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10 Things to Know about THE US HEALTH CARE SYSTEM

10 Things to Know about THE US HEALTH CARE SYSTEM. Nancy Turnbull Department of Health Policy and Management. Who’s in the room: Where are you from?. Africa region Central/South America region Europe region Asia region Australia region North America—not United States United States.

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10 Things to Know about THE US HEALTH CARE SYSTEM

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  1. 10 Things to Know about THE US HEALTH CARE SYSTEM Nancy Turnbull Department of Health Policy and Management

  2. Who’s in the room:Where are you from? • Africa region • Central/South America region • Europe region • Asia region • Australia region • North America—not United States • United States

  3. What Degree Program are you in at HSPH? • Master of Public Health • Master of Science • Doctoral (SD, DPH, PhD) • I am not a student but wandered in to see if there was any free food

  4. How much do you already know about the US health care system? • Nothing • A little bit • Quite a bit • I should be leading this session • More than I want to know

  5. Compared to the US HC System, the health care system in my country generally provides • Higher quality care • The same quality care • Worse quality care

  6. Compared to the US HC System, the health care system in my country is: • More equitable • Less equitable • Equally equitable/inequitable

  7. The biggest problem in the US health care system is • High costs • The number of people without insurance • Uneven quality of care • Disparities in access, care and health based on race, ethnicity, income • Administrative complexity/costs • Medical malpractice system/blood-sucking lawyers • A market-oriented approach to health care • US patients who don’t have to take enough responsibility for their health • Something else

  8. One of the things I would like to understand better about the US system is: • Why are costs so high? • How can there be so many people with no health insurance? • Who is responsible for this mess? • How can I get paid as much as specialist doctors in the US?

  9. 1. Financing -How is money raised? -Who is insured? -How are “risks” pooled? -Who bears the financial risk? 2. Organization -Planned vs. market forces and competition? -Who owns the resources? -What is the degree of integration (vertical and horizontal)? -Is the system organized at local, regional, or national level? 3. Payment of Doctors/Hospitals and Others (“Providers”) -What method is used? -What is the level of payment? 4. Regulation -What is the mix of government vs. private vs. self-regulation? -What types of regulatory approaches are used (e.g., supply, market rules, social marketing)? -What level of government regulates? Four Key Structural Elements of Health Systems

  10. How do structural elements affect system performance?

  11. #1: Important Social and Cultural Influences • Lack of “social solidarity” • Belief in individual responsibility • “Deserving” vs. “Undeserving” poor • High tolerance for inequity • Health care not regarded as part of a wider system of social supports • Faith in competition and the market • Distrust of government • High religiosity • Pluralistic but highly polarized

  12. #2: Important Institutional Influences on US Health Care System • Weak executive branch at all levels of government • Frequent elections • Lowvoter turnout (62% in 2008 was 40-year high) • Strong influence of private interest groups • Contributions to political campaigns • Union membership low and falling (11%) • “States rights” are dominant in many areas • Path dependence • Accidental history of employer-based private health insurance

  13. #3: Pluralistic Financing • Mixed private and public insurance system • Privately-run, competitive system for most people • Employment-based coverage predominates • Voluntary offer by employers • Voluntary purchase by workers and individuals • Employer decides “benefit package” • Premiums based on “risk” of each employer • Regressive financing • Individual market for some • Premiums vary by age, gender and health status • Might not be available to those with health problems • Government insurance system for Elderly and certain people with disabilities : Medicare Certain low-income populations: Medicaid

  14. US Financing: Health insurance coverage by type of insurance: 2011 • Type of Health Insurance # % of pop • Private • Employment-based 149m 49% • Private, individual 15 m 5% • Public • Medicare 40 m 13% • Medicaid 51 m 16% • Other Public 4 m <1% • Uninsured49m16% Source: US Census, CPS. Total US population is ~308 million .

  15. #4: Coverage is lacking or insecure for many • Poor • Not eligible for existing public programs • Eligible for public programs but not signed up • Moderate income • Not offered employer-sponsored coverage • Can’t afford employer coverage • Can’t afford individual insurance • Higher income • Not eligible because of health conditions • Coverage is too expense because premiums vary by age • Eligible and affordable but choose not to purchase

  16. Who are the Uninsured? • Most are adults • 84% adults and 16% children • Most are low income • 40% are poor; 50% are moderate income • Nearly half are White • 47% White, 30% Hispanic and 15% Black • Most are citizens • 81% citizens and 19% non-citizens • Most are employed full-time • 61% are in families with 1 or 2 FT workers

  17. Rates of Uninsurance Vary Widely by Income, Age and Race PERCENT OF EACH SUBGROUP THAT IS UNINSURED INCOME AGE RACE

  18. Lowest and Highest Rate of Non-Elderly Uninsured: 2011 MASSACHUSETTS Source: US Census Bureau, Current Population Reports, 2011 (2 year average 20010-2011)

  19. What Happens to People with No Health Insurance? • Pay out of pocket • Public hospitals in some areas • Community health centers in some areas • Free or reduced cost care from individual providers(“charity” care) • Hospitals have legal obligation to “screen and stabilize” those with emergencies • Forego needed care

  20. Source: Kaiser Family Foundation, Primer on Uninsured, 2010

  21. #5: Federal coverage reform law is about to help • Expansion of Medicaid for the poor • If a state decides to expand its program • Public subsidies for low and moderate income people • Through health insurance exchanges/ marketplaces • Tighter regulation of private health insurance market • Required purchase of insurance by most individuals (“individual mandate”)

  22. #6: Market Forces Largely Determine Supply, Distribution and Payment of Providers • Little regulation of provider supply • Little regulation of provider prices or health insurance premiums • Government sets prices for Medicare and Medicaid • Private negotiations for privately-insured • Regulation at state level in many cases • Provider licensing • Health insurance • Most public health functions • Strong history of “self-regulation” of providers

  23. Ownership and Control of Resources Mostly Private • Mix of for-profit and not-for-profit structure • Not-for-profits are tax-exempt • Mix of local, regional and national companies • Hospital and physician markets are mainly local • Prescription drugs is national/international • Health plans/insurers regional/national • Degree of integration varies • More horizontal than vertical integration in last decade • Dominant/monopoly hospitals/provider systems in many geographic regions

  24. Supply: 2010 Source: OECD

  25. Active Primary Care and Specialty Physicians Per 100,000 Population, 1970-2007

  26. Provider Payment in US • Methods and levels are diverse and vary by payer • Medicare has uniform payment methods across country • Medicaid methods vary from state to state • Private payers determine own rates based on private negotiations with each provider • HUGE variation in rates of payment based on market power • Fee-for-service is dominant payment method • Lots of interest in moving to “global payment” or capitation methods

  27. US “Managed Care” Penetration: Percent of Covered People in 2011

  28. #7: Highest Health Care Costs in the World

  29. Health Care Expenditure Per Capita and GDP Per Capita: 2007 OECD 2009

  30. Average Annual Firm and Worker Contribution to Health Insurance: 2013 $16,715 $5,967 KFF/HRET, 2013 Employer Health Benefits Survey (Exhibits 6.9 and 6.10)

  31. Why are US Costs so Much Higher? • More use of medical care? • Higher prices? • Supply and use of costly medical technology? • Fragmented financing system? • Administrative costs and complexity? • Provider payment methods? • Lack of regulation and planning? • Large number of uninsured people? • Greater burden of disease? • Medical malpractice and defensive medicine?

  32. Why are US Costs so Much Higher? • More use of medical care? • Higher prices? • Supply and use of costly medical technology? • Fragmented financing system? • Administrative costs and complexity? • Provider payment methods? • Lack of regulation and planning? • Large number of uninsured people? • Greater burden of disease? • Medical malpractice and defensive medicine?

  33. #8: Use of many services is relatively low and use of others is relatively high Hospital Discharges per 1,000 Population, 2009 * 2008. Source: OECD Health Data 2011 (June 2011).

  34. Average Length of Hospital Stay, 2009

  35. Average Annual Number of Physician Visits per Capita, 2009 * 2008. ** 2007. Source: OECD Health Data 2011 (June 2011).

  36. Use Rates of Specific Procedures

  37. Hospital Spending per Discharge, 2009Adjusted for Differences in Cost of Living #9: Higher Prices for Most Services Dollars * 2008. ** 2007. Source: OECD Health Data 2011 (June 2011).

  38. Physician Fee for Hip Replacement, 2008Adjusted for Differences in Cost of Living Dollars Private payers Public payers THE COMMONWEALTH FUND Source: M. J. Laugesenand S. A. Glied, “Higher Fees Paid to U.S. Physicians Drive Higher Spending for Physician Services Compared to Other Countries,” Health Affairs,Sept. 2011 30(9):1647–56.

  39. MRI Scan and Imaging Fees, 2009 Dollars US high-end: 1,500 US average: Source: International Federation of Health Plans, 2009 Comparative Price Report.

  40. Physician Incomes, 2008Adjusted for Differences in Cost of Living Dollars Orthopedic surgeons Primary care doctors Source: M. J. Laugesenand S. A. Glied, “Higher Fees Paid to U.S. Physicians Drive Higher Spending for Physician Services Compared to Other Countries,” Health Affairs,Sept. 2011 30(9):1647–56.

  41. Drug Prices for 30 Most Commonly Prescribed Brand-Name and Generic Drugs, 2006–07US is set at 1.00 Source: IMS Health; analysis by Gerard Anderson, Johns Hopkins University.

  42. Recommended Reading:NY Times series: Paying Till It Hurts

  43. Recommended Reading The Cost Conundrum: What a Texas town can teach us about health care. by AtulGawande New Yorker June 1, 2009 Available at http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande

  44. France Italy San Marino Andorra Malta Singapore Spain Oman Austria Japan Norway Portugal Monaco Greece Israel Morocco Canada Finland Australia Chile Denmark Dominica Costa Rica United States of America Slovenia #10: Overall Health System Performance is Relatively Weak (particularly compared to $) WHO Health Rankings of Health Systems • Iceland • Luxembourg • Netherlands • United Kingdom • Ireland • Switzerland • Belgium • Colombia • Sweden • Cyprus • Germany • Saudi Arabia • United Arab Emirates Source: WHO 2000

  45. Available at: www.commonwealthfund.org

  46. 2010 Overall Ranking

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