Health Care Fund Health Care Fund FlowFlow

Where it comes from, Where it comes from,

Where it goesWhere it goes

Samuel Metz, MDPNHP Portland OR Chapter

Mad As Hell DoctorsMay 4th, 2010

What is Health Care What is Health Care Reform?Reform?

Universal access regardless of Universal access regardless of health, wealth, or employmenthealth, wealth, or employment

Reduced costReduced cost Improved public healthImproved public health

What makes American health care so What makes American health care so expensive?expensive?

Answers from the Physician’s Answers from the Physician’s LoungeLounge

End of life careEnd of life care Patient demand for unnecessary Patient demand for unnecessary

proceduresprocedures Fee-for-service paymentFee-for-service payment Unreimbursed immigrant careUnreimbursed immigrant care Defensive medicineDefensive medicine Fraud and abuseFraud and abuse Drug company profitsDrug company profits Insurance company profitsInsurance company profits

Insurance: Unregulated vs Insurance: Unregulated vs RegulatedRegulated

UnregulatedUnregulated: : Young and healthy pay low prices for comprehensive Young and healthy pay low prices for comprehensive

policies. 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.

RegulatedRegulated:: 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 No profit on financing health care (profit may be

made on providing health care)made on providing health care)

: :

What’s the Point?What’s the Point?

Before we improve how we Before we improve how we practicepractice,,

we must improve how we we must improve how we paypay..

$2,400

Health Care Money: Flow In, Flow Out Numbers in billions

$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

$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

$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

$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

PrivateOverhead$350

Medical care for citizens $1,666

Government $1,080

Insurance: Employer

$672

Insurance: Individual

$288

Out of Pocket $360

SourcesSources: : Woolhandler S, Costs of health care administration in the United States and Canada, NEJM 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 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); 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; 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, Mohanty . Health Care Expenditures of Immigrants in the United States. American Journal of Public Health, 200595, No. 8200595, No. 8

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

Carol J. Simon, Julie Wolcott, Paul Hogan*, The Lewin Group. Can We Reduce Health Care Spending? October 26, Carol J. Simon, Julie Wolcott, Paul Hogan*, The Lewin Group. Can We Reduce Health Care Spending? October 26, 2009. 2009. http://www.lewin.com/content/publications/LewinReport-CostDrivers.pdf

The Health Care For All Californians Act: Cost &Economic Impacts Analysis. JF SheilsThe Health Care For All Californians Act: Cost &Economic Impacts Analysis. JF Sheils, , RA HaughtRA Haught, Lewin Group, , Lewin Group, January 19, 2005January 19, 2005

Funds in, funds out:Funds in, funds out:What did we learn?What did we learn?

45% of health care funds flow through 45% of health care funds flow through government (“socialized medicine”).government (“socialized medicine”).

Unregulated private insurance is the Unregulated private insurance is the most expensive method of funding most expensive method of funding health care in the world.health care in the world.

We can provide universal cost-We can provide universal cost-effective health care with money we effective health care with money we already spend.already spend.

Beware of what you Beware of what you promise…promise…

“… “…if you like your health care plan, if you like your health care plan, you keep your health care plan.”you keep your health care plan.”

Protecting the right to keep our Protecting the right to keep our unregulated private insurance unregulated private insurance policies costs us $350 billion each policies costs us $350 billion each yearyear

Is it worth it? Is it worth it?

What’s the Point?What’s the Point?

Before we improve how we Before we improve how we practicepractice,,

we must improve how we we must improve how we paypay..

Universal Laws of Health Care Universal Laws of Health Care SystemsSystems

Tsung-Mei Cheng, economistTsung-Mei Cheng, economist

No matter how good the care, No matter how good the care, people complain about it.people complain about it.

No matter how much you spend, No matter how much you spend, doctors and hospitals want more.doctors and hospitals want more.

The last reform always fails.The last reform always fails.

What can Americans do?What can Americans do?““I love change, except the part about I love change, except the part about

doing things differently.”doing things differently.”

"In the United States today, we give you all the "In the United States today, we give you all the care you can afford, whether or not you need care you can afford, whether or not you need

it, as opposed to all the care you need, whether it, as opposed to all the care you need, whether or not you can afford it." or not you can afford it."

Arthur Kellerman, M.D., Associate Dean, Emory University School of MedicineArthur Kellerman, M.D., Associate Dean, Emory University School of Medicine

““First we enroll everyone in our dysfunctional, First we enroll everyone in our dysfunctional, barbaric medical system. Then everyone has a barbaric medical system. Then everyone has a

stake in making it better.” stake in making it better.”

How do they do it?How do they do it?

Single payer: Single payer: publicpublic payer, payer, publicpublic providers providers (England, similar to our VA system)(England, similar to our VA system)

Single payer: Single payer: publicpublic payer, payer, privateprivate providers providers (Canada, on which our Medicare is based)(Canada, on which our Medicare is based)

Single payer: Single payer: privateprivate payer, payer, privateprivate providers providers (Taiwan, similar to union medical trusts)(Taiwan, similar to union medical trusts)

EmployerEmployer based non-profit insurance (France) based non-profit insurance (France) IndividualIndividual based non-profit insurance based non-profit insurance

(Germany)(Germany)

What do they have in What do they have in common?common?

Everyone is in a single risk pool with Everyone is in a single risk pool with a single schedule of benefitsa single schedule of benefits

Minimal cost-sharing to increase Minimal cost-sharing to increase primary care use, reduce tertiary primary care use, reduce tertiary care use.care use.

Financing through regulated, non-Financing through regulated, non-profit agenciesprofit agencies

ReferencesCosts 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. Woolhandler’s article lists these figures per capita. I multiplied each by 300 million.)

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=&author1=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=TheProblemOfHCFraudDefensive 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

Relman A. Second opinion: Rescuing America’s health care. Public Affairs, New York NY, 2007, p.91-2Government 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 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.pdf

ReferencesMedical 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.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 American Association of Medical Colleges. 2009 State Physician Workforce Data Book, Center for

Workforce Studies, November 2009. http://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.pdf

Comparative spending, government expenditures: US Federal Budget, 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; Medicaid expenditures: Kaiser Family Foundation, StateHealthFacts.org 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.html Interest on national debt: US Treasury, http://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