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The BUSINESS CASE FOR single-payer Health care

The BUSINESS CASE FOR single-payer Health care. Stephen B. Kemble, MD Clinical Assistant Professor of Medicine John A. Burns School of Medicine The Rotary Club March 11, 2014. Disclosure. No financial conflicts of interest to disclose.

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The BUSINESS CASE FOR single-payer Health care

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  1. The BUSINESS CASE FOR single-payer Health care Stephen B. Kemble, MD Clinical Assistant Professor of Medicine John A. Burns School of Medicine The Rotary Club March 11, 2014

  2. Disclosure • No financial conflicts of interest to disclose. • I receive no money whatsoever for any of my involvement in health care reform and health policy activities.

  3. Definition • SINGLE-PAYER: Public funding that pays for the health care of the entire population for a geographic/political entity. • Private care delivery: Traditional Medicare, FFS Medicaid, Canada • Public care delivery: VA, Military health system, Indian Health Service, Great Britain Eliminates private health insurance except for supplemental benefits not covered in single-payer program.

  4. US Public Spending for Health ExceedsTotal Spending in Other Nations $8,950 2011 healthcare spending per capita Data are for 2011 Sources: OECD 2013; Health Affairs 2002 21(4)88

  5. Health Costs: USA vs Canada USA Health costs % of GDP “Uniquely American” Single Payer Implemented Canada 2014 Source: Statistics Canada, Canadian Institute for Health Info, and NCHS/Commerce Dept.

  6. Are we getting better health care?

  7. Life Expectancy Years Note: Data are for 2011 or most recent year available Source: OECD, 2013

  8. Decline in Preventable Deaths 1998-2002Preventable deaths per 100,000 (males) Nolte & McKee, Measuring The Health Of Nations, Health Affairs, Jan-Feb 2008

  9. Infant MortalityDeaths in First Year of Life Per 1,000 Live Births Note: Data are for 2011 or most recent year available Source: OECD, 2013

  10. Maternal MortalityDeaths per 100,000 Live Births Note: Data are for 2011 or most recent year available Source: OECD, 2013

  11. How Many People Don’t Have Health Insurance? USA with the ACA Canada 30 Million 0 US Census Bureau, 2012

  12. How Many People Go Without Some Medical Care Because of Cost? USA Canada 0 115 Million Commonwealth Fund, Schoen 2007

  13. How Many People Die Each Year From Not Having Insurance? USA Canada 0 45,000 Wilper, et al “Health Insurance and Mortality in U.S. Adults,” American Journal of Public Health; Vol. 99, Issue 12, Dec 2009

  14. How Many People Are Involved in Medical Bankruptcies Each Year? USA Canada 0 2 Million 62% of Americansfile cases 866,000 total cases affecting 2 million Americans Excludes those too poor to declare bankruptcy Source: Himmelstein et al. Am J Med: August, 2009

  15. What costs us so much more?Are we utilizing too much care?

  16. Hospital Inpatient Days per Capita Note: Data are for 2011 or most recent year available Source: OECD, 2013

  17. Physician Visits per Capita Note: Data are for 2011 or most recent year available Source: OECD, 2013

  18. Is it “moral hazard”because patients don’t have enough “skin in the game?”

  19. Deductibles Are Rapidly Increasing Percent of workers with deductibles >$1,000 Kaiser/HRET Survey of Employer-Sponsored Benefits, 2013

  20. We Have the Most “Skin in the Game” Out-of-pocket dollars per capita Note: Data are for 2011 or most recent year available Figures adjusted for Purchasing Power Parity Source: OECD, 2013

  21. Financial Barriers Worsen Diabetes Care and Outcomes JGIM On-Line, 9/27/2013. Note: Financial barrier = needed to see a doctor in last 12 months but couldn’t

  22. Medicare HMO Copayments Drive Fewer Office Visits, More Hospitalizations Difference between plans that did and didn’t raise copays Source: NEJM 2010;362:320 All figures are per 100 enrollees

  23. Restricting Access Increases Costs • Restricting care requires bureaucracy that costs more than it saves • We already rely heavily on incentives to deliver less care and pushing more costs onto patients. • If these worked to control costs, we would not be spending twice as much as other advanced countries!

  24. So, the reality is: • We’re spending twice as much • We’re under-utilizing, not over-utilizing care • Our health outcomes are worse

  25. Then what is costing us so much more than other countries?

  26. Growth of Physicians vs Administrators Growth Since 1970 Physicians Administrators Data updated through 2013 Source: Bureau of Labor Statistics; NCHS; Himmelstein/Woolhandler analysis of CPS

  27. Hospital Billing and Administration Dollars per capita, 2014 Source: Woolhandler/Himmelstein/Campbell NEJM 2003;349:769 (updated 2013)

  28. Physicians’ Billing and Office Expenses Dollars per capita, 2014 Source: Woolhandler/Himmelstein/Campbell NEJM 2003;349:769 (updated 2013)

  29. Overall Administrative Costs Dollars per capita, 2014 Source: Woolhandler/Himmelstein/Campbell NEJM 2003;349:769 (updated 2013)

  30. Competitive Private Health Insurance • Administrative costs: 5-6 times that of public systems • Incentive is to avoid risk (caring for sick people) • “Race to the bottom” among plans • Misguided and costly efforts to centrally manage health care providers

  31. Can the Affordable Care Act work?

  32. ACA Fails for Sick People • Website rollout complications • Low value plans (bronze, silver) • Deter needed care • For individual making only $25,000 (max subsidies), > $7,500/yr in premiums, deductibles, & co-pays !!! • Access problems: • MD shortage, narrow & ghost networks, dysfunctional Medicaid

  33. Ineffective ACA “Cost Controls” • Preserves private, competitive insurance model • Leaves obstacles to access in place • “Cost control” aimed at further restricting care • Pushes more cost onto patients • Shifts insurance risk to doctors and hospitals • Increases administrative complexity and cost All counter to evidence for achieving “Triple Aims” - better quality, better health, lower cost!

  34. Can the Affordable Care Act work? • Doesn’t work for sick people • Relies on strategies shown to increase costs

  35. The Single-Payer Alternative – HR 676 • Everyone covered, all medically necessary care • Minimal or no deductibles & co-pays • Access to care based on need, not means • Insurance risk is managed by risk pooling alone, pooled across entire population – not shifted onto doctors, hospitals, and patients. • Vastly simplified administration • Minimizes centralized management of care & bureaucracy

  36. Single-Payer Cost Control • Assure access to cost-effective care for all • Simplify, streamline administration • Use admin savings to reduce prices • Hospitals - global budgeting • Doctors – negotiated fees, simplified billing, support quality improvement • Drugs and medical equipment -negotiated prices, bulk purchasing

  37. Single-Payer Savings • Hospitals (~7%): global operating budgets– no itemized billing • Doctors (~5%): Reduced admin and malpractice cost, incentive-neutral pay – FFS based on time, or salary • Patients (~5%): • better access to cost-effective outpatient care • reduced complications • reduced ER and hospital use (Savings as % of total health spending) Sources include Price Waterhouse Coopers,Blanchfield et al, “Saving Billions of Dollars—and Physicians’ Time— by Streamlining Billing Practices,” Health Affairs, Apr. 29, 2010, Lewin Group and Friedman economic analyses for California, Maryland, Colorado

  38. Single-Payer Savings • Drugs and Medical Equipment (~6%): • bulk purchasing, negotiated prices, less fraud • Business (~1%): • no health insurance administration • much lower worker’s comp, liability, and vehicle insurance • No COBRA or retiree health benefits

  39. Single-Payer Savings • Administration (~16%): focused on assuring care and payment, not avoiding “risk” • For entire health care system: ~ 30-40% savings

  40. HR 676 “Medicare for All”Covers Everyone and Spends Less $ Billions $142 Increased utilization (especially home health and dental) Covering the uninsured $110 Medicaid Rate Adjustment $74 Government administration ($23B) $153 Health insurance administration $178 Increased market power (pharmaand devices) $215 Admin costs to providers New Costs Savings Friedman, G. Dollars & Sense. March/April 2012

  41. HR 676 “Medicare for All”Covers Everyone and Spends Less New Costs: $326 B Net savings: $243 Billion New Savings: $569 B Cover everyone with better benefits and spend less. Friedman, G. Dollars & Sense. March/April 2012

  42. What Do You Spend on Health Care Benefits? USA Employers Today Single Payer Model 3.3% tax on wages 7 - 12% of wages Bureau of Labor Statistics Business Health Coalition for Single Payer

  43. 8 Ways that Single Payer Strengthens American Businesses Level the global playing field for business

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