Healthcare in America

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Healthcare in America

• David Hanig
• February 18, 2003

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Of all the forms of inequality, injustice in
health care is the most shocking and inhumane.

• -Martin Luther King, Jr.

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A Roadmap

• Over the next hour, we will
• Describe the state of healthcare today
• Try to explain how we got here
• Hint at where we are headed

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Total U.S. Health Care Expenditures as a
Percentage of Gross Domestic Product, 1960-95
Healthcare costs growing
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No Sector is Spared
National Per Capita Health Expenditures 1980-2001
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In WA State, Healthcare Increasing Faster than
Other Areas
The Rising Cost of Medical
SOURCE Legislative Evaluation and Program
Committee (LEAP), ProShare calculation from DSHS
Budget Division. Medical costs include the
Washington State Health Care Authority and DSHS
Medical Assistance payments.
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Medical Pac Man of DSHS?
2001-03 Biennium 14.1 Billion
DSHS Budget 1987-89 4.5 Billion
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Nationally, most coverage is employer-based,
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Combined Medical Assistance and Basic Health
Enrollment for Children and Adults as of
Population
But, public coverage is gaining steadily
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And uninsured are growing faster
WA State Survey WA State Survey
Uninsured in 2000 8.4
Uninsured 2002 10.7
Note U.S. Census Bureau shows much higher levels of uninsured Note U.S. Census Bureau shows much higher levels of uninsured
More Stats about Uninsured More Stats about Uninsured
Age 19-24 19.5
Households below 35,000 19.5
Hispanics 22.8
Native Americans 24.4
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(No Transcript)
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How did we get here?
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Beginnings - Poor Law of 1601

• Primary focus Deserving or Undeserving?
• Provide care for the lame, old, impotent, blind,
  and such other among them being poor and not able
  to work.
• Society should help those in need through no
  fault of their own. As for others
• Able-bodied poor put to work in poorhouses
• Able, but unwilling provide nothing
• These ideas continue unbroken to our time

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The U.S. Built on Poor Laws

• Early Republic initiated some programs notably
  Public Health Service, which started as insurance
  for indigent sailors
• After Civil War, Veterans services. Grew
  substantially after WWI. (Is VA obstacle to
  universal coverage?)
• These programs conformed to strict notions of
  deserving v. undeserving.

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20th Century Attempts

• Several attempts for healthcare coverage through
  1946, including one major effort under Roosevelt
  in 1930s
• At the end of World War II, Truman promoted
  comprehensive, prepaid medical insurance plan
• AMA and business opposed it as socialized
  medicine and it was defeated.

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Finding the Deserving

• Post-Truman, focus shifted from universal
  coverage to covering the deserving
• 1965 Passage of Medicare Medicaid
• Elderly (could not get private insurance
  coverage)
• Disabled
• Poor Children (in need through no fault of their
  own)
• Redux Elizabethan Poor Laws the lame, old,
  impotent, blind, and such other among them being
  poor and not able to work.

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Focus on deserving leads to

• Byzantine screening rules. Example
• Aliens who were in U.S. before August 22, 1996
  can get Medicaid BUT
• Aliens who entered U.S. after August 21, 1996
  cant get Medicaid for 5 years, EXCEPT
• Those in U.S. military
• Veterans of the Philippines military before July
  1, 1946
• Hmong or Highland Lao veteran or
• Spouse or child of above
• And this is just one of literally tens of
  thousands of similar regs!

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Result Costly, bureaucratic system

• Costs millions to determine who is eligible and
  who is not
• 5,000 FTEs in WA State just for eligibility and
  that is not nearly enough!
• Confusing rules pose barriers to entitled and
  require expensive outreach efforts
• A system designed by Kafka and executed by the
  Marx Brothers!

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Other Ills - to shift or not to shift

• Administrative costs highest in the world 25 of
  healthcare dollars
• Cost-shifting primary driver find someone else
  to pay the bill
• Average primary care provider has 3.0 FTEs just
  to handle billing and admin.

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Meanwhile, outside the U.S. . . .

• In 1900s, other industrializing nations
  established health insurance for workers and
  dependents
• Later extended coverage
• Post-WW2 devastation prompted universal social
  programs moving away from deserving v.
  undeserving

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Result Uncontrolled Expenditures in U.S.
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Compare Contrast

• Countries with universal, public- financed
  coverage
• Better control of rising costs by bargaining with
  physicians, hospitals, and corporations
• Tried to maintain social equity in access to
  facilities and treatments.

• The U.S.
• Government subsidized employers, private
  hospitals, physicians, and pharmaceuticals
• Skyrocketing costs
• Shrinking access
• Growing social inequity

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Whats next?
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• It is now more than half a century since the
  first European country passed from debate on the
  advisability of social health insurance to
  actual legislation.
• There are now 22 countries, including all the
  industrialized countries of the world except the
  United States, that have compulsory health
  insurance . . ..
• The time is ripe for action."
• Dr. Barbara ArmstrongTestimony to CongressJuly
  5, 1935.

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Current Federal Initiatives

• Block grant Medicaid and shift long-term
  responsibility to states
• Use of tax incentives to expand coverage
• Medicare Rx coverage
• Safety net for poor
• Will these steps help or hinder?

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Our Future (according to Feds)

• Slower Medicare and private personal health
  spending growth
• Higher Medicaid spending growth due to
• Weak labor markets
• Continued private health premium inflation
• Private health insurance enrollment peaked in
  2000 during hot job market. Enrollment has
  since declined

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More Health Care Inflation

• Pharmaceutical products few controls
• Labor market nurses, techs, pharmacists
• Hospital consolidation and market power
• New, innovative drugs, devices, procedures
• Elderly those with disabilities living longer
• Result 2001-2012, healthcare share of GDP will
  increase from 14.1 to 17.7

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Result Uncontrolled Expenditures in U.S.
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Future (continued)

• Percent of people with private insurance will
  decline
• Shift to service jobs without coverage
• Slowing real per capita income growth
• Employers and insurers to shift more costs to
  employees
• 1 Cause of bankruptcy healthcare costs
• Result Increase in uninsured AND increase in
  underinsurance

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Long-Term Prospects

• As costs escalate, coverage declines and more
  people have no or catastrophic coverage, pressure
  will grow
• But, groups getting some of the 1.5 trillion
  will resist systemic changes
• We tend to look for incremental solutions
• Is Government the solution?

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• Only one other time in our history did we move
  away from our focus on helping only the deserving
  to supporting all. During the Great Depression,
  when over 1/3 of people were unemployed and
  nearly all Americans were suffering, we
  recognized our connectedness to others and
  enacted programs to benefit all.

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• This seeking for a greater measure of welfare
  and happiness does not indicate a change in
  values. It is rather a return to values lost in
  the course of our economic development and
  expansion . . ."
• Franklin D. Roosevelt Message to Congress
  regarding passage of Social Security Act
• June 8, 1934.

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Citations

1. Health Spending Projections For 20022012 Stephen
   Heffler, Sheila Smith, Sean Keehan, M. Kent
   Clemens, Greg Won, and Mark Zezza in Health
   Affairs 7 February 2003. http//www.healthaffair
   s.org/WebExclusives/Heffler_Web_Excl_020703.htm
2. Scope of the Health Care Cost Challenge.
   National Health Policy Audioconference, July 30,
   2002. Professor James C. Robinson, University of
   California, Berkeley. www.ehcca.com/presentations/
   healthpolicyaudio20020730/robinson.pdf
3. The Development of the American Health Care
   System. Lecture for Social Analysis 54, by Theda
   Skocpol. http//cg.harvard.edu/sa54/lectures/PD
   F/lecture_4-15-02.pdf

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Citations

• Health Policy Analysis Program University of
  Washington School of Public Health and Community
  Medicine http//depts.washington.edu/hpap/
• http//cms.hhs.gov/about/history/milestones.asp
• http//www.fvcc.edu/academics/dept_pages/human.ser
  vices/poorlaws.htm