A Presentation for Health Professional Students

1
The Ailing U.S. Health-Care System A
Prescription for the 21st Century by the Doctors
of the 21st Century
The American Medical Student Association, 2000
Adapted from the Physicians for a National Health
Program Slide Show, by Drs. David Himmelstein and
Steffie Woolhandler

• A Presentation for Health Professional Students
• By Joseph L. Lin and Aalok Agarwala
• Edited by Simon Ahtaridis

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Health-Care Spending Per Capita, 1997
Source OECD, 1998
3
Infant Mortality, 1995Deaths in First Year of
Life/1,000 Births
Source, OECD, 1997
4
Hospital Inpatient Days Per Capita, 1996
Days/Person
Source OECD, 1998
5
44.3 Million
Uninsured
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Who Are the Uninsured?
Source Himmelstein Woolhandler, Tabulations
CPS, 1997
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Percent Uninsured by Race/Ethnicity
Source Census Bureau CPS, 1998
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Milliman Robertson Says That Patients Cant

• have cataracts removed in more than one eye
  unless the patient is young and needs both eyes
  to work.
• stay overnight for a mastectomy.
• stay one day for a vaginal delivery, two days
  for a cesarean.
• see a neurologist for new onset seizures.
• stay three days for a stroke, even if you cant
  walk.

Source NY Times, 3/20/95
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How Managed Care Makes Profits

• Rationing and Denials of Care

• Implementation of Capitation

• Shifting Costs to Patients in the Form of
  Co-Pays and Deductibles

• Fee Discounts

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How Managed Care Makes Profits
Cherry Picking Healthy Patients
Projected Health- Care Costs
Source Health Affairs 1997 16(3)239
11
Dissatisfaction with HMOs
Source Modern Healthcare 10/7/96 (Data from
National Research Corp. survey of 160,000
households)
12
Quality of Care in Investor-Owned vs
Not-for-Profit HMOs

• Compared with not-for-profit HMOs,
  investor-owned plans had lower rates for 14 HEDIS
  quality-of-care indicators.
• If all women in the United States were covered
  in investor owned HMOs rather than non-profit
  plans, there would be an estimated 5925
  additional deaths per year from breast cancer
  alone.

Source JAMA. 7 / 14 / 99. Vol. 282 No. 2.
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HMO Overhead and Profits
Overhead and Profits as a Percentage of Premiums
Source Outlook for Managed Care 1997, Corporate
Research Group Stat Canada, NCHS OECD
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For-Profit MedicineCorporate Social
Responsibility??
Few trends could so thoroughly undermine the
very foundations of our free society as the
acceptance by corporate officials of a social
responsibility other than to make as much money
for their stockholders as possible.
Milton Friedman, Capitalism Freedom, 1962
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Health Care Costs Projected to Rise
Projected
Source Health Care Financing Administration,
Office of the Actuary, 1998
16
Increase in Number of Physicians and
Administrators, 1970-1995
Source Bureau of Labor Statistics NCHS,
Approximate
17
HMO CEO Pay and Stockholdings
CEO FIRM PAY STOCK (in millions) (in
millions) 1996 mid 1997 Malik
Hassan Foundation 17.2 166.4 William
McGuire United Healthcare 14.7
74.7 Leonard Shaeffer Wellpoint 14.2
16.5 David Jones Humana 10.5
223.4 George Jochum MAMSI 5.0
16.9 Alan Hoops Pacificare 4.7
26.9 Stephen Wiggins Oxford 4.6
230.4 Larry House MedPartners 2.5 108.5
Source Managed Healthcare Marketing Report,
1/31/97, 7/15/97
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Options and Avenues for Reform

• Continuing Attempts to Reform
• For-Profit Managed Care
• Medical Savings Accounts
• Expansion of Medicare
• Establishment of a Single-Payer Universal
  Health-Care System

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Continuing Attempts to Reform For-Profit Managed
Care

• Incremental Reform
• Patient Bill of Rights and Other Consumer
  Protection Measures
• Ensuring Accountability of Health Plans

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Medical Savings Accounts

• Sickest 10 percent of Americans use 72 percent of
  care. MSAs cannot lower these catastrophic
  costs.
• The 15 percent of people who use no care would
  get premium refunds, removing their
  cross-subsidy for the sick, but not lowering use
  or cost.
• MSAs would discourage prevention
• Complex to administerInsurers would have to keep
  track of all out-of-pocket payments.
• MSAs would increase Medicare costs by 2 billion,
  as projected by the Congressional Budget Office.

No Savings
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Medical Savings Accounts A Scam
We would make out like bandits, but as a
physician I have a very serious concern that we
would be fragmenting the insurance poolWe are
going into MSAs because these things are going
to be a gold minelet there be no doubt. They
are a scam and we will get our share of that
scam.
Malik Hasan, M.D. Former CEO, Foundation Health
Systems
Source NEJM 1997 3361828
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Expansion of Medicare

• Expand Medicare coverage to additional
  populations incrementally (i.e. children)
• Would not provide comprehensive coverage
• Significant out-of-pocket costs would remain

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Single Payer What Is It

• Universal, comprehensive coverage, including
  preventive care
• No out-of-pocket payments
• A single, public payer
• Public accountability
• No for-profit HMOs or providers
• Centrally funded, locally administered with
  minimal bureaucracy
• Coordinated community-based care

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Single Payer in Action

• Administration Savings
• Significant reduction of administrative costs.
• Provides a more simplified and uniform system for
  distribution of funds.

• Patients and Clinical Providers
• More funds for patients and clinical providers.
• More funds for diagnostic and treatment
  technologies.
• Physicians still remain autonomous, and patients
  can choose their doctors.

67 Billion
U.S. General Accounting Office. Canadian Health
Care Lessons for the U.S. 1991
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Health Costs as of GDPUnited States and
Canada, 1960-1995
Source Statistics Canada NCHS/Commerce
Department
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Paperwork CostsUnited States and Canada, 1991
Administration 11
Administration 24
U.S.
Canada
Clinical Care 76
Clinical Care 89
Source Woolhandler/Himmelstein NEJM 1991
3241253
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What Does Single Payer Mean to the Average Family
Universal Health Coverage How Do We Pay for
It? Edie Rasell, M.D., Ph.D.
Single-payer insurance would be financed through
a progressive tax, spreading the burden of health
care more evenly.
The average middle-income family would have an
income tax increase of 731. That increase in
income tax would replace premium payments and any
out-of-pocket expenses.
Source http//www.epinet.org/
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Single Payer in Action

• Will there be long waiting times for procedures?

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Single Payer in Action

• Will there be long waiting times for procedures?

• Waiting for Coronary Artery Bypass Surgery in
  Ontario
• A Study of 8,517 Consecutive Patients Referred
  for CABS
• 0.4 died before surgery.
• Overall median wait pre-op 17 days.
• Median wait for urgent cases 1 day.
• Waiting time varied substantially between
  hospitals.
• Best predictors of waiting time were symptom
  status and coronary anatomy.

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Single Payer in Action

• Will there be long waiting times for procedures?

Although Canada spends half of what we do on
health care, surveys show that Canadians have
significantly lower out-of-pocket expenses, can
see a specialist or get needed care more easily
than Americans.
Canadians receive high-technology care at a rate
comparable to Americans. A comparison of heart
and/or lung, kidney, liver and bone marrow
transplants revealed similar rates for the two
countries.
Source Health Affairs 1996 15(2) 263, OECD
1995 and ANN INT MED 1992116507
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Single Payer In Action

• Will there be long waiting times for procedures?

What about physician salaries?
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Single Payer in Action
Will there be long waiting times for procedures?
What about physician salaries?
Average physician salaries would remain
essentially the same, though the range of
salaries would narrow due to standardization of
reimbursements.
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Single Payer in Action
Will there be long waiting times for procedures?
What about physician salaries?
Will the government determine which doctor the
patient can see, and what the doctor can do?
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Single Payer in Action
Will there be long waiting times for procedures?
What about physician salaries?
Will the government determine which doctor the
patient can see and what the doctor can do?
Single payer is not socialized medicine. A
single-payer system does not dictate what a
doctor can do, and which doctors patients choose
to visit. The single-payer system allows more
doctor and patient autonomy than the current
system under managed care.
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Single Payer in Action
Will there be long waiting times for procedures?
What about physician salaries?
Will the government determine which doctor the
patient can see, and what the doctor can do?
How will medical students be affected?
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Single Payer in Action
Will there be long waiting times for procedures?
What about physician salaries?
Will the government determine which doctor the
patient can see, and what the doctor can do?
How will medical students be affected?
Medical students in Canada graduate with a
significantly lower debt than American graduates
due to large public subsidies for education.
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Single Payer in Action
Will there be long waiting times for procedures?
What about physician salaries?
Will the government determine which doctor the
patient can see, and what the doctor can do?
How will medical students be affected?
Is a single-payer system politically feasible?
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The Decision Is Yours!Speak Up, America!
Health Care Is Our Right!
Todays System
Single Payer

• 44.3 Million Uninsured
• Restricted Patient Choice
• High Patient Dissatisfaction
• High Physician Dissatisfaction
• Over 100 billion wasted each year on unnecessary
  administrative costs and profit
• Higher out-of-pocket costs for those who are
  insured
• Bottom line more important than patient care

• Universal, comprehensive coverage for all
  populations
• Greater freedom of choice for patients and
  physicians
• Improved preventive care
• Improved quality of care for all, especially the
  uninsured, disabled, poor, chronically and
  mentally ill, and children
• Cost-efficient system of delivery with minimal
  bureaucracy

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For More Information
Physicians for a National Health Program
Physicians for a National Health Program 332 S.
Michigan, Suite 500 / Chicago, IL 60604 (312)
554-0382 fax [phone] www.pnhp.org The
Center for National Health Program
Studies Harvard Medical School/The Cambridge
Hospital 1493 Cambridge Street, Cambridge, MA
02139 [phone]
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For More Information About AMSAs Initiatives,
Contact
American Medical Student Association Simon
Ahtaridis, Legislative Affairs Director 1902
Association Drive Reston, VA 20191 (703)
620-6600, ext. 211 E-mail lad_at_www.amsa.org
Check our universal health care initiative web
site for ideas on how you can get
involved. www.amsa.org