Health Care Policy
POLS 304
Public Policy
Ten Quick Facts:
1) Medicine is both labor and technology intensive.
2) Health care problem in the US can be broken into four interrelated categories:
Access
Cost
Quality
Aging Population
3) For 2014, health care is eighth in public concern after the economy, jobs, terrorism, Social Security and more.
http://www.people-press.org/2014/01/27/deficit-reduction-declines-as-policy-priority/1-25-2014_01/
4) Average US Individual Health Care Expenditure:
1990: $2000
2000: $6280
2012: $8915
5) 46 million uninsured
(Note: 36.8 = just citizens. 46 is the total number.)
6) 7.3 million uninsured children (down!)
http://www.kaiserhealthnews.org/stories/2013/september/17/census-numbers-uninsured-numbers-remain-nearlyunchanged.aspx
7) ¾ of uninsured work full time or a have a full time worker in the house
8) Medicaid is the single largest expenditure for states after education.
9) Spending on Long Term Care:
1970: $ 8 billion
2003: $120 billion
2010: $ 207.9 b.
10) Health care is a global issue: http://kff.org/global-indicator/nurses-and-midwives/#map
Four Big Questions Looming in the Distance:
1) What will happen in terms of overall health care reform?
2) What should we do about medical malpractice and damages caps?
3) How will we pay for Medicare?
4) What should we do about the cost of prescription drugs?
We’ll look at just one question today.
But First: Health Care and the Rational Policy Model
Mene, Mene, Tekel u-Pharsin – Daniel 5:25
Rationalism:
Policy as Maximum Social Gain
“A policy is rational when the difference between the values it achieves and the values it sacrifices are positive and greater
than any other policy alternative.” page 15
Know ALL (preferences),
see ALL (alternatives), understand ALL (consequences).
The Rational Approach
Big “R” vs. rational/logical
Based on micro-economic models for decision making
This is a model containing specific elements:
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Assumes decision makers are able to:
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Specifically state the ends
Analyze the means to attain them
All options are to be analyzed
Wants least possible input of scarce resources per unit of valued output
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Utility value and cost benefit analysis
“There is no better illustration of the dilemmas of rational policymaking in America than in the field of health.” (
Dye, p. 161)
The first obstacle to Rationalism is to define the problem.
Agree upon the “ends”
Do we want –
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Good health
Good medical care
Long life
Quality of life
“Americans now generally view access to medical care as a right. No one should be denied medical care or suffer
pain or remedial illness for lack of financial resources.”
“There is widespread agreement on this ethical principle. The tough questions arise when we seek rational strategies
to implement it.” p. 163
Rational Model – Cost/Benefit Analysis
“The US… offers the most advanced and sophisticated medical care in the world, attracting patients from countries that
rank ahead of us in common health measures…”
“Our problems center more on access to care, education and prevention of health problems than on the quality of care
available.”
Background on Public and Private Health Care coverage
Public Health Care Coverage
Need Based
Medicaid –
1965 Amendments to SSA
Nation’s largest welfare program for the poor.
Provides medical benefits for the indigent and disabled.
Funding split between federal and state governments.
States set eligibility requirements and administer programs.
Medicaid waivers allow states to adjust their programs to meet the needs of their citizens.
SCHIP –
State Children’s Health Insurance Program
Joint state federal program created to cover the gap between too rich for Medicaid and too poor for private
coverage.
Age Based
Medicare –
1965 Amendment to SSA
Federal program which provides medical benefits to complement Social Security benefits. Pre-paid hospital
insurance and low-cost voluntary medical insurance.
Funded by salary taxes and supplemental premiums.
Medicare Modernization Act of 2003 –
Provides prescription drug benefits to Medicare recipients.
Estimated Cost – 2006: $7 billion
2015: $ 174 billion
Private Health Care Coverage:
Most insured Americans have: third party, employment based, managed care coverage.
Third Party Payer: Not the patient or the provider, but a third party (an insurer or the government) who is
responsible for payment.
Employment based: Insurance coverage is provided as part of a compensation package. Costs are shared between
employers and employees.
Portability: an ability to maintain and transfer coverage when employment changes. (COBRA)
Managed Care: Attempts to decrease costs and increase health via negotiated contracts, management of resources
and a focus on preventative care
PPO – Preferred Provider Organization – An association of independent physicians who contract for discounted fees
for service
HMO – a prepaid group practice
Common Insurance Terms
Premiums – What you and/or your employer pay for insurance coverage
Deductible – A set amount that you must pay out each year before coverage kicks in
Co-pay – Flat, per visit (or per prescription) fee, not related to overall cost of service
80/20 plan – The insurer covers 80% of costs, the insured is responsible for 20%
Out of Pocket – A combination of your deductible and your co-pay or 20%. Some insurers set a maximum annual
out-of-pocket payment.
Primary Care Physician – Your general health care provider. Refers you out to a specialist if needed. (Gatekeeper)
Long term care – In home health care and nursing home care. Often a separate policy.
Today’s Question:
What will happen in terms of overall health care reform?
Options for Providing Health Care
Socialized Medicine – Health care is provided by governmental agencies, much like education or law enforcement.
Single Payer – A system where the government is the singular provider of health insurance coverage.
Universal Coverage – Full access to health insurance coverage via governmental subsidies and incentives.
Options for Providing Health Care
Mandatory Coverage – Governmental requirements to offer or obtain health insurance. Compliance is achieved
through subsidies, grants and economic disincentives.
Employer mandates – Requirements for ALL employers to offer ALL employees coverage.
Individual Mandates – Requirements for individuals to obtain medical coverage.
Open Access – Guarantees of access to insurance for anyone who wishes to purchase it.
Requirements for insurers to accept ALL applicants regardless of pre-existing conditions or risks
Ability to buy into Medicaid at reduced rates
Access, not coverage is guaranteed.
Who Loves it, Who Hates it…
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Employers – no increase in the already high costs of benefits
Physicians – no price controls, no treatment guidelines, full patient choice, help with skyrocketing malpractice
insurance costs
Big Pharma – increased coverage, but no price controls
Insurers – maintain profits and maintain control over who they cover
Trial Lawyers – no caps on damages or other tort reforms
Hospitals – increased coverage and reimbursement, but no government payment schedules
Seniors – keep drug benefits, maybe add dental or long term care, but no decrease over patients choice and no
increase in premiums
Pro-life – no federal funds for abortions
Jane Q. Public – actually, most people are satisfied with their health care…
You Can’t Always Get What You Want…
How would you describe ACA?
Which option did we go with?
Who won? Who lost?