Continuing Need for Health Care Reform

The Continuing Need for Health Care Reform: From Health Reform 1.0 Toward Health Reform 2.0: 

The Continuing Need for Health Care Reform: From Health Reform 1.0 Toward Health Reform 2.0 Leonard Rodberg, PhD Urban Studies Dept., Queens College/CUNY and NY Metro Chapter, Physicians for a National Health Program www.pnhpnymetro.org Presented at Reach Out America, Manhasset

Lancet cover: 

Lancet cover

Why Health Care Was On the Agenda: Escalating Cost: 

Average Annual Premiums for Single and Family Coverage, 1999-2011 * Estimate is statistically different from estimate for the previous year shown (p<.05). Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2011. Why Health Care Was On the Agenda: Escalating Cost

Number and Rate of Uninsured 1987-2010: 

Number and Rate of Uninsured 1987-2010 Source: U.S. Census Bureau, Current Population Survey, 1988-2011 Annual Social and Economic Supplements But the New Reform Plan Seeks to Address this Problem Instead: The Rising Number of Uninsured (Though the Rate is Steady)

Employer-sponsored Insurance is Declining: 

Percent of population covered by employment-based insurance Employer-sponsored Insurance is Declining Source: Income, Poverty, and Health Insurance Coverage in the United States: 2010 (Washington, D.C.: U.S. Census Bureau, Sept. 2011).

Out-of-Pocket Medical Expenses: The Major Contributor to Poverty: 

Out-of-Pocket Medical Expenses: The Major Contributor to Poverty

Affordability, Access, and Coordination Experiences in the Past Year, by Age and Insurance Among U.S. Adults: Medicare Works!: 

Affordability, Access, and Coordination Experiences in the Past Year, by Age and Insurance Among U.S. Adults: Medicare Works! 7 Percent Source: 2011 Commonwealth Fund International Health Policy Survey of Sicker Adults in Eleven Countries.

Other Countries Have Universal Coverage…: 

All OECD countries have achieved universal or near - universal health care coverage , except Turkey, Mexico and the United States 2007 Source : OECD Health Data 2009, OECD (http://www.oecd.org/health/healthdata). Other Countries Have Universal Coverage…

…And They Spend a Lot Less Than We Do: 

Health expenditure per capita varies widely across OECD countries. The United States spends almost two -and-a- half times the OECD average 2007 1. Health expenditure is for the insured population rather than resident population . 2. Current health expenditure . Source : OECD Health Data 2009, OECD (http://www.oecd.org/health/healthdata). …And They Spend a Lot Less Than We Do

Hospital Discharges per 1,000 Population: 

Hospital Discharges per 1,000 Population * 2008 Source: OECD Health Data 2011 (June 2011). 10 We Don’t Use Hospitals As Much…

Average Length of Hospital Stay for Acute Myocardial Infarction: 

Average Length of Hospital Stay for Acute Myocardial Infarction Days * 2008 Source: OECD Health Data 2011 (June 2011). 11 ...And We Don’t Stay as Long

Annual Number of Physician Visits per Capita: 

12 Annual Number of Physician Visits per Capita * 2008 ** 2007 Source: OECD Health Data 2011 (June 2011). We Don’t See The Doctor as Often

We Don’t Live as Long…: 

Life expectancy at birth has increased by more than 10 years in OECD countries since 1960, reflecting a sharp decrease in mortality rates at all ages Source : OECD Health Data 2009, OECD (http://www.oecd.org/health/healthdata). We Don’t Live as Long…

…And We Aren’t As Healthy: Mortality Amenable to Health Care: 

…And We Aren’t As Healthy: Mortality Amenable to Health Care Deaths per 100,000 population* * Countries’ age-standardized death rates before age 75; including ischemic heart disease, diabetes, stroke, and bacterial infections. Analysis of World Health Organization mortality files and CDC mortality data for U.S, 2006-2007. Source: Adapted from E. Nolte and M. McKee, “Variations in Amenable Mortality—Trends in 16 High-Income Nations,” Health Policy, published online Sept. 12, 2011 .

So the Question Is:: 

So the Question Is: Can we reform our system so as to achieve what every other advanced country has already accomplished?

Most People Get Their Coverage from the Private Sector…: 

Most People Get Their Coverage from the Private Sector… Source: Income, Poverty, and Health Insurance Coverage in the United States: 2009 , Census Bureau, 2010 (169.7 million) (43.4 million) (47.7 million) (50.7 million) (27.2 million) (12.4 million)

But Most of the Money Comes from the Public Sector: 

But Most of the Money Comes from the Public Sector Out of pocket 12% Other private funds (charity, etc.) 7% State and Local Government (existing Medicaid, other) 13% Federal Government (existing Medicare, Medicaid, other) 34% Source: Health Affairs , Feb. 2008; data for 2006 Private Insurance 34% (Federal tax subsidy)

Even More Money Will Come from the Public Sector after Reform: 

Even More Money Will Come from the Public Sector after Reform Federal Government ( Medicare, Medicaid, other) 40% State and Local Government (Medicaid, other) 12% Other private funds (charity, etc.) 7% Out of pocket 12% Private Insurance 29% Source: CBO and Lewin projections (Federal tax subsidy)

The President’s Fateful Choice: 

The President’s Fateful Choice In creating a reform plan, the President could have chosen to -- build on the public sector, especially Medicare, or -- expand the private sector. He chose to build his program on private insurance: -- leave the basic structure unchanged -- attempt to achieve the goals of health reform by changing the behavior of private insurance companies through regulation .

The New Reform Plan: Health Reform 1.0*: 

The New Reform Plan: Health Reform 1.0* Provides insurance coverage for some of the uninsured …but does almost nothing about cost! * The formal name for the legislation is the Patient Protection and Affordable Care Act (PPACA). The Obama Administration refers to it as the Affordable Care Act (ACA).

The Great Dealmaker The Obama Administration made a series of deals to pass the ACA:: 

The Great Dealmaker The Obama Administration made a series of deals to pass the ACA: The insurance industry: Assured that everyone would be required to buy their product -- and there would be no public option The drug industry: No negotiation on prices The AMA: No cut in physician fees Hospitals: No cut in reimbursements, only slower growth in payments Employers: Continued control of health benefits Nervous members of the public: “You can keep what you have” – but not really true

The Problems Facing the Program: 

The Problems Facing the Program Private insurance is -- too expensive for many people -- complex and deficient in many ways -- profitable for the insurers when they can avoid sick people and limit what they have to pay for. The reform program tries to solve these problems through -- subsidies for individuals and employers -- trying to tame the insurance companies through public exposure and regulation

Overall Consequences of ACA: 

Overall Consequences of ACA Continued reliance on private insurance Employment-based insurance largely unchanged Market competition will determine what health care costs (insurance premiums, co-pays, deductibles) and how it works (payment and denial practices) Experimental pilot programs to try and reduce system costs Result: The program will make very little difference in the lives of most people. Why? Because there’s no change in the way we will be paying for health care.

ACA will be implemented over ten years. Beginning now:: 

ACA will be implemented over ten years. Beginning now : Insurance companies required to cover dependent children up to age 26 No lifetime limits on coverage Begin closing the Medicare drug benefit “donut hole”, finally closed in 2020 Government review of insurance premiums Experimental programs in Medicare to reduce costs (e.g. primary care medical home, accountable care organizations)

Starting in 2014: The Insurance Mandate: 

Citizens and legal immigrants required to be insured. Penalties up to 2.5% of income. Insurers required to take everyone. State-based insurance “exchanges” for individuals and small employers Subsidies up to 400% Federal poverty level so premium is less than 9.5% of income “Hardship waiver” if premium greater than 8% of income  Can remain uninsured! Medicaid for all below 133% poverty level Starting in 2014: The Insurance Mandate

What Happened to the Public Plan? The Original “robust” Plan: 

What Happened to the Public Plan? The Original “robust” Plan Open enrollment Medicare-like, backed by the Federal Government 119 million members The Congressional Plan Restricted enrollment (only the uninsured) Self-sustaining, follow same rules as private insurers Perhaps 6 million members The 800-pound gorilla turned into a mouse – and then it was gone !

Millions Will Remain Uninsured (and Millions More Poorly Insured): 

Millions Will Remain Uninsured (and Millions More Poorly Insured) Millions Note: The uninsured include about 5 million undocumented immigrants. Source: Congressional Budget Office.

…and Costs Will Keep On Rising: 

…and Costs Will Keep On Rising National Health Expenditures (trillions) Notes: * Modified current projection estimates national health spending when corrected to reflect underutilization of services by previously uninsured. Source: D. M. Cutler, K. Davis, and K. Stremikis, Why Health Reform Will Bend the Cost Curve, Center for American Progress and The Commonwealth Fund, December 2009. Estimated Financial Effects of PPACA as Amended, Richard Foster, CMS Actuary, April 2010 $4.67 $4.5 6.4% annual growth 6.6% annual growth 6.0% annual growth $4.7 National Health Expenditures as Percent of GDP 17.8 17.9 18.0 18.2 18.8 19.3 19.8 20.2 20.5 21.0

But We Know That, with Universal Coverage, Costs Can be Contained: 

Total health expenditures as percent of GDP Source: OECD Health Data 2010 (Oct. 2010). But We Know That, with Universal Coverage, Costs Can be Contained

The Bottom Line: 

The Bottom Line The world’s most expensive system will become even more costly Millions will remain uninsured and underinsured Premiums and co-pays will keep climbing Why? Because ACA doesn’t change the way we pay for health care.

The Alternative Public Route to Health Care Reform: Conyers’ Expanded and Improved Medicare for All/Single Payer HR 676: 

The Alternative Public Route to Health Care Reform: Conyers’ Expanded and Improved Medicare for All/Single Payer HR 676 Extend Medicare to cover everyone Comprehensive benefits Free choice of doctor and hospital Public agency processes and pays bills Financed through progressive taxes Spend no more than we are now spending

Big Savings from Single Payer: Billing and insurance overhead consume nearly 30 cents of every dollar: 

Big Savings from Single Payer: Billing and insurance overhead consume nearly 30 cents of every dollar 28% Spending through private insurers

Covering Everyone with No Additional Spending: 

Covering Everyone with No Additional Spending Additional costs Covering the uninsured and poorly-insured +6.4% Elimination of cost-sharing and co-pays +5.1% Savings Reduced hospital administrative costs -1.9% Reduced physician office costs -3.6% Reduced insurance administrative costs -5.3% Bulk purchasing of drugs & equipment -2.8% Primary care emphasis & reduce fraud -2.2% Source: Health Care for All Californians Plan, Lewin Group, January 2005 134 107 241 -21 -76 -111 -59 -46 -313 $ B Total Costs +11.5% Total Savings -15.8% Net Savings - 4.3% - 73

How Medicare for All Could Be Paid For: One Example from a Recent Study of a California Plan: 

How Medicare for All Could Be Paid For: One Example from a Recent Study of a California Plan

Medicare for All offers real tools to contain costs: 

Medicare for All offers real tools to contain costs Budgeting, especially for hospitals Fee negotiation with other providers Capital investment planning Emphasis on primary care, coordination of care, alternative ways of paying for services

Conclusion: 

Conclusion A reform plan based on private insurance will -- never lead to universal coverage -- can’t control costs An expanded Medicare for All program can -- provide comprehensive services -- cost no more than we now spend -- control costs going into the future. The problems of the health care system will not go away under ACA – Health Reform 1.0 Real health care reform built on Medicare for All – Health Reform 2.0 – continues to be essential.

We Can’t Wait Another 16 Years! We Need Health Reform 2.0 Before the Premium Takes All our Income!: 

We Can’t Wait Another 16 Years! We Need Health Reform 2.0 Before the Premium Takes All our Income! Source: American Family Physician, November 15, 2005 Today