Health Reform: Will States Be Left Holding the Bag?

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Meredith Stanley
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1 1 Health Reform: Will States Be Left Holding the Bag? Marcia Nielsen, PhD, MPH Vice Chancellor for Public Policy & Planning Associate Professor Department of Health Policy and Mgmt University of Kansas Medical Center

2 2 Today s Discussion Agenda Where to start? From the beginning! Does the US need FEDERAL health reform? Given all the rhetoric, what is NOT in the law? An Overview of the Health Reform Legislation and Impacts on States Jennifer Tolbert; Kaiser Family Foundation, Washington, D.C. Medicaid: A Changing Federal-State Partnership Mary B. Kennedy; Centers for Medicare and Medicaid Services, Department of Health and Human Services, Baltimore, MD. Making Sense of the Dollars and Cents Christine Eibner; Economist, RAND Corporation, Washington, D.C.

3 3 Q: Does the US Need FEDERAL health reform? A: Data on US costs, access, and outcomes would suggest we can improve on the current system.

4 4 COST: Premiums Rising Faster Than Inflation and Wages Cumulative Changes in Components of U.S. National Health Expenditures and Workers Earnings, Insurance premiums Workers' earnings Consumer Price Index 108% Percent % 24% * 2009* * 2008 and 2009 NHE projections. Data: Calculations based on M. Hartman et al., National Health Spending in 2007, Health Affairs, Jan./Feb. 2009; and A. Sisko et al., Health Spending Projections through 2018, Health Affairs, March/April Insurance premiums, workers earnings, and CPI from Henry J. Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits Annual Surveys, Source: K. Davis, Why Health Reform Must Counter the Rising Costs of Health Insurance Premiums, (New York: The Commonwealth Fund, Aug. 2009).

5 COST: National Health Expenditures per Capita Average spending on health per capita ($US PPP) United States Canada France Germany Netherlands United Kingdom Data: Organisation for Economic Cooperation and Development (OECD) Health Data 2009 (June 2009).

6 6 COST: Pharmaceutical Spending per Capita $210 NETH $ $228 AUS $ GER FR $317 $335 $542 * $588 CAN $319 $691 US $385 $878 $0 $200 $400 $600 $800 $1,000 * 2006 Source: OECD Health Data 2009 (June 2009). Figures adjusted for cost of living..

7 7 COST: High U.S. Overhead & Administrative Costs Fragmented payers + complexity = high transaction costs and overhead costs $90 billion per year* Insurance and providers Variation in benefits is hard to understand Expensive for doctors, hospitals, and patients $600 $500 $400 $300 $200 $100 $0 Spending on Health Insurance Administration per Capita, 2007 $516 $247 $220 $198 $191 $140 $86 $76 US FR SWIZ NETH GER CAN AUS* OECD Median * 2006 Source: 2009 OECD Health Data (June 2009). * McKinsey Global Institute, Accounting for the Costs of U.S. Health Care: A New Look at Why Americans Spend More (New York: McKinsey, Nov. 2008).

8 ACCESS: ER Visit for Condition a Primary Care Doctor Could Have Treated if Available, by Income Percent 75 Below average income Above average income United New Australia United Canada Kingdom Zealand States Source: 2004 Commonwealth Fund International Health Policy Survey of Adults Experiences with Primary Care (Schoen et al. 2004; Huynh et al. 2006).

9 9 36 ACCESS: Ability to See Doctor When Sick or Need Care Base: Adults with any chronic condition Percent AUS CAN Same-day appointment FR GER NETH 54 NZ UK 48 US AUS CAN Data collection: Harris Interactive, Inc. Source: 2008 Commonwealth Fund International Health Policy Survey of Sicker Adults. 6+ days wait or never able to get appointment FR GER NETH NZ 8 UK 14 US 23

10 ACCESS: Diagnosis of Late-Stage Cancer Uninsured vs. Privately Insured Ratio of probability of diagnosis of late vs. early stage cancer, Uninsured/private insurance Equal likelihood between Uninsured and Insured Colorectal Cancer Lung Cancer Melanoma Breast Cancer NOTE: Odds ratios were adjusted for age, sex, race/ethnicity, facility type, region, and income and education on basis of postal code. They represent the odds of being diagnosed with stage III or state IV cancer vs. stage I cancer. Analysis based on cases occurring between SOURCE: Kaiser Family Foundation, based on Halpern MT et al, Association of insurance status and ethnicity with cancer stage at diagnosis for 12 cancer sites: a retrospective analysis." The Lancet Oncology. March 2008.

11 OUTCOMES: Mortality Amenable to Health Care Mortality from causes considered amenable to health care is deaths before age 75 that are potentially preventable with timely and appropriate medical care Deaths per 100,000 population* 150 International variation, State variation, France Japan Spain Sweden Italy Australia Canada Norway Netherlands Greece Germany Austria New Zealand Denmark United States Finland Ireland United Kingdom Portugal U.S. avg 10th 25th Median 75th Percentiles 90th * Countries age-standardized death rates, ages 0 74; includes ischemic heart disease. See Technical Appendix for list of conditions considered amenable to health care in the analysis. Data: International estimates World Health Organization, WHO mortality database (Nolte and McKee 2003); State estimates K. Hempstead, Rutgers University using Nolte and McKee methodology.

12 12 Infant deaths per 1,000 live births OUTCOMES: Infant Mortality Rate 10 International variation State variation Iceland Japan Finland Sweden Norway Spain France Austria Czech Republic Germany Belgium Denmark Italy Switzerland Netherlands Australia Portugal Ireland Greece United Kingdom Canada New Zealand* United States U.S. avg 10th 25th Median 75th Percentiles 90th * Data: International estimates OECD Health Data 2005; State estimates National Vital Statistics System, Linked Birth and Infant Death Data (AHRQ 2005a).

13 13 OUTCOMES: Infant Deaths per 1,000 Live Births Infant mortality by race/ethnicity, and mother s education, 2002 Infant mortality trends, U.S. National White Hispanic AI/AN Black Asian/PI White Black Hispanic Asian/PI AI/AN Less than high school * 7.9 At least some college * For mothers age 20 and older. PI = Pacific Islander; AI/AN = American Indian or Alaskan Native. Data: National Vital Statistics System Linked Birth and Infant Death Data for infants up to one year (AHRQ 2005a; NCHS 2005).

14 14 Q: Given all the rhetoric, what is NOT in federal health reform? A: Unfortunately, misinformation abounds.

15 15 How do you tell who is telling the truth? a non-partisan, nonprofit website with aims to reduce the level of deception and confusion in U.S. politics A project of the Annenberg Center of Public Policy at the University of Pennsylvania Directed by Brooks Jackson, a former Cable News Network and Wall Street Journal reporter for 34 years

16 Top Whoppers of 2009 Conservatives Death panels Paying for end-of-life counseling Socialized medicine Wasn t even considered Dictating to doctors Comparative effectiveness research Breast cancer

16 16 Top Whoppers of 2009 Conservatives Death panels Paying for end-of-life counseling Socialized medicine Wasn t even considered Dictating to doctors Comparative effectiveness research Breast cancer massacre TV spot comparing US to Great Britain 26 lies s Viral chain purporting untrue claims Source: Liberals False finger pointing Illinois patient death not caused by insurance company Double trouble Bankruptcy every minute (not every 30 seconds) Puffed-up premiums Average family pays $200 for uncompensated care shifted onto insured, not $1000 Saving $2500 Average family with group insurance would save from 0 to 3% on premiums

17 17 Q. So what IS in federal health reform? A. Most significant changes to US health policy in almost 50 years a new state and federal partnership.

18 Summary of federal health insurance reform Requires all citizens to have insurance Expands Medicaid & provides subsidies to help people buy private insurance Creates new insurance exchanges where

18 18 Summary of federal health insurance reform Requires all citizens to have insurance Expands Medicaid & provides subsidies to help people buy private insurance Creates new insurance exchanges where individuals and small businesses would go to buy insurance Offered through states or regional exchanges Bans insurers from discriminating against people with chronic conditions (pre-existing) Starts with children this year, expanded to adults in 2014

Multinational Comparisons of Health Systems Data, Roosa Tikkanen The Commonwealth Fund

Multinational Comparisons of Health Systems Data, 217 Roosa Tikkanen The Commonwealth Fund Health Care Spending HEALTH CARE SPENDING Health Care Spending per Capita, 2 216 Adjusted for Differences in Cost