Overview of the State of U.S. Health Care Today (Karen Davis)

8/7/2019 Overview of the State of U.S. Health Care Today (Karen Davis)

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THECOMMONWEALTH

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Presidential Candidates Health

Care Plans: A First Look

Karen Davis

President, The Commonwealth Fund

National Press Foundation

November 11, 2007

[email protected]

www.commonwealthfund.org


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What Are the Problems?What Are the Problems?

Costs of Care

Quality of Care Chasm

Uninsured Rates

Administrative

Complexity


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US Scorecard:US Scorecard:Why Not the Best?Why Not the Best?

Commonwealth Fund Commission National ScorecardCommonwealth Fund Commission National Scorecard

69

71

67

51

71

66

0 100

Long, Healthy &

Productive Lives

Quality

Access

Efficiency

Equity

OVERALL SCORE

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006 3

37+ Indica rs U.S. c mpared tobenc marks


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Health Care is Top Domestic Issue for 2008Health Care is Top Domestic Issue for 2008Presidential RacePresidential Race

42

2

63

6 5

0

20

40

60

Iraq Health care Econom

Immi ration Terrorism Education Gas Prices Ta

es

Percent of Americans who think issue is the most important problem for

overnment to address

Source: Kaiser Health Tracking Poll: Election 2008, Issue 3, August 2007


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Uninsured Top Priority for CongressUninsured Top Priority for CongressAccording to Health Care Opinion LeadersAccording to Health Care Opinion Leaders

%

%

%

%

%

%

%

%

%

%

Reduce racial/eth ic disparities in care

Reform Medicare paymentto reward performance on

quality, efficiency

Control the rising cost of prescription drugs

Address shortage oftrained health care professionals

Ensure families don't pay excessive out-of-pocket

costs in relation to income

Expand SCHIPto reach all uninsured children

Increase use of IT to improve quality, safety of care

Reform Medicare to ensure its long-run solvency

Enact reforms to moderate rising health care costs

Expand coverage forthe uninsured

Source: The Commonwealth Fund Health Care Opinion Leaders Survey, Jan 2007.

How important do you think the following health care issuesare for Congress to address in the next five years?

Top 10 issues: Percent responding absolutely essential orvery important

9

9

8

7

6

5

3

3

2

1

Rank

Note: Based on a list of 17 issues.


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Health Insurance Coverage Getting Worse

for Adults, Better for Children

Data: Two-year averages 19992000, updated with 2007 CPS correction, and 20052006 from the Census Bureaus March2000, 2001 and 2006, 2007 Current Population Surveys.

WA

OR

ID

MT ND

WY

NV

CA

UT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SC

TNNC

KY

FL

VA

OH

MI

WV

PA

NY

AK

MD

MEVT

NH

MA

RI

CT

DE

DC

HI

CO

GAMS

OK

NJ

SD

WA

OR

ID

MT ND

WY

NV

CA

UT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SC

TNNC

KY

FL

VA

OH

MI

WV

PA

NY

AK

ME

DE

DC

HI

CO

GAMS

OK

NJ

SDMA

RI

CT

VTNH

MD

Percent change between 1999-2000 and200 -200 in uninsured adults ages 18-

Percent change between 1999-2000 and200 -200 in uninsured children under 18

Increased.1% to 7%

Decreased 2.

to 0%

Increased 0.1% to %

Decreased -7% to -2. %

WA

OR

ID

MT ND

WY

NV

CA

UT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SC

TNNC

KY

FL

VA

OH

MI

WV

PA

NY

AK

MD

MEVT

NH

MA

RI

CT

DE

DC

HI

CO

GAMS

OK

NJ

SD

WA

OR

ID

MT ND

WY

NV

CA

UT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SC

TNNC

KY

FL

VA

OH

MI

WV

PA

NY

AK

ME

DE

DC

HI

CO

GAMS

OK

NJ

SDMA

RI

CT

VTNH

MD

Increased.1% to 7%

Decreased 2.

to 0%

Increased 0.1% to %

Decreased -7% to -2. %


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Adults With No or Unstable Insurance Are LessAdults With No or Unstable Insurance Are LessLikely to et Preventive Screening TestsLikely to et Preventive Screening Tests

56

5

3

56

64

4

4

6

Pa test olon cancer screening Ma ogra

Insured all year Insured no , ti e uninsured in ast year Uninsured noPercent

Note: Pap test in past year for females ages 1929, past three years age 30+; colon cancer screening in past fiveyears for adults age 5064; and mammogram in past two years for females age 5064.Source: S.R. Collins et al., Gaps in Health Insurance: An All-American Problem, Findings from the CommonwealthFund Biennial Health Insurance Survey, The Commonwealth Fund, April 2006.


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Adults Without Insurance Are Less LikelyAdults Without Insurance Are Less Likelyto Be Able to anage Chronic Conditionsto Be Able to anage Chronic Conditions

ki ed doses or did not ill

rescri tion or chronic condition

because o cost

Visited hos ital or both or chronic

condition

Insured all year Insured no time uninsured in ast year Uninsured no

Percent o adults ages ith at least one chronic condition*

*Hypertension, high blood pressure, or stroke; heart attack or heart disease; diabetes; asthma, emphysema, or lung disease.

Source: S. R. Collins, K. Davis, M. M. Doty, J. L. Kriss, A. L. Holmgren, Gaps in Health Insurance: An All-American Problem,Findings from the Commonwealth Fund Biennial Health Insurance Survey (New York: The Commonwealth Fund, Apr. 2006).


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Figure 12.


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Cumulative Annual Changes in NationalCumulative Annual Changes in NationalHealth xpenditures rowth, 2000Health xpenditures rowth, 2000--20072007

0

25

50

75

00

25

2000 200 2002 2003 2004 2005 2006 2007

Net ost of private health insuran e adminstration

amil private health insuran e premiums

ersonal health are

Wor ers earnings

Note: Data on premium increases reflect the cost of health insurance premiums for a family of four/ The average premium increase is

weighted by covered workers. *2006 and 2007 private insurance administration and personal health care spending growth rates are

projections.

SOURCE: A. Catlin, National health Spending in 2005: The Slowdown Continues, Health Affairs, January/February 2007, 143-153; J.A. Poisal, et al. Health Spending Projections Through 2016: Modest Changes Obscure Part Ds Impact, Health Affairs, February

2007, w242-w253; 2000-2007 Kaiser Employer Benefits Survey

109%

%

91%

2 %


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Percentage of National Health xpendituresPercentage of National Health xpendituresSpent on Health Administration and Insurance, 200Spent on Health Administration and Insurance, 200

Net costs of health administration and health insurance

as percent of national health expenditures

1.9 2.1 2.12.6

3.3 4.04.1 4.2

4.8

5.6

7.3

0

2

4

6

8

cil p

C

Ui

Kig

N

l ui

uli

Swi z

l y

Ui

S

a b c

*

a2002 b1999 c2001*Includes claims administration, underwriting, marketing, profits, and other administrative costs;based on premiums minus claims expenses for private insurance.

Data: OECD Health Data 2005.Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006.


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Why Does the Current Health InsuranceWhy Does the Current Health Insurance

System Fail to Promote High Performance?System Fail to Promote High Performance?

Access to care is une ual

Poor access to care is linked to pooruality

Care delivery is inefficient Fragmented health insurance system

makes it difficult to control costs

Financing of care for uninsured and

underinsured families is inefficient Positive incentives in benefit design

and insurance markets are lacking


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Roadmap to Health Insurance for All:Roadmap to Health Insurance for All:Principles for ReformPrinciples for Reform

Builds an essential foundation for uality andefficiency as well as access

Benefits cover essential services withfinancial protection

Premiums/deductibles/out of pocket costsaffordable

Coverage is automatic, stable, seamless Choice of health plans or care systems Broad health risk pools; competition based on

performance not risk or cost shift

Simple to administer: lowers overhead costsproviders/payers inimizes dislocation Financing ade uate/fair/shared across

stakeholders


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What are the Options for Health Insurance Reform?What are the Options for Health Insurance Reform?

PrinciplesforReform

Tax Incentivesand

Individ al Ins ranceMarkets

Mixed Private-P blicGro p Ins rancewit

S ared ResponsibilitforFinancin P blic Ins rance

Covers Ever one 0 + +

Minim m Standard Benefit Floor + +

Premi m/Ded ctible/O t-of-Pocket Costs

Affordable Relative to Income

+ +

Eas Seamless Enrollment 0 + ++

C oice + + +

Pool Healt Care Risks Broadl + ++

Minimize Dislocation, Abilit toKeep C rrent Covera e + ++

Administrativel Simple + ++

Work to Improve Healt CareQ alit and Efficienc

0 + +

0 = Minimal or no change from current system; = Worse than current system; + = Better than current system;++ = Much better than current system

Source: S.R. Collins, et al., A Roadmap to Health Insurance for All: Principles for Reform, Commission on a HighPerformance Health System, The Commonwealth Fund, October 2007.


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Medicare for All, Private Insurance xchanges, Tax IncentiveMedicare for All, Private Insurance xchanges, Tax IncentiveProposals Cause Major Shifts in Coverage, 2007Proposals Cause Major Shifts in Coverage, 2007

Current LawHealthy Americans Act

(Wyden)

Total population = 29 .1 million

Uninsured

47.8

(16%)

Private

Non-Employer

9.5

(3%)

Employer

153.7

(52%)

Medicaid/

SCHIP

37.5

(13%)

Medicare

31.9

(11%)

CHAMPUS

3.4

(1%)

Dual

Eligible

8.0

(3%)

Uninsured2.5

(1%)

HAA

Coverage

248.8

(84%)

Medicare

31.9

(11%)

CHAMPUS

3.9

(1%)

Dual

Eligible

8.0

(3%)

Note: Average monthly coverage. Primary payer is determined on basis of current prevailing coordination of benefits practices.Source: The Lewin Group for The Commonwealth Fund.

Employer

Retiree

3.3

(1%)

Uninsured

38.8

(13%)

Private

Non-Employer

29.3

(10%)

Employer

145.2

(49%)

Medicaid/

SCHIP

38.5

(13%)

Medicare

39.9

(14%)

CHAMPUS

3.4

(1%)

President BushsProposal

Medicare

31.9

(11%)

Employer

5.0

(2%)

AmeriCare

246.8

(83%)

CHAMPUS

3.4

(1%)

Dual Eligible

8.0

(3%)

AmeriCare

(Stark)


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Some Reform Proposals Reduce Total Health System Spending,Some Reform Proposals Reduce Total Health System Spending,But Federal overnment Outlays Re uire Feasible FinancingBut Federal overnment Outlays Re uire Feasible Financing

(Change in Health Spending by Stakeholder roup,(Change in Health Spending by Stakeholder roup,Billions of Dollars, 2007)Billions of Dollars, 2007)

PresidentBushs

Proposal

HealthyAmericans Act2

(Wyden)

AmeriCare(Stark)

Total Uninsured Covered,Millions

9.0 . 7.8

Federal overnment $70. $2 . $1 .

State and Localovernment

($0. ) ($10.2) ($ 7. )

Private mployers ($ 0.8) $ 0.2 ($1 .2)

Households ($ 1.0) ($78.8) ($1 2. )

Net Health System Cost in2007 (in billions)

($11.7) ($ . ) ($ 0.7)

Total Uninsured NotCovered1, Millions

8.8 2. 0

1Out of an estimated total uninsured in 2007 of 47.8 million.2

Estimates reflect a mandatory cash-out of benefits on the part of employers that currently offer coverage.Source: S. R. Collins, K. Davis, and J. L. Kriss, An Analysis of Leading Congressional Health Care Bills, 2005-2007: Part IInsurance Coverage, The Commonwealth Fund, March 2007


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Creating Consensus:Creating Consensus:Minimal Disruption in Current Coverage, 200Minimal Disruption in Current Coverage, 200

Medicaid/CHIP10%

mployer8%

Non-group%

CURR NT INDI IDUALMANDAT

CHAMPUS/Others

1%

Uninsured1 %

Medicare12%

Non-group1%

CHAMPUS/Others

1%

Uninsured1%

Medicaid/CHIP/FHIP

1 %

Medicare1 %

mployer

9%

CongressionalHealth Plan

9%

Source: K. Davis and C. Schoen, Creating Consensus on Coverage Choices, Health Affairs (Web Exclusive April 23,2003). Lewin Group estimates using the Health Benefits Simulation Model.


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New Coverage for Currently Uninsured

CongressionalHealth Plan

TOTAL = 2 m

MedicareTOTAL = 8 m

11m 1 m

CHIP/FHIPTOTAL = m

mployer roupCoverage

TOTAL = 1 m

1 m 1m

Improved Coverage for Underinsured

m 1mm 11m

Source: K. Davis and C. Schoen, Creating Consensus on Coverage Choices, Health Affairs (Web ExclusiveApril 23, 2003).

Creating Consensus: Choice between PrivateCreating Consensus: Choice between PrivateInsurance and Public Program CoverageInsurance and Public Program Coverage


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Health Reform and the Presidential CandidatesHealth Reform and the Presidential Candidates

Leading Democrats:

Mixed private-public insurance Shared financial responsibility (government, employers,

households), individual mandate

F HBP orMedicare national insurance connector

IT, prevention, chronic care management, comparative

effectiveness, pay for performance, transparency Finance with system reforms and repeal/expiration of high-

income tax breaks

Leading Republicans:

Tax incentives for purchase of individual insurance

Make employer health insurance contributions taxableincome to employee

Buy insurance from any state

reater state flexibility to reallocate Medicaid/SCHIP dollars

Tort reform, transparency, IT


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Candidates Agreement on Health Care Reform FeaturesCandidates Agreement on Health Care Reform FeaturesSenatorClinton

Senatordwards

SenatorObama

Mayoriuliani

SenatorMcCain

overnorRomney

Candidates From BothParties Agree

xpandingcoverage X X X X X X

Health IT X X X X X X

Transparency X X X X X X

Malpractice reform X X X X X X

Some Candidates

AgreePay forperformance X X X No X No

Prevention X X X X X No

Candidates Differ

Universal coverage X X X No No No

Individual mandate X X All c ildren No No Nomployer pay or

play X X X No No No

Changes toemployer benefittax exemption X No No X No Unclear

Regulation ofinsurance markets

X X X No No No


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Judging the 2008 PresidentialJudging the 2008 PresidentialCandidates Health PlansCandidates Health Plans

Note: Scale is1-10; 10 is t e bestSo rce: Maril n WerberSerafini, "J d in t e2008 Healt Plans," National Journal, October26, 2007

Clinton dwards Obama iuliani McCain Romney

Universal Covera e 9 9 7

Useexistin dollars

Government ets val eformone

Spendin constant percent ofGDP

Cons merinformed c oices 7 7

ProviderQI tools, best practices 8 7 7

Providerscompete onq alit /price

No adverseeffect on covera e orpatients

7 8 7

Covera eaffordableforsickest 8 9 8

Patientsseek val eformone 7

Patients aveaccess to providers 8 8 8 7 8 8

Emplo ers elppa forcovera e 8 8 8 7

No financial ards ip onemplo ers

9 9 8

TOTAL 8 8 81 82


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Health Reform and the PresidentialHealth Reform and the PresidentialCampaignCampaign

Health policy a top domestic issue Universal coverage is central to highperformance health system

Needs to be combined with initiation ofeffective health system reforms

Organize the health care system around thepatient to ensure accessible and coordinatedcare

Align financial incentives: payment reform andeffective strategies for enhancing value and

achieving savings Pursue and raise benchmark levels of highuality, efficient care and enhance capacity to

innovate and improve including IT capacity nsure national leadership and public/private

collaboration


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Why Not the Best?Why Not the Best?

Current directions absent policy change Costs expected to go to 20% of DP

More uninsured, affecting middle classfamilies as well as low-income

More underinsured, bill problems, medicaldebt

Aiming higher: Why not the best?

U.S. has the resources and expertise

Benchmarks for a high performance healthsystem are achievable

Achieving consensus re uires thateveryone participate and be willing to

come together for the greater good


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Visit the Funds website atVisit the Funds website atwww.commonwealthfund.orgwww.commonwealthfund.org


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Thank You!Thank You!

Stephen C. Schoenbaum,M.D., xecutive VicePresident and xecutiveDirector, Commission on aHigh Performance HealthSystem, [email protected]

Katherine Shea,ResearchAssociate

[email protected]

Cathy Schoen, SeniorVice President forResearch and

[email protected]

Sara Collins,Assistant VicePresident,[email protected]


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Appendix: Presidential Candidate PlansAppendix: Presidential Candidate Plans


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Senator Clintons Health PlanSenator Clintons Health Plan

Universal health coverage with mixed private-public coverage, individualmandate

National insurance connector building on F HBP, Medicare-like productoption; keep current coverage if prefer

Sliding scale premium assistance; expandMedicaid/SCHIP

Shared financial responsibility; tax breaks for small business under 2employees

Re uire all health plans to cover prevention; coordinate public spending onprevention; create National Prevention Initiative

nd insurance discrimination to help reduce administrative costs Quality and fficiency Reforms

Chronic care coordination models

Create paperless health information technology system

Create independent Best Practices Institute

Implement Smart Purchasing Initiatives to constrain excess expenditures

on prescription drugs and managed care Pay providers for coordinated care, bonuses for maintenance of physician

specialty certification

Revenue

$110 billion annual federal budget cost financed by system reforms andexpiration of income-tax cuts for highest income


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Senator dwards Health PlanSenator dwards Health Plan

Individual mandate once insurance is affordable

Shared responsibility

mployers provide coverage to workers or pay % of wages into pool

Medicaid/SCHIP expansions

Parents and children up to 2 0% of poverty

Childless adults up to 100% of poverty

Sliding scale premium subsidies (refundable tax credits)

Regional Markets insurance pools of competing private plans and a publicplan like Medicare

Quality and fficiency Reforms Insurance market; guaranteed issue and community rating

Coverage of preventive care and chronic care with minimal cost-sharing

Pay for results reward uality and efficiency; reward primary care

Transparency public reporting; IT

Patient safety; FDA device and drug safety

Quality benchmarks vidence-based medicine; health services research

Revenues

$90 to $120 billion a year federal budget cost from eliminating waste inhealth system and repealing Bush tax breaks for those over $200,000

nforcement of capital gains tax

mployer % of payroll contribution


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Senator Obamas Health PlanSenator Obamas Health Plan

Shared responsibility - mployers provide coverage to workers or contributea percentage of payroll toward the costs of the national plan

Medicaid/SCHIP expansion; Sliding scale premium subsidies

Public health insurance plan based on F HBP available to smallbusinesses, individuals who dont have access to group coverage

National Health Insurance xchange to provide access to private coverage

Mandate that all children have coverage; Young adults expansion allowyoung people up to age 2 to continue coverage through their parents plans

Reinsurance for employer health plans

Quality and fficiency Reforms Disease management programs; implement medical homes

Re uire cost and uality reporting, including medical errors anddisparities in care, from participating providers; Re uire health plans toreport percent of premiums that goes to patient care

Support efforts to align reimbursement with uality of care

Increase investment in comparative effectiveness reviews and research

Invest $10 billion per year over years for U.S.-wide adoption ofstandards-based health IT systems

Increase competition in insurance and drug markets

Promote disease prevention

Revenues

$ 0 to $ billion annual federal budget costs funded through expirationof high income tax breaks ($200,000 and above)

mployer contribution


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Mayor iulianis Health PlanMayor iulianis Health Plan

Tax incentives to buy health coverage income-taxexclusion of up to $1 ,000 for families and $7, 00 for

individuals to buy private insurance and contribute toexpanded health savings accounts

Buy insurance out-of-state Block grants to states instead ofMedicaid matching

funds Tort reform reasonable caps on non-economic

damages, alternative dispute resolution Transparency of prices, provider ualifications,

outcomes Pay Medicare doctors and hospitals more for better-

uality care

Public/private partnerships for IT standards StateMedicaid payments tied to success inpromoting preventive care, tracking obesity inchildren

Reduce red tape in approval of medical devices


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SenatorMcCains Health PlanSenatorMcCains Health Plan

Keep employer tax incentives, but offerindividuals tax incentives to buy insurance --$2, 00 refundable tax credit for individuals,$ ,000 for families; if premium less, balancefor health savings accounts

Buy health insurance out-of-state Association health plans Medicare/Medicaid pay providers for good

outcomes, coordinating care, preventiveservices

Transparency about outcomes, uality ofcare, costs, and prices

Innovative delivery forms, e.g. retail clinics Tort reform; protect doctors following clinical

guidelines and patient-safety protocols National standards for electronic health

information systems and data collection


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Governor Romneys Health PlanGovernor Romneys Health Plan Recommends extending health insurance to all Americans, not through a

government program or new taxes, but through market reforms Would expand and deregulate the private health insurance market

Foster competitive health insurance markets in each state to bring down

the cost of private health insurance Reform tax code to make it cheaper for individuals to purchase private

insurance, provide a deduction for the cost of health insurance andcatastrophic medical expenses

Premium assistance to help people purchase private health insurance plans Redirect state and federal spending fromfree care payments to provide

sliding scale premium assistance Insist that middle income individuals either purchase health insurance or pay

for their own health care (reform state health insurance regulations to makehealth insurance more affordable)

ncourage more Health Savings Accounts and co-insurance products nhance the portability of private health insurance Slow the rate of inflation in health care spending by:

Instituting tax reforms to promote smart spending on health care Creating incentives for states to reform their health insurance markets Implementing medical liability reform (caps on non-economic and punitive

damage awards) Federalist approach: Facilitate and encourage reforms, dont mandate them States able to create reforms to match their uni ue needs States as laboratories of innovation

ncourage innovation inMedicaid by providing block grants to states nhance the use of information technology stablish cost and uality transparency

Documents

Overview of the State of U.S. Health Care Today (Karen Davis)