Transcript Critical Condition: How Health Care in America Became Big

Critical Condition:
How Health Care in America Became Big
Business & Bad Medicine
Donald L. Barlett & James B. Steele
Failure of a Market-Driven System
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Failure to control costs.
Failure to provide equitable access to care
Distortions in the provision of care.
Lack of incentives for needed medical/
pharmaceutical research.
Health Care Spending 2004
• USA National health Expenditures $1.87
Trillion
• USA $6,280 per capita
• OECD median $2,193 per capita
• 53% more than any other OECD country
• 140% above the OECD median
Health Care Spending 2003
• USA spent 16.0% GDP
• Only Switzerland and Germany spent
more than 10%
• Annual Growth in spending 1992-2003
– USA 3.3%
– OECD 3.4%
In every OECD the growth of health care
spending outpaced inflation.
Uninsured
• 2001 41.2 million
• 2004 45.0 million
15.2% population
Health Status 2003
Male Life Expectancy
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1. Japan
2. Spain
3. Switzerland
23. USA
85.3 years
83.7 years
83.0 years
79.9 years
Health Status 2003
Male Life Expectancy
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1. Japan
2. Switzerland
3 Spain
22. USA
78.4 years
77.8 years
77.2 years
74.5 years
Reasons for Rising Health Care
Costs
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Aging
Technology
Waste/Inefficiency
The Legal System
New Diseases
Fraud
Rising Prices
Efforts to Slow Rising Costs in the
USA
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Increased cost sharing
Consumer choice
Disease management
Evidence-based practice
Information Technology
Tort Reform
Supply of Health Resources
• Number of RNs
– USA
7.9/1,000 pop
– OECD 8.9/1,000
• Number of Physicians
– USA 2.4/1,000 pop
– OECD 3.1/1,000
• Number of Hospital Beds per capita
– USA 2.9/1,000 pop
– OECD 3.7/1,000
Supply of Health Resources
• Number of CT Scanners
– USA 12.8/million pop
– OECD 13.3/million
• Number of MRI Units
– USA 1.4/million pop
– OECD 1.0/million
Malpractice Claims and Payments
2001
Country
USA
Claims/1,000
pop
0.18
Av. Payment or
settlement
$265,103
Canada
0.04
$309,417
UK
0.12
$411,171
Australia
0.12
$ 97,014
Annual Growth of Malpractice Payments
1996-2001
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USA
UK
Canada
Australia
5%
10%
20%
28%
Most Important Reasons for Higher
USA Spending
• Higher incomes
• Higher medical care prices for
pharmaceuticals, hospital stays, physician
visits, etc.
Reform Proposals
• Universal coverage
• Single-payer system
• Administration
o U.S. Council on Health Care (USCHC).
o Quasi-governmental organization like the Federal
Reserve System.
o Set policy for health care.
o Control federal spending for basic and catastrophic
medical coverage.
Reform Proposals
• Funding: Two taxes
o Tax on gross receipts of businesses.
o Flat tax on individual income (like the Medicare tax).
• USCHC Regions
o Take into account regional differences
• Individual could supplement basic government
supported coverage with private insurance.
Curing the Problems
• Guarantee basic levels of care for
everyone.
• Establish flexible co-pays for basic care.
• Pay all costs of catastrophic illness.
• Restore freedom of choice.
• Redirect health care spending to disease
prevention.
• Curtail out-of-control prescription drug
costs.
Curing the Problems
• Provide drug information to consumers.
• Concentrate health care spending on costeffective areas.
• Control costs by reducing variation in
health care spending.
• Correct unrealistically low provider
reimbursement rate.
• Stop the trend toward over-diagnosis and
over treatment.
Advantages
• Reduce medical errors.
• Reduction in malpractice claims and
malpractice insurance premiums
• Reduction in defensive medicine.
• Provide information on best practices.
• Negotiate drug prices.
Health Spending : Driving Forces
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Prices
Technology
Ageing
Waste and inefficiency
The legal system
New diseases
Corporate consolidation
Profligate providers and consumers
Efforts to Slow Rising Costs
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Increased cost sharing
Consumer choice
Disease management
Evidence-based practice
Information technology
Tort reform
If insurers and Employers require members to pay more out-ofpocket for health care, how much do you think each of the following
will happen? (Harris Poll September, 2003)
Influence people to make better decisions about their
health
35%
Reduce unnecessary care
36%
Reduce the use of expensive prescription drugs
Harm the health of the public
49%
54%
Cause preople to go without prescription drugs
63%
Cause people to go without care
64%
Increase use of Generic Drugs
65%
0%
20% 40% 60% 80% 100%
A Lot