1. Component 1: Introduction to Health Care and Public Health in the U.S. 1.5: Unit 5: Financing Health Care (Part 2) 1.5c: Medical Expenditures: Costs Gone Wild

2. Objectives Review US healthcare expenditures and medical inflation Examine the factors that contribute to the increasing health care expenditures in the United States Describe the EMTALA Act, its provisions for care for the uninsured, and its contribution to increasing medical costs The cost of care to the uninsured Component 1/Unit 5d2 Healthcare IT Workforce Curriculum Version 1.0/Fall 2010

3. National Health Expenditures per Capita and Their Share of Gross Domestic Product, 1960-2008 Adapted from: Healthcare Costs – A Primer 2009. Available at: http://www.kff.org/insurance/7670.cfm. Slides. Last accessed 07/31/2010. 5.2% 7.2% 9.1% 12.3% 13.5% 13.6% 15.1% 15.6% 15.8% 16.2% Component 1/Unit 5d3 Healthcare IT Workforce Curriculum Version 1.0/Fall 2010

4. 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. Slides. Last accessed 07/31/2010. Component 1/Unit 5d4 Healthcare IT Workforce Curriculum Version 1.0/Fall 2010

5. 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. Slides. Last accessed 07/31/2010. Component 1/Unit 5d5

6. Adapted from: Healthcare Costs – A Primer 2009. Available at: http://www.kff. org/insurance/7670.cfm. Slides. Last accessed 07/31/2010. Concentration of Health Spending in the Total U.S. Population, 2007 Percent of Total Health Care Spending Component 1/Unit 5d 6

7. Factors Contributing to High Healthcare Expenditures Technology Increased demand and utilization Administrative costs Component 1/Unit 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 7

8. Technology Estimated 40-50% of total expenditures Technology in healthcare - procedures, equipment, and processes by which medical care is delivered Component 1/Unit 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 8

9. Technology Previously untreatable conditions –Repair of torn ligament of the knee New medical and surgical procedures –Angioplasty –Joint repairs/replacements Component 1/Unit 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 9 Adapted from: http://www.thehastingscenter.org/uploadedFiles/Publications/BriefingBook/ health%20care%20costs%20chapter.pdf

10. Technology Medical devices –CT scanners –MRI imaging –Implantable defibrillators Health Information Technology(HIT) –Electronic medical records –Telemedicine Component 1/Unit 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 10 Adapted from: http://www.thehastingscenter.org/uploadedFiles/Publications/BriefingBook/health% 20care%20costs%20chapter.pdf

11. 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 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 11

12. Administrative Costs ~7% of annual healthcare expenditures Administrative costs account for more than twice average of other western industrialized nations Excessive expense = $91 billion Component 1/Unit 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 12 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_Chapter1.pdf; last accessed Aug 1, 2010

13. Physician/Hospital Costs Increased demand –Utilization –Techniques Minimally invasive surgery Imaging techniques Component 1/Unit 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 13

14. 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 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 14

15. 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 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 15

16. 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 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 16

17. Early Detection and Prevention Increased preventive services –Detection Screening mammograms Colonoscopy –Prevention Immunizations Component 1/Unit 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 17

18. 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 Component 1/Unit 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 18 Adapted from: Healthcare Costs – A Primer 2009. Available at: http://www.kff.org/insurance/7670.cfm. Slides. Last accessed 07/31/2010.

19. 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 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 19

20. 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 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 20

21. 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 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 21

22. 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 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 22

23. 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 Component 1/Unit 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 23 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.

24. 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 Component 1/Unit 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 24 Adapted from: DeLia, D., Cantor, J., Emergency department utilization and capacity; The Synthesis Project, Robert Wood Johnson Foundation. Research Synthesis Report 17, July 2009

25. Summary US healthcare expenditures highest ion world Factors –Technology –Pharmaceutical costs –Increase demand and utilization Aging and chronic disease –Administration costs Component 1/Unit 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 25

26. Summary Uninsured costs –7% of total healthcare expenditures in 2004 –Receive less care and treatment, sicker, higher mortality rates Component 1/Unit 5d Healthcare IT Workforce Curriculum Version 1.0/Fall 2010 26