Transcript The Basics - Health Care For All Texas

Ana Malinow, MD
Associate Professor Pediatrics, BCM
Co-founder, Health Care for All Texas
September 22, 2009
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Rising health care costs are the root of most
of the problems in health care
Most costs are fixed whether health care is
used or not
Other countries cover everyone, have more
services, higher quality and live longer yet
spend far less than we do
We are already paying the whole bill
You can’t hold down costs without a system!
Average Health Insurance Premiums and
Worker Contributions for Family Coverage, 1999-2009
$13,375
131%
Premium
Increase
$9,860
$5,791
$4,247
128%
Worker
Contribution
Increase
$1,543
1999
$3,515
2009
Employer Contribution
Note: The average worker contribution and the average employer contribution
may not add to the average total premium due to rounding.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009.
Worker Contribution
Cumulative Changes in Health Insurance Premiums, Inflation, and
Workers’ Earnings, 1999-2009
140%
131%
120%
100%
80%
60%
38%
40%
20%
28%
0%
1999
2000
2001
2002
2003
2004
Note: Due to a change in methods, the cumulative changes in the average family
premium are somewhat different from those reported in previous versions of the
Kaiser/HRET Survey of Employer-Sponsored Health Benefits. See the Survey Design
and Methods Section for more information, available at
http://www.kff.org/insurance/7936/index.cfm.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009.
Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation
(April to April), 1999-2009; Bureau of Labor Statistics, Seasonally Adjusted Data from
the Current Employment Statistics Survey, 1999-2009 (April to April).
2005
2006
2007
2008
2009
Health Insurance Premiums
Workers' Earnings
Overall Inflation
Percentage of All Firms Offering Health Benefits, 1999-2008*
100%
90%
99%
80%
70%
65%
99%
99%
98%
98%
99%
68%
68%
66%
65%
63%
60%
50%
56%
57%
58%
58%
55%
40%
52%
98%
98%
99%
59%
60%
59%
47%
48%
2005
2006
45%
99%
62%
49%
30%
20%
10%
0%
1999
2000
2001
2002
2003
*Tests found no statistical differences from estimate for the
previous year shown (p<.05).
Note: Estimates presented in this exhibit are based on the sample of
both firms that completed the entire survey and those that
answered just one question about whether they offer health
benefits.
2004
2007
2008
All Small Firms (3-199 Workers)
All Large Firms (200 or More Workers)
3-9 Workers
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2008.
Total Annual Household Income and
Federal Poverty Level
Texas
U.S.
$44,861
$49,901
$22,050
$22,050
200% FPL family of 4,
2007
$44,100
$44,100
Minimum Wage $7.25/hr
$15,080
$15,080
Total Median Annual
Household Income
www.kff.org
100% FPL family of 4,
2007
Dept of US Health and Human
Services
or $8.00/hr
Ave*. Annual ES HI
$13,375
$13,375
Premiums for Family of
*Does not include out-of-pocket costs; group market only
4, 2009
Getting Public Insurance in Texas
Take a family with a 2-mo old, 4 y/o & parents who
make $40,792/year (185% FPL) and no
employer-sponsored health insurance:
The 2 month-old qualifies for Medicaid
The 4 year-old qualifies for S-CHIP
Parents make over the limit to qualify for public
health insurance.
The limit?
$6,000 /year
Public Health Insurance
Taxes
Public Health Insurance is
financed through federal
and state taxes
TX pays
40% Medicaid bill and
30% S-CHIP bill
State
Fed
Pays % Pays %
Medicaid
40
60
CHIP
30
70
Medicare
0
100
VA
0
100
FEHBP
0
100
Source: www.kff.org State Facts
Distribution of Total
Population by FPL
<100%FPL
Texas
%
22
Mass
%
16
U.S.
%
17
100-199%
21
15
19
Low
Income
200%+
43
31
36
57
71
64
www.statehealthfacts.org Nonelderly Population and Poverty Rate: Urban Institute and Kaiser Commission
on Medicaid and the Uninsured estimates based on the Census Bureau's March 2007 and 2008 Current
Population Survey (CPS: Annual Social and Economic Supplements). Data are for states (2006-2007) and U.S. (2007).
Number of Uninsured Americans
1976 - 2006
44,840 Adult Excess Deaths Annually
Due to Uninsurance in U.S.
17-64 years
State
Texas
Total % Excess Deaths
Uninsured
2005
29.7
4,675
Sourxe: AP Wilper, et al. American Journal of Public Health, Dec 2009, Vol 99, No. 12
Administration is the Fastest
Growing job in Health Care
3000%
2500%
2000%
1500%
1000%
500%
0%
1970
1975
1980
1985
Physicians
Source: Bureau of Labor Statistics and NCHS
1990
1995
Administrators
2000
One-Third of Health Spending is
Consumed by Administration
Clinical
Care
Administrative
Costs
31%
$775 Billion
69%
Total: $2.5 Trillion
Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004
Distribution of National Health Expenditures, by Type of
Service, 2007
74% Fixed Costs
Other Health
Spending
16.2%
Other Personal
Health Care
12.7%
Home Health
Care, 2.6%
Nursing Home
Care, 5.9%
Prescription
Drugs
10.1%
Hospital Care
31.1%
Physician/
Clinical
Services
21.4%
Note: Other Personal Health Care includes, for example, dental and other professional health services, durable medical equipment,
etc. Other Health Spending includes, for example, administration and net cost of private health insurance, public health activity,
research, and structures and equipment, etc.
Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the
Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health
Expenditures by type of service and source of funds, CY 1960-2007; file nhe2007.zip).
The Implications of Fixed costs
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The cost of the infrastructure is there whether or
not it is used (nurse, hospital)
84% of hospital costs are fixed
Cost containment for utilization won’t work if
most costs are in infrastructure
Trying to save money by keeping patients out of
the hospital is like trying to save money on
schools by keeping kids home for the day
It is much more cost effective to invest in only
what we need.
Whose responsibility should it be to pay for
the health care services we all expect to be
there should we need them?
Out of Pocket Costs are Higher
$/per capita
$900
$803
$800
$700
$624
$600
$519
$500
$472
$403
$400
$300
$239
$200
$100
$0
U.S.
Australia
Italy
Source: OECD 2006
Data are for 2004 or for most recent year available
Figures adjusted for purchasing power parity
Canada Germany
France
Administrative Costs US vs Canada
U.S. (%)
Canada (%)
31
17
Source: Woolhandler et al. New England Journal of Medicine 349 (8): 768
August 21, 2003
% population smoking daily
Fewer Americans Smoke
Compared with Other Nations
35
30.0
30
25
20
17.0
17.5
Canada
U.S.
24.2
24.3
Italy
Germany
26.0
15
10
5
0
OECD, 2006 (2003 Data)
U.K.
Japan
We Drink Less Alcohol
16
14.0
Liters/capita (15+)
14
11.2
12
10.2
10
8
7.4
7.6
Japan
Canada
8.4
6
4
2
0
OECD, 2006 (2003 Data)
U.S.
Germany
U.K.
France
But… We Don’t Live as Long
85
81.8
80
78.5
78.6
U.K.
Germany
79.4
79.7
79.9
France
Italy
Canada
77.5
75
70
U.S.
OECD, 2006 (2003 Data)
Japan
More Babies Die
in the U.S. in the First Year of Life
7
6.9
6
5.3
4.7
5
4.1
4.1
4
3.9
3.1
3
2
1
0
U.S.
Canada
Australia
Italy
Germany
OECD, 2006
Data are for 2004 or more recent year available
France
Sweden
We Do an Average Number of
Bone Marrow Transplants
per million people
80
68
70
71
61
60
50
40
45
40
30
20
10
0
U.K.
OECD, 2006 (2003 Data)
Germany
U.S.
France
Italy
We are Average in Number of
Renal Transplants (2001/2002)
Transplants/million population
40
38
35
30
29
34
35
35
U.S.
Sweden
Canada
31
25
20
15
10
5
0
U.K.
OECD, 2004
Australia
France
We are Average in the Number of
MRI Units
MRIs/ million population
40
35.3
35
30
25
20
15
10
5
9.1
8.6
2.8
4.7
11
6
0
France
Canada
Germany
U.S.
Denmark
Source: OECD, 2005
Note: data are for 2004 ,or most recent year available
Italy
Japan
We Do Fewer Hip
Replacements
Procedures per 100,000 population
200
180
160
140
120
100
80
60
40
20
0
197
182
146
125
126
U.S.
N.Z.
133
106
Canada
Italy
Australia
Source: OECD 2006
Data are for 2004 or most recent year available
U.K.
Sweden
Our Quality is Not the Best in the World
Survival Rates for 5 Countries
Australia
Canada
England
2nd
2nd
best
worst
2nd
2nd
best
4th
3rd
3rd
best
best
best
4th
worst
worst
worst
3rd
3rd
worst
worst
3rd
best
4th
4th
3rd
*
2nd
best
4th
2nd
2nd
worst
3rd
3rd
AMI, ages 20-84
best
worst
NA
2nd
NA
Stroke, ages 20-84
2nd
best
NA
worst NA
Breast Cancer
Colorectal Cancer
Cervical Cancer
Childhood Leukemia
Kidney Transplant
Liver Transplant
Non-Hodgkin’s
Lymphoma
Source: Health Affairs Vol 23:#3 , 2004
N.Z.
U.S.
(2007=$7,421/p/y www.cms.hhs.gov)
18
US Health Costs Rise Faster
than Other Countries’ Costs
US
Health Costs as Percent of GNP
16
Canada
14
France
Germany
12
Japan
UK
10
8
6
4
2
0
1960
1970
1980
1990
1995
2000
Source: Health United States 2005, Natl. Center for Health Statistics
2004
Other Industrialized Countries
Availability of expensive technology
Rising drug costs
Have similar demographics
Similar levels of service
Why are their costs so much lower?
Why Costs Are So Much Lower in
Other Countries
Administrative simplicity
Negotiated prices
More primary care and prevention
Health planning
Global budgets
They have a system
Japan Has a $1400 Competitive
Advantage on Every Car They Sell
$/Car
$1,600
$1,500
$1,309
$1,400
$1,200
$1,040
$1,000
$800
$600
$449
$419
$400
$207
$200
$0
$97
GM
Ford
Chrysler
Source: Modern Healthcare 10/24/05: 14
BMW
Mercedes
Toyota (US)
Toyota(Japan)
Fundamental Features of a True
Health Care System
Everyone Included
Public Financing
Clear Accountability
Public Stewardship
Budget Process
In the End Individual Households Pay for
All of Health Care
INDIVIDUAL
HOUSEHOLDS
Lower
wages
Private
employers
pay for health
insurance
Taxes for
Medicare and
Medicaid
Individual health
insurance
Out of pocket
Property taxes
Higher prices
for goods
Health insurance for
public employees
How Much is the U.S. Health Care
System Costing You NOW?
What Americans Pay Into the
U.S. Health Care System Today
Household Income Level
$25,000
$50,000
$75,000
Share and Amount of Income
Going to Health Care via Taxes
Alone without Insurance
9.0%
($2,425)
9.8%
($5,300)
10.7%
($8,633)
Share and Amount of
Total Wage Packet
Going to Health Care
for Household with
Insurance (not
including out of
pocket costs)
Individual
22.0%
($6,904)
16.8%
($9,779)
15.4%
($13,112)
Family
37.2%
($14,531)
26.4%
($17,406)
22.3%
($20,749)
Share of total wage packet going to HC= (amount of total tax burden going to health + annual health insurance premium)
(annual salary + payroll tax [FICA and Medicare] + annual health insurance premium)
Source: Dollars & Sense, May/June 2008 OOP = co-pays, deductibles, co-insurance, uncovered expenses
60% of our Health Care is
Financed through Taxes
100% Financed by Us!
$2.5 Trillion
Individuals
20%
Taxpayers
Private
Employers
{Deferred
Wages}
60%
20%
$1,500 B
Source: NEJM 1999; 340:109; Health Affairs 2000; 19(3):150
{Medicare, Medicaid,
Public employees,
tax subsidies}
One-Third of Health Spending is
Consumed by Administration
Clinical
Care
Administrative
Costs
31%
$775 Billion
69%
Total: $2.5 Trillion
Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004
Clinical Care
$387 B + $1.75 T =
$2.14 Trillion
 85%
Enough to pay for all uninsured and underinsured!
Investment Model
 Healthcare is regarded as a public good with
investment in needed services for the whole
population
 The costs of these shared services are spread
across the whole population (when you are not
using them, someone else is—that’s what keeps
them operational)
 Pools money and pays for health care directly
Single Payer Health Care Systems
 Sweden, Norway, Denmark, Canada, Finland, Iceland,
Australia, and Taiwan all have single payer financing
 Single publicly financed risk pool that pays for health
care directly from a fund ear-marked for health care
 Everyone has access to privately delivered, publicly
financed health care services
 Public can buy health insurance for services not covered
by public plan.
National Health Insurance
•
•
•
•
•
•
•
•
•
•
Everybody in, nobody out
Portable
Uniform, comprehensive benefits
Prevention oriented
Choice of physician
Ends insurance industry influence
Reduced administrative waste
Cost savings
Common sense budgeting
Public oversight
Source: http://thomas.loc.gov/cgi-bin/thomas
Single-Payer
Financing Single-Payer
Medicare
Medicaid
Payroll Tax
Single-Payer
Health Care
Fund
$$$
Income Tax
Negotiated formulary with physicians, global budget for hospitals, increased
primary and preventive care, reduction in unnecessary high-tech interventions,
bulk purchasing of drugs and medical supplies =
long term cost control.
US National Health Insurance Act
Health Care Calculator
Estimate your Savings with:
HR 676 “The United States
National Health Care Act” or
“Expanded and Improved
Medicare for All”
http://www.mirelestech.com/CalcWizard/Heal
thcareCalculator.aspx