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Universal Health Insurance Coverage in the United States
The document summarizes the current state of universal health insurance in the United States. It discusses the fragmented nature of today's health care system and statistics on the uninsured. Research studies show that a universal single-payer system could cover all Americans for less money by reducing administrative costs. The document also briefly reviews universal health care systems in other countries like the UK, Germany, Japan, and Canada. It concludes by suggesting a universal system may be more achievable in the US than commonly believed.
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Universal Health Insurance Coverage in the United States
- 1. Universal Health InsuranceCoverage in the United States Brian Wells, MPH University of Florida May 18, 2004
- 2. Overview Today’s HealthCare System Health Care Statistics Research studies Implementing a Universal System Health Care System Around the World Concluding Thoughts
- 3. “ Of allthe forms of inequality, injustice in health care is the most shocking and inhumane.” - Martin Luther King, Jr.
- 4. Today’s Health CareSystem It’s not a system It is a “kaleidoscope of financing, insurance, delivery, and payment mechanisms that remain unstandardized and loosely coordinated” Major part of the system in private hands Market driven economy invites the participation of numerous private entities to serve these functions Source: Lecture, Dr. Robert Garrigues, Ph.D.
- 5. Today’s Health CareSystem This blend of public and private involvement in health care delivery has resulted in: A multiplicity of arrangement which enable individuals to receive health care services Numerous insurance providers using various mechanisms to insure against risk Multiple payers that make their own determinations as to what to cover and how much to pay Source: Lecture, Dr. Robert Garrigues, Ph.D.
- 6. Today’s Health CareSystem Types of Managed Care IPA Single Specialty, Multi-specialty HMO Staff, Group, Network PPO POS Types of reimbursement Discounted fee-for-service Capitation Source: Shortell, Stephen and Kaluzny, Arnold. Health Care Management: Organization Design and Behavior 4 th Edition
- 7. Today’s Health CareSystem Investor Owned v. NFP HMOs Compared with not-for-profit HMOs, investor-owned plans had lower rates for 14 HEDIS quality-of-care indicators. If all women in the United States were covered in investor owned HMOs rather than non-profit plans, there would be an estimated 5925 additional deaths per year from breast cancer alone. Epo and Xigris Source: Himmelstein, D. et al. Quality of Care in Investor-Owned vs. Not-for-Profit HMOs. JAMA. 7 / 14 / 99. Vol. 282 No. 2.
- 8. Today’s Health CareSystem Accounts for 15.5% of GDP Approximately $1.8 trillion $6,167 per capita (2004 projected amount) Projected to reach 18.4% GDP, $3.3 trillion, and $10,709 per capita in 2013 Higher per capita expenditures than any other country Reason? High technology, number of uninsured, multiple payers, medical liability, charity care, etc. Source: Centers for Medicare and Medicaid Services - http://www.cms.hhs.gov/statistics/nhe/projections-2003/ National Center for Health Statistics - http://www.cdc.gov/nchs/
- 9.
- 10. Health Insurance Coverageof the U.S. Population, 2002 Total = 285 million Note: Data do not total 100% due to rounding. SOURCE: Urban Institute and Kaiser Commission estimates based on March 2002 Current Population Survey.
- 11. Health Insurance Coverageof Children and Nonelderly Adults, 2002 Total: 77.3 million Total: 173.6 million SOURCE: Kaiser Commission on Medicaid and the Uninsured (KCMU) and Urban Institute analysis of the March 2003 Current Population Survey. Children Adults under 65
- 12. Barriers to HealthCare by Insurance Status, 2002 Source: NPR/Kaiser Family Foundation/Kennedy School of Government Health Care Survey, May, 2002.
- 13. Research demonstrates thatthe uninsured: Use fewer preventive and screening services Are sicker when diagnosed Receive fewer therapeutic services Have poorer health outcomes (higher mortality and disability rates) and Have lower annual earnings because of poorer health The Consequences of Being Uninsured
- 14. Characteristics of theUninsured, 2002 Income Work Status Total = 43.3 million uninsured Age Note: Percentages may not total 100% due to rounding. SOURCE: KCMU and Urban Institute analysis of the March 2003 Current Population Survey. 1 Full-Time Worker 56% No Workers 19% Part-Time Workers 12% 2 or More Full-Time Workers 14%
- 15. The Nonelderly Uninsuredby Race, 2002 Total = 43 Million Distribution by Race/Ethnicity Risk of Being Uninsured Note: Asian group includes Pacific Islanders; American Indian group includes Aleutian Eskimos. SOURCE: KCMU and Urban Institute analysis of the March 2003 Current Population Survey. National Average 17.3%
- 16. Health Insurance Coverageby Poverty Level, 2002 Employer Medicaid Uninsured Notes: The federal poverty level was $14,348 for a family of three in 2002. Percentages may not total 100% due to rounding. SOURCE: Urban Institute and Kaiser Commission on Medicaid and the Uninsured, analysis of the 2003 Current Population Survey. Other 285 million 52 million 54 million 51 million 128 million
- 17. Uninsured Rates Amongthe Nonelderly by State, 2001-2002 <13% Uninsured (19 states) 13 to <17% Uninsured (13 states & DC) > 17% Uninsured (18 states) National Average = 17% SOURCE: KCMU and Urban Institute analysis of the March Current Population Survey, 2002 and 2003, two-year pooled data.
- 18.
- 19. Research Studies- StatesMissouri Foundation for Health Health care costs $29.4 billion annually Switch to government- run program could save $3 billion in administrative costs If state offered better benefits than 75% of Missourians now get through private health insurance , state could save additional $1.3 billion
- 20. Research Studies-States 1992Report of the State Health Care Access Commission Publicly financed and publicly administered system would have saved Connecticut $2 billion in 1999 Would cover entire population, cover all necessary medical care, and provide dental coverage Mainly done through cutting administration costs and purchasing medicine in bulk AMA of Massachusetts Study Same Results as the Connecticut study, save as much as $2.7 billion in Massachusetts
- 21. Research Studies-National NewEngland Journal of Medicine- Drs. Himmelstein and Woolhandler, Aug. 2003 Compared spending on health care administration in the U.S. and Canada U.S. spends $209 billion more than Canada Multiple insurers increase costs- 755 in Seattle alone
- 22. Research Studies-National ABCNews-Washington Post Poll 8 out 10 respondents felt it was more important to provide coverage for all Americans, even if it means higher taxes 53% of insured say they worry about losing insurance because of job loss Commonwealth Fund Report 32% of uninsured workers in 2001 employed by large companies as compared to 25% in 1987 Center for Studying Health System Change Report Uninsured people’s reliance on emergency care indicates decreased access to other care, such as physicians’ offices
- 23. Research Studies-National CongressionalBudget Office Has repeatedly found a single payer, national health care system able to cover prescriptions, catastrophic care, and offer fair wages for less than current national spending PNHP Fact Sheet More than ½ of academic physicians endorse single payer systems Most Americans favor some form of national health insurance
- 24. Implementing a UniversalHealth Care System
- 25. Implementing a UniversalSystem Incremental Approach Expansion of the existing public/private, pluralistic healthcare framework of Medicare, Medicaid, SCHIP (State Children’s Health Insurance Program), HMO’s (Health Maintenance Organizations), PPO’s (Preferred Provider Organizations), and POS’s (Point of Service Plans) Single-Payer Approach Fundamental restructuring of the national/statewide healthcare system to wholly government-financed, universal, public health insurance
- 26. How do wepay for it? A new study by Harvard Medical School and Public Citizen National health insurance could save at least $286 billion annually on paperwork. Funding will come from Existing government health care spending (more than $1 trillion) A phased-in tax on employers of 7.7% (almost $1 trillion)
- 27. General Accounting OfficeThe GAO has said: "If the US were to shift to a system of universal coverage and a single payer, as in Canada, the savings in administrative costs (10% to private insurers) would be more than enough to offset the expense of universal coverage."
- 28. But, think aboutit for a second Employers who provide coverage are already paying 8.5%, on average. That would raise about $920 billion. In addition to that, there's already over a trillion dollars being spent a year in local, state and federal dollars for health care. The American people are already paying for universal health care; they're just not getting it.
- 29. Health Care SystemAround the World
- 30. Health Care SystemAround the World Universal healthcare action network - http://www.uhcan.org
- 31. Health Care Systemin UK NHS Set up on 5 th July 1948 Largest organisation in Europe One of the best health services in the world as per WHO Free appointment with GP NHS Funding Mandatory salary contrib. 7% of GDP NHS Staff NHS in England - http://www .nhs.uk/england/
- 32. Health Care Systemin Germany Self governance, decentralization, solidarity Independent of government Sickness fund – multiple non profit insurers 90% of population covered Free appointments with GP Low waiting list
- 33. Health Care Systemin Japan Similar to German Primary health care/Tertiary health care Multiple insurers Mandatory enrollment Residence/employment Premiums proportional to income Low risks/high income low premiums 7.3% of GDP – half of that in America Social factors Less violence Less drugs Life expectancy/infant mortality rate higher than in America
- 34. Health Care Systemin Canada Setup in 1947 Mandatory insurance Free GP – any number of opinions Funding Graduated progressive income tax Sales tax/payroll taxes Provincial health insurance Federal govt. block grants to provinces Territorial health insurance
- 35. Conclusion “… theCubs will play the Red Sox in the World Series long before this problem (uninsured Americans) is solved”- Neil McLaughlin, Modern Healthcare Perhaps the future is not quite that grim “ Their system was virtually identical to ours.”- Dr. Steffie Woolhandler referring to Canada’s system in place before national health insurance
- 36. Summary Today’s HealthCare System Health Care Statistics Research studies Implementing a Universal System Health Care System Around the World
Editor's Notes
- #4 The United States is the only industrialized nation that does not guarantee access to health care as a right of citizenship.
- #31 Approaches to health care vary enormously between countries. As well as the ideas presented here, U.S. can look to other countries for ideas. Presented here are a few snapshots of foreign health systems, Public health care systems have existed successfully in other countries for a number of years now, no reason why it can’t exist in U.S. In France 80% of healthcare is financed from a compulsory insurance scheme built up by payments from employers and employees. The private market is also quite large – 20% of all spending is individuals buying private care. A charge is levied to see your GP, 75% of which can be claimed back from the compulsory insurance fund, although this system is expensive to administer. In Germany about 13% of an employee’s income is put into a non-profit sickness fund, matched by an employer’s contribution. Patients can seek free appointments with GPs or directly with specialists. The amount of money being spent directly on patient care is far lower than in the UK, but there is little evidence of long waits for treatment. In Spain GPs are gatekeepers for the rest of the service, as in the UK. There are also charges for prescriptions and dental treatment, but the remainder of care is free. A fifth of the population has private healthcare compared with about 13% in the UK and 80% of the population rely on a system largely financed from general taxation.
- #32 The National Health Service or NHS as it is more commonly known, was set up on the 5th July 1948 to provide healthcare for all citizens, based on need, not the ability to pay. Equal access to healthcare regardless of income is the cornerstone of the NHS. The NHS is now the largest organisation in Europe. It is recognised as one of the best health services in the world by the World Health Organisation. The national government owns and operates over 2,000 hospitals, directly employs most hospital staff and most physicians. With about 1 million employees, including over 50,000 physicians, the British National Health Service is one of the world's largest employers. The health care system in Great Britain is funded, controlled and administered totally by the National Health Service. It is managed by the Department of Health, which sets overall policy on health issues. It is the responsibility of the Department of Health to provide health services to the general public through the NHS. It was launched as a single organisation based around 14 regional hospital boards. originally split into three parts: hospital services family doctors, dentists, opticians and pharmacists local authority health services, including community nursing and health visiting The United Kingdom spends just under 7% of its gross domestic product on its health service. UK Spending on the NHS was £46bn – about £790 per person – in 1998/1999. the lowest in Europe. Healthcare spending is decided via a bidding process involving all the Government departments, each putting forward an estimate of the funds it needs. The Treasury may allocate less than the bid to ensure the expenditure across all departments does not exceed its spending targets. This process is known as the Public Expenditure Survey. Before putting in its bid the Department of Health estimates future activity from past levels and looks at changes in a range of costs. It does not attempt to estimate the health needs of the population and work out a total budget to meet them. The NHS is funded by the taxpayer. The system is paid for through general tax revenues, and the proceeds are divided among regional health authorities that plan local health services. Hospitals receive global budgets -- yearly government grants to cover operating expenses. Citizens have access to a primary care physician, with some limitations on who they see, at no charge and can obtain prescription drugs at a nominal cost of less than $4, although 80% of the population is exempt from that charge. There are no hospital or physician charges for tests or in-hospital treatment. Participation in the NHS is not mandatory, and about 11% of the population choose to be insured privately. Many physicians and dentists combine their NHS work with private practice. Older people are the largest users of the health service and have undoubtedly suffered as result of it being under pressure.
- #33 Three principles have guided evolution of the German health care system since its inception in 1883: self-governance, decentralization, and solidarity. Through self-governance and decentralization, the German health care system traditionally has operated almost independently of the government. Some 1,200 autonomous, nonprofit insurers known as &quot;sickness funds&quot; serve as intermediaries among individuals, employers, providers and the government. The federal government through statute, sets parameters for the system such as caps on annual incomes of providers, but leaves practically all operational decisions to the sickness funds and associations representing providers. The German system prides itself on solidarity within the population to meet the needs of those less able to provide for themselves. Those with higher incomes help pay for health care services for lower income people; the employed help pay for services for the unemployed or partially employed; younger and healthier people help pay for the older and sicker; the single and childless help support health care for families and children. While this is the intention of the German system, it has not always described reality. Relatively poor younger people, who use few services, subsidize relatively wealthy elderly, who use more services. Further, while members of a sickness fund are subject to equal payroll deduction rates, in recent years the payroll deduction rates varied dramatically among sickness funds. The sickness funds insure about 90% of the population; approximately 75% of Germans are insured mandatorily. Participation is compulsory for employees whose gross income is less than a threshold income level (DM 5,400/$3,460 per month in 1993), and for farmers, students, apprentices, the unemployed, and many retirees. Of the remaining 10% not covered by sickness funds, most have private insurance or are civil servants for whom the government administers health coverage. Fewer than .5% have no health insurance; these individuals have incomes above the income threshold and may choose to remain uninsured. When choice of funds is granted, the choice is left to the individual, not the employer. White-collar workers (and some blue-collar workers) may choose their local sickness fund or from among the white and blue-collar substitute funds. Generally, blue-collar workers are assigned to a specific fund, with no opportunity for choice. This limitation on choice has led to distortions, including a concentration of higher risk, lower income individuals in particular funds, especially the local and craft funds. The German health insurance industry was criticized for its role in increasing risk segmentation in the health care financing system and the resultant inequitable distribution of health care costs. In response, a risk structure compensation mechanism was instituted in 1994. This is hoped to increase equity and enhance efficient competition among insurers.
- #34 Japan provides all citizens with access to primary and tertiary health care. The government regulates the insurers by requiring mandatory coverage of large groups of the population. The payments are then disbursed to independently operating care providers or hospitals, according to a government set fee schedule which lists prices for individual procedures. The total cost of health care in Japan in 1993 was about 7.3% of GDP, about half of the American figure: 14.3%. Although some of this difference is due to social factors, such as less violence and drug use in Japan, such factors do not provide a sufficient explanation. Paradoxically, the gross outcomes based on life expectancy and infant mortality are significantly higher in Japan than in the U.S. (See life expectancies .) Japan finances medical care through multiple insurers, with mandatory enrollment based on employment or residence, and premiums proportional to income. In contrast to what happens in Canada , plans enrolling those with relatively low risks and high incomes tend to have lower premium rates and more benefits (extra benefits are for preventive services only, since diagnostic and treatment services are the same for everyone). Although the Japanese system is most similar to the German one, Japan's is more egalitarian, with government subsidization of plans covering inherently less healthy and poorer populations, and no opportunity for people to opt out by buying private insurance. For employees of large companies and public-service agencies, the health plans are established at the level of the company or agency and administered by committees representing management and labor. Health care costs are wholly covered by premiums. For employees of small companies, who are on average less well off and less healthy, the Ministry of Health and Welfare acts as the insurer and directly subsidizes 14 percent of the expenditures. For the self-employed and pensioners, the least wealthy and healthy, municipal governments are the insurers and the central government contributes half the costs. Inequalities in income level and need are thus compensated for by subsidies to groups, not to individuals. Despite the multiple insurers, payments to providers all flow through a single faucet. This is the national fee schedule, which applies to all Japanese, regardless of their health plans and where they receive their care. The fee schedule lists all procedures and products that can be paid for by health insurance and sets their prices. Billing the patient for fees not covered by insurance is strictly prohibited, so nearly all revenues of medical care providers are determined by the fee schedule. Hospitals receive direct subsidies from government or university budgets for capital and even some operating expenses above what they receive from the fees for provided services. Freedom of choice for both patients and physicians is an obvious benefit from this system. Any Japanese can choose virtually any physician or hospital, and all physicians can decide for themselves about appropriate treatments, although claims are reviewed retrospectively by a committee of physicians at the local level. The simplicity of this review-and-reimbursement mechanism keeps administrative costs down as does the mandatory, and therefore non-competitive health insurance system, and the lack of opportunity for physicians to manipulate the system. Along with its many advantages, Japan's fee-schedule system has some inherent problems that have been the focus of efforts to reform health care in the 1980s and 1990s. The key problems include the difficulty of controlling volume, particularly of medications and laboratory tests, in the absence of natural time constraints; the effect of uniform fees and therefore uniform incentive structures in making it more profitable to provide primary than tertiary care leading to too much primary care even at university and large public hospitals; and the effect of fee-for-service payments for long-term care, leading to overtreatment. These problems under discussion in Japan are leading to modest reform that would not alter the fundamental characteristics of the health care system. The Japanese system remains very popular (see desired changes ).
- #35 Canada History In 1947 the province of Saskatchewan introduced the first publicly funded insurance program applicable to hospital services. This program provided universal insurance for hospital care. Each person was entitled to have any basic hospital bills paid in exchange for an annual premium, with the residents of the province required to pay for the premium. By 1957 hospital care insurance had spread to other provinces, in separate political battles, and in 1958 the federal government got involved. The Canadian government offered to cooperate with the provinces to &quot;cost-share&quot; on roughly a 50-50 basis for hospital and diagnostic services. By 1961 all provinces and 2 territories had introduced public insurance plans that provided universal coverage for at least inpatient hospital care. In 1962 again Saskatchewan lead the way with the introduction of the first Medicare program, which extended the universal coverage to include office visits. A well publicized twenty three day strike by doctors resulted, during which only emergency services were given. The federal Medicare Act of 1966 gave incentives for the provinces to follow Saskatchewan's example, and since 1971, all of Canada's provinces have provided universal hospital and physician insurance. Financing Canada's Medicare program is an interlocking set of the separate provincial and territorial health insurance schemes, each being universal and publicly funded. The federal government gives block grants to the provinces, which are equal per capita contributions. This system, called the Established Programs Financing (EPF), helps with financing the insured health services, extended health services, and educational services for post-secondary education. This system of payment has been largely financed through a graduated progressive income tax. Most provinces have financed part of the cost of hospital and medical care through premiums, although the premiums have never accounted for more than one-third of the provincial program costs. Sales taxes and payroll taxes have also been used as financing means. This financing scheme based on progressive income tax ensures that the system is financed based on ability to pay. Even in those provinces with premiums (British Columbia and Alberta), public assistance is given to lower income individuals to help with the payment. Private funding of health care has been restricted largely to health services and good which are considered supplementary to medically necessary services. These include dental services, eyeglasses and out-of- hospital prescription drugs. Hospitals in Canada are mostly non-profit entities owned by voluntary organizations, municipal/provincial authorities, or, less often, religious orders. Their operations are guided by community boards of trustees. About 5% of the hospitals are privately owned, mostly those dealing with long-term care. Hospital financing is accomplished through &quot;global budgets&quot;, which gives money to hospitals based on prospective operating costs. If a hospital runs over budget, it is possible to get extra money from the government. Most physicians work as independent practitioners on a fee-for-service basis and submit their claims to provincial health insurance plans for payment. Fee schedules are negotiated periodically between the provincial governments and medical associations. Although generalist physicians earn approximately the same amount in Canada as in the U.S., specialists earn much less compared to specialist salaries in the U.S. Using Medicare Canadians may visit any doctor they wish at any time when they can arrange an appointment, regardless of their level of income. Patients can get a second opinion, or even a third. There is no limitation on access to physician services at the individual patient level. And not surprisingly, then, Canadian visits to physicians are higher per capita than in the U.S. Private insurance still exists in Canada for services not covered under Medicare -- services such as dental care, and payment for some prescription medication.
- #36 The United States can claim the highest standards of care, which costs 14% of GDP. But it is an unfair system that provides high-quality care to the minority who can afford it. The private market accounts for 64% of all spending. Medicaid and Medicare provide less well-resourced care to the poor and over 65s. Over 30 million children are not covered by any type of medical insurance. Overall life expectancy is lower than in Europe and infant mortality is higher. Financing healthcare through a progressive tax system – as the UK does – means that each citizen contributes according to the size of their income. Equal access to healthcare regardless of income is the cornerstone of the NHS. Systems that use a central insurance fund tend to spread the cost less fairly and have higher administration costs. Countries with a large private healthcare market such as the US also spend a high amount on marketing and advertising health services. Single payer universal health care costs would be lower than the current US system due to lower administrative costs. The United States spends 50 to 100% more on administration than single payer systems. By lowering these administrative costs the United States would have the ability to provide universal health care, without managed care, increase benefits and still save money