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Health Care Fund Flow Where it comes from, Where it goes Samuel Metz, MD PNHP Portland OR Chapter Mad As Hell Doctors May 4th, 2010.

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Presentation on theme: "Health Care Fund Flow Where it comes from, Where it goes Samuel Metz, MD PNHP Portland OR Chapter Mad As Hell Doctors May 4th, 2010."— Presentation transcript:

1 Health Care Fund Flow Where it comes from, Where it goes Samuel Metz, MD PNHP Portland OR Chapter Mad As Hell Doctors May 4th, 2010

2 What is Health Care Reform? Universal access regardless of health, wealth, or employment Universal access regardless of health, wealth, or employment Reduced cost Reduced cost Improved public health Improved public health

3 What makes American health care so expensive? Answers from the Physicians Lounge End of life care End of life care Patient demand for unnecessary procedures Patient demand for unnecessary procedures Fee-for-service payment Fee-for-service payment Unreimbursed immigrant care Unreimbursed immigrant care Defensive medicine Defensive medicine Fraud and abuse Fraud and abuse Drug company profits Drug company profits Insurance company profits Insurance company profits

4 Insurance: Unregulated vs Regulated Unregulated : Young and healthy pay low prices for comprehensive policies. Young and healthy pay low prices for comprehensive policies. Old and sick pay high prices for limited policies. Old and sick pay high prices for limited policies. Profit made on financing health care. Profit made on financing health care. Regulated : Everyone pays the same price for the same policy. Everyone pays the same price for the same policy. No profit on financing health care (profit may be made on providing health care) No profit on financing health care (profit may be made on providing health care):

5 Whats the Point? Before we improve how we practice, we must improve how we pay.

6 $2,400 Health Care Money: Flow In, Flow Out Numbers in billions

7 $2,400 Health Care Money: Flow In, Flow Out Numbers in billions Government $1,080 Insurance: Employer $672 Insurance: Individual $288 Out of Pocket $360

8 $2,400 Health Care Money: Flow In, Flow Out Numbers in billions Hospital: $620 Medication: $261 Non-MD Fees: $405 Physicians: $160 Home & Residential: $220 Medical care for citizens $1,666 Government $1,080 Insurance: Employer $672 Insurance: Individual $288 Out of Pocket $360

9 $2,400 Health Care Money: Flow In, Flow Out Numbers in billions Hospital: $620 Defensive medicine: $60 Fraud: $77 Research: $139 Medication: $261 Non-MD Fees: $405 Immigrant care: $40 Government overhead: $72 Physicians: $160 Home & Residential: $220 Medical care for citizens $1,666 Government $1,080 Insurance: Employer $672 Insurance: Individual $288 Out of Pocket $360

10 $2,400 Health Care Money: Flow In, Flow Out Numbers in billions Hospital: $94 Home: $32 Hospital: $620 Defensive medicine: $60 Fraud: $77 Research: $139 Medication: $261 Private insurance: $146 Physician: $61 Non-MD Fees: $405 Immigrant care: $40 Employer: $17 Government overhead: $72 Physicians: $160 Home & Residential: $220 Private Overhead $350 Medical care for citizens $1,666 Government $1,080 Insurance: Employer $672 Insurance: Individual $288 Out of Pocket $360

11 Sources: Woolhandler S, Costs of health care administration in the United States and Canada, NEJM 2003;349:768-772; Institute for Health and Socio-Economic Policy. Single Payer/Medicare for All: An economic stimulus plan for the nation. 2009; National Health Care Anti-Fraud Association (NHCAA); Leonhardt D. Medical Malpractice System Breeds More Waste. New York Times, September 23, 2009; Mohanty. Health Care Expenditures of Immigrants in the United States. American Journal of Public Health, 200595, No. 8

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13 US Federal Budget, http://www.whitehouse.gov/omb/budget/fy2010/assets/hist04z1.xls; U.S. Department of Education, National Center for Education Statistics. (2009). Digest of Education Statistics, 2008; Kaiser Family Foundation, StateHealthFacts.org http://www.statehealthfacts.org/comparemaptable.jsp?ind=177&cat=4; Center for Defense information, quoted at http://www.infoplease.com/ipa/A0933935.html http://www.whitehouse.gov/omb/budget/fy2010/assets/hist04z1.xlsDigest of Education Statistics, 2008 http://www.statehealthfacts.org/comparemaptable.jsp?ind=177&cat=4 http://www.infoplease.com/ipa/A0933935.htmlhttp://www.whitehouse.gov/omb/budget/fy2010/assets/hist04z1.xlsDigest of Education Statistics, 2008 http://www.statehealthfacts.org/comparemaptable.jsp?ind=177&cat=4 http://www.infoplease.com/ipa/A0933935.html

14 Carol J. Simon, Julie Wolcott, Paul Hogan*, The Lewin Group. Can We Reduce Health Care Spending? October 26, 2009. http://www.lewin.com/content/publications/LewinReport-CostDrivers.pdf http://www.lewin.com/content/publications/LewinReport-CostDrivers.pdf The Health Care For All Californians Act: Cost &Economic Impacts Analysis. JF Sheils, RA Haught, Lewin Group, January 19, 2005

15 Funds in, funds out: What did we learn? 45% of health care funds flow through government (socialized medicine). 45% of health care funds flow through government (socialized medicine). Unregulated private insurance is the most expensive method of funding health care in the world. Unregulated private insurance is the most expensive method of funding health care in the world. We can provide universal cost-effective health care with money we already spend. We can provide universal cost-effective health care with money we already spend.

16 Beware of what you promise… …if you like your health care plan, you keep your health care plan. …if you like your health care plan, you keep your health care plan. Protecting the right to keep our unregulated private insurance policies costs us $350 billion each year Protecting the right to keep our unregulated private insurance policies costs us $350 billion each year Is it worth it? Is it worth it?

17 Whats the Point? Before we improve how we practice, we must improve how we pay.

18 Universal Laws of Health Care Systems Tsung-Mei Cheng, economist No matter how good the care, people complain about it. No matter how good the care, people complain about it. No matter how much you spend, doctors and hospitals want more. No matter how much you spend, doctors and hospitals want more. The last reform always fails. The last reform always fails.

19 What can Americans do? I love change, except the part about doing things differently. "In the United States today, we give you all the care you can afford, whether or not you need it, as opposed to all the care you need, whether or not you can afford it." Arthur Kellerman, M.D., Associate Dean, Emory University School of Medicine First we enroll everyone in our dysfunctional, barbaric medical system. Then everyone has a stake in making it better.

20 How do they do it? Single payer: public payer, public providers (England, similar to our VA system) Single payer: public payer, public providers (England, similar to our VA system) Single payer: public payer, private providers (Canada, on which our Medicare is based) Single payer: public payer, private providers (Canada, on which our Medicare is based) Single payer: private payer, private providers (Taiwan, similar to union medical trusts) Single payer: private payer, private providers (Taiwan, similar to union medical trusts) Employer based non-profit insurance (France) Employer based non-profit insurance (France) Individual based non-profit insurance (Germany) Individual based non-profit insurance (Germany)

21 What do they have in common? Everyone is in a single risk pool with a single schedule of benefits Everyone is in a single risk pool with a single schedule of benefits Minimal cost-sharing to increase primary care use, reduce tertiary care use. Minimal cost-sharing to increase primary care use, reduce tertiary care use. Financing through regulated, non-profit agencies Financing through regulated, non-profit agencies

22 References Costs of private insurance: Woolhandler S, et al. Costs of Health Care Administration in the United States and Canada. New England Journal of Medicine. 2003; 349:768-775. http://content.nejm.org/cgi/content/full/349/8/801. (Dr. Woolhandlers article lists these figures per capita. I multiplied each by 300 million.)http://content.nejm.org/cgi/content/full/349/8/801 Casalino LP, et al. What Does It Cost Physician Practices to Interact with Health Insurance Plans? Health Affairs Web Exclusive, May 14, 2009, w533–w543 http://content.healthaffairs.org/cgi/content/abstract/28/4/w533?maxtoshow=&HITS=10&hits=10&RESULTFORMAT=&au thor1=Casalino&andorexactfulltext=and&searchid=1&FIRSTINDEX=0&resourcetype=HWCIT http://content.healthaffairs.org/cgi/content/abstract/28/4/w533?maxtoshow=&HITS=10&hits=10&RESULTFORMAT=&au thor1=Casalino&andorexactfulltext=and&searchid=1&FIRSTINDEX=0&resourcetype=HWCIT Immigrant care: Mohanty SA, Steffie Woolhandler S, Himmelstein DU, Pati S, Carrasquillo O, Bor DH. Health Care Expenditures of Immigrants in the United States: A Nationally Representative Analysis. American Journal of Public Health, 2005, Vol 95, No. 8, August Fraud and abuse: Inglehart JK. Finding Money for Health Care Reform Rooting Out Waste, Fraud, and Abuse. New Engl J Med 2009, website 10.1056/nejmp0904854 National Health Care Anti-Fraud Association (NHCAA). http://www.nhcaa.org/eweb/DynamicPage.aspx?webcode=anti_fraud_resource_centr&wpscode=TheProblemOfHCFraud Defensive medicine: Leonhardt D. Medical Malpractice System Breeds More Waste. New York Times, September 23, 2009, http://www.nytimes.com/2009/09/23/business/economy/23leonhardt.html?_r=1&emc=tnt&tntemail1=yals http://www.nytimes.com/2009/09/23/business/economy/23leonhardt.html?_r=1&emc=tnt&tntemail1=yals Relman A. Second opinion: Rescuing Americas health care. Public Affairs, New York NY, 2007, p.91-2 Government overhead: Relman A. The Health Reform We Need & Are Not Getting. New York Review of Books, 2 July 2009, http://www.nybooks.com/articles/22798?email http://www.nybooks.com/articles/22798?email Institute for Health and Socio-Economic Policy. Single Payer/Medicare for All: An economic stimulus plan for the nation. 2009. from the California Nurses Association. http://www.calnurses.org/research/pdfs/ihsp_sp_economic_study_2009.pdfhttp://www.calnurses.org/research/pdfs/ihsp_sp_economic_study_2009.pdf

23 References Medical research: Institute for Health and Socio-Economic Policy. Single Payer/Medicare for All: An economic stimulus plan for the nation. 2009. from the California Nurses Association. http://www.calnurses.org/research/pdfs/ihsp_sp_economic_study_2009.pdfhttp://www.calnurses.org/research/pdfs/ihsp_sp_economic_study_2009.pdf Breakdown of medical spending: Kaiser Family Foundation Slides, "Costs / Insurance" slide # 77 of 141 - http://facts.kff.org/results.aspx?view=slides&topic=3&start=1&num=4 http://facts.kff.org/results.aspx?view=slides&topic=3&start=1&num=4 American Association of Medical Colleges. 2009 State Physician Workforce Data Book, Center for Workforce Studies, November 2009. http://www.aamc.org/workforce/statedatabook/statedata2009.pdfhttp://www.aamc.org/workforce/statedatabook/statedata2009.pdf Institute for Health and Socio-Economic Policy. Single Payer/Medicare for All: An economic stimulus plan for the nation. 2009. from the California Nurses Association. http://www.calnurses.org/research/pdfs/ihsp_sp_economic_study_2009.pdfhttp://www.calnurses.org/research/pdfs/ihsp_sp_economic_study_2009.pdf Comparative spending, government expenditures: US Federal Budget, http://www.whitehouse.gov/omb/budget/fy2010/assets/hist04z1.xls;http://www.whitehouse.gov/omb/budget/fy2010/assets/hist04z1.xls US spending on primary and secondary education: U.S. Department of Education, National Center for Education Statistics. (2009). Digest of Education Statistics, 2008;Digest of Education Statistics, 2008 Medicaid expenditures: Kaiser Family Foundation, StateHealthFacts.org http://www.statehealthfacts.org/comparemaptable.jsp?ind=177&cat=4;http://www.statehealthfacts.org/comparemaptable.jsp?ind=177&cat=4 War in Afghanistan: Center for Defense information, quoted at http://www.infoplease.com/ipa/A0933935.htmlhttp://www.infoplease.com/ipa/A0933935.html Interest on national debt: US Treasury, http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htmhttp://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm Obesity, Tobacco, and Alcohol: Carol J. Simon, Julie Wolcott, Paul Hogan, The Lewin Group. Can We Reduce Health Care Spending? Searching for Low- Hanging Fruit in the Garden of Health System Reform, October 26, 2009. http://www.lewin.com/content/publications/LewinReport-CostDrivers.pdf http://www.lewin.com/content/publications/LewinReport-CostDrivers.pdf


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