The web site pagetutor.com put up an excellent illustration of what 1 trillion dollars looks like. The original site is here: http://www.pagetutor.com/trillion/index.html

I excerpted the post here to help illustrate how much the United States spends on health care.

What does one TRILLION dollars look like?

We’ll start with a $100 dollar bill, currently the largest U.S. denomination in general circulation. Most everyone has seen them, slightly fewer have owned them. Guaranteed to make friends wherever they go.

A packet of one hundred $100 bills is less than .5 inch / 12.7 mm thick and contains $10,000. It fits in your pocket easily and is more than enough for week or two of shamefully decadent fun.

Believe it or not, this next little pile is $1 million dollars (100 packets of $10,000). You could stuff that into a grocery bag and walk around with it.

While a measly $1 million looked a little unimpressive, $100 million is a little more respectable. It fits neatly on a standard pallet…

And $1 BILLION dollars… now we’re really getting somewhere…

Next we’ll look at ONE TRILLION dollars. This is that number we’ve been hearing so much about. What is a trillion dollars? Well, it’s a million million. It’s a thousand billion. It’s a one followed by 12 zeros.
Ladies and gentlemen… I give you $1 trillion dollars…

In 2008 the United States of America spent $2.4 trillion dollars on health care. That equals 2.4 times this graphic.

The current unfunded liabilities (meaning the U.S. is committed to spending the money but has no way to pay those obligations) for Medicare total $85.6 trillion. That equals 85.6 times this graphic.

The crisis related to health care spending in the United States is real, it is just sometimes very challenging to visualize. In this case, each one of us is that man in the red shirt in the lower left corner of the graphic. We face a challenge 2.4 and 85.6 times the pallets of money illustrated in this graphic. And that is a lot of $100 bills.

The following are the views of one PhD on that topic.

Key excerpts:

• 80% of total health care spending linked to chronically ill patients
• Rise in obesity prevalence in the US accounted for 27% of the growth in health spending over the past 20 years.
• We are not going to “solve” the spending growth through a singular focus on health insurance redesign (i.e. HSAs, higher co-pays).

I have gathered a few repsentative samples here to give you an idea of what is being offered. It is very likely that some of the elements of these proposals will be included in the new health care system.

The Options: A Single Payer Example

For those who long for or dread a government owned and operated single payer system, here’s a chance to see how one operating within the United States would be structured, governed, funded and operated.

A bill was introduced into the California legislature on 27 February 2009 that would create a state owned and operated single payer health care system in California.

The bill is posted here: http://info.sen.ca.gov/pub/09-10/bill/sen/sb_0801-0850/sb_810_bill_20090227_introduced.html

For those who have never read legislation before, it will be an interesting introduction to how the laws that define our society are written.

For those interested in how a single payer model of health care might be structured, it will be interesting reading.

For those adamantly opposed to or in passionate support of a single payer system, there will be plenty of material to absorb.

One opinion I have openly stated in this thread is that a single payer system is not on the table as an option for a national health care system. I have stated that it is a complete political non-starter and a ‘third-rail’, poison topic at the national level. I have stated that any system we end with nationally will retain all the familiar components we currently know, such as private insurance companies, HMOs, PPOs, lawyers, etc. I still hold those opinions.

Happy reading!

Highlights of Aetna’s proposal for health care reform:

Excerpts from the introduction section – the challenge:
A robust body of research concludes that the uninsured obtain less care, receive fewer preventive services and fail to adhere to recommended treatments. Additionally, tens of billions of dollars are spent each year treating those without health insurance, often in expensive emergency room settings for illnesses or chronic conditions that could have been prevented or treated earlier had they been part of a course of care associated with having health insurance.

Premium increases are driven primarily by three factors: general inflation, health care price increases in excess of inflation (for example, cost shifting and higher priced technologies) and increased utilization (for example, aging population, lifestyle changes and new treatments).(1)

With the average premium for employer-sponsored family coverage now exceeding $12,000, participating in the health insurance marketplace is a financial strain for a growing number of Americans.(2)

These [health care delivery] quality gaps result in 35,000 to 75,000 avoidable deaths each year and between $2.7 billion and $3.7 billion in avoidable medical costs.(3)

(1) Price Waterhouse Coopers, “The Factors Fueling Rising Healthcare Costs 2006,” Prepared for America’s Health Insurance Plans, January 2006.
(2) Of this total premium cost, workers pay an average $3,281 from their paychecks, with employers covering the remaining premium costs. Gary Claxton, Samantha Hawkins, Jeremy Pickreign, et al. “Employer Health Benefits: 2007 Annual Survey,” Kaiser Family Foundation and Health Research and Education Trust, September 2007. Accessed online: www.kff.org/insurance/7672/upload/76723.pdf.
(3) National Committee on Quality Assurance, “The State of Health Care Quality 2007.” Accessed online: http://www.ncqa.org/Portals/0/Publications/Resource%20Library/SOHC/SOHC_07.pdf

Excerpts from the proposed plan section:
Get and keep everyone covered
Require all Americans to possess health insurance coverage — an individual coverage requirement — as a common-sense approach for achieving universal coverage through universal participation.

Strengthen public programs to ensure certain populations have access to quality health care.

Maintain the employer-based system and export its
strengths to make the individual market function betterEqualize the tax treatment of health insurance for those who obtain coverage through their employer and those who purchase it directly in the individual market by extending favorable tax treatment to both sets of individuals, without changing the favorable tax treatment employers currently receive for offering benefits.

Permit the purchase of health insurance across state borders (that is, rather than having to purchase in one’s home state) so consumers can use phone, mail and internet facilities to purchase coverage in states with legislative and regulatory environments that facilitate the existence of affordable health insurance options.

Reorient the system toward prevention,
value and quality of care
Create incentives for individuals to achieve optimal health status by making healthy choices, participating in wellness, chronic care and disease management programs and obtaining routine preventive care.

Reward health care providers who efficiently deliver evidence-based care through pay-for-performance (P4P) programs.

Transform the medical liability system into one that focuses on the fair and timely resolution of medical disputes and promotes health care quality improvements. The medical liability system should encourage — not discourage — physicians to discuss and learn from mistakes and preventable errors.

Use market incentives to improve coverage, drive down
costs and make the system more consumer-oriented
Create new pooling mechanisms that facilitate affordable access to health insurance for individuals and small employers.

Encourage uniformity of state laws and regulations. Explore the development of an optional federal charter.

Invest in efforts to improve health and benefits literacy, especially for the nearly half of adults in the nation who have difficulty locating, matching and integrating written information.

Advance public-private partnerships to develop and implement health information technology (HIT), including personal health records and the development of an interoperable health record system that allows for the seamless and secure transmission of health information.

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Jack Ebeler of Ebeler Consulting

Source for presentation:
Approaches for Covering the Uninsured: A Guide by Jennifer Tolbert, Jack Ebeler, Tanya Schwartz
Kaiser Commission on Medicaid and the Uninsured
http://www.kff.org/uninsured/upload/7795.pdf
December 2008

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Overview of Options

Overall approaches

• Build on current financing approaches
• Substantially replace current approaches

Within either, attend to access to and affordability of coverage

Mix and match from menu

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Overall: strengthen/build on current approaches

Overall approaches

Employment-based coverage:

• Employer mandate – require employer to offer/subsidize
• “Pay or play” – require employer to offer/subsidize, or pay to pool to finance alternative coverage source

Public coverage:

• Expand Medicaid/CHIP enrollment, and/or eligibility
• Medicare for those age 55-64
• Subsidize benefits for temporarily unemployed

Individual coverage: revise regulatory approaches

Individual mandate option [within] any of these arrangements

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Overall: substantially replace current financing and tax subsidies

• Single payor (eg, Medicare for all)
• Redirect tax subsidy away from employment-based coverage and provide directly to individuals: tax credits for individual market

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Availability/affordability/subsidy approaches within overall framework

Affordability/subsidies

• Subsidies (tax, other) for individuals and/or employers
• Offer/encourage products with less expensive premiums (high deductible)
• Young adult plans
• Reinsurance

Availability of products/market organization

Access to/organization of larger purchasing pools (eg., connector; FEHB)

• Medicare-like plan available as an option
• Association health plans
• High risk pools

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Mix and match

If Congress does not go for one “pure” model, multiple combinations possible – can mix and match from the menu:

• McCain
• Obama campaign
• Baucus
• Wyden
• And…

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Bradley Herring, The Johns Hopkins University

Potential Complications with the Different Approaches to Health Reform

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Potential Complications

Ideology:
Private markets vs. government

Special Interests:
Insurers, physicians, hospitals, drug companies, business

Redistribution of Income:
How much? How complex?

Consider These Four Options:
Single payer, McCain, Obama/Baucus, Wyden-Bennett

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Single Payer: HR 676

The Underlying Appeal:

• Elegant
• Universal
• Large reduction in administrative costs

Potential Complications:

• Who says no?
• Taxes: employer/employee payroll taxes of 4.75% each; repeal Bush tax cuts; additional 5% tax on top 5% of income and 10% tax on top 1% of income; 0.25% stock transaction
• Lower reimbursements to medical providers

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McCain / Republican Vision(Tax Reform, Individual Markets, Cross-State Purchasing)

The Underlying Appeal:

• Tax reform “can” improve efficiency and equity
• Achieve a competitive market for health insurance

Potential Complications:

• Reductions in pooling across health status
• High risk pools either expensive or underfunded
• Reductions in consumer protections
• High administrative costs in individual markets

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Obama / Baucus

The Underlying Appeal:

• Built on the current system – least upheaval

Potential Complications:

• Built on the current system – fragmented
• Who really pays under an employer mandate?
• Does it have an individual mandate? Is it enforceable?
• “Crowd out” with expanded Medicaid/SCHIP
• Controversy surrounding the public plan option
• Is this bipartisan enough to actually pass?

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Wyden, Bennett, et al.’s “Healthy Americans Act”

The Underlying Appeal:

• Bipartisan support
• Grand compromise: markets w/ regulation, ample subsidies
• CBO/JCT: breaks even after a few years

Potential Complications:

• Willingness of high-income people to redistribute?
• Vulnerable Medicaid population folded into private plans
• Defining the basic benefit package
• Hardly anyone’s favorite: third place behind status quo?

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The Options: A Health Care Professionals Advocacy Group’s Plan

Healthcare Professionals for Healthcare Reform (HPfHR) is a group of physicians, nurses, public health experts, healthcare economists, health information technologists, business leaders, hospital administrators, politicians and patients with a 3 Tier plan that offers a comprehensive, effective, efficient and politically viable alternative to the current defective system or other plans previously proposed.

The HPfHR plan is called Expanding Medical and Behavioral Resources with Access to Care for Everyone (EMBRACE), and is based on the tenet that the entire population should be covered for life sustaining and health promoting “basic” healthcare with supplemental levels of coverage for those desiring it. The plan is designed to make healthcare delivery more effective, efficient, and universal; yet, preserve the unique American character of the present system.

The HPfHR web site is here: http://www.hpfhr.org/

The EMBRACE plan is described in this article from the online edition of The Annals of Internal Medicine ahead of a printed publication date of 7 April 2009 | Volume 150 Issue 7

Article is here: http://www.annals.org/cgi/content/fu…904070-00113v1

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The Expanding Medical and Behavioral Resources with Access to Care for Everyone Health Plan
Gilead I Lancaster, MD; Ryan O’Connell, MD; David L. Katz, MD, MPH; JoAnn E. Manson, MD, DrPH; William R. Hutchison, MSIR; Charles Landau, MD; Kimberly A. Yonkers, MD; and for Healthcare Professionals for Healthcare Reform

7 April 2009 | Volume 150 Issue 7

Healthcare Professionals for Healthcare Reform is a group of physicians and others interested in health care reform who, recognizing the urgent need for change, convened to propose a universal health care plan that builds on the strengths of the U.S. health care system and improves on its coverage, efficiency, and capacity for patient choice.

The group proposes a tiered plan, the core of which (Tier 1) would be lifetime, basic, publicly funded coverage for the entire population on the basis of the best evidence about which therapies are considered life saving, life-sustaining, or preventative. Optional coverage (Tier 2) would be funded by private insurance and cover all therapies considered to help with quality of life and functional impairment. Items considered to be luxury or cosmetic (Tier 3) would generally not be covered, as is the case under the current system.

The entire system would be overseen by a quasigovernmental, largely independent organization known as “The Board,” which would resemble the Federal Reserve and interact with U.S. Department of Health and Human Services agencies to oversee implementation and coverage.

By building on the current health care system while introducing other features and efficiencies, the Expanding Medical and Behavioral Resources with Access to Care for Everyone (EMBRACE) plan for universal health insurance coverage offers several advantages over alternative plans that have been proposed.

The United States spends twice as much per capita on health care as other developed countries (1) but ranks in the bottom third for important measures, such as infant and maternal death rates and life expectancy (2). Current interest in U.S. health care system reform focuses on the expansion of health insurance to more individuals (3), but many proposals lack the structure that would improve the health of Americans in an affordable, efficient, and transparent way that maintains or even expands patient choice (4).

Healthcare Professionals for Healthcare Reform is a group of physicians, nurses, medical technicians, hospital administrators, public health experts, health care economists, business leaders, politicians, and patients who, inspired by the realization that conversations about health care reform lack input from health care professionals, convened to propose a universal coverage plan that builds on the strengths of the U.S. health care delivery system and improves on its efficiency and capacity for patient choice. Our plan, called Expanding Medical and Behavioral Resources with Access to Care for Everyone (EMBRACE), is based on a tiered approach to health care and on the tenet that the entire population can be covered for life-sustaining and health-promoting (basic) health care, with additional coverage available for those who desire it.

The EMBRACE 3-Tier System

The EMBRACE system would be composed of 3 tiers of coverage.

Tier 1, the base level, would cover the entire population from cradle to grave. It would include all medical, surgical, and psychiatric therapies considered to be life saving, life-sustaining, or preventative on the basis of the best evidence (from the medical literature and expert opinions).

A government-subsidized account similar to Medicare would provide the funds (with the elimination of all other public insurance). The method of raising this revenue could be similar to the present funding of Medicare (such as the Federal Insurance Contributions Act tax) and Medicaid, but because businesses should receive substantial savings after initiation of this plan, additional sources of revenue may be considered. These could include payroll taxes (indexed to salary), a tax on businesses on the basis of the number of employees (and their wages), or a combination of these. Because the number of items covered by Tier 1 in this new system would be substantially less than what Medicare and Medicaid currently cover, funds would be available to redistribute to achieve universal Tier 1 coverage. We believe that this should be a “revenue neutral” redistribution of public funding.

Tier 2 would cover all therapies considered to help with quality of life, as well as some diagnoses or services that do not have sufficient evidence for a Tier 1 indication.

Private insurance carriers would administer Tier 2 services. The private insurance carriers would be allowed to offer a limited number of plans that would be developed by an oversight board (see next section), similar to the Medigap Plans A to L now stipulated by the Centers for Medicare & Medicaid Services (5). Although each insurance carrier would not have to offer all the plans, the offered plans would cover all the services stipulated by the board. A major advantage of this approach is that consumers (either employers or individuals) can compare the price of the plans.

Tier 2 plans can be broad (covering most Tier 2 services) or can be customized for specific groups, such as a geriatric plan that covers extended care facilities but not fertility care, a heavy laborer plan that includes chiropractic therapy, or a Workman’s Compensation plan purchased by employers, employees, or unions.

Tier 3 would apply to all medical and surgical issues considered luxury or cosmetic, such as Lasik surgery or Botox treatments. Funding for Tier 3 would not be covered under the EMBRACE system—as in the current system—and all bills would go to the patient.

Pharmaceuticals will have similar Tier assignments for medical coverage: Tier 1 would include formulations and therapies that treat or prevent serious illnesses and would mostly be paid for by public funds or be heavily subsidized. Tier 2 would apply to those drugs and therapies that enhance quality of life and would be covered by private insurance. Tier 3 would be for luxury items.

Oversight

Our proposed system would be overseen by a panel of physicians and other health care professionals, public health experts, and economists who specialize in health care, known as “The Board”. The Board’s mission would be to promote the health of Americans in a socially responsible and economically sound way. Similar to former Senator Tom Daschle’s recently proposed “Federal Health Board”(6), it would be a quasigovernmental organization that resembles the Federal Reserve, which should make it less beholden to political pressures. It would be headed by a chairperson who would be appointed to a 10-year term by the president and require Senate confirmation.

The Board would have oversight of the Centers for Medicare and Medicaid Services and input into the Food and Drug Administration and the National Institutes of Health. Using already-established Diagnostic Related Group, Ambulatory Payment Classification, and International Classification of Diseases codes, the Board would decide which diagnoses and services are covered by Tier 1, 2, or 3 on the basis of medical importance (by using evidence-based data, including practice guidelines developed by expert medical panels, Cochrane Library reviews, and other sources), public health considerations, and economic effect. These assessments would be updated periodically.

The Board’s authority to direct the National Institutes of Health and the U.S. Food and Drug Administration would allow it to direct research that focused on the therapeutic issues that it needs to achieve its mission (to improve the health of the country and reduce costs). For example, if evidence supporting a particular treatment is based on expert consensus, the Board may direct the U.S. Food and Drug Administration (for a medication or device) or National Institutes of Health (for an intervention) to request applications for studies that will allow better tier determination.

Among the prerequisites to the implementation of this system would be delineation of the specific relationships between the Board and existing agencies within the U.S. Department of Health and Human Services, in particular the U.S. Food and Drug Administration and the National Institutes of Health. Some reorganization of these government agencies might be warranted to optimize interagency interactions.

Billing

To address the excessive overhead involved in claim submission by providers and insurance companies, the Board would create a universal reimbursement form that would be implemented electronically by using a Web-based tool available to hospitals and physician offices. This form would be the only form of billing for all providers and would be Internet-based and simple to use. Form data would be transmitted to a central billing system, which would decide whether the condition or service is Tier 1, Tier 2, or Tier 3. Tier 1 services would be reimbursed directly to the provider. Tier 2 services would trigger a computerized search for insurance coverage; if insurance is found, the insurance carrier would be billed and if not, the patient would be billed. Bills for Tier 3 would be sent directly to the patient.

To help with questions about the assigned tier for a particular service, the central billing system would have a billing inquiry feature available to providers and consumers to allow inquiries about tier assignment in advance.

Advantages of the EMBRACE System Over Single-Payer Models

Ideally, a single-payer model would accomplish the goals of improving the health of the nation with a uniform and universal system of health care delivery. One such proposed system is the “Physicians for a National Health Program” model. Proposed in 2003 (7) and introduced to Congress in 2007 as H.R.H. 676 (8), the plan advocates an expanded Medicare system that would exclude all private insurance payers and eliminate all for-profit hospitals and HMO-type providers.

Like our proposal, the Physicians for a National Health Program plan would provide patients universal access to approved medical care that would be paid by a national health insurance agency. However, if the desired treatment or service in the Physicians for a National Health Program system is not approved, patients will most likely find ways outside of the system to obtain that service. As in other countries with a single-tiered health care system, use of unapproved services may lead to a de facto multitiered system (9). In these latter systems, parallel outside enterprises often grow, become private, and compete with the publicly funded system—usually to the detriment of both.

EMBRACE encourages private (Tier 2) participation for those services that are not publicly financed. The existence of this integrated private tier would allow for fewer covered services in Tier 1, which in turn would reduce the public financial burden. In addition, allowing all the tiers to be a part of the same system would allow patients to see the same provider for all services and render all services subject to the same ultimate oversight. Politically, a system that continues to allow private, for-profit insurance and some degree of free market forces would be more viable than a system that attempted to control or eliminate them.

Our plan preserves many of the favored features of the present system, such as a provider’s ability to offer all services even if they are Tier 2 or Tier 3, which would keep the new system more familiar to the patient and provider and in turn facilitate the transition to it.

Conclusion

The EMBRACE plan offers universal coverage for essential health care and promises to reduce mortality and morbidity and encourage preventative care. The increased efficiency of the system should allow hospitals to reallocate funds to other services, such as health information technologies, and allow health care professionals more clinical time. For the patient, the system offers universal coverage for basic health care needs, transparency for Tier 2 coverage, and complete portability of all insurance coverage. Employers would be relieved of the financial burden of coverage for most services but retain the option to offer Tier 2 coverage as a benefit to employees. Finally, insurance providers would benefit from the elimination of the financial risks associated with Tier 1 services, and the system at large would benefit from centralized billing and a reduction in administrative overhead.

A PDF file version of this post is available here: http://www.hackneys.com/docs/healthcarereformfaq.pdf

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Q: Why should I care about health care system reform in the United States?

A: Because:

• The nation can no longer afford the current system, not on an individual, family, business, state or national level. Left unchecked, health care system spending will reach 20% of GDP by 2017.
• Health care system reform in the United States will affect health care worldwide, to the extend it attenuates innovation in new forms of diagnosis and treatment.
• The quality, cost and outcomes of health care in the United States is sub-standard when compared to peer economies, yet Americans pay more for health care than any other country on earth.
• More than 47 million Americans are without health insurance; when they seek care it is extremely costly when delivered via Emergency Rooms and other high cost delivery settings.
• More than 10% of American children are without health insurance.

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Q: The current system is excellent, the best in the world. Why should we change?

A:There are some stakeholders who are very resistant to change of any form, and use the rationale that the U.S. health care system is peerless and inherently above reform. Those of us who’ve been around the various aspects of the system for decades and have seen the ugly stuff hidden under the rugs tend to feel differently. But for those who believe there is nothing wrong with the standards of care and outcomes the current system delivers, it is worth taking a look at data from uniform comparative surveys with peer economies and data from within the U.S. itself.

Total Health Expenditures Per Capita, U.S. and Selected Countries, 2006

Amounts in U.S.D. Source: Organisation for Economic Co-operation and Development, OECD Health Data 2008, updated August 26, 2008.

How Do Assessments of U.S. Patients Compare to Assessments of Patients in Other Countries?

The Commonwealth Fund ( http://www.commonwealthfund.org/ ) regularly surveys the experiences of patient in several countries. The 2008 survey focused on patients who had at least one chronic condition (arthritis, cancer, depression, diabetes, heart disease, hypertension, lung problems) and was conducted in eight countries (Australia, Canada, France, Germany, the Netherlands, New Zealand, the United Kingdom, and the United States). Figure 9 provides highlights of the findings. [B]Because the questions focus on problems, a higher score represents poorer performance.[/B] Patients with chronic illnesses in the United States report more problems than patients in any of the other seven countries with access problems related to cost and with having received wasteful care. These same patients report the best experiences among the countries surveyed with waiting times to see a specialist. In most other categories, U.S. performance is in the middle.

Source: RAND, Schoen C, Osborn R, How SKH, Doty MM, Peugh J, “In Chronic Condition: Experiences of Patients with Complex Health Care Needs, In Eight Countries, 2008,” Health Affairs [Epub, November 13, 2008], Vol. 28, No. 1, 2009, pp. w1—w16.
Note that counties with universal access, overtly capitated systems rated poorly on access (time to treatment). The U.S. rated poorly on cost and receiving wasteful care. If you read the OP you know the cost story. Wasteful care is a clinical inefficiency often exemplified by needless tests and diagnostic imaging usually driven by the need for the doctors, staff and hospital to protect themselves from litigation. A series of studies conducted over the past two decades indicate that [I]one-third or more of all procedures performed in the United States are of questionable benefit[/I]. (See, for example, Bernstein et al., 1993; Hilborne et al., 1993; Kleinman et al., 1994; Winslow et al., 1988.)
So, with same-set data the U.S. scores better in access and poorer in cost and waste, neither of which should be a big surprise.

How about the performance measured within the U.S. itself? How well is the health care system performing to its own metrics?

Percentage of Recommended Care Received by U.S. Adults

In a recent study that produced the first national report on quality of care, RAND assessed the extent to which recommended care was provided to a representative sample of the U.S. population for a broad range of conditions in 12 metropolitan areas. Key findings include the following:

• Overall, adults received about half of recommended care.
• Quality of care was similar in all of the metropolitan areas studied.
• Quality varied across conditions, and across communities for the same condition.
• No community had consistently the best or worst quality of care.
• All sociodemographic groups were at risk for poor care.

SOURCES: RAND, Author’s analysis of (a) S. M. Asch, E. A. Kerr, J. Keesey, J. L. Adams, C. M. Setodji, S. Malik, and E. A. McGlynn, “Who Is at Greatest Risk for Receiving Poor-Quality Health Care?” New England Journal of Medicine, Vol. 354, No. 11, 2006, pp. 1147-1156 and (b) E. A. McGlynn, S. M. Asch, J. Adams, J. Keesey, J. Hicks, A. DeCristofaro, and E. A. Kerr, “The Quality of Health Care Delivered to Adults in the United States,” New England Journal of Medicine, Vol. 348, No. 26, 2003, pp. 2635-2645.
 
Note that last bullet point: Care is consistently sub-standard across all sociodemographic groups.

Reliability of Care for Population Subcategories: Sex, Age, Race, Education, and Income

Source: RAND, Asch et al., 2006.
What do these last two charts mean? They mean that between 40 and 50% of the time the people of the United States do not receive the the care recommended for them.

And for this we pay more money than any other society on the planet earth for health care.

The United States is a hero based culture. We are exceptionally excellent at diving in and saving lives using extraordinary courage, fortitude and beyond-science-fiction-level technology.

However, once you get beyond the ‘hero’ aspects, our health care system delivers sub-standard results at a beyond-premium price.

As a country, we are not receiving value for our money.

We need health care system reform not only because we’re going broke paying for the current system, we need it because our health care system does not deliver what we are paying it to do – produce positive outcomes.

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Q: How is the money for health care spent?

A: There are four primary sources of money spent on health care in the United States:

• Medicare: public money spent on health care for the elderly
• Medicaid: public money spent on health care for the poor
• Private insurance: private money spent on health care by company and worker funded health insurance
• Out of pocket: private money spent on health care by company and worker funded co-payments and deductibles

In 2006, the total amount spent on health care in the U.S. was allocated as follows:

Health Care Spending, 2006

SOURCE: RAND, Centers for Medicare & Medicaid Services, Health and Human Services, “National Health Expenditures Accounts, 1965–2017 (Personal Health Care).”
This chart shows more detail on the public monies spent on health care:

Details of Public Sources of Health Care Spending, 2006

SOURCE: RAND, Centers for Medicare & Medicaid Services, Health and Human Services, “National Health Expenditures Accounts, 1965–2017 (Personal Health Care).”

Sources of Payments for Health Care, 1965–2017 (historical and projected)

SOURCE: RAND, Centers for Medicare & Medicaid Services, Health and Human Services, “National Health Expenditures Accounts, 1965–2017.”

• In 1965, out-of-pocket expenses made up 44% of health spending, private insurance made up 24 percent, and federal outlays constituted 11%.
• By 1980, out-of-pocket expenses decreased sharply to only 23% of health spending, while the proportion of federal health spending increased to 28%.
• In 2000, the proportion of out-of-pocket spending had fallen to 14% of total health spending, and federal outlays made up 31% of heath spending.
• Currently, the proportions of health care spending are even more weighted toward federal spending and private insurance (33% and 35%, respectively); out-of-pocket expenses are now equivalent to state and local contributions (12%).

Total federal spending has grown, on average, about 12% per year, about twice as fast as out-of-pocket expenses, which are growing at an annual rate of about 6.5%. Private insurance grows at about 10% per year; and state and local spending grows at about 9%.
Personal Health Care Expenditures

Personal health care expenditures consist of the total amount of money spent to treat individuals with specific medical conditions.

Personal Health Care Expenditures, by Type of Expenditure, 2006

SOURCE: Centers for Medicare & Medicaid Services, Health and Human Services, “National Health Expenditures Accounts 1965-2017.”*
 
*NOTE: Physician category comprises physician and clinical services; hospital category comprises hospital care, other category comprises other personal health, dental services, other professional care, structures and equipment, and home health care.

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Q: Doesn’t our current system work best for the very poor or the very wealthy? Isn’t everyone else in the middle left out?

A:The average household spends around 6% of their personal income on health care. There are major variations across the age and economic spectrums.

• The elderly and individuals in low-income households devote a much larger share of their income to medical expenses than other groups.
• Low-income households spend nearly 16% of their income on health care; higher-income households spend 3 to 5 percent.
• Households headed by individuals age 65 and older spend more than 11% of their income on health care.
• Households headed by younger persons spend just under 3 percent.

Household Health Spending as a Percentage of Personal Income in the United States, 1987-2003

SOURCE: RAND, Centers for Medicare & Medicaid Services (CMS), Office of the Actuary: Data from National Health Statistics Group, 1987-2003; U.S. Department of Commerce, Bureau of Economic Analysis (BEA) (January, 2005) as cited in Cowan CA. “Ultimate Source of Funding in the United States, 1987-2003,” Presentation (National Health Statistics Group, Office of the Actuary, CMS, September 30, 2005). Last accessed on November 11, 2008: [url]http://www.oecd.org/dataoecd/42/3/35823168.ppt[/url]

Health Care Spending as a % of Income, by Age, 2006*

Source: RAND, U.S. Department of Labor (DOL), U.S. Bureau of Labor Statistics (BLS), Table 3: Age of Reference Person: Average Annual Expenditures and Characteristics, Consumer Expenditure Survey, 2006. Last accessed on November 12, 2008: [url]http://www.bls.gov/cex/2006/Standard/age.pdf[/url]
 
*Regardless of insurance status.

Health Care Spending as a Percentage of Income by Income Level, 2006*

Source: RAND, U.S. Department of Labor (DOL), U.S. Bureau of Labor Statistics (BLS), Table 2, Income Before Taxes: Average Annual Expenditures and Characteristics, Consumer Expenditure Survey, 2006. Last accessed on November 12 2008: [url]http://www.bls.gov/cex/2006/Standard/income.pdf[/url]
 
*Regardless of insurance status.

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Q: Isn’t Universal Access the same thing as nationalized health care? Doesn’t Universal Access mean we are socializing medicine? Doesn’t Universal Access mean we are becoming a socialist/communist country?

A: No.

This a common misperception. Universal Access is not a nationalized health care system.

Universal access does not equal nationalized health care. In the current debate on health care reform, a single payer nationalized health care system is not even on the list of options. In the U.S., it is politically non-viable, a complete non-starter.

Nationalize: Verb  -ized, -iz·ing, -iz·es ‘nashunu`lIz
    – Put under state control or ownership
    (Source: WordWeb Pro, answers.com)

Universal Access: Stipulation that every participant in health care has the right according to law to purchase health insurance from a private insurance entity. The participant’s purchase is voluntary and must not be eligible for a public health insurance program. (Source: Insurance Dictionary)

Please note the phrase: purchase health insurance from a private insurance entity

There is no nationalization in universal access.

Universal access is not nationalized health care.

The health care system that you and your family, along with every other American, will end up with at the end of this debate will almost certainly retain all the components and industries you are currently familiar with. The vested interests involved have way too much political influence for them to be removed from this cash stream.

Universal access means that every citizen has access to health care. In the U.S., that will mean that every citizen will have some form of health insurance.

Nationalized health care is a single payer system in which there is one set of data standards, one set of payment standards, one set of everything related to the basic health care system. In some systems, such as the UK, a nationalized system is combined with 3rd party/private insurance. Compared to the thousands of payers a typical hospital has to deal with in the U.S., a single payer system might seem pretty efficient and a tremendous potential cost saver, but it will not happen in the U.S. anytime within our political lifetimes, so you don’t have to lose any sleep over that one.

If you want to have nationalized care or see how it works, you’ll need to move to or visit Canada, the UK, etc.

The closest thing to nationalization among any of the policy proposals on the table for the U.S. is to allow open access to the Federal Employees Health Benefits Program (FEHBP).

The Federal Employees Health Benefits Program (FEHBP) is the largest employer-sponsored health insurance program in the country, with approximately eight million enrollees located around the country, and is often touted as a model for “managed competition” in the health insurance marketplace. The FEHBP is the health insurance program offered to federal employees (including members of Congress), their families, and retirees. (Federal retirees over the age of 65 generally have Medicare as their primary coverage, with FEHBP as a secondary insurance.)

The U.S. Office of Personnel Management (OPM) manages the FEHBP. OPM is in charge of approving and monitoring health plans, negotiating benefits, and determining premium rates. Individual federal agencies process enrollments and collect premiums. Federal agencies send collected premiums to OPM, where they are deposited in a trust fund. The trust fund then pays premiums to the participating health plans and transfers administrative fees to OPM. In addition, a reserve of money is held in the trust fund that can be used to blunt changes in premiums from year to year or to cover losses for a particular health plan.

This option would allow people who are not federal employees, their dependents, or retirees to participate in the FEHBP.

In this policy option, [B]the same private insurance companies that provide coverage today would be providing this coverage tomorrow[/B]. All the Feds do is provide a pool / group to the insurance companies to underwrite.

Italicized source: RAND

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Q: My rates are affordable and we receive good health care. I don’t see a problem. Why should we change a system that works for me?

A: As I wrote in the essay Thoughts on Health Care Reform: “There are two basic pools of people and correlated perspectives on health care in the U.S. The sample groups are bifurcated between those who have access to health care at low to moderate cost (those insured on affordable plans that provide reasonable access to care), and those who are not in that group, such as the self-employed and the uninsured. It is essentially impossible for those who have access to affordable health care to understand the nature and scope of the challenge in a direct and personal way, unless someone they know well or a close family member is in the group without access to affordable healthcare.”

The yawning chasm between those with affordable group based health care and the rest of the population is not limited to understanding and perception of a problem, it is also manifested financially. Even for those who have private insurance coverage, the proportion of income spent on health care can be significant.

Blumberg and colleagues (2007) measured the level of health care spending, including premium payments and out of pocket (OOP) spending, among individuals and families with private health insurance coverage. They determined that, even among households with insurance, the proportion of income spent on health care can be significant, particularly in lower income groups (see Table 1).

Table 1. Health Care Spending as a Proportion of Income Among Households with Private (Non-group or Employer-Sponsored) Insurance Coverage, 2001—2003

 
SOURCE: RAND, Adapted from a table in Blumberg LJ, Holahan J, Hadley J, Nordahl K, “Setting a Standard of Affordability for Health Insurance Coverage,” Health Affairs, Web Exclusives, [Epub, June 4, 2007], Vol. 26, No. 4, July/August 2007, pp. w463—w473.

*Excluding the cost of forgone wages.
 

As you will notice, there is a significant difference in health insurance costs between those with group and non-group coverage.

For those without affordable group coverage, the cost of health care insurance is often a financial crisis.

Again, quoting from the Thoughts on Health Care Reform essay, “Iowa consumers found that in order to cope with rising health insurance costs, 86 percent said they had cut back on how much they could save, and 44 percent said that they have cut back on food and heating expenses. Retiring elderly couples will need $250,000 in savings just to pay for the most basic medical coverage. A new survey shows that more than 25 percent said that housing problems resulted from medical debt, including the inability to make rent or mortgage payments and the development of bad credit ratings. About 1.5 million families lose their homes to foreclosure every year due to unaffordable medical costs.”

Between 2003 and 2006 health insurance premiums increased by 42%, while rates of increase in inflation and earnings fluctuated between 2% and 6%.

Illustrations of Health Insurance Premium Increases 

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2008; KPMG Survey of Employer-Sponsored Health Benefits, 1993, 1996; The Health Insurance Association of America (HIAA), 1988, 1989, 1990; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation, 1988-2007; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 1988-2007.

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Q: The number of people without insurance, 47 million, is a bogus number. The census bureau says there are 37 million people at or below the  poverty line and every one of them is eligible for Medicare. The other 10 million all choose not to have insurance. Why do we need to change if these people are either eligible or willingly not choosing to have insurance?

A: Federal law does not require states to cover adults under Medicaid, unless they are disabled, elderly, or pregnant — regardless of income. Many states cover adults as an optional population, though coverage is very limited. Twenty-seven states have eligibility levels for non-working adults with incomes below the poverty level and 26 states have eligibility levels less than the poverty level for working adults. All states except Alaska and Connecticut have eligibility levels for disabled optional populations of less than the poverty level. Thus in most states, Medicaid coverage is limited to very low-income Americans.  Medicaid is a vital source of coverage for low-income Americans, but existing state Medicaid programs have not reached everyone living below the poverty level.

Medicaid and State Children’s Health Insurance Program (SCHIP) are public health insurance programs that provide health benefits to certain low-income groups. Medicaid is a federally regulated, state administered, jointly funded health insurance program for low-income families and individuals who meet certain eligibility requirements under federal and state law. Although the federal government provides general guidelines regarding which individuals must be covered under Medicaid, states set their own guidelines regarding eligibility, for determining income and resources, and for deciding the breadth of services covered. Eligible individuals typically fall under three types of groups: categorically needy, medically needy, or special groups. States may extend eligibility, under the medically needy option, to include additional individuals who may have incomes too high to qualify under mandatory or optional categorically needy groups.

Poor and near poor adults and children are the most likely to lack health insurance. More than a third of adults with incomes below 100 percent of the federal poverty level (FPL) and nearly a third of adults with incomes less than 200 percent of the FPL are uninsured, compared with 18.1 percent of those with incomes between 200 and 300 percent of the FPL, 10.7 percent of those with incomes between 300 and 400 percent of the FPL, and 5.4 percent of those with incomes equal to or greater than 400 percent of the FPL (Hoffman, Schwartz, and Tolbert, 2007).

Figure 9 presents the uninsured rate by household income. The high cost of health insurance means that lower income groups are more likely to be uninsured. Households with incomes of less than $25,000 are nearly three times as likely to be uninsured the entire year as are households with incomes of $75,000 or more.

Figure 9. Uninsured Rate, by Household Income

SOURCE: RAND, Adapted from DeNavas–Walt, Proctor, Smith, 2007, Table 6.
NOTE: The uninsured category represents people who were uninsured during all of the relevant calendar year.
Figure 10 shows the relationship between income, as reflected in multiples of the federal poverty level, and type of coverage. Public insurance programs (such as Medicaid) help make up some of the difference in coverage among income groups, but not enough to bring the poor up to the same levels of coverage as higher income groups.

Figure 10. Health Insurance Coverage, by % of Federal Poverty Level (FPL), 2007

Note the portion of each income segment that is uninsured. Not everyone qualifies for Medicaid or other public health programs, no matter what their income level.

Most Americans with no health insurance do not choose to be uninsured, unless the definition of choose means choosing between buying shelter (mortgage, rent, etc.) and food or paying for health insurance.

QuickStats: Reasons for No Health Insurance Coverage* Among Uninsured Persons Aged <65 Years — National Health Interview Survey, United States, 2004†

* Based on response to a survey question regarding the reasons a household member stopped being covered by health insurance or did not have health insurance. Persons might be counted in more than one category.

† Estimates are age adjusted using the 2000 projected U.S. population as the standard population and using four age groups: 0–11 years, 12–17 years, 18–44 years, and 45–64 years. Estimates are based on household interviews of a sample of the civilian, noninstitutionalized U.S. population.

§ 95% confidence interval.

¶ Includes moved, self-employed, never had coverage, did not want or need coverage, and other unspecified reasons.

Overall, approximately 17% (41 million) of persons aged <65 years had no health insurance at the time of interview. Of these, approximately one half did not have coverage because of cost, and one fourth did not have coverage because of loss of a job or a change in employment. Approximately 14% of uninsured persons did not have coverage because their employer did not offer it or the insurance company refused coverage, and 10% did not have coverage because of cessation of Medicaid benefits. Less than 3% of persons without health insurance did not have coverage because of a change in marital status or death of a parent.

SOURCE: CDC, Adams PF, Barnes PM. Summary health statistics for the U.S. population: National Health Inteview Survey, 2004. National Center for Health Statistics. Vital Health Stat 2006;10(229). Available at http://www.cdc.gov/nchs/data/series/sr_10/sr10_229.pdf .  Henry J. Kaiser Family Foundation, “Medicaid’s Optional Population: Coverage and Benefits,” The Kaiser Family Foundation, (2005),Italicized source: RAND

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Q: The numbers of people without insurance are not true. They are counting people that are without insurance for a brief time between jobs. Why should we change based on bogus numbers?

A:The numer of people without health insurance is actually calculated based on people who have been without health insurance for an entire year.

In 2007, about 45.7 million individuals in the United States were uninsured. They come from every income level, age group, employment status, gender, race, ethnicity, and region of the country.

During the course of a calendar year (the time frame used to describe insurance status in many surveys), individuals may gain or lose coverage. Data from the 2006 Medical Expenditure Panel Survey (a set of large scale surveys of families and individuals, their medical providers, and employers across the United States) present a dynamic picture of insurance status in the United States. In that year, 68 million non–elderly individuals were uninsured at some point during the year [23% of the 2006 U.S. population]; 50.1 million were uninsured throughout the first half of the year; 37.1 million were uninsured all year (Chu, Rhoades, 2008). The substantially larger proportion of Americans who lacked insurance for some part of that year reflects a level of potential financial risk as the result of a medical emergency that is not reflected in “all year” uninsured statistics.

Number Uninsured and the Uninsured Rate, 1987 Through 2006

NOTE: The uninsured category represents people who were uninsured during all of the relevant calendar year.

Italicized source: RAND

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Q: The uninsured are all illegal immigrants or lazy bums who won’t get off their butts and get a job so they can get insurance. Why should we change our system for them?

A: In 2007, about 45.7 million individuals in the United States were uninsured. They come from every income level, age group, employment status, gender, race, ethnicity, and region of the country. Some groups are more likely than others to be uninsured, but because of their lower numbers in the general population, they do not necessarily make up the largest shares of the uninsured population. For example, Hispanics are more likely to be uninsured than non–Hispanic whites, but there are more non–Hispanic whites that are uninsured.

In general, (younger) adults, males, immigrants, the poor, American Indians/Alaska natives, Hispanics, and individuals living in the South and West are most likely to be uninsured. Nevertheless, (because of underlying differences in the larger population) most of the uninsured are workers, are white, are citizens, and are over 30.

During the course of a calendar year (the time frame used to describe insurance status in many surveys), individuals may gain or lose coverage. Data from the 2006 Medical Expenditure Panel Survey (a set of large scale surveys of families and individuals, their medical providers, and employers across the United States) present a dynamic picture of insurance status in the United States. In that year, 68 million non–elderly individuals were uninsured at some point during the year; 50.1 million were uninsured throughout the first half of the year; 37.1 million were uninsured all year (Chu, Rhoades, 2008). The substantially larger proportion of Americans who lacked insurance for some part of that year reflects a level of potential financial risk as the result of a medical emergency that is not reflected in “all year” uninsured statistics. Were a catastrophe to strike at the wrong time, such as during a transition from job to job or some other life event, those individuals and families would be vulnerable.

Family work status, family income, and age. Figure 7 shows the family work status, family income, and age of the uninsured. Uninsured individuals are likely to be employed, young adults, poor or near poor, and childless. Adult men are more likely to be uninsured than adult women: Medicaid provides coverage to some pregnant women and single mothers.

Family work status, family income, and age. Figure 7 shows the family work status, family income, and age of the uninsured. Uninsured individuals are likely to be employed, young adults, poor or near poor, and childless. Adult men are more likely to be uninsured than adult women: Medicaid provides coverage to some pregnant women and single mothers.

 Characteristics of the Uninsured 2007

SOURCE: RAND, The Uninsured: A Primer (#7451–04), The Henry J. Kaiser Family Foundation, October 2008. As of November 28 2008 available at: http://www.kff.org/uninsured/7451.cfm. This information was reprinted with permission from the Henry J. Kaiser Family Foundation. The Kaiser Family Foundation is a nonprofit private operating foundation, based in Menlo Park, California, dedicated to producing and communicating the best possible information, research, and analysis on health issues. NOTE: The federal poverty level(FPL) was $21,203 for a family of four in 2007.

Note that 69% of the uninsured were full time workers and 12% were part time workers. This means that 81% of the uninsured in America were working in 2007.

Race, ethnicity and place of birth. Figure 8 shows type of insurance coverage by race and ethnicity:

• About one–third of Hispanics and American Indians are uninsured, compared with 12% of non–Hispanic whites and 18% of Asians.
• Of uninsured persons, 78% are native or naturalized U.S. citizens.
• Although recent immigrants are less likely to be insured, evidence suggests that they are not the primary cause for growth in the uninsured population (Holahan, Cook, 2005).

Insurance Status, by Race/Ethnicity

SOURCE: RAND, The Uninsured: A Primer (#7451–04), The Henry J. Kaiser Family Foundation, October 2008. As of November 28 2008 available at: http://www.kff.org/uninsured/7451.cfm. This information was reprinted with permission from the Henry J. Kaiser Family Foundation. The Kaiser Family Foundation is a nonprofit private operating foundation, based in Menlo Park, California, dedicated to producing and communicating the best possible information, research, and analysis on health issues. NOTE: The uninsured category represents people who were uninsured during all of the relevant calendar year.

Italicized source: RAND

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Q: Most proposals I see for a new system include a mandate for everyone to have health insurance. Why should everyone be required to be insured?

A:A national health care system, boiled down to its essense, is basically a demogrphics numbers game, just like social security. If the young and healthy, who typically have very low health care costs, are not in the overall pool of insured, then the pool will skew toward the old, unhealthy and high cost members of society.

The only way a system based on private insurance, which is what we have and will continue to have in the U.S., can be affordable, is to have everybody in the pool so that from and actuarial standpoint, it can be affordable. Put another way, if the only people in the pool are unhealthy and high cost, then the cost for the system will be very expensive. The country cannot afford a very expensive system any longer. By getting everyone into the pool, the overall risk and costs are much, much lower, thus the cost of insuring everyone on a per individual basis is lower.

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Q: I am hearing talk that the system used to ensure federal employees will be opened up to all Americans. What does that mean?

A:The Federal Employees Health Benefits Program (FEHBP) is the largest employer-sponsored health insurance program in the country, with approximately eight million enrollees located around the country, and is often touted as a model for “managed competition” in the health insurance marketplace. The FEHBP is the health insurance program offered to federal employees (including members of Congress), their families, and retirees. (Federal retirees over the age of 65 generally have Medicare as their primary coverage, with FEHBP as a secondary insurance.)

The U.S. Office of Personnel Management (OPM) manages the FEHBP. OPM is in charge of approving and monitoring health plans, negotiating benefits, and determining premium rates. Individual federal agencies process enrollments and collect premiums. Federal agencies send collected premiums to OPM, where they are deposited in a trust fund. The trust fund then pays premiums to the participating health plans and transfers administrative fees to OPM. In addition, a reserve of money is held in the trust fund that can be used to blunt changes in premiums from year to year or to cover losses for a particular health plan.

This option would allow people who are not federal employees, their dependents, or retirees to participate in the FEHBP.

In this policy option, the same private insurance companies that provide coverage today would be providing this coverage tomorrow. All the Feds do is provide a pool / group to the insurance companies to underwrite. 

Opening up the FEHBP is viewed as a relatively easy option for health care reform.

In my view, it is easy for the following reasons:

• It requires no structural change in the existing system. All current components function exactly like they always have. It really is nothing more than a ‘front-end’ for the existing private insurance companies, in other words, all it does is create a new pool of applicants for the insurance companies to analyze, price and sell product to.
• It has no political price. The managers of the program cannot and do not fund a PAC, so there is no potential loss of revenue for a legislator. The managers of the program have no political voice or clout. The downside is there is no PAC, other than the insurance companies, around to distribute funds to promote this legislation. Even so, it is a win-win for a legislator: no one of any power to make angry and no potential loss of lobbying dollars.
• In the context of the health care system, it is easy to implement. It is nothing more than creating a new pool and selling that pool to an existing set of suppliers.
• It is possible to protect the existing pool from the new entrants. By creating a new pool of non-fed employee applicants, people like you can be insulated from the pricing of the new applicants. In other words, by isolating the non-fed insured in seperate pool, fed employees do not have to suffer higher premiums to cover new applicants with poor health and high costs.
• It is a natural program for guaranteed acceptance. Because it is a fed program, it is relatively (politically) easy to make this the supplier of last resort for any uninsured. By guaranteeing acceptance, regardless of pre-existing condition, it ensures that every person can find insurance. As you suggest, federal subsidies can be used to ensure affordability in light of this potentially high-cost loaded pool.
• It is a natural adjunct to a mandatory-insurance scenario. In a private insurance based system such as we have and will continue to have, it is essential to get everyone into the insurance pool. If the young and healthy do not get into the pool, the pool will be skewed to the older and unhealthy. Boiled down to its essence, public health is a demographic numbers game, just like social security. Be mandating that everyone in the country must be insured, the public health pool of insured is quickly and effectively moved into a much lower cost realm, from the actuarial standpoint. By using the FEHBP as a guaranteed-acceptance, insurer of last resort, along with subsidies to the private insurance companies who cover the high cost pool, individual tax credits for lower income customers, tax offsets and deductions for higher income customers, etc., for funding, there is no excuse for anyone to not be insured (other than the iconoclast curmudgeons among us).

For these reasons and more, I think it is likely that the FEHBP will be a component of the new system. 

Italicized Source: RAND

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Q: I read/listen to/watch to my favorite blog/station and they say that health care reform is communism/a plot of the neocon fascists. Why should I support health care reform?

A: Media personalities, especially polarizing media personalities, have only one agenda and that is to expand and strengthen their notariety and franchise. They are excellent at accomplishing that goal at any cost, including well structured public policy for the United States. You can always count on media personalities to spew a hot stream of assertions and opinions, but you  cannot count on them for facts.

The debate about the reform of the U.S. health care system will probably be one of, if not the, most important public policy debates of our lifetime. It will determine the course of health care for us, for our children and for our grandchildren. What is put in place will be in place for decades.

I believe it is very important for Americans to be educated about the facts regarding the current health care system and the proposals for new public policy related to health care.

I believe that citizens who are armed with the facts can make their own informed decisions about what system they feel is best for the country and then participate in the debate to shape future public policy.

Assertions and opinions such as those provided by media personalities and their acolytes, true believers and foot soldiers are rightfully protected by law and custom. However, at this time, what the country needs most is facts and data on which to base these critical decisions regarding public policy.

Facts and/or data are a positive contribution. Strongly held opinions in the absence of factual or data support do not contribute to the debate.

What is needed now is not bombastic proclamations. What is needed now is education of the American people about the facts and the supporting data around our current and proposed health care system in the U.S.

I believe now is the time to put aside philosophical and partisan political rancor and put together a health care system that the country can afford and provides parity outcomes with other industrialized countries.

The country needs everybody to be part of this process–you, me, and everybody we know. IMO, if we leave this to the special interests and the vested interests of the existing system we will not produce a system that is in our best interests.

Health care reform is going to happen in some form. It can either happen with us or without us. I think our chances as a society for success are greater if it happens with all of us armed with facts and supporting data.

The media personalities really don’t care what happens as long as they remain media personalities. Those of us who need a functioning, productive and high quality health care system do care what happens. We can only make it happen with facts, not opinions.

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Q: Aren’t most health care issues a result of poor personal choices? Why should I pay more for someone ele’s bad life choices?

A: Your question goes to the heart of why public policy is very, very challenging. It’s relatively easy to get people to agree that change is necessary compared to gaining consensus on what the change ought to be. The question you ask is but one of the very, very tough questions related to health care systems that must be resolved; especially as those tough questions relate to the rationing of the available throughput and capabilities of the health care system.

We met a man on our travels who survived two seperate heart bypass operations and still smoked like a chimney and drank like a fish. Should he get an angioplasty or another bypass if he rolls into an ER on a gurney in full cardiac arrest?

These are the questions that the congressional staffers and lobbyists who actually write the policy and laws we live under are probably discussing right now as I write this.

Here’s some information from RAND, a major supplier of the data and analysis to the people who form public policy in America. In fact, those capital hill staffers and lobbyists who are writing the law for the potential next health care system probably just came from a briefing by a RAND team. 

Major Influences on Health

Health policy changes may not affect health as much as expected because medical care is only one factor determining the health of an individual or population. Medical advances have improved care and outcomes for many diseases, but the effects of health care on health may be less than the effects of other factors (Evans, Barer, Marmor, 1994).

Factors that strongly affect health include the following:

• Behavioral choices: Diet, exercise, smoking, and sexual practices, among other behaviors, influence health.
• Genetics: Chronic illnesses, such as diabetes and cardiovascular disease, have a genetic component.
• Social circumstances: Education, employment, income, race/ethnicity, and poverty are several of the social factors that influence health.
• Medical care: Both access to and quality of care are factors. Medical care is generally assumed to improve health; however, medical errors can actually be a significant source of mortality and morbidity.
• Environmental conditions: Physical surroundings, including pollutants, food contamination, and microbial agents, all affect health.

One way to assess the importance of these factors is to quantify how each affects the number of premature deaths in the United States. Figure 1 illustrates this link.

Causes of Premature Death in the United States, 2002

SOURCE: RAND, Created with data from McGinnis JM, Williams-Russo P, Knickman JR, 2002.

The interaction among these categories is clearly significant. For example, poor diet combined with a genetic predisposition for heart disease may have a greater effect on health than just the sum of these two risk factors. Thus, even if a proposed policy would improve the quality of or access to health care, it may have a limited ability to extend life or reduce morbidity (the relative incidence of a particular disease).

Obesity increases the prevalence of chronic disease and can lead to significant disability, decreasing health related quality of life (Lakdawalla, Bhattacharya, Goldman, 2004). Rates of obesity related disability increase as people get older, as illustrated in Figure 11.

Figure 11. Rate of Routine Needs Disability per 10,000 U.S. Population, by Age Group and Obesity Status, 1990

SOURCE: RAND, Lakdawalla, Bhattacharya, Goldman, 2004.

One study predicts that if the obesity trends continue without any other changes in behavior or medical technology, the proportion of people reporting fair or poor health would increase by about 12 % among men and 14 % among women by the year 2020 (Sturm, Ringel, Andreyeva, 2004).

Obviously, lifestyle choices make a significant difference in an individual’s overall health and the subsequent societal costs of health care.

From the health care reform standpoint, lifestyle choices that lead to chronic disease states are a very undesireable and expensive outcome. To mitigate and minimize these outcomes, it is likely that the proposed Disease Management component will be included in any new health care system.

Disease management (DM) is an organized, proactive approach to health care for members of a population with a specific disease or combination of diseases or to prevent the development of diseases. The aim of DM is to increase the delivery of appropriate care to enrolled patients. Improved care is expected to lead to better health outcomes and lower costs. Although the original impetus for DM was quality improvement, the focus in recent years has been on its potential to reduce spending. Cost reduction would be achieved through fewer acute exacerbations of disease, leading to lower utilization of avoidable inpatient and emergency care services. Savings would be achieved if utilization of avoidable services outweighed the cost of delivering the DM services and any increase in utilization of appropriate services. Since patients with chronic diseases account for a large share of total health spending, the potential savings through better management of chronic diseases are large.

Almost all DM programs identify a target population, such as patients with a particular diagnosis, patients who are at risk for developing a chronic condition, or employees eligible for a wellness intervention. Patient participation is voluntary. The programs identify a set of (usually measurable) goals, such as decreasing hospitalizations among participants, improving compliance with medications, or increasing exercise levels. Some organizations, particularly health plans, administer their own DM programs, but many organizations contract with third-party vendors to administer the plan. The level of involvement of physicians in DM plans differs. For example, physicians and support personnel in health maintenance organizations may be integrally involved in the DM care processes. Physicians in a community setting could conceivably have patients in their practice who have the same diagnosis but who have different insurers and therefore may be enrolled in different commercial DM programs. These plans operate with less physician involvement. Some DM plans include financial incentives to the DM organization for meeting care management and/or cost goals.

Italicized Source: RAND

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Q: There is a lot of talk about the need to fully computerize patient records, hospital records, etc. I don’t want my health care history computerized because I think digital health care information will be used by insurance companies to deny coverage and employers to deny employment.

A:As I mentioned in the Comments On Health Care Reform essay, Americans have a morbid fear of a unique medical ID due to privacy fears. As dieselcruiserhead notes, there are many others who fear an Electronic Medical Record (EMR) due to privacy concerns.

In this case, I am the grim reaper; “I am become death , the destroyer of worlds;” the ultimate messenger of bad news. It doesn’t matter if your medical records are paper or digital, the data is already collated and available. Resisting the Electronic Medical Record (EMR) will not prevent everything about your medical history from being known. It already is.

And if you think that is disconcerting, as jacket pointed out, the health care market segment is a decade or two behind all other industry segments. Other industry segments such as travel, banking, telecommunications, insurance, retail, etc.

Americans have a knee-jerk reaction about privacy and information but have essentially zero awareness that every single aspect of their existence is already known, cross-referenced and merchandised.

Does that mean that health care system information should not be digital?

Although this will border on an opinion, I believe that a review of the information technology (IT), medical and ethicists research and discussions on this topic will yield a result that the societal advantages of a fully digital health care system far outweigh the risks.

At the individual level, the ability to be fully portable across an entire nation’s health care system for your medical condition, past treatments, current treatment methodology and prescription drug mix would be more than just life saving, it would probably be the highest impact major thing we could do to add efficiencies and lower costs to the nation’s health care system. At the macro level, the ability to analyze the effeciency and outcomes of various treatments, drugs, protocols, etc., across the incidence footprint of various disease states would be staggeringly powerful for improving outcomes and reducing costs. (Yes, that comment can be interpreted as a full-on drool from someone who used to design and build systems to accomplish that goal.)

That’s the good news. The bad news is that it will take a looooooot longer and billions more in costs to accomplish this goal than any politician realizes or will ever talk about if they did.

Believe me, I’ve personally lived this, and it is very, very challenging. Be wary of anyone who promises a return on investment (ROI) in a near-term time frame.

However, that should not change the primacy of the health information technology (HIT) option in the debate, or its role in a probable new health care system. It is almost certain that HIT will be included, if for no other reason than executives, including politicians, love magic bullets, and HIT is often viewed as such.
The U.S. health care system has been called the world’s largest, most inefficient information enterprise. Most health information is still stored on paper in individual physician offices and health care organizations. The use of information technology (IT) in the health care system trails far behind other sectors of the economy, and the United States trails far behind other countries in rates of use of health IT. Health IT refers to a variety of electronic tools for use in the management of health information. Applications of health IT include the electronic medical record (EMR), the electronic health record (EHR), the personal health record (PHR), computerized physician order entry (CPOE), clinical decision support (CDS), picture archiving and communications systems, (PACS) and e-prescribing. In addition, health information exchanges (HIEs) are being developed to support sharing of information electronically among health care providers. Health IT is an enabling technology that may allow other cost containment strategies to be implemented (for example, better claims transaction processes, more-efficient management of patients within systems, reducing unnecessary utilization through more clinically detailed criteria for matching patients to interventions). Policy options focus on approaches to accelerating adoption of health IT, including financial incentives, direct provision, regulatory mandates, development of standards, and enhancing the interoperability of health IT through the establishment of health information exchanges at the local, regional, and national levels.

Proponents believe that widespread adoption and use of such health IT applications will lead to substantial improvements in health care delivery, leading to improved quality, better health, and lower costs. However, much of the promise associated with health IT requires high levels of adoption (90 percent of doctors offices, hospitals, and other clinical settings) and high levels of use of interoperable systems (in which information can be exchanged across unrelated systems) that are used to change clinical workflow (for example, improved management of chronic disease).

Italicized Source: RAND

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Although I write on many subjects as a result of research, health care is one subject I write about based on extensive personal professional experience. I have been involved with the world’s and U.S. health care system at literally all levels, from the general practitioner’s office to large scale vertically integrated healthcare systems (birth to death and everything in between), diagnostic imaging, pharmaceutical, device manufacturers, insurance companies, public policy, etc.

The current and coming debate on health care reform will be filled with super-heated rhetoric and emotionally compelling marketing messages designed to sway political and public opinion. If it follows the historical pattern of public policy debate in the U.S., there will be very little discussion of facts.  I believe the debate will produce a better outcome for the citizens of America if the citizens are educated on some facts concerning health care and those citizens subsequently demand their elected representatives operate within a framework of factual information.

Click here for the rest of the document: http://www.hackneys.com/docs/healthcarereform.pdf

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