The U.S. Health System: Challenges and Reform in International Perspective

Size: px

Start display at page:

Download "The U.S. Health System: Challenges and Reform in International Perspective"

Cody Houston
5 years ago
Views:

1 The U.S. Health System: Challenges and Reform in International Perspective Karen Davis President, The Commonwealth Fund World Bank October 13,

2 Health Reform in the U.S.: Learning from International Experience 2 U.S. can learn from other countries which guarantee coverage for all at lower spending Ways in which other countries use purchasing power to leverage prices can be instructive to U.S. Delivery system with strong primary care foundations work well in other countries Infrastructure of information technology and comparative effectiveness research can yield greater value Major health reform proposals under consideration in Congress U.S. has historic opportunity to provide health insurance for all while laying the foundation for payment and delivery system reform

3 Mirror Mirror: US Falls Behind 3 Country Rankings AUSTRALIA CANADA GERMANY NEW ZEALAND UNITED KINGDOM UNITED STATES OVERALL RANKING (2007) Quality Care Right Care Safe Care Coordinated Care Patient-Centered Care Access Efficiency Equity Long, Healthy, and Productive Lives Health Expenditures per Capita, 2004 $2,876* $3,165 $3,005* $2,083 $2,546 $6,102 * 2003 data Source: K. Davis, C. Schoen, S. C. Schoenbaum, M. M. Doty, A. L. Holmgren, J. L. Kriss, and K. K. Shea, Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care, The Commonwealth Fund, May 2007

4 Cost-Related Access Problems Among the Chronically Ill, in Eight Countries, Base: Adults with any chronic condition Percent reported access problem due to cost in past two years* NETH UK FR CAN GER NZ AUS US * Due to cost, respondent did NOT: fill Rx or skipped doses, visit a doctor when had a medical problem, and/or get recommended test, treatment, or follow-up. Data: The Commonwealth Fund International Health Policy Survey of Sicker Adults (2008). Source: C. Schoen et al., In Chronic Condition: Experiences of Patients with Complex Healthcare Needs in Eight Countries, 2008, Health Affairs Web Exclusive, Nov. 13, 2008.

5 Access to Doctor When Sick or Needed Care, Base: Adults with any chronic condition Percent 80 Same-day appointment 80 Any ER use in past 2 years NETH NZ UK GER FR AUS CAN US Data: 2008 Commonwealth Fund International Health Policy Survey of Sicker Adults Source: C. Schoen et al., In Chronic Condition: Experiences of Patients with Complex Healthcare Needs in Eight Countries, 2008, Health Affairs Web Exclusive, November 13, NETH GER UK FRA NZ AUS US CAN

6 Difficulty Getting Care After Hours Without Going to the Emergency Room 6 Base: Adults with any chronic condition who needed after-hours care Percent reported very difficult getting care on nights, weekends, or holidays without going to ER NETH GER NZ UK FR CAN AUS US Data: 2008 Commonwealth Fund International Health Policy Survey of Sicker Adults Source: C. Schoen et al., In Chronic Condition: Experiences of Patients with Complex Healthcare Needs in Eight Countries, 2008, Health Affairs Web Exclusive, November 13, 2008.

7 U.S. Chronically Ill Patient Experiences: Access, Coordination & Safety, Base: Adults with any chronic condition Percent reported in past 2 years: AUS CAN FR GER NETH NZ UK US Access problem due to cost* Coordination problem** Medical, medication, or lab error*** *Due to cost, respondent did NOT: fill Rx or skipped doses, visit a doctor when had a medical problem, and/or get recommended test, treatment, or follow-up. **Test results/records not available at time of appointment and/or doctors ordered test that had already been done. ***Wrong medication or dose, medical mistake in treatment, incorrect diagnostic/lab test results, and/or delays in abnormal test results. Data: 2008 Commonwealth Fund International Health Policy Survey of Sicker Adults Source: C. Schoen et al., In Chronic Condition: Experiences of Patients with Complex Healthcare Needs in Eight Countries, 2008, Health Affairs Web Exclusive, November 13, 2008.

8 Only 28% of U.S. Primary Care Physicians Have Electronic Medical Records; Only 19% Advanced IT Capacity, Percent reporting EMR Percent reporting 7 or more out of 14 functions* NET NZ UK AUS GER US CAN 0 NZ UK AUS NET GER US CAN *Count of 14: EMR, EMR access other doctors, outside office, patient; routine use electronic ordering tests, prescriptions, access test results, access hospital records; computer for reminders, Rx alerts, prompt tests results; easy to list diagnosis, medications, patients due for care. Data: 2006 Commonwealth Fund International Health Policy Survey of Primary Care Physicians. Source: Schoen et al., On the Front Lines of Care, Health Affairs Web Exclusive, Nov. 2, 2006.

9 Mortality Amenable to Health Care U.S. Rank Fell from 15 to Last out of 19 Countries 9 Deaths per 100,000 population * / / France Japan Australia Spain Italy Canada Norway Netherlands Sweden Greece Austria Germany Finland New Zealand Denmark United Kingdom Ireland Portugal United States * Countries age-standardized death rates before age 75; from conditions where timely effective care can make a difference. Includes: Diabetes, asthma, ischemic heart disease, stroke, infections screenable cancer. Data: E. Nolte and C. M. McKee, Measuring the Health of Nations, Health Affairs, Jan/Feb 2008). Source: The Commonwealth Fund Commission on a High Performance Health System, Why Not the Best? Results from the National Scorecard on U.S. Health System Performance, 2008, (New York: The Commonwealth Fund, July 2008).

10 International Comparison of Spending on Health, Average spending on health per capita ($US PPP) 16 Total expenditures on health as percent of GDP United States Canada Netherlands France Germany Australia United Kingdom United States France Germany Canada Netherlands Australia United Kingdom Data: OECD Health Data 2009 (July 2009).

11 Pharmaceutical Spending per Capita: 1995, 2007 Adjusted for Differences in Cost of Living 11 NETH $210 $ AUS $228 $ GER $317 $542 FR $335 $588 * CAN $319 $691 US $385 $878 $0 $200 $400 $600 $800 $1,000 *2006 Source: OECD Health Data 2009.

12 Lessons from International Comparisons 12 Gaps between average performance and benchmarks make compelling case for change What receives attention gets improved Country patterns reflect underlying strategic policy choices National leadership on health policy matters Universal coverage matters Having an integrated health care system matters Better primary care and care coordination hold potential for improved outcomes at lower costs Align incentives to promote more effective and efficient use of staff, IT, and clinical resources Health information technology has significant potential

Five Key Strategies for High Performance 13 1. Extending affordable health insurance to all 2. Organizing care around the patient 3.

13 Five Key Strategies for High Performance Extending affordable health insurance to all 2. Organizing care around the patient 3. Aligning financial incentives to enhance value and achieve savings 4. Meeting and raising benchmarks for highquality, efficient care 5. Ensuring accountable national leadership and public/private collaboration Source: Commission on a High Performance Health System, A High Performance Health System for the United States: An Ambitious Agenda for the Next President, The Commonwealth Fund, November 2007

14 DRAFT Insurance Reform Proposals As Of DRAFT Senate Finance Committee Modified Chairman s Mark 9/22/09 Senate HELP proposal 7/15/09 House of Representatives Tri- Committee 7/31/09 Insurance Market Regulations GI, adjusted CR 4:1; 5 yr phase-in for small group; report medical loss ratio GI, adjusted CR 2:1; meet medical loss standards GI, adjusted CR 2:1;meet medical loss standards Individual mandate Amendment charges excise tax of $750 per adult in household phased in at $200 in 2014, $400 in 2015, $600 in 2016, $750 in Penalty $750/year per person (exemptions if unaffordable) Penalty 2.5% difference btwn MAGI and GI up to avg. natl premium Exchange State or Regional State or Regional National or state Plans offered Private and Co-op Private and public Private, public and co-op Eligibility for exchange Individuals and small businesses; uninsured eligible for high risk pools until 2013 Individuals and small businesses Individuals and small businesses Minimum benefit standard, tiers Essential health benefits 65%-90% actuarial value, Four tiers plus young adults policy Essential health benefits 76%-93% actuarial value, Three tiers Essential Health Benefits 70%-95% actuarial value, Four tiers Premium / cost-sharing assistance Sliding scale 2%-12% of income up to 300% FPL/ flat cap at 12% 300%-400%; cost sharing credits for %fpl Sliding scale 1%-12.5% of income up to 400% FPL Sliding scale 1.5%-12% of income up to 400% FPL; cost-sharing credits 133%-350%FPL Medicaid / CHIP expansion Up to 133% FPL Up to 150% FPL Up to 133% FPL Shared Responsibility / Employer Pay-or-play Firms >50 FTEs pay uncovered worker fee Small employer tax credit Play or Pay; firms >25 workers 60%+ premium contribution; penalty $750/yr per uncovered FTE, $375/yr per uncovered PTE Small employer subsidy Play or pay; firms >$500,000 payroll 72.5% + prem. contribution for ind/65% + for families; sliding scale phased-in from 2% to 8% of payroll Small employer tax credit Source: Commonwealth Fund analysis of health reform proposals.

15 Exchange Standards and Plans Primary Care Prevention and Wellness Innovative payment pilots: medical homes, accountable care organizations, bundled hospital and post-acute care Productivity Improvements System Improvement Provisions of National Health Reform Proposals, 2009 H.R as amended National or state exchanges; private, public or co-op plans offered; Essential health benefits 70%-95% actuarial value, four tiers; insurers must meet specified medical loss ratio Increase Medicare payments for PCPs by 5%; bring Medicaid PCPs up to Medicare level Develop a national prevention and wellness strategy; remove costsharing for proven preventive services in Medicare; grants to support employer wellness programs Adopt medical homes, ACOs, and bundled payments on large scale if pilot programs prove successful; Center for Payment Innovation Modify market basket updates to account for productivity improvements Senate HELP State exchanges (can band together to form regional); private and public plans offered; Essential health benefits 76%-93% actuarial value, three tiers; insurers must meet specified medical loss ratio Develop a national prevention and wellness strategy; invest in preventive programs; grants to wellness incentive programs; grants to support community prevention programs Grants to support medical home model 15 DRAFT Sen. Baucus Chairman s Mark as Amended State or regional exchanges; private and co-op plans offered; Essential health benefits 65%-90% actuarial value, four tiers plus young adults policy; insurers must report percent of premium spent on items other than medical care 10% bonus payments for 5 years; cut all other payments by 0.5% Provide annual wellness visit and/or health risk assessment for Medicare beneficiaries; strengthen state & employer wellness programs; remove cost-sharing for proven preventive services Allow Medicaid beneficiaries to designate medical home; ACOs to share savings in Medicare; Innovations Center Modify market basket updates to account for productivity improvements Comparative Effectiveness Establish Comparative Effectiveness Research within AHRQ Create Center for Health Outcomes Research and Evaluation with AHRQ Create Patient-Centered Outcomes Research Institute Quality Improvement Establish the Center for Quality Improvement to identify, develop, evaluate, disseminate, and implement best practices; develop national priorities for performance improvement and quality measures Source: Commonwealth Fund analysis of health reform proposals. Provide grants for improving health system efficiency Direct HHS to develop national quality strategy

16 Trend in the Number of Uninsured, Under Current Law and Sen. Baucus and House Tri-Committee Proposals Millions Current law Sen. Baucus' Chairman's Mark as Amended House Proposal Note: The uninsured includes unauthorized immigrants. With unauthorized immigrants excluded from the calculation, nearly 94% and 97% of legal nonelderly residents are projected to have insurance under the Senate Finance and House proposal, respectively. Data: Estimates by The Congressional Budget Office.

17 Total National Health Expenditures, : Current Projection, Path, and Illustrative Ways and Means, Energy and Commerce Scenarios NHE in trillions $6 Current projection Energy and Commerce $5 Ways and Means Commonwealth Fund Path $4 $3 5.6% annual growth 6.5% annual growth 5.2% annual growth $5.0?? $4.6 $ $2 $2.5 $1 $ Note: GDP = Gross Domestic Product. Data: Estimates by The Commonwealth Fund.

18 Major Sources of Savings And Revenues Compared with Projected Spending, Net 18 Cumulative Effect on Federal Deficit, DRAFT Dollars in billions CBO estimate of Chairman s Mark as Amended, Senate Finance Committee CBO estimate of H.R. 3200, as of Total Net Impact on Federal Deficit, $81 $239 Total Federal Cost of Coverage Expansion and Improvement $719 $1,042 Medicaid/CHIP outlays Exchange subsidies Payments by employers to exchanges 0-45 Small employer subsidies Payments by uninsured individuals Play-or-pay payments by employers Associated effects on taxes and outlays Total Savings from Payment and System Reforms -$404 -$219 Physician payment SGR reform Net improvements and savings Total Revenues -$397 -$583 Excise tax on high premium insurance plans Surtax on wealthy individuals and families Other revenues Source: The Congressional Budget Office Preliminary Analysis of the Senate Finance Chairman's Mark of the America's Healthy Future Act as Amended, October 7, 2009, The Congressional Budget Office Analysis of HR 3200, The Affordable Health Choices Act, July 17, 2009,

19 Overall Findings 19 Possible to extend affordable insurance to all and improve health outcomes and cost performance Insurance reforms would enhance access, choice, continuity and lower premiums Insurance, payment, and system reforms could slow spending growth Families and businesses would spend less compared to current projections Savings accrue across all income groups Savings partially offset federal costs of investing in insurance and system reforms Critical to start now: policies interact over time A comprehensive approach is essential

20 Historic Opportunity for Change 20 The U.S. has a historic opportunity to adopt reforms that will achieve a high performance health system; we can t afford to continue on our current course Goals of stable and secure coverage for all are achievable; requires one-time shift in federal budget to assist uninsured and underinsured Slowing growth in total health spending and Medicare outlays is achievable Investing in primary care Rapid cycle testing of innovative payment reforms to reward quality and value Productivity improvement Correcting market price signals: Medicare Advantage, Rx Choice and competition: public/co-op plan; limits on plan premium growth Harmonization of private and public payment methods Independent commission Budget-neutrality is achievable through combination of cost-containment and new revenues Oversight and system of tracking performance will be needed

21 Thank You! 21 Sara Collins, Vice President, Robin Osborn, Vice President and Director, International Program, Rachel Nuzum, Senior Policy Director Stephanie Mika, Program Associate, Sheila Rustgi Program Associate, Kristof Stremikis, Senior Research Associate, For more information, please visit:

Exhibit ES-1. Total National Health Expenditures (NHE), Current Projection and Alternative Scenarios

Exhibit ES-1. Total National Health Expenditures (NHE), 2009 2020 Current Projection and Alternative Scenarios NHE in trillions $6 $5 Current projection (6.7% annual growth) Path proposals (5.5% annual