HEALTH AND WEALTH:
MEASURING HEALTH SYSTEM
PERFORMANCE
Karen Davis
President, The Commonwealth Fund
Senate Commerce Committee Hearing
March 12, 2008
kd@cmwf.org
THE
COMMONWEALTH
FUND
Figure 1. International Comparison of Spending on Health,
1980–2005
Average spending on health
per capita ($US PPP)
7000
6000
United States
Germany
Canada
France
Australia
United Kingdom
Total expenditures on health
as percent of GDP
16
14
5000
12
4000
10
8
3000
6
2000
4
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
0
2
0
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
1000
United States
Germany
Canada
France
Australia
United Kingdom
Source: K. Davis, C. Schoen, S. Guterman, T. Shih, S. C. Schoenbaum, and I. Weinbaum, Slowing the Growth of
U.S. Health Care Expenditures: What Are the Options?, The Commonwealth Fund, January 2007, updated with 2007
OECD data
THE
COMMONWEALTH
FUND
LONG, HEALTHY & PRODUCTIVE LIVES
Figure 2. Mortality Amenable to Health Care
Deaths per 100,000 population*
1997/98
150
2002/03
130
116
109
99
100
88
81
76
89
84
97
89
71
74
71
77
74
128
115
113
97
88
50
65
115
106
134
80
82
84
84
82
90
93
96
101
103
103
104
110
m
an
y
Fi
nl
an
Ne
d
w
Ze
al
an
d
De
Un
nm
ite
ar
d
k
Ki
ng
do
m
Ir e
la
nd
Po
r tu
Un
ga
ite
l
d
St
at
es
ria
Ge
r
Au
st
ec
e
Gr
e
No
rw
Ne
ay
th
er
la
nd
s
Sw
ed
en
da
ly
Ca
na
It a
n
Sp
ai
ra
lia
Au
st
pa
n
Ja
Fr
an
ce
0
* Countries’ age-standardized death rates, ages 0–74; includes ischemic heart disease.
See Technical Appendix for list of conditions considered amenable to health care in the analysis.
Source: E. Nolte and C. M. McKee, Measuring the Health of Nations: Updating an Earlier Analysis,
Health Affairs, January/February 2008, 27(1):58–71
THE
COMMONWEALTH
FUND
Figure 3. National Health Expenditures
as a Percentage of GDP, 2000-2017
25
20
15
15.9
16.6
2005
2008
17.7
19.5
13
10
5
0
2000
2012
2017
Note: Data for 2008-2017 is projected
Source: S. Keehan, et al. “Health Spending Projections Through 2017: The Baby-Boom Generation Is Coming to
Medicare,” Health Affairs, February 2008, w145-w155
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COMMONWEALTH
FUND
Figure 4. Medicare Spending Per Enrollee and
Mortality Rate by State, 2003
Mortality Rate of Medicare Enrollees
Medicare Spending per Enrollee
$4,500
$5,500
$6,500
$7,500
$8,500
2.5%
HI
3.5%
4.5%
5.5%
MN
OR
CO
AK
UT
ID WY
NH AZ DC
DE
NV FLMD CA
NM WI VT
NY
IA SD MTWA VA IN SCKS
US
MI TX
ND
CT
NE ME
MA
NC WV KY OH IL
GA
AR
MS
MO
AL
PA
LA
TN OK
RI
NJ
6.5%
Source: Data from The Dartmouth Atlas of Health Care, www.dartmouthatlas.org.
THE
COMMONWEALTH
FUND
EFFICIENCY
Figure 5. Quality and Costs of Care for Medicare Patients
Hospitalized for Heart Attacks, Colon Cancer, and Hip Fracture,
by Hospital Referral Regions, 2000–2002
1 year mortality rate
Annual relative resource use*
Deaths per 100
30
27
Dollars ($)
28
30
31
32
$26,829
$23,314
Mean of
highest
90%
10th
25th
Median
Percentiles
75th
90th
Mean of
highest
90%
$24,623
10th
25th
$25,994
$27,465
Median
75th
$29,047
90th
Percentiles
THE
* Risk-adjusted spending on hospital and physician services using standardized national prices.
COMMONWEALTH
Data: E. Fisher and D. Staiger, Dartmouth College analysis of data from a 20% national sample of Medicare beneficiaries. FUND
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006
Figure 6. Fifteen Options that Achieve Savings
Cumulative 10-Year Impact
Producing and Using Better Information
• Promoting Health Information Technology
• Center for Medical Effectiveness & Health Care Decision-Making
• Patient Shared Decision-Making
-$88 billion
-$368 billion
-$9 billion
Promoting Health and Disease Prevention
• Public Health: Reducing Tobacco Use
• Public Health: Reducing Obesity
• Positive Incentives for Health
-$191 billion
-$283 billion
-$19 billion
Aligning Incentives with Quality and Efficiency
• Hospital Pay-for-Performance
• Episode-of-Care Payment
• Strengthening Primary Care & Care Coordination
• Limit Federal Tax Exemptions for Premium Contributions
-$34 billion
-$229 billion
-$194 billion
-$131 billion
Correcting Price Signals in the Health Care Market
• Reset Benchmark Rates for Medicare Advantage Plans
• Competitive Bidding
• Negotiated Prescription Drug Prices
• All-Payer Provider Payment Methods & Rates
• Limit Payment Updates in High-Cost Areas
-$50 billion
-$104 billion
-$43 billion
-$122 billion
-$158 billion
Source: C. Schoen et al., Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health
Spending, Commonwealth Fund, December 2008.
THE
COMMONWEALTH
FUND
Figure 7. Total National Health Expenditures, 2008–2017
Projected and Various Scenarios
Dollars in Trillions
4.4
Projected under current system
4.1
Insurance Connector plus selected
individual options*
$4
$3
2.8
2.6
2.4
2.3
2.7
3.9
3.7
3.4
3.2
3.0
3.9
3.6
Spending at current proportion
(16.2%) of GDP
3.6
3.4
3.4
3.2
3.0
2.9
4.1
3.3
3.1
3.0
2.9
2.8
2.6
2.5
2.4
$2
2007
2008
2009
2010
2011
2012
2013
2014
2015
*Savings options include: Health Information Technology, Center for Medical Effectiveness, Public Health,
Episode-of-Care, Strengthening Primary Care, Benchmark Rates, and Prescription Drug Prices.
Source: C. Schoen et al., Bending the Curve: Options for Achieving Savings and Improving Value
in U.S. Health Spending, Commonwealth Fund, December 2008
2016
2017
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COMMONWEALTH
FUND
Figure 8. Employer-Provided Health Insurance,
by Income Quintile, 2000–2006
Percent of population under age 65 with health benefits from employer
100%
80%
60%
88%
88%
87%
86%
85%
84%
77%
77%
62%
60%
75%
87%
84%
74%
87%
83%
74%
87%
82%
72%
86%
82%
Highest
quintile
Fourth
72%
Third
57%
55%
25%
23%
54%
54%
53%
40%
29%
26%
23%
20%
22%
22%
Second
Lowest
quintile
0%
2000
2001
2002
2003
2004
2005
2006
Source: Analysis of the March Current Population Survey, 2001-07, by Elise Gould, Economic Policy Institute, reported
in S. R. Collins, C. Schoen, K. Davis, A. K. Gauthier, and S. C. Schoenbaum, A Roadmap to Health Insurance for All:
Principles for Reform, The Commonwealth Fund, October 2007 .
THE
COMMONWEALTH
FUND
Figure 9. Health Consequences of Gaps in
Health Insurance Coverage – An Update
Deaths of Adults Ages 25 – 64, 2004
1. Cancer – 164,832
2. Heart disease – 117,257
3. Unintentional injuries – 56,096
4. Suicide – 22,629
5. Uninsured – 20,000
6. Cerebrovascular disease – 19,075
7. Diabetes – 18,972
8. Chronic lower respiratory disease – 15,265
9. Chronic liver disease and cirrhosis – 17,173
Sources: U.S. Department of Health and Human Services, National Center for Health Statistics, Health, United
States, 2007, Table 31, p. 186 – leading causes of deaths; S. Dorn, “Uninsured and Dying Because of It,” Urban
Institute, January 2008, deaths attributable to higher risks of uninsured adults 25–54.
THE
COMMONWEALTH
FUND
Figure 10. Majority of Americans Experience
Health Problems, Sick Loss, or Reduced
Productivity, All Adults Ages 19–64
Working with no
sick loss or reduced
productivity days
21%
Working with 1-5 sick
loss to reduced
productivity days
27%
Not working due to
disability or other
health reasons
12%
Working with six or more
sick loss or reduced
productivity days
36%
Source: Karen Davis, Sara R. Collins, Michelle M. Doty, Alice Ho, and Alyssa L. Holmgren, Health and Productivity
Among U.S. Workers, The Commonwealth Fund, August 2005
THE
COMMONWEALTH
FUND
Figure 11. Percentage of Uninsured Children
Has Declined Since Implementation of SCHIP,
but Gaps Remain
1999–2000
2005–2006
U.S. Average: 11.3%
U.S. Average: 12.0%
WA
VT
NH ME
NH
WA
ND
MT
VT
MT
MN
OR
ID
NY
WI
SD
MI
WY
PA
IA
NE
CA
OH
IN
NV
UT
IL
CO
MA
KS
MO
WV
VA
KY
NJ
RI
CT
MN
OR
ID
MI
PA
IA
NE
CA
IL
CO
KS
MO
AZ
NM
MS
TX
AL
CT
DE
MD
DC
NC
AZ
GA
NM
OK
SC
AR
MS
LA
TX
AL
GA
LA
FL
AK
VA
NJ
TN
SC
AR
WV
KY
TN
OK
OH
IN
NV
UT
MA
RI
NY
WI
SD
WY
DE
MD
DC
NC
ME
ND
FL
AK
HI
16% or more
10%–15.9%
HI
7%–9.9%
Less than 7%
Source: J. C. Cantor, C. Schoen, D. Belloff, S. K. H. How, and D. McCarthy, Aiming Higher: Results from a State Scorecard
THE
on Health System Performance (New York: The Commonwealth Fund, June 2007). Updated Data: Two-year averages COMMONWEALTH
FUND
1999–2000, updated with 2007 CPS correction, and 2005–2006 from the Census Bureau’s March 2000, 2001 and 2006, 2007
Current Population Surveys.
Figure 12. Preventive Care Visits for Children,
by Top and Bottom States, Race/Ethnicity,
Family Income, and Insurance, 2003
Percent of children (ages <18) received BOTH a medical and dental preventive care visit in past year
59
U.S. average
73
Top 10% states
48
Bottom 10% states
62
White
58
Black
49
Hispanic
70
400% + of poverty
48
<100% of poverty
63
Private insurance
35
Uninsured
0
50
Data: 2003 National Survey of Children’s Health (HRSA 2005; retrieved from Data Resource
Center for Child and Adolescent Health database at http://www.nschdata.org).
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006.
100
THE
COMMONWEALTH
FUND
Figure 13. Five Key Strategies for High Performance
1. Extending affordable health insurance to all
2. Aligning financial incentives to enhance value and
achieve savings
3. Organizing the health care system around the patient
to ensure that care is accessible and coordinated
4. Meeting and raising benchmarks for high-quality,
efficient care
5. Ensuring accountable national leadership and
public/private collaboration
Source: Commission on a High Performance Health System, A High Performance Health System for the United States:
An Ambitious Agenda for the Next President, The Commonwealth Fund, November 2007
THE
COMMONWEALTH
FUND