Critical Issues in Healthcare

A QuickGuide to Pertinent

Healthcare Topics in the United States

What is public health?

•  Mission: fulfilling society’s interest in assuring conditions in which people can be healthy; promote physical and mental health and prevent disease, injury and disability

•  Core functions: Assessment, Policy Development, Assurance

•  Vision: Healthy people in healthy communities

•  Goals: Prevent epidemics & spread of disease, protect against environmental hazards, prevent injuries, promote & encourage healthy behaviors, respond to disasters & assist communities in recovery, assure the quality and accessibility of health services

•  Unique aspects: interdisciplinary approach & methods, emphasis on preventive strategies, linkage with government and political decision making, dynamic adaptation to new problems

How is health measured?

•  WHO defines health as a state of complete physical, mental and social wellbeing and not merely the absence of disease or infirmity

•  Health is measured through mortality and morbidity •  Crude mortality rate= number of deaths in an region divided by total population

of the same region (usually mid-year population) multiplied by 100,000 •  Age-adjusted mortality rate = death rate that controls for effects of age

distributions in populations (by cause) •  Life expectancy = # of years between age and the average age of death •  Years of Potential Life Lost (YPLL) = Estimate of average years a person

would have lived if they hadn’t died prematurely •  Disability-Adjusted Life Year (DALY) = Sum of life years lost due to premature

mortality and the years lost due to disability for incident cases •  Quality Adjusted Life Years (QALY) - Change in utility value induced by

treatment multiplied by duration of treatment effect (places weight on time in different health states) can be used to determine costs/QALY

•  Prevalence = # or rate of cases at a specific time •  Incidence = # or rate of NEW cases occurring during a specific period

Determinants of Health

Evans & Stoddard Field Model of Health and Well-Being

Public Health strategies

•  Primary: Seek to prevent occurrence of disease or injury by reducing risk factors (i.e. laws for seatbelts or preventing harmful exposures

•  Secondary: Preventative screening that seeks to control or reverse disease processes before signs and and symptoms develop (i.e. mammograms)

•  Tertiary: Prevention strategies that restore individuals to optimal functioning after a disease or injury is established.

Health Services/Clinical strategies

•  Primary: Clinical preventative services & basic care; i.e. vaccines

•  Secondary: Specialized attention once disease is present

•  Tertiary: Subspecialty care that is designed to cure or mitigate disease states (i.e. CABG for patients with CHF)

misplaced priorities in healthcare

•  Woolf, et al

•  Put resources toward interventions that maximize health benefits to lessen disease burden on the public and lower costs- more effective = more attention

•  Devote resources to interventions in proportion to their ability to improve outcomes, OR pay extra for healthcare- in lives and dollars

Woolf’s solutions to misplaced priorites

•  Choosing Effective Services: Most effective services don’t always get priority (ex: breast cancer screenings (net cost) vs. smoking cessation (net savings))

•  Delivering Care: Focus on restoring quality as much or more than biomedical advances (big investments on medical advances, but most patients can’t access them)

•  Preventing Disease: Spend heavily on treatment but little on prevention (ex: chronic diseases- risk reduction and prevention rather than late-stage disease costs)

•  Foster Social Change: Alleviate social distress (determinants of health) (ex: put resources toward education, health care access, etc.)

How is health care organized?

•  Primary Care – Common health problems and preventive measures (sore throat, diabetes, hypertension, vaccines, mammograms, etc)

•  Secondary Care – Problems that require more specialized clinical expertise (usually hospital care)

•  Tertiary Care – Management of rare and complex disorders/cases

Regionalized vs. Dispersed model of care

•  Regionalized •  Primary Care is the main focus, most physicians are GPs

•  Secondary Care – Specialties, hospital-based clinics

•  Tertiary Care – Subspecialties located at few tertiary care medical centers

•  Patients defer to GP/PCP FIRST and then see specialists

•  Dispersed (US) •  Less structure

•  Can go directly to a specialist- not everyone has or uses a PCP/GP and there is more freedom of choice

•  PCPs provide inpatient and outpatient care

•  Competing hospitals because they are not geographically separated as in a regionalized model

•  Bulk of hospitals provide secondary and tertiary care

Structure of healthcare services marketplace

Challenges in healthcare

Major Trends

•  Pressure over financing of health care

•  Impact of aging population

•  Rising activism among consumers and providers

•  Advances in technology

•  Unequal distributions of health resources

•  Recognition of non-medical determinants of health

IOM: Safe, Timely, Efficient, Effective, Patient Centered, Equitable (STEEPE)

Berwick’s triple aim

•  The US healthcare system is broken (assessed by our health-expenditure vs. rankings in life expectancy, insured population, and infant mortality”

•  The triple aim is: Increase Access, Reduce Cost, and Improve Quality

Risk & Insurance

•  Risk is the chance of something bad happening •  Patient Perspective: getting sick and not being able to to

pay a provider

•  Provider Perspective: providing services to someone who can’t pay you

•  Insurance is a contractual agreement used to distribute risk over a large base

Risk & insurance

•  Moral Hazard – “an insulated third party may behave differently than it would if it were fully exposed to risk” => Once someone has insurance they may act more recklessly because they do not feel the risk

•  Adverse Selection – The tendency of people with poor health to apply for and continue health coverage more than people with good health

Risk & insurance

•  Community Rating – Distributes risk “within and across groups.” => Everyone pays the same rate

•  Experience Rating – Distributes risk “within” groups. => The amount someone pays is based on their level of risk. Bankers would pay less than coal miners => draws healthy people away from community ratings and is less redistributive

How insurance works

•  Insurance purchasers pay premiums to insurance companies for health insurance plans •  Premiums are deposited into financial reserves which pay for

covered services (for subscribers), and investments/marketing/administrative costs (for insurance companies)

•  Medical Loss Ratio = % of premiums spent on medical services •  States determine how to enforce laws on MLRs (range is 50-80%) •  Health Reform requires plans in individual/small group markets to

maintain a MLR of 80%

•  Factors affecting the # of uninsured: Costs of health insurance can be prohibitive, transition in the US economy from industry to service provision, unstable economic conditions, changes in public policy

Types of Health coverage

•  Out of Pocket: Individual pays provider through private funds

•  Individual Private Insurance: Individual pays premium to health plan, plan reimburses care provider

•  Employer-Sponsored Insurance: Employee and employer pay premiums to health plan, plan reimburses care provider

Types of health coverage

•  Managed Care: Manages healthcare delivery to control costs, typically relying on PCP as gatekeeper

•  HMO: Most restrictive, patients must receive care from specific providers, pain on “per-member, per month” fee

•  PPO: Loose-knit, insurers contract with doctors and hospitals to care for patients at a discount with medical/utilization review (flexible in choice of provider but sometimes at a higher cost)

•  Alternative Insurance: Indemnity (deductible & copay), HMO, PPO

Government Insurance

•  Medicare: Federal, 65 y/o+, disability, dialysis or kidney transplant

•  Medicaid: Federally aided state-operated, for indigent/low-income

•  Reimbursement Methods: Per service, episode of illness, per diem, capitation, global

Unwarranted variation in healthcare

•  Variation not explained on the basis of illness, patient preference, or evidence-based medicine

•  Estimated 30% of current spending on healthcare is wasted

•  Types of Unwarranted Variation: •  Effective Care -> Medically necessary interventions on the basis of

clinical outcomes evidence for which benefits outweigh the risks

•  Preference-Sensitive Care -> Variation due to patient choice or preference, choice of treatment involves tradeoffs

•  Supply-Sensitive Care -> Services where supply of resource has major influence on utilization rates, largely due to differences in local capacity

Accountable care organizations

•  Network of doctors, hospitals, and other healthcare organizations that share responsibility for providing care

•  Major Principles •  Local Accountability: Providers within a community that can

effectively provide/manage full continuum of patient care

•  Shared Savings: ACOs that meet quality standards while slowing spending growth will receive a portion of shared savings

•  Performance Measurement: Must collect a core set of performance measures that include clinical processes, outcomes, and patient experiences -> measurements are essential to ensure appropriate care is being delivered

Accountable care organizations

Essential Characteristics

•  Provide continuum of care in integrated system

•  Sufficient size to support performance measure

•  Capable of planning budgets

•  Provider inclusiveness

•  Ability to manage risk

Challenges

•  Critical mass of provider/payer participation

•  Adequate financing

•  Clinical support infrastructure and technical issues

•  Changing provider culture and patient behavior

•  Potential to increase provider concentration and market power