractice

Exhibit 72004 Medical Liability Costs - Philadelphia County

Primary plus Mcare assessment. Primary based upon average of filed rates for major carriers*

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

015Family Practice

030Cardiology

070General Surgery

080Obstetrics

090Orthopedic surgery

100Neurosurgery

Mcare abatement

Mcare payment

Primary premium

* Primary can be higher or lower than filed rate due to surcharges and discounts.

Source: PA Medical Society, 2004

Philadelphia Malpractice Rates, 2004 by Philadelphia Malpractice Rates, 2004 by specialtyspecialty

MalpracticeMalpractice

Economic vs. Non economic damages

Economic DamagesEconomic Damages

Lost wages– Huge loss in high wage earners

Current and future health care costs– Huge loss without universal coverage

Non economic damagesNon economic damages

To cap or not to cap? That is the question

Phila vs. Ontario malpractice premiums, Phila vs. Ontario malpractice premiums, 20042004

$1,970 $3,165

$13,443$17,773

$39,635

$76,350

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

Family Practice Cardiology General Surgery

Ontario Phila

Source: PA Medical Society, Canadian Medical Protective Assoc, US Dollars, 2004

Phila vs. Ontario by high malpractice Phila vs. Ontario by high malpractice specialties, 2004specialties, 2004

Source: PA Medical Society, Canadian Medical Protective Assoc, US Dollars, 2004

$66,859

$22,061

$38,386

$99,739

$78,848

$117,923

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Obstetrics Orthopedic Surgery Neurosurgery

Ontario Phila

Possible Reasons for Less Malpractice Possible Reasons for Less Malpractice Fees in CanadaFees in Canada

Much less money is spent on health care Access to preventive services for all Under universal coverage, all future health

care costs covered by health care system 95% of docs covered by Canadian Medical

Protective Association, a non profit entity Malpractice fees paid for by provinces

Perspectives on Health Care ReformPerspectives on Health Care Reform

Managed Competition Managed Care Health Savings Accounts National Health Insurance

Balanced and Comprehensive Health Balanced and Comprehensive Health Care Reform Act of 2005 Care Reform Act of 2005

Highlights of the State Reform proposalHighlights of the State Reform proposal

Comprehensive health, dental, mental health and Rx drug benefits for all

Free choice of private doctors, dentists, hospitals

No deductibles, co-pays, caps Can opt out if bargaining agreement as

comprehensive as Reform proposal

Choice of “no fault” malpractice vs. Choice of “no fault” malpractice vs. current tort remediescurrent tort remedies

No-fault malpractice assures payment to victims

Funding for electronic medical record system Investigations of medical errors Sufficient savings with single payer will fund

all malpractice premiums for doctors, NPs

Added incentivesAdded incentives

$1000 tax credit for certified volunteer firemen, EMTs, paramedics

Restoration of certificate of need K-12 health education and phys ed funding Transitional funding for displaced workers

Public financing, Private deliveryPublic financing, Private delivery

Funding of Reform proposalFunding of Reform proposal

10% Health Care levy on payroll 3% wellness tax on personal income 1% tax on personal income for qualifying

bargaining agreement plans

Physician Proposal in Physician Proposal in JAMAJAMA, Aug. 2003, Aug. 2003

www.physiciansproposal.org

Congress introduces Physician ProposalCongress introduces Physician Proposal

AngellHimmelstein

Conyers

House Judiciary Committee Room, Feb 4, 2003

US National Health Insurance ActUS National Health Insurance Act

Simplified flow of fundsSimplified flow of funds

Medicare

Medicaid

VA Benefits

State and Local

Private Insurance

Patient fees

HEALTH

FUND

Physicians

Hospitals

Pharmacy

Laboratories

Radiology

Long Term Care

Public Private

Universal Health Care will cost less nowUniversal Health Care will cost less now

Projected Health Care Costs Current vs. Universal (2005)

1918

1861.3

1830

1840

1850

1860

1870

1880

1890

1900

1910

1920

1930

$ b

illion

s

Current System Universal-Single payerSource: Lewin Group 2002, Centers for Medicare and Medicaid Services, and Dean Baker, Center for Economic and Policy Research,

Economies of Scale Saves MoneyEconomies of Scale Saves Money

Savings Under Single Payer (2005)

178.2

50.5

0

20

40

60

80

100

120

140

160

180

200

Administrative Savings Bulk Buying Savings

$ b

illi

on

s

Source: Lewin Group 2002 and Dean Baker, Center for Economic and Policy Research,

Sources of Revenue for NHISources of Revenue for NHI

Sources of Revenue (2005)Total Health Expenditures $1.86 trillion($56 billion less than without single-payer reform)

Stock/bond transaction tax (8%)

Health Surtax on top 5% of Income Earners

(12%)Household (4%)

Non-patient revenue (2%)

Repeal Bush 2001 tax cut and re-direct

2003 stimulus to health care (11%)

Employers (12%)

Close Corporate tax loopholes (6%)

Government(45%)

Source: Dean Baker and the Center for Economic and Policy Research, January 2003.

NHI will save $5000 per capita by 2024NHI will save $5000 per capita by 2024

Per Capita Health Expenditures

0

5000

10000

15000

20000

25000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Dolla

rs

current system single payerSource: Lewin Group 2002 and Dean Baker, Center

$12114 vs 10405

$8828 vs 8059

$16623 vs 13434

$21411 vs 16480

How can we get there?How can we get there?

Business community American public

Government is the “swing” voteGovernment is the “swing” vote

Government

Business People

Health care and Big BusinessHealth care and Big Business

Rising insurance premiums (10-30%) Limited choices with managed care Subsidizing small businesses and uninsured

Less workers covered by private health Less workers covered by private health insuranceinsurance

Health benefit will eclipse corporate Health benefit will eclipse corporate profits between 2005-2008profits between 2005-2008

Source: McKinsey Quarterly, Sept 2004

Corporate Dilemma on HealthCorporate Dilemma on Health

High health care costs have "created a competitive gap that's driving investment decisions away from the U.S.," Ford Vice Chairman Allan Gilmour said in a speech at a recent auto industry conference. "If we cannot get our arms around this issue as a nation, our manufacturing base and many of our other businesses are in danger,"

Source: Washington Post, March 6, 2004

Jobless recovery due to health careJobless recovery due to health care

Source: Wall St. Journal, March 11, 2004

“For every new hire, health insurance costs each employer as much as payroll taxes.”

- Helen Darling, Natl Business Group on Health

GM retiree cost is $60 Billion!GM retiree cost is $60 Billion!

Source: Wall St. Journal, March 11, 2004

Ideology trumps rationalityIdeology trumps rationality

“But while the Big Three automakers told Canadians that their nationalized health insurance system helped preserve jobs, and lobbied the Canadian government last year to maintain the program, their corporate executives are not willing to go that far when it comes to health care in the United States.”

Source: Washington Post, March 6, 2004

Ideology vs. Rational thinking?Ideology vs. Rational thinking?

Government incompetent

Marketplace can solve everything

Privately financed, privately “run”

Gov’t does some things well

Essential goods respond poorly to markets

Publicly financed, privately “run”

WSJ survey of Business LeadersWSJ survey of Business Leaders

“But if managed care fails to contain health care costs over the next few years, 53% of corporate executives said they might accept national health care” (Louis Harris poll of 2,048 business leaders)

Two Myths about National Health Two Myths about National Health InsuranceInsurance

We can’t afford it. We don’t have the “political will”

Political feasibility and cost containmentPolitical feasibility and cost containment

“Here is the ultimate paradox of US health politics . . .The more likely a reform proposal is to control costs, the less likely it is to be politically viable.”- Jonathan Oberlander, Health Affairs, Aug. 27, 2003

American PublicAmerican Public

Want quality, affordable health care for all Americans

Not concerned about health care unless ill Economy and health care are becoming the

same

Most Important Issues for 2005 Congress?Most Important Issues for 2005 Congress?

Within health care, what do people care Within health care, what do people care about?about?

Source: NEJM, Sept. 23, 2004

Do We Have the Political Will?Do We Have the Political Will?

Congress is debating whether to cut MA Congress is debating whether to cut MA and Medicare by $32 billionand Medicare by $32 billion

Current thoughts are $12 billion cut in MA $20 billion cut in Medicare

Balanced Budget Amendment,1997Balanced Budget Amendment,1997

Cuts to “DSH” hospitals Cost to DV hospitals=$1B

Philadelphia Hospitals are cuttingPhiladelphia Hospitals are cutting

PennPenn

Year Closed Hospital Beds Outcome

1994 Sacred Heart Hospital & Rehab. Ctr 234 Closed

1995 Community Hospital of Chester 179 Converted to Outpt Clinics

1995 Thomas Jefferson UH Ford Road 38 Converted to Outpt Clinics

1997 Allegheny Univ Hospitals, Mt Sinai 141 Closed

1997 Institute of Pennsylvania 91 Sold to become Kirkbride Center

1999 Germantown Hospital 88 Converted to Outpt Clinics

1999 Neumann Medical Center 133 Converted to Outpt Clinics

2000 John F. Kennedy Memorial Hospital 103 Converted to Outpt Clinics

2000 City Avenue Hospital 44 Closed

2002 Mercy Community Hospital 113 Converted to Outpt Clinics

2003 Parkview Hospital 149 Closed

2003 Elkins Park Hospital 114 Purchased by Einstein

Number of Beds removed from Inpatient Use(excl.s Elkins Park, some or all of whose bed capacity

will be used by Einstein/MossRehab)

1,222 25.3%

Bed Capacity Reduction At Hospitals Remaining open 3,615 74.7%

12 hospitals have closed from 1994-200312 hospitals have closed from 1994-2003

Philadelphia Hospitals are ClosingPhiladelphia Hospitals are Closing

““Iron Triangle of Health Policy”Iron Triangle of Health Policy”““Iron Triangle of Health Policy”Iron Triangle of Health Policy”

Access to Care

Cost Containment Quality of Care

Political Willpower:Political Willpower:New Iraqi Constitution Article 31New Iraqi Constitution Article 31

“Every Iraqi has the right to health service, and the state is in charge of public health and guarantees the means of protections and treatment by building different kinds of hospitals and health institutions.”

Will Iraq get universal health care before America??

Rex Morgan, MD on NHIRex Morgan, MD on NHI

PHYSICIANS FOR A NATIONAL HEALTH PROGRAM

29 EAST MADISON STREETSUITE 602CHICAGO, IL 60602-4404TEL: (312) 554-0382

WWW.PNHP.ORG

Questions? Questions?