HEALT CARE

A Presentation for Health Professional StudentsBy Joseph L. Lin and Aalok AgarwalaEdited by Simon Ahtaridis

The Ailing U.S. Health-Care System: A Prescription for the 21st Century by the Doctors of the 21st Century

Adapted from the Physicians for a National Health ProgramAdapted from the Physicians for a National Health Program

Slide Show, by Drs. David Himmelstein and Steffie WoolhandlerSlide Show, by Drs. David Himmelstein and Steffie Woolhandler

The American Medical Student Association, The American Medical Student Association, 20002000

Health-Care Spending Per Capita, 1997

$4,090

$2,547 $2,339 $2,095 $2,051$1,741

$1,347

$0

$1,000

$2,000

$3,000

$4,000

$5,000U.

S.

Switz

erla

nd

Ger

man

y

Can

ada

Fran

ce

Japa

n

U.K

.Source: OECD, 1998Source: OECD, 1998

Infant Mortality, 1995Deaths in First Year of Life/1,000 Births

8

6.3 6.15.8

5.34.7

3.8

2

4

6

8

U.S.Canada U.K

France

Germany

Switzerland

Japan

Source, OECD, 1997Source, OECD, 1997

Hospital Inpatient Days Per Capita, 1996

1.11.7 1.9

2.6 2.7 2.8

4.1

01234

U.S

.

U.K

Can

ada

Fran

ce

Switz

erla

nd

Ger

man

y

Japa

nSource: OECD, 1998Source: OECD, 1998

Days/PersonDays/Person

44.3 Million44.3 MillionUninsureUninsuredd

Who Are the Uninsured?

Children24%

Employed46%

Unemployed9%

*Out of Labor Force21%

* Students>18, Homemakers, Disabled, Early Retirees

Source: Himmelstein & Woolhandler, Tabulations CPS, 1997Source: Himmelstein & Woolhandler, Tabulations CPS, 1997

Percent Uninsured by Race/Ethnicity

11.9%

35.3%

22.2% 21.1%

0.0%

10.0%

20.0%

30.0%

White, Non-Hispanic

Hispanic Black Asian,Pacific-Islander

Source: Census Bureau CPS, 1998Source: Census Bureau CPS, 1998

Milliman & Robertson Says That Patients Can’t…

have cataracts removed in more than one eye unless the patient is young and needs both eyes to work.

stay overnight for a mastectomy. stay > one day for a vaginal delivery, >

two days for a cesarean. see a neurologist for new onset seizures. stay > three days for a stroke, even if

you can’t walk.

Source: Source: NY Times,NY Times, 3/20/95 3/20/95

How Managed Care Makes Profits

Rationing and Denials of Care Implementation of Capitation

Fee Discounts

Shifting Costs to Patients in the Form of Co-Pays and Deductibles

How Managed Care Makes Profits

Cherry Picking Healthy Patients

$0$2,000$4,000$6,000$8,000

$10,000$12,000$14,000

No Chronic Illness

AnxietyHeadache

Heart Disease

Stroke

Source: Source: Health AffairsHealth Affairs 1997; 16(3):239 1997; 16(3):239

Projected Health- Care Costs

Dissatisfaction with HMOs

0

5

10

15

20

25

Perc

ent e

xper

ienc

ing p

robl

em

Insurer causeddelay

Hard to get care Denied specialistcare

HMO Private FFS Medicare

Source: Source: Modern HealthcareModern Healthcare 10/7/96 (Data from National Research Corp. survey of 160,000 households) 10/7/96 (Data from National Research Corp. survey of 160,000 households)

Quality of Care in Investor-Owned vs Not-for-Profit HMOs

• Compared with not-for-profit HMOs, investor-owned plans had lower rates for 14 HEDIS quality-of-care indicators. • If all women in the United States were covered in investor owned HMOs rather than non-profit plans, there would be an estimated 5925 additional deaths per year from breast cancer alone.

Source: JAMA. 7 / 14 / 99. Vol. 282 No. 2.

HMO Overhead and Profits

26%24% 23% 23%

20%18%

16%

3%1%

0%

10%

20%

30%

Aetna/U.S. Healthcare

Wellpoint

FoundationOxford

United HealthcareHumana

PacificareMedicare

Canada

Overhead and Profits as a Percentage of Premiums

Source: Outlook for Managed Care 1997, Corporate Research Group; Stat Canada, NCHS & OECD

For-Profit MedicineCorporate Social Responsibility??

““Few trends could so thoroughly Few trends could so thoroughly undermine the very foundations of our free undermine the very foundations of our free society as the acceptance by corporate society as the acceptance by corporate officials of a social responsibility other officials of a social responsibility other than to make as much money for their than to make as much money for their stockholders as possible.”stockholders as possible.”

Milton Friedman, Milton Friedman, Capitalism & Freedom, 1962Capitalism & Freedom, 1962

2.5%

5.0%

7.5%

10.0%

1980-90 1990-93 1993-96 1996-98* 1998-2001* 2001-07*

National Health Expenditures, Average Annual Growth Rate From Prior Year Shown

Health Care Costs Projected to Rise

Source: Health Care Financing Administration, Office of the Actuary, 1998

* * Projected

Increase in Number of Physicians and Administrators, 1970-1995

0%500%

1000%1500%2000%2500%

1970 1975 1980 1985 1990 1995

Physicians Administrators

Source: Bureau of Labor Statistics & NCHS, ApproximateSource: Bureau of Labor Statistics & NCHS, Approximate

HMO CEO Pay and Stockholdings

CEO FIRM PAY STOCK(in millions) (in millions)1996 mid 1997

Malik Hassan Foundation $ 17.2 $ 166.4William McGuire United Healthcare 14.7 74.7Leonard Shaeffer Wellpoint 14.2 16.5David Jones Humana 10.5 223.4George Jochum MAMSI 5.0 16.9Alan Hoops Pacificare 4.7 26.9Stephen Wiggins Oxford 4.6 230.4Larry House MedPartners 2.5 108.5

Source: Managed Healthcare Marketing Report, 1/31/97, 7/15/97

Options and Avenues for Reform Continuing Attempts to Reform For-Profit Managed Care Medical Savings Accounts Expansion of Medicare Establishment of a Single-Payer

Universal Health-Care System

Continuing Attempts to Reform For-Profit Managed Care Incremental Reform Patient Bill of Rights and Other

Consumer Protection Measures Ensuring Accountability of

Health Plans

Medical Savings Accounts

Sickest 10 percent of Americans use 72 percent of care. MSAs cannot lower these catastrophic costs.

The 15 percent of people who use no care would get premium “refunds,” removing their cross-subsidy for the sick, but not lowering use or cost.

MSAs would discourage prevention Complex to administer—Insurers would have to

keep track of all out-of-pocket payments. MSAs would increase Medicare costs by $2 billion,

as projected by the Congressional Budget Office.

No SavingsNo Savings

Medical Savings Accounts: “A Scam”““We would make out like bandits, but as a We would make out like bandits, but as a physician I have a very serious concern [that physician I have a very serious concern [that we would be] fragmenting the insurance we would be] fragmenting the insurance pool…We are going into [MSAs} because pool…We are going into [MSAs} because these things are going to be a gold mine…let these things are going to be a gold mine…let there be no doubt. They are a scam and we there be no doubt. They are a scam and we will get our share of that scam.”will get our share of that scam.”

Source: Source: NEJMNEJM 1997; 336:1828 1997; 336:1828

Malik Hasan, M.D.Malik Hasan, M.D.Former CEO, Foundation Health SystemsFormer CEO, Foundation Health Systems

Expansion of Medicare

Expand Medicare coverage to additional populations incrementally (i.e. children)

Would not provide comprehensive coverage

Significant out-of-pocket costs would remain

Single Payer: What Is It

Universal, comprehensive coverage, including preventive care

No out-of-pocket payments A single, public payer Public accountability No for-profit HMOs or providers Centrally funded, locally administered

with minimal bureaucracy Coordinated community-based care

Administration Administration SavingsSavings

•Significant reduction Significant reduction of administrative of administrative costs.costs.

•Provides a more Provides a more simplified and simplified and uniform system for uniform system for distribution of funds.distribution of funds.

Patients and Clinical Patients and Clinical ProvidersProviders

•More funds for patients More funds for patients and clinical providers.and clinical providers.

•More funds for More funds for diagnostic and treatment diagnostic and treatment technologies.technologies.

•Physicians still remain Physicians still remain autonomous, and autonomous, and patients can choose their patients can choose their doctors.doctors.

U.S. General Accounting Office. U.S. General Accounting Office. Canadian Health Care: Canadian Health Care: Lessons for the U.S.Lessons for the U.S. 1991 1991

$67 Billion$67 Billion

Single Payer in Action

Health Costs as % of GDPUnited States and Canada, 1960-1995

5%

7%

9%

11%

13%

15%

1960 1965 1970 1975 1980 1985 1990 1995

U.S.

Canada

NHP Fully Implemented

Canada's NHP Enacted

Source: Statistics Canada & NCHS/Commerce DepartmentSource: Statistics Canada & NCHS/Commerce Department

Paperwork CostsUnited States and Canada, 1991

Source: Woolhandler/Himmelstein NEJM 1991; 324:1253

U.S.U.S. CanadaCanada

Clinical Clinical Care 76%Care 76%

Clinical Clinical Care 89%Care 89%

Administration Administration 24%24%

Administration Administration 11%11%

What Does Single Payer Mean to the Average Family

The average middle-income family would have an income tax The average middle-income family would have an income tax increase of $731. That increase in income tax would replace increase of $731. That increase in income tax would replace premium payments and any out-of-pocket expenses. premium payments and any out-of-pocket expenses.

Universal Health Coverage: How Do We Pay for It?Edie Rasell, M.D., Ph.D.

Single-payer insurance would be financed through a Single-payer insurance would be financed through a progressive tax, spreading the burden of health care progressive tax, spreading the burden of health care more evenly. more evenly.

Source: http://www.epinet.org/

Will there be long waiting times for procedures?




Waiting for Coronary Artery Bypass Surgery in OntarioWaiting for Coronary Artery Bypass Surgery in OntarioA Study of 8,517 Consecutive Patients Referred for CABSA Study of 8,517 Consecutive Patients Referred for CABS

•0.4% died before surgery.0.4% died before surgery.

•Overall median wait pre-op = 17 days.Overall median wait pre-op = 17 days.

•Median wait for urgent cases = 1 day.Median wait for urgent cases = 1 day.

•Waiting time varied substantially between hospitals.Waiting time varied substantially between hospitals.

•Best predictors of waiting time were symptom status and Best predictors of waiting time were symptom status and coronary anatomy.coronary anatomy.



Although Canada spends half of what we do on health Although Canada spends half of what we do on health care, surveys show that Canadians have significantly care, surveys show that Canadians have significantly lower out-of-pocket expenses, can see a specialist or lower out-of-pocket expenses, can see a specialist or get needed care more easily than Americans.get needed care more easily than Americans.

Source: Health Affairs 1996; 15(2): 263, OECD 1995 and ANN INT MED 1992;116:507

Canadians receive high-technology care at a rate Canadians receive high-technology care at a rate comparable to Americans. A comparison of heart comparable to Americans. A comparison of heart and/or lung, kidney, liver and bone marrow transplants and/or lung, kidney, liver and bone marrow transplants revealed similar rates for the two countries. revealed similar rates for the two countries.


What about physician salaries?

Single Payer In Action

Will there be long waiting times for procedures?What about physician salaries?Average physician salaries would remain essentially the same, though the range of salaries would narrow due to standardization of reimbursements.


Will the government determine which doctor the patient can see, and what the doctor can do?

Will there be long waiting times for procedures?What about physician salaries?


Will the government determine which doctor the patient can see and what the doctor can do?

Will there be long waiting times for procedures?What about physician salaries?

Single payer is not “socialized medicine.” A Single payer is not “socialized medicine.” A single-payer system does not dictate what a single-payer system does not dictate what a doctor can do, and which doctors patients choose doctor can do, and which doctors patients choose to visit. The single-payer system allows more to visit. The single-payer system allows more doctor and patient autonomy than the current doctor and patient autonomy than the current system under managed care.system under managed care.


Will there be long waiting times for procedures?What about physician salaries?Will the government determine which doctor the patient can see, and what the doctor can do? How will medical students be affected?


Will there be long waiting times for procedures?What about physician salaries?Will the government determine which doctor the patient can see, and what the doctor can do? How will medical students be affected?Medical students in Canada graduate with a Medical students in Canada graduate with a

significantly lower debt than American graduates due significantly lower debt than American graduates due to large public subsidies for education. to large public subsidies for education.


Will there be long waiting times for procedures?What about physician salaries?Will the government determine which doctor the patient can see, and what the doctor can do? How will medical students be affected?


Is a single-payer system politically feasible?

The Decision Is Yours!“Speak Up, America! Health Care Is Our Right!”

44.3 Million Uninsured Restricted Patient Choice High Patient Dissatisfaction High Physician Dissatisfaction Over $100 billion wasted

each year on unnecessary administrative costs and profit

Higher out-of-pocket costs for those who are insured

Bottom line more important than patient care

Universal, comprehensive coverage for all populations

Greater freedom of choice for patients and physicians

Improved preventive care Improved quality of care for

all, especially the uninsured, disabled, poor, chronically and mentally ill, and children

Cost-efficient system of delivery with minimal bureaucracy

Today’s SystemToday’s System Single PayerSingle Payer

For More InformationPhysicians for a National Health ProgramPhysicians for a National Health Program Physicians for a National Health Program Physicians for a National Health Program

332 S. Michigan, Suite 500 / Chicago, IL 60604332 S. Michigan, Suite 500 / Chicago, IL 60604 (312) 554-0382; fax (312) 554-0383(312) 554-0382; fax (312) 554-0383

www.pnhp.orgwww.pnhp.org

The Center for National Health Program StudiesThe Center for National Health Program StudiesHarvard Medical School/The Cambridge HospitalHarvard Medical School/The Cambridge Hospital1493 Cambridge Street, Cambridge, MA 021391493 Cambridge Street, Cambridge, MA 02139

(617) 498-1032(617) 498-1032

For More Information About AMSA’s Initiatives, Contact:

American Medical Student AssociationAmerican Medical Student AssociationSimon Ahtaridis, Legislative Affairs DirectorSimon Ahtaridis, Legislative Affairs Director

1902 Association Drive1902 Association DriveReston, VA 20191Reston, VA 20191

(703) 620-6600, ext. 211(703) 620-6600, ext. 211E-mail: [email protected]: [email protected]

Check our universal health care initiative web Check our universal health care initiative web site for ideas on how you can get involved.site for ideas on how you can get involved.

www.amsa.orgwww.amsa.org

HEALT CARE

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