Achieving Universal Health Care for Kids (& Adults): The Minnesota Health Plan

1. Achieving Universal Health Care for Kids (& Adults): The Minnesota Health Plan Ann Settgast, MD National Children’s Study Speakers’ Series Saint Paul, Minnesota May 16, 2012

2. The U.S. health care system becomes a more embarrassing disaster each year… — Donald Kennedy, former President, Stanford University; former Editor Science, August 15, 2003 America has the best health care system in the world, pure and simple. — President George W. Bush, addressing the American Hospital Association, May 1, 2006

3. The U.S. health care system becomes a more embarrassing disaster each year… — Donald Kennedy, former President, Stanford University; former Editor Science, August 15, 2003 America has the best health care system in the world, pure and simple. — President George W. Bush, addressing the American Hospital Association, May 1, 2006

4. National research & education organization of ~ 18,000 physicians and medical students • Single-payer care provides the most cost efficient and equitable way to reform our broken system • “…access to high-quality health care is a right of all people and should be provided equitably as a public service rather than bought and sold as a commodity…”

5. Objectives • Define the problems of uninsurance and underinsurance as they relate to US children • Distinguish single-payer healthcare reform from other reform proposals • Introduce the Minnesota single-payer movement

6. Definitions of Approaches to Universal Care Socialized medicine • Publicly financed • Publicly owned Single-payer system • Publicly financed • Privately owned (delivered)

7. What is Single Payer? • Hospitals & clinics now bill > 1000 payers (insurers) • In a single-payer system, there would be no private health insurance • Recovery of $400 billion annually due to drastically reduced administrative costs (Steffie Woolhandler et al., “Costs of Health Care Administration in the United States and Canada,” New England Journal of Medicine 2003;349:768-75).

8. Why Single-Payer? Access US has major problems in all 3 areas Cost Quality

13. 480,000 Uninsured 68% of the uninsured have a FULL-TIME worker in the household Source: http://www.census.gov/hhes/www/hlthins/hlthins.html

15. Does being uninsured matter? Model adjusted for gender, age, race/ethnicity, income level, education, employment status, smoking status, alcohol use, exercise habits, self-reported health status… Source: Wilper et al. American Journal of Public Health, 2009 45,000 adult deaths/ year

17. * Adjusted for gender, race, age, region, hospital type, comorbid disease J Public Health (2010) 32 (2): 236-244 (Data from 23 535 491 pediatric inpatient hospitalizations over 18 years from 37 US states were analyzed).

18. “Underinsurance Among Children in the United States”, NEJM, 2010, 363;9 • 14.1 million US children with continuous coverage are underinsured • Underinsurance defined: • “Insurance does not provide adequate benefits, provider choices, or coverage of costs.” • Findings: Underinsured children were less likely than insured children to have a healthcare home or obtain preventive care • Underinsured children were 3x as likely as insured children to forego needed care in the past year Data: 2007 National Survey of Children’s Health – sample size 91,642 children

20. We're 51st? On a health measure? For kids?! • Minnesota ranked 51rst in children’s health insurance “adequacy” • 41st in # of children receiving preventive care • Among the best in children’s uninsurance & infant mortality • Best in the nation for teen obesity and oral health Minneapolis Star Tribune report of Commonwealth Fund study 2/2/11

21. Underinsurance • 62% of personal bankruptcies due to medical expenses (2007) • 78% of people with medical bankruptcies had health insurancewhen they got sick “Medical impoverishment, although common in poor nations, is almost unheard of in wealthy countries other than the US.” Himmelstein et al, American Journal of Medicine, June 4, 2009

22. Why Single-Payer? Access US has major problems in all 3 areas Cost Quality

28. Why Single-Payer? Access US has major problems in all 3 areas Cost Quality

29. US ranked 37th by the WHO World Health Report

32. Why do we pay more and get less? • 31 cents of each healthcare $ is spent on administration • Administrative spending comes from two sides: • Providers • Payers (Steffie Woolhandler et al., “Costs of Health Care Administration in the United States and Canada,” New England Journal of Medicine 2003;349:768-75)

33. Interactions between physician practices & insurers are costly Morra et al, Health Affairs, August 2011, 30:8, 1443-1450

37. Why do we pay more and get less? • 31 cents of each healthcare $ is spent on administration • Administrative spending comes from two sides: • Providers • Payers (Steffie Woolhandler et al., “Costs of Health Care Administration in the United States and Canada,” New England Journal of Medicine 2003;349:768-75).

38. Insurance (Payer) Overhead International Journal of Health Services 2005; 35(1): 64-90

39. Why are their administrative costs higher than Medicare’s? • Advertising/marketing • Enrolling/disenrolling • Underwriting • Denial of claims • Deciding what to cover (exclusions, pre-existing conditions) • Negotiating multiple contracts with providers • Lobbying ($1.2 billion in 2009) • Salaries (CEO pay at top 10 insurers in 2009 = $228 million) • Profit (Top 5 insurers reported $11.7 billion in 2010)

40. Admin costs of private payers versus Medicare: • Do these “services” make our patients healthier? • Should we be spending these healthcare dollars on healthcare?? • Do these “services” help diagnose, treat, or prevent illness?

41. April 13, 2011 UnitedHealth Group Inc. CEO Stephen Hemsley took home $48.8 million in total compensation in 2010. KSTP-TV – March 14, 2012 $2.3 million in bonuses paid in 2011 $300 million in reserve accounts

42. Is it feasible??? • We already have… • Excellent hospitals and well-trained professionals • A nation of vast wealth with sufficient spending • Acceptance of pooled resources to publicly fund the military, the NIH, the CDC, highways and roads, police and fire services, schools, libraries, water sanitation, etc. • And… • Every other industrialized nation is doing it!

43. Public Support – Single Payer • 49% favor coverage from a single govt. plan1 • 59% prefer a system like Medicare for all2 • 59% say government should provide national health insurance3 Polls from 2009 1 April, Kaiser Family Foundation 2 January, Grove Insight Opinion Research 3January, New York Times/CBS News

44. What do doctors think of single-payer? • 5000 surveys, 2008: 51% response rate • “In principle, do you support or oppose government legislation to establish national health insurance?” • 59% supported (49% in 2002)

45. Support for government legislation to establish National Health Insurance in 2007 and 2002, by specialty Annals of Internal Medicine, 1 April 2008, Volume 148 Issue 7, Pages 566-567

46. But didn’t we just pass historic national reform? • Individual Mandate • Mandated health insurance for some (23 million will remain uninsured in 2019) • Policies required to cover at least 60% of expected health costs (problem of underinsurance remains alive and well) • Raises costs “While the legislation will enhance access to insurance, the trade-off will be an accelerated crisis of costs and perpetuation of the current dysfunction…” – Jeffrey Flier, dean of Harvard Medical School

48. Massachusetts: Required Coverage (56 y/o male with income > $32,000) • Premium: $5,600 • $2000 deductible • 20% co-insurance once deductible reached

49. Massachusetts continued • Healthcare will consume 54% of state budget in 2012 (up from 49% in 2009) • Monthly premium for a minimal (“bronze”) plan increased by 57% from $175 in 2007 to $275 in 2012 Zirui S et al, NEJM, 4/11/12

50. SF 8/HF 51 Chief author - Senator John Marty