Component 1: Introduction to Health Care and Public Health in the U.S. Unit 5: Financing Health Care (Part 2) Lecture 3

Health IT Workforce Curriculum Objectives Review US healthcare expenditures and medical inflation Examine the factors contributing to the increase in health care expenditures in the United States Describe the Emergency Medical Treatment and Active Labor Act (EMTALA), its provisions for care for the uninsured, and its contribution to increasing medical costs The cost of care to the uninsured Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum National Health Expenditures per Capita and Their Share of Gross Domestic Product, 1960-2008 5.2% 7.2% 9.1% 12.3% 13.5% 13.6% 15.1% 15.6% 15.8% 16.2% Adapted from: Healthcare Costs – A Primer 2009. Available at: http://www.kff.org/insurance/7670.cfm Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Per Capita Health Care Expenditures, U.S. and Selected Countries, 2007 Adapted from: Healthcare Costs – A Primer 2009. Available at: http://www.kff.org/insurance/7670.cfm Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Distribution of National Health Expenditures, by Type of Service, 2008 Adapted from: Healthcare Costs – A Primer 2009. Available at: http://www.kff.org/insurance/7670.cfm Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011 5

Percent of Total Health Care Spending Concentration of Health Spending in the Total U.S. Population, 2007 Percent of Total Health Care Spending Adapted from: Healthcare Costs – A Primer 2009. Available at: http://www.kff.org/insurance/7670.cfm Health IT Workforce Curriculum Version 2.0/Spring 2011 Component 1/Unit 5-3 6

Factors Contributing to High Healthcare Expenditures Technology Increased demand and utilization Administrative costs Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Technology Estimated 40-50% of total expenditures Technology in healthcare - procedures, equipment, and processes by which medical care is delivered Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Technology Previously untreatable conditions Repair of torn ligament of the knee New medical and surgical procedures Angioplasty Joint repairs/replacements Adapted from: http://www.thehastingscenter.org/uploadedFiles/Publications/Briefing_Book/health%20care%20costs%20chapter.pdf Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Technology Medical devices CT scanners MRI imaging Implantable defibrillators Health Information Technology(HIT) Electronic medical records Telemedicine Adapted from: http://www.thehastingscenter.org/uploadedFiles/Publications/Briefing_Book/health%20care%20costs%20chapter.pdf Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Pharmaceuticals Estimated 10% of total expenditures $234 billion 2008/$40.3 billion 1990 Average ~12% increase over the last 10 years Drug costs inflated above CPI/other healthcare sectors Increased availability Medications for chronic disease e.g. cholesterol, diabetes Increased demand Cancer chemotherapy Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Administrative Costs ~7% of annual healthcare expenditures Administrative costs account for more than twice average of other western industrialized nations Excessive expense = $91 billion Adapted from: McKinsey Global Institute, Accounting for the cost of US health care: A new look at why Americans spend more, November 2008 available at: http://www.mckinsey.com/mgi/publications/US_healthcare/pdf/US_healthcare_Chapter1.pdf; last accessed Aug 1, 2010 Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Physician/Hospital Costs Increased demand Utilization Techniques Minimally invasive surgery Imaging techniques Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Chronic Disease 2005 – ~1 of 2 adults with chronic disease 7 of 10 deaths due to chronic disease CDC - four health risk behaviors Lack of physical activity Poor nutrition - obesity Tobacco use Excessive alcohol consumption Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Chronic Diseases Chronic Disease Asthma Chronic obstructive pulmonary disease Chronic renal failure Congestive heart failure Coronary artery disease Diabetes Mood disorders/senility Cancer Hypertension Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Chronic Disease and Increased Demand for Services Increased utilization of services Management/treatment to decrease risk of complications e.g. aggressive treatment of diabetes to avoid such complications as heart disease, kidney failure or blindness Early intervention at risk groups e.g. weight loss, smoking cessation Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Early Detection and Prevention Increased preventive services Detection Screening mammograms Colonoscopy Prevention Immunizations Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Spending per Age Group Average Spending Per Person Age (in years) <5 $1508 5-17 1267 18-24 1441 25-44 2305 45-64 4863 >64 8776 Sex Male $3002 Female 3886 Adapted from: Healthcare Costs – A Primer 2009. Available at: http://www.kff.org/insurance/7670.cfm Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Increased Demand: Aging 1946-1964 – 66 million children Medicare eligibility beginning in 2011 Additional 10 million enrollees by 2018 Costs projected>$13,000 per capita with Medicare costs higher Increased utilization of services for chronic illness above age 64 Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum EMTALA Emergency Medical Treatment and Active Labor Act Legal mandate to offer medical care to all patients regardless of ability to pay Anyone presenting to an emergency department (ED) Must be examined to determine if there is an emergency Treated until stabilized, discharged to self care or continuing care Transfer to a facility capable of providing care if the facility is unable to provide the required care Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum The Uninsured 15% of the population = ~47 million people The Kaiser Commission on Medicaid and the Uninsured 2010 In 2004 - $125 billion cost = 7% total healthcare costs $40.7 billion uncompensated Government paid the majority Uninsured poor use the ED as a safety net for care Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Uninsured Spending Cost of care for insured twice as much as uninsured Uninsured receive Less preventive care Diagnosed at more advanced disease states Once diagnosed, received less therapeutic care Have higher mortality rates Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

ED Utilization and Uninsured Is uninsured care cause for overcrowding of the ED? 2008 – Weber et al found Percent of uninsured using the ED did not change over 10 years Most ED visits increase due to non-poor insured with primary care physician as usual source of care Weber EJ, Showstack JA, Hunt KA, et al. “Are the Uninsured Responsible for the Increase in Emergency Department Visits in the United States?” Annals of Emergency Medicine 52(2): 108–115, 2008. Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Emergency Department Utilization and Capacity Lack of key clinical staff also has been cited as a driver of ED overcrowding Care provided to the uninsured and patients with non-urgent conditions is not a driver of ED overcrowding Evidence links ED overcrowding to reduced health care quality and patient safety Adapted from: DeLia, D., Cantor, J., Emergency department utilization and capacity; The Synthesis Project, Robert Wood Johnson Foundation. Research Synthesis Report 17, July 2009 Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Summary US healthcare expenditures highest worldwide Factors Technology Pharmaceutical costs Increase demand and utilization Aging and chronic disease Administration costs Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011

Health IT Workforce Curriculum Summary Uninsured costs 7% of total healthcare expenditures in 2004 Receive less care and treatment, sicker, higher mortality rates Component 1/Unit 5-3 Health IT Workforce Curriculum Version 2.0/Spring 2011