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WPBA Presents... The 2008-2009 Finalist Policy Proposals from the First Annual WPBA Policy Cup A publication of Wharton Politics & Business Association

Policy Cup 2009 Finalists

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Page 1: Policy Cup 2009 Finalists

WPBA Presents...

The 2008-2009 Finalist Policy Proposals

from the First Annual WPBA Policy Cup

A publication of Wharton Politics & Business Association

Page 2: Policy Cup 2009 Finalists
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Wharton Politics & Business AssociationPolicy Cup Proposals2008 - 2009

Every year, Wharton Politics and Business Association holds a Policy Cup as its token competition. The Policy Cup addresses questions relating to the year’s theme, and entrants are encouraged to choose a topic within the guidelines provided to research and eventually on which to write a policy proposal. All teams are guided through the research and writing process with a series of checkpoints and seminars. With the aid of Penn professors and other guests who speak and teach about the policy writing and formulating process, the students create their own deliverables.At the end of the year, the Policy Cup finalists present their policy research and final product to a board of adjudicators who judge the winner of the competition and award cash prizes to the best proposals.For the 2008-2009 school year, WPBA chose the controversial and prominent topic of healthcare for the annual Policy Cup. The guidelines were as follows:

What is the most cost effective way to provide •healthcare to those citizens who cannot afford it? What role should the federal government play in •mitigating rising healthcare costs? What role should the US play in helping developing •nations to fight widespread health challenges such as HIV/AIDS, malaria and general access to healthcare?

This year’s proposals were judged by Professor Arnold Rosoff of the Wharton School and Dr. Eric Ashton of the School of Social Policy & Practice as well as WPBA’s President Emeritus and Wharton Class of 2009, Anthony Orlando. The prizes were awarded as follows:

FirstPrize:MichaelHarayandSamuelLeeSecondPrize:ThomasHouandAlanHsuThirdPrize:AdamBlochandDougEckhardt

Thanks to all of our participants for making this year’s Policy Cup so successful!

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Table of Contents1 Combating Neglected Tropical Diseases: A Novel Way of

Fighting HIV/AIDS, Malaria, and Tuberculosis and Improving Healthcare in Africa

2 About the Authors3 Executive Summary4 Background and Problems with the Status Quo 8 Context and Integration11 Policy Proposal12 Analysis of Our Proposal15 Conclusion16 Sources Utilized

21 Covering Kids: Making Public Insurance for Children Equitable and Effective

22 About the Authors23 Executive Summary24 Context and Importance of the Problem25 Our Plan25 Implementation of Our Plan27 Funding28 Conclusion29 References

31 HSAs & the FDA: The Role of the Federal Government in Reducing Health Care Costs

32 About the Authors33 Context and Importance of the Problem33 Executive Summary36 Critique of the Proposed Policy37 Policy Recommendations45 Endnotes

47 Universal Health Care: A Market-Oriented Approach 48 About the Authors49 Executive Summary49 Current Policy52 Policy Recommendation56 Comparison to Alternative Proposed Policy

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61 Working Towards a Better Health: The Path to Diversity and Dependence on a Domestic Health Care Workforce

62 About the Author63 Executive Summary63 Context and Importance65 Importance of Human Resource Health Policy66 Current Policy67 Policy Recommendations67 Critique of Policy67 What the Experts Say71 References

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Combating Neglected Tropical Diseases: A Novel Way of Fighting HIV/AIDS, Malaria, and Tuberculosis and Improving Healthcare in Africa

Proposal by Michael Harhay and Samuel Lee

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About the Authors

Samuel S. Lee is a freshman in the College of Arts and Sciences at the University of Pennsylvania planning on double majoring in Biology and Politics, Philosophy, and Economics. He does scientific research as a University Scholar, but he also likes to read about, write about, and debate public policies and politics.

Michael Harhay is a student in Penn’s Masters of Public Health program and will begin his PhD at Penn’s Population Studies Center in fall 2009.

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There are over 22 million people living with HIV in Africa, representing two¬thirds of the global population diagnosed with HIV.1 There are approximately 300 million cases of malaria in Africa causing 95% of all malaria deaths worldwide.2 Africa, also, has the highest concentration of tuberculosis with over 544,000 tuberculosis¬caused deaths annually.3 In Africa, HIV, malaria, and tuberculosis, known as the Big Three, cause a staggering 5.6 million deaths annually, perpetuate poverty, and create political unrest on an unparalleled scale.4

In addition to the Big Three, there are several parasitic and bacterial infections called the neglected tropical diseases (NTDs) that overlap geographically with the Big Three¬inflicted populations in Africa. The NTDs and the insects and animals that transmit them thrive in tropical settings of poverty marked by poor sanitation, dirty water, substandard housing, and close proximity between humans and livestock. The physical and mental effects of NTDs on a human being are heinous and can be severely disfiguring, disabling, and debilitating to the individual and consequently local populations where they flourish. Further, research has shown that co¬infection with one or more of these NTDs can negatively affect the morbidity and clinical outcome of the Big Three considerably.

For these reasons, NTDs not only augment the toll of the Big Three but are severely crippling and deadly by themselves. They sustain a cycle of poverty and human suffering through their adverse impact on agricultural productivity, education, future wage earning, and the health of mothers and children in low¬income countries whose people live on less than US$2 per day. In Africa these countries overlap closely with those suffering from political instability and conflict. The war¬torn belt in Africa that stretches from the East in Sudan, through Central African Republic and the Democratic Republic of the Congo in Central Africa, to Angola and further into West Africa exhibits some of the highest rates of NTD infection in the world.5

The sad irony is that the medications for these NTDs are in many cases donated freely by pharmaceutical companies. Thus, control, if not eradication, of four to six of these NTDs can be achieved through a combined delivery of four to six safe and effective drugs once to twice a year. They are not hindered by complicated treatment regimens, patents or high costs like those medications for the Big Three. Thus, a cost¬effective way to combat poverty and disease in Africa is to streamline treatment for NTDs using existing physical and human resources that have been erected to combat the Big Three. Therefore we propose to allocate, beginning in 2010, a 10-year, three-fold expansion of the NTDs budget, based on the US fiscal year 2009 (FY09) budget. In this framework approximately 15% of the existing (FY09) International Affairs health program budget, or 1.065 billion dollars yearly would be devoted to research towards, and actual integration of the NTDs and Big Three control programs and partnerships. When combined with the poverty alleviation monies of FY09 this equals ~%4 of the total US FY09 International Affairs Budget.

Executive Summary

Combating Neglected Tropical Diseases

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NeglectedTropicalDiseases(NTDs)The NTDs are discussed as a group by the global community because they tend to

cluster in the same poor populations throughout Asia, Latin America, and most substantially in Sub¬Saharan Africa (SSA). The NTDs and the insects and animals that transmit and host them flourish under conditions linked to tropical poverty, such as poor sanitation, dirty water, substandard housing and close proximity to livestock, all of which serve as reservoirs for insects and other diseases.6

The World Health Organization designated group of 13 NTDs ravage more than 1 billion people and put at least 2 billion at risk, or nearly one in three persons on the planet.7

The manifestation of these parasitic and bacterial infections in the human body cause chronic, debilitating, disabling, and disfiguring effects which limit those who are inflicted to attend school and perform physical labor which in turn reduces short and long term income potential, especially in agrarian and rural societies. When considered in a group the global burden of the NTDs is equivalent to at least half of the combined global burden of the Big Three diseases and exist with considerable geographical overlap with them. Co¬infections with NTD that negatively affect the susceptibility and clinical outcome from any or a combo of the Big Three is common.8,9,10

What makes them “neglected” is that the integrated control for four¬six NTDs can be implemented at marginal costs – less than US$2.00 per person per year by safe and effective drugs already in existence, many of which are donated by pharmaceutical companies (Merck, GlaxoSmithKline, Johnson & Johnson and Pfizer).11,12 Integrated control would utilize “rapid-impact packages,” so named because the drugs can be quickly deployed by community-based distributors, with rapid reductions in disabilities, improvement in well¬being, and, in some cases, interruption of disease transmission through one or two large scale mass nationwide delivery programs each year. Proposals for multiple diseases ranging from two to six drugs for the leading NTDs have been published in recent years. However, these ideas and their empirical evidence have been slow to be translated into action.

The WHO has identified a group of 13 of these NTDs that are among the most common infections in Africa (See Table 3 and Map 1). They include parasitic and bacterial diseases or conditions that disable or debilitate, such as lymphatic filariasis, leprosy, leishmaniasis, and schistosomiasis; those that cause anemia and adversely affect physical growth and development, such as soil¬transmitted helminthiasis (STH; ascariasis, trichuriasis, and hookworm infection); those that can cause blindness, such as onchocerciasis and trachoma; and parasitic zoonoses often transmitted as part of the human food consumption chain. Other important NDs in some poor communities include dengue, skin diseases or conditions caused by bacteria (e.g., Buruli ulcer, yaws), superficial fungi, ectoparasites (scabies mites; “sand fleas” causing tungiasis), and myiasis¬causing flies. Some NTDs, such as schistosomiasis, visceral leishmaniasis, human African trypanosomiasis (HAT), and Chagas disease, may also cause death

Background and Problems with the Status Quo

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Social,EconomicandPublicHealthImpactofNeglectedTropicalDiseasesThe NTDs (see Tables 1 and 2 on the following page) as a group contribute, directly

and indirectly, to global poverty, social unrest, and economic insecurity.13,14,15 The NTDs cause chronic, debilitating, disabling, and disfiguring effects.16 They exacerbate poverty by destabilizing communities’ ability to perform physical labor and thus reducing income potential, especially in agrarian and rural societies, but also in urban settings. For example, the chronic and irreversible limb lymphedema caused by lymphatic filariasis (aka, elephantatis) reduces agricultural productivity when the parasitic manifestation becomes so disabling that people greatly lessen their activities or even stop working altogether.17 Blinding eye disease caused by trachoma and onchocerciasis (river blindness) can also disable subsistence agricultural workers, as do hookworm infection and schistosomiasis because they each produce severe anemia which can stunt growth, slow cognition and promote illness.18-21 Onchocerciasis often becomes pervasive among subsistence farmers who are then forced to flee or abandon their fields and migrate to areas with poor soils or inadequate climate.18 For all of these reasons, NTDs have a pivotal role in the world’s food crisis, particularly in developing countries.19 In addition to their agricultural impact, the NTDs, especially hookworm and other helminth infections, contribute to the “poverty trap” as they adversely affect school attendance and test performance, thus limiting the chances of successful completion of schooling and the chance for better employment. 20 Parasitic worms also injure pregnant women and cause low birth weight.21

NeglectedTropicalDiseases,WarandConflictAs Hotez and Thompson (2009) describe in detail, it comes as no surprise that

poverty breeds political instability.22-23 NTDs sustain a cycle of poverty and human suffering through their adverse impact on agricultural productivity, education, future wage earning, and the health of mothers and children in low¬income countries with large numbers of people who live on less than US$2 per day. In Africa these countries overlap closely with those suffering from political instability and conflict.24 The war¬torn belt in Africa that stretches from the East in Sudan, through Central African Republic and the Democratic Republic of the Congo in Central Africa, to Angola in West Africa exhibits some of the highest rates of NTDs in the world. 25,26

Tables 1 and 2 are taken from a 2007 review in

the New England Journal of Medicine27

Combating Neglected Tropical Diseases

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Map 1: Number of NTD’s found in SSASource: Brady MA, Hooper PJ, Ottesen EA. Projected benefits from integrating NTD programsin sub-Saharan Africa. Trends in Parasitology. 2006;22:285-291.

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InadequacyofHIV,Malaria,andTuberculosisTreatmenttoDateDue to the relatively high cost of HIV, malaria, and tuberculosis treatment and

cost¬prohibitive pharmaceutical patents, compounded by the often differing agendas of both politicians and the numerous actors active in global health (e.g., MSF, WHO, Bill and Melinda Gates Foundation) it could be said that our achievements in directly combating the Big Three have lagged considerable behind our potential to alleviate them. In the last decade, the establishment of numerous global partnerships (see Table 4) that address the Big Three have succeeded in substantially raising the profiles of these health problems, generating unprecedented financial resources, and improving the technical means to tackle them. However, the actual decrease in disease transmission and burden has not been observed.28

In his 2008 paper, “Combating the “other diseases” of MDG 6: changing the paradigm to achieve equity and poverty reduction?”29 David Molyneux, one of the world’s most eminent tropical disease experts and President of the Royal Society of Tropical Medicine and Hygiene, writes, “…The ‘other diseases’ of Millennium Development Goal 6 (MDG 6) are ignored by policy¬makers and politicians who over¬focus on unachievable objectives and targets around the ‘big three’ diseases of HIV, tuberculosis (TB) and malaria, which if the planet was viewed by aliens would be seen as the only diseases that existed on the planet. The diseases of the majority of the poor [NTDs] represent ‘low hanging fruit’ for control and elimination and opportunities are ignored despite the availability of cheap or donated drugs and ample evidence that such interventions are effective and reduce incidence, as well as mortality and morbidity. The time frame available to achieve the MDGs of some 7—8 years requires a re¬evaluation of what can be done with the tools available now and which can address the problems faced by the majority of poor people afflicted by disabling conditions which together represent a global burden greater than malaria or TB.”30

The underlying point is that it is important to realize that the Big Three are only three of the challenges facing poor people and that their health remains tightly linked to the full range of development challenges, including food security, education, gender equality, water and sanitation, and poverty reduction. This has been neglected by donors and those active in global health. Stronger and integrated health systems focused on the NTD’s can provide a platform to sustain a successful fight against these diseases while advancing the other health priorities of developing countries, including child and maternal health and in the future, chronic disease.

The arrival of a new US Presidential Administration, guided by the vision of Barack Obama, presents a profound opportunity to renovate international health assistance and priority areas. A more expansive and holistic vision of the world¬wide health assistance delivered by the US has been called for by the US National Research Council, Global Health Council, global health policy leaders, and others. 28-31

The Millennium Declaration, adopted by world leaders at the United Nations in September 2000, establishes an ambitious set of eight millennium development goals to

Combating Neglected Tropical Diseases

Context and Integration

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eliminate extreme poverty, hunger, and disease by 2015. The sixth goal, “to combat HIV–AIDS [human immunodeficiency virus infection–acquired immunodeficiency syndrome], malaria, and other diseases,” specifically addresses the health and economic impact of infectious diseases. This goal has led to considerable and welcomed large¬scale financial support through ambitious initiatives sponsored by the Group of Eight (G8) governments to fight HIV/AIDS, malaria and tuberculosis (H-M-T). However, programs to combat many of the “other diseases,” particularly the NTDs have not yet benefited from such support.

The WHO’s new Global Plan to Combat NTDs 2008–2015 recognizes the importance of an integrated action to control and eliminate NTDs31; fighting NTDs supports all eight of the United Nations Millennium Development Goals, including those that target the eradication of hunger; promoting primary education (by increasing school attendance); empowerment of women; reducing child mortality; improving maternal health; combating H-M-T; and ensuring environmental sustainability, such as in urban slums. Once more funding from the U.S. government is acquired, integrating with these public and private sector partnerships that (see Table 3) exist will accelerate and amplify NTDs treatment delivery.

The High¬Level Forum on the Health Millennium Development Goals has described partnership activities as the best practice for moving forward a global agenda.32 There are additional opportunities to bundle the control of NTDs with the control of malaria and HIV–AIDS.33 Such measures could exploit the geographic overlap of these conditions as well as potential synergies in public health control, with resultant cost savings by both funding and donor governments. For example, a recent study showed that the administration of drugs for NTDs by community distributors resulted in a nine¬fold increase in the distribution of anti¬malaria bed nets. 34

The Global Network for NTDs, (http://gnntdc.sabin.org/), led by Peter Hotez, MD, PhD, has established the infrastructure to provide preventive drug packages and to develop, test, and distribute a new generation of tools to control these diseases. In January 2009 the GNNTD received 34 million dollars from the Bill and Melinda Gates Foundation to support these endeavors. The first five years of our proposal would focus on amalgamating existing infrastructure and delivery potential (e.g. physical and human resources) of national programs rolled out under former President Bush (e.g., President’s Emergency Plan for AIDS Relief (PEPFAR) and U.S. President’s Malaria Initiative. Central to this is aligning these national programs with international programs, such as The Global Fund, Global Alliance for Vaccines and Immunization (GAVI) and many others that the US supports as a member country of the United Nations as well as other, private¬sector partnerships. The global community independently and in unison under the UN umbrella, with the US, is now well positioned to control or eliminate NTDs in developing countries.Three Partnerships and Initiatives with Which Delivery of NTDs can Integrate and “piggy back” on:

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Combating Neglected Tropical Diseases

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Policy ProposalProposedFinancing

On Feb. 4, 2008 President Bush submitted a $3.1 trillion budget request to Congress for FY09. Much of this budget was just approved in March 2009 by President Obama. The request includes $39.5 billion for the International Affairs account, a 16% increase over the fiscal year 2008 (FY08) enacted base budget passed in December 2007. Within the International Affairs budget, $20.3 billion is dedicated to poverty reduction programs with approximately $6.5 billion designated for core global health programs. These programs include maternal and child health, family planning, HIV/AIDS and other infectious diseases. The domestically¬focused Labor¬Health and Human services account provides an additional $800 million for direct services abroad through the Centers for Disease Control and Prevention, taking total proposed FY09 global health funding to approximately $7.1 billion.35

ProposalOur proposal promotes a “diagonal approach” which in its initial focus (first five

years) will be used to fortify basic health infrastructures (horizontal) and elimination of the major NTDs (vertical). In 2008, President Bush allocated ~$350 million to NTDs and the integration of rapid integrated packages. We propose to allocate, beginning in 2010, a 10¬year, three fold expansion of the NTD budget, based on the US fiscal year 2009 (FY09) budget. In this framework approximately 15% of the existing (FY09) International Affairs health program budget, or 1.065 billion dollars yearly would be devoted to research towards, and actual integration of the existing NTDs and Big Three control programs and partnerships. It is important to note that this 15% is from 7.1 billion allocated directly to global health programs and does not include the 20.3 billion directed for poverty alleviation, but nevertheless promises profound synergism with poverty reduction goals. In this view our proposal equals ~ 4% of total International Affairs budget.

Analysis of Our ProposalFeasibility

The use of mass drug administration for the control of NTDs, sometimes called preventive chemotherapy, was pioneered in China. Hotez and Colleagues have provided multiple reviews.36,37 In China the widespread use of praziquantel and other measures (including snail control and health education) is leading to the control of schistosomiasis.38

Egypt has also succeeded in reducing the prevalence of lymphatic filariasis and schistosomiasis and their associated morbidity.39 Multiple versions of integrated control have been proposed, tested and are at some level under way in Burkina Faso, Ghana, Mali, Niger, Nigeria, Togo and Uganda.40

The history of such successes has laid a foundation for the establishment of numerous partnerships to control or eliminate these infections (see Table 3).41 A critical

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Combating Neglected Tropical Diseases

step occurred in the late 1980s, when Merck created the first partnership to control a neglected tropical disease; this partnership was formed to deliver donated ivermectin to treat onchocerciasis.42 To date, more than 300 million treatments have been provided, initially through the Onchocerciasis Control Program and subsequently through the African Programme for Onchocerciasis Control and the Onchocerciasis Elimination Program for the Americas.43 In addition, Pfizer has partnered with the International Trachoma Initiative to donate azithromycin as part of a comprehensive program to eliminate trachoma,44 and GlaxoSmithKline is working with the WHO, Merck, and the Global Alliance to Eliminate Lymphatic Filariasis to add donated albendazole, a treatment for lymphatic filariasis, to mass¬drug¬administration regimens of either diethylcarbamazine or ivermectin also used to treat onchocerciasis as well as lymphatic filariasis and other lesser seen but similar filarial diseases.45 These efforts have resulted in the near elimination of lymphatic filariasis as a public health problem in Egypt, Samoa, and Zanzibar46 and of trachoma as a public health problem in Morocco.47 Similarly, using donated generic formulations of praziquantel from MedPharm and other organizations, the Schistosomiasis Control Initiative and African health ministries have significantly reduced the disease burden of urinary and intestinal schistosomiasis in schoolchildren in six countries in East and West Africa,48,49 and the widespread use of albendazole and mebendazole is having an effect on school performance and the disease burden of soil¬transmitted helminth infections,50especially ascariasis and trichuriasis among children. Dracunculiasis is on the verge of being eradicated.51 Many of these large¬scale programs are being conducted in response to several World Health Assembly resolutions calling for the global control or elimination of the NTDs with the greatest disease burden as a public health problem by the year 2020 or sooner.52

BenefitsIn aggregate, the NTDs cause approximately 534,000 deaths annually. This substantial

number of deaths is considerably less than that resulting from lower respiratory tract infections, diarrheal diseases, HIV–AIDS, or malaria. However, if metrics are applied to the disability and poverty associated with these diseases, the NTDs can be shown to constitute large burdens on the health and economic development of low¬income countries. In terms of disability¬adjusted life¬years, the NTDs together rank closely with diarrheal diseases, ischemic heart disease, cerebrovascular diseases, malaria, and tuberculosis as being among the most important health problems in the developing world. In addition, the effect of the NTDs on worker productivity causes annual losses of billions of dollars.

Populations in such regions are infected with several different parasites and have multiple NTDs simultaneously.53 Therefore, the delivery of a rapid¬impact package of drugs is beneficial. The rapid¬impact package is so named because the drugs can be quickly deployed by community¬based distributors, with rapid reductions in disabilities, improvement in well¬being, and, in some cases, interruption of disease transmission. This package includes a combination of four of six drugs: albendazole or mebendazole, praziquantel, ivermectin or diethylcarbamazine, and azithromycin. Through coordination of the partnerships to control neglected tropical disease and the public health infrastructures they create, these drugs can be delivered at an estimated cost savings of 26 to 47% as

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compared with nonintegrated programs.54 Because four of the six rapid¬impact drugs are donated, the projected average total cost is as low as $0.40 to $0.79 per person per year in sub¬Saharan Africa.55 Thus, an entire at¬risk population of approximately 500 million could be treated for $400 million or less annually.56 Such estimates are a fraction of the annual costs of treatments with antiretroviral agents or directly observed multi¬drug therapy for tuberculosis.57 Moreover, the most prevalent NTDs, especially hookworm infection and schistosomiasis, are frequently endemic with malaria and HIV–AIDS and they have considerable coexisting or synergistic effects. 58

The most deadly condition among young children that arises from co¬infection with malaria and NTDs in sub¬Saharan Africa is anemia.59 Anemia accounts for one half of malaria deaths in young children; chronic anemia in young children is also correlated with impaired cognition and school performance and impaired growth. Many of the NTDs, but especially two of the most common ones in sub¬Saharan Africa, hookworm infection and schistosomiasis cause substantially more severe anemia than that which results from only malaria infection. In addition to their correlation with anemia severity, there is evidence that hookworm and schistosomiasis promotes susceptibility to malaria, so that treating NTDs would work in synergy with other measures to reduce malaria incidence.60 Therefore, combining classic malaria preventative measures with hookworm and schistosomiasis treatment allows for a cost¬effective method to prevent malaria infection, treat malaria, reduce cases of anemia and save lives.

Studies have also suggested that pregnant women in particular may benefit from drug access to 62,63 NTDs when infected with malaria.61 These studies have shown that the anaemia caused by hookworm and schistosomiasis substantially exacerbates the anaemia caused by malaria, resulting in growth and learning impairments in their children and increased maternal morbidity and low birthweight. Thus, there is a strong argument for adding anthelminthic drugs to any malaria preventative treatments for pregnant women in sub¬Saharan Africa.

Finally, by facilitating health and a better quality of life in other countries through disease eradication and control the U.S. could utilize what some call “medical diplomacy”¬ the establishment of positive relations with the U.S. and other countries through healthcare assistance, which promises more for the world’s impoverished countries and the U.S. than any ambassador or traditional diplomatic efforts.

EstimatedDeliverablesBrandy and Colleagues64 propose that if the programs for Five of these NTDs –

lymphatic filariasis, onchocerciasis, schistosomiasis, STH and trachoma were integrated in 2006 in sub¬Saharan Africa that:

10.5 million children would have been protected from STH disease • 14.7 million adults would have been protected from STH disease • 5 million cases of skin disease and itching would have been prevented • 569,000 women who got pregnant in the next year would have been • protected from anemia 105,000 people would have been prevented from getting severe kidney or •

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Combating Neglected Tropical Diseases

bladder disease 62,500 cases of hydrocele would have been prevented • 28,400 cases of lymphedema would have been prevented • 25,500 cases of blindness would have been prevented • 4,600 people would have been prevented from getting life¬threatening liver • disease

Molyneux, Hotez and Colleauges, have promulgated significant analysis on this idea. They estimate that $2 to $9 per disability¬adjusted life¬year (i.e., per life¬year lost to disability or premature death) would be averted by de¬worming,65 with up to 47% in cost savings through integration.66 This cost for the coordinated control or elimination of the seven most prevalent NTDs represents a relatively inexpensive but potent public health intervention. It also represents a priority investment in human capital and a reduction in global poverty.67

Because of the unparalleled severity of SSA health needs and the potential highest lives saved/dollars ratio that this region possesses, SSA demands the highest priority of supporters of improving global health. In SSA, the three deadliest killers are HIV, malaria, and tuberculosis. Treatment and preventative methods for the Big Three are costly and uncoordinated. There exists a known group of NTDs that overlap geographically with the Big Three in SSA and that significantly augment the morbidity and clinical outcomes of the Big Three, in addition to directly causing ill health and poverty. These NTDs are not burdened by expensive pharmaceutical patents, and consequently the treatments for most NTDs are often donated by large pharmaceutical companies or can be purchased for a few cents per treatment. For these reasons they represent one of the “quickest wins” in terms of reducing overall disease burden and combating extreme poverty in Africa. Thus, a novel and cost¬effective way of treating and preventing HIV, malaria, and tuberculosis infection while simultaneously combating poverty and improving the overall state of health in Africa is to finance both research towards, and actual integration of, rapid impact packages of the treatments for the NTDs into existing programs for the Big Three.

Conclusion

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1 Regions, UNAIDS, http://www.unaids.org/en/CountryResponses/Regions/default.asp (25January 2009).2 Malaria and Development in Africa, American Association for the Advancement of Science,http://www.aaas.org/international/africa/malaria91/background.html (25 January 2009).3 Tuberculosis, March 2007, WHO, http://www.who.int/mediacentre/factsheets/fs104/en/ (25January 2009).4 Hotez PJ, Molyneux DH, Fenwick A, Kumaresan J, Sachs SE, Sachs JD, Savioli L. Control ofneglected tropical diseases. N Engl J Med. 2007 Sep 6;357(10):1018-27.5 Hotez PJ, Thompson TG. Waging Peace through Neglected Tropical Disease Control: A USForeign Policy for the Bottom Billion. PLoS Negl Trop Dis. 2009;3(1):e3466 The Global Network for NTDs, (http://gnntdc.sabin.org/), led by Peter Hotez, MD, PhD,7 Ault SK. Intersectoral approaches to neglected diseases. Ann N Y Acad Sci. 2008;1136:64-9.8 Hotez PJ, Molyneux DH, Fenwick A, Kumaresan J, Sachs SE, Sachs JD, Savioli L. Control ofneglected tropical diseases. N Engl J Med. 2007 Sep 6;357(10):1018-27.9 Hotez PJ, Molyneux DH. Tropical anemia: one of Africa’s great killers and a rationale forlinking malaria and neglected tropical disease control to achieve a common goal. PLoS NeglTrop Dis 2008; 2: e270.10 Hotez PJ, Molyneux DH, Fenwick A, Ottesen E, Ehrlich Sachs S, Sachs JD. Incorporating arapid-impact package for neglected tropical diseases with programs for HIV/AIDS, tuberculosis,and malaria. PLoS Med. 2006 Jan;3(5):e10211 Brady MA, Hooper PJ, Ottesen EA. Projected benefits from integrating NTD programs in sub-Saharan Africa. Trends Parasitol 2006;22:285-291.12 Hotez PJ, Molyneux DH, Fenwick A, Ottesen E, Ehrlich Sachs S, Sachs JD. Incorporating arapid-impact package for neglected tropical diseases with programs for HIV/AIDS, tuberculosis,and malaria. PLoS Med. 2006 Jan;3(5):e10213 Hotez PJ, Thompson TG. Waging Peace through Neglected Tropical Disease Control: A USForeign Policy for the Bottom Billion. PLoS Negl Trop Dis. 2009;3(1):e34614 Hotez, PJ. Forgotten people and forgotten diseases: The neglected tropical diseases and theirimpact on global health and development. Washington (D. C.): American Society ofMicrobiology; 2008.15 Beyrer, C; Villar, JC; Suwanvanichkij, V; Singh, S; Baral, SD, et al. Neglected diseases, civilconflicts, and the right to health. Lancet. 2007;370:619–627. doi:10.1016/S0140-6736(07)61301-4.16 Hotez PJ, Molyneux DH, Fenwick A, Kumaresan J, Sachs SE, Sachs JD, Savioli L. Control ofneglected tropical diseases. N Engl J Med. 2007 Sep 6;357(10):1018-27.17 Ramaiah, KD; Radhamani, MP; John, KR; Evans, DB; Guyatt, H, et al. The impact oflymphatic filariasis on labour inputs in southern India: Results of a multi-site study. Ann TropMed Parasitol. 2000;94:353–364.18 Amazigo, U; Noma, M; Bump, J; Benton, B; Liese, B, et al. Chapter 15: Onchocerciasis. In:Jamison DT, Feachem RG, Makgoba MW, Bos ER, Bingana FK, et al., editors. Disease andmortality in sub-Saharan Africa. 2nd Edition. Washington (D. C.): World Bank; 2006. pp. 215–222.19 Hotez PJ, Thompson TG. Waging Peace through Neglected Tropical Disease Control: A USForeign Policy for the Bottom Billion. PLoS Negl Trop Dis. 2009;3(1):e346Harhay and Lee. 2009. Combating Neglected Tropical Diseases - 18 -20 Hotez PJ, Thompson TG. Waging Peace through Neglected Tropical Disease Control: A USForeign Policy for the Bottom Billion. PLoS Negl Trop Dis. 2009;3(1):e346

Sources Utilized

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21 Hotez, PJ; Brooker, S; Bethony, JM; Bottazzi, ME; Loukas, A, et al. Hookworm infection. NEngl J Med. 2004;351:799–80722 Hotez PJ, Thompson TG. Waging Peace through Neglected Tropical Disease Control: A USForeign Policy for the Bottom Billion. PLoS Negl Trop Dis. 2009;3(1):e34623 Collier, P. The bottom billion: Why the poorest countries are failing and what can be doneabout it. Oxford: Oxford University Press; 2007.24 Beyrer, C; Villar, JC; Suwanvanichkij, V; Singh, S; Baral, SD, et al. Neglected diseases, civilconflicts, and the right to health. Lancet. 2007;370:619–627. doi:10.1016/S0140-6736(07)61301-4.25 Hotez PJ, Thompson TG. Waging Peace through Neglected Tropical Disease Control: A USForeign Policy for the Bottom Billion. PLoS Negl Trop Dis. 2009;3(1):e34626 Hotez, PJ; Bethony, J; Costa Oliveira, S; Brindley, PJ; Loukas, A. A multivalent anthelminthicvaccine to prevent hookworm and schistosomiasis: A new tool for disease control andsustainable poverty reduction. Expert Rev Vaccines. 2008;7:745–752.27 Hotez PJ, Molyneux DH, Fenwick A, Kumaresan J, Sachs SE, Sachs JD, Savioli L. Control ofneglected tropical diseases. N Engl J Med. 2007 Sep 6;357(10):1018-27.28 Molyneux DH. Control of human parasitic disease: Context and overview. Adv Parasitol.2006;61:1-4529 Molyneux DH. Combating the “other diseases” of MDG 6: changing the paradigm to achieveequity and poverty reduction? Trans R Soc Trop Med Hyg. 2008 Jun;102(6):509-19.30 Molyneux DH. Combating the “other diseases” of MDG 6: changing the paradigm to achieveequity and poverty reduction? Trans R Soc Trop Med Hyg. 2008 Jun;102(6):509-19.31 World Health Organization.. 2007. Global Plan to Combat Neglected Tropical Diseases 2008–2015. Document WHO/CDS/NTD/2007.3. WHO. Geneva .32 Molyneux DH, Hotez PJ, Fenwick A. “Rapid-impact interventions”: how a policy of integratedcontrol for Africa’s neglected tropical diseases could benefit the poor. PLoS Med 2005;2:e336-e336.33 Sachs JD, Hotez PJ. Fighting tropical diseases. Science 2006;311:1521-1521.34 Blackburn BG, Eigege A, Gotau H, et al. Successful integration of insecticide-treated bed netdistribution with mass drug administration in central Nigeria. Am J Trop Med Hyg 2006;75:650-655.35 Global health Council. http://www.globalhealth.org/images/pdf/budget_analysis_fy09.pdf36 Hotez PJ, Molyneux DH, Fenwick A, Kumaresan J, Sachs SE, Sachs JD, Savioli L. Control ofneglected tropical diseases. N Engl J Med. 2007 Sep 6;357(10):1018-27.37 Brady MA, Hooper PJ, Ottesen EA. Projected benefits from integrating NTD programs in sub-Saharan Africa. Trends Parasitol 2006;22:285-29138 Wang LD, Chen HG, Guo JG, Zeng XJ, Hong XL, Xiong JJ, Wu XH, Wang XH, Wang LY,Xia G, Hao Y, Chin DP, Zhou XN. A strategy to control transmission of Schistosoma japonicumin China. N Engl J Med. 2009 Jan 8;360(2):121-8.39 Ramzy RMR, El Setouhy M, Helmy H, et al. Effect of yearly mass drug administration withdiethylcarbamazine and albendazole on bancroftian filariasis in Egypt: a comprehensiveassessment. Lancet 2006;367:992-999.Harhay and Lee. 2009. Combating Neglected Tropical Diseases - 19 -40 Hotez P, Raff S, Fenwick A, Richards F Jr, Molyneux DH. Recent progress in integratedneglected tropical disease control. Trends Parasitol. 2007 Nov;23(11):511-4.41 Molyneux DH. “Neglected” diseases but unrecognized successes -- challenges andopportunities for infectious disease control. Lancet 2004;364:380-383.42 Hotez PJ, Ottesen E, Fenwick A, Molyneux D. The neglected tropical diseases: the ancientafflictions of stigma and poverty and the prospects for their control and elimination. Adv ExpBiol Med 2006;582:22-33.

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43 Boatin BA, Richards FO Jr. Control of onchocerciasis. Adv Parasitol 2006;61:349-394.44 Kumaresan J. Can blinding trachoma be eliminated by 20/20? Eye 2005;19:1067-1073.45 Mohammed KA, Molyneux DH, Albonico M, Rio F. Progress towards eliminating lymphaticfilariasis in Zanzibar: a model programme. Trends Parasitol 2006;22:340-344.46 Mohammed KA, Molyneux DH, Albonico M, Rio F. Progress towards eliminating lymphaticfilariasis in Zanzibar: a model programme. Trends Parasitol 2006;22:340-344.47 Levine R, What Works Working Group. Controlling trachoma in Morocco. In: Millions saved:proven successes in global health. Washington, DC: Center for Global Development, 2004:83-9.48 Kabatereine NB, Fleming FM, Nyandindi U, Mwanza JCL, Blair L. The control ofschistosomiasis and soil-transmitted helminths in East Africa. Trends Parasitol 2006;22:332-339.49 Fenwick A. New initiatives against Africa’s worms. Trans R Soc Trop Med Hyg2006;100:200-207.50 Bethony J, Brooker S, Albonico M, et al. Soil-transmitted helminth infections: ascariasis, andhookworm. Lancet 2006;367:1521-1532.51 Ruiz-Tiben E, Hopkins DR. Dracunculiasis (Guinea worm disease) eradication. Adv Parasitol2006;61:275-309.52 World Health Organization. Deworming for health and development: report of the ThirdGlobal Meeting of the Partners for Parasite Control. Geneva: World Health Organization, 2005.53 Raso G, Luginbuhl A, Adjoua CA, et al. Multiple parasite infections and their relationship toself-reported morbidity in a community of rural Côte d’Ivoire. Int J Epidemiol 2004;33:1092-1102.54 Brady MA, Hooper PJ, Ottesen EA. Projected benefits from integrating NTD programs in sub-Saharan Africa. Trends Parasitol 2006;22:285-291.55 Molyneux DH, Hotez PJ, Fenwick A. “Rapid-impact interventions”: how a policy of integratedcontrol for Africa’s neglected tropical diseases could benefit the poor. PLoS Med 2005;2:e336-e336.56 Molyneux DH, Hotez PJ, Fenwick A. “Rapid-impact interventions”: how a policy of integratedcontrol for Africa’s neglected tropical diseases could benefit the poor. PLoS Med 2005;2:e336-e336.57 Molyneux DH, Hotez PJ, Fenwick A. “Rapid-impact interventions”: how a policy of integratedcontrol for Africa’s neglected tropical diseases could benefit the poor. PLoS Med 2005;2:e336-e336.58 Brooker S, Clements AC, Hotez PJ, et al. The co-distribution of Plasmodium falciparum andhookworm among African schoolchildren. Malar J 2006;5:99-99. Druilhe P, Tall A, Sokhna C.Worms can worsen malaria: towards a new means to roll back malaria? Trends Parasitol2005;21:359-362. Kjetland EF, Ndhlovu PD, Gorno E, et al. Association between genitalschistosomiasis and HIV in rural Zimbabwean women. AIDS 2006;20:593-600. Borkow G,Harhay and Lee. 2009. Combating Neglected Tropical Diseases - 20 -Bentwich Z. HIV and helminth co-infection: is de-worming necessary? Parasite Immunol2006;28:605-612.59 Brooker S, Akhwale W, Pullan R, Estambale B, Clarke SE, et al. (2007) Epidemiology ofplasmodium-helminth co-infection in Africa: Populations at risk, potential impact on anemia,and prospects for combining control. Am J Trop Med Hyg 77: (Suppl 6)88–98.60 Druilhe P, Tall A, Sokhna C (2005) Worms can worsen malaria: Towards a new means to rollback malaria? Trends Parasitol 21: 359–362. doi:10.1016/j.pt.2005.06.011.61 Hotez PJ, Molyneux DH. Tropical anemia: one of Africa’s great killers and a rationale forlinking malaria and neglected tropical disease control to achieve a common goal. PLoS NeglTrop Dis 2008; 2: e270.62 DHM receives grants from the UK Department for International Development, which includesa Brooker S, Clements AC, Hotez PJ, et al. The co-distribution of Plasmodium falciparum and

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hookworm among African schoolchildren. Malaria J 2006; 5: 99.63 Malaria J 2006; 5: 99. Brooker S, Hotez PJ, Bundy DA. Hookworm-related anaemia amongpregnant women: a systematic review. PLoS Negl Trop Dis 2008; 2: e291.64 Brady MA, Hooper PJ, Ottesen EA. Projected benefits from integrating NTD programs in sub-Saharan Africa. Trends Parasitol 2006;22:285-29165 Laxminarayan R, Mills AJ, Breman JG, et al. Advancement of global health: key messagesfrom the Disease Control Priorities Project. Lancet 2006;367:1193-1208.66 Brady MA, Hooper PJ, Ottesen EA. Projected benefits from integrating NTD programs in sub-Saharan Africa. Trends Parasitol 2006;22:285-291.67 Canning D. Priority setting and the `neglected’ tropical diseases. Trans R Soc Trop Med Hyg2006;100:499-504.

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Covering Kids:Making Public Insurance for Children Equitable and Effective

Proposal by Thomas Hou and Alan Hsu

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About the Authors

My name is Thomas Hou, School of Arts and Sciences, Class of 2009. I major in Health and Societies and am particularly interested in topics of primary care, health care reform and law and health. I greatly enjoy participating in academic and other extracurricular activities on and off campus. After graduation, I hope to work briefly in the health care or legal field and eventually attend law school.

My name is Alan Hsu, College of Arts and Sciences (Biology, Health and Societies) Class of 2009. My interest in healthcare and politics was strengthened by an internship at the Agency for Healthcare Research and Quality. Next year, I’ll be working somewhere in Philadelphia’s non-profit sector as a Philly Fellow, while applying to medical school. Ultimately, I hope to enroll in an MD/MPH program and work in public health and pediatrics.

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Executive SummaryThe issue of uninsured and under-insured children is serious. Data from the Kids

Inpatient Database from the Agency of Healthcare Quality and Research suggest that children who lack insurance are at a greater risk to die during their inpatient stay at a hospital than those who have private insurancei. This outcome is consistent with numerous studies, which have demonstrated that uninsured children have reduced access to and lower utilization of basic medical servicesii, iii. The solution, on the surface, appears to be simple: provide health insurance to these children.

Certainly, the infrastructure to do this is partially in place. Government-run programs such as Medicaid and the State Children’s Insurance Program (SCHIP) have been providing insurance for many children. Despite large gains in enrollment in these public programs, however, the proportion of uninsured children in the United States actually increased between 2006 and 2007iv. It is troubling to note that among these uninsured children, over 70% are already eligible for either Medicaid or SCHIPv.

We believe that the provision of insurance to these uninsured-but-eligible (UBE) children represents a targeted and politically feasible approach to reducing the current levels of uninsured children. Also pertinent, we believe, is an enhancement of the primary care system which is fundamental to providing essential care once these children become insured.

Our objectives in this proposal are thus, 1) to increase enrollment of UBE children by making the enrollment process easier to navigate, 2) to reduce beneficiary confusion by streamlining the administrative systems of Medicaid and SCHIP to prepare for eventual assimilation of the two programs, and 3) to encourage states to promote innovative means of reimbursing pediatricians with the intent of reinvigorating primary care.

It is oft-repeated that “no one is against providing insurance for all children” but how to do it has often been politically contentious and thus stalled in the legislative process. Ensuring that those who should already be covered actually do have insurance is a strong step towards remedying the uninsurance situation.

Covering Kids

Context and Importance of the ProblemProblemSynopsis:UninsuredChildrenintheUnitedStates

In the past decade, the role of public insurance in “filling the gaps” in private insurance coverage has increased; expansions and redefinitions of federal and state government-administered programs such as Medicaid and SCHIP have increased the percentage of children covered by public insurance from 21.3% of all children in 1996 to 32.8% in 2007iv.

However encouraging this increase may appear, the trends belie the fact that the total percentage of uninsured children is actually on the rise, from 11.0% of all children in 2006 to 13% in 2007iv. Even more troubling is the fact that nearly 75% of the children who are currently uninsured fall under the eligibility requirements for both SCHIP and Medicaidv. It is among these uninsured-but-eligible children that an effective means to reduce overall uninsurance exists.

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CurrentPolicy:AnAmalgamofprogramsandacronyms,SCHIPandStatesWe argue that the current structure of the public insurance system for children is flawed

in its ability to achieve total, comprehensive coverage. This is evident in the high percentage of eligible children who are among the uninsured. The reasons for non-enrollment of these eligible children are numerous: distrust and unfamiliarity of public programs, the complexity of navigating the system and any required paperwork, unawareness of the program’s existence, and non-conducive enrollment rules, among othersvi. For instance, several states including California, faced with impending limitations on strained SCHIP budgets, have proposed more frequent re-enrollment periods, increasing the risk of foregone deadlines and subsequent dis-enrollment from SCHIP for those who are eligible or already enrolledvii.

In establishing SCHIP, the Balanced Budget Act of 1997 allowed three options for the creation of a public program, which was to be administered by the state: a targeted expansion of Medicaid, the creation of a separate SCHIP program, and varying combinations of the twoviii. With states given the freedom to choose, a national amalgam of SCHIP programs has arisen, with various degrees of federal-state partnerships, each with distinct funding and reimbursement structures, and a multitude of eligibility requirements. For example, SCHIP income eligibility in Idaho is 185% of the federal poverty level, while in Pennsylvania, eligibility for the same program is 300% of the FPLix. Furthermore, while numerous states have adopted joint applications for enrollment and renewal in Medicaid and SCHIP, separated programs in the states that have not yet amalgamated the two applications, such as Hawaii, may contribute to the difficulty in navigating both programs, potentially contributing to difficulties in enrollmentix.

An example of the flaws in a current SCHIP system comes from a 2004 study of the California SCHIP programx. In that study of the early years of SCHIP operation in California (1998-2000), high variations in SCHIP enrollment are found across county and racial and ethnic lines. These variations play a significant role in causing different outcomes measures of children under SCHIP and children without SCHIP. Specifically, children covered under SCHIP are less likely than those without SCHIP to be hospitalized for many common preventable hospitalizations; nonetheless, within the SCHIP-covered cohort, strong variations exist that are attributable to the inefficiencies of SCHIP coverage within the state and the lagging result of the variations in the quality of primary care, which is also an important issue and one that our plan seeks to address.

Thus, alleviating the high proportion of UBE children and making the current system more navigable and targeted in terms of care are objectives our plan seeks to address.

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Our PlanIn order to address the issues regarding the current system we propose the

following:

Enhance accessibility and user-friendliness of enrollment within the programs; 1. Initiate built-in incentives to increase enrollment of uninsured-but-eligible childrenStreamline the administrative systems of Medicaid and SCHIP to prepare for 2. eventual assimilationReform SCHIP reimbursement schemes and encourage states to explore innovative 3. means that encourage pediatricians and primary care providers

Implementation of Our PlanImprovingretentionandtake-up

The preponderance of uninsured-but-eligible children has been attributed to two factors: poor retention, leading to disenrollment, and poor initial take-up. In 2006, one third of uninsured children were shown to have had been enrolled in either Medicaid or SCHIP the previous year, indicating that retention was a major causative factor for UBE children . One factor inhibiting consistent retention has been the renewal process. States that have switched towards an active renewal process requiring justification paperwork on behalf of the applicant have experienced disenrollment rates nearly ten times greater than when a passive renewal system was in place . Thus, we propose that states adopt an application process designed to reduce the burden of proof on the applicant. Benjamin Sommers has suggested pre-printed forms with available patient information from the previous year’s enrollmentxii. An additional initiative that we propose would be to construct computer network linkages between state employment data that identify families with children who would be at risk for uninsurance or disenrollment and to amplify notices closer towards the renewal period. This could be part of a greater trend in a push to have available the option to apply for the SCHIP and Medicaid by online application in all states by 2011.

Tied with the problem of poor retention due to renewal is the frequency of renewal periods. More frequent renewals have been tied to increased disenrollmentvii. Thus, we propose that periods in between re-enrollment become fixed for a period of one year without any pause of coverage. Furthermore, we propose that states institute a fixed reenrollment date for all SCHIP beneficiaries. Marketing this date to beneficiaries would ensure that confusion as to when to reenroll is diminished. Furthermore, beneficiaries would have a minimum of 12 months without reenrollment after the start of coverage. Thus, in the case that beneficiaries begin enrollment less than 12 months before the fixed reenrollment date, they could wait until the next reenrollment period.

In order to increase take-up of eligible children who are not yet in the system, we propose for state and federal investment into community-based efforts towards increasing awareness of public programs and increasing application transparency to potential

Covering Kids

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beneficiaries. “Covering Kids and Families,” a campaign instituted in 2006 on behalf of the Robert Wood Johnson Foundation, instituted television ads, phone hotlines, and community-wide events in order to raise awareness on public coverage . We propose that the federal government provide grant awards to encourage these types of community awareness efforts on a national scale.

Finally, in terms of enrollment, we propose that the federal government implement a “funding pool” from which money can be allocated to bolster state insurance programs that exceed enrollment and access benchmarks. This would serve as a positive-reinforcement initiative to increase enrollment as opposed to the current negative-reinforcement policy of withholding federal matching funds if enrollment levels are not met.

StreamliningtheSystemDropout rates among children previously enrolled in either Medicaid or SCHIP, has

been shown to be 45% higher in states which run the two programs separately . We propose that federal and state governments prepare to assimilate the programs under one single administrative oversight. Assimilation of the Medicaid and SCHIP programs will have the shared purpose of cutting administrative costs of running two separate programs and incorporating shared resources, such as coordinated databases of beneficiaries. Furthermore, running joint applications and re-enrollment requests between Medicaid and SCHIP, as is already in practice in most states, will cut down on confusion of applicants. Computer systems could be implemented to automatically sort the applicant towards the appropriate program.

PrimaryCareandReimbursementReformWe also propose to reform the reimbursement mechanisms of SCHIP to favor

pediatricians and other primary care physicians. Primary care and preventive medicine play a crucial role in not only increasing the overall wellness of the children but also reducing avoidable pediatric hospitalizations and reducing costs for the system . We urge that states be allowed to explore creative means of SCHIP reimbursement, including using capitation methods like those employed in managed care, that give incentives that favor pediatricians and primary care providers. The federal government should give oversight and advice but allow states some flexibility in experimenting with new reimbursement structures. Furthermore, states can mandate periodical primary care visits for children under SCHIP. Pediatricians should in turn be reimbursed favorably, especially those who provide quality and thorough care to their patients. States can also offer additional loan forgiveness programs for medical school students to become primary care pediatricians, like those already in place under various National Health Service Corps programs. We believe that states should be the main experimenters in reimbursement reform as they have greater leverage over local SCHIP policies and can act as laboratories for primary care and insurance reform . Overall, we believe that primary care reform should accompany SCHIP reform, especially because the primary care system, including the pediatricians, need to effectively and efficiently handle any additional patients after increased coverage for children.

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FundingSuccessful implementation of our proposal will no doubt require a great amount of

political capital, but also financial capital. However, it is pertinent to note that our proposal does not call for a structural or fiscal expansion of the SCHIP or Medicaid program. Rather, the purpose of the plan is to make the existing program more efficient. Thus, it is our belief that our plan will more effectively use the money that has already been allocated to SCHIP by the Congressional Budget Office, and would not require a significant amount of additional funding outside what is already required to initiate coverage of currently eligible children.

Savings in the system will undoubtedly arise from the diminished administrative costs from the reduction of redundancies in SCHIP, such as repetitive paperwork and processing. With combined Medicaid and SCHIP administrative programs, there exists the potential for savings due to economies of scale, as opposed to separate administration of both programs.

In addition to administrative savings, increased coverage of children, who previously would have been uninsured, will likely reduce reliance on the emergency department as a source of primary care and reduce the costs of serious and expensive complications further down the line, such as preventable hospitalizations. Providing insurance to currently uninsured children has been shown to be cost-effective, with the capacity of an intervention to provide up to an additional $36,330 per QALY . On a scale of millions, this would amount to significant cost savings as a result of providing insurance to UBE children.

Outside these cost-savings, which we believe would by themselves could financially justify our program, various other funding opportunities exist. Lottery proceeds, additional taxes on gambling revenues, and alcohol taxes could be avenues towards funding a children-directed program, although further analysis would be required as to the political feasibility and efficiency of these as funding sources. States can explore such taxes to generate revenue for their individual SCHIP reforms and needs.

Furthermore, given that children’s insurance and public health initiatives for children are politically attractive, we believe there would be an impetus among private foundations and grantmakers to provide funding for outreach programs enrolled UBE children. Indeed, the Robert Wood Johnson Foundation has recently launched a $15 million initiative to seek innovative enrollment strategies for Medicaid and SCHIPvi. Other grantmakers can be urged to collaborate with states and form partnerships for funding SCHIP.

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The subject of providing insurance for children has been debated for decades, even with the recent passage of SCHIP expansion bill. Despite the debates, it does appear that in the minds of voters and in the current political environment, further SCHIP reform is very politically feasible. In Washington, SCHIP expansion and reform enjoy unusual bipartisan support, starting from the end of the Bush presidency . According to Mark Peterson, the early years of the Obama presidency are a historic moment conducive toward reform, especially in health care. Obama enjoys much political support and inherits a strong mandate for reform, despite the condition of the economy . Furthermore, Peterson notes that primary care reform, like children’s health insurance, in general is also an issue with bipartisan support, which strengthens the likelihood of our plan’s passage as we target solutions to both systems. Combining that fact with our dual emphasis on federal oversight and states’ experimentation, our proposal will be agreeable for both political parties and many constituencies.

The initiatives which we propose will be both politically and economically feasible, and we believe that the resulting long-term effects of this reform will be of enormous benefit for governments, providers and the children in terms of providing and expanding coverage. Our proposal will help to reduce total uninsurance in an effective and efficient manner that incorporates primary care reform. However, merely expanding coverage does not immediately equate to better health or guaranteed provision of quality health care for children, as we have indicated. Better health for children should involve more reforms that aim for an efficient and equitable system. On the “iron triangle” of health, providing access to coverage is only one step towards a better health care system, but it is a crucial step.

Conclusion

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Healthcare Cost and Utilization Project. Agency for Healthcare Research and Quality. http://hcupnet.ahrq.gov/ Federico SG, Steiner JF, Beaty B, Crane L, Kempe A. “Disruptions in insurance coverage: patterns and relationship to health care access, unmet need, and utilization before enrollment in the State Children’s Health Insurance Program.” Pediatrics. 2007 Oct;120(4):e1009-16. Szilagyi PG, Holl JL, Rodewald LE, Shone LP, Zwanziger J, Mukamel DB, Trafton S, Dick AW, Raubertas RF. “Evaluation of children’s health insurance: from New York State’s CHild Health Plus to SCHIP.” Pediatrics. 2000 Mar;105(3 Suppl E):687-91. Health Insurance Status of Children in America, First Half 1996-2007: Estimates for the U.S. Civilian Noninstitutionalized Population under Age 18” Medical Expenditure Panel Survey. Agency for Healthcare Quality and Research. “Why Aren’t Eligible Uninsured Children Enrolling in Medicaid and SCHIP?” The Urban Institute. Abstr Acad Health Serv Res Health Policy Meet. “Maximizing Kids’ Enrollment in Medicaid and SCHIP: What Works in Reaching, Enrolling and Retaining Eligible Children” Robert Wood Johnson Foundation. www.maxenroll.org From Medicaid to uninsured: drop-out among children in public insurance programs.” Sommers B. Health Policy, Harvard University. Balanced Budget Act of 1997: SCHIP. US. Department of Health and Human Services. http://aspe.hhs.gov/health/schip/pl105-33.htm Individual State Profiles. Statehealthfacts.org. The Henry J. Kaiser Family Foundation. Bermudez, D. and Baker, L. Relationship between SCHIP Enrollment and Hosp. for ACSC in California. Journal of Health Care for the Poor and Underserved. 16 (2005): 96–110. Sommers BD. “Why millions of children eligible for Medicaid and SCHIP are uninsured: poor retention versus poor take-up.” Health Aff (Millwood). 2007 Sep-Oct;26(5):w560-7. Epub 2007 Jul 26. Herndon JB, Vogel WB, Bucciarelli RL, Shenkman EA. “The effect of renewal policy changes on SCHIP disenrollment.” Health Serv Res. 2008 Dec;43(6):2086-105. Epub 2008 Jun 3. Covering Kids and Families Results. Robert Wood Johnson Foundation. http://www.coveringkids.org/about/results/ Sommers BD. “The impact of program structure on children’s disenrollment from Medicaid and SCHIP.” Health Aff (Millwood). 2005 Nov-Dec;24(6):1611-8. A Gadomski, et al. “Impact of a Medicaid Primary Care Provider and Preventive Care on Pediatric Hospitalization”, Pediatrics 101, no. 3 (1998). C. Volden, “States as Policy Laboratories: Emulating Success in the Children’s Health Insurance Program”, American Journal of Political Science 50, no. 2 (April 2006). Chen JY, Swonger S, Kominski G, Liu H, Lee JE, Diamant A. “Cost-effectiveness of insuring the uninsured: the case of Korean American children.” Med Decis Making. 2009 Jan-Feb;29(1):51-60. Epub 2009 Jan 6. J. Oberlander, “Presidential Politics and the Resurgence of Health Care Reform”, New England Journal of Medicine, 335, no. 21 (Nov. 22, 2007). Mark Peterson. Powerpoint presentation and personal interview. Leonard Davis Institute of Penn, February 20, 2009.

References

Covering KidsCovering Kids

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HSAs & the FDA:The Role of the Federal Government in Reducing Health Care Costs

Proposal by Adam Bloch and Doug Eckhardt

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About the Authors

Originally from Scottsdale, AZ Adam Bloch is a sophomore in the College majoring in Philosophy, Politics, and Economics. Adam is the chair of the Student Life committee on the Undergraduate Assembly, the Head Delegate from Penn to the Ivy Council, and a member of Sigma Alpha Epsilon.

Douglas Eckhardt is a Wharton sophomore from Arizona, with tentative concentrations in OPIM and Marketing. At Penn, Doug has focused on a number of different activities, ranging from forensic debate to symphony orchestra. He became interested in public policy and the public sector at a young age, working on one US Senator’s reelection campaign.

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Executive SummaryIn the ongoing battle to combat rising healthcare costs, it is obvious that the federal

government needs to take action. Although, many support the federal government taking a more active role in healthcare, the evidence is overwhelmingly in favor of a free market approach to solving the healthcare crisis. Indeed, the simple solution would appear to be universal government controlled healthcare; however, our nation’s legislators must carefully consider the potential negative consequences of such a measure. In fact, by utilizing market forces the key initiatives outlined below will affect much greater reform than any single plan might.

First, a careful reform is needed of the system by which citizens pay for their medical costs. Instead of making marginal changes to the current insurance bureaucracy, the creation of Health Savings Accounts (HSAs) would market forces to increase efficiency and reduce costs. In fact, HSAs would eliminate the moral hazard problem fostered by the insurance system. Instead of an “under-the-weather” individual paying a visit to the hospital merely because his visit will cost him nearly nothing, the owner of an HSA will carefully consider how much he truly needs medical care, for it will be his own money he is spending. Because the patient has an incentive to consider cost, the demand for medical services will be reduced and the efficiency of health care delivered will improve.

Second, deregulation of the pharmaceutical and technology industries would improve quality of care and reduce healthcare costs. Bodies such as the Food and Drug Administration have long hampered private industry’s efforts to innovate. Reduced regulation from the FDA would result in the development of more medications, and would expedite their availability to the public. Indeed, without the high costs drug companies shoulder for FDA regulation, drug costs would be greatly reduced.

ProblemSynopsis:RisingCostsIn 2005, health spending was 18.8 times 1970s levels, while the Consumer Price

Index was merely 5 times 1970s levels1. Unfortunately, the state of America’s health care system is clear: costs are rising faster than consumers of health care can afford. These consumers, including employers, private citizens, and the federal government, are quickly finding themselves unable to afford proper health care. In one poll, “Fifteen Percent of employers said that they offset premium increases with smaller raises for their employees”2. Even the government is hit hard by rising costs as Medicare and Medicaid expenses in 2007 totaled $735 billion3. These numbers are staggering, especially considering that “if the federal government were to deposit funds into an interest-bearing account to cover all of Medicare’s future deficits, the amount it would have to deposit in 2005 would be $68.4 trillion.”4

Context and Importance of the Problem

HSAs and the FDA

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CurrentPolicy:Employer-Insured,Self-Insured,Government-Insured,andUninsuredFor the 84.7% of Americans with health insurance, coverage comes from their

employer-purchased plans, individually-purchased plans, or government-purchased plans. The remaining 15.3% of Americans, or about 45.7 million people were without health insurance for some period of time during 2007.

While 59.3% of Americans are provided health insurance by their employers, premiums for family coverage have increased 78%, while wages have risen 19% and inflation has risen 17% since 2001, according to a 2007 study by the Kaiser Family Foundation. Since most employer-based health insurance is provided by managed care organizations, lower prices from healthcare providers are often negotiated by these organizations given their market power.

These lower prices for the managed care organizations spell doom for the 8.9% of Americans who purchase their own health insurance. The cost-sharing mechanism, through which these patients pay significantly higher rates than those in employer-groups, is just one of the ways higher costs are realized.

The most detrimental effect on costs may well come from the 27.8% of people who receive their health insurance from the government. Programs including Medicare and Medicaid are continuing to see increased enrollment with decreased participating physicians. And despite the fact that little more than a quarter of the population uses these programs, public spending represented over half of all health spending. Of course, this has a great deal to do with age; however, the lack of individual responsibility certainly plays a role.

The final key factor is the problem of the uninsured. Of the 45.7 million Americans who were uninsured for at least part of 2006, for example, 12.1 million were eligible for current programs, 20 million were not US citizens, 3.5 million had incomes over $75,000, and 10.1 million had incomes over $50,000. Furthermore, of the 45.7 million uninsured, 45% of them were uninsured for fewer than four months, and only 16% were uninsured for more than two years.

ProposedPolicy:HealthSavingsAccountsandFDAReform

Many of the increasing costs of health care result from overuse. This is not surprising considering the marginal cost of medical care for those with insurance approaches zero. The best solution to lowering costs is to increase this marginal cost by giving health care users more individual responsibility over their spending. By allowing tax-deductible Health Savings Accounts (HSAs), the United States Congress would allow consumers to control costs at every point of service in the healthcare delivery system.

As study after study has shown, HSAs reduce the moral hazard currently associated with health care spending. Consumers will play an active role in improving the value of healthcare services. HSAs must, of course, be nuanced enough to cover those unable to save enough as well as to cover those with long-term medical costs. These are all concerns that can be answered, with the result being lower cost health care.

ProblemSynopsis:HighDrugPricesintheUSPrescription drug prices are higher in the United States than anywhere else in the world.

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Even the most common drugs, such as Lipitor, a Pfizer product which lowers cholesterol, cost $392 at Drugstore.com for 90 40mg tablets in the United States, but can be purchased for $138 in India and $199 in Europe. The research and development costs of prescription drugs range from $500 million to $2 billion per drug5, and substantially contribute to the high prices for prescription drugs in the U.S. The FDA-mandated regulations compound the expense to develop new drugs, costs which are passed onto healthcare consumers.

CurrentPolicy:FDAregulationThe randomized clinical experiments required by the FDA to show safety and

effectiveness, are often themselves ineffective. For some illnesses, it may take years of testing to prove safety and efficacy (during which period many patients could be helped). Additionally, for drugs whose effects are minor, multitudes of people are required for clinical trials. Finally, finding a sufficient number of patients who suffer from the particular illness is often difficult and costly. The extra costs that must be absorbed by the drug companies force them to charge much higher prices for the first 10 years during which they have a monopoly on the drug.

ProposedPolicy:EliminateTestingRequirementsThe safety and efficacy tests, when added to the FDA’s power, expanded significantly

the timeline between discovery and approval. Given the fact that the cost to bring a drug to market is anywhere from $500 million to $2 billion, the reduction in the testing requirement would make great strides towards reducing the cost of prescription drugs. Since 25% reductions in phase three lengths lower capitalized total cost per approved drug by 16%, and 50% reductions in time lower cost by 29%, the decrease in time resulting from the elimination of these extraneous trials would certainly lower the cost of prescription drugs6. According to Nobel Laureate Gary Becker’s research, FDA requirements have raised drug development costs by 40%7. These costs are then passed along to consumers.

Additionally, the lowering of these barriers to bring a drug to market would encourage innovation by the drug companies since the sunk cost of a failed drug would be significantly less. An increased variety of new drugs could be offered helping to lower the drug companies’ average sunk cost and promoting price reductions.

Finally, and perhaps most importantly, the ability of a pharmaceutical company to market and sell a drug earlier allows the company to increase its profit. Since a particular drug is only patent protected for 20 years, and FDA compliance often means a drug will spend up to 10 years going through trials, pharmaceutical companies must gain as much profit during the 10 years the drug may be on the market as possible. By allowing drugs to come to market sooner, these companies would have a longer amount of time over which to spread the costs of research and development.

HSAs and the FDA

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As often discussed over the past election cycle, there are significant problems with our current approach to healthcare in the United States. However, while almost everyone would agree that cutting costs is integral to fixing our healthcare system, there seems to be widely varying opinions as how best to achieve this goal. Indeed, the pervasive popular opinion centers on universal healthcare, the idea being that if everyone purchases insurance (or has some form of insurance) costs for the collective will decrease. While this may have an effect vis-à-vis cutting costs for emergency care, it doesn’t reduce the cost of practicing or providing medicine—it only changes the way we pay for things, namely that at some point, the wealthier citizens will pay more to help pay for the poorer citizens, be it through taxes, insurance, or at the hospital itself. At the point where costs don’t change significantly from healthcare system to system, the best fixes lie within the bureaucracy of medicine.

Accordingly, we believe there are a number of current policies that arbitrarily add cost to healthcare with little or no improvement in quality. While many people can discuss a few often mentioned controversies, such as tort reform, for the purposes of this discussion, we will focus on the less mentioned, though just as important, problems. The following discussion will therefore focus on two main issues: insurance coverage in America, and the FDA.

It seems obvious that some form of coverage is necessary for a functioning healthcare system, and we agree. We find, however, that the current insurance system adds costs and inefficiencies to healthcare delivery. Firstly, the insurance companies make profit. While this doesn’t seem undesirable on face, the problem resides more in that insurance poses an unnecessary cost, adding an extra fee on the money that goes between patient and physician. Granted, perhaps the insurance system adds benefit to practicing medicine in terms of spreading out the cost over a group of people, but if this is the case, then the insurance industry itself is inefficient simply by right of it being too diffuse. The fact that the insurance industry is spread across every state adds innumerable cost to medicine, and actually disadvantages the minority population in smaller states, as these states would have significantly less draw for insurance companies. The insurance system in the country, at best, should be consolidated, so as to reduce the cost of providing insurance and increase options for every citizen.

Prompted by Upton Sinclair’s evocative novel about the meatpacking industry, The Jungle, public outcry forced the hand of the United States Congress in 1906 to pass the Pure Food and Drugs Act. While the original law only applied to “misbranding”, the Food and Drug Administration quickly attempted to augment its role in regulating drugs. In a 1911 Supreme Court decision, the FDA’s power was limited to providing information, and it was forbidden from restricting consumers’ choices.

With President Franklin Delano Roosevelt’s signing of the 1938 Food, Drug, and Cosmetics Act, though, the FDA saw its role expand in the drug industry. With this new piece of legislation came the ability of the FDA to begin regulating drugs, and the

Critique of the Proposed Policy

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organization has never looked back. In fact, the FDA has significantly expanded its role in the drug approval process with the current three phase system. After the three phases are completed, the FDA then weighs the efficacy of the drug, an action provided by the Kefauver-Harris Amendments of 19628.

Unfortunately, this process has ballooned as the number of clinical trials required before a drug can be approved has more than doubled in the past twenty years. With this increased scrutiny has come the principal harm of the FDA: higher drug costs. In a joint study by professors from Tufts University, the University of Rochester, and Duke University, the costs imposed by FDA regulation amount to more than $800 million per new drug on average. These costs are twofold, both in direct out-of-pocket expenses for the drug companies and in the lost profits the drug could have generated with earlier arrival to the market. Each of these two costs amounts for about 50% of the total $800 million burden the FDA imposes on the consumers of drugs9. Further, many consumers have long trusted the judgment of the FDA, believing that its certification guarantees the safety and effectiveness of new medications. While this may be true for many products, evidence suggesting the FDA isn’t quite as objective as its government status should imply, slowly increases. Indeed, evidence of political tampering at the FDA has recently surfaced10.

The Policy Recommendation of Adam Bloch and Doug Eckhardt is a careful reform of Health Savings Accounts and the Food and Drug Administration.

HealthSavingsAccountsThe terms of the Health Savings Accounts plan are as follows:

Universal Compliance: Every citizen aged 18 and older must register an individual plan.Exception: If an individual is attending an accredited 4-year university/college, he may delay acquiring an individual plan for four years, or the completion of his undergraduate degree, whichever comes sooner.

A plan will consist of the following: A high deductible insurance plan with any commercial insurance company• For the deductible limit, see below:• A health savings account (HSA)•

On deductibles:Every individual will be required to acquire an insurance plan with a deductible • initially equal to $2000There is no limit to the potential size of the insurance deductible, although $2000 • is the base number.The individual is never forced to increase the size of his insurance deductible (i.e. • he could have $5000 in his HSA but still retain the $2000 insurance deductible).The individual can increase the size of his deductible a theoretically infinite number •

Policy Recommendations

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of times during the fiscal year.The individual can only decrease the size of the deductible at the end of the fiscal • year.

We anticipate a few critiques of the preceding plan, which therefore has the following qualifications:An individual must meet twice his deductible limit in HSA contributions within the first

eight years of opening his HSA, and therefore must deposit a sum equal to 1/8 of twice the deductible limit each year, and thus for a deductible of X, an individual must deposit at least X/4 (2X/8) every year until he has reached twice the deductible.

For example, the individual will deposit at a rate of $2000/4=$500 per year for the first eight years to reach the $4000 HSA requirement for the $2000 deductible. Note: if the individual has met his deductible requirement in his HSA, he is not

forced to either continue depositing funds in his HSA or, if he chooses to deposit more money in his HSA, to deposit at any particular rate. That is, once the deductible requirement is met, he is no longer forced to deposit additional funds at the X/4 rate, with one exception, explained below.

The individual will, of course, be allowed to deposit money at a much higher rate—he could deposit $10,000 in his first year and thus take an insurance deductible of $5000.Note: the HSA requirement is twice the insurance deductible, and to increase

the insurance deductible beyond the base $2000 the HSA requirement for the new deductible must be met prior to switching insurance plans.

For example, if an individual has $4000 in his HSA, thus fulfilling the deposit requirement for the base $2000 insurance deductible, he must increase the money in his HSA to $5000 before he can acquire a $2500 insurance deductible.

While individuals will be permitted to channel deposits intended to pay for their insurance premiums through their HSA, these deposits will not satisfy the X/4 rule, intended to build each individual’s HSA. That is, any funds individuals add to their HSA to pay insurance premiums must be added on top of the standard X/4 addition where it applies.

There are three limits imposed on the amount of money deposited into the HSA:No individual may deposit any amount into his HSA such that the total net value of

the HSA would be equal to more than $1.5 million.Individual’s aged 60 and older may not add more than $50,000 to their HSA account

per each fiscal year.An individual cannot deposit more than $15,000 in his HSA until he has acquired an

insurance deductible of at least $4,000.Similarly, if an individual has increased the funds in his HSA to more than $15,000 with

an insurance deductible of $4,000, he cannot decrease his insurance deductible until the funds in his HSA have once again dropped below the $15,000 level.

Similar to the above rule, an individual may not deposit more than $50,000 in his HSA until he has acquired an insurance deductible of $6,000. Additionally, he may

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not deposit more than $100,000 in his HSA until he has acquired an insurance deductible of $8,000. He may not deposit more than $500,000 in his HSA until he has acquired an insurance deductible of $15,000.

Should the individual find the need to spend money from his HSA he must replenish it at the rate of X/4 (where X is again equal to the insurance deductible) per year until the insurance deductible is again covered by the HSA requirement of twice the deductible.

For example, if the individual saved up enough money over a span of years to amass $8000 in his HSA with an insurance deductible of $4000, and spent any amount of his HSA, he must replenish it at a rate of X/4, or $4000/4=$1000, per year even if he initially deposited the money at a much lower rate. Again, if he only spent $500, thus decreasing the HSA to $7500, he need only deposit an additional $500 to bring his HSA back to $8000. If, however, he spent $1500, decreasing the HSA to $6500, he must deposit money at a rate of $1000 per year until the $8000 insurance deductible requirement is met.

He may decrease the insurance deductible.Note above exception regarding HSA’s worth more than $15,000.To review the exact procedure for replenishing funds, a given individual has an HSA

account value of $8,000 with a deductible of $4,000 in base year zero, and spends $2,000 in year one. At the end of year one the account will note that the individual’s HSA is below the requirement of $8,000. Even though the account was depleted in year one, the individual need not begin fulfilling the X/4 fund replenishment rule until year two, whereupon replenishing procedure continues to apply.

On investments:Individuals will be allowed to invest funds contained in their HSA, with the following rules:

Individuals must maintain un-invested cash levels equal to 5 times their insurance • deductible, with an absolute base deductible requirement of $4,000 to invest.The individual may not invest the first $20,000 (5*X where X=$4,000 in this case) • in his HSA—he may only invest additional funds deposited on top of the first $20,000—which will increase as his insurance deductible increases.Should the individual increase his insurance deductible to $6,000, for example, he • must then maintain un-invested cash levels of $30,000 in his HSA.Individuals may not leverage other assets when investing their HSA, nor may they • leverage the HSA in other investmentsAll capital gains will not be taxed, but capital losses may not be deducted.• Should the individual have a health expenditure depleting the un-invested cash • below $20,000, he must deposit additional funds to meet the $20,000 requirement in the given fiscal year.He may also sell investments, to increase cash levels.• The requirement regarding cash levels in the individual’s HSA does not apply if the • individual chooses not to invest funds.

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On individuals living at or below 100% and 200% of the federally defined poverty level:The federal government will subsidize these individuals at two separate rates—

individuals living at or below 100% of the poverty line will be subsidized at the rate of 2 federal dollars per personal dollar spent, and individuals living between 100% and 200% of the poverty line will be subsidized at the rate of 1 federal dollar per personal dollar spent. That is, the federal government will match individual expenditures listed rates ($2 to $1, and $1 to $1)

If an individual should choose to receive this additional funding (he is not required to) he is required to have an insurance deductible of $1,000 (with HSA requirement of $2,000)Note, this is less than the standard minimum insurance deductible of $2,000.

Individuals living above 200% of the federally defined poverty level will not be eligible for reduced insurance deductible requirements and must maintain at least an insurance deductible of $2,000.

The individual receiving these funds may not raise his insurance deductible beyond $1,000 until he ceases to receive funding.

While these individuals are subject to the normal HSA/insurance guidelines the federal government will subsidize two components of their health expenses at the above rates

The federal government will subsidize each individual’s insurance premium expenseThe federal government will subsidize medical expenses paid out of each individual’s

HSAFor example, for an individual living at 100% of the poverty level, the individual will

need to invest $250 per year in his HSA to meet the $2,000 requirement for a $1,000 deductible as well as approximately $800 each year for a hypothetical insurance premium costing $2,400 annually

The government will subsidize the extra $1,600 required to pay for the insurance premiums (at the rate of 2 federal dollars per personal dollar)

Assuming the individual has no medical expenses, his $250 addition to his HSA will remain in his HSA. If, however, the individual has medical expenses requiring him to spend money from his HSA the federal government will subsidize every dollar spent from the HSA (not dollars added to the HSA). So if the individual in question has medical costs of $2,000, to meet his insurance deductible, his HSA must pay out $333, which will be matched at the 2:1 ratio by the federal government, which will pay $666.

On the individual/HSA/insurance policy framework:The individual will purchase an insurance policy from a private insurer and open an

HSA with a private bank. These institutions will then submit data detailing these transactions to a new branch of the IRS, which will merely monitor HSA levels against the insurance deductible of the reported policy.

The bank and insurer will impose the restrictions on the funds in the HSA against the size of the insurance deductible, refusing to allow individuals to increase

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insurance deductibles without proper documentation of an HSA with adequate funds, or conversely, refusing HSA additions pushing funds beyond $15,000 should the individual not maintain an insurance deductible of $4,000. The IRS will ensure that additions to HSA’s of the proper amount occur.

If an individual should fail to meet the X/4 deposit requirement for a given fiscal year, for example, the IRS will assess penalties in his taxes, taxing the additional amount and adding it directly to the individual’s HSA. Additionally, for his failure to comply with the X/4 deposit, the individual will be subject to a federal penalty equal to 20% of his individual X/4 value.

On insurers:Insurance companies will no longer be forced to operate on a state-by-state basis—

they will exist on the national level. Individuals may cross state boundaries to purchase insurance policies from the insurers. Essentially, health insurance companies will become national companies.

Insurers may only offer the high-deductible insurance plans discussed in the policy.Insurers must assume 100% of the necessary costs after the individual has met the

deductible, with the following exceptionThe insurance company must assume 100% of the cost between the individual’s

insurance deductible limit and $20,000 in medical expenses. After the first $20,000 medical expenses, the individual must again meet his insurance deductible limit (i.e. again pay $2,000 for an insurance deductible of $2,000) whereupon the insurance company must again meet 100% of the cost for the next $20,000 (total cost $40,000). This pattern will continue for the remainder of medical costs.

The insurer is required to regulate insurance deductibles, as per requirements imposed by the HSA plan to the best of its abilities, not allowing individuals to decrease the insurance deductible below $4,000 should they have and HSA value in excess of $15,000, for example.

These requirements don’t restrict insurance companies from offering long-term wellness incentive plan components of the high-deductible policies (plans that reward individuals for maintaining or improving their fitness levels) or similar incentive insurance plans.

Upon marriage or civil union, two individual’s HSA’s will be pooled together, the insurance deductible minimum will be raised to $4000, and the cap on HSA deposits raised to $30,000, with a $8,000 insurance deductible necessary to deposit beyond the $30,000 limit. Similarly, all other qualifications will be multiplied by a factor of two: cap on HSA additions becomes $3 million; contributions after age 60 become $100,000; insurance deductible requirement for individuals living at 100 and 200% of federally defined poverty line and also receive additional federal funding doubles from $1,000 to $2,000; etc.

Dependent minors will be covered under the umbrella of their legal guardian’s HSA and insurance plan. However, for each dependant minor, the minimum insurance deductible requirement will be raised by $500, with all other rules continuing to

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apply.The penalty at which money withdrawn from an individual’s HSA for non-medical

uses and prior to age 65 will be taxed is equal to the top marginal tax rate. Upon reaching age 65, the individual may withdraw funds from his HSA for non-medical purposes without penalty.

All deposits made to HSA’s will be made with pre-tax dollars, lowering each individual’s taxable income.

Advantages:First and foremost, the recommendation discussed above is a significant simplification

of the current system. Americans are frustrated with the healthcare system currently in America mostly because of its costs, but also because many payment systems are needlessly complex. The plan will save many individuals time in addition to money.

Second, an HSA and high deductible insurance system decreases the moral hazard that plagues the current medical care system. By requiring consumers of medical care to use their own money to pay for most medical expenses (see chart below), HSAs increase individual responsibility over medical expenditures. With increased responsibility comes an increased incentive to spend only on those medical expenses which are absolutely necessary. This will reduce the demand for medical services, thereby reducing the cost of these services. The HSA should significantly ratchet down healthcare demand, freeing doctors’ time to then focus on the sicker, needier patients. In addition to decreasing demand, the nature of moral hazard and the direct impact of the medical expenses on the consumer should involve the consumer to a much greater degree. Consumers might be less inclined to use high priced brand name drugs, such as Lipitor, when similar drugs, such as Lescol, might have a lower price. At the very least, involving patients more in the medical process should tailor medical services more to their individual need.

Third, by limiting the options for health insurance, there will be simplification of the insurance industry, thereby allowing consumers to be better customers and ensuring the best and least expensive insurance companies survive. Essentially, because insurance companies will exist on a national level, and because they are limited to providing high deductible insurance plans, insurance companies will begin to compete solely on cost. This intra industry competition should eliminate the weaker health insurance companies, and begin the slow consolidation of the insurance giants able to compete on the national level. This will ensure that only those firms who can cut costs the most will survive. By cutting costs, the insurance companies will continue to drop their premium prices in constant competition for customers. Eventually, the insurance industry should contract into a natural monopoly, which will maintain low prices given the ever-present threat of new competition. While insurance companies will eventually cut costs and therefore prices, the immediate effect of legalizing the sale of insurance across state lines will impact the consumers in states with inflated insurance prices, as well as create more freedom for a significant portion of Americans who are currently constrained by employers’ insurance plans.

Fourth, those below and just above the poverty line will have the opportunity to receive top-shelf medical care unrestricted by such bureaucracies as Medicaid. Furthermore, with more responsibility over their medical expenses, these impoverished medical consumers

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will begin to save more money through their HSA, allowing them better medical care and more flexibility when they pay their medical bills.

Fifth, this program will effectively eliminate the need for Medicare and Medicaid. The maximum exposure of the government to poverty-assistance programs contained in the above plan will be $119 billion. This is a significantly smaller sum than the current $735 billion the federal government’s annual Medicare and Medicaid expenditures. Our plan will more efficiently pay for the poorest people in our nation, and will provide the proper incentives to allow people to plan for their future healthcare needs.

Lastly, our system provides the proper incentives to allow the richest Americans to take on more personal risk, and thereby decreases insurance costs and healthcare costs for poorer Americans. Because HSAs allow individuals to deposit money pre-tax, and because there are caps on the amount of money allowed to be deposited per a specific insurance deductible, the richest Americans have strong incentives to take higher insurance deductibles, and therefore pay for themselves for over 90% of expected medical costs (see chart below). In doing so, rich Americans will use less private insurance companies, and therefore decrease the cost of insurance for everyone else.

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FoodandDrugAdministrationThe terms of the Food and Drug Administration plan are as follows:

The drug testing and approval component of the FDA will be abandonedThe FDA will continue to function, but only in its role regulating food suppliesThe FDA will become a composite of drug testing information

It will create a database of drug testing information, clinical trials, and other relevant usage information, which will be made available to the public.

The FDA will collect the studies conducted by private drug regulators, which it will add to its drug information database.

AdvantagesGiven the high costs the Food and Drug Administration’s testing requirements impose

on drug companies and thereby on consumers, the removal of these requirements would decrease the cost of producing new pharmaceuticals by as much as 40%12. Of course, without the FDA’s testing requirements, many consumers would be wary of the safety and effectiveness of the drug they are buying. There are two very simple free-market solutions to this problem that would impose no additional cost on the consumer.

First, the principle of brand management would require that pharmaceutical companies only market safe and effective drugs. If a pharmaceutical company were to begin flooding the market with drugs that either harmed people or failed to cure that which they claimed to cure, then the company would lose credibility and people would cease to purchase the drug. Thus, with their reputations on the line, drug companies would ensure that safety and efficacy is guaranteed before bringing a drug to market.

Second, we expect the creation of independent rating agencies for pharmaceutical and medical products, similar to the accounting companies who perform audits of other corporations. These drug ratings agencies would begin to evaluate the safety and effectiveness drugs. After the drug research and development process, these rating agencies would then test the drug to ensure that it accomplished that which it claimed without significant harm to its consumers. The ratings agency would certify that the approved drug causes no significant side effects, as suggested by the clinical trials. The ratings agencies would be wary to approve drugs without a proper process, as their reputations, their sole product, would be at stake. Indeed, pharmaceutical companies would only want the strictest ratings agencies to approve their drugs, because otherwise doctors and patients might reasonably assume that the clinical trial process performed by a suspect agency was compromised.

America has been slowly moving away from standards of negligence towards standards of liability in the courts. This transformation might be fine for some products, but poses unnecessary hardship for the medical industry. The healthcare industry is unique in that its services are of critical importance to its consumers, and yet its services, because of their highly technical nature, pose significant risk. Clinical trials might suggest that 100% of the recipients of a specific drug will experience specific clinical outcomes, and yet one patient in one billion, because of some bizarre physiological quirk, might suffer a deadly result. Standards of liability have eroded the significance behind the FDA’s approval rating,

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even leaving pharmaceutical companies liable for damages caused by a product with a stellar usage history of over 50 years13. The truth is, even decades of clinical research cannot guarantee results for every patient, and so pharmaceutical companies must no longer certify drugs’ safety through the FDA, but rather provide information and standards of comparison, to then allow consumers to assume the risks. Pharmaceutical companies, the FDA, and private ratings companies cannot certify a given drug’s safety or effectiveness for every patient, and so they should not mislead consumers about all the possible effects of the given drug.

In addition to lowering the costs of the drugs, eliminating the approval function of the FDA would save thousands of lives every year. Patients would have access to potentially life-saving drugs much earlier. Indeed, if a terminally-ill patient is within months of his death and he learns of a drug that might possibly safe his life, he would not hesitate to purchase the drug, regardless of its rating or proven effectiveness14. The mere chance of effectiveness means he would buy it. Indeed, even if a drug doesn’t attempt to save a life, many patients still might risk death or serious side effects for improvements in the quality of their lives15.

Lastly, because pharmaceutical companies would be releasing new drugs without the false gold standard certification given by the FDA, they would likely price new medications much lower. New products would no longer be certified as completely safe, and so pharmaceutical would need to price medications lower in order to persuade otherwise hesitant consumers. Because new pharmaceuticals would enter the market at lower prices, pharmaceutical companies would find themselves facing considerable pressure from all manner consumer groups should they ever attempt to raise prices in the future.

1 Wells Fargo Insurance Services2 Healthy Competition: What’s Holding Back Health Care and How to Free It, Page 223 http://www.usatoday.com/news/washington/2007-10-08-medicaid_N.htm 4 Healthy Competition: What’s Holding Back Health Care and How to Free It, Page 225 http://content.healthaffairs.org/cgi/content/abstract/25/2/420 6 http://www.ncbi.nlm.nih.gov/pubmed/12457421 7 http://www.fastercures.org/index.cfm/OurVoice/EssaysforChange/Gary_Becker_PhD 8 http://www.fdareview.org/history.shtml 9 DiMasi J.A., Hansen R.W., Grabowski H.G., The price of innovation: New estimates of drug development costs, (2003) Journal of Health Economics, 22 (2), pp. 151-185. 10 http://online.wsj.com/article/SB123629954783946701.html 11 http://www.meps.ahrq.gov/mepsweb/data_stats/MEPSnetHC.jsp12 http://www.fastercures.org/index.cfm/OurVoice/EssaysforChange/Gary_Becker_PhD13 http://www.washingtonpost.com/wp-dyn/content/article/2008/11/03/AR2008110300192.html14 http://online.wsj.com/article/SB123059825583441193.html15 http://www.drugs.com/comments/rofecoxib/vioxx.html

Endnotes

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Universal Health Care: A Market-Oriented Approach

Proposal by Corbett Brown, John Coglianese, Elliot Kim

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About the Authors

John Coglianese is a student in The College majoring in economics and mathematics. A graduate of Arlington High School in Massachusetts, John is an Eagle Scout and works as a backcountry ranger at Philmont Scout Ranch. John serves as the Chief Trip Leader of the Penn Outdoors Club.

Corbett Brown, a native of Arizona, is a Doctoral student in the Center for Biobehavioral Research of the School of Nursing. His research mentor is Stella Volpe PhD, RD, LD/N, FACSM, and his research focus is the prevention and treatment of overweight and obesity in families.

Elliot Kim is a sophomore pursuing a degree in History with a topical concentration in Intellectual History. Outside of WPBA, Elliot is part of Rebuilding Together, for the prevention of homelessness, and Diakanos, for the alleviation of homelessness. In his free time, he is a freelancing bassoonist.

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Executive SummaryOver the past few decades, health care spending as a percentage of GDP in the

United States has risen dramatically in comparison to other developed nations. Over the next 10 years, health care spending in the US is projected to almost double from $2.3 trillion last year to $4.2 trillion by 2016. In addition to nationwide increases in health care spending, households now face health care costs that are rapidly outpacing their income growth.

The concerns about growing health care costs have held the attention of policymakers across the country. Legislative responses to this problem include Massachusetts mandating health care coverage in an effort to mitigate rising costs from uninsured and underinsured citizens. Proposals currently being debated in Washington range from health insurance savings accounts to eliminating barriers for out¬of¬state insurance to further expansions of Medicare and Medicaid.

In this policy paper, we propose a universal health care system to address these problems. Our solution is founded on a market¬oriented approach that moves away from an employer¬based system. In addition, we propose a number of measures, including increased transparency and malpractice reform, to further address the current problems of health care. We aim to demonstrate how our solution cuts costs while increasing both quality and access.

OverviewoftheCurrentSystemIn 2007, Americans spent $2.3 trillion dollars on health care, which amounts to more

than $7,500 per person. Health care spending grows at more than twice the rate of inflation and is projected to represent almost 20% of GDP in ten years.

A large majority of Americans, over 60%, receive health coverage from their employer. This grew from the economy during World War II, when employers offered health benefits in order to attract workers without violating wartime wage controls. After the war ended, these health benefits were given tax exemption by the Federal Government.

Since then, health care costs have risen steadily, driven by many factors. The last half¬century has brought incredible advances in technology, from the MRI to heart bypass surgery to dialysis. In addition, the number of elderly Americans is larger now and it will continue to grow as the “baby boomer” generation retires. Medicine has become increasingly specialized as newer treatments are developed. As the health care industry has grown, more and more workers were needed to operate new technology and provide care to an increasing number of patients.

Finally, problems with access to health care and uneven quality of health care can distort costs. For many workers the insurance provided by their employer does not adequately meet their health insurance needs. Yet this may be their only option, if they can afford it, due to a private health insurance market that has been hindered by an unfair tax system. These uninsured or underinsured Americans are more likely to not receive treatment until later stages of illness, when a health problem is more expensive to treat and, in some instances,

Current Policy

Universal Healthcare

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fatal. In addition, the economic costs of job lock can create problems in the labor market. Uneven quality of health care can lead to more severe health problems for some segments of the population, raising the costs of treating these patients.

CostAccording to the National Coalition on Health Care, health care spending in the

United States has reached $2.3 trillion by 2007. It’s projected to reach $3 trillion in 2011 and $4.2 trillion by 2016. The United States spent 16% of its GDP on health care in 2005 and at its current rate of increase that percentage is expected to reach 20% by 2016. The exponentially rising cost of health care is now 4.3 times the amount spent on national defense.

The National Coalition on Health Care cites that health insurance premiums have consistently grown exponentially faster than inflation or workers earnings in recent years. Between 2002 and 2007, the cumulative growth in health insurance premiums was 78% against the cumulative inflation growth of 17% and cumulative wage growth of 19%. Premiums for employer¬based health insurance rose by 6.1% in 2007 and firms with less than 24 workers saw their insurance premium rise 6.8% in 2007.

The California Health Care Foundation observed that the amount spent per person increased 77% between 1995 and 2005.

Workers are paying $1,400 more in premiums annually for the same coverage they received in 2000. Since then, employment¬based health insurance premiums rose 100%. The Kaiser Family Foundation and Health and Research and Education Trust observes that premiums for employer¬sponsored health insurance have been rising four times faster on average than worker’s earnings since 2000.

Companies often sponsor only one plan for their employees, putting employees who would prefer a different plan in a difficult position. Even firms that offer multiple plans will sometimes add additional costs to choosing an alternative plan. Looking for an insurance plan on the open market is quite simply not an option for many Americans because of the extra taxes and higher premiums compared to employer¬sponsored health insurance. These extra taxes are due to the preferential treatment given to employer¬provided health insurance. The higher premiums result from the problem of adverse selection, which is not present in employer¬provided health insurance due to the risk pooling effect. Currently, employer¬provided health insurance may be the only option for many Americans.

Studies show that for employees of small businesses, the task of finding health insurance is even more difficult. Only half of firms with fewer than 10 employees offer health insurance, and even if they do offer it, the premiums may be significantly higher than a similar plan at a larger firm. About 25% of the firms employing between 10 and 24 workers offer no health benefits whatsoever. Yet almost half of the employees in this country work for small businesses. The rising costs of health care will continue to create problems for small business employees trying to find health coverage.

There are many causes for the exponentially rising costs. The growth in the population of older adults is driving up the costs of Medicare, increasing the number of eligible recipients. Elderly patients cost significantly more to care for and are much more susceptible to illness.

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The growing number of the uninsured and underinsured also drive up costs. Their inability to be covered for treatment at the preventive, primary and secondary stages of illnesses force them to be treated in emergency rooms when their illnesses are well developed and costly to treat. Finally, the lack of sufficient competitive pressure in the market for health insurance has led to increased costs for consumers. We will focus primarily on this last problem, since it affects the overwhelming majority of Americans.

AccessThe present health care system has left over 45 million Americans without health

insurance at any given time. This number has increased substantially in recent years due to an increasing number of employers that are dropping health insurance benefits. Some of the uninsured are either able to afford insurance or eligible to receive benefits through various government programs like Medicaid. Unfortunately many of the uninsured are unable to afford health insurance as health care costs have risen. These Americans place a strain on government budgets, which pay for emergency room visits when an individual has no health insurance. Moreover, individuals without health insurance are much less likely to receive preventive care, leading to the potential for more severe health problems in the long run.

Many Americans have health insurance, but are still unable to receive adequate care. Most insurance companies decline to cover preexisting conditions, leading many individuals to struggle to find care for a family member suffering from a preexisting condition. The system of employer provided health

coverage limits the ability of workers to choose a plan that would best fit their health care needs by providing all workers in a company with few options for health insurance, or even just one option. Individuals who need specialized care are often left to find an insurance plan on their own, without the same level of tax breaks. In essence, those who purchase health insurance individually in the current system pay more for the same coverage that an employer could purchase for less. This is due to the taxes levied on the individuals income before he or she could purchase health insurance, whereas the funds used by the employer are untaxed.

Employer provided health care also creates the problem of “job lock”, where a worker is reluctant to leave his or her current job for a more preferred job, because of the possibility of losing health care benefits. This problem is more evident in some demographics than others. Economists estimate that the job mobility for women in the labor force has been reduced anywhere from 30% to 50% by the problem of job lock. The issue becomes more important as workers near retirement. The severity of job lock in a particular state has been linked to an increase in early retirement. Workers who might have remained in the labor force have instead retired to receive Medicare benefits.

QualityThe United States is the leader in new medications as well as new testing and

treatment technologies which directly improve the quality of U.S. health care. Magnetic Resonance Imaging (MRI), used to view a patient’s internal physiology without an invasive

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procedure, is held by the U.S. more per one million individuals than any other country. And the survival rate after diagnosis of breast cancer is highest in the U.S. But according to the World Health Organization (WHO), the United States is 37th in terms of health care quality.

Upon closer examination, one must consider a confounding factor that pulls down the ranking for the U.S. We contend that it is less a function of actual quality of health care provided within the United States than the unequal distribution of health care. Innovated machines such as the MRI are expensive, and thus they are inaccessible to patients who cannot afford them. Even for breast cancer diagnosis, women of lower socioeconomic status cannot well afford them. The result is lower levels of preventive screenings, insufficient treatment, and thus higher mortality rates. So although the United States leads the world in advances in quality health care technologies, limited access from extraordinary costs render a poor distribution over socioeconomic differences. Much can be done to ensure broad application of high quality health care for those of all socioeconomic levels.

RestructuringtheTaxIncentivesThe first step in implementing our health care plan would involve restructuring the

Federal tax system to level the playing field for consumers. The current tax system treats health insurance provided by employers as exempt from income and payroll taxes. This amounts to a tax subsidy for employees who obtain health insurance through their employer instead of buying it as an individual. Subsidizing employer¬provided health insurance costs the government about $250 billion per year. Moreover, this tax subsidy applies to all tax brackets, so higher income Americans will receive a larger proportion of the subsidy than low income Americans, since higher tax brackets would pay a higher tax rate without the exemption.

We propose to extend this tax exemption to cover all income spent on health insurance. This will allow individuals to choose between employer provided insurance and insurance bought in an open market based on the characteristics of each plan instead of based on our tax policy. By leveling the playing field in this way, the decision of which insurance plan to purchase will now rest on the individual rather than on employers. Where employers might opt for a basic plan with low coverage to save costs, employees will now have the option of buying a different plan with more coverage if they would prefer it. This would end any instances of job lock due to health insurance. Employees would no longer face a financial penalty for moving to a more enjoyable job that lacks health insurance.

This tax exemption will also be means¬tested, eliminating the subsidy for higher income Americans who can afford to pay taxes on health insurance. For households with incomes less than 300% of the poverty line ($66,150 for a family of four), the full tax exemption from both income and payroll taxes would remain. For households between 300% and 400% of the poverty line, the amount of income spent on health insurance that is tax exempt will decrease proportionally (for example, households earning at 350% of the poverty line would pay taxes on half of their health care spending). Above 400% of the poverty line (over $88,200 for a family of four), income spent on health insurance would be subject to the full

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income and payroll tax rates. This will ensure that the subsidy will have the greatest impact on the budgets of those who are struggling the most to afford health insurance.

This reform would decrease government spending on tax exemptions for health insurance. As we will discuss, this plan would increase competitive forces in the health insurance market. The increased competition would lead to lower prices for health insurance, decreasing the amount the government spends on this subsidy. However, the government would have to pay for subsidies to people who were previously uninsured if they decide to go out and buy new insurance. Based on data provided by the Joint Committee on Taxation and the Medical Expenditure Panel Survey, we estimate that this increase in the cost of the subsidy would not exceed $35 billion. The government would also gain extra revenue from taxing health care spending that was previously exempt. We estimate that this increased revenue would be around $110 billion. Thus, on the whole, the cost to the government of providing this subsidy will decrease by approximately $75 billion per year, even after the uninsured have bought back into the system. This new revenue could be used for a variety of purposes, including increasing the amount of federal spending on Medicare and Medicaid or decreasing the deficit.

CompetitionMoving away from an employer¬based system is vital to reversing the rapid increase

in health care costs. Individuals will be able to choose from a wide variety of health insurance plans, exerting competitive pressures on health insurance companies to cut costs and increase the quality of care. Case studies of consumer driven health care initiatives have shown that high deductible plans can provide large savings for average families. Employees at Idaho Power can now save over a thousand dollars per year by switching to a high deductible plan. Moreover, they significantly decrease the cost to the employer of providing health coverage by cutting down on over¬consumption of health care. However, very few employers offer such plans. Moving away from an employer¬based system would give consumers the option of saving money by switching to a high¬deductible plan, or any type of plan they would prefer.

Switzerland has developed a consumer¬driven system that has produced a wide variety of plans. Plans with low deductibles and high premiums are popular, as are plans with high deductibles and low premiums. Insurers are able to offer two types of managed care, a general practitioner gatekeeper system and a system resembling American HMOs. Yet most consumers opt for insurance that offers free choice among any physicians and unrestricted access to the patient by any licensed physician. Other options include plans that offer discounts for nonsmokers and plans with premiums that decrease if the enrollee doesn’t use health insurance. Some consumers opt for a catastrophic insurance plan and pay other medical expenses out of pocket. Consumers in the United States would gain choices like these and others as competition forces firms to innovate in how they provide health coverage.

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TransparencyIn order to select an insurance policy that fits them best, consumers need a clear and

accurate view of the cost of health care to be purchased as well as a performance¬based assessment of the providers from whom they would receive care. The core cost benefits of reduced out¬of¬pocket payments and minimized increases in insurance fees result from the affect transparency has on consumers decision making. Consumers will choose relatively more inexpensive options while seeking out the most efficacious outcomes, thus limiting the increases in cost that would otherwise occur.

Although executive and legislative orders such as the Patient Safety and Quality Improvement Act of 2005 and the Value¬Driven Health Care Initiative of 2006 have increased transparency in some aspects over the last few years, it is too soon to say that sufficient transparency has been met. All, not some, confidential hospital reports must be made completely public. For example, while the Medicare Improvements for Patients and Providers Act of 2008’s Physician Quality Reporting Initiative allowed for a physician quality reporting system, it does not require it. So in even Medicare, basic transparency such as physician quality has still not been insured.

When moving away from the employer¬based system of insurance coverage, the cost benefits from the arising competition on part of the insurers may help offset the costs of inadequate transparency. Because it may be unwise to federally mandate transparency, consumers can rely on competition and the increasingly value¬driven health care market for lowered costs. As competition increases among insurers, increased transparency will be a key marketing tool used to attract consumers away from insurers with less transparency. The same phenomenon will probably occur among health care providers as well.

UniversalHealthCareUniversal health care coverage should be a priority for any health care system. No

individual should be denied medical treatment because they lack insurance. Universal coverage provides all Americans protection from potential bankruptcy or severe financial hardship caused by unforeseen medical expenses.

In order to ensure universal coverage, we would enact a mandate requiring every American to purchase a health insurance plan for him/herself and for his/her family. The insurance plans that would satisfy the mandate would range from the minimum of catastrophic coverage plans with low premiums and high deductibles, to more comprehensive plans that cover a larger variety of health services. This spectrum of plans allows for greater flexibility of choice for each American family, while limiting the influence of bureaucrats and lobbyists in determining the components of health care coverage for each family.

Essentially, the majority of Americans will invest in their own health care costs through purchasing health insurance according to the level of coverage that they feel is most appropriate for their own circumstances. Those who cannot afford coverage premiums according to the current federal poverty guidelines will be enrolled a Medicaid insurance plan.

This mandate would be enforced at the time that an individual seeks treatment for a health condition. If he or she is not presently covered under a health plan, he or she will be

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required to sign up for a plan at the time of service, with the requirement of paying up to six months of back payments for the specific premium, as well as the related deductible if applicable. If the individual was without insurance coverage for less than six months, he or she will be required to pay premiums for the period in which he or she was not covered. In the case of an individual who is seeking treatment without current coverage, who also meets the federal guidelines for subsidization, he or she will also be required to choose a plan at the time of service with or without the requirement to pay back¬premium payments. Those who sign¬up for a health care plan after receiving treatment are under contract to maintain that coverage for one year before he or she can change health insurance companies. He or she may change plans within the specific company during that time period according to company policies.

In order to enforce the mandate, a small amount of additional federal resources would be required to handle the paperwork and documentation processing for the health care requirement. If states were to develop additional requirements or specifications about the level of health care coverage required, they would handle the enforcement of those regulations.

Additionally, this mandate would require that insurance companies cover preexisting conditions. This would ensure that all consumers would be able to find and be covered under an adequate health care plan.

Risk¬AdjustmentIn an open market for insurance, the problem of adverse selection would need to be

addressed or the market would simply collapse. Sick individuals are motivated to buy plans with a large amount of

coverage, while healthy patients tend buy plans with little coverage. If nothing is done about this problem, companies offering plans with a large amount of coverage would be driven out of business by the higher costs of sick patients, leaving those patients who need health care the most without it.

The answer is to implement a program of risk adjustment for insurance companies. The premiums charged by insurers would be governed by a community¬rated system, so people living in the same area will be charged the same premiums for a given policy regardless of age, sex, or medical condition. However, insurers might still face problems of adverse selection, so to compensate, they would be subject to transfers based on the risk posed by their enrollees. This risk would be measured by age and sex alone without looking at past medical history or current medical condition. This will ensure that insurers are not able to discriminate among patients, but will also maintain the long¬term financial viability of private health insurance providers.

This model has been implemented successfully in Switzerland. Insurance premiums are community¬rated for individuals over the age of 25 and insurance companies are forced to accept any consumer who wishes to purchase insurance at the given premium. They also have a system where insurers receive transfers based on how much their enrollees’ medical costs deviated from the average for their demographic subset, as defined by age and sex only. Insurers who cater to sick patients can remain financially stable because of

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these transfers. A similar form of risk¬adjustment is also used in Germany. Risk¬adjustment of insurers in this way creates the right incentives without sacrificing the financial stability of the health insurance markets.

The Obama Administration plans to develop a series of health care reforms that it will implement with the help of the Democratic majority in Congress. While the details of their plan are still being debated, they have summarized the plan’s main elements on whitehouse.gov as follows:

Require insurance companies to cover preexisting conditions so all Americans • regardless of their health status or history can get comprehensive benefits at fair and stable premiums. Create a new Small Business Health Tax Credit to help small businesses provide • affordable health insur¬ance to their employees. Lower costs for businesses by covering a portion of the catastrophic health costs • they pay in return for lower premiums for employees. Prevent insurers from overcharging doctors for their malpractice insurance and • invest in proven strategies to reduce preventable medical errors. Make employer contributions more fair by requiring large employers that do not • offer coverage or make a meaningful contribution to the cost of quality health coverage for their employees to contribute a percent¬age of payroll toward the costs of their employees’ health care. Establish a National Health Insurance Exchange with a range of private insurance • options as well as a new public plan based on benefits available to members of Congress that will allow individuals and small businesses to buy affordable health coverage. Ensure everyone who needs it will receive a tax credit for their premiums. •

While there are several similarities between this plan and the one that we have outlined, their plan falls short in several ways. We feel that a consumer¬driven system would be better for consumers, insurers, and the government and would decrease the cost of health care without sacrificing access or quality.

ConsumersThe Administration agrees with us on the need to ensure that health care is affordable

for all Americans and to make sure that preexisting conditions are covered. Yet while the Administration’s plan appears to substantially increase the options available to the consumer and create competition to lower costs, it would actually add very few options for consumers in the long run and fail to create a competitive environment. By perpetuating the broken system of employer provided insurance and adding a public insurance plan paid for by the taxpayers, this system will crowd out private insurance companies and cause massive inefficiencies in the market.

Comparison to Alternative Proposed Policy

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Our plan will actually increase the options available to consumers by leveling the playing field in the insurance market and letting the market create a wide variety of insurers and plans to choose from. Moving to a consumer¬driven system will eliminate the inefficiencies caused by the employer¬based system and the increase in competition will lower costs while increasing accessibility and portability.

Not only will consumers have more options with lower premiums, under our plan, they will actually receive better care. Competition will force low quality providers and insurers to either improve or go out of business. Better transparency will allow consumers to choose the highest quality care for their health care needs and will hold providers and hospitals accountable for their mistakes. Finally, risk¬adjusting the prices for care will give insurers an incentive to seek out sick consumers and make a profit by improving their health.

InsurersUnder the Administration’s plan, insurers will face an increased amount of regulation

as well as unfair competition from a government plan subsidized by taxpayers. These pressures would force many insurance companies out of business and would restrict variety and innovation in the market. Companies who offer plans through the National Health Care Exchange could run into problems of adverse selection unless there is a mandate for universal health coverage, which is not included in the Administration’s proposal.

In our plan, insurers would face competition on a level playing field. In addition, companies would be free to innovate in the way health care is covered, leading to plans that are both effective for consumers and profitable for insurers. The system of transfers might cut into profits for some companies, but would also make sure that insurance plans catering specifically to sicker consumers would be just as economically viable and lower the costs to consumers. With a level playing field nationally, the market would be able to sustain many companies competing over different demographics and levels of care. Lastly, smaller insurance companies would be able to compete with larger insurance companies, since the risk¬adjustment system would allow insurers to target smaller groups of consumers without facing the problem of adverse selection.

GovernmentThe current Administration’s plan will significantly increase the role that the government

plays in not only funding the health care of tens of millions of Americans, but in determining what type of health care those Americans would receive. This will lead to an increased tax burden for the majority of Americans.

Also, cost containment will be a major issue that the government will have to confront. The Administration’s plan is projected to cost as much as $160 billion a year, before accounting for the eventual migration of privately covered consumers to a government¬subsidized plan. Given current economic conditions, the costs associated with this plan could lead policymakers to require price¬fixing or even rationing of health care to bring the budget deficit under control. Both measures would decrease the quality of health care, leading to negative health outcomes, which would negate the effects of cost¬cutting measures in the long run.

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Our health care system would cost less to the government than the Administration’s proposal. By closing the tax exemptions for Americans earning over 400% of the poverty line, the government will gain

about $75 billion per year in new revenue. In addition, lowering the costs of health insurance on the private market through competition will decrease the amount that the government spends on this subsidy, generating even more revenue. This can be used to offset the increasing costs of Medicare and Medicaid, or could be put to use as a subsidy to allow low¬income Americans to purchase their own health insurance plan.

According to our health care plan, the government would level the playing field for consumers to obtain health insurance without relying on their employer. The government would also be involved in working with insurance carriers and consumer groups in defining the minimum coverage allowable under the health insurance mandate. This type of government control will lead to the enforcement of legal contracts between consumers and insurance carriers as well as health care providers, while respecting the right of American citizens to choose more individualized coverage. At the same time it would assist deserving Americans with the funds needed to secure the same type of coverage as wealthier Americans based on their own needs and wants.

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Working Towards a Better Health: The Path to Diversity and Dependence on a Domestic Health Care Workforce

Proposal by Linda Xiao Kang

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About the Author

Linda Xiao Kang is a Health and Societies major student who was inspired to become a nurse educator by Professor Linda H. Aiken’s course on health policy. This proposal would not have been possible without Dr. Aiken’s support and encouragements. Linda Xiao Kang is also very grateful to the Wharton Politics & Business Association for giving students like her a chance to participate in public policy.

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Executive SummaryOver the last century, the vast improvements in health have not been shared equally

across the world due to inequalities between developed and developing countries. According to the World Health Organization, as of today, one billion people lack access to health care and 32.8 million people are living with AIDS. Closely associated with AIDS, 1.75 million people die every year from tuberculosis with an increase of 8.8 million new cases annually. In addition, around 11 million children under five die from malnutrition and other treatable diseases each year. Most of this occurs in developing countries that face enormous health care challenges.

A specific problem that these developing nations face that the United States could help solve would in the health care human resources sector. Currently, there is a crisis in the global health workforce and many countries are faced with imbalances of personnel in the health care sector. In fact, the 2006 World Health Report concludes that Botswana’s commitment to providing free antiretroviral therapy to all eligible citizens has been undermined not by financing but by the severe shortage of health personnel. The 2006 World Health Report focuses on the problem of the shortage in health care workforce worldwide. The United States has the one of the largest health care workforces in the world and contributes to this imbalance by recruiting medical personnel from developing countries like Nigeria, one of the top 10 source countries of nurses for the U.S., which desperately needs these health care workers.

This policy plan seeks to increase access, quality and decrease cost of health care through increasing diversity and dependence on domestic health care personnel. Its implementation would help the United States to be self-sufficient and sustainable and in turn help developing nations to meet their needs for human resources in the health care sector.

Problemsynopsis:In 2004, the High Level Forum on the Health Millennium Development Goals reported

that “There is a human resources crisis in health, which must be urgently addressed.” In 2006, the whole World Health Report, compiled by the World Health Organization, was devoted to the negative impact the shortage of human resources was having on global health care. The WHO estimated that there were 59.2 million full time paid health workers worldwide in 2006, which around two thirds were health service providers with the remaining being composed of health management and support workers. At the same time, WHO also calculated the health workforce density threshold needed to meet the health related Millennium Development Goals and reported that there are 57 countries with critical shortages in human resources in the health care sector, translating to a deficit of 2.4 million doctors, nurses and midwives.1

Context and Importance

Working Toward a Better Health

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The threshold at which 80% coverage rate for measles immunization and deliveries by a health care professional can be maintained is 2.5 health care professionals (counting only doctors, nurses and midwives) per 1000 and within these 57 countries, there are 37 of them in sub-Sahara Africa that falls below this threshold. An addition of 1.4 million health care professionals would be needed to help these countries reach the target levels.

Due to the size of its population, the numerical deficits are also very large in South-East Asia with the greatest need in Bangladesh, India and Indonesia. Globally, to meet the combined needs of these two continents, at least 2.4 million health care professionals must be added to the health care workforce.2

In addition, many of the countries in the Organisation for Economic Co-operation and Development (OECD), which is mainly composed of developed countries, are also reporting health care workers shortages. For example, Australia reports a shortage of around 6,000 nurses while Canada reports a shortage of 16,000 and the United States reports a shortage of 110, 700 nurses in 2000.3 To alleviate their own problems of health care workforce shortages many of the countries in the OECD have opted to use imported foreign health workers. According to the American Public Health Association, professionals from outside of the United States currently make up one-fourth of the US physician workforce and 4% of the overall nurse workforce (which is 90,000 in numbers terms). Overall, while the Northern Americas only carry 10% of the global disease burden, 37% of the world’s health care workers live predominantly in the United States and Canada. Meanwhile, only 3% of the

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world’s health care workers reside in Africa, home of 24% of the global burden of disease, according to the 2006 WHO report.4

With an increased trend in global migration of health care workforce, the cost implications to poor countries are very significant. The financial cost of South Africa’s 600 medical graduates being registered in New Zealand was estimated at $37 million.5 The United Nations Commission for Trade and Development has estimated that each migrating African professional represents a loss of $184 000 to Africa.6 Unfortunately, Africa spends $4 billion a year on the salaries of 100,000 foreign experts they have hired to alleviate the shortages.7 In an example of brain drain in Kenya, out of the 5000 registered doctors only 600 work in the public hospitals; the rest are either working in the private sectors or have emigrated to other countries. Paradoxically, “Brain waste” also occurs when health care personnel end up working outside the health sector or as unskilled labor in their destination countries. According to Dr Hiroko Minami, President of International Council of Nurses and the Florence Nightingale International Foundation, “Today’s crisis in the global health workforce is marked by critical imbalances. Many countries are faced with the challenge of underemployed and unemployed health professional, side by side with dramatic shortages.”8

HealthinstitutionsarehighlydependentonhumanresourcesHuman resources are a major strategic asset in any institution, especially in service and

health organizations. People in various areas of clinical, technical, and managerial roles are the infrastructure for health care delivery. In health organizations where health interventions are knowledge based, it is the staff who diagnose the problems and determine where, when, how, and which types of services will be provided. Humanresourcesaccountforamajorityofbudgetsinthehealthsector

As there are almost 60 million health care workers worldwide, we cannot overlook the fact that wage of health care professionals account for between 65% and 80% of the recurrent health expenditures globally. In addition, health care providers who have the ability to prescribe also generate other costs. Thus, an increase in efficiency in health care workforce would increase the quality and decrease the cost of health care.9 Thehighproportionofwomeninthehealthworkforce

The health sector is a major employer of women who are increasingly seeking new job opportunities to support their families. Especially in third world countries, as seen in Zimbabwe, women in the health care sectors are mainly concentrated in the nursing category and suffer the most when budgets are cut.10 Thus, it is especially important to establish good human resource policy as women’s status affects the health of their families as well as their patients. Thelackofdiversityinthehealthworkforceiscausingdisparity

A report released by the Sullivan Commission on Diversity in the Health Care Workforce in September 2004 stated: “The fact that the nation’s health professions have not kept pace with changing demographics may be an even greater cause of disparities in health

Importance of Human Resource Health Policy

Working Toward a Better Health

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access and outcomes than the persistent lack of health insurance for tens of millions of Americans.

Dr. Minami also said that “Globally, there are too many examples of poorly conceived and short-term policy actions that have negatively affected health care delivery. These include reductions of student places, inappropriate downsizing of the health care workforce and ineffective retention strategies.”

In addition, the United States currently lacks a nurse workforce policy to increase nursing supply domestically and this much needed policy did not even place in the top 10 policy priorities in the survey of experts by the Commonwealth Fund in 2004. To top it off, unlike most other countries, financing for medical and nursing school education in the United States come out of personal funds and there are only limited scholarships and student loan programs.11 Thus, it is no surprise that the United States copes with the shortage by importing foreign educated health personnel. Current immigration policies in the United States allow nurse migrants to work in the United States with an H-1C visa which allows them to “work for up to three years in health professional shortage areas.” In addition, physicians and foreign medical graduates may also apply for the O-1 visa which will be issued to persons of “Extraordinary ability in Sciences, Arts, Education, Business, or Athletics.” Unfortunately, it is difficult to pin¬point the exact immigration processes and numbers, but there are estimates of a quarter of the 900,000 doctors in the United States who are from outside of the United States and an estimated 200,000 foreign educated nurses (refer to Table 1). These policies and reliance on foreign workforce hinders the development of domestic human resources and the United States does not have policies for managing health personnel or the nursing labor market.12

Aiken L. U.S. Department of Commerce, Bureau of the Census of Population and Housing (2000), Public Use Micro data, 1% sample.

Current Policy

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The Health Worker Migration Policy Initiative launched by the World Health Organization in 2007 brought together organizations to develop a road map and a code of practice for health worker migration and called for a global effort in coordinating action to more equitably manage the current migration of health care workers. While the WHO has been coordinating this global effort, the migration rates to developed countries have still not decreased, thus a better policy will need to be established within each importing country.

The use of bilateral agreements sometimes helps to manage migration for the benefit of the sending and receiving countries as well as individual migrants. An example is the agreement between the United Kingdom and South Africa which allows for time-limited health care workers exchanges and pairs UK and South African hospitals for such exchanges but it is not a long-term solution. The United States has similar programs like the Peace Corp, which sends health care workers to assist other countries in need. However there is rarely, if ever, a balance between the resources that flow to developing countries’ human resources in health and those that flow out of the country. Because of the decentralized nature of health care decision-making in the U.S., it is almost impossible to develop bi-lateral agreements regarding health worker migration. In addition, there is also a lack of effective policy to increase diversity in the health care workforce and this is also needs to be addressed.

Health workforce policy expert Linda Aiken of the University of Pennsylvania’s School of Nursing concurs in her article: U.S. Nurse Labor Market Dynamics Are Key to Global Nurse Sufficiency by saying that the United States is the largest importer of nurses with almost 15,000 foreign-educated nurses passing the nursing license exam in 2005. With a projected shortage of 800,000 nurses by 2020, the government needs to address the issue of this drastic shortage immediately through establishing more educational facilities and opportunities for domestic workers.13

This proposed policy seeks mainly to alleviate the problem of migration of human resources in the health care sector from third world countries like Nigeria and Ghana through making the United States, one of the major importers of foreign educated health personals, self sufficient.

One of the key components to this problem that the policy will focus on is the nursing shortage. The United States, with a nurse: population ratio of almost 10 nurses to 1000 population is reporting a nursing shortage and so are countries in Africa and Asia with a nurse: population of less than 0.5 nurses per 1000 population. In Zambia, the ratio of nurse to population is 0.22 to 1000, which is 40 times less than the United States.14 As the ratio of the nursing shortage is far worse in the low income countries (see figure 1) the United States really needs to decrease the importation of foreign health care workers

Critique of Policy

What the Experts Say

Policy Recommendations

Working Toward a Better Health

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from countries of low supplies of health human resources and the best way to do that is to increase the domestic supply of health care workers and achieve self sufficiency.

Table 2. Top 10 Source Countries for NCLEX-RN Exam Passers and First-Time Pass Rates for

20051

Moving to self-sufficiency for the United States is more than a viable solution. Each year, more than 50,000 qualified applicants for nursing schools are turned away but the American Hospital Association reported in 2005 that there were 126,000 vacant, full-time positions for RNs in hospitals throughout the country. It is unfortunate that these spots are vacant not due to a lack of interest in the domestic population but to a lack of institutional capacity to train them. The Bureau of Labor Statistics estimates that the national shortage of RNs in all health care facilities will swell to more than 400,000 by 2020.15 In such a time of economic recession, the government has the potential to increase jobs and decrease the nursing shortage in the United States through providing more institutional expansion funding for nursing schools to ensure that the shortfalls are filled through the ample domestic supply

of applicants. The U.S. Department of Labor estimates 1.2 million nurses will be required to fill new and vacated nursing positions by 2014.16

The United States also needs to increase the diversity in the health care workforce. It is unfortunate that the health care workforce does not reflect such a diverse nation with more than 81% of registered nurses being Caucasian, only 4% of nurses being African American and only 2% of nurses being Hispanic. Whereas in the general population, only 70% of the population are Caucasian, 12% are African American and

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12% are Hispanic (refer to Exhibition 1). The National Advisory Council on Nurse Education and Practice says that “A culturally diverse nursing workforce is essential to meeting the health care needs of the nation and reducing the health disparities that exist among minority populations.”17

The steps to achieving diversity and self-sufficiency on domestic workforce will be outlined through the 3 Rs and Es to address the challenges of numbers, diversity and competencies of health workforce production.

Recruitment–EncouragediversityStart early in the pipeline in middle school and encourage minority students to pursue

academic courses relating to nursing to increase diversity in the workforce in the long term. This is very important as cultural sensitive health issues such as end of life care may require more diversity in the workforce as patients hold different cultural, social beliefs, values and preferences.

Reimbursementforeducation–EducationexpansiontoincreasenumberProvide educational scholarships and loans for nurses who are willing to work in

undeserved areas to address areas with critical shortages as well as contribute to increasing the number of nurses. The policy seeks to balance the distribution of personnel between isolated and urban areas and rich and poor regions with appropriate incentives for recruiting and retain staff in less well served areas. To correct the imbalances in personnel, short-term financial investments maybe need to address this problem.18 Using regularly updated statistical data, state governments will ensure that personnel are adequately distributed between different geographical regions, establishments, and levels of care and plan for the supply of personnel with an increase funding for expanding nursing education institutions.

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Retention–RewardexcellenceinnurseworkenvironmentsReward the health care facilities that create an attractive environment that helps

retain their nurses. One form of recognition for excellent work environments is the Magnet Recognition Programs, an accreditation program for hospitals that excel at improving their patient outcomes through an increased capacity to recruit and retain the best and the brightest health care workforce. It would be feasible for public agencies to publicize the achievement of Magnet Status as an incentive for hospitals to improve their work environments. Also small seed money improve working conditions including pursuit of Magnet status. Also adapt training curricula and requirements and develop new teaching and learning methods to ensure maximum efficiency capabilities for health institutions and monitor skills and training requirements and regulate training institutions and programs. 19

Performance of health care facilities can also be managed by establishing guidelines for the organization’s practice standards, payment methods, management practices, circulation of information, evaluation and accountability procedures.

SummaryIn the United States, to decrease the importation of foreign health care workforce, the

government needs to increase training facilities and financial aid for nurses and physicians. In addition, the United States also has to properly distribute health care workers for communities with greater needs such as the inner cities and those that lack access to health care services such as rural and isolated areas.

In the world today, everything is interconnected and problems have to be tackled in a culturally sensitive way by moving towards a workforce that focuses on diversity and greater self-sufficiency on the domestic personnel. We can help solve the developing nations’ health care problems by not needing to import so many of their health care professionals by increasing our domestic supply. Indeed, not only do we improve the access and quality of our health care at home, we also increase access for health care elsewhere in the world. Global health transcends national boundaries and the solution starts at home.

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References1 Buchan, James, and Linda Aiken. 2008. Solving nursing shortages: a common priority. Journal of Clinical Nursing 17, no. 24 (December): 3262-8.2 World Health Organisation (WHO) (2006) The World Health Report 2006 – Working Together for Health. WHO, Geneva. Available at: http://www.who.int/whr/2006/en/ (accessed 22 January, 2009)3 Simoens, Steven. 2005. Tackling Nurse Shortage in OECD Countries. http://www.oecd.org/dataoecd/11/10/34571365.pdf (accessed 22, February 2009) 4 World Health Organisation (WHO) (2006) The World Health Report 2006 – Working Together for Health. WHO, Geneva. Available at: http://www.who.int/whr/2006/en/ (accessed 22 January, 2009) 5 Medical migration and inequity of health care. Lancet 2000;356:177. 6 Oyowe A. Brain drain: Colossal loss of investment for developing countries. The Courier ACPEU 1996;159:59-60. 7 Pang, T., M. A. Lansang, and A. Haines. 2002. Brain drain and health professionals A global problem needs global solutions. Vol. 324. British Medical Association.8 Anon. 2007. ICN launches new centre to aid global solutions to nursing workforce issues. International Nursing Review 54, no. 1: 4-7. 9 Dussault, Gilles, and Carl-Ardy Dubois. 2003. Human resources for health policies: a critical component in health policies. Human Resources for Health 1: 1. doi:10.1186/1478-4491-1-1. 10 Pang, T., M. A. Lansang, and A. Haines. 2002. Brain drain and health professionals A global problem needs global solutions. Vol. 324. British Medical Association. 11 Aiken, L. H. 2007. US Nurse Labor Market Dynamics Are Key to Global Nurse Sufficiency. Health Services Research 42, no. 3p2: 1312. 12 Aiken, L. H. 2007. US Nurse Labor Market Dynamics Are Key to Global Nurse Sufficiency. Health Services Research 42, no. 3p2: 1299-1320.13 Aiken, L. H. 2007. US Nurse Labor Market Dynamics Are Key to Global Nurse Sufficiency. Health Services Research 42, no. 3p2: 1299-1320.14 World Health Organisation (WHO) (2006) The World Health Report 2006 – Working Together for Health. WHO, Geneva. Available at: http://www.who.int/whr/2006/en/ (accessed 22 January, 2009) 15 Projected Supply, Demand and Shortages of Registered Nurses: 2000-2020, U.S. Department of Health and Human Services, Health Resources and Services Administration, Bureau of Health Professions, July 2002. 16 Anon. 2006. Higher wages to solve nursing shortage. November 1. http://findarticles.com/p/articles/mi_hb6569/is_200611/ai_n25952345?tag=content;col1 (access 12 March 2009) 17 Siantz, L., and A. I. Meleis. 2007. Integrating cultural competence into nursing education

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and practice: 21st century action steps. Journal of Transcultural Nursing 18.18 Aiken, L. H. 2007. US Nurse Labor Market Dynamics Are Key to Global Nurse Sufficiency. Health Services Research 42, no. 3p2: 1299-1320.19 O Brien-Pallas, L., and S. Wang. 2006. Innovations in Health Care Delivery: Responses to Global Nurse Migration-A Research Example. Policy Politics and Nursing v7, no. 3: 49.

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