Patient Advocacy for Healthcare Quality Earp, French, Gilkey

1. Patient Advocacy for Healthcare QualityEarp, French, Gilkey Chapter 2 Overview of the U.S. Health System

2. Origins of the Healthcare “Non-System” Healthcare financing mechanisms have arisen from a variety of sources to create a patchwork system. Financers include: 1. Federal, state, and local governments 2. Non-profit civic and religious groups 3. Employers via third-party insurers

3. Origins of the Healthcare “Non-System” • The Federal Government 1798 - Marine Hospital Service 1912 - Public Health Service 1930 - Veteran’s Administration 1960s - Medicare, sponsorship of neighborhood health centers

4. Origins of the Healthcare “Non-System” 2. Non-profit civic and religious groups were numerous throughout the 20th century and characterized by a wide variety of governance styles, each serving a slightly different constituency

5. Origins of the Healthcare “Non-System” 3. Employers and third-party insurers • Gained popularity during WWII when employers sought ways to attract scarce workers • Emergence of Blue Cross health insurance plans • Managed care

6. Who finances healthcare today? Private Sources • 55% of all healthcare spending in 2004, including private insurance (35%) and out-of-pocket payments (13%) Government Sources • 45% of spending, including the federal government (32%) and state and local governments (13%)

7. A Closer Look at Governmental Spending Federal spending • Medicare (16% of total spending) • Medicaid and the State Children’s Health Insurance Program (SCHIP) (9%) State and local spending • Medicaid and SCHIP (6.4%) • Other state and local health spending (6.8%)

8. How are Americans insured? People under 65 • Employer-sponsored insurance (63%) • Private direct-purchase coverage (7%) • Medicaid and SCHIP (13%) • Medicare for disabled individuals (2.5%) • Military coverage (3%) • Uninsured (18%) People 65 and over • Medicare (95%)

9. Types of Insurance • Employer-sponsored • Private direct-purchase coverage • Medicaid • Medicare

10. Types of Insurance • Employer-sponsored • Preferred Provider Organizations are a network of healthcare providers willing to offer services at lower rates to large groups of insured consumers. • Health Maintenance Organizations (HMOs) offer lower premiums and out of pocket costs while limiting choice of providers to those within the HMO network. • Point-of-Service Plans are similar to HMOs, but give the option to seek care outside provider networks for higher out-of-pocket costs. • Indemnity coverage plans allow enrollees to see any provider with little insurance oversight.

11. Types of Insurance • Employer-sponsored • Coverage not offered by all employers • Coverage is difficult to maintain with loss of or changes in employment • Rising premiums and deductibles

12. Types of Insurance 2. Private direct purchase coverage • Often referred to as “non-group” policies, because they are not purchased as part of a larger employer-based association, or other group plan • Limited availability, higher cost

13. Types of Insurance 3. Medicaid • Covers hospitalizations, doctors’ and other health professional services, prescription drugs, and long-term care. • Often reimburses at lower rates than commercial insurance plans do, leading many private providers to be less willing to treat Medicaid patients • In addition to low-income status, enrollees must be pregnant women, children under age 21, families with dependent children, people with disabilities, or older adults (age 65 years and above)

14. Types of Insurance 4. Medicare • Coverage for Americans aged 65 years and older, some younger people with disabilities • May provide coverage for hospital insurance (Part A), physicians and other providers (Part B), and prescription drugs (Part D) • Medicare Advantage (Part C) allows beneficiaries to obtain their Medicare coverage through private HMOs, PPOs or private fee-for-service insurers

15. Who are the Uninsured? • Number of uninsured has grown steadily, from 39.8 million people or 14.2% of the population in 2000 to 46.6 million (15.9%) in 2005 • Two-thirds have incomes below 200% of the federal poverty guidelines • More than two-thirds are full-time workers or are in a family with at least one full-time worker • Racial and ethnic minorities are more likely to be uninsured (11% of non-Hispanic whites, 20% of African Americans, and 33% of Latinos)

16. Advocacy Approaches to Expanding Insurance Coverage • Expanding coverage through employers • Divorcing coverage from employment while requiring or encouraging individuals and their families to purchase health insurance (with tax subsidies or vouchers for lower-income individuals) • Initiating government-sponsored health insurance (e.g., single payer approach)

17. Case Study: Washington State SCHIP In 2003, the Children’s Alliance, a children’s advocacy group, mobilized to resist financial barriers to state-sponsored health insurance for children. Advocates succeeded in their efforts by: • Using respected research to make their case. • Offering an alternative financing plan. • Applying political pressure.