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Solving the Health Care Crisis in Minnesota Minnesota Universal Health Care Action Network

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Solving the Health Care Crisis in Minnesota Minnesota Universal Health Care Action Network

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  1. Solving the Health Care Crisis in MinnesotaMinnesota Universal Health Care Action Network Prepared and Researched by: Joel M. Albers health economics researcher, clinical pharmacist Website:, Email: joelalbers@uhcan-mn Tel: 612-384-0973 MN-UHCAN Joel Albers

  2. Outline • Documentation of the health care crisis • Analysis of power structure of the industry • What’s causing the health care crisis ? • Compare universal publicly-funded single-payer model to private HMO, multi-payer, job-based market approach. • What polls, studies show about various health care reform models ability to cover all without increasing costs. • Solving the Crisis by Building a Movement MN-UHCAN Joel Albers

  3. Essence and Summary of Health Reform Debate • Health care system that is market-based in which health care is a commodity, distributed according to ability to pay ? • Health care system that is social insurance distributed according to need? MN-UHCAN Joel Albers

  4. Documentation of the health care crisis MN-UHCAN Joel Albers

  5. Is There Really a Health Care Crisis in MN and U.S. ? • “The American Health system is in need of fundamental change. It is failing both clinicians, and patients, and their frustration levels have never been higher”, U.S. Institute of Medicine, 2001 Report MN-UHCAN Joel Albers

  6. WHO: Health System Rating • US Ranks 37th in the World MN-UHCAN Joel Albers

  7. Uninsured in Minnesota • Point in time: 5.4% (266,000), at time of survey • Uninsured at some point in year:8.1% • Uninsured at some point in 2 yrs:20% or 941,000** Source: * MN Health Dept ‘01 Health Access Survey;** Robert Wood Johnson Foundation. Survey did not ask about mental health coverage. Minnesota’s population = 5 million 2004 MN-UHCAN Joel Albers

  8. Underinsured in MN • 16% lack prescription drug insurance • 50% of seniors lack prescription drug coverage • 34% lack dental coverage • Large unmeasured % lack mental health coverage • Private insurance and Medicare generally do not cover long term care (neither nursing home nor home health care) Source: * MN Health Dept ‘01 Health Access Survey MN-UHCAN Joel Albers

  9. 2001 Minnesota Uninsured Rates by Race/EthnicitySource: MN Health Dept 2001 Health Access Survey 17.3% 16.1% 15.6% 6.6% 4.5% MN-UHCAN Joel Albers

  10. International Comparison: Canada’sSingle-Payer v. U.S. Multi-Payer System • Life expectancy 2 years longer • Infant deaths 25% lower • Universal comprehensive coverage • More MD visits, hospital care; less bureaucracy • Quality of care equivalent to insured Americans’ • Free choice of doctor/hospital • Health spending half U.S. level MN-UHCAN Joel Albers

  11. 8 MN Labor Union Strikes Provoked by Health Care Costs 2000 - 2004 • 2004 Transit Union ATU 1005 • 2003 AFSCME 3800 U of MN • 2002 Teachers in Red Wing • 2002 Teachers in International Falls • 2001 Nurses Fairview Hospital • 2001 MN Association of Professional Employees • 2000 HERE, Hotel and Restaurant Employees • 2000 Teamsters Minneapolis Pepsi workers MN-UHCAN Joel Albers

  12. MN 2003 Legislature Cut $200 Million From Public Assistance Programs • 38,000 people will lose public health insurance by 2007 • Severe restrictions for people still on MNCare,GAMC Source: MN Dept of Human Services MN-UHCAN Joel Albers

  13. Effects of Budget Cuts on only Remaining Public Hospital: Hennepin Cty Medical Center • Overcrowded emergency rooms • Understaffing,higher workloads, longer shifts • Lower quality health care • $30 million in federal government cuts • $7.8 million in other cuts • Less revenue from public assistance patients, more uncompensated care • Serious $ problems, 190 “nonclinical” staff fired. Source: Save HCMC Coalition 612-338-3331 MN-UHCAN Joel Albers

  14. Power structure of the industry MN-UHCAN Joel Albers

  15. Power Structure of MN Health Care Industry:Medical-Industrial-Government-Academic Complex • Health Professional Associations: MMA, MPubHA, MN pharmacists Assoc. • Corporate: HMOs, drug, medical device, biotech corporations:attorneys,lobbyists • Big Business, MN Business Partnership, Chamber of Commerce • Trade Assocs: MN Council of Health Plans (HMO), MNBio (biotech) • Think tanks: Interstudy (HMO),MedicalAlley (Tech) • Foundations: HealthPartners Research Foundation • Government agencies:Legislature, MN Dept of Health • Commissions: Pawlenty-Durenberger • Academia: U of MN MN-UHCAN Joel Albers

  16. How MN HMO & Drug Corporate Money Controls MN Legislature,2000

  17. What’s causing the health care crisis ? MN-UHCAN Joel Albers

  18. MN Statewide Health Care Cost Trends; Current Law 60.8 37.2 Billions $ 20.4 Year Sources: Center for Medicare and Medicaid Services ; “Health spending projections for 2001-2012,Health Affairs, 2/3/03 MN-UHCAN Joel Albers

  19. Double-Digit Health Care Cost Increases in Every Sector of MN • Total Statewide • State government • Seniors • Business • Labor Unions • Households MN-UHCAN Joel Albers

  20. Market-based System Since 1994 Results in Oligopoly4 Private HMOs Control MN Health Care Market 2002 • Blue Cross-Blue Shield, 2 million members • Medica, 1 million members • HealthPartners,660,000 members • Preferred One, 600,000 members • These 4 insure 9 of every 10 Minnesotans, • Own or investors in most of MN’s major hospitals & clinics Source: HMO companies MN-UHCAN Joel Albers

  21. Twin Cities Hospital Market Share,1996 & 2001 Measured as Percent of Inpatient Admissions Children’s 5%,5.6% Other non-affiliated 3%,3.9% Methodist 6% Allina 27%, 29.2% HealthPartners,(was Regions) 7%,7.6% N.Memorial 7%,7.8% Hennepin Cty 8%,6.3% Fairview University 26%, 20.9% HealthEast12.0%, 12.1% Source: MN Dept of Health, Consolidation in MN’s Health Care Market, Issue Brief 98-04, MN Managed Care Review 2002, Part 1 MN-UHCAN Joel Albers

  22. What is causing health care costs to spiral out of control? Medical-industrial-government-academic-complex strategy: blame consumer demand & overutilization • Drink too much alcohol • Smoke too much • Overweight • Don’t feel cost of care • Aging population • Malpractice costs MN-UHCAN Joel Albers

  23. Myth: The US Health System Costs so Much Because Americans Drink and Smoke so Much MN-UHCAN Joel Albers

  24. Myth: US Health Care Costs so Much Because Americans are so Fat and Obesity Res 2001;9:2306 MN-UHCAN Joel Albers

  25. Myth: US Health Care Costs so Much Because Americans Don’t Feel the Cost of Care % of total health spending: WHO: 2000 MN-UHCAN Joel Albers

  26. Myth: US Health Care Costs so Much Because Americans don’t personally pay for Health Care MN-UHCAN Joel Albers

  27. Myth: US Health Care Costs so Much Because Americans are Really Old! MN-UHCAN Joel Albers

  28. Per Capita Spending and % Elderly % of Population over 65 Health Aff 2002;21:170 MN-UHCAN Joel Albers

  29. Myth: Malpractice costs are why US Health care costs so much % of total US Health Spending • Premiums MD and Hosp .07% • Defensive medicine .12% • Comp Ther 1998;24:455-9 MN-UHCAN Joel Albers

  30. What is REALLY causing health care costs to spiral out of control? In reality, the CAUSE comes from the supply side • HMO premium prices, administrative costs • Drug,medical device, biotechnology company prices MN-UHCAN Joel Albers

  31. It’s the Prices and Administrative costs • Health Care Costs = Price X Volume + adm costs MN-UHCAN Joel Albers

  32. Excess Administrative Costs (% of Revenues) in U.S. Compared to Canada,1999 Source: Woolhandler S., Campbell T., Himmelstein D. Costs of Health Care Administration in the U.S. and Canada. New England Journal of Medicine 2003;349:768-75 MN-UHCAN Joel Albers

  33. International Comparisons • Every other industrialized nation has a healthcare system that assures medical care for all • All spend less than we do; most spend less than half • Most have lower death rates, more accountability, and higher satisfaction MN-UHCAN Joel Albers

  34. U.S. Public Spending Per Capita for Healthis Greater than Total Spending in Other Nations Note: Public includes benefit costs for govt. employees & tax subsidy for private insuranceSource: NEJM 1999; 340:109; Health Aff 2000; 19(3):150 MN-UHCAN Joel Albers

  35. How are profits made in Health care ? • HMOs,other insurers are fiscal intermediaries (middlemen) do it by denying care, underutilization • Drug, device, biotech companies do it by overpromotion, overutilization • Thus, the system suffers from both overutilization, AND underutilization of health care services MN-UHCAN Joel Albers

  36. What is single-payer compared to current HMO multi-payer enterprise ? MN-UHCAN Joel Albers

  37. Single-payer is: publicly financed andadministered, yet privately practiced, social insurance system • Public financing; public taxes replace private premiums • Public Admin: the single-payer- a citizen board- replaces multi-payers • Social insurance: All in,None out; healthy subsidize sick, disperse financial risk over entire population.No bankruptcy • Socialized medicine: ONLY if gov’t EMPLOYS practitioners and OWNS hospitals, nursing homes etc MN-UHCAN Joel Albers

  38. Health Care is a Public Good: • like roads, fire protection, parks • something we all need but cannot afford to pay for ourselves MN-UHCAN Joel Albers

  39. Basic principles of a single-payer system • Universal – it covers everyone • Comprehensive – covers all needed health care services • Cost Containment – sets fee schedules for practitioners, budgets for hospitals, controls prices; ends insurance co. waste. • Choice of Practitioners – patients choose practitioners  Fairly Financed – funds health care by consolidating existing public programs, & a tax that replaces premiums & copays. • Publicly Accountable – a board of citizens sets fee schedules for providers, budgets for hospitals, and ensures quality of care.

  40. Models for Single-payer Health Care ? • U. S. Medicare 41 million elderly and disabled • Internationally: Canada, Sweden, Norway, Denmark MN-UHCAN Joel Albers

  41. Myths About Single-payer perpetuated by Medical-Industrial- Government- Academic Complex • We can’t afford it • It’s socialized medicine • It’s not politically feasibility • It will stifle innovation • We would have to ration care • Will increase taxes • It would be government run MN-UHCAN Joel Albers

  42. Difference Between Single-payer and Multipayer-HMO system Analogy • Fences (Macromanagement) • Reins (micromanagement) MN-UHCAN Joel Albers

  43. How the HMO System Works in MN • Micromanagement system to control costs by restrict or deny services • Managed care: hands-on supervision of practitioners • Transferred financial risk to physicians (capitation bonuses) • Utilization review, • Heavier workloads • Sometimes limiting choice of physician. • Managed competition theory: competition among HMOs controls costs. MN-UHCAN Joel Albers

  44. What the polls, studies, and cost analyses show about various health care reform models. MN-UHCAN Joel Albers

  45. ABCNEWS Poll Comparison: The response was very similar in the national poll with 17% favoring holding down taxes and 80% favoring providing health care for all Americans. opinions regarding health care services Which of these do you think is more important? Providing health care coverage for all Americans, even if it means raising taxes Holding down taxes, even if it means some Americans do not have health care coverage. (Base=795) 20% Eight out of ten Minnesotans are willing to pay higher taxes in order to ensure that all Americans have health care coverage. 20% 20% 80% 80% 80% MN-UHCAN Joel Albers

  46. Washington Post/ABC Poll Oct 2003 • 62% of the U.S. supports a national health care system that covers everyone • 32% favor the current system • 6% don’t know • Most think Canada’s (single-payer) system is better MN-UHCAN Joel Albers

  47. 56% of Medical Students & FacultyFavor Single Payer,Majority of Med School Deans Concur “What is the best health care system for the most people?” Source: NEJM 1999; 340:928 MN-UHCAN Joel Albers

  48. 9 State Studies Conclude Single-Payer Financing Saves $ While Covering All • Massachusetts Medical Society, 2 studies, 1998 • California, funded by State legislature, 2002* • Oregon, Health Care for All, 2001 • Vermont State publicly funded study, 2001 * • Maryland, privately funded* • Maine • Rhode Island 2002 • Missouri 2003 *Evaluations carried out by The Lewin Group, Inc MN-UHCAN Joel Albers

  49. 7 National Studies Conclude Single-Payer Financing Saves $, Covers All U.S. • Economic Policy Institute (private) 1998 • 4 studies by Congressional Budget Office, ‘91-’93 • U.S. General Accounting Office, 1991 • Physicians for a National Health Program,PNHP,’91 MN-UHCAN Joel Albers

  50. Projected Universal Single-payer Health Plan Savings for MN 2005 (in millions) Source: Joel Albers MN-UHCAN Joel Albers