Overview of US Health Care System

1. Overview of US Health Care System • Distinguishing features • Performance • Barriers to Reform • Recent Legislation/Current Debates

2. Features of US System • Individualism • Private responsibility and opportunity • Public programs for the vulnerable • Medicare • Medicaid/SCHIP • Community health centers • Regulations on those who get public funds • Tolerance for variance is strong

3. Fundamental Fact of Health Economics • Distribution of spending – and acute need in any one year – is highly, highly skewed • Top 1% of population spends 30% • Top 10% spends 70% • Bottom 50% spends 3%

4. Implications of Fundamental Fact • Risk pooling is essential • Most of us are healthy most of the time • Insurance is a “contingent” benefit • Voluntary insurance markets will have adverse selection problems

5. Some Coverage Trends (percent of under-65 population) 198719932002 Employer 70.1% 64.3% 64.2% Medicaid+SCHIP 8.7% 12.9% 11.9% Uninsured 13.7% 16.0% 17.3% Source: EBRI, December 2003.

6. Who are the 43.3 million Uninsured? • Mostly low income (2/3 are in households with income below $40,000, 1/3 below $20,000) • Mostly adults (80% are over 18) • Mostly male • Mostly attached to working families (61% full time, 23% part-time) • Mostly white (48%; 16% African American, 29% Hispanic)

7. Do the Uninsured get the care they need? • No (Institute of Medicine) + proponents of major reforms) • Yes (Opponents of major reforms) • Sorta? • Charity care is available • Most evidence suggests it is less effective than care received by the insured, on average

8. Financing Shares of National Health Expenditures Over Time Private Out-of-Pocket Total Gov./State Health Ins. 196022.0% 48.4% 24.8% / 14.2% 1970 21.3 34.3 37.8 / 13.7 1980 27.8 23.7 42.7 / 13.6 1990 33.5 19.7 40.6 / 12.9 2002 35.4 13.7 45.9 / 13.4 Source: CMS, NHA data, various years.

9. Opportunity Cost is RisingNational Health Spending as a share of Gross Domestic Product Source: CMS, National Health Accounts Data

10. Health Spending as Share of GDP

11. Some International Rankings of US • Expenditures per capita, share of GDP: #1 • Infant Mortality: # 28 (right behind Cuba, Ireland, and Portugal) • Life expectancy at birth: 29th • Life expectancy at age 60: 26th (tied with Cuba, Slovenia, and Korea)

12. Recent Premium, Health Cost and Wage Growth Source: KFF Employer Survey, premium data; Strunk and Ginsburg, cost data; 2003 EROP, wage data.

13. Percent of Recommended Care Adults Receive Source: E. McGlynn et al. NEJM, 2003;348:2635-45.

14. Summary of US Health System Problems • Waste • Uneven quality • Uneven access • Cost of first two make solving third expensive, polarizes our national debate

15. Dementia care worries 16 July 2002 By JENNY ELLIOTT A lack of facilities for people in Northland needing dementia care means elderly couples are being separated from each other when one of them has to placed outside of the area. It’s one of a number of issues concerning dementia care in the region that is raised in the Alzheimers Society Northland newsletter by Carol Pringle, a community support worker, who says the lack of stage 3 dementia beds in Whangarei and the North generally is leading to placements outside of the area. Stage 3 beds are secure beds for patients who may hurt themselves if they don’t receive a high level of care. Ann Wilson of the society’s Whangarei office agrees. “People are being moved out of their area and it’s causing distress for the family. For example I have a patient who has been moved to Kaikohe from Whangarei and his wife of 63 years isn’t able to visit him. It is awful for her. There are also no emergency beds available for a person with dementia in times of crisis.” The shortage of stage 3 beds means some clients are being inappr Mother wins support for research into rare disease 10 July 2002 A Richmond mother's presentation on a drug trial that has helped two of her children walk again has sparked international interest in finding a cure for the rare lysosomal disease that affects them. Jenny and Paul Noble's children, Hayden, 20, and Sarah, 16, are the only New Zealanders who suffer from mucolipidosis type 3 (ML3), and were the first people in the world to try the osteoporosis drug pamidronate to treat the bone disease it causes. After the first 20 months of the drug trial, Hayden and Sarah, who had both been wheelchair-bound, were walking and pain-free. Mrs Noble presented her findings with Sydney-based researcher Dr Grace David at the Third Scientific Lysosomal Storage Diseases Congress in Paris last month. She said the response had been encouraging. " of pamidronate but had no followup. He was very interested in what we have been doing. "I'm just really stoked that we are able to help other families." Public to have say on drinking water content 10 July 2002 Whangarei residents will be canvassed for their opinion on whether or not they want their drinking water fluoridated. Whangarei District Council made the decision recently to go ahead with a survey about fluoridating water supplies, although it declined an offer from local GP Dr Shane Reti to fund a survey. Mayor Craig Brown said it was a council responsibility to fund the survey, which could cost in the region of $20,000. At present 16 of New Zealand's 41 councils fluoridate some, if not all of their water supplies. Whangarei hit by return of Kaitaia Hospital services 16 July 2002 The battle to have surgical services fully restored at Northland's Kaitaia Hospital has claimed an unexpected casualty – operations at Whangarei Hospital. One operation has been cancelled at Whangarei Hospital and more cancellations could come as staff from Whangarei are sent to ease Kaitaia's staffing crisis. A urological procedure, believed to be for a five-year-old, was cancelled after a specialist anaesthetist was sent to Kaitaia, leaving Whangarei Hospital short. Finance - Scarcity “…scarcity is a fact of life. No matter the size of the health care budget, it will always be a fixed envelope of funds. The claims will always be greater than the resources available, in that there will always be more ways to spend those resources” (Donaldson et al 2002)

16. Recent Medicare Legislation • Proved “Washington” can do something • Added drugs to Medicare benefit package • Acknowledged need for long run structural reform • Was crafted by elected representatives, not policy wonks

17. Conclusion • Crisis is in the eye of the beholder • Reform has many prerequisites • Moral consensus • Shared assessment of basic facts • Recognition of mutual self-interest • Catalytic leadership and luck • Don’t divorce politics from policy analysis