Transcript Document

Healthcare Economics
Is it all just dollars and cents?
19 April 2009
James S Eadie MD, FACEP
Co-Chair, ACEP FGA Committee
GSACEP, Immediate Past President
Academic Faculty, Wilford Hall Medical Center,
San Antonio, Texas
Overview
1. How much does the US spend on
health care?
2. Where do the dollars go?
3. How fast are the costs growing?
4. What can be done to contain the
costs?
5. Is the system really at a “crisis”?
Economics…..ouch
Why do we need to study economics?
I’d rather be herding cats….
Health Care Economics 101 Quiz
•
How much did the US pay for health
care in 2007?
•
What is the % GDP spent on health
care?
•
What are the most expensive parts of
the health care system?
Health Care Spending – 2007
• >$2.2 Trillion dollars
• 16.2% of GDP, Switzerland next highest 11.4%
• $7,421 per living person
• Spending rose 6.1% (inflation 4.1%)
“Spending is driven by new medical treatments,
rising prices and growing utilization.”
Smith et al. Health Affairs Jan 2006
US Healthcare = French Economy
Percent Health Care of GDP 2006
data from WHO http://www.who.int/en/
Expenditures per Capita 2006
data from WHO http://www.who.int/en/
Per Capita Health Spending in 2006
Source: McKinsey Global Institute and NEJM 2009
WHO Health Care Rankings
1. France
18. England
25. Germany
30. Canada
36. Costa Rica
37. United States
38. Slovenia
Health Comparisons
Health Care Spending - 2006
Hospital Care
– 31% of total health care expenditures
– $648.2 billion
Physician Payment
– 21% of total health care expenditures
– $447.6 billion
– Growth from inc. office visits and imaging
Health Care Spending - 2006
Prescription drugs
– 10% of total expenditures
– Total: $216.7 billion *
• greater than nursing homes and home
health care combined ($177.6 billion)
Health Insurance Admin Costs (private + Gov)
- $204.1 billion
Health Care Spending - 2006
Medicare
– $401.3 billion
– 19% of national health expenditures
– Revenue
• 65% from payroll taxes and premiums
• 35% from general taxes
–Key: this competes with Gov. spending
Health Care Spending - 2006
Medicaid
– $310.6 billion
– 15% of national health expenditures
– > 20% state budgets
SCHIP
– $ 8 billion
Federal Government pays over 46% Health care bills
Federal Budget 2008
Federal Budget 2008
2.979 Trillion dollars
Social Security
612 billon
Medicare/Medicaid
682 billion
Defense
613 billion
Education
59 billion
Debt Interest
249 billion
Federal Spending FY 2008
Source: Congressional Budget Office
US Federal Spending
Federal Receipts – FY 2008
Source: Congressional Budget Office
Projected Growth
•
Health Care Projected Growth Rates
–
6.2% annually through 2018
–
16.2% GDP2007 to 20.3% GDP2018
•
Public Payers
–
2016 – will be largest source of funding
–
2018 – over half of all health care spending
•
Why?
–
Baby Boomers – 76 M
Projected Growth
Health Care Reform – Is it Possible?
Health Care Timeline
Social Security
Medicare
Clinton
1935
Progressive Era
1965
1994 Medicare
Germany
1910 - 17
Truman Plan
Nixon
Drug Bill
1883
1945
1970s
2003
Pre-1880
Physicians limited
authority
1930s – 70s
Physicians /
AMA Strong
1980s - Present
Corporations
Competing Interests
Loss of Political Influence
1880 – 1920
Industrial Revolution
Rise in prestige
Rapid Health Care Growth
1950s-70s
Health Care Reform Issues
•
Uninsured and Underinsured
•
Quality Initiatives
•
Patient Centered Medical Home
•
Health IT
•
Physician Pay Reform
•
Medical Liability
Health Care Costs
How Do You Share The Resources?
How Do You Slice The Pie?
•
Who’s going to take the smaller piece?
–
Physicians?
–
Hospitals?
–
Drug Companies?
–
Trial Lawyers?
Emergency Medicine’s Slice of Pie
•
119.2 million ED visits 2006
•
$ 37.5 billion on emergency care
–
Only 1.8% of all health care expenditures
•
Emergency Medicine is a small fish
•
Fixing the “over-utilization” of emergency
departments will NOT fix the problem
1 in 10 Jobs in US is Health Care Related
Are we in Crisis?
“US health care costs have been in “crisis” for
roughly 40 years” Brown, NEJM 24 Jan 08
Imminent Collapse rests on 3 indicators
1. There are 47M uninsured – we must have
universal coverage
2. Health care costs are extraordinarily high
3. US system is in fact not a system, but
incoherent hodge-podge
Are we in Crisis?
1. The Safety Net for the Uninsured
• Community Health Centers
• Emergency Departments
• Public and voluntary hospitals
– Funds come from donations, Medicaid,
grants, etc. “11th hour infusion of money”
– President Bush told everyone that they can
always go to the emergency room
Are we in Crisis?
2. Health Care Costs are High
•
Costs have been skyrocketing since 1965
when Medicare/Medicaid were signed into
law
•
US system has pushed technology
• Research hospitals, drugs, medicines
• Public health fell to the side
Are we in Crisis?
3. The non-system of US health care will
ultimately drive reform
– Clearly deep interest on all parties to bring
together the fragmented system, BUT:
– Business, insurance, and providers have
different priorities, but all agree:
•
Big Government is NOT the answer
•
Costs of reform should not fall on them
•
Their agenda takes precedence
Law of Reform
“There is nothing more difficult to
manage, more dubious of success…
than to initiate a new order of things.
The reformer has enemies in all those
who profit from the old order and only
lukewarm defenders in all those who
would profit from the new order.”
Machiavelli 1513
What Glasses Are You Looking Through?
Every System is Perfectly Designed To
Produce The Results It Produces
Don Berwick, MD
The Institute for Healthcare Improvement
Here we go again….
1917, 1935, 1948,
1965, 1970, 1994
2009