1 / 29

Health Care Today: Filling in the Big Picture

Health Care Today: Filling in the Big Picture. John Marshall Law School April 28, 2006. “The Present and Future Organization of Medicine”.

nathaniel-waller
Download Presentation

Health Care Today: Filling in the Big Picture

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Health Care Today: Filling in the Big Picture John Marshall Law School April 28, 2006

  2. “The Present and Future Organization of Medicine” “Today medicine stands at a crossroad. No one can fully grasp the content of medical science and medical art or forsee the path which the newer knowledge will follow more than a decade hence. No one can fully comprehend the present position of medical practice in society or anticipate the form it is destined to take.” From the Milbank Memorial Fund Quarterly, Vol. 12, No. 2, 1934 Anna Rappaport presentation at John Marshall Law School April 28, 2006

  3. Stakeholders Patients/Families Retired Patients/Families Disabled Patients/Families Employed Patients/Families Unemployed Public Regulators Providers Employers Insurers Anna Rappaport presentation at John Marshall Law School April 28, 2006

  4. Agenda • Filling in some facts • Mercer survey highlights • Defining the future landscape Anna Rappaport presentation at John Marshall Law School April 28, 2006

  5. Filling in Some Facts • How the US compares • Reasons for higher spending in the US • Claims distribution: A few people account for most of the cost • Illness and injury as contributors to personal bankruptcy • Negotiating prices: how the Amish drive down costs • Medical errors and the tort system Anna Rappaport presentation at John Marshall Law School April 28, 2006

  6. How the US Compares US Spending is Higher — % of GDP 2002 Source: “Health Spending in the United States and the Rest of the Industrialized World,” Health Affairs, Volume 34, Number 4, page 905 Anna Rappaport presentation at John Marshall Law School April 28, 2006

  7. Reasons for higher spending in the US • Higher incomes and higher medical prices are major factor • Price example – 2002 average cost of hospital day • U.S. $2,434 • Canada 870 • Less in other OECD countries • Malpractice is not a major factor in difference – cost of defending claims in 2001 = .46% of total health spending • Supply issues: “Surprisingly, Americans have access to fewer health care resources than people in most other OECD countries measured in three major categories: hospital beds per capita, physicians and nurses per capita, and MRI and CT scanners per capita.” Source: “Health Spending in the United States and the Rest of the Industrialized World,” Health Affairs, Volume 34, Number 4, pages 903-906 Anna Rappaport presentation at John Marshall Law School April 28, 2006

  8. 100% 3% 90% 19% 80% 50% 70% 25% 60% 50% 40% 35% 30% 53% 20% 10% 10% 5% 0% % Claimants % Cost Typical Claim DistributionFew People: Majority of the Cost Anna Rappaport presentation at John Marshall Law School April 28, 2006

  9. Implications of Claim Distribution • Big difference between different buyers • Anti-selection = big issue • Voluntary individual market solutions don’t work • Risk adjustment key for future Big question: who will pay for the high cost claimants? Anna Rappaport presentation at John Marshall Law School April 28, 2006

  10. Illness and Injury as Contributors to Personal Bankruptcy • Study focuses on links between personal medical costs and bankruptcy • Studied sample of 1771 bankruptcy filings in 2001 • 28% of filers reported illness or injury as cause for bankruptcy • Estimate that 1.9 to 2.2 million Americans (debtors and dependents) experienced medical bankruptcy • The overwhelming majority of uninsured medical debtors had found coverage to be unaffordable of effectively unavailable Source: Himmelstein, David and others, “Illness and Injury as Contributors to Bankruptcy, 2005,” Health Affairs – Web Exclusive Market Watch Anna Rappaport presentation at John Marshall Law School April 28, 2006

  11. Negotiating Prices: How the Amish Drive Down Costs • Amish and Mennonite are generally uninsured • Elders negotiated with Heart of Lancaster Regional Medical Center (community spent $5 million/year at center) • Result: • Total hip replacement: negotiated $16,578 vs.$37,260 national average • Adult appendectomy: $5,527 vs. $19,957 • C-section: $5,000 vs. $13,458 • 50% payment required in cash up-front • Elders pledged that community members would not sue for malpractice Source: Millman, Joel, “How the Amish Drive Down Medical Costs,” Wall Street Journal, February 21, 2006 Anna Rappaport presentation at John Marshall Law School April 28, 2006

  12. Medical Errors and the Tort System • 34% of public were personally involved in a situation where a preventable medical error occurred • Consequences to the public experiencing errors • 16% significant loss of time • 16% severe pain • 11% long term disability • 8% death • Reforming the tort liability system will not solve a major part of the health care cost problem as malpractice payments represent only 0.5% of total health spending – US is fairly similar to UK, Canada and Australia in malpractice spending Sources: (1) Kaiser Family Foundation, “Trends and Indicators in the Health Care Marketplace,” Exhibit 7.17; (2) “Health Spending in the United States and the Rest of the Industrialized World,” Health Affairs, Volume 34, Number 4, page 910 Anna Rappaport presentation at John Marshall Law School April 28, 2006

  13. Trends in Employer Plans:Mercer’s 2005 National Survey of Employer-Sponsored Health Plans About the Survey • Largest and most comprehensive annual survey • Established in 1986, national probability sample used since 1993 • 2,999 employers participated • All employers with 10 or more employees are surveyed; size groups examined separately in this presentation include: • small employers – 10-499 employees • large employers – 500+ employees • jumbo employers – 20,000+ employees Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans” Anna Rappaport presentation at John Marshall Law School April 28, 2006

  14. Trends in Employer Plans: Mercer’s 2005 National Survey of Employer-Sponsored Health Plans Total health benefit cost increase slows for the third straight year All Employers Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans” Anna Rappaport presentation at John Marshall Law School April 28, 2006

  15. Trends in Employer Plans:Mercer’s 2005 National Survey of Employer-Sponsored Health Plans Employers see care management, consumerism as top cost management strategies for the next five years Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans” Anna Rappaport presentation at John Marshall Law School April 28, 2006

  16. Trends in Employer Plans:Mercer’s 2005 National Survey of Employer-Sponsored Health Plans Growth in use of care management programs Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans” Anna Rappaport presentation at John Marshall Law School April 28, 2006

  17. Trends in Employer Plans:Mercer’s 2005 National Survey of Employer-Sponsored Health Plans Actions taken to promote consumerism Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans” Anna Rappaport presentation at John Marshall Law School April 28, 2006

  18. Trends in Employer Plans:Mercer’s 2005 National Survey of Employer-Sponsored Health Plans Consumer-directed health plans concentrated among jumbo employers in 2005 Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans” Anna Rappaport presentation at John Marshall Law School April 28, 2006

  19. Trends in Employer Plans: Mercer’s 2005 National Survey of Employer-Sponsored Health Plans Decline in retiree medical coverage levels off in 2005 Large Employers Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans” Anna Rappaport presentation at John Marshall Law School April 28, 2006

  20. Trends in Employer Plans:Mercer’s 2005 National Survey of Employer-Sponsored Health Plans Offer retiree coverage in 2005, by employer size Number of employees Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans” Anna Rappaport presentation at John Marshall Law School April 28, 2006

  21. COST QUALITY ACCESS Moving into the Future: Defining Key Issues Choose two — You can’t have all three! Future of employer role depends on total health care system issues Anna Rappaport presentation at John Marshall Law School April 28, 2006

  22. Lessons Learned • The payment system often drives the patterns of care • Ex: if care is paid for in the hospital and not out of the hospital, care will shift • Ex: if care is paid for if job related and not otherwise, there will be job related problems • Liability system can influence patterns of care—sometimes improving quality but maybe leading to unnecessary care • Costs can increase beyond anyone’s expectations • High-cost claimants drive market possibilities • Technology can lead to marvelous results, but it also can cost a lot • Sometimes people focused on the latest technology forget the basics Anna Rappaport presentation at John Marshall Law School April 28, 2006

  23. Big Questions • What rights does the public have to health care? • Who will define the risk pools? • How do we reduce the number of uninsured? • How can we keep costs under control? • What role will employers take in financing and providing health care? • What role will state and federal government take in regulating, financing and providing health care? • How will those without employer coverage gain access to care? • How will resources be allocated to public health, acute care and chronic care? Anna Rappaport presentation at John Marshall Law School April 28, 2006

  24. Big Questions (continued) • How will decisions about individual care be made? • What control/management systems will be in place? • What will be the role and who will control academic medical centers? • How will managed care evolve? • What systems will be used to control that excessive care is not provided? • What is appropriate care at the end of life? • Who can make decisions about end of life care and choosing when to die? • Will insurers be allowed to underwrite individuals without any restrictions? • Will risk adjustment methods be developed? Anna Rappaport presentation at John Marshall Law School April 28, 2006

  25. Big Questions (continued) • What liability will be imposed on providers, insurers? • What limits will there be on liability? • Where will early retirees without employer coverage get their coverage? • Who will define standards for quality of care? • Who will set/negotiate prices? • Will providers be allowed to charge different prices to different customers? Anna Rappaport presentation at John Marshall Law School April 28, 2006

  26. Appendix: Additional Data Anna Rappaport presentation at John Marshall Law School April 28, 2006

  27. Percentage of GDP 13.4% 14.9 16.0* 18.7* *Estimate Per Capita $3,353 5,670 2006 6,830* 2014 11,045* National Health Expenditures Source: “US Health Spending Projections for 2004-2014,” Health Affairs, Feb. 2005 Anna Rappaport presentation at John Marshall Law School April 28, 2006

  28. Uninsured • A growing problem • 44.7 million – 2003 • 40.0 million – 1999 • Consequences • 47% postponed seeking care because of cost (compared to 15% of insured) • 37% did not fill a prescription because of cost (compared to 13%) • Result of uninsured not getting care • 57% painful temporary disability • 19% long term disability Source: Kaiser Family Foundation, “Trends and Indicators in the Changing Health Care Marketplace” (Exhibits 7.1, 7.6, 7.7) Anna Rappaport presentation at John Marshall Law School April 28, 2006

  29. Nursing Home Costs • Average $74,000/year • Average stay is 2.5 years • 11% of 65 year old men and 28% of women will need more than five years of care at home or in a facility • Among benefit claimants with a three year benefit limit, 8% will exhaust benefits in policy Source: Jonathon Clements, “Getting Going,” Wall Street Journal. Feb. 22, 2005 Anna Rappaport presentation at John Marshall Law School April 28, 2006

More Related