An Abbreviated History of American Health Politics

Dr. J. HughesBioethics and Public Policy

Trinity College – Summer 2010

Policy Analysis Models

Who gets what and why

Inputs: influences on government

Process: the legislative bargaining and maneuvering

Outputs: decisions, actions and implementation

Type of Explanations

Government as rational actorPopular rule through

elections/rep elitesPolitical bargaining/

Interest groupsAmerican political cultureLegislative processElite ruleMarxist FunctionalismClass Struggle Marxism

Dimensions of Power

Coercive: A and B fight, B loses

Remunerative: A buys B’s consent

Normative: A convinces B that A’s way is the only way

Nondebates: A keeps B from ever thinking about what she wants

"Democratic Culture"

The Jacksonian compromise between capitalism and democracy

Domestic Medicine The Medical Counterculture

– Thomsonians, homeopaths– What is homeopathy (3min)

Professional Medicine – AMA founded 1847

Germ Theory of Disease

1867 - Joseph Lister publishes On the Antiseptic Principle in the Practice of Surgery, showing that disinfection reduces post-operative infections.

1879 - Pasteur demonstrates anthrax vaccine

1882 – Koch demonstrates TB & cholera micro-organisms

1885 – Pasteur develops rabies vaccine 1916 - Polio epidemics break out,

continue for decades 1918-1919 - Flu pandemic kills 15

million people worldwide, 600,000 in U.S.

Allopathic medicine triumphs

1910 – Flexner ReportHospitals become

centers for healingAMA becomes

powerful guild

Abraham Flexner

Alternative: Social medicine

Role of poverty, housing and education

Growth of social insurance in Europe

John Snow and the removal of the Broad Street pump handle (8 min video)

John Snow

Progressives and the AALL

Theodore Roosevelt 1901 -- 1909 AALL Bill 1915 AMA supported AALL Proposal AFL opposed AALL Proposal Private insurance industry

opposed AALL Proposal WWI and anti-German fever Why did the Progressives fail?

1930s – Health Care in Crisis

Blue Cross and Blue Shield get started

FDR's first attempt at NHI -- failure to include in the Social Security Bill of 1935

Food, Drug and Cosmetic Act– FDA given control over drug safety

– Establishes class of drugs available by Prescription

FDR's second attempt at NHI -- Wagner Bill, Nat. Health Act of 1939

1940s – Building Modernity

War, trauma and penicillin1946 – Hill/Burton Act1946 - British Nat. Health

ServiceWagner-Murray-Dingell Bills 1948 - Truman's SupportGrowth of private insurers

1965 – Medicare/Medicaid

Medicare A: Hospital costs, paid for with payroll tax

Medicare B: Supp insurance for docs & outpatient

Medicaid: federal-state program for the poor, all hospital, doc, lab, home health and nursing home care

Expected goal – universal health coverage in 20 years No fee schedules for docs or hospitals Expected 1990 cost: $10 billion Actual 1990 cost: $180 billion 1969 – Canadians enact Nat. Health Insurance

1970s – Costs spur innovation

Costs begin to riseGrowth of bureaucracyGrowth of medical specialists1973 – Nixon passes HMO Act;

provided subsidies and exempted from regs

1972-1979 Ted Kennedy’s campaign for NHI

1980s – Managed Care

DRGs Growth of Managed care Growing interest among

employers in controlling costs

Capitation of physician payment

Growth in size of physician groups

Growth of for-profit institutions Selective contracting Price competition Mergers and acquisitions: Hospital Corporation of America Vertical and horizontal integration HMOs for Medicaid and Medicare

Managed Care Types

Type of Health Plan

HMOs v. PPOs (1min)HMO vs POS vs PPO (4min)

1990-1994 – Clinton Effort

Harris Wofford elected on “single-payer” platform

1994 Clinton Health Plan– Committee of 500– Managed competition

Clinton’s Plan

ConsumerChoice

ConsumersVouchers Health Alliances

Producing report cards on- benefits and access- pt satisfaction/ disenrollment- clinical outcomes- cost

ReportCards

Plan A Plan B Plan C Plan D

1994-2008

1996: HIPAA – patient info privacy1997: CHIPS – subsidized children’s

insurance1997 Part C: Medicare Advantage plansStates: Patient Bill of Rights2006: Part D: Prescription Drug plans

Reform Support Was High

Majorities Favored Elements

2009 – Obama’s Reform

Frontline history 60min Compromises:

– Pharmaceutical prices

– Public option

Individual MandateExpansion of Medicaid and

subsidiesHealth Insurance ExchangesNo pre-existing condition &

high-risk pool

But, we are still the most expensive

Total health spending 17% of GDP in the United States in 2009, highest in OECD

Canada and France about 10%OECD avereage 8.6%$2,000,000,000,000 a year$1 trillion increase in health care

spending over the last decade

As a Percent of Family Income

Health Care Costs per Capita

  1970 1980 1990 2003

United States $352 $1,072 $2,752 $5,711

Switzerland $351 $1,031 $2,029 $3,847

Norway $141 $665 $1,393 $3,769

Iceland $163 $703 $1,593 $3,159

France $205 $697 $1,532 $3,048

Belgium $148 $636 $1,341 $3,044

Canada $299 $783 $1,737 $2,998

Austria $193 $770 $1,328 $2,958

Netherlands NA $755 $1,435 $2,909

Australia $252 $691 $1,306 $2,886

Sweden $312 $944 $1,589 $2,745

Denmark $384 $927 $1,522 $2,743

Ireland $117 $519 $794 $2,455

United Kingdom $163 $480 $987 $2,317

Italy NA NA $1,387 $2,314

Japan $149 $580 $1,116 $2,249

Finland $191 $590 $1,419 $2,104

Cost per Year per Capita

Cost Trends 1980-2004

Public/Private Expenditures

More than 75% of health spending is through public insurance in other countries, just half in US

Putting Off Care Because of Cost

Consequences

Causes of Health Care Inflation

TechnologyAging of population, longer lifespanLack of effective competition or global

budgeting

Administrative Overhead

Admin Staff per Patient

Life Expectancy

Spending & Life Expectancy

Infant Mortality

Obesity

Mental Illness

OECD 2009 - http://dx.doi.org/10.1787/538536332624

Uninsured in the US

The problem of the uninsured is continuing to grow. The federal government estimates that over 45 million individuals lacked health insurance coverage of any kind during 2008.

Source: SHADAC estimates from the Current Population Survey Annual Social and Economic Supplements, 1995-2008. Note: 1995-2003 data are adjusted for Census correction announced in March 2007.

Future Trends

Financial Viability of Medicare and Medicaid

Pressures for universal coverage and cost containment

Emerging technologies could:– dramatically reduce or expand costs, – eliminate, create or transform professions, – enable consumer choice and quality

measurement

IDEOLOGIES AND MARKETS

Democracy

Liberty/AutonomySolidarity/BeneficenceEquality/Justice

Autonomy/Liberty

Negative freedom from coercionPositive: freedom to Exit and Voice Patient autonomy and informed

consent Right to refuse 

 

Beneficence/Solidarity

Positive rights to demand entitlements of citizenship

Should access to basic health care be a right?

Which services should health care providers be obligated to provide regardless of risks or their moral or economic reservations?

Justice/Equality

Equal opportunitiesEquality before the lawThe right to control institutions

through equal sufferage

Market vs. State

Exit vs. VoiceEfficiency vs. EqualityFlexibility vs. AccountabilityResponsibility vs. SolidarityFreedom from vs. Freedom to

Rights

Dems, liberals, women, the young, seculars support healthcare rights

Principles for allocation of scarce medical interventions

Emanuel et al’s Proposal

GOVERNMENT IN HEALTH CARE

TransNational Agencies

UN: World Health OrganizationForeign AidInternational Family PlanningRefugee Assistance and Famine ReliefWTO and Transnat. Treaties on

Environmental Protection

Executive Branch

Health and Human Services The Secretary of Health and Human Services (OS) Administration for Children and Families (ACF) Administration on Aging (AOA) Agency for Healthcare Research and Quality (AHRQ) Agency for Toxic Substances and Disease Registry (ATSDR) Centers for Disease Control and Prevention (CDC) Food and Drug Administration (FDA) Health Care Financing Administration (HCFA) Health Resources and Services Administration (HRSA) Indian Health Service (IHS) Program Support Center (PSC) Substance Abuse and Mental Health Services Administration (SAMHSA) National Institutes of Health (NIH)

National Institutes of Health

Office of the Director (OD) Nat. Cancer Institute (NCI) Nat. Eye Institute (NEI) Nat. Heart, Lung, and Blood Institute (NHLBI) Nat. Human Genome Research Institute

(NHGRI) Nat. Institute on Aging (NIA) Nat. Institute on Alcohol Abuse and Alcoholism

(NIAAA) Nat. Institute of Allergy and Infectious Diseases

(NIAID) Nat. Institute of Arthritis and Musculoskeletal

and Skin Diseases (NIAMS) Nat. Institute of Child Health and Human

Development (NICHD) Nat. Institute on Deafness and Other

Communication Disorders (NIDCD) Nat. Institute of Dental and Craniofacial

Research (NIDCR) Nat. Institute of Diabetes and Digestive and

Kidney Diseases (NIDDK)

Nat. Institute on Drug Abuse (NIDA) Nat. Institute of Environmental Health Sciences

(NIEHS) Nat. Institute of General Medical Sciences

(NIGMS) Nat. Institute of Mental Health (NIMH) Nat. Institute of Neurological Disorders and

Stroke (NINDS) Nat. Institute of Nursing Research (NINR) Nat. Library of Medicine (NLM) Warren Grant Magnuson Clinical Center (CC) Center for Information Technology (CIT) Nat. Center for Complementary and Alternative

Medicine (NCCAM) Nat. Center for Research Resources (NCRR) John E. Fogarty InterNat. Center (FIC) Center for Scientific Review (CSR)

Congressional Health Policy Committees

Senate Committee on Health and Labor

House Ways and Means Committee

Lobbyists

Other Federal Health Policy

Supreme Court: Rulings on Assisted Suicide, Oregon scheme, etc.

EPACHAMPUS

State and Local

State – State Legislative Committees– State Depts of Health– State Depts of Insurance Regulation– State Depts of Professional Regulation

Municipal and County Depts of HealthMicropolitics

– Hospitals

COMPARATIVE SYSTEMS

American Exceptionalism: Lack of Global Budgeting

Year in which elected representatives enacted universal

health care:

Germany1883

Switzerland 1911

New Zealand 1938

Belgium 1945

United Kingdom 1946

Sweden 1947

Greece 1961

Japan 1961

Canada 1966

Denmark 1973

Australia1974

Italy 1978

Portugal 1979

Spain 1986

South Africa 1996

Causes of American Exceptionalism

Libertaran valuesWeak federal structuresRacial and ethnic diversityLack of a strong socialist

movement

Over-Use of High-tech, Under-Use of Public Health

Over-specialization of physician labor force

Underuse of non-physician providersToo Few Primary Care DocsUnderinvestment in public health and

primary care

Lack of Clear Priorities: Rationing

Priority-Setting in National Systems

British Informal RationingThe Oregon Approach

Lack of Adequate Competition

Third Party Payment Makes No One Accountable

Health Purchasing Decisions are Too Complex 

Canadian National Health Insurance (“Medicare”) 1946 - Swift Current, Sask. 1947 - Saskatchewan 1957 - Liberal government of Louis St. Laurent introduces a national

hospital insurance program. 1965 - Royal Commission headed by Emmett Hall calls for a universal

and comprehensive national health insurance program 1966 - Parliament enacts Bill 227, creating a national health insurance

system 1977 - Trudeau Liberals replaces from 50:50 cost-sharing with 5yr block

payments 1978 - Doctors begin “extra-billing” to raise their incomes above the

levels provided through public insurance schemes (1980-84) 1980-84 - CHC calls for Canada’s health care to reflect 5 principles:

public and non-profit; comprehensive; universal; portable; and accessible.

1984 - Canada Health Act

British National Health Service

1942 - Beveridge report 1946 - The NHS Bill1948 – Implementation1980s – Thatcher reform attempts1991 – NHS Trusts2000 – Blair examining reforms

Hospital Use per Capita in OECD, 2004

Hospital Costs per Day in OECD, 1996

Hospital Days

Hospital Days, MI & Childbirth

Doctor Visits per Capita

Physician Incomes in OECD, 1996

• After adjusting for inflation, physician incomes increased most rapidly in the United States between 1965 and 1991

Mean Physician Income 1992-1996

Managedcaremag.com

In 1973, the average income for physicians in private practice was $137,000, which was 4 times greater than the median income.

In 1997, the average income for physicians in private practice was $200,000, which was 10.6 times greater than the median U.S. income of $18,800.

MRIs in the OECD, 2006

INSURANCE AND MANAGED CARE

Basic Ideas of Insurance

Risk poolsMeans testingRisk-rating and Community-ratingGuaranteed Issue, Renewability and

PortabilityPre-Existing ConditionsMandating Coverage

What is Managed Care?

The Industrial Model Changes in Physician PracticeChanges in Physician Payment Exclusion of Expensive ProvidersChanges in Organizations

Changes in Physician Practice

gate-keeping primary-care assignment pre-utilization authorizationutilization reviewdoc, unit, hospital & plan report cardspractice guidelines & critical pathways

Where the Primary Care Docs Will Come From

Nurses, NPs, PAs

Family & General Practitioners

Internists

Retrained Specialists

Quasi-Primary

Primary Specialists

True Specialists

(Oncologists,Cardiologists,Rheumatologists) (Geriatrics, Pediatrics)

Hospital Stays After Childbirth

Dr. Frank (Dartmouth Med School) studied 15,000 infants born in New Hampshire in 1993.

Of those newborns discharged early– 1.61% were re-admitted– additional 2.04% needed emergency care

among those who stayed at least two days, – 1.09% were re-admitted – 1.17% were treated in the emergency room.

The medical costs of all 361 infants who returned to the hospital was $670,000, while savings of discharging the 3600 newborns early was $7.5 million.

Changes in Physician Payment

FFSCapitation“At-risk" capitation Salaried employment

Physician Incentives

Salary

FFSCapitation

At-Risk Capitation

FFS with Ownership of Equipment

Have a Many Patients as Possible, But Do As Little As Possible For Them

Have a Many Patients as Possible, and Do As Much As Possible To Them

Have as Few Patients as Possible, and See Them As Little As Possible

Exclusion of Expensive Providers

PPOs and "economic credentialing"

substitution for physicians: NPs, PAs, etc.

Gatekeeping

Changes in Organizations

integration of all services and payments

shrinking hospitals: more ambulatory care, shorter stays, more home care

The Medical Loss Ratio

Managed Care Models

Staff-Model HMOGroup-Model HMONetwork-Model HMOIndividual Practice Association (IPA)Point of Service (POS)Preferred Provider Organization (PPO)

Alleged Decline of Managed Care

PPOs most popular PPOs contract with panels

of providers who agree to provide medical care and be paid according to a negotiated fee schedule.

Less oversight of services used than for HMOs.

Out-of-network visits more expensive but large numbers of providers often make going outside unnecessary.

HMOs and Preventive Medicine

1. HMOs can't count of being rewarded for long-term investments

2. HMOs (and physicians) don't know how to deliver effective prevention, and to the extent that they have...

3. Effective prevention programs often are as expensive as treating the illness, especially across the life-course

4. Consequently, while there is plenty of evidence that HMOs have reduced tests, procedures and hospitalizations with little negative effect...

5. There is little evidence that HMOs provide more or better preventive medicine

Conclusion: If the only group sure to profit is society as a whole, than the appropriate investor is society.