1. 1 Health Coverage and Care in the United States Comparing the U.S. and Canadian Systems Richard N. Gottfried Chair, NY State Assembly Health Committee CSG-ERC Annual Meeting August 2011 Halifax, NS

2. 2 “(T)he U.S. health system is not delivering superior results despite being more expensive, indicating opportunities for cross-national learning to improve health system performance.” The U.S. Health System in Perspective: A Comparison of Twelve Industrialized Nations, David A. Squires, Commonwealth Fund, July 2011

3. 3 History Early 1800s – U.S. decided: universal, free, public education is part of “public agenda” No one thought to add health care: Health care was leeches, doctor with a saw, nurses to keep you comfortable while you die. Not expensive. Why would one turn to the government?

4. 4 Then some things changed... Health care became: Very effective Very expensive Most world, including U.S.: Using 3rd Party Payers But: done very differently

5. 5 Sources of U.S. Health Coverage Private & Public %’s overlap: Some have 2 or more coverages 64% = Private (mainly employer) - declining 31% = Public - growing Medicaid: 15% Medicare: 15% 17% = No coverage - growing

6. 6 Source: DeNavas Walt, Carmen Bernadette D. Proctor, Jessica C. Smith: Income, Poverty and Health Insurance Coverage in the United States:2009, U.S. Census Bureau, 2010

7. 7 Private Coverage Insurance Co’s focus: Earn dividends for stockholders Charge as much as they can Pay out as little as they can Employer’s focus: Earn dividends for stockholders Spend as little as possible Individual coverage Hard to look at anything but price

8. 8 Private Coverage Pressure = all downward: Say “No” whenever possible Pay as little as possible Little incentive for investing in primary/preventive care: When it pays off -- you’ll be someone else’s customer

9. 9 Public Coverage -- Medicaid “Programs for the poor tend to be poor programs” Poor = not a powerful constituency Pressure = downward Except perhaps for Major institutions Unionized

10. 10 Public Coverage -- Medicare Covers all elderly, rich and poor Not “for the poor”  Pressure = balanced Downward pressure – keep taxes down Upward pressure: Powerful constituency Middle & upper income  Medicare most popular part of system

11. 11 Growth in Spending, 1969-2005, Medicare vs. Private Insurance Per Enrollee Source: David Himmelstein and Steffie Woolhandler, citing K. Levit, CMS, personal communication

12. 12 And yet... “(T)he U.S. health system is not delivering superior results despite being more expensive, indicating opportunities for cross-national learning to improve health system performance.” The U.S. Health System in Perspective: A Comparison of Twelve Industrialized Nations, David A. Squires, Commonwealth Fund, July 2011

13. 13 A lot more expensive... Health Care Spending per Capita, 2008 Adjusted for Differences in Cost of Living * 2007. Source: OECD Health Data 2010 (Oct. 2010). Dollars

14. 14 Source: OECD Health Data 2010 (Oct. 2010). …and the gap is widening Spending on Health, % of GDP, 1980–2008

15. 15 Who pays? Employers Consumers Share of premium Out of pocket Taxpayers – 57% Medicare, Medicaid & tax subsidy of employment-based coverage Even more than in Canada

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17. 17 Why so expensive? Why isn’t all that downward pressure working? Not because we use more health care...

18. 18 We use hospitals less Average Annual Hospital Inpatient Acute Care Days per Capita, 2008 Source: OECD Health Data 2010 (Oct. 2010). * 2007. ** 2006.

19. 19 We go to the doctor less Average Annual Number of Physician Visits per Capita, 2008 Source: OECD Health Data 2010 (Oct. 2010). * 2007. ** 2006.

20. 20 You might think we’re getting excellent results for what we’re paying. But we’re not.

21. 21 “(T)he U.S. health system is not delivering superior results despite being more expensive, indicating opportunities for cross-national learning to improve health system performance.” The U.S. Health System in Perspective: A Comparison of Twelve Industrialized Nations, David A. Squires, Commonwealth Fund, July 2011

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23. 23 Life Expectancy at Birth, 2008 * 2007. Source: OECD Health Data 2010 (Oct. 2010). Years

24. 24 Life Expectancy at Age 65, 2008 * 2007. ** 2006. Source: OECD Health Data 2010 (Oct. 2010). Years

25. 25 Administrative Costs Multiple health plans, each spending on Marketing Bureaucracy for saying “No” Dividends to stockholders Health care providers Dealing with multiple plans

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29. 29 Medicare & Medicare HMOs, Administration & Profit, % Source: David Himmelstein and Steffie Woolhandler, citing GAO 6/24/2008 and National Health Account data for 2005

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31. 31 Needed Health Care Reforms Payment reform that promotes: Primary & Preventive care Wellness, not Volume Care coordination & management Electronic records & systems

32. 32 Needed Health Care Reforms Requires people with: Stake in making improvements Up-front investment Authority/ability to lead

33. 33 Interests are not always clear Health care providers Paid fee-for-service (volume) Insurance industry Raise premium 10% Lose 5% of customers Still ahead 4.5%

34. 34 Federal Health Care Reform -- ACA Good programs to promote reform Grants for Care coordination & “medical homes” – in Medicaid Electronic Health Records Insurance market reforms No out-of-pocket for preventive care No pre-existing condition limits Medicaid expansion Insurance exchanges & premium subsidies

35. 35 Federal Health Care Reform -- ACA Accountable Care Organizations – ACO’s Integrated system of HC Providers Using payment reform, e.g.: Capitated payment from payer Pooling income from payers To shift resources to: Primary-preventive care Care coordination So all providers thrive by Controlling costs Improving outcomes

36. 36 Still based in insurance system Multiple, competing payers  Little incentive to invest in change No authority/ability to lead Each payer: limited impact Obstacles to working together Legal Business

37. Everything we need to do is much more difficult...... because of our system. 37

38. 38 And don’t forget... Still have Millions of Uninsured Millions of Underinsured Grossly unfair funding Premiums = regressive “tax” Unrelated to ability to pay

39. 39 Learn from other countries... “(T)he U.S. health system is not delivering superior results despite being more expensive, indicating opportunities for cross-national learning to improve health system performance.” The U.S. Health System in Perspective: A Comparison of Twelve Industrialized Nations, David A. Squires, Commonwealth Fund, July 2011... no better place than Canada!

40. 40 Physicians for a National Health Program pnhp.org Subscribe to: “Quote of the Day” Richard N. Gottfried Gottfried@nysa.us “The future is not a gift; it is an achievement.” Robert F. Kennedy