U.S. Healthcare. And God populated the earth with broccoli and cauliflower and spinach and green and...

U.S. HealthcareU.S. Healthcare

And God populated the earth with broccoli and cauliflower and spinach and green and yellow vegetables of all kinds, so man and woman would live long and healthy lives.

And Satan created McDonald's.. . .

And God created the healthful yogurt, that woman might keep her figure that man found so fair.

And Satan froze the yogurt, and he brought forth chocolate, nuts and brightly colored sprinkle candy to put on the yogurt....

And God brought forth running shoes....

And Satan brought forth cable TV with remote control....

And God brought forth the potato....

And Satan peeled off the healthful skin and sliced the starchy center into chip and deep-fat fried them....

And Man clutched his remote control and ate the potato chips....

And Satan saw and said, "It is good.“

And Man went into cardiac arrest.

And God sighed and created quadruple bypass surgery.

And Satan created the HMO.Jonas S, 2003


ObjectivesObjectives

• Review the Economic Trends of 2003Review the Economic Trends of 2003

• Review the components of Health CareReview the components of Health Care

• Compare Health Insurance PlansCompare Health Insurance Plans

• Discuss current issues in health care coverage Discuss current issues in health care coverage and and insuranceinsurance

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

1960 1970 1980 1985 19901995 1996 1997 1998 1999 2000 2001 2002 2003 2004 20052006 2007 2008 2009 2010

Calendar Year

Bill

ion

s

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

GD

P S

har

e

NHE Projected NHE GDP Share Projected GDP Share

Source: CMS, Office of the Actuary, National Health Statistics Group.

Actual Projected

National health spending growth is projected to significantly increase as ashare of GDP over the next decade.

Table 1.2National Health Expenditures Per Capita, 1986-2010

Calendar Year

Source: CMS, Office of the Actuary, National Health Statistics Group.

$2,477

$3,183

$3,698

$4,177

$5,039

$6,926

$8,228

$1,872

$5,757

$9,216

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

ActualProjected

National health spending per capita is projected to increase rapidly over the next decade.

Table 1.13Health Care Employment by Occupation, 1983-2000

Source: Dept. of Labor, Bureau of Labor Statistics. Current Population Survey.

Health care employment growth exceeded that of the general economy.

0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200

Managers, Medicine & Health

Medical Scientists

Physicians

Dentists

Optometrists

Health Diagnosing Practitioners

Licensed Practial Nurses

Registered Nurses

Pharmacists

Dietitians

Respiratory Therapists

Occupational Therapists

Physical Therapists

Speech Therapists

Physicians' Assistants

Clinical Laboratory Technologists & Technicians

Dental Hygienists

Health Record Technologists & Technicians

Radiologic Technicians

Employment (Thousands)

1983 1990 2000

Percent Change 1990-02

32.0%

-75.4%

28.7%

14.8%

7.5%

39.4%

61.9%

56.5%

48.6%

23.8%

16.9%

21.6%

26.6%

-15.2%

30.4%

5.0%

24.6%

95.3%

332.2%

13.8% Total Employment

. . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. .

. . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . .

Table 1.22Growth in the Overall Consumer Price Index (CPI) and

Medical-Specific Consumer Price Index (MCPI), 1993-2001

Source: Dept. of Labor, the Bureau of Labor Statistics.

Medical prices have risen faster than overall consumer prices.

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

1993 1994 1995 1996 1997 1998 1999 2000 2001

CPI MCPI


Forecast SummaryForecast Summary• Health Care Expenditures in 2008

$ 2.2 trillion

16.2% of GDP

Average 1.8% points above GDP 1998-2008

HCFA 1999 Report: National Health Expenditures Projections


Factors Contributing to Projected Factors Contributing to Projected Acceleration in GrowthAcceleration in Growth

- An upturn in private health insurance underwriting cycle

- Slower growth in managed care enrollment

- A movement toward less restrictive forms of managed care

- Continued trend towards increased state and federal

regulation of health plansHCFA 1999 Report: National Health Expenditures Projections


Factors Expected to Restrain GrowthFactors Expected to Restrain Growth- Implementation of the 1997 balanced budget act

- A projected increase in the uninsured fraction of the

population

- The continued (although smaller) impact of managed care

- The effect of projected excess capacity among health

providersHCFA 1999 Report: National Health Expenditures Projections


Primary CarePrimary Care Preventive and Treatment measures

Often provided by a physician or nurse practitioner


Secondary CareSecondary CareServices available both in community hospitals and

physicians’ offices

Surgeries

Specialists, e.g.. Cardiologists, GI, Derm


Tertiary CareTertiary Care- Highly specialized care

- Often at large medical centers

Transplants

Open-heart surgery

Neonatal wards

Chemo- & Radiotherapy


The Nation's Health Dollar: 2000

Where It Came From

Where It Went


Components of Health CareComponents of Health Care

• ConsumersConsumers - Insurance- Insurance

• Providers of CareProviders of Care - - GovernmentGovernment

• Institutions that provide careInstitutions that provide care- Employers- Employers

• Support IndustriesSupport Industries

• Economists / FinancingEconomists / Financing

• Information / TechnologyInformation / Technology

• Higher Education Higher Education


ConsumersConsumers

• US PopulationUS Population

• Minors, Aged, Disabled, OthersMinors, Aged, Disabled, Others

• Employed, Not-employed, working poorEmployed, Not-employed, working poor

Family Family

CaregiversCaregivers

Representatives of ConsumersRepresentatives of Consumers

• ActivistsActivists

• Associations - AARPAssociations - AARP


Providers of CareProviders of Care

• PhysiciansPhysicians

• Nurses, PAs, Others (SW, Pharm, RDs, PTs)Nurses, PAs, Others (SW, Pharm, RDs, PTs)

• Diagnostic and Laboratory TechniciansDiagnostic and Laboratory Technicians

• Associations / Trade OrganizationsAssociations / Trade Organizations


Institutions that Provide CareInstitutions that Provide Care

• Hospitals, Medical CentersHospitals, Medical Centers

• Specialty ClinicsSpecialty Clinics

RehabRehab

Drug / Substance AbuseDrug / Substance Abuse

• Long-term care facilitiesLong-term care facilities

• AssociationsAssociations

American Hospital AssociationAmerican Hospital Association


Government : Federal, State, LocalGovernment : Federal, State, Local

• Regulatory RoleRegulatory Role

• Political Process - set regulations, respond to Political Process - set regulations, respond to electorateelectorate

• Reimbursement Reimbursement

Medicare, Medicaid (States)Medicare, Medicaid (States)

• Public Health SystemPublic Health System


Insurance GroupsInsurance Groups

• BluesBlues

• Associations / Trade OrganizationsAssociations / Trade Organizations


Support IndustriesSupport Industries

• Pharmaceutical Companies and DistributorsPharmaceutical Companies and Distributors

• Medical DevicesMedical Devices

• Medical EquipmentMedical Equipment


EmployersEmployers

EconomistsEconomists

Judiciary; Legal SupportJudiciary; Legal Support

Information / Technology IndustryInformation / Technology Industry

• WebMD; Drugstore.comWebMD; Drugstore.com

Higher EducationHigher Education


Components of Health CareComponents of Health Care

• ConsumersConsumers - Insurance- Insurance

• Providers of CareProviders of Care - - GovernmentGovernment

• Institutions that provide careInstitutions that provide care- Employers- Employers

• Support IndustriesSupport Industries

• Economists / FinancingEconomists / Financing

• Information / TechnologyInformation / Technology

• Higher Education Higher Education


SOCIETYSOCIETY

• Components of Health Care


Health Insurance PlansHealth Insurance Plans

Traditional Care / Fee-for-ServiceTraditional Care / Fee-for-Service

Health Maintenance OrganizationsHealth Maintenance Organizations

Preferred Provider OrganizationsPreferred Provider Organizations

MedicareMedicare

MedicaidMedicaid

Disability InsuranceDisability Insurance

Hospital Indemnity InsuranceHospital Indemnity Insurance

Long Term CareLong Term Care


Fee-for-ServiceFee-for-Service

Client may visit any physician, use any hospitalClient may visit any physician, use any hospital

Pay a premium each monthPay a premium each month

Deductible; after deductible provide a copayDeductible; after deductible provide a copay

Patient may need to submit billPatient may need to submit bill

Limited servicesLimited services

Preventive CarePreventive Care

Experimental; Home Health Care; Long-term care; Experimental; Home Health Care; Long-term care; PT; PT;


Health Maintenance OrganizationHealth Maintenance OrganizationHMOs are organizations that insure groups of

individuals against the costs of medical services and also provide those medical services

Shouldice 1991


Health Maintenance OrganizationHealth Maintenance Organization• Pay a premium each monthPay a premium each month

• Receive ‘complete’ careReceive ‘complete’ care

• ‘‘Primary Care Doctor’ you must selectPrimary Care Doctor’ you must select

• Some preventive services covered, such as well Some preventive services covered, such as well baby check ups, immunizationsbaby check ups, immunizations

• Care must be provided by HMO’s practice groupCare must be provided by HMO’s practice group

• Cannot self-refer to a specialistCannot self-refer to a specialist

• No claim forms to fill outNo claim forms to fill out

• Small copaySmall copay


Preferred Provider OrganizationsPreferred Provider Organizations• Combination of a fee-for-service and HMOCombination of a fee-for-service and HMO

• Limits choice of doctors / hospitalsLimits choice of doctors / hospitals


Preferred Provider OrganizationsPreferred Provider Organizations• Has arrangements with doctors, hospitals, and Has arrangements with doctors, hospitals, and

other providers of care who have agreed to accept other providers of care who have agreed to accept lower fees from the insurer for their services. lower fees from the insurer for their services.

• CopayCopay

• More expensive outside the networkMore expensive outside the network


MedicareMedicare

• Health Care Financing Administration Health Care Financing Administration (HCFA)(HCFA)

• Largest health insurance programLargest health insurance program

• 39 million Americans39 million Americans

• EligibilityEligibility

65 years of age or older65 years of age or older

Some disable persons < 65Some disable persons < 65

End-Stage Renal Disease with dialysis or End-Stage Renal Disease with dialysis or transplanttransplant


MedicareMedicare

• Part APart A

Hospital InsuranceHospital Insurance

Funded by SSFunded by SS

• Part BPart B

Supplemental Medical InsuranceSupplemental Medical Insurance

Doctor appointmentsDoctor appointments

Other services and suppliesOther services and supplies

Funded by General Revenues and PremiumsFunded by General Revenues and Premiums


MedicaidMedicaid• Title XIX of the Social Security Act - law in 1965

• Administered by the States


MedicaidMedicaid• Eligibility

* Low income families with children

* Aged, blind, disabled individuals who meet criteria

* Infants born to Medicaid eligible pregnant women

* Children < 6 and pregnant women at < 133% of the

Federal poverty level

* Recipients of adoption assistance and foster care

* Certain Medicare beneficiaries


MedicaidMedicaid• Each of the States:

1. Establishes its own eligibility standards

2. Determines the type, amount, duration, and scope

of services

3. Sets the rate of payment for services; and

4. Administers its own program


Medicaid and MedicareMedicaid and Medicare

Medicare beneficiaries who have low income and limited resources may receive assistance from State Medicaid program

http://www.hcfa.gov/Medicaid/meligib.htm


‘‘Medigap’Medigap’

Insurance that covers expenses outside of Medicare


What does this mean for medical fees?What does this mean for medical fees?

Consider billingConsider billing

What the client gets billed depends on What the client gets billed depends on the health care plan.the health care plan.


What about pre-existing conditions?What about pre-existing conditions?

““A medical condition diagnosed or treated before A medical condition diagnosed or treated before joining a new plan (employment).”joining a new plan (employment).”

By law (1997) a preexisting condition By law (1997) a preexisting condition must be covered if the person had been must be covered if the person had been insured in the previous 12 months insured in the previous 12 months without a waiting period.without a waiting period.


Current IssuesCurrent Issues

Government Reimbursement RatesGovernment Reimbursement Rates

State and Federal Government not paying the actual

cost of care for their beneficiaries

* HMOs are dropping Medicare beneficiaries



Reimbursement for medicationsReimbursement for medications

Pharmaceutical spending ’d by 24.8% annually between 1996 and 1998

Americans are: • Using more prescriptions

• Using prescriptions at a younger age

• Using prescriptions for more conditions

• Substituting newer, more expensive medications

for established products. Blue Shield Press Release 5/10/00



Consumers report dissatisfaction with HMOsConsumers report dissatisfaction with HMOs

California survey (6/29/00) found 8 of the largest health maintenance organizations received ‘low grades’ from physicians and hospitals for

* quality of care

* patient satisfaction

survey of 85 physician’s groups; 154 hospitals; 25,000 MDs



Lack of InsuranceLack of Insurance

Underinsured or Uninsured

1998 = 16.3% of the population

Decreased Number of Health Insurance CompaniesDecreased Number of Health Insurance Companies

Trends in health insurance:

Vermont in 1991 16 companies offering health insurance, in

2000 there are only 3.


Universal Health Care CoverageUniversal Health Care Coverage1. Everyone in the US

2. Comprehensive benefits; through primary team and specialists

3. Elimination of Financial Barriers

4. Financing based on ability to pay

5. Organization and administration through publicly accountable means


Universal Health Care CoverageUniversal Health Care Coverage 6. Incentives and safeguards

7. Fair provider payments

8. Ongoing evaluation and planning

9. Disease prevention and health promotion

10. Education and training programs

11. Affirmative action programs in training, promotion, and employment.

12. Non-discrimination in health services delivery


Universal Health Care CoverageUniversal Health Care Coverage13. Education of consumers about their health rights and

responsibilities

14. Attention to the needs of all populations

American Public Health Association; 7/00

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