An Abbreviated History of American Health Politics Dr. J. Hughes Bioethics and Public Policy Trinity College

1
An Abbreviated History of American Health
PoliticsDr. J. HughesBioethics and Public
PolicyTrinity College Summer 2010
2
Policy Analysis Models

• Who gets what and why
• Inputs influences on government
• Process the legislative bargaining and
  maneuvering
• Outputs decisions, actions and implementation

3
Type of Explanations

• Government as rational actor
• Popular rule through elections/rep elites
• Political bargaining/Interest groups
• American political culture
• Legislative process
• Elite rule
• Marxist Functionalism
• Class Struggle Marxism

4
Dimensions of Power

• Coercive A and B fight, B loses
• Remunerative A buys Bs consent
• Normative A convinces B that As way is the
  only way
• Nondebates A keeps B from ever thinking about
  what she wants

5
"Democratic Culture"

• The Jacksonian compromise between capitalism and
  democracy
• Domestic Medicine
• The Medical Counterculture
• Thomsonians, homeopaths
• What is homeopathy (3min)
• Professional Medicine
• AMA founded 1847

6
Germ Theory of Disease

• 1867 - Joseph Lister publishes On the Antiseptic
  Principle in the Practice of Surgery, showing
  that disinfection reduces post-operative
  infections.
• 1879 - Pasteur demonstrates anthrax vaccine
• 1882 Koch demonstrates TB cholera
  micro-organisms
• 1885 Pasteur develops rabies vaccine
• 1916 - Polio epidemics break out, continue for
  decades
• 1918-1919 - Flu pandemic kills 15 million people
  worldwide, 600,000 in U.S.

7
Allopathic medicine triumphs

• 1910 Flexner Report
• Hospitals become centers for healing
• AMA becomes powerful guild

Abraham Flexner
8
Alternative Social medicine

• Role of poverty, housing and education
• Growth of social insurance in Europe
• John Snow and the removal of the Broad Street
  pump handle (8 min video)

John Snow
9
Progressives and the AALL

• Theodore Roosevelt 1901 -- 1909
• AALL Bill 1915
• AMA supported AALL Proposal
• AFL opposed AALL Proposal
• Private insurance industry opposed AALL Proposal
• WWI and anti-German fever
• Why did the Progressives fail?

10
1930s Health Care in Crisis

• Blue Cross and Blue Shield get started
• FDR's first attempt at NHI -- failure to include
  in the Social Security Bill of 1935
• Food, Drug and Cosmetic Act
• FDA given control over drug safety
• Establishes class of drugs available by
  Prescription
• FDR's second attempt at NHI -- Wagner Bill, Nat.
  Health Act of 1939

11
1940s Building Modernity

• War, trauma and penicillin
• 1946 Hill/Burton Act
• 1946 - British Nat. Health Service
• Wagner-Murray-Dingell Bills
• 1948 - Truman's Support
• Growth of private insurers

12
1965 Medicare/Medicaid

• Medicare A Hospital costs, paid for with
  payroll tax
• Medicare B Supp insurance for docs outpatient
• Medicaid federal-state program for the poor, all
  hospital, doc, lab, home health and nursing home
  care
• Expected goal universal health coverage in 20
  years
• No fee schedules for docs or hospitals
• Expected 1990 cost 10 billion
• Actual 1990 cost 180 billion
• 1969 Canadians enact Nat. Health Insurance

13
1970s Costs spur innovation

• Costs begin to rise
• Growth of bureaucracy
• Growth of medical specialists
• 1973 Nixon passes HMO Act provided subsidies
  and exempted from regs
• 1972-1979 Ted Kennedys campaign for NHI

14
1980s Managed Care

• DRGs
• Growth of Managed care
• Growing interest among employers in controlling
  costs
• Capitation of physician payment
• Growth in size of physician groups
• Growth of for-profit institutions
• Selective contracting
• Price competition
• Mergers and acquisitions Hospital Corporation of
  America
• Vertical and horizontal integration
• HMOs for Medicaid and Medicare

15
Managed Care Types
16
Type of Health Plan

• HMOs v. PPOs (1min)
• HMO vs POS vs PPO (4min)

17
1990-1994 Clinton Effort

• Harris Wofford elected on single-payer platform
• 1994 Clinton Health Plan
• Committee of 500
• Managed competition

18
Clintons Plan
19
1994-2008

• 1996 HIPAA patient info privacy
• 1997 CHIPS subsidized childrens insurance
• 1997 Part C Medicare Advantage plans
• States Patient Bill of Rights
• 2006 Part D Prescription Drug plans

20
Reform Support Was High
21
Majorities Favored Elements
22
2009 Obamas Reform

• Frontline history 60min
• Compromises
• Pharmaceutical prices
• Public option
• Individual Mandate
• Expansion of Medicaid and subsidies
• Health Insurance Exchanges
• No pre-existing condition high-risk pool

23
But, we are still the most expensive

• Total health spending 17 of GDP in the United
  States in 2009, highest in OECD
• Canada and France about 10
• OECD avereage 8.6
• 2,000,000,000,000 a year
• 1 trillion increase in health care spending over
  the last decade

24
As a Percent of Family Income
25
Health Care Costs per Capita
  1970 1980 1990 2003
United States 352 1,072 2,752 5,711
Switzerland 351 1,031 2,029 3,847
Norway 141 665 1,393 3,769
Iceland 163 703 1,593 3,159
France 205 697 1,532 3,048
Belgium 148 636 1,341 3,044
Canada 299 783 1,737 2,998
Austria 193 770 1,328 2,958
Netherlands NA 755 1,435 2,909
Australia 252 691 1,306 2,886
Sweden 312 944 1,589 2,745
Denmark 384 927 1,522 2,743
Ireland 117 519 794 2,455
United Kingdom 163 480 987 2,317
Italy NA NA 1,387 2,314
Japan 149 580 1,116 2,249
Finland 191 590 1,419 2,104
26
Cost per Year per Capita
27
Cost Trends 1980-2004
28
Public/Private Expenditures
More than 75 of health spending is through
public insurance in other countries, just half in
US
29
Putting Off Care Because of Cost
30
Consequences
31
Causes of Health Care Inflation

• Technology
• Aging of population, longer lifespan
• Lack of effective competition or global budgeting

32
Administrative Overhead
33
Admin Staff per Patient
34
Life Expectancy
35
Spending Life Expectancy
36
Infant Mortality
37
Obesity
38
Mental Illness
OECD 2009 - http//dx.doi.org/10.1787/538536332624
39
Uninsured in the US
The problem of the uninsured is continuing to
grow. The federal government estimates that over
45 million individuals lacked health insurance
coverage of any kind during 2008.
Source SHADAC estimates from the Current
Population Survey Annual Social and Economic
Supplements, 1995-2008. Note 1995-2003 data are
adjusted for Census correction announced in March
2007.
40
Future Trends

• Financial Viability of Medicare and Medicaid
• Pressures for universal coverage and cost
  containment
• Emerging technologies could
• dramatically reduce or expand costs,
• eliminate, create or transform professions,
• enable consumer choice and quality measurement

41
IDEOLOGIES AND MARKETS
42
Democracy

• Liberty/Autonomy
• Solidarity/Beneficence
• Equality/Justice

43
Autonomy/Liberty

• Negative freedom from coercion
• Positive freedom to
• Exit and Voice
• Patient autonomy and informed consent
• Right to refuse   

44
Beneficence/Solidarity

• Positive rights to demand entitlements of
  citizenship
• Should access to basic health care be a right?
• Which services should health care providers be
  obligated to provide regardless of risks or their
  moral or economic reservations?

45
Justice/Equality

• Equal opportunities
• Equality before the law
• The right to control institutions through equal
  sufferage

46
Market vs. State

• Exit vs. Voice
• Efficiency vs. Equality
• Flexibility vs. Accountability
• Responsibility vs. Solidarity
• Freedom from vs. Freedom to

47
Rights

• Dems, liberals, women, the young, seculars
  support healthcare rights

48
Principles for allocation of scarce medical
interventions
49
Emanuel et als Proposal
50
GOVERNMENT IN HEALTH CARE
51
TransNational Agencies

• UN World Health Organization
• Foreign Aid
• International Family Planning
• Refugee Assistance and Famine Relief
• WTO and Transnat. Treaties on Environmental
  Protection

52
Executive Branch

• Health and Human Services
• The Secretary of Health and Human Services (OS)
• Administration for Children and Families (ACF)
• Administration on Aging (AOA)
• Agency for Healthcare Research and Quality (AHRQ)
  
• Agency for Toxic Substances and Disease Registry
  (ATSDR)
• Centers for Disease Control and Prevention (CDC)
• Food and Drug Administration (FDA)
• Health Care Financing Administration (HCFA)
• Health Resources and Services Administration
  (HRSA)
• Indian Health Service (IHS)
• Program Support Center (PSC)
• Substance Abuse and Mental Health Services
  Administration (SAMHSA)
• National Institutes of Health (NIH)

53
National Institutes of Health

• Office of the Director (OD)
• Nat. Cancer Institute (NCI)
• Nat. Eye Institute (NEI)
• Nat. Heart, Lung, and Blood Institute (NHLBI)
• Nat. Human Genome Research Institute (NHGRI)
• Nat. Institute on Aging (NIA)
• Nat. Institute on Alcohol Abuse and Alcoholism
  (NIAAA)
• Nat. Institute of Allergy and Infectious Diseases
  (NIAID)
• Nat. Institute of Arthritis and Musculoskeletal
  and Skin Diseases (NIAMS)
• Nat. Institute of Child Health and Human
  Development (NICHD)
• Nat. Institute on Deafness and Other
  Communication Disorders (NIDCD)
• Nat. Institute of Dental and Craniofacial
  Research (NIDCR)
• Nat. Institute of Diabetes and Digestive and
  Kidney Diseases (NIDDK)

• Nat. Institute on Drug Abuse (NIDA)
• Nat. Institute of Environmental Health Sciences
  (NIEHS)
• Nat. Institute of General Medical Sciences
  (NIGMS)
• Nat. Institute of Mental Health (NIMH)
• Nat. Institute of Neurological Disorders and
  Stroke (NINDS)
• Nat. Institute of Nursing Research (NINR)
• Nat. Library of Medicine (NLM)
• Warren Grant Magnuson Clinical Center (CC)
• Center for Information Technology (CIT)
• Nat. Center for Complementary and Alternative
  Medicine (NCCAM)
• Nat. Center for Research Resources (NCRR)
• John E. Fogarty InterNat. Center (FIC)
• Center for Scientific Review (CSR)

54
Congressional Health Policy Committees

• Senate Committee on Health and Labor
• House Ways and Means Committee
• Lobbyists

55
Other Federal Health Policy

• Supreme Court Rulings on Assisted Suicide,
  Oregon scheme, etc.
• EPA
• CHAMPUS

56
State and Local

• State
• State Legislative Committees
• State Depts of Health
• State Depts of Insurance Regulation
• State Depts of Professional Regulation
• Municipal and County Depts of Health
• Micropolitics
• Hospitals

57
COMPARATIVE SYSTEMS
58
American Exceptionalism Lack of Global Budgeting

• Year in which elected representatives enacted
  universal health care
• Germany 1883
• Switzerland 1911
• New Zealand 1938
• Belgium 1945
• United Kingdom 1946
• Sweden 1947

• Greece 1961
• Japan 1961
• Canada 1966
• Denmark 1973
• Australia 1974
• Italy 1978
• Portugal 1979
• Spain 1986
• South Africa 1996

59
Causes of American Exceptionalism

• Libertaran values
• Weak federal structures
• Racial and ethnic diversity
• Lack of a strong socialist movement

60
Over-Use of High-tech, Under-Use of Public
Health

• Over-specialization of physician labor force
• Underuse of non-physician providers
• Too Few Primary Care Docs
• Underinvestment in public health and primary care

61
Lack of Clear Priorities Rationing

• Priority-Setting in National Systems
• British Informal Rationing
• The Oregon Approach

62
Lack of Adequate Competition

• Third Party Payment Makes No One Accountable
• Health Purchasing Decisions are Too Complex 

63
Canadian National Health Insurance (Medicare)

• 1946 - Swift Current, Sask.
• 1947 - Saskatchewan
• 1957 - Liberal government of Louis St. Laurent
  introduces a national hospital insurance program.
  
• 1965 - Royal Commission headed by Emmett Hall
  calls for a universal and comprehensive national
  health insurance program
• 1966 - Parliament enacts Bill 227, creating a
  national health insurance system
• 1977 - Trudeau Liberals replaces from 5050
  cost-sharing with 5yr block payments
• 1978 - Doctors begin extra-billing to raise
  their incomes above the levels provided through
  public insurance schemes (1980-84)
• 1980-84 - CHC calls for Canadas health care to
  reflect 5 principles public and non-profit
  comprehensive universal portable and
  accessible.
• 1984 - Canada Health Act

64
British National Health Service

• 1942 - Beveridge report
• 1946 - The NHS Bill
• 1948 Implementation
• 1980s Thatcher reform attempts
• 1991 NHS Trusts
• 2000 Blair examining reforms

65
Hospital Use per Capita in OECD, 2004
66
Hospital Costs per Day in OECD, 1996
67
Hospital Days
68
Hospital Days, MI Childbirth
69
Doctor Visits per Capita
70
Physician Incomes in OECD, 1996

• After adjusting for inflation, physician incomes
  increased most rapidly in the United States
  between 1965 and 1991

71
Mean Physician Income 1992-1996
In 1973, the average income for physicians in
private practice was 137,000, which was 4 times
greater than the median income. In 1997, the
average income for physicians in private practice
was 200,000, which was 10.6 times greater than
the median U.S. income of 18,800.
Managedcaremag.com
72
MRIs in the OECD, 2006
73
INSURANCE AND MANAGED CARE
74
Basic Ideas of Insurance

• Risk pools
• Means testing
• Risk-rating and Community-rating
• Guaranteed Issue, Renewability and Portability
• Pre-Existing Conditions
• Mandating Coverage

75
What is Managed Care?

• The Industrial Model
• Changes in Physician Practice
• Changes in Physician Payment
• Exclusion of Expensive Providers
• Changes in Organizations

76
Changes in Physician Practice

• gate-keeping primary-care assignment
• pre-utilization authorization
• utilization review
• doc, unit, hospital plan report cards
• practice guidelines critical pathways

77
Where the Primary Care Docs Will Come From
78
Hospital Stays After Childbirth

• Dr. Frank (Dartmouth Med School) studied 15,000
  infants born in New Hampshire in 1993.
• Of those newborns discharged early
• 1.61 were re-admitted
• additional 2.04 needed emergency care
• among those who stayed at least two days,
• 1.09 were re-admitted
• 1.17 were treated in the emergency room.
• The medical costs of all 361 infants who returned
  to the hospital was 670,000, while savings of
  discharging the 3600 newborns early was 7.5
  million.

79
Changes in Physician Payment

• FFS
• Capitation
• At-risk" capitation
• Salaried employment

80
Physician Incentives
Have as Few Patients as Possible, and See Them As
Little As Possible
Salary
FFS
FFS with Ownership of Equipment
Capitation
At-Risk Capitation
Have a Many Patients as Possible, But Do As
Little As Possible For Them
Have a Many Patients as Possible, and Do As Much
As Possible To Them
81
Exclusion of Expensive Providers

• PPOs and "economic credentialing"
• substitution for physicians NPs, PAs, etc.
• Gatekeeping

82
Changes in Organizations

• integration of all services and payments
• shrinking hospitals more ambulatory care,
  shorter stays, more home care
• The Medical Loss Ratio

83
Managed Care Models

• Staff-Model HMO
• Group-Model HMO
• Network-Model HMO
• Individual Practice Association (IPA)
• Point of Service (POS)
• Preferred Provider Organization (PPO)

84
Alleged Decline of Managed Care

• PPOs most popular
• PPOs contract with panels of providers who agree
  to provide medical care and be paid according to
  a negotiated fee schedule.
• Less oversight of services used than for HMOs.
• Out-of-network visits more expensive but large
  numbers of providers often make going outside
  unnecessary.

85
HMOs and Preventive Medicine

• 1. HMOs can't count of being rewarded for
  long-term investments
• 2. HMOs (and physicians) don't know how to
  deliver effective prevention, and to the extent
  that they have...
• 3. Effective prevention programs often are as
  expensive as treating the illness, especially
  across the life-course
• 4. Consequently, while there is plenty of
  evidence that HMOs have reduced tests, procedures
  and hospitalizations with little negative
  effect...
• 5. There is little evidence that HMOs provide
  more or better preventive medicine
• Conclusion If the only group sure to profit is
  society as a whole, than the appropriate investor
  is society.