Achieving Universal Health Care for Kids (& Adults): The Minnesota

Health Plan

Ann Settgast, MDUniversity of Minnesota Pediatric Grand Rounds

August 31, 2011

Disclosures• No financial relationships • No discussion of off label or investigational use

The U.S. health care system becomes a more embarrassing disaster each year… — Donald Kennedy, former President,

Stanford University; former EditorScience, August 15, 2003

America has the best health care system in the world, pure and simple.— President George W. Bush,

addressing the American Hospital Association, May 1, 2006

The U.S. health care system becomes a more embarrassing disaster each year… — Donald Kennedy, former President,

Stanford University; former EditorScience, August 15, 2003

America has the best health care in the world, pure and simple. — President George W. Bush,

addressing the American Hospital Association, May 1, 2006

- National research & education organization of ~ 18,000 physicians and medical students advocating universal, comprehensive, single-payer health insurance

- Single-payer care provides a more cost efficient and equitable way to administer health care

- “…access to high-quality health care is a right of all people and should be provided equitably as a public service rather than bought and sold as a commodity…”

Objectives• Distinguish single-payer healthcare reform

from other reform proposals• Define the problems of uninsurance and

underinsurance as they relate to US children

• Introduce the Minnesota single-payer movement

Definitions• Universal health care

– Access for all – Doesn’t specify how

• Socialized medicine– Publicly financed– Publicly owned

• Single-payer system– Publicly financed– Privately owned

(delivered)

What is Single-Payer?• Hospitals & clinics now bill > 1000 payers

(insurers)• In a single-payer system, there would be no

private health insurance• Recovery of $400 billion annually due to

drastically reduced administrative costs

Why Single-Payer?

Quality

Access

Cost

US has

major problems in all 3 areas

480,000 Uninsured

Source: http://www.census.gov/hhes/www/hlthins/hlthins.html

68% of the uninsured nonelderly have a FULL-TIME worker in the household.

Does being uninsured matter?

45,000 adult deaths per year

Source: Wilper et al. American Journal of Public Health, 2009

Likelihood of Hospitalization After an Injury by Coverage Type

n=1847 injuries in children <18 yrs

Hospitalization

InsuranceType

Adjusted OR 95%

Private 2.21 0.73-6.63

Medicaid Ref

Uninsured 4.07 1.13-14.66

S Hostetler et al., Health Care Access After Injury by Insurance Type in a Pediatric Population, Pediatric Emergency Care Vol. 21 (7) July 2005 National Health Interview Survey 2000,01,02

* Adjusted for gender, race, age, region, hospital type, comorbid disease

J Public Health (2010) 32 (2): 236-244 (Data from 23 535 491 pediatric inpatient hospitalizations over 18 years from 37 US states were analyzed).

“The Hidden Uninsured”Among Children Insured in Jan 2006, Percent

Uninsured in Each Month, Jan 2006 to Dec 2007

Underinsurance

Himmelstein et al, American Journal of Medicine, June 4, 2009

• 62% of personal bankruptcies due to medical expenses (2007)–50% in 2001

• 78% of people with medical bankruptcies had health insurance when they got sick

“Medical impoverishment, although common in poor nations, is almost unheard of in wealthy countries other than the US.”

“Underinsurance Among Children in the United States”, NEJM, 2010, 363;9

• 14.1 million US children with continuous coverage are underinsured

• Underinsurance defined:– “Insurance does not provide adequate

benefits, provider choices, or coverage of costs.”

Data: 2007 National Survey of Children’s Health – sample size 91,642 children

“Underinsurance Among Children in the United States”, NEJM, 2010, 363;9

Why Single-Payer?

Quality

Access

Cost

US has

major problems in all 3 areas

Why Single-Payer?

Quality

Access

Cost

US has

major problems in all 3 areas

US ranked 37th by the WHO World Health Report

Why do we pay more and get less?

• 31 cents of each healthcare $ is spent on administration

• Administrative spending comes from two sides:– Providers– Payers

(Steffie Woolhandler et al., “Costs of Health Care Administration in the United States and Canada,” New England Journal of Medicine 2003;349:768-75)

Interactions between physician practices & insurers are costly

Morra et al, Health Affairs, August 2011, 30:8, 1443-1450

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000$90,000

Spending per physician peryear interacting with

payer(s)

OntariophysicianpracticesUS physicianpractices

Why do we pay more and get less?

• 31 cents of each healthcare $ is spent on administration

• Administrative spending comes from two sides:– Providers– Payers

(Steffie Woolhandler et al., “Costs of Health Care Administration in the United States and Canada,” New England Journal of Medicine 2003;349:768-75).

Insurance (Payer) Overhead

16.3%19.9%

26.5%

3.1%

0%

10%

20%

30%

Medicare Non-Profit Blues CommercialCarriers

Investor-OwnedBlues

International Journal of Health Services 2005; 35(1): 64-90

Why are their administrative costs higher than Medicare’s?

• Advertising/marketing• Enrolling/disenrolling• Underwriting• Denial of claims• Deciding what to cover (exclusions, pre-existing

conditions)• Negotiating multiple contracts with providers • Lobbying ($1.2 billion in 2009)• Salaries (CEO pay at top 10 insurers in 2009 =

$228 million)• Profit (Top 5 insurers reported $11.7 billion in 2010)

April 13, 2011

UnitedHealth Group Inc. CEO StephenHemsley took home $48.8 million in totalcompensation in 2010.

Admin costs of private payers versus Medicare:

• Do these “services” make our patients healthier?

• Should we be spending these healthcare dollars on healthcare??

• Do these “services” help you as a doctor to diagnose, treat, or prevent illness?

Is it feasible???• We already have…

– Excellent hospitals and well-trained professionals – A nation of vast wealth with sufficient spending – Acceptance of pooled resources to publicly fund the

military, the NIH, the CDC, highways and roads, police and fire services, schools, libraries, water sanitation, etc.

• And…– Every other industrialized nation is doing it!

What do doctors think of single-payer?

• 5000 surveys, 2008: 51% response rate• “In principle, do you support or oppose

government legislation to establish national health insurance?”

• 59% supported (49% in 2002)

Support for government legislation to establish National Health Insurance in 2007 and 2002, by specialty

Annals of Internal Medicine, 1 April 2008, Volume 148 Issue 7, Pages 566-567

But didn’t we just pass historic national reform?

• Individual Mandate– Mandated health insurance for some (23 million

will remain uninsured in 2019)– Policies required to cover at least 60% of

expected health costs (problem of underinsurance remains alive and well)

– Raises costs

“While the legislation will enhance access to insurance, the trade-off will be an accelerated crisis of costs and perpetuation of the current dysfunction…” – Jeffrey Flier, dean of Harvard Medical School

SF 8/HF 51

Chief author - Senator John Marty

Minnesota Health Plan• Who: All Minnesota residents• What: All medically necessary services

– Inpatient/outpatient services– Rehab care/NH care/HHC/Hospice– Immunizations/preventive care– Prescription drugs/Medical equipment– Mental health care– Dental and vision care

• How: Funded through premiums based on ability to pay + a business health tax

Unique features of a Single-Payer System

• Guaranteed care for all• Decreased costs• Healthcare de-linked from employment• Free choice of provider• Publicly accountable & responsive

http://www.pnhpminnesota.org/

Thank you for your attention!• Educate yourself and

others (www.pnhp.org)• Join PNHP-MN and/or

sign our physician resolution

• Invite a PNHP speaker to your organization or group’s event

• Support the single payer resolution at the 2012 AAP annual leadership meeting

“Of all the forms of inequality, injustice in healthcare is the most shocking and inhumane.”

- Dr. Martin Luther King, Jr.