2. Cost Containment & Alternatives How can the increasing costs of health care be contained? Consider several alternatives and weigh them against: –Effectiveness –Cost –Equity

3. Cost control measures Limits on technology acquisition – making expensive technologies available increases likelihood of use/therefore, use should be limited to control costs Gatekeeper system – patients must see GP & get referral to see a specialist PPOs – limit patients to their selection of doctors who agree to insurer’s fee schedule Different approaches to medical insurance: Actuarial fairness or risk pooling

4. U.S. How are we served? Debate has been dominated by two issues: cost control & uninsured residents In 2006, U.S. spent $6,933/person on health care; most other industrialized countries $3,005/person Cost debate: Overbilling by private providers to compensate for losses in providing services for uninsured OR High administrative costs due to multiple payers and providers OR practice of “defensive medicine” to avoid malpractice lawsuits OR all of the above?

5. Comparisons U.S. has minimal gov’t activity (so far) Italy & UK have national health service model France, Germany, & Japan have adopted mandatory national health insurance which is the prevailing model in the industrialized world In 2009, U.S. spent about 17.3% of GDP on health care; Canada 10.4%; UK 8.7% McKinsey report showed the U.S. paid more than any other developed country for virtually every aspect of care, from staff to drugs to overhead and administration.

6. U.S. Health Care Policy U.S. is most decentralized with multiple segments such as: Gov’t mandated and managed health insurance for the elderly (Medicare) Medicaid program for the poor w/ guidelines set by federal gov’t, but standards and benefits determined by states Majority of population (60%) covered by private insurance providers who are regulated by federal and state legislation

7. Some have called for a radical reinvention of the American medical system, i.e., new ways of thinking about living, aging, and dying. One medical provider said, “This fiscal crisis is about many things, but one of them is our inability to face death – our willingness to spend our nation into bankruptcy to extend life for a few sickly months.” Do you agree or disagree?

8. Japanese Health Care Policy Japan is more like European nations than like the U.S. in that health policy was built on a foundation of occupationally grounded, gov’t mandated insurance plans Policy making has corporatist element: government, funds established by businesses, council representing payers, providers, and general public, but not hospitals Gov’t run National Health Insurance program established for those not covered by employee health plans; every locality has one (2/5 of population in NHI/60% covered by employers)

9. German Health Care Policy Also corporatist in approach to policy. Twice a year, representatives from over 70 groups review system and negotiate fees for next 6 months with hospitals, outpatient services, pharmacies, & dental care First adopted government mandated health care in 1883. Patchwork of occupational funds coupled with gov’t system for unemployed, pensioners In 2009, all residents had to join sickness fund or purchase private insurance

10. Italy Health Care Policy Health care policy is administered by 20 regional gov’ts who set budgets and fee schedules for local health units (USLs) SSN system is a patchwork of public clinics, public hospitals, and private providers contracted by USLs for mandated care About 30% have some form of private insurance to cover copayments, additional services, and to provide comprehensive insurance as an alternative to SSN A VAT tax collected by regional gov’ts funds health care, but copays comprised >1/5 of funding Italy, like GB, has introduced market-based elements into system driven by changes in which party constitutes the majority in parliament

11. United Kingdom Health Policy National Health Service (NHS) provides comprehensive range of services to all citizens. All patients must enroll w/ GP who serves a gatekeeper for specialists/ GPs use capitation system for payment NHS covers all physician services, hospitalization, dental and eye care, long-term care, and prescription drugs Most hospitals publicly owned, but large hospitals can become self-governing trusts Reforms from Blair’s “New Labour” introduced performance rewards and also increased spending by gov’t / moved toward more market-based elements About 11% have private insurance, but most citizens have supplemental coverage for nonemergency care to avoid waiting lists for NHS