U.S. Health Care SystemU.S. Health Care System

Why is healthcare so controversial in the US?Why is healthcare so controversial in the US?

Do you agree or Do you agree or disagree?disagree?1.1. Quality, affordable healthcare is basic Quality, affordable healthcare is basic

right that should be guaranteed to all right that should be guaranteed to all AmericansAmericans

2.2. In general, healthcare in the US is very In general, healthcare in the US is very expensive for most people. expensive for most people.

3.3. The reason why healthcare is so The reason why healthcare is so expensive for Americans is because expensive for Americans is because insurance and drug companies are more insurance and drug companies are more interested in profit than providing careinterested in profit than providing care

Do you agree or Do you agree or disagree?disagree?

4.4. Employers with over 50 employees should be Employers with over 50 employees should be required to provide healthcare to their employees required to provide healthcare to their employees as a benefit of employment.as a benefit of employment.

5.5. All Americans should be required to have at least All Americans should be required to have at least major medical insurance, (much like the major medical insurance, (much like the requirement for car insurance) or they should pay requirement for car insurance) or they should pay a penalty. a penalty.

6.6. Insurance companies should be able to drop Insurance companies should be able to drop individuals with “pre-existing” conditions (such as individuals with “pre-existing” conditions (such as diabetes, cancer, or even obesity)diabetes, cancer, or even obesity)

Do you have a healthcare Do you have a healthcare experience?experience? Turn to a neighbor and tell them a story Turn to a neighbor and tell them a story

about your experience with the healthcare about your experience with the healthcare industry – good or bad.industry – good or bad.

THE FACTSTHE FACTSHealthcare in the USHealthcare in the US

CoverageCoverage

Most people (about 53%) in the US get Most people (about 53%) in the US get healthcare through private insurance, healthcare through private insurance, usually through their employerusually through their employer

About 32% of people get healthcare About 32% of people get healthcare through a government programthrough a government program MedicareMedicare MedicaidMedicaid

That leaves about 15% that are without any That leaves about 15% that are without any insuranceinsurance

Profile of the uninsuredProfile of the uninsured

About 50 million peopleAbout 50 million people Usually under age 65 (19-25 have the Usually under age 65 (19-25 have the

highest rates of no insurance)highest rates of no insurance) Usually have incomes less than $25KUsually have incomes less than $25K Usually have jobs, but are not full-timeUsually have jobs, but are not full-time 9.4% of the uninsured are children9.4% of the uninsured are children Tend to live in urban areasTend to live in urban areas

The healthcare dollarThe healthcare dollar

HOW DOES THE US COMPARE HOW DOES THE US COMPARE TO THE REST OF THE TO THE REST OF THE WORLD?WORLD?

World Map

Questions to consider:Questions to consider:

What country spends the most public What country spends the most public dollars on health care? Private dollars?dollars on health care? Private dollars?

What % of GDP is spent on health care?What % of GDP is spent on health care? What is the per capita rate?What is the per capita rate?

How long do people live?How long do people live? How many babies die at birth?How many babies die at birth? Do these numbers tell us anything about Do these numbers tell us anything about

how healthy we are as a nation?how healthy we are as a nation?

FinancinFinancingg

Public versus Private Spending, 2003Public versus Private Spending, 2003

Source: OECD Health Data 2005

44.4

58.5

78.2 76.369.9 67.5

81.5 83.3

55.6

41.5

21.8 23.730.1 32.5

18.5 16.7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

UnitedStates

Switzerland Germany France Canada Australia Japan UnitedKingdom

% o

f Hea

lth S

pen

din

g

publicpublic

privateprivate

15.3

11.610.7

11.1

9.8 9.5

8 8.3

0

2

4

6

8

10

12

14

16

18

UnitedStates

Switzerland Germany France Canada Australia Japan UnitedKingdom

% G

DP

Total Spending on Health Care, 2005Total Spending on Health Care, 2005

Source: OECD Health Data 2007

International International perspective perspective

Health Care Spending per Capita, 2005Health Care Spending per Capita, 2005

Source: OECD Health Data 2007

$6,401

$4,177

$3,287 $3,374 $3,326$3,128

$2,358$2,724

0

1000

2000

3000

4000

5000

6000

7000

UnitedStates

Switzerland Germany France Canada Australia Japan UnitedKingdom

Spe

ndin

g pe

r C

apit

a, U

SD

International International perspective perspective

Health status and Health status and outcomes outcomes

Life Expectancy at Birth, 2004-5Life Expectancy at Birth, 2004-5

Source: OECD Health Data 2007

77.8

81.3

79

80.3 80.2

80.9

82

79

75

76

77

78

79

80

81

82

83

UnitedStates

Switzerland Germany France Canada Australia Japan UnitedKingdom

Yea

rs

Health status and Health status and outcomes outcomes

Infant Mortality, 2004-5Infant Mortality, 2004-5

Source: OECD Health Data 2007

6.8

4.23.9

3.6

5.35

2.8

5.1

0

1

2

3

4

5

6

7

8

UnitedStates

Switzerland Germany France Canada Australia Japan UnitedKingdom

Dea

ths

per

1,00

0 li

ve b

irth

s

CoverageCoverage

Employer-sponsored

62%Private Non-

group5%

Medicaid/ Other Public

15%

Uninsured18%

Health Insurance Coverage of the Health Insurance Coverage of the Non-elderly Population, 2003Non-elderly Population, 2003

Source: Kaiser Commission on Medicaid and the Uninsured (KCMU) and Urban Institute analysis of the March 2004 Current Population Survey

FinancinFinancing g

Other Public12%

Other Private5%

Private Insurance

36%

Out-of-pocket14%

Medicare17%

Medicaid and SCHIP16%

Where the Health Care Dollar Came From, 2003Where the Health Care Dollar Came From, 2003

Source: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group

FinancinFinancing g

Physician and Clinical Services

22%

Nursing Home Care7%

Prescription Drugs11%

Program Administration and Net Cost

7% Other Spending

23%

Hospital Care30%

Where the Health Care Dollar Went, 2003Where the Health Care Dollar Went, 2003

Source: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group

Employer-sponsored Employer-sponsored insuranceinsurance

Offered by employers as part of benefits Offered by employers as part of benefits packagepackage

Run by private insurance companies (for-profit Run by private insurance companies (for-profit and non-profit)and non-profit)

Employer pays bulk of premium; employee pays Employer pays bulk of premium; employee pays remainderremainder

Erosion of employer-sponsored insurance in Erosion of employer-sponsored insurance in recent yearsrecent years

Individual insuranceIndividual insurance

Purchased directly by people who do not get Purchased directly by people who do not get coverage through their employerscoverage through their employers

Non-group (individual) plansNon-group (individual) plans Premiums based on individual health riskPremiums based on individual health risk

Very expensiveVery expensive

MedicareMedicare

Covers elderly (ages 65 and older) and non-Covers elderly (ages 65 and older) and non-elderly with disabilitieselderly with disabilities

Administered by the federal government Administered by the federal government Paid for by:Paid for by:

Federal income taxesFederal income taxes Payroll taxesPayroll taxes Out-of-pocket payments by enrolleesOut-of-pocket payments by enrollees

MedicaidMedicaid

Covers certain low-income individuals; not every low-Covers certain low-income individuals; not every low-income person is covered!income person is covered!

Administered by state governmentsAdministered by state governments

Benefits are fairly comprehensive, but many providers Benefits are fairly comprehensive, but many providers won’t take care of Medicaid patientswon’t take care of Medicaid patients

Profile of the uninsuredProfile of the uninsured

47.0 million Americans47.0 million Americans 81% from working families81% from working families 52-59% from low-income families (200% 52-59% from low-income families (200%

FPL)FPL) 80% are adults80% are adults 50% are ethnic minorities50% are ethnic minorities 79% are American citizens79% are American citizens

Source: Kaiser Commission on Medicaid and the Uninsured

Source: US Census Bureau

Other public insurance Other public insurance programsprograms

Veterans Health AdministrationVeterans Health Administration Indian Health ServiceIndian Health Service

FinancinFinancing g

Individuals/Individuals/BusinessesBusinesses

GovernmentGovernment

Health Service Health Service ProvidersProviders

Private Private InsurersInsurers

premiumspremiums

taxestaxes

direct/out-of-pocket paymentsdirect/out-of-pocket payments

Medicare, Medicare, Medicaid, SCHIP, Medicaid, SCHIP,

VA, IHSVA, IHS

payments to payments to providersproviders

public public employees’ employees’ premiumspremiums

subsidiessubsidies

FinancinFinancing g

Individuals/Individuals/BusinessesBusinesses

GovernmentGovernment

Health Service Health Service ProvidersProviders

Private Private InsurersInsurers

premiums

taxes

direct/out-of-pocket payments

Medicare, Medicare, Medicaid, SCHIP, Medicaid, SCHIP,

VA, IHSVA, IHS

payments to payments to providersproviders

public public employees’ employees’ premiumspremiums

subsidiessubsidies

FinancinFinancing g

Individuals/Individuals/BusinessesBusinesses

GovernmentGovernment

Health Service Health Service ProvidersProviders

Private Private InsurersInsurers

premiumspremiums

taxestaxes

direct/out-of-pocket paymentsdirect/out-of-pocket payments

Medicare, Medicaid, SCHIP,

VA, IHS

payments to payments to providersproviders

public employees’ premiums

subsidies

FinancinFinancing g

Individuals/Individuals/BusinessesBusinesses

GovernmentGovernment

Health Service Health Service ProvidersProviders

Private Private InsurersInsurers

premiumspremiums

taxestaxes

direct/out-of-pocket paymentsdirect/out-of-pocket payments

Medicare, Medicare, Medicaid, SCHIP, Medicaid, SCHIP,

VA, IHSVA, IHS

payments to providers

public public employees’ employees’ premiumspremiums

subsidiessubsidies

FinancinFinancing g

Individuals/Individuals/BusinessesBusinesses

GovernmentGovernment

Health Service Health Service ProvidersProviders

Private Private InsurersInsurers

premiumspremiums

taxestaxes

direct/out-of-pocket paymentsdirect/out-of-pocket payments

Medicare, Medicare, Medicaid, SCHIP, Medicaid, SCHIP,

VA, IHSVA, IHS

payments to providers

public public employees’ employees’ premiumspremiums

subsidiessubsidies

HOW DOES THE US HOW DOES THE US COMPARE?COMPARE?

The The patchwork patchwork

employer-sponsored

employer-sponsored

employer-sponsored

employer-sponsored

employer-sponsored

VAMedicareindividual

employer-sponsored

IHSMedicaid

Medicaid

Medicaid

SCHIP

Medicare

Medicare

Medicare

VA

Medicareemployer-sponsoredMedicaid

THE HEALTHCARE REFORM THE HEALTHCARE REFORM ACTACT

What has changed and why?What has changed and why?

PPACA PPACA (OBAMACARE)(OBAMACARE)

Patient Protection Affordable Care ActPatient Protection Affordable Care Act

Provisions of the LawProvisions of the Law Will cost $940 billion over 10 yearsWill cost $940 billion over 10 years

Incomes above $250K will pay additional 3.8% Incomes above $250K will pay additional 3.8% tax on investment incometax on investment income

Tanning taxTanning tax

Expands Medicare and MedicaidExpands Medicare and Medicaid By 2014, insurance companies can no By 2014, insurance companies can no

longer deny people for pre-existing longer deny people for pre-existing conditions (already in place for kids)conditions (already in place for kids)

Young adults can stay on parents’ insurance Young adults can stay on parents’ insurance until age 26until age 26

All people must have insurance by 2014 or face All people must have insurance by 2014 or face a $695 finea $695 fine This piece has been challenged in court and This piece has been challenged in court and

the Supreme Court decided recently that the the Supreme Court decided recently that the provision is constitutionalprovision is constitutional

Illegal immigrants will not be allowed to buy Illegal immigrants will not be allowed to buy insurance, even if they pay with their own moneyinsurance, even if they pay with their own money

Employers (over 50 employees) will be fined if Employers (over 50 employees) will be fined if they do not offer an insurance plan to employeesthey do not offer an insurance plan to employees

THE CASE AGAINST PPACATHE CASE AGAINST PPACA

Violates LibertyViolates Liberty It’s unconstitutional It’s unconstitutional

No where else does has the federal government No where else does has the federal government regulated one’s right buy something (commerce regulated one’s right buy something (commerce clause)clause)

It’s unenforceable It’s unenforceable It would take a mass audit of citizens to know if It would take a mass audit of citizens to know if

they were participating or notthey were participating or not Even if it was, the incentive is to avoid the Even if it was, the incentive is to avoid the

purchasepurchase

Affects Jobs, Wages and Affects Jobs, Wages and PricesPrices If employers are forced to offer a health If employers are forced to offer a health

insurance plan, they will hire fewer people insurance plan, they will hire fewer people for lower wages to keep costs downfor lower wages to keep costs down

Higher labor costs are passed down to Higher labor costs are passed down to customers through higher prices for customers through higher prices for goods/servicesgoods/services $2500 per Cadillac is to insure an auto worker$2500 per Cadillac is to insure an auto worker

FederalismFederalism

PPACA undermines the ability of the PPACA undermines the ability of the states to have programs that best fit their states to have programs that best fit their citizens citizens

There is no “right” to There is no “right” to healthcarehealthcare

Rights do not pose an obligation on Rights do not pose an obligation on others (funding healthcare)others (funding healthcare)

Universal access to healthcare would Universal access to healthcare would force an obligation by those who can pay force an obligation by those who can pay onto those who cannotonto those who cannot

““Free” is a mythFree” is a myth

Politicians cannot create wealth, they can Politicians cannot create wealth, they can only redistribute itonly redistribute it

When prices are artificially low, the demand When prices are artificially low, the demand will skyrocket and shortages will resultwill skyrocket and shortages will result

The government can force prices down, but The government can force prices down, but not costs. That will force doctors, drug not costs. That will force doctors, drug companies and hospitals out of businesscompanies and hospitals out of business

SO WHERE IS IT THE SO WHERE IS IT THE BEST?BEST?

Was Michael Moore telling the truth?Was Michael Moore telling the truth?

CanadaCanada

1 in 6 have trouble getting routine care1 in 6 have trouble getting routine care Wait times are long Wait times are long

4 weeks for a CT scan/ultrasound 4 weeks for a CT scan/ultrasound 8 weeks for an MRI8 weeks for an MRI

1 in 9 Canadian doctors have left to 1 in 9 Canadian doctors have left to practice in the USpractice in the US

Costs are risingCosts are rising

FranceFrance

High cost: 10% of household income for High cost: 10% of household income for healthcarehealthcare

The system is in debtThe system is in debt Doctors are not paid wellDoctors are not paid well Hiring is impeded because of high costs Hiring is impeded because of high costs

to the employersto the employers

USA Canada France

Universal Healthcare?

No Yes Yes

Vacation Time 2 weeks? (No government set

minimum)

3 Weeks 6 weeks/35 hour work week

Maternity Leave 6 weeks unpaid (FMLA)

1 year at 55% of salary

4-6 months; 16 weeks at 100% salary

Daycare $9000/year $6000/year $2000/year

College $12,000/year $8000/year Free

Taxes Low (22%)Take home: $39,000

Medium (26%)Take home: $37,000

High (46%)Take home: $27,000

Unemployment Rate 9.5% 8.5% 11%

Prison Rate(per 100,000 people)

756 116 96