1. Achieving a High Performing Health Care System: Applying Lessons from Other Countries to U.S. Health Care David C. Dale MD, FACP J. Fred Ralston, Jr. MD, FACP Robert B. Doherty American College of Physicians Based on a Presentation to the National Congress on the Un and Underinsured December 11, 2007

2. Introduction What is the American College of Physicians? What is the American College of Physicians? 124,000 Doctors of Internal Medicine and Medical Students124,000 Doctors of Internal Medicine and Medical Students The Second Largest Medical Organization in the USAThe Second Largest Medical Organization in the USA The Largest Medical Specialty SocietyThe Largest Medical Specialty Society

3. What Did We Do? Analyzed the US Health Care System Analyzed the US Health Care System Evaluated According to Commonwealth Fund Criteria for Measuring Performance Evaluated According to Commonwealth Fund Criteria for Measuring Performance Analyzed Health Care Systems in 12 Other Countries Analyzed Health Care Systems in 12 Other Countries Compared the US Health Care System to Systems in Other Countries Compared the US Health Care System to Systems in Other Countries Determined Lessons From Other Countries Determined Lessons From Other Countries Issued Recommendations for Achieving a High Performance Health Care System Issued Recommendations for Achieving a High Performance Health Care System

4. Why Did We Do It? ACP has Advocated for Universal Health Insurance Coverage Since 1990 ACP has Advocated for Universal Health Insurance Coverage Since 1990 Previous Efforts By ACP and Others Have Focused on Improving Specific Aspects of Health Care Previous Efforts By ACP and Others Have Focused on Improving Specific Aspects of Health Care Systemic Changes Are Needed Systemic Changes Are Needed Goal to Achieve a High Performance Health Care System With Universal Access Goal to Achieve a High Performance Health Care System With Universal Access Lessons Can Be Learned from Successful Health Care Systems in Other Countries Lessons Can Be Learned from Successful Health Care Systems in Other Countries

5. The Cost of Health Care in the US National Health Expenditures in 2005 = National Health Expenditures in 2005 = $2.0 Trillion$2.0 Trillion $6,697 per person$6,697 per person 16% of GDP16% of GDP Health Insurance Costs Continue to Rise Health Insurance Costs Continue to Rise Health Spending is Rising Faster Than Inflation and Economic GrowthHealth Spending is Rising Faster Than Inflation and Economic Growth Employers Are Reducing or Dropping CoverageEmployers Are Reducing or Dropping Coverage Health Spending is Projected to Reach $4.0 Trillion (20% of GDP) by 2015Health Spending is Projected to Reach $4.0 Trillion (20% of GDP) by 2015

6. Paying for Health Care in the US

7. Health Insurance Coverage in the US 250 Million Have Health Insurance (84.2%) 250 Million Have Health Insurance (84.2%) 47 Million (15.8%) Uninsured All Year 47 Million (15.8%) Uninsured All Year 89.5 Million (34.6%) Uninsured 1 Month or More 89.5 Million (34.6%) Uninsured 1 Month or More Another 16 Million Under-Insured Another 16 Million Under-Insured

8. People Without Health Insurance are: Less Likely to Receive Preventive Services and Medications Less Likely to Receive Preventive Services and Medications Less Likely to Have Access to Regular Care by a Personal Physician Less Likely to Have Access to Regular Care by a Personal Physician Less Able to Obtain Needed Health Care Services Less Able to Obtain Needed Health Care Services More Likely to Suffer Complications for Preventable Illnesses More Likely to Suffer Complications for Preventable Illnesses More Likely to Die Prematurely More Likely to Die Prematurely

9. Chronic Health Conditions 120 Million Americans (45%) Have at Least 1 Chronic Condition 120 Million Americans (45%) Have at Least 1 Chronic Condition 60 Million Have Multiple Chronic Conditions 60 Million Have Multiple Chronic Conditions 83% of Medicare Beneficiaries Have 1 or More 83% of Medicare Beneficiaries Have 1 or More 23% of Medicare Have 5 or More 23% of Medicare Have 5 or More By 2015, 150 Million Will Have at Least 1 Chronic Condition By 2015, 150 Million Will Have at Least 1 Chronic Condition

10. The Increasing Elderly Population Source: U.S. Census Bureau, “U.S. Interim Projections by Age, Sex, Race, and Hispanic Origin,”

11. As Patients Age They Require More Visits to the Doctor

12. Physician Workforce The Supply of Primary Care Physicians Will Not Keep Pace with the Aging Population The Supply of Primary Care Physicians Will Not Keep Pace with the Aging Population Already Anecdotal Evidence of Shortages Already Anecdotal Evidence of Shortages As the Population Over Age 65 Increases More Doctors Will be Needed High Student Debt and a Dysfunctional Payment System are Deterring Physicians from Primary Care Careers High Student Debt and a Dysfunctional Payment System are Deterring Physicians from Primary Care Careers The Physician Workforce Is Also Aging: 250,000 Active Physicians Are Over Age 55

13. Interest in Entering Primary Care has been Declining Among Graduating Seniors (Percentages 1999-2006) Source: AAMC Medical School Graduation Questionnaires: All School Reports 2000-2006, Choice of Specialty/Subspecialty. http://www.aamc.org/data/gq/allschoolsreports/2006.pdf http://www.aamc.org/data/gq/allschoolsreports/2006.pdf

14. Equity and Utilization Wide Variations in Costs Wide Variations in Costs Wide Differences in Volume and Intensity of Services Among Areas Wide Differences in Volume and Intensity of Services Among Areas Outcomes No Better in High Cost Areas Outcomes No Better in High Cost Areas Disparities in Access and Quality Based on Race and Income Disparities in Access and Quality Based on Race and Income

15. The System is Costly and Inefficient Payers Are Straining to Reduce Costs Payers Are Straining to Reduce Costs Cost Sharing Increasing Cost Sharing Increasing Rise of Consumer-Directed Health Plans Rise of Consumer-Directed Health Plans Increasing Out-of-Pocket Costs Increasing Out-of-Pocket Costs High Administrative Costs High Administrative Costs High Regulatory Burden High Regulatory Burden

16. A big caveat Any solution for the United States will be unique to our political and social culture, demographics, and form of government Any solution for the United States will be unique to our political and social culture, demographics, and form of government Larger and more diverse populationLarger and more diverse population Tradition of individualism and distrust of the federal governmentTradition of individualism and distrust of the federal government Constitution limits the power of the federal government, requires that authority be shared between federal and state governments, and protects commercial and individual free speechConstitution limits the power of the federal government, requires that authority be shared between federal and state governments, and protects commercial and individual free speech Deeply rooted system of employer-based coverage, tied to a powerful industry invested in maintaining private insurance and employer- based coverageDeeply rooted system of employer-based coverage, tied to a powerful industry invested in maintaining private insurance and employer- based coverage

17. So why study other countries’ experiences? Goal should not be to replicate other countries’ experiences Goal should not be to replicate other countries’ experiences But to identify approaches that the evidence shows are more likely to be effective But to identify approaches that the evidence shows are more likely to be effective So that they can inform the political debate in the United States So that they can inform the political debate in the United States And be adapted to the unique circumstances in the U.S. And be adapted to the unique circumstances in the U.S.

18. Lesson: All high performing systems have universal coverage Universal: every person is guaranteed, by law, access to affordable coverage through a public or private plan and is required to obtain coverage Universal: every person is guaranteed, by law, access to affordable coverage through a public or private plan and is required to obtain coverage Some have a system funded solely by the national or provincial governments (single payer) Some have a system funded solely by the national or provincial governments (single payer) Others use a mix of public and private funding (pluralistic); coverage is compulsory and guaranteed Others use a mix of public and private funding (pluralistic); coverage is compulsory and guaranteed Canada UK Japan Taiwan Australia, Belgium, Denmark, France, Germany, Netherlands, New Zealand and Switzerland Australia, Belgium, Denmark, France, Germany, Netherlands, New Zealand and Switzerland Australia Belgium Denmark France Germany Netherlands New Zealand Switzerland

19. Lesson: Global budgets and price controls can restrain costs but can have negative consequences Global budgets can restrain costs. but do not improve efficiency unless the budget is reasonable and the target region is small enough to motivate individual providers Global budgets can restrain costs. but do not improve efficiency unless the budget is reasonable and the target region is small enough to motivate individual providers Price controls can restrain costs, but may lead to Price controls can restrain costs, but may lead to delays for elective procedures, cost- shifting anddelays for elective procedures, cost- shifting and creation of parallel private sector marketscreation of parallel private sector markets Canada Germany New Zealand Taiwan United Kingdom Belgium Canada Japan UK Japan New Zealand UK

20. Recommendation: U.S. must provide universal coverage Guarantee by law that all people within the United States have equitable access to appropriate health care without unreasonable financial barriers Guarantee by law that all people within the United States have equitable access to appropriate health care without unreasonable financial barriers Health insurance coverage and benefits should be continuous and not dependent on place of residence or employment statusHealth insurance coverage and benefits should be continuous and not dependent on place of residence or employment status U.S. should consider adopting either a single payer or pluralistic model with guaranteed coverage U.S. should consider adopting either a single payer or pluralistic model with guaranteed coverage

21. Single payer or pluralistic systems are both capable of achieving universal coverage Single-payer systems can achieve universal access to health care without barriers based on ability to pay Single-payer systems can achieve universal access to health care without barriers based on ability to pay Pluralistic systems can assure universal access, but must provide (1) a legal guarantee that all individuals have access to coverage and (2) sufficient government subsidies and funded coverage for those who cannot afford to purchase coverage through the private sector Pluralistic systems can assure universal access, but must provide (1) a legal guarantee that all individuals have access to coverage and (2) sufficient government subsidies and funded coverage for those who cannot afford to purchase coverage through the private sector

22. Either has tradeoffs that the public will need to weigh in making a choice Single-payer: more equitable, lower administrative costs, lower per capita health care expenditures, high levels of consumer/patient satisfaction and high performance on measures of quality and access Single-payer: more equitable, lower administrative costs, lower per capita health care expenditures, high levels of consumer/patient satisfaction and high performance on measures of quality and access May create shortages of services, delays in obtaining elective procedures and limit individuals’ choices May create shortages of services, delays in obtaining elective procedures and limit individuals’ choices Pluralistic with guaranteed coverage: allows individuals the freedom to purchase supplemental coverage and services Pluralistic with guaranteed coverage: allows individuals the freedom to purchase supplemental coverage and services More likely to result in inequities in coverage and higher administrative costsMore likely to result in inequities in coverage and higher administrative costs

23. Lesson: Primary care is the foundation of high performing delivery systems Societal investment in medical education, can help achieve a workforce that has the right proportion of primary care physicians and specialists, is well-trained, and is large enough to assure access Societal investment in medical education, can help achieve a workforce that has the right proportion of primary care physicians and specialists, is well-trained, and is large enough to assure access Investment in primary and preventive care can result in better health outcomes, reduce costs, and help assure an adequate supply of primary care physicians Investment in primary and preventive care can result in better health outcomes, reduce costs, and help assure an adequate supply of primary care physicians These efforts can be enhanced by assuring that all residents have equitable access to a patient-centered medical home model These efforts can be enhanced by assuring that all residents have equitable access to a patient-centered medical home model France Germany United Kingdom Australia, Canada, Denmark France Netherlands New Zealand Switzerland UK Denmark

24. Recommendation: U.S. policy should support the value of primary care Federal government should intervene to avert the impending catastrophic shortage of primary care physicians Federal government should intervene to avert the impending catastrophic shortage of primary care physicians U.S. should set specific targets for producing generalists and specialists and enact policy to achieve those targets U.S. should set specific targets for producing generalists and specialists and enact policy to achieve those targets Support care that builds upon the relationship between patients and their primary care physicians and financially supports the patient-centered medical home Support care that builds upon the relationship between patients and their primary care physicians and financially supports the patient-centered medical home

25. Lesson: High performing systems encourage patients to be prudent purchasers and engage in healthy behaviors Cost-sharing with co-payment schedules based on income can help restrain costs while assuring that poorer individuals are still able to access services Cost-sharing with co-payment schedules based on income can help restrain costs while assuring that poorer individuals are still able to access services Incentives to encourage personal responsibility can be effective in influencing healthy behaviors, improved health outcomes and responsible utilization, without punishing people who fail to adopt recommended behaviors or lifestyles Incentives to encourage personal responsibility can be effective in influencing healthy behaviors, improved health outcomes and responsible utilization, without punishing people who fail to adopt recommended behaviors or lifestyles Belgium France Japan New Zealand Switzerland Australia Belgium Japan New Zealand Netherlands Switzerland Taiwan

26. Recommendation: The U.S. should use financial incentives for individuals to be prudent purchasers Patients should have ready access to health information necessary for informed decision-making Patients should have ready access to health information necessary for informed decision-making Cost-sharing provisions should be designed to encourage patient cost- consciousness without deterring patients from receiving needed and appropriate services or participating in their care Cost-sharing provisions should be designed to encourage patient cost- consciousness without deterring patients from receiving needed and appropriate services or participating in their care

27. Lesson: High performing systems continuously measure how well they do and link payment to performance Performance measures, financial incentives linked to quality, and active monitoring of performance are key elements of health systems that provide high quality care Performance measures, financial incentives linked to quality, and active monitoring of performance are key elements of health systems that provide high quality care Australia New Zealand United Kingdom

28. Lesson: The best payment systems recognize the value of care coordinated by primary care physicians Effective payment systems: Effective payment systems: Provide adequate payment for primary care servicesProvide adequate payment for primary care services Create incentives for quality improvement and reportingCreate incentives for quality improvement and reporting Recognize geographic or local payment differencesRecognize geographic or local payment differences Provide incentives for care coordinationProvide incentives for care coordination Canada Denmark Germany United Kingdom Belgium United Kingdom Denmark Netherlands

29. Recommendation: U.S. should align payments to physicians with quality and care coordination Provide financial incentives for physicians to achieve evidence-based performance standards Provide financial incentives for physicians to achieve evidence-based performance standards Revise existing volume-based payment systems used by Medicare and most private insurers to Revise existing volume-based payment systems used by Medicare and most private insurers to create care coordination payments for physicians working with health care teams to provide patient care managementcreate care coordination payments for physicians working with health care teams to provide patient care management maintain a fee-for-service component for separately-identifiable visitsmaintain a fee-for-service component for separately-identifiable visits (modeled on a bundled and hybrid payment model used in Denmark and the Netherlands)

30. Lesson: High performing systems invest in HIT, have uniform billing, and lower administrative costs Adoption of a uniform billing system and electronic processing of claims improves efficiency and reduces administrative expenses Adoption of a uniform billing system and electronic processing of claims improves efficiency and reduces administrative expenses An inter-operable health information infrastructure will enable physicians to obtain instantaneous information at the point of medical decision- making and enhance electronic communications among physicians, hospitals, pharmacies, diagnostic testing laboratories, and patients An inter-operable health information infrastructure will enable physicians to obtain instantaneous information at the point of medical decision- making and enhance electronic communications among physicians, hospitals, pharmacies, diagnostic testing laboratories, and patients Germany Canada Canada Taiwan Taiwan United Kingdom and most others United Kingdom and most others Denmark Taiwan TaiwanNetherlands

31. Lesson: High performing systems invest in research and comparative effectiveness Insufficient investments in research and medical technology result in reliance on outdated technologies and medical equipment, and delay patients’ access to advances in medical science Insufficient investments in research and medical technology result in reliance on outdated technologies and medical equipment, and delay patients’ access to advances in medical science Some countries with national health insurance programs have achieved better results (benefit and cost) through evidence-based evaluations of new drugs and technology Some countries with national health insurance programs have achieved better results (benefit and cost) through evidence-based evaluations of new drugs and technology Canada United Kingdom UK Australia Australia

32. Recommendation: The U.S. should invest in research to foster continued innovation and improvements in health care Funding should come from both public and private sources Funding should come from both public and private sources Increase investment in basic health research to advance medical knowledge Increase investment in basic health research to advance medical knowledge Increase funding for health services and comparative effectiveness research Increase funding for health services and comparative effectiveness research

33. Summary The U.S. can learn much by studying what works well in other countries and by applying those “best practices” to the U.S.’s distinctive political system, values and culture The U.S. can learn much by studying what works well in other countries and by applying those “best practices” to the U.S.’s distinctive political system, values and culture No single system studied is perfect—each has trade-offs. In general: No single system studied is perfect—each has trade-offs. In general: Single payer systems have lower administrative costs, high quality, and satisfaction but cost controls may create shortages and delaysSingle payer systems have lower administrative costs, high quality, and satisfaction but cost controls may create shortages and delays Pluralistic systems can be designed to achieve universal coverage with individual freedom to purchase additional services, but are less equitable and have higher administrative costsPluralistic systems can be designed to achieve universal coverage with individual freedom to purchase additional services, but are less equitable and have higher administrative costs The evidence shows that either option merits consideration by the U.S. The evidence shows that either option merits consideration by the U.S.

34. Conclusion: A high performing U.S. health care system would be one that: Achieves universal coverage (single payer or pluralistic with guaranteed coverage) Achieves universal coverage (single payer or pluralistic with guaranteed coverage) Is built on a foundation of primary care, supported by workforce and payment policies Is built on a foundation of primary care, supported by workforce and payment policies Provides patients with access to a patient- centered medical home Provides patients with access to a patient- centered medical home Pays physicians for care coordination and quality instead of volume Pays physicians for care coordination and quality instead of volume

35. Conclusion: A high performing U.S. health care system would be one that: Creates positive and non-punitive incentives for individuals to be “prudent purchasers” and engage in healthy behavior Creates positive and non-punitive incentives for individuals to be “prudent purchasers” and engage in healthy behavior Measures and reports on its own performance Measures and reports on its own performance Has uniform billing and lower administrative costs Has uniform billing and lower administrative costs Has high levels of public and private investment in research (basic, health services, and comparative) Has high levels of public and private investment in research (basic, health services, and comparative)

36. The 47 million (uninsured) question: What can we do together to assure that the 2008 elections creates a debate on how to achieve a high performing health care system...... So that the next President and Congress have a political mandate to learn from other health systems and adapt their best practices to the United States?