Introduction to Healthcare and Public Health in the US

1. Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c This material (Comp1_Unit4c) was developed by Oregon Health and Science University, funded by the Department of Health and Human Services, Office of the National Coordinator for Health Information Technology under Award Number [IU24OC000015)].

2. Financing Healthcare (Part 1)Learning Objectives • Understand the importance of the healthcare industry in the US economy and the role of financial management in healthcare.  (Lecture b) • Describe models of health care financing in the US and in selected other countries. (Lecture c) • Describe the history and role of the health insurance industry in financing healthcare in the United States, and Federal laws that have influenced the development of the industry. (Lecture a) • Understand the differences among various types of private health insurance and describe the organization and structure of network-based managed care health insurance programs. (Lecture d) • Understand the various roles played by government as policy maker, payer, provider, and regulator of healthcare. (Lecture d) • Describe the organization and function of Medicare and Medicaid. (Lecture e) Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

3. Financing Healthcare (Part 1)Learning Objectives • Describe two public (tax-funded) health care plans • The United Kingdom’s multipayer system • Canada’s single payer health care system • Describe the role of private health insurance in each system • Discuss the benefits and drawbacks of each system Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

4. Types of Healthcare System • Mixed Delivery System • Primarily private healthcare organizations and providers • Government operated system • Veteran’s Health Administration • Military Health System • Indian Health Service Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c 4

5. Single vs. Multipayer Systems • United Kingdom • Public payer • Public funded • Provides basic services • Private payer • Employer plans • Canada • Single public payer in each province or territory • Limited or no private payer Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c 5

6. Public Health Care in the United Kingdom and Canada • United Kingdom National Health Service • General taxes fund the Department of Health • Department of Health funds 5 regional health care plans throughout the country • Canada  Medicare • Provincial/Territorial Single Payer • General taxes fund Health Canada • Medicare funds provinces and territories, which run their own health plans Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

7. Five Single-Payer Systemsin the United Kingdom • The U.K. Department of Health: • Funds the National Health Service (NHS) in England, Northern Ireland, Scotland, Wales, and the Isle of Man • Uses regional health authorities to run Primary Care Trusts (PCTs) that pay providers and hospitals • Providers receive a salary, fee-for-service, or capitation Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

8. How the NHS Began • National Health Service Act passed in 1946 as part of new social safety net legislation • Goal of the NHS: Provide free health care for all citizens • Health minister Aneurin Bevan let doctors keep private practices if they joined NHS • 90% of British doctors joined NHS by the time it was open in 1948 Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

9. NHS Governance & Responsibilities • The Department of Health is responsible for the NHS and must report to the public and to Parliament • The Department of Health also sets and implements public health policies, such as health education campaigns Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

10. NHS Expenditures and Funding • Expenditures • Per capita spending (2009) $2966 • Financing • National taxes (76%) • Payroll taxes (18%) • Other sources (6%) • NHS patients • Private patients • Other Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c 10

11. What the NHS Provides Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c Universal health coverage for all U.K. residents Primary care, specialists, hospital care, long-term care, and preventive care Mental health, rehabilitation, dental, and eye care services

12. NHS Patient Fees Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c • All health care was free until the early 1950s • In 2007, the average person paid the equivalent of $343 in out-of-pocket costs • That figure in the U.S. was $890 • To help keep health care affordable, there are: • Fee exemptions for special populations • Caps on out-of-pocket costs

13. U.K. Private Health Insurance Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c • 12% of population have private health insurance • Employer sponsored • Self-pay • Private insurance provides more choices and shorter wait lists for services • Patients can go to NHS or private hospitals • The NHS is reducing the hospital specialist wait list to 18 weeks or less

14. NHS Reform Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c • Health services determined locally not centrally • Groups of local general practitioners, specialists, nurses, and consumer advocates • Know the needs of the local community • Must continue to provide urgent and emergency care in the area • Must address the health and social needs of all NHS users • Protect patients’ interests, quality, and efficiency through outcomes 14

15. The Canadian Health Care System (MEDICARE) • Similar to the NHS • Taxpayer-funded • Universal coverage • Different from the NHS • Nationwide and regional funding • Federal government cannot run regional health care plans • Limitations on private health insurance Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

16. Financing Canada’s Healthcare • Canada Health Act 1984 • Increased access • Lowered individual costs • Defined medically necessary services • Financing • Federal income tax distributed to provinces and territories • Province/territory fund a portion • Most health care providers are in private practice and are paid a fee-for-service Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

17. Hospital & Provider Dichotomy Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c • Hospitals • Most hospitals public institutions • Providers • Most providers in private practice • Paid fee-for-service

18. Five Principles ofthe Canada Health Act Provinces and territories must follow 5 principles in order to receive federal funding: • Public administration • Comprehensiveness • Universality • Portability • Accessibility Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

19. Public Administration and Comprehensiveness The first two principles explain how health plans must be administered • Public administration: Health plans must be publicly administered, run as non-profit organizations, and accountable to the public • Comprehensiveness: Provinces and territories must provide all medically necessary services Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

20. Universality, Portability,and Accessibility The last 3 principles protect patient rights • Universality: Gives every resident the right to health care • Portability: Provides health care coverage if a resident moves between regions or travels outside of Canada • Accessibility: Health care is provided regardless of health, age, or income Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

21. MEDICARE Coverage in Canada • Medically necessary services • Medical and surgical care • Preventive care • Hospitalization due to illness or injury • Medical Equipment • Dental surgery • Extended healthcare services • No requirement for coverage • Dental care, prescriptions, and eye care • Many provinces and territories provide some coverage • Average $580 per year out-of-pocket Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

22. The Role of Private Insurance • Private insurance • Available through employers or purchase • Supplement for non-covered Medicare services • Private insurers prohibited from paying for medically necessary services • Private insurance payments • 30% of Canada’s total healthcare expenditures Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

23. Limiting Private Insurance • Limiting private insurance does not let people reduce wait times for some services • Limiting private insurance increases the public cost of universal coverage • Some Canadians want to expand the role of private insurers to solve these problems • Others want to restrict private insurance to ensure equal access to basic medical services Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

24. Public Health Benefits of the Canadian System • Statistics show that Canadians benefit from good health care • Life expectancy at birth is more than 80 years as of 2005, among the highest in industrialized nations • Infant mortality was cut in half from 1979 to 2005 Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c

25. Financing Healthcare (Part 1) Summary - lecture c • Health plans in the United Kingdom and Canada reflect different national priorities • Both have tax funded universal coverage • United Kingdom NHS • Centrally administered and funded • Services at government operated facilities • Providers employees of NHS • Private insurance allows for additional access and choice Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c 25

26. Financing Healthcare (Part 1) Summary continued - lecture c • Canada MEDICARE • Services at government facilities by private providers • Private health insurance limited to provide equal access • Challenge of wait times • UK permits private insurance • Canada does not Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c 26

27. Financing Healthcare (Part 1)References – Lecture c References British Broadcasting Corporation. Birth of the National Health Service: the early history of the NHS. http://www.bbc.co.uk/archive/nhs. Accessed April 7, 2011. British Broadcasting Corporation. The NHS at 50: making Britain better. http://news.bbc.co.uk/2/hi/events/nhs_at_50/special_report/119803.stm. July 1, 1998. Accessed April 7, 2011. Canadian Health Care. www.canadian-healthcare.org. Accessed April 6, 2011. Citizens Advice Bureau [United Kingdom]. National insurance—contributions and benefits. http://www.adviceguide.org.uk/index/life/benefits/national_insurance_contributions_and_benefits.htm. Accessed April 8, 2011. Citizenship and Immigration Canada. Health care in Canada. http://www.cic.gc.ca/english/newcomers/after-health.asp. Updated March 10, 2011. Accessed April 10, 2011. Commonwealth Fund. International profiles of health care systems. http://www.commonwealthfund.org/~/media/Files/Publications/Fund%20Report/2010/Jun/1417_Squires_Intl_Profiles_622.pdf. June 2010. Accessed April 12, 2011. Department of Health [United Kingdom]. History of the department. http://www.dh.gov.uk/en/Aboutus/HowDHworks/DH_074813. Updated May 23, 2007. Accessed April 8, 2011. Department of Health [United Kingdom ]. How DH works. http://www.dh.gov.uk/en/Aboutus/HowDHworks/DH_4106148. Updated May 13, 2010. Accessed April 8, 2011. Health Canada. About Health Canada: activities and responsibilities. http://www.hc-sc.gc.ca/ahc-asc/activit/index-eng.php. Updated May 3, 2008. Accessed April 6, 2011. Human Resources and Skills Development Canada. Indicators of well-being in Canada. http://www4.hrsdc.gc.ca/.3ndic.1t.4r@-eng.jsp?iid=2.. Accessed April 10, 2011. Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c Health IT Workforce Curriculum Version 3.0/Spring 2012

28. Financing Healthcare (Part 1)References – Lecture c (cont.) References Madore O. The Canada Health Act: overview and options. Library of Parliament, Parliamentary Information and Research Services. http://www2.parl.gc.ca/content/lop/researchpublications/944-e.htm. Updated May 16, 2005. Accessed April 10, 2011. National Health Service. Help with health costs. http://www.nhs.uk/NHSEngland/Healthcosts/Pages/Abouthealthcosts.aspx. Updated. June 1, 2010. Accessed April 8, 2011. National Health Service. How do I get assisted living equipment? http://www.nhs.uk/chq/Pages/1549.aspx?CategoryID=155&SubCategoryID=155. Updated January 15, 2009. Accessed April 8, 2011. National Health Service. NHS history. Updated July 5, 2007. http://www.nhs.uk/NHSEngland/thenhs/nhshistory/Pages/NHShistory1948.aspx.Accessed April 6, 2011. National Health Service. What is the national framework for NHS continuing healthcare and NHS-funded nursing care? http://www.nhs.uk/chq/Pages/2392.aspx?CategoryID=155&SubCategoryID=155. Updated September 25, 2007. Accessed April 8, 2011. National Health Service Act. Encyclopaedia Britannica. http://www.britannica.com/EBchecked/topic/404910/National-Health-Service-Act. Accessed April 7, 2011. Prime Minister of Canada. Canada’s new government announces patient wait times guarantee. http://pm.gc.ca/eng/media.asp?id=1611. April 4, 2007. Accessed April 10, 2011. Steinbrook R. Private health care in Canada. N Engl J Med. 2006;354:1661-1664. Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 1) Lecture c