Health Politics and Policy in the
United States
PH 150
November 25, 2013
Prof. Tom Rice
Dept. of Health Policy and Management
Topics Covered
(1)
(2)
(3)
U.S. health system performance in an
international context
Politics of cost containment
Recent reform legislation: The Patient
Protection and Affordable Care Act
U.S. Health System Performance
SPENDING
4
International Comparison of Spending on Health, 1980–2010
Average spending on health
per capita ($US PPP)
Notes: PPP = purchasing power parity; GDP = gross domestic product.
Source: Commonwealth Fund, based on OECD Health Data 2012.
Total health expenditures as
percent of GDP
Total Health Expenditure per Capita
and GDP per Capita,
US and Selected Countries, 2008
$8,000
Per Capita Health Spending
USA
$7,000
$6,000
$5,000
Belgium
$4,000
France
$3,000
Italy
$2,000
Austria
Germany
Spain
Switzerland
Canada
Norway
Netherlands
U.K.
Japan
Australia
Sweden
$1,000
$0
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
GDP Per Capita
Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350en (Accessed on 14 February 2011).
Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates.
Average Annual Worker and Employer Contributions to
Premiums and Total Premiums for Family Coverage
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2002-2012.
ACCESS
8
Percentage of Population Covered Under Public Programs
(Source: OECD Health Data, 2008)
100%
100%
100%
99.9%
100%
98.7%
100%
100%
100%
89.5%
90%
80%
70%
Percent
60%
50%
40%
27.4%
30%
20%
10%
0%
AUS
CAN
FRA
GER
JAPAN
NETH
SWE
SWITZ
UK
US
Country
9
Percentage of Population Uninsured, 2007
(Source: OECD Health Data, 2008)
18%
16%
16%
14%
Percent
12%
10%
8%
6%
4%
2%
2%
1%
0%
0%
AUS
CAN
0%
0%
GER
NETH
UK
US
Country
10
Projected Trend in the Number of Uninsured in Absence of Health
Reform in Absence of Health Care Reform, 2009–2020
Millions
80
60
48.0
48.9
50.3
51.8
53.3
54.7
56.0
57.2
58.3
59.2
60.2
61.1
40
20
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Data: Estimates by The Lewin Group for The Commonwealth Fund.
Source: The Path to a High Performance U.S. Health System: A 2020 Vision and the Policies to Pave the Way,
February 2009.
11
Cost-Related Access Problems in the Past Year
Percent
AUS
CAN
FR
GER
NETH
NZ
NOR
SWE
SWIZ
UK
US
Did not fill
prescription or
skipped doses
16
15
11
14
8
12
7
7
9
4
30
Had a medical
problem but did
not visit doctor
17
7
10
12
7
18
8
6
11
7
29
Skipped test,
treatment, or
follow-up
19
7
9
13
8
15
7
4
11
4
31
Yes to at least
one of the above
30
20
19
22
15
26
14
11
18
11
42
Source: 2011 Commonwealth Fund International Health Policy Survey of Sicker Adults in Eleven Countries.
12
Access to Doctor When Sick or Needed Care
Base: Adults with any chronic condition
Percent
80
80
Same-day appointment
6+ days wait or never able
to get appointment
60
60
60
54
48
42
40
43
36
40
26
34
26
20
26
20
18
23
18
14
8
3
0
S
N
AU CA
0
H
FR GER NET
NZ
UK
US
S
N
AU CA
H
FR GER NET
Data collection: Harris Interactive, Inc.
Source: 2008 Commonwealth Fund International Health Policy Survey of Sicker Adults.
NZ
UK
US
13
14
Wait Times for Elective Surgery and
Specialist Appointments
Percent
AUS
CAN
FR
GER
NETH
NZ
NOR
SWE
SWIZ
UK
US
Specialist appointment*
Less than
4 weeks
54
41
53
83
70
61 50
45
82
72 80
2 months
or more
28
41
28
7
16
22 34
31
5
19
9
Elective surgery**
Less than
1 month
53
35
46
78
59
54 44
34
55
59 68
4 months
or more
18
25
7
0
5
8
22
7
21
21
7
* Base: Needed to see specialist in past 2 years.
** Base: Needed elective surgery in past 2 years.
Source: 2010 Commonwealth Fund International Health Policy Survey in Eleven Countries.
14
QUALITY
15
HEALTHY LIVES
Infant Mortality Rate
Infant deaths per 1,000 live births
National average and state distribution
U.S. average
12
Top 10% states
11.1
10.3
8
Bottom 10% states
7.2
7.0
International comparison, 2007
10.8
10.2 9.9
9.9
6.9
7.0
6.8
9.6
10.1
6.8
6.8
10.0 9.9
6.9
6.7
6.8
6.8
5.1
4
5.3
5.1
5.0
4.9
4.8
4.7
4.7
5.0
5.0
4.0
5.0
2.0
0
98
19
99
19
00
20
01
20
02
20
^
03
20
04
20
^
05
20
06
20
07
20
2.6
2.5
n
d
de
la n
e
e
w
Ic
S
2.7
3.1
s
ay
da
nd
ate
ark
an
t
a
a
w
p
l
m
r
S
n
n
Ja
Ca ited
No
Fin
De
Un
^ Denotes years in 2006 and 2008 National Scorecards.
Data: National and state—National Vital Statistics System, Linked Birth and Infant Death Data (AHRQ 2003–2008;
Mathews and MacDorman, 2011); international comparison—OECD Health Data 2011 (database), Version 06/2011.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.
17
Medical, Medication, or Lab Test Errors in Past Two Years
Percent reported:
AUS
CAN
FR
GER
NETH
NZ
NOR
SWE
SWIZ
UK
US
Wrong medication
or dose
4
5
6
8
6
7
8
5
2
2
8
Medical mistake in
treatment
10
11
6
8
11
13
17
11
4
4
11
Incorrect
diagnostic/
lab test results*
4
5
3
2
6
5
4
3
3
2
5
Delays in
abnormal
test results*
7
11
3
5
5
8
10
9
5
4
10
Any medical,
medication, or
lab errors
19
21
13
16
20
22
25
20
9
8
22
* Base: Had blood test, x-rays, or other tests in past two years.
Source: 2011 Commonwealth Fund International Health Policy Survey of Sicker Adults in Eleven Countries.
U.S. Lags Other Countries: Mortality Amenable to Health Care
Deaths per 100,000 population*
1997–98
150
2006–07
134
127
116
115
109
99
100
89
88
120
113
106
97
97
88
81
76
50
96
57
55
61
60
61
64
66
74
67
76
79
78
77
80
83
d
De
nm
Un
ar
ite
k
d
Ki
ng
do
Un
m
ite
d
St
at
es
al
an
d
Ze
la
n
Ne
w
Ir e
ec
e
Gr
e
m
an
y
d
Ge
r
Fi
nl
an
No
rw
ay
Ne
th
er
la
nd
s
Au
st
ria
en
Sw
ed
pa
n
Ja
ly
It a
ra
lia
Au
st
Fr
an
ce
0
* Countries’ age-standardized death rates before age 75; including ischemic heart disease, diabetes, stroke,
and bacterial infections. Analysis of World Health Organization mortality files and CDC mortality data for U.S.
Source: Adapted from E. Nolte and M. McKee, “Variations in Amenable Mortality—Trends in 16 High-Income Nations,” Health
Policy, published online Sept. 12, 2011.
Readmitted to Hospital or Went to ER
from Complications During Recovery
Base: Adults with any chronic condition who were hospitalized
Percent
40
20
17
18
17
11
7
9
11
10
NZ
UK
0
AUS
CAN
FR
GER
NETH
Data collection: Harris Interactive, Inc.
Source: 2008 Commonwealth Fund International Health Policy Survey of Sicker Adults.
US
19
20
Features of U.S. Health Care System
• Insurance coverage is not universal and relies on a
system of voluntary private insurance
– Employers do not have to offer coverage
– Individuals do not have to purchase coverage
– This will change partly on January 1, 2014
• There is no overall budget
• Rationing is largely carried out on the demand rather
than supply side
– Price rather than personnel or technology is
limiting factor
Politics of Cost Containment
A Fundamental Identity in Health
Economics*
Total Revenue = Total Expenditures = Total Income
T+R+C=PxQ=WxZ
where,
T = taxes
R = private insurance premiums
C = direct charges to patients
P = average price of health care services
Q = quantity of health care services provided
W = average wage
Z = total inputs used (labor and capital)
*from Robert Evans
Some Political Implications Regarding Cost
Containment from this Economic Identity
T+R+C=PxQ=WxZ
• If we cut taxes, we either have to cut prices or
services provided to deal with reduced revenue.
• If revenue is reduced, either wage or inputs (e.g.,
employment) will have to be cut.
• There are therefore strong forces that will oppose
particular cost containment proposals because
every dollar of costs that are contained means
that someone’s income or job will be at stake.
Patient Protection and Affordable Care
Act of 2010 (ACA)*
* Most provisions go into effect on
January 1, 2014
Insurance Coverage
• From about 55 million to about 31 million uninsured:
–
–
–
–
Income-based subsidies to uninsured
Employer mandate
Individual mandate
Medicaid (low-income coverage) expansion but at states’
option
• Mechanisms:
– Private: Each state create insurance exchange for
individuals w/o coverage and small employers
– Public: the Medicaid expansion
26
Coverage (continued)
• Subsidies: sliding scale up to 400% poverty level
• Medicaid: everyone covered whose income is less
than 138% of poverty level – if state agrees
• Individual mandate: Everyone must buy coverage or
pay a penalty (by 2016, $700/individual,
$2100/family), unless this exceeds 8% of income.
• Employer mandate: Employers with more than 50
employees must provide coverage or pay penalty of
$2000/employee. (This has been delayed to 2015.)
27
Health Insurers…
• Cannot turn applicants down who have history of
illness
• Cannot terminate coverage
• Must renew coverage
• Cannot charge more to those who history of illness
(older people can be charged maximum of 3 times
that of younger person)
• Return at least 80% of premiums in the form of
health service benefits
28
Quality Enhancement
• Establish office to support “comparative
effectiveness research”
• Pilot program to develop “bundled payment”
systems for hospital, physician, and post-acute
services to “accountable care organizations”
• Pay hospitals based on performance on
quality measures, with nursing homes and
home health care to follow
29
Financing
• Increase Medicare Part A payroll tax from 1.45 to 2.35%,
and 3.8% extra tax on investment income, for those with
incomes over $200,000 individual or $250,000 family
• “Cadillac tax” on employer health plans with values
above $10,000 individual/$27,500 families, beginning
2018. Tax = 40% of amount above thresholds
• Reduce payments to Medicare managed care plans
• Effect other reductions in Medicare spending; establish
Board to submit proposals to contain costs if Medicare
spending rises too quickly
• 10% tax on indoor tanning services
30
Examples of How Politics Affected ACA
• Insurance exchanges only include private
companies; no government option
• Comparative effectiveness research cannot
consider costs, and cannot influence what
services will be covered or their
reimbursement
• No coverage for undocumented individuals
• More generally, very little in the way of cost
containment is included
Issues “du jour”
• “Disastrous” roll-out of the websites for
purchasing insurance
• President Obama’s original assurance that “If
you like your plan, you can keep it.”