Health Policy 101:Health Policy 101:Why America Wants NHIWhy America Wants NHI

Walter Tsou, MD, MPH Physicians for a National Health Program

Congressional Forum

April 24, 2007

Americans know more about Anna Americans know more about Anna Nichole Smith than about health careNichole Smith than about health care

Two Questions?Two Questions?

What is the health policy of the United States of America?

How much will the US spend this year for health care?

“Iron Triangle of Health Policy”“Iron Triangle of Health Policy”

Access to Care

Cost Containment Quality of Care

Looking at CostsLooking at Costs

Health Care Costs at $2.3 Tr in 2007 and almost Health Care Costs at $2.3 Tr in 2007 and almost doubles in 9 years. Total for Decade? $31 Trillion!!doubles in 9 years. Total for Decade? $31 Trillion!!

Source: Projected from Natl Health Expenditures, Health Affairs, Feb. 22, 2006

$2,262$2,421

$2,590$2,771

$2,966$3,171

$3,390$3,624

$3,874$4,137

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2007 08 09 10 11 12 13 14 15 2016

National Health Expenditures (NHE) Share of Gross Domestic National Health Expenditures (NHE) Share of Gross Domestic Product (GDP) and Private and Public Shares of NHEProduct (GDP) and Private and Public Shares of NHE

0

10

20

30

40

50

60

70

80

90

100

1965 1970 1980 1990 1993 2000 2003 2006 2009 2014

Sh

are

of N

HE

(p

erce

nt)

0

2

4

6

8

10

12

14

16

18

20

Sh

are

of G

DP

(p

erce

nt)

Source: Heffler, et al. 2005. U.S. Health Spending Projections For 2004-2014. Health Affairs, web-exclusive: w5-74 – w5-85.

Public

Private funds

Public funds

US spends far more than other countries US spends far more than other countries on health careon health care

$0$500

$1,000$1,500$2,000$2,500$3,000$3,500$4,000$4,500

Turke

yM

exico

Pola

nd

Hungary

Kore

aC

zech

Spain

Gre

ece

Portu

gal

New

Findla

nd

Unite

dIre

land

Sw

eden

Japan

Italy

Austria

France

Belg

ium

Austra

liaIce

land

Denm

ark

Norw

ay

Neth

erla

nds

Luxe

mbourg

Canada

Germ

any

Sw

itzerla

nd

U.S

.

OECD, Health Expenditures per capita, 1998

Looking at QualityLooking at Quality

Americans get only 55% of Americans get only 55% of recommended quality indicatorsrecommended quality indicators

0

10

20

30

40

50

60

70

80

Inte

rven

tion

Med

icat

ion

Imm

unizat

ion

Phys

Exa

m

Lab

or X

ray

Surg

ery

Histo

ry

Couns

elin

g

% p

erf

orm

ed

55%

McGlynn, E. A. et al. N Engl J Med 2003

Problems with the quality of careProblems with the quality of care

are indeed widespread and systemic are indeed widespread and systemic and require a system-wideand require a system-wide approachapproach

Institute of Medicine, 2003

Institute of Medicine, WSJ - June 15, 2006

Looking at AccessLooking at Access

46.6 MillionUninsured

Source: US Census, 2005

US Health Policy is a balance between US Health Policy is a balance between business and public interestsbusiness and public interests

Government

Business People

What Do Americans Want?What Do Americans Want?

NY Times, March 2, 2007

Does Business Want Universal Health Care?Does Business Want Universal Health Care?

Does Business Want Universal Health Care?Does Business Want Universal Health Care?

YES!!

Retiree Health Benefits!Retiree Health Benefits!

GM retiree cost is $60 Billion!GM retiree cost is $60 Billion!

Source: Wall St. Journal, March 11, 2004Source: Wall St. Journal, March 11, 2004

GM Lays Off 30,000GM Lays Off 30,000

Source: NY Times, Nov. 21, 2005NY Times, Nov 21, 2005

Ford Cuts 25,000 JobsFord Cuts 25,000 Jobs

Source: USA Today, Jan 2006USA Today, Jan 24, 2006

Chrysler is in trouble due to health careChrysler is in trouble due to health care

“Chrysler faces $21.1 billion in future retiree health care liabilities . . . and the majority of the obligation is not funded. The massive liability is one of the key hurdles DaimlerChrysler is seen facing as it tries to sell its US unit.”Wall St. Journal, Feb 26, 2007

Financial Accounting Standards Board Financial Accounting Standards Board Rule #158Rule #158

Employers Accounting for Defined Benefit Pension and Other Postretirement Plans

Requiring an employer to recognize the … status of a defined benefit postretirement plan as an asset or liability in its statement of financial position . . .

Starts Dec. 15, 2006

Standard and Poor 500 have $321 Billion Standard and Poor 500 have $321 Billion Health Care Liability!Health Care Liability!

Source: Wall St. Journal, June 6, 2006Source: Wall St. Journal, June 6, 2006

$1 Trillion Public Retiree Obligation$1 Trillion Public Retiree Obligation

Source: USA Today, May 18, 2006oday, May 18, 2006, Reuters June 13, 2006

Gov’t Sticker Shock-$600 Billion to $1.3 Gov’t Sticker Shock-$600 Billion to $1.3 TrillionTrillion

Source: WSJ, Nov. 9, 2006Wall St. Journal, Nov. 9, 2006

New estimate of $1.5 Trillion liability, New estimate of $1.5 Trillion liability, many states are over $10 billionmany states are over $10 billion

Credit Suisse, March 22, 2007

Only 100% Universal Health CareOnly 100% Universal Health Care

Discounts future health care costs Dramatically eliminates retiree health

liability on balance sheet

Health Care Hits Home . . .Health Care Hits Home . . .

Year Closed Hospital Beds Outcome

1994 Sacred Heart Hospital & Rehab. Ctr 234 Closed

1995 Community Hospital of Chester 179 Converted to Outpt Clinics

1995 Thomas Jefferson UH Ford Road 38 Converted to Outpt Clinics

1997 Allegheny Univ Hospitals, Mt Sinai 141 Closed

1997 Institute of Pennsylvania 91 Sold to become Kirkbride Center

1999 Germantown Hospital 88 Converted to Outpt Clinics

1999 Neumann Medical Center 133 Converted to Outpt Clinics

2000 John F. Kennedy Memorial Hospital 103 Converted to Outpt Clinics

2000 City Avenue Hospital 44 Closed

2002 Mercy Community Hospital 113 Converted to Outpt Clinics

2003 Parkview Hospital 149 Closed

2003 Elkins Park Hospital 114 Purchased by Einstein

Number of Beds removed from Inpatient Use(excl.s Elkins Park, some or all of whose bed capacity

will be used by Einstein/MossRehab)

1,222 25.3%

Bed Capacity Reduction At Hospitals Remaining open 3,615 74.7%

13 Phila. hospitals have closed from 13 Phila. hospitals have closed from 1994-20041994-2004

Source: Delaware Valley Healthcare Council

Phila Inquirer, Feb. 17, 2007

Despite a Full Hospital . . . .Despite a Full Hospital . . . .

Single Payer, National Health InsuranceSingle Payer, National Health Insurance

A National Health ProgramA National Health Program

Universal - covers everyone Comprehensive - all needed care, no co-pays Single, public payer No investor-owned HMOs, hospitals, etc. Improved health planning Public accountability for quality and cost, but

minimal bureaucracy

Simplified flow of fundsSimplified flow of funds

Medicare

Medicaid

VA Benefits

State and Local

Private Insurance

Patient fees

HEALTH

FUND

Physicians

Hospitals

Pharmacy

Laboratories

Radiology

Long Term Care

Public Private

Public financing, Private deliveryPublic financing, Private delivery

Physician Proposal in Physician Proposal in JAMAJAMA, Aug. 2003, Aug. 2003

www.physiciansproposal.org

Congress introduces Physician ProposalCongress introduces Physician Proposal

AngellHimmelstein

Conyers

House Judiciary Committee Room, Feb 4, 2003

US National Health Insurance ActUS National Health Insurance Act

5

67

89

10

1112

1314

15

1960

1965

1970

1975

1980

1985

1990

1995

1999

% o

f G

NP

CANADA

U.S.

HEALTH COSTS AS % OF GNP:HEALTH COSTS AS % OF GNP:U.S. & CANADA, 1960-1999U.S. & CANADA, 1960-1999

CANADA'S NHP ENACTED

NHP FULLY IMPLEMENTED

Source: Statistics Canada, Canadian Inst. for Health Info., & NCHS/Commerce Dept

Economies of Scale Saves MoneyEconomies of Scale Saves Money

Savings Under Single Payer (2005)

178.2

50.5

0

20

40

60

80

100

120

140

160

180

200

Administrative Savings Bulk Buying Savings

$ b

illi

on

s

Source: Lewin Group 2002 and Dean Baker, Center for Economic and Policy Research,

U.S. Public Spending Per Capita for HealthU.S. Public Spending Per Capita for Healthis Greater than Total Spending in Other Nationsis Greater than Total Spending in Other Nations

Note: Public includes benefit costs for govt. employees & tax subsidy for private insuranceSource: NEJM 1999; 340:109; Health Aff 2000; 19(3):150

$1,450

$1,780

$1,820

$2,120

$2,250

$2,400

$1,530$2,740

$0 $1,000 $2,000 $3,000 $4,000 $5,000

U.K.

Japan

Sweden

France

Canada

Germany

U.S.

$ Per Capita

Total Spending U.S. Public U.S. Private

NHI will save $5000 per capita by 2024NHI will save $5000 per capita by 2024

Per Capita Health Expenditures

0

5000

10000

15000

20000

25000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Dolla

rs

current system single payerSource: Lewin Group 2002 and Dean Baker, Center

$12114 vs 10405

$8828 vs 8059

$16623 vs 13434

$21411 vs 16480

Independent analysis of single payer for Independent analysis of single payer for America would save a trillion dollars!America would save a trillion dollars!

National Coalition on Health Care, Aug 1, 2005

Government is the “swing” voteGovernment is the “swing” vote

Government

Business People

Rex Morgan, MD on NHIRex Morgan, MD on NHI

PHYSICIANS FOR A NATIONAL HEALTH PROGRAM

29 EAST MADISON STREETSUITE 602CHICAGO, IL 60602-4404TEL: (312) 554-0382

WWW.PNHP.ORG