The US Healthcare System Impact on Equity, Efficiency and Effectiveness

BASIC SERVICE COMPONENTS OF A HEALTH CARE SYSTEM Public Health (Including Health Promotion and Disease Prevention) Emergency medical services (including transportation) Ambulatory care for simple/limited conditions Acute and community hospitals and medical centers Long-term care (either in-home or institutional care) Mental Health Services (both inpatient and ambulatory) Rehabilitation services (both inpatient and ambulatory) Dental services Pharmaceuticals/supplies/medical devices and equipment

Need vs. Demand and Utilization Need – an interpretation of an individual’s evaluated requirements for obtaining professional care through the health service system Demand – seeking out, but not necessarily receiving health services. Utilization – actual use of services. A result of need and demand

Health Care Spending in the U.S. In 2003, $1.7 trillion was spent on health care in U.S. In 2003, the United States spent 15.3 percent of its Gross Domestic Product (GDP) on health care. Compared to other countries: Switzerland – 10.9% Germany – 10.7% Canada – 9.7% France – 9.5% 45 million Americans were uninsured in 2003 Total out-of-pocket spending on health care rose $13.7 billion, to $230 billion in 2003.

Spending by Service in Health Care 2002 ServiceAmount Spent 2002 (in billions) Major cost factors Hospitals$486.5 (9.5% increase) Inflation; increase in patient volume Physicians$339.5 (7.7% increase) Medicare costs decelerated causing a reduction in the rate of growth in physicians spending Drugs$162.4 billion (15.4% increase) Rate “decelerated” from Out of pocket expenses increased.

Percent of health care expenditures 2002

Four Systems of Health Care Private, insured, middle-income Americans Poor, unemployed or under-employed Americans Active duty military personnel Veterans of military service

Private, insured, middle-income Americans Care is coordinated by physicians in private practice Care is funded by insurance (personal, non- governmental sources paid for by employer, individual or both) Characterized as an informal system of care Even though it is an informal system, patient has considerable control over their care It is also often poorly coordinated Medicare for the middle-income

Employer and Employee Health Insurance Costs The premiums for employer-based health insurance rose by 11.2 percent in 2004, the fourth consecutive year of double-digit increases. The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $9,950, or $829 a month in Health insurance premium rates have risen five times faster on average than workers' earnings since 2000 Employee spending for health insurance coverage has increased 126 percent between 2000 and 2004 Since 2001, the employees' share of health insurance costs has soared 63 percent for single coverage and 58 percent for family coverage.

Poor, Unemployed/Underemployed Families Without Insurance There is no formal system Majority of services are provided by local government agencies Patients have no continuity of service In sum, the poor must take whatever they can get Use of Medicaid and other government funded services

Military Medical System A well-organized system of “high quality” care at no direct cost to the recipient All inclusive and omnipresent System in effect whether personnel want it or not Emphasis is on keeping personnel well, prevention and early treatment of injury or illness It is a closely organized, highly integrated, rational and regionalized approach

Veterans Administration Health Care System Provides care to retired, disabled or other deserving veterans of military service History of VA is rooted in controversy Not as complete as other services Large number of male patients VA health system is just one of a system of social services and benefits for veterans Interest group representation 1990s represented a waning period for veterans and veteran services (“Snowbirds”) Future for the veteran

Primary Cause of Death 1900

Primary Cause of Death 1997 Source: Healthy People 2010