What’s Wrong With theHealth Care System and
Who’s Going to Fix It?
Bishop’s Convocation on Health Care Reform and Faith, March 31, 2006
What’s Wrong With theHealth Care System and
Who’s Going to Fix It?
Bishop’s Convocation on Health Care Reform and Faith, March 31, 2006
Robert F. St. Peter, M.D.
President and CEO Kansas Health Institute
Kansas Health InstituteKansas Health Institute
Private, non-profit 501(c)(3) Conduct policy analysis and research Non-partisan (really), no lobbying or advocacy Annual operating budget of $2.8 million 20 full-time positions Use of experts/consultants ad hoc Working relationship with legislature, state
agencies, associations, universities Funding from foundations, local, state and
federal government agencies
Healthier Kansans through informed decisionsHealthier Kansans through informed decisions
What Is Health?What Is Health?What Is Health?What Is Health?
Health is a state of complete
physical, mental and social
wellbeing, and not merely the
absence of disease or infirmity
World Health Organization
United Health Foundation
State Health Rankings
Kansas
Kansas Kids Count State Ranking
Ten Leading Causes ofTen Leading Causes ofDeath in the U.S., 2000Death in the U.S., 2000Ten Leading Causes ofTen Leading Causes ofDeath in the U.S., 2000Death in the U.S., 2000
Heart disease 710,760Cancer 553,091Stroke 167,661Chronic obstructive pulmonary disease 122,009Unintentional injuries 97,900Diabetes 69,301Pneumonia/influenza 65,313Alzheimer disease 49,558Kidney disease 37,251Septicemia 31,224Other diseases 499,283
Mokdad, AH, et. al.
Actual Causes of Death, 2000Actual Causes of Death, 2000Actual Causes of Death, 2000Actual Causes of Death, 2000
Tobacco use 435,000
Poor diet and physical inactivity 400,000
Alcohol consumption 85,000
Certain infections 75,000
Toxic agents 55,000
Motor vehicles 43,000
Firearms 29,000
Sexual behavior 20,000
Illicit drug use 17,000
Mokdad, AH, et. al.
What Are the Determinants of Health?
What Are the Determinants of Health?
Social and economic conditions Physical and built environments Health behaviors and coping skills Genes and biology Health care services
Determinants of HealthDeterminants of Health
Social and economic conditions Income and income distribution Class Social support Community characteristics/social
cohesion Race/ethnicity Education
Determinants of HealthDeterminants of Health
Physical environment Water Air Food supply
Built environment Housing Recreational opportunities Work place Injuries (intentional and unintentional)
Determinants of HealthDeterminants of Health
Health behaviors and coping skills Health promoting attitudes, beliefs,
behavior Adaptive/maladaptive behaviors to
stress Diet and exercise Tobacco Sexual behavior Substance abuse
Determinants of HealthDeterminants of Health
Genes and biology Conception through aging Predisposition to disease Interaction with other determinants Targeted interventions
Determinants of HealthDeterminants of Health
Health care services Access Preventive vs. curative Quality Effectiveness Cost of services
Determinants of Health
Thomas McKeown “The Role of Medicine(London; Nuffield Provincial Hospitals Trust, 197) p. 81
92-037
01-024
0.2
0.6
1
1.4
1.8
1850 1870 1890 1910160
162
164
166
168
170
He
igh
t (cm)
Deaths/1,000Population
Income/CapitaHeight
Inco
me
/Ca
pita
De
ath
s/1
,00
0 P
op
ula
tion
Re
lativ
e In
de
x 1
850
=1
Year
Economic Development and HealthHolland 1850 - 1910
Mustard, 2005
Literacy Levels by Physical, Mental or Other Health Conditions – USA (Quantitative)
0
10
20
30
40
50
60
1 2 3 4 5
Per
cen
t
Level NALS, p. 44, 2002
Health Problems
Mental or Emotional Problems
Long-term Illness
05-173
00-046
-1.2
-1
-0.8
-0.6
-0.4
-0.2
0 10 20 30 40 50
Months of Orphanage Rearing
Log1
0 S
aliv
ary
Cor
tisol
*linear trendline
Evening Cortisol Levels Increase withMonths of Orphanage Rearing *
03-089
Serotonin Gene, Experience, and Depression
Age 26
No Abuse Moderate Abuse Severe Abuse
.30
.50
.70
A. Caspi, Science, 18 July 2003, Vol 301.
Depression Risk
LL
SS
SL
S = Short Allele L = Long Allele
Early Childhood
Medical Care
DeterminantsDeterminants ofof HealthHealth
EnvironmentalBehavioral
Social
Genetic
10
88
20
4
20
4
50
4
0%10%20%30%40%50%60%70%80%90%
100%
Influence on Health National HealthExpenditures
Social/BehavioralEnvironmentGeneticsAcces to Care
Where Does the Money Go?Where Does the Money Go?
Robert Wood Johnson Foundation, 2000
What Do We Get forOur Health Care Dollar in the U.S.?
What Do We Get forOur Health Care Dollar in the U.S.?
U.S. spends more than twice as much on health care per capita as other industrialized countries ($4,631 vs. $1,983 in 2000)
Americans spend 13% of GDP on health care compared to OECD median 8% (2000)
Health care costs are on the rise again How much is enough? What should we expect for this investment?
What Do We Get forOur Health Care Dollar in the U.S.?
What Do We Get forOur Health Care Dollar in the U.S.?
Quality of care Health status
U.S. Adults Receive Half of Recommended U.S. Adults Receive Half of Recommended Care, and Quality Varies Significantly by Care, and Quality Varies Significantly by
Medical ConditionMedical Condition
Source: E. McGlynn et al., "The Quality of Health Care Delivered to Adults in the United States,"The New England Journal of Medicine (June 26, 2003): 2635–2645.
55
7665
5445
39
23
0
20
40
60
80
Overall Breast
Cancer
Hypertension Asthma Diabetes Pneumonia Hip Fracture
Percent of recommended care received
Provision of Appropriate CareProvision of Appropriate Care
First
Third
Fourth
Source: S.F. Jencks, E.D. Huff, and T. Cuerdon, “Change in the Quality of Care Delivered to Medicare Beneficiaries, 1998–1999 to 2000–2001,” Journal of the American Medical Association 289, no. 3 (Jan. 15, 2003): 305–312.
Second
WA
OR
ID
MT ND
WY
NV
CAUT
AZ NM
KS
NE
MN
MO
WI
TX
IA
ILIN
AR
LA
AL
SC
TNNC
KY
FL
VA
OH
MI
WV
PA
NY
MD
MEVT
NH
MA
RI
CT
DE
DCCO
GAMS
OK
NJ
SD
Quartile Rank
Note: State ranking based on 22 Medicare performance measures.
Performance on Medicare Quality IndicatorsPerformance on Medicare Quality Indicators2000–20012000–2001
HI
AK
Quality of Care in US Compared Quality of Care in US Compared to Other Countriesto Other Countries
AUS CAN NZ UK US
Medical mistake in care 13 15 14 12 15
Wrong medication/dose 10 10 9 10 13
Lab error 14 18 14 11 23
Any of above 27 30 25 22 34
Source: 2004 Commonwealth Fund International Health Policy Survey.
Opportunities Exist for Enhanced Doctor–Opportunities Exist for Enhanced Doctor–Patient Communication and InteractionsPatient Communication and Interactions
Percent saying doctor: AUS CAN NZ UK US
Always listens carefully 71 66 74 68 58
Always explains things so you can understand
73 70 73 69 58
Always spends enough time with you
63 55 66 58 44
Source: 2004 Commonwealth Fund International Health Policy Survey.
U.S. Health Outcomes Better in Some CasesU.S. Health Outcomes Better in Some Cases
Life expectancy at age 80 Survival of very low birth weight
infants Survival after heart attack, breast
cancer Waiting time for complex procedures Availability of high technology
services
U.S. Outcomes Worse on Other MeasuresU.S. Outcomes Worse on Other Measures
U.S. Rank*
Life expectancy at birth
11-16
Infant mortality 18-19
Mortality rates, 15-59 yrs
9
Injuries 15-16
*Among 19 members of OECD
What Is Our Goal?What Is Our Goal?What Is Our Goal?What Is Our Goal?
To purchase the best health care?
or
To purchase the best health?
WHO DeclarationWHO Declaration
…Health is a fundamental human right
and that the attainment of the highest
possible level of health is a most
important world-wide social goal whose
realization requires the action of many
other social and economic sectors in
addition to the health sector.Declaration of Alma-Ata (1978) World Health Organization
Which one do you see as the most important health care issue
at the present time?
9%
38%
48%
Percent saying
The cost of health care
People who are not covered by insurance
The quality of health care
“Some other issue” and “Don’t know” responses not shown Harvard, KHI 2003
Problems getting or paying for medical care in the past 12 months
40%
9%
14%
14%
20%
45%
Uninsured at any time in the past 12 months Continuously insured General population
Percent saying
Did not get needed care due
to cost
Had a serious problem paying
medical bills
Harvard, KHI 2003
Worries about getting and paying for care in the future
14%
24%
29%
16%
20%
26%
Very worried Somewhat worried
They might not be able to afford health insurance (among those currently insured)
They might not be able to afford the prescription drugs they need
They will lose their health coverage (among those currently insured)
Percent saying they are worried that in the next six months…
55%
44%
30%
55%
44%
30%
Harvard, KHI 2003
The BasicsThe Basics Health Care Costs
Total health care spending Health insurance premiums Out-of-pocket spending State health care spending
Ability to Pay Employment and wage growth Economic growth
Quality of Care ?
Access: 45 Million Uninsured Americans (15.6%)
Kansas: 10.9%
Texas: 24.7%
MO: 10.9%
OK: 17.8%
CO: 15.8%
New Mexico: 20.9%
NE: 9.9%
Percent of Adults 19-64 Uninsured by StatePercent of Adults 19-64 Uninsured by State
WA
ORID
MT ND
WY
NV
CAUT
AZ NM
KS
NE
MN
MO
WI
TX
IA
IL IN
AR
LA
AL
SCTN
NCKY
FL
VA
OH
MI
WV
PA
NY
AK
MD
MEVT
NH
MARI
CT
DE
DC
HI
CO
GAMS
OK
NJ
SD
WA
ORID
MT ND
WY
NV
CAUT
AZ NM
KS
NE
MN
MO
WI
TX
IA
IL IN
AR
LA
AL
SCTN
NCKY
FL
VA
OH
MI
WV
PA
NY
AK
MD
MEVT
NH
MARI
CT
DE
DC
HI
CO
GAMS
OK
NJ
SD
19–23.9%
Less than 14%
14–18.9%
24% or more
1999–20001999–2000 2003–20042003–2004
Source: Two-year averages 1999-2000 and 2003-2004 from the Census Bureau’s March Current Population Survey (CPS: Annual Social and Economic Supplements). Estimates by EBRI.
Total National Health Expenditures and As a Percentage of GDP
$0.00
$200.00
$400.00
$600.00
$800.00
$1,000.00
$1,200.00
$1,400.00
$1,600.00
$1,800.00
$2,000.00
1960 1970 1980 1990 1991 1992 1993 1994 1995 1998 1999 2000 2001 2002 2003 2004
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
National Health Expenditures As Percent of GDP
Levit et al, "Trends In U.S. Health Care Spending, 2001,” Health Affairs, January/February 2003 and Center for Medicare and Medicaid Services tabulations at http://cms.hhs.gov/statistics/nhe/historical/t1.asp
Custer, 2003
Source: KFF/HRET Survey of Employer-Sponsored Health Benefits: 2005; *Estimate is statistically different from the previous year shown at p<0.05^ Estimate is statistically different from the previous year shown at p<0.1.Note: Data on premium increases reflect the cost of health insurance premiums for a family of four. Historical estimates ofworkers’ earnings have been updated to reflect new industry classifications (NAICS).
12.0
18.0
0.8
9.2*8.5
11.2*
5.3*
8.2*
10.9*12.9*
13.9^
0
5
10
15
20
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Health Insurance PremiumsWorkers EarningsOverall Inflation
Increases in Health Insurance Premiums Increases in Health Insurance Premiums Compared to Other Indicators, 1988-2005Compared to Other Indicators, 1988-2005
Percent
Does More Spending Mean Better Health?
Does More Spending Mean Better Health?
When it comes to achieving better medical outcomes, how much you spend matters a great deal less than what you buy (Dartmouth study, 2006)
Put more simply, the benefits of health spending depend on how one spends the money (Garber, 2006)
Sources: Adapted from Heffler, Smith, Keehan, Clemens, Zezza, and Truffer, Health Affairs, February 2004
Why have costs increased?Why have costs increased?
Medical prices51%
Demographics3%
Utilization46%
Role of Chronic DiseaseRole of Chronic Disease
Rise in treated disease prevalence Population factors
• 27% of increase in spending from 1987-2002 due to rise in modifiable risk factors (e.g., obesity)
Changing treatment threshholds (e.g., high BP, diabetes)
Innovation (e.g., SSRIs, statins) Total: 63% of increase in spending
Rise in spending for treated cases Innovation (e.g., premies, heart attack) 37% of increase in spending
Thorpe, et al, 2005
Role of Chronic DiseaseRole of Chronic Disease
Obesity Annual health cost in Kansas is $657m
• $143m paid by Medicaid
Medicare will spend 34% more on obese person than normal weight
Aged (>65) Disabled Low income
Employee Dependents
DirectPurchase
DirectPurchase
Health Care Providers
Government80 mil.
Uninsured = 45 mil
The U.S. Health System—A Simplified View
Insurancecarrier/Health
plan/TPA
Employer170 mil.
Hurley, 2003
Types of health insurance coverage in Kansas in 2003Types of health insurance coverage in Kansas in 2003
Source: March 2004 Current Population Survey.
0%
10%
20%
30%
40%
50%
60%
70%
Private, job-based
Medicare Private,individuallypurchased
Medicaid Military Uninsured
Per
cen
ten
ge o
f al
l Kan
san
s
Note: Percentages add to more than 100% because some individuals have more than one kind of insurance. Kansas Health Institute 2004
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Out of Pocket Private I nsurance
Percentage of Private Health Expenditures "Out-of-Pocket"
Center for Medicare and Medicaid Services National Health Expenditures-http://cms.hhs.gov/statistics/nhe/historical/t3.asp
73
48
37
29
23
15
14
9
8
7
4
5
11
27
25
29
31
35
34
38
41
48
52
54
7
15
14
19
20
22
25
22
22
18
17
16
19
23
27
27
30
30
28
29
23
24
26
0% 20% 40% 60% 80% 100%
1988
1994
1996
1998
2000
2002
Indemnity PPO POS HMO
Percent of all covered employees.
National Employee Enrollment By Type Of Plan
Gabel et al, KFF, 2002
Percentage of Large Employers (>200 workers) Making Selected Benefit Changes in Past Year
34
44
47
65
56
52
34
66Increase office
copays
Increasedeductible
Increase Rxcopay
Increasepremium
Yes No
Gabel et al, KFF, 2003
Consumer Directed Products—A Continuum Perspective
No Premium Contribution and “First Dollar” Coverage
Cash in Lieu of Benefits
Premium contributions and cost sharing
Sharply increased out-of-pocket costs/benefits buy-down
High deductible plan option/ Medical spending account
Defined contributionplans
Hurley, 2003
Percentage of Firms That Offer Employees a Percentage of Firms That Offer Employees a High-Deductible Health Plan, by Firm Size, High-Deductible Health Plan, by Firm Size,
2003-20052003-2005
5% 5% 5%
17%
5%
10%7%
20%
10%9%*
20%*
33%*
20%*20%*20%*
0%
5%
10%
15%
20%
25%
30%
35%
Small Firms (3-199Workers)
Midsize Firms (200-999 Workers)
Large Firms (1,000-4,999 Workers)
Jumbo Firms (5,000or More Workers)
All Firms
2003 2004 2005
Estimate is statistically different from previous year shown at p<.05
High-deductible health plan (HDHP): A plan with an annual deductible of at least $1,000 for single coverage and $2,000 for family coverage. In 2003 and 2004, the survey used a different definition and asked if firms offered a health plan with a deductible of more than $1,000 for single coverage. The survey did not specify a minimum deductible for family coverage. The prevalence shown is for all HDPs, regardless of whether they are offered with an HRA, are HAS qualified, or neither
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2003-2005.
Annual Change in Private Health Spending per Capita (adjusted for inflation), 1961-2001
3.6
5.1
6.1
9.4
6
-1.6
-3
7
5.75.3
3.8
7.3
2.9
-1.6
0.9
8.4
6.9
1.9
0.2-0.7
4.3
6.25.95.2
5.7
2.83.6
9.1
5.7
4.7
1.32 1.9
-1.1
00.7
2.93.4
3
4.7
8.1
-4
-2
0
2
4
6
8
10
12
% Change In Spending per Capita
Medicare and Medicaid Implemented
Voluntary Effort
Managed Care and Threat of Health Reform
Wage and Price Controls
WhatNext?
Altman and Levitt, 2002
Keep the government out of my health care?
Keep the government out of my health care?
4 of 10 now covered by government Medicare Medicaid Government employee (incl. military) VA, CHAMPUS, IHS
$6 of $10 paid by government Tax policy on health benefits
Insurance cost deductible to employer and employee
Costs greater than home mortg. int. deduct.
What role is government already playing?
What role is government already playing?
Public health insurance Medicare, Medicaid, SCHIP, VA, IHS
Government employee benefits Local, state, federal levels
State high-risk pools Health savings accounts, tax breaks,
group purchasing initiatives Regulation of insurance industry Direct-to-provider subsidies (safety net)
What can states do on costs? What can states do on costs?
Revisit price controls Attempt to limit expansion of health
care facilities and technology Relax insurance mandates Re-insurance mechanisms Insurance market reforms
Group purchasing cooperatives Association health plans
What can states do on access?
What can states do on access?
Expand public health insurance Maximize federal match for Medicaid and
SCHIP (e.g., provider tax) Enroll those eligible but not enrolled Raise income thresholds for eligibility Allow buy-in for workers
Employer or individual mandates Expand access for those who have
been priced out of the market Health insurance subsidies for workers Strengthen the health care safety net
What else can states do?What else can states do?
Administrative simplification Tort reform Promote prevention, dz. mgmt. Become model purchaser
Medicaid State employee health plan
Promote use of data & information Value-based purchasing Improve quality from providers More informed consumers
What states can not doWhat states can not do
Regulate health insurance provided by large employers
Control development of technology Put themselves at competitive
disadvantage to neighbors Achieve statewide universal coverage
on their own
Where do we go from here?Where do we go from here?
Market-based solutions Emphasize role of consumers Maintain focus on employer-based
insurance system Increased government participation Single-payer health system
Are any of these enough?Are any of these enough?
Role of chronic disease Social determinants framework
Early childhood imperative Comprehensive vs. transformational
change of “health system”
Transformative ChangeTransformative Change
Major reform demands long range vision What we want to accomplish in 20 years
Criteria should not just be about economics which conceals values
Criteria in a democracy needs to consider Values Science/ evidence Social goals Economics
Healthier Kansans through informed decisionsHealthier Kansans through informed decisions
Kansas Health InstituteKansas Health Institute
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