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Healthcare in America

Healthcare in America. David Hanig February 18, 2003. Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”. -Martin Luther King, Jr. A Roadmap. Over the next hour, we will: Describe the state of healthcare today Try to explain how we got here

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Healthcare in America

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  1. Healthcare in America David Hanig February 18, 2003

  2. Of all the forms of inequality, injustice in health care is the most shocking and inhumane.” -Martin Luther King, Jr.

  3. A Roadmap Over the next hour, we will: • Describe the state of healthcare today • Try to explain how we got here • Hint at where we are headed

  4. Healthcare costs growing Total U.S. Health Care Expenditures as a Percentage of Gross Domestic Product, 1960-95

  5. No Sector is Spared National Per Capita Health Expenditures 1980-2001

  6. 327% from 1989-91 Health Care 275% from 1989-91 Health Care 198% from 1989-91 Health Care 151% from 1989-91 Health Care 109% from 1989-91 89% Health Care 76% 55% from 1989-91 Rest of Budget 58% Rest of Budget 44% Rest of Budget 31% Health Care Rest of Budget Rest of Budget The Rest 1991-93 1993-95 1995-97 1997-99 1999-01 2001-03 In WA State, Healthcare Increasing Faster than Other Areas The Rising Cost of Medical SOURCE: Legislative Evaluation and Program Committee (LEAP), ProShare calculation from DSHS Budget Division. Medical costs include the Washington State Health Care Authority and DSHS Medical Assistance payments.

  7. Medical – “Pac Man” of DSHS? Agency Medical 41% All Other 59% Agency Medical 23% All Other 77% 2001-03 Biennium $14.1 Billion* DSHS Budget 1987-89 $4.5 Billion

  8. Nationally, most coverage is employer-based,

  9. But, public coverage is gaining steadily; Combined Medical Assistance and Basic Health Enrollment for Children and Adults as % of Population

  10. And uninsured are growing faster

  11. How did we get here?

  12. Beginnings - Poor Law of 1601 • Primary focus – Deserving or Undeserving? • Provide care for “the lame, old, impotent, blind, and such other among them being poor and not able to work.” • Society should help those in need through “no fault of their own”. As for others: • Able-bodied poor – put to work in poorhouses • Able, but unwilling – provide nothing These ideas continue unbroken to our time

  13. The U.S. Built on Poor Laws • Early Republic initiated some programs – notably Public Health Service, which started as insurance for indigent sailors • After Civil War, Veterans services. Grew substantially after WWI. (Is VA obstacle to universal coverage?) • These programs conformed to strict notions of deserving v. undeserving.

  14. 20th Century Attempts • Several attempts for healthcare coverage through 1946, including one major effort under Roosevelt in 1930s • At the end of World War II, Truman promoted comprehensive, prepaid medical insurance plan • AMA and business opposed it as “socialized medicine” and it was defeated.

  15. Finding the “Deserving” • Post-Truman, focus shifted from universal coverage to covering the “deserving” • 1965 – Passage of Medicare & Medicaid • Elderly (could not get private insurance coverage) • Disabled • Poor Children (in need through no fault of their own) • Redux Elizabethan Poor Laws – “the lame, old, impotent, blind, and such other among them being poor and not able to work.”

  16. Focus on deserving leads to: Byzantine screening rules. Example: • Aliens who were in U.S. before August 22, 1996 can get Medicaid; BUT • Aliens who entered U.S. after August 21, 1996 can’t get Medicaid for 5 years, EXCEPT: • Those in U.S. military • Veterans of the Philippines military before July 1, 1946 • Hmong or Highland Lao veteran; or • Spouse or child of above And this is just one of literally tens of thousands of similar regs!

  17. Result: Costly, bureaucratic system • Costs millions to determine who is eligible and who is not • 5,000 FTEs in WA State just for eligibility – and that is not nearly enough! • Confusing rules pose barriers to entitled and require expensive outreach efforts “A system designed by Kafka and executed by the Marx Brothers!”

  18. Other Ills - to shift or not to shift • Administrative costs highest in the world ~25% of healthcare dollars • Cost-shifting primary driver – find someone else to pay the bill • Average primary care provider has +3.0 FTEs just to handle billing and admin.

  19. Meanwhile, outside the U.S. . . . • In 1900s, other industrializing nations established health insurance for workers and dependents • Later extended coverage • Post-WW2 devastation prompted universal social programs – moving away from deserving v. undeserving

  20. Result – Uncontrolled Expenditures in U.S.

  21. Compare & Contrast • The U.S.: • Government subsidized employers, private hospitals, physicians, and pharmaceuticals • Skyrocketing costs; • Shrinking access; • Growing social inequity • Countries with universal, public- financed coverage: • Better control of rising costs by bargaining with physicians, hospitals, and corporations • Tried to maintain social equity in access to facilities and treatments.

  22. What’s next?

  23. “It is now more than half a century since the first European country passed from debate on the advisability of social health insurance – to actual legislation.” “There are now 22 countries, including all the industrialized countries of the world except the United States, that have compulsory health insurance . . ..” “The time is ripe for action." Dr. Barbara ArmstrongTestimony to CongressJuly 5, 1935.

  24. Current Federal Initiatives • Block grant Medicaid and shift long-term responsibility to states • Use of tax incentives to expand coverage • Medicare Rx coverage • Safety net for poor Will these steps help or hinder?

  25. Our Future (according to Feds) • Slower Medicare and private personal health spending growth • Higher Medicaid spending growth due to: • Weak labor markets • Continued private health premium inflation • Private health insurance enrollment peaked in 2000 during hot job market. Enrollment has since declined

  26. More Health Care Inflation • Pharmaceutical products – few controls • Labor market: nurses, techs, pharmacists • Hospital consolidation and market power • New, innovative drugs, devices, procedures • Elderly & those with disabilities living longer • Result: 2001-2012, healthcare share of GDP will increase from 14.1% to 17.7%

  27. Result – Uncontrolled Expenditures in U.S.

  28. Future (continued) • Percent of people with private insurance will decline • Shift to service jobs without coverage • Slowing real per capita income growth • Employers and insurers to shift more costs to employees • #1 Cause of bankruptcy – healthcare costs • Result: Increase in uninsured AND increase in underinsurance

  29. Long-Term Prospects • As costs escalate, coverage declines and more people have no or catastrophic coverage, pressure will grow • But, groups getting some of the $1.5 trillion will resist systemic changes • We tend to look for incremental solutions • Is Government the solution?

  30. Only one other time in our history did we move away from our focus on helping only the deserving to supporting all. During the Great Depression, when over 1/3 of people were unemployed and nearly all Americans were suffering, we recognized our connectedness to others and enacted programs to benefit all.

  31. “This seeking for a greater measure of welfare and happiness does not indicate a change in values. It is rather a return to values lost in the course of our economic development and expansion . . ." Franklin D. Roosevelt: Message to Congress regarding passage of Social Security Act June 8, 1934.

  32. Citations • Health Spending Projections For 2002–2012 Stephen Heffler, Sheila Smith, Sean Keehan, M. Kent Clemens, Greg Won, and Mark Zezza in Health Affairs: 7 February 2003. http://www.healthaffairs.org/WebExclusives/Heffler_Web_Excl_020703.htm • Scope of the Health Care Cost Challenge. National Health Policy Audioconference, July 30, 2002. Professor James C. Robinson, University of California, Berkeley. www.ehcca.com/presentations/healthpolicyaudio20020730/robinson.pdf • The Development of the American Health Care System. Lecture for Social Analysis 54, by Theda Skocpol. http://cg.harvard.edu/~sa54/lectures/PDF/lecture_4-15-02.pdf

  33. Citations • Health Policy Analysis Program University of Washington School of Public Health and Community Medicine http://depts.washington.edu/hpap/ • http://cms.hhs.gov/about/history/milestones.asp • http://www.fvcc.edu/academics/dept_pages/human.services/poorlaws.htm

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