Transcript CoverThyNeighbor_LenNichols_11042005

Cover Thy Neighbor:
Moral and Economic Imperatives
for Health System Reform
Len M. Nichols, Ph.D.
Director, Health Policy Program
New America Foundation
Illinois Adequate Health Care Task Force
Chicago, Illinois
November 4, 2005
Overview
• Linked problems of our health care system
• Why incremental reforms can’t work
• Pathways to comprehensive reform
2
Linked Problems
• Low Value for Dollar
• Uneven quality
• Inequitable access to care
3
Premium Payments v. GDP
Growth Rate
14%
12%
10%
8%
esi
gdp
6%
4%
2%
0%
1999
2000
2001
Source: NIPA, BEA/Commerce Dept.
2002
2003
4
Uneven Quality
• Beth McGlynn
• Dartmouth
5
Percent of Recommended Care
Adults Get
80
70
60
50
40
30
20
10
0
Overall
Cancer
(B)
BP
Diabetes
Source: E. McGlynn et al. NEJM, 2003;348:2635-45.
UTI
Alcohol
6
Annual Number of Excess Deaths
• Medical Errors in Hospitals: 98,000
• Poor Quality: 42,000-79,000
• Diabetes (for comparison): 73,000
Source: IOM, NCQA, and CDC
7
Inequitable Access
• Uninsured and IOM
• Income-based rationing
8
What IOM concluded
• Cost of uninsurance  cost of coverage expansion,
$65-130B per year
• 18,000 premature deaths annually
• Acutely and chronically ill receive fewer timely
services and have worse morbidity, days lost, etc.
than similar insured patients
• 60 million suffer financial insecurity each year
• People in high uninsured areas suffer from lack of
health resources available to them
9
Percent of median family income
required to buy family health insurance
20
18
16
14
12
10
8
6
4
2
0
18
7.7
1987
2004
Source: Author’s calculations, using KFF and AHRQ premium data,
CPS income data.
10
Result of our incremental
approaches
• Health insurance as we know it is
out of reach of a growing share of
our workforce
11
Why Incremental Reforms Don’t
Work
• No sense of urgency
– We continue to accept the unacceptable
• Key incentives remain unchanged and
perverse
• Excessive individualism
• Problems are LINKED
12
Linkages Among Problems
Access
Cost
Quality
13
Linkages Between Universal
Coverage and Cost Containment
• Uncompensated care costs are shifted to … ?
• Lowest quality care is practiced on uninsured
– Late in disease progression
– Financial barriers to patient compliance
– Lack of information on what patient needs, has had
• How can state of the art info system succeed if 1/6 to
1/4 of population falls or remains out of it over time?
14
Myths That Impede Progress
• Uninsured get all the care they need
• America is rich and can afford unfettered
medical technology growth
15
What Do We Need?
• Moral case
• Economic case
• Delivery system “culture of value”
• Credible policy design
– 3 dimensions of credibility
• Stakeholders, politicians, people
16
Moral Case
• Feed the Hungry
– Gleaning, the community, and the stranger
• Health care joins food as an indispensable
commodity
• IOM clarifies that the lack of health insurance
leads to excess death
• Therefore, to deny insurance is to deny food
• Stewardship over health care resources is also
essential
17
Economic Case
• Health costs are reducing wages, profits,
investments
• Jobs are being lost due to lack of
competitiveness
• Middle class preponderance is not
guaranteed
18
Health System Culture of Value
• Information infrastructure to support quality
improvement
• Safe harbors and value-enhancing incentives (for
all) for service limits
• Comparative technology assessment as
countervailing power between medical technology
and coverage/use decisions
19
Credible Policy Design
• Require individuals to buy private health
insurance
– Make it possible for them to do so
• Subsidies for low income
• Purchasing vehicle for those who need it
• Maintain existing employer system where possible
• Create delivery system culture of value
• Set evidence-based limits on collectively financed
benefits in “American” benefit package (ABP)
• Tie subsidy, tax exclusion, and dedicated revenue
to coverage decisions, ABP
• Preserve liberty and choice
20
Sequence of Policy Steps
• Create political space
– Articulate moral case, explain economic facts and risk
• Institute cost growth containment policies
• Create purchasing requirements, venues, subsidies
• Link dedicated tax revenue appropriation to
evidence-based coverage decisions over time
21
Winners and Losers
• Winners:
– Providers who can prove clinical value added
– Payers and patients who use them
– Politicians who created enabling conditions
• Losers:
– Providers who try to hide behind opaque aura
– Payers and patients who reject information institutions
– Politicians who define freedom as individual provider
autonomy
22
Coalitions of the Willing
• Those who care about their fellow citizens
• Employers who shrink from the future they see
• Governors and state legislators who shrink from
the futures they see
• Providers who want to lead and prosper
• Workers who know access has cost and value
• Politicians who want to lead
23