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Healthcare Economics Is it all just dollars and cents 19 April 2009 James S Eadie MD, FACEP Co-Chair, ACEP FGA Commit - PowerPoint PPT Presentation


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Healthcare Economics Is it all just dollars and cents? 19 April 2009 James S Eadie MD, FACEP Co-Chair, ACEP FGA Committee GSACEP, Immediate Past President Academic Faculty, Wilford Hall Medical Center, San Antonio, Texas. Overview. How much does the US spend on health care?

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Healthcare Economics

Is it all just dollars and cents?

19 April 2009

James S Eadie MD, FACEP

Co-Chair, ACEP FGA Committee

GSACEP, Immediate Past President

Academic Faculty, Wilford Hall Medical Center,

San Antonio, Texas


Overview
Overview

  • How much does the US spend on health care?

  • Where do the dollars go?

  • How fast are the costs growing?

  • What can be done to contain the costs?

  • Is the system really at a “crisis”?


Economics ouch
Economics…..ouch

Why do we need to study economics?

I’d rather be herding cats….


Health care economics 101 quiz
Health Care Economics 101 Quiz

  • How much did the US pay for health care in 2007?

  • What is the % GDP spent on health care?

  • What are the most expensive parts of the health care system?


Health care spending 2007
Health Care Spending – 2007

  • >$2.2 Trillion dollars

  • 16.2% of GDP, Switzerland next highest 11.4%

  • $7,421 per living person

  • Spending rose 6.1% (inflation 4.1%)

    “Spending is driven by new medical treatments, rising prices and growing utilization.”

    Smith et al.Health Affairs Jan 2006



Percent health care of gdp 2006
Percent Health Care of GDP 2006

data from WHO http://www.who.int/en/


Expenditures per capita 2006
Expenditures per Capita 2006

data from WHO http://www.who.int/en/


Per capita health spending in 2006
Per Capita Health Spending in 2006

Source: McKinsey Global Institute and NEJM 2009


Who health care rankings
WHO Health Care Rankings

  • France

    18. England

    25. Germany

    30. Canada

    36. Costa Rica

    37. United States

    38. Slovenia



Health care spending 2006
Health Care Spending - 2006

Hospital Care

  • 31% of total health care expenditures

  • $648.2 billion

    Physician Payment

  • 21% of total health care expenditures

  • $447.6 billion

  • Growth from inc. office visits and imaging


Health care spending 20061
Health Care Spending - 2006

Prescription drugs

  • 10% of total expenditures

  • Total: $216.7 billion *

    • greater than nursing homes and home health care combined ($177.6 billion)

      Health Insurance Admin Costs (private + Gov)

  • $204.1 billion


Health care spending 20062
Health Care Spending - 2006

Medicare

  • $401.3 billion

  • 19% of national health expenditures

  • Revenue

    • 65% from payroll taxes and premiums

    • 35% from general taxes

      • Key: this competes with Gov. spending


Health care spending 20063
Health Care Spending - 2006

Medicaid

  • $310.6 billion

  • 15% of national health expenditures

  • > 20% state budgets

    SCHIP

  • $ 8 billion

    Federal Government pays over 46% Health care bills


Federal budget 2008
Federal Budget 2008

Federal Budget 2008 2.979 Trillion dollars

Social Security 612 billon

Medicare/Medicaid 682 billion

Defense 613 billion

Education 59 billion

Debt Interest 249 billion


Federal spending fy 2008
Federal Spending FY 2008

Source: Congressional Budget Office



Federal receipts fy 2008
Federal Receipts – FY 2008

Source: Congressional Budget Office


Projected growth
Projected Growth

  • Health Care Projected Growth Rates

    • 6.2% annually through 2018

    • 16.2% GDP2007 to 20.3% GDP2018

  • Public Payers

    • 2016 – will be largest source of funding

    • 2018 – over half of all health care spending

  • Why?

    • Baby Boomers – 76 M



Health care reform is it possible
Health Care Reform – Is it Possible?

State Mandate

Mandates

Health Savings Accounts

Defined Contributions

Universal Coverage


Health care timeline

Social Security

1935

Medicare

1965

Clinton

1994

Germany

1883

Truman Plan

1945

Nixon

1970s

1980s - Present

Corporations

Competing Interests

Loss of Political Influence

Pre-1880

Physicians limited

authority

1930s – 70s

Physicians /

AMA Strong

1880 – 1920

Industrial Revolution

Rise in prestige

Rapid Health Care Growth

1950s-70s

Health Care Timeline

Progressive Era

1910 - 17

Medicare

Drug Bill

2003


Health care reform issues
Health Care Reform Issues

  • Uninsured and Underinsured

  • Quality Initiatives

  • Patient Centered Medical Home

  • Health IT

  • Physician Pay Reform

  • Medical Liability




How do you slice the pie
How Do You Slice The Pie?

  • Who’s going to take the smaller piece?

    • Physicians?

    • Hospitals?

    • Drug Companies?

    • Trial Lawyers?


Emergency medicine s slice of pie
Emergency Medicine’s Slice of Pie

  • 119.2 million ED visits 2006

  • $ 37.5 billion on emergency care

    • Only 1.8% of all health care expenditures

  • Emergency Medicine is a small fish

  • Fixing the “over-utilization” of emergency departments will NOT fix the problem



Are we in crisis
Are we in Crisis?

“US health care costs have been in “crisis” for roughly 40 years”Brown, NEJM 24 Jan 08

Imminent Collapse rests on 3 indicators

  • There are 47M uninsured – we must have universal coverage

  • Health care costs are extraordinarily high

  • US system is in fact not a system, but incoherent hodge-podge


Are we in crisis1
Are we in Crisis?

  • The Safety Net for the Uninsured

    • Community Health Centers

    • Emergency Departments

    • Public and voluntary hospitals

  • Funds come from donations, Medicaid, grants, etc. “11th hour infusion of money”

  • President Bush told everyone that they can always go to the emergency room


Are we in crisis2
Are we in Crisis?

2. Health Care Costs are High

  • Costs have been skyrocketing since 1965 when Medicare/Medicaid were signed into law

  • US system has pushed technology

    • Research hospitals, drugs, medicines

    • Public health fell to the side


Are we in crisis3
Are we in Crisis?

  • The non-system of US health care will ultimately drive reform

    • Clearly deep interest on all parties to bring together the fragmented system, BUT:

    • Business, insurance, and providers have different priorities, but all agree:

      • Big Government is NOT the answer

      • Costs of reform should not fall on them

      • Their agenda takes precedence


Law of reform
Law of Reform

“There is nothing more difficult to manage, more dubious of success… than to initiate a new order of things. The reformer has enemies in all those who profit from the old order and only lukewarm defenders in all those who would profit from the new order.”

Machiavelli 1513



Every System is Perfectly Designed To Produce The Results It Produces

Don Berwick, MD

The Institute for Healthcare Improvement


Here we go again
Here we go again…. Produces

1917, 1935, 1948,

1965, 1970, 1994

2009


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