Component 1: Introduction to Health Care and Public Health in the U.S. Unit 4: Financing Health Care Lecture 2 This material was developed by Oregon Health & Science University, funded by the Department of Health and Human Services, Office of the National Coordinator for Health Information Technology under Award Number IU24OC000015.

Health IT Workforce Curriculum Topics in This Lecture Two public (tax-funded) health care plans The United Kingdom’s single-payer system Canada’s multiple payer health care system Structure of these health care systems Role of private health insurance in each system Benefits and drawbacks of each system Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Public Health Care in the United Kingdom and Canada United Kingdom: Single Payer General taxes fund the Department of Health Department of Health funds 5 regional health care plans (NHS) throughout the country Canada: Multiple Payers General taxes fund Health Canada, which funds the Medicare program Medicare funds provinces and territories, which run their own health plans Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Five Single-Payer Systems in the United Kingdom The U.K. Department of Health: Funds the National Health Service (NHS) in England, Northern Ireland, Scotland, Wales, and the Isle of Man Uses regional health authorities to run Primary Care Trusts (PCTs) that pay providers and hospitals Providers receive a salary, fee-for-service, or capitation Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum How the NHS Began National Health Service Act passed in 1946 as part of new social safety net legislation Goal of the NHS: Provide free health care for all citizens Health minister Aneurin Bevan let doctors keep private practices if they joined NHS 90% of British doctors joined NHS by the time it was open in 1948 Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum What the NHS Provides Universal health coverage for all U.K. residents Primary care, specialists, hospital care, long-term care, and preventive care Mental health, rehabilitation, dental, and eye care services Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum NHS Patient Fees All health care was free until the early 1950s In 2007, the average person paid the equivalent of $343 in out-of-pocket costs That figure in the U.S. was $890 To help keep health care affordable, there are: Fee exemptions for special populations Caps on out-of-pocket costs Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

U.K. Private Health Care Insurance 12% of people in the United Kingdom pay for private health care Private insurance provides more choices and shorter wait lists for services Patients can go to NHS or private hospitals The NHS is reducing the hospital specialist wait list to 18 weeks or less Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum NHS Funding The NHS is funded by: National taxes (76%) Payroll taxes (18%) Fees paid by private patients and NHS patients, and other sources (6%) Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Who Runs the NHS? The Department of Health is responsible for the NHS and must report to the public and to Parliament The Department of Health also sets and implements public health policies, such as health education campaigns Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

The Canadian Health Care System (Medicare) Similar to the NHS: Taxpayer-funded Universal coverage Different from the NHS: Both nationwide and regional funding Federal government cannot run regional health care plans Unique limitations on the use of private insurance Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Funding Health Care in Canada 1984 Canada Health Act increased access and cut individual costs of health care Income tax collected by the federal government is distributed to provinces and territories Some provinces and territories supplement this money with lotteries, sales tax, and patient premiums Most health care providers are in private practice and are paid a fee-for-service Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

What Medicare Covers in Canada Medically necessary services are paid for under the Canada Health Act Services that are not medically necessary do not need to be covered, such as vision and dental care However, many provinces and territories do provide some coverage Each Canadian spends an average of $580 per year on out-of-pocket health care expenses Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

The Role of Private Insurance Most Canadians purchase private insurance, often through their employer, to supplement Medicare services Private insurance payments contribute about 30% of Canada’s health care costs Private insurers cannot legally cover services already provided by Medicare Canada is unique in structuring its private insurance this way Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Effects of Limiting Private Insurance Limiting private insurance does not let people reduce wait times for some services Limiting private insurance increases the public cost of universal coverage Some Canadians want to expand the role of private insurers to solve these problems Others want to restrict private insurance to ensure equal access to basic medical services Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Problems with Wait Lists Private insurance rules add strain to wait lists for medical care in Canada Canadian Supreme Court ruled that long waiting lists have caused deaths and suffering Some private clinics bypass the law and provide publically covered services to patients with private insurance The 2007 Patient Wait Times Guarantee has decreased wait times in key areas Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Public Health Benefits of the Canadian System Statistics show that Canadians benefit from good health care Life expectancy at birth is more than 80 years as of 2005, among the highest in industrialized nations Infant mortality was cut in half from 1979 to 2005 Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Five Principles of the Canada Health Act Provinces and territories must follow 5 principles in order to receive federal funding: Public administration Comprehensiveness Universality Portability Accessibility Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Public Administration and Comprehensiveness The first two principles explain how health plans must be administered Public administration: Health plans must be publicly administered, run as non-profit organizations, and accountable to the public Comprehensiveness: Provinces and territories must provide all medically necessary services Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Universality, Portability, and Accessibility The last 3 principles protect patient rights Universality: Gives every resident the right to health care Portability: Provides health care coverage if a resident moves between regions or travels outside of Canada Accessibility: Health care is provided regardless of health, age, or income Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Summary Health plans in the United Kingdom and Canada reflect different national priorities The United Kingdom’s NHS is centralized, while Canada’s Medicare is regionally run The United Kingdom lets residents purchase private insurance for more choice and quicker access to services Canada limits private insurance, so that all residents have equal access to basic services Both the United Kingdom and Canada are working to reduce wait times for services Component 1/Unit 4-2 Health IT Workforce Curriculum Version 2.0/Spring 2011