Healthcare Reform: Is It Necessary?

Subroto Kundu, M.D.

Consultant Neurologist SF Bay Area

Public Opinion is often a mish-mash of misconceptions and myths..

(…and then there is Fox News)

Tally of Assets

Let us look at what are our strengths and weaknesses…

What is Right with our System?

Excellent hospitals, equipment, and health care facilities

Enough well trained professionals Superb research Sufficient spending

What is Wrong with our System?

We spend far more money than any other country on health care...

…but get far fewer benefits, far worse health outcomes, and far less patient satisfaction.

The Healthcare Americans Want Guaranteed access

Free choice of doctor

High quality

Affordability

Trust and respect

The Healthcare Americans Get

1/3 are uninsured or underinsured HMOs deny care to millions Death rates higher than other wealthy nations’ Costs double Canada's, Germany's, or

Sweden's - and rising faster Executives and investors making billions Destruction of the doctor/patient relationship

Approaching these myths with appropriate scientific validation

is not hard to do….

Myth #1: We Have The Best Health Care System In The World

Just the facts, please

45 MillionUninsured

Who Are The Uninsured?

Source: Himmelstein & Woolhandler - Tabulation from 1999 CPS

*Students>18, Homemakers,

Disabled, Early retirees

»Employed»50%

»Children»25%

»Unemployed»5%

»*Out of labor »force»20%

Maternal Mortality 1999

Infant Mortality, 1999Deaths In First Year Of Life/1000 Live Births

Source: OECD, 2002

5.75.3 5.1

4.5 4.33.4

7.1

012

3456

78

U.S.

AUSTRALIA

CANADAIT

ALY

GERMANY

FRANCE

SWEDEN

Life Expectancy For Women, 1999

Source: OECD, 2002 - Data on Italy are for 1998

82

80.7

82.5

79.8

81.6 81.7

79.4

77

78

79

80

81

82

83U.S

.

U.K.

GERM

ANY

ITALY

CANADA

SWEDEN

FRANCE

YE

AR

S

Life Expectancy For Men, 1999

Source: OECD, 2002 - Data for Italy are for 1998

74.7 75 75 75.3

76.376.7

73.9

70

71

72

73

74

75

76

77

78

U.S.

GERMANY

FRANCEUK

ITALY

CANADA

SWEDEN

YE

AR

S

Hospital Inpatient Days Per Capita, 2000

Source: OECD, 2002

1.1 1.2

2.42.6 2.7

4

0.8

0

1

2

3

4

U.S.

Canad

aU.K

.

France

Austra

lia

Germ

any

Japan

Day

s/pe

rson

Consider Associated Statistics…..

Poverty Rates, 1997U.S. and Other Industrialized Nations

Source: Luxembourg Income Study Working PapersNote: U.S. figure for 1997, other nations most recent available year

6%

8%

9%

11%

11%

11%

17%

0% 5% 10% 15% 20%

Netherlands

France

Sweden

Canada

UK

Germany

US

% of Population Below Poverty Level

Americans Lead the World in Hours Worked

Source: International Labor Organization, 1999

1399

1560

1656

1731

1889

1883

1966

0 250 500 750 1000 1250 1500 1750 2000

Norway

Germany

France

U.K.

Japan

U.S. (1980)

U.S. (1997)

Hours/worker-year - 1997

Incarceration Rates, 2000

Illness and Medical Costs,A Major Cause of Bankruptcy

45.6% of all bankruptcies involve a medical reason or large medical debt

326,441 families identified illness/injury as the main reason for bankruptcy in 1999

An additional 269,757 had large medical debts at time of bankruptcy

7 per 1000 single women, and 5 per 1000 men suffered medical-related bankruptcy in 1999

Source: Norton's Bankruptcy Advisor, May, 2000

Myth #1: We Have The Best Health Care System In The World

Certainly does not seem like the best, does it?

Myth #2: We Don’t Have the Money to Cover Everyone

Health Care Spending

2009 value: $2.5 trillion !! (17.6% of GDP)

2018 projection: $4.4 trillion

Source: National Coalition on Health Care www.nchc.org

US Spends More Than Any Other NationPer Capita Spending, U.S. Dollars, 1998

$1.424

$1.461

$1.822

$2.043

$2.07

$2.077

$2.133

$2.312

$2.424

$2.425

$2.794

$4.178

New Zealand

United Kingdom

Japan

Australia

Netherlands

France

Denmark

Canada

Germany

Norway

Switzerland

United States

Source: Anderson & Hussey, Health Affairs, May/June 2001.

Per Capita National Health Spending Reached $4,637 in 2000

$82 $105 $141 $202$341

$582

$1052

$1733

$2690

$3637

$4637

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

SOURCE: Centers for Medicare and Medicaid Services

HEALTH COSTS AS % OF GNP:U.S. & CANADA, 1960-2001

CANADA'S NHP ENACTED

NHP FULLY IMPLEMENTED

Source: Statistics Canada, Canadian Inst. for Health Info., & NCHS/Commerce Dept

5

6

7

8

9

10

11

12

13

14

15

1960

1965

1970

1975

1980

1985

1990

1995

2000

% o

f G

NP

CANADA

U.S.

Myth # 3: Government Is Less Efficient Than the Private Sector

Overhead & Profit As Percent of Premium

Cigna

RC Aetna Wellpoint

UnitedHumana Pacific

Medicare0

5

10

15

20

25

30

35

Cigna RC Aetna Wellpoint United Humana Pacific Medicare

Private insurers’ High Overhead

Medicare Coverage is Better than Private

Healthcare Cradle to Grave…

Productive years

90% of healthcareexpenditure donein last 10% of life

Medicare: governmentspending

Healthiest portion of lifeleast healthcare

spending

HMO/PPO Spending

Only earning period of lifeHighest contribution to healthcare

25 65

services

Patients Medical Providers

Pvt HealthInsurance

payment

payment

AutoInsurance

WorkmensCompensation

Home OwnersInsurance

Misc HealthInsurance

payment

payment

payment

payment

MediCareMediCaid

So, what would you say to a plan that reduced the multiple payments with a single coverage…

servicesPatients Medical

Providers

payment payment

Single InsurancePayer

Specially one with 3.1% overhead

And no profit

56% of Medical Students & FacultyFavor Single Payer, Med School Deans

Source: NEJM 1999; 340:928

22%

56%

3%19%

Managed Care Single PayerNo Preference Fee-for-service

“What is the best health care system for the most people?”

Harris Poll: “Government Should ProvideQuality Medical Coverage to All Adults . . .”

Source: USA Today/Harris Poll - 11/23/98

77%

53% 52%47%

0%

20%

40%

60%

80%

GeneralPublic

Employers StateLegislators

Congressional Aides

Per

cent

agr

eein

g

•Since everyone is covered in this system, there are no:

--“Pre-existing conditions”--“loss of coverage” e.g., by change of job, moving--and multiple other ills of the present system

Myth #4: Single Payer Means Single Delivery System

Myth #5: We Will Have Rationing “Like They Have in Canada”

We do have “rationing” already. We only recognize them differently, such as by limited access to healthcare, denials by insurance companies, high cost

Access is already restricted!

1 of 5 Americans postponed getting needed health care last year

1 of 7 Americans had a problem paying for medical bills last year

1 of 10 did not get a prescription drug they needed due to cost

Kaiser Commission on Medicaid and the Uninsured, July 2002

U.S. Public Spending Per Capita for Healthis Greater than Total Spending in Other Nations

Note: Public includes benefit costs for govt. employees & tax subsidy for private insuranceSource: NEJM 1999; 340:109; Health Aff 2000; 19(3):150

$1,670

$1,750

$1,850

$2,230

$2,430

$2,620

$1,760$2,600

$0 $1,000 $2,000 $3,000 $4,000 $5,000

U.K.

Sweden

Japan

France

Canada

Germany

U.S.

$ Per Capita

Total Spending U.S. Public U.S. Private

Out-of-Pocket Payments, 2000

Myth # 6: It is Bad for Business

Employers’ Health Benefit Costs US vs. Canada

Healthcare cost to US businesses…

Myth # 7: Our population is older than the rest of the world

Elderly as Percent of Total Population, 2000

Source: Health Affairs 2000; 19(3):192

12.1% 12.8%

15.9% 16.0% 16.4% 17.1%

12.5%

0%

5%

10%

15%

20%

U.S

.

Aus

tral

ia

Can

ada

Fra

nce

U.K

.

Ger

man

y

Japa

nPer

cent

of

Pop

ulat

ion

Old

er T

han

65

Infant Deaths by Income, Canada 1996Even the Poor Do Better than U.S. Average

3.94.7 5.1 5.2

6.5

7.8

0123456789

Wealthiest20%

Middle20%

Poorest20%

U.S.Average

Infa

nt

Mo

rtali

ty

MYTH # 8: Doctors will leave

“DOCTORS ARE LEAVING CANADA IN DROVES FOR THE PROMISED LAND OF THE USA”

Few Canadian Physicians Emigrate

Applicants per Medical School Place

2.4

5.5

0.0

1.0

2.0

3.0

4.0

5.0

6.0

United States Canada

Source: JAMA; 282:892; Canadian Medical Education Statistics, 1999:150

Myth # 9: We Don’t Want All That Government Intrusion

Instead, We Now Have Private Sector Intrusion

The Administrative Nightmare

$384 Billion Spent on Administrative Costs Last Year. Saving Half of This

Would Easily Cover the Uninsured

Physicians' Billing & Office ExpensesUnited States & Canada, 2000

Source:Woolhandler/Himmelstein NEJM 1991;324:1253 (updated)

$430

$102

$0

$100

$200

$300

$400

$500

U.S. CANADA

$ P

ER

CA

PIT

A

Hospital Billing & AdministrationUnited States & Canada, 2000

Source: Woolhandler/Himmelstein NEJM 1991; 324:1253 & 1993; 329:400 (updated)

$372

$68

$0

$100

$200

$300

$400

$500

U.S. CANADA

$ P

ER

CA

PIT

A

Growth of Physicians, RNs & Administrators 1970-1998

0

500

1000

1500

2000

2500

1970 1975 1980 1985 1990 1998

AdministratorsRNsPhysicians

Bureau of Labor Statistics, NCHS

Percentage Growth

0

500

1000

1500

2000

2500

1970 1975 1980 1985 1990 1995

Administrators

RNs

Physicians

Do you want your

health care dollars spent

Here or

Here?

What are the options?

No intervention … maintain status quo Reform health care market. Expand public programs. Improve the employer approach (pay or

play). Single payer.

The Single Payer System

What do we get from Single-Payer?

Administrative efficiency via simplified reimbursement. Patient freedom to choose/change health care providers,

without paying more. Provider freedom to choose mode of practice (fee-for-

service, capitation, or salary). Fairer financing (lower cost to sick, poor/middle-income). Explicitness in priorities (e.g., prevention) and financing

(e.g., risk adjustment) Shared dedication to success, via universal participation.

How Does Single-Payer Do It?

Global Budgeting controls costs while leaving clinical decision-making in the hands of the patient’s chosen health care professional.

Just collects money and pays bills without needing to intrude into individual doctor-patient relationships to make a profit.

That is, review the flow of healthcare dollars, but leave HEALTHCARE alone!

• Eliminates hidden sources of waste and profiteering

NO NEED TO REINVENT THE WHEEL

THAT IS HOW ALL THE INDUSTRIALIZED NATIONS OF THE WORLD DO IT !!

Who Benefits from the Single Payer System?

You do!!

And do all providers who are not paidfor their services, but look towards

their “HMO” kickbacks

Who Loses from the Single Payer System?

The Insurance Company and its brokers!!

Money Managers

HENCE THE NEED OF THE HOUR IS…

NOT NECESSARILY HEALTHCARE REFORM

BUT CERTAINLY HEALTH INSURANCE REFORM !

THANK YOU !