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Feb 2, 2010 Healthcare Reform Discussion Materials

Presenter: KaLynne Harris
For those of you who don't know me, I am a dermatology resident physician at the University of Utah with an interest in healthcare reform. Thanks for the invitation to discuss one of my interests. I am looking forward to the discussion!

Now for the discussion:

The U.S. House and Senate are currently in the midst of formulating a final healthcare bill intended to "reform" an industry that makes up nearly 20% of the national economy.

The readings/viewings below are meant to serve as a primer for a provocative discussion. I hope the discussion will examine 1) what are the problems with the current system, 2) what are the solutions being proposed by Congress, 3) what are other possible solutions and 4) how much will legislative process influence the final reform effort?

Please feel free to review as much or as little of the information below as you wish. If time is limited, I'd recommend reviewing the first three documents first.


1. Basic overview of the House and Senate bills.
http://www.kff.org/healthreform/upload/housesenatebill_final.pdf


2. Two different comentaries on healthcare reform strategies.
http://www.nytimes.com/2009/07/19/magazine/19healthcare-t.html?pagewanted=1&_r=2

http://www.theatlantic.com/doc/200909/health-care


3. Two New Yorker articles looking at the pros and cons of regional variation in our vast healthcare system.
http://www.newyorker.com/reporting/2009/12/14/091214fa_fact_gawande?currentPage=1

http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande


4. Two Frontline episodes relating to healthcare. The first examines other healthcare systems around the world and the second places healthcare within the larger context of government finances.
http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/view/?utm_campaign=homepage&utm_medium=proglist&utm_source=proglist

http://www.pbs.org/wgbh/pages/frontline/tentrillion/view/?utm_campaign=searchpage&utm_medium=videosearch&utm_source=videosearch


5. Finally, for the political junkies like me, a discussion between two progressives about the current healthcare bills and an article about the sticking points between the House and Senate bills.
http://www.pbs.org/moyers/journal/12182009/watch.html

http://healthcarereform.nejm.org/?p=2723

Comments

  1. As we went around the room and people introduced themselves, they shared why they care about this topic. KaLynne made the observation that most of the reasons people identified were very personal, tied to their own experiences or those of family or friends. She said it's not surprising, given the fact that very little is more personal than health.

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  2. Kaylynne asked for people's topical interests:
    - Budget, money concerns. Money is a big part of this
    - What are the options that have been presented?
    - How did we get to where we are?
    - Is health care a fundamental right?
    - How do we disempower the lobbyists?
    - How does the recent political upset in MA really affect this?
    - Why can't we take 10% away from the wealthiest providers and consumers and slide it down to the least fortunate
    - Article from The Atlantic - so interesting to hear his take on the topic. If you take away all the profits, those would only pay for health care for all for months. Not generations or years or for the most critical items. Perspective on that?
    - Is health care a fundamental human right?
    - How does coverage affect level of care (how much treatment you get based on how much you can "afford"
    - Why doesn't the health care industry respond like other free markets? Why doesn't competition drive the costs
    - A lot to learn from other countries. End of life care in the US is interesting. Exorbitant costs at the end of life. How does the American perspective on death and dying affect health care at end of life?

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  3. KH shared a few slides (a lot of data came from Kaiser Family Foundation (http://www.kff.org/) We'll ask KaLynne to post these slides later.

    First slide:
    - graph showing growth of health care expenditures and their % of GDP. KH comment: spending a greater percentage on health care is a choice. You spend more on health care, something else has to give. Not good or bad necessarily, but it is a choice
    - How did we get here? In US, it's an employer-based system for subsidized insurance, except Medicaid for the poor and Medicare for the elderly.
    - After WWII, companies couldn't compete for wages (due to wage caps). Had to compete on benefits.
    - Other countries didn't take that route. Different solutions.

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  4. Slide Two:
    - Total health care expenditures across developed countries and how much more the US spends.
    Comment: Is part of the problem that we are just much more unhealthy than the rest of the world? We eat less healthy. We don't use "folk remedies." We run to the doctor too quickly.
    Comment: A Canadian noted that she saw people go to the doctor more because it was free.
    KH: People in this country get less primary care, but more advanced procedures
    Comment: Providers are incentivized to provide more service. (Fee for service model - paid by the procedure) The more you do, the more you get paid. Other systems in other countries have lump sums for the entire process, from the visit to the surgery to the physical therapy. That is a form of "capitation."
    - In the last decade, the growth in healthcare has more than doubled the rate of inflation. When HMOs were in vogue (1990s), the model was not "fee for service." It was closer to the lump sum model, per patient, for the year.
    Comments:
    - Patients hated the HMOs. Didn't like having to choose. Perception that care was capped.
    KH: extremes at both ends: At fee for service - incentive for giving too much care. At the other end, fully capitated - incentive for doing less care (to a point, because lack of care now may lead to extreme care later)
    KH: The bigger question is "Does more care mean better care?" That's the assumption, but there is a lot of data that does not necessarily support that perception.

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  5. Comment on the growth of the government-sponsored sector of health care costs and how it will overtake the budget in a matter of years.
    KH - Yes. It brings up the US's mix of systems. Both public and private. KH showed another graph showing the split of kinds of insurance people have. Government currently covering 27% of Americans. How is that affected by the rise in unemployment? Becoming an increasing problem as people fall out of the employer-provided insurance.
    13% of the federal budget spent on Medicare. 20% total for Medicare and Medicaid (equal to what we spend on defense).
    Comment: It's remarkable that we spend as much public dollars on health care as any other country, but only cover a portion of the population instead of everyone. We already have government-run healthcare, it just doesn't provide for all.
    KH response: Should be recognized that Medicare and Medicaid pay for the most "expensive" health consumers in society (poor, elderly, disabled). The government is paying for half of all the healthcare that is consumed in this country. Covering 30% of the population. It's not a free market.

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  6. Comment: How much does our American value of doing everything possible to keep people alive play into all of this (particularly since the elderly are the most expensive)
    KH: In 2000, we had 4 workers for every 1 person on Medicare. By 2030, we'll only have 2.4 workers for every person on Medicare.
    Comment: Social Security is the same
    KH: Maybe, but Social Security needs growing at the same rate as inflation. Health care costs growing three times inflation. SS solvent for possibly 75 year. Medicaid potentially insolvent in 7 - 10 years.

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  7. Universal healthcare is not a new debate. Old debate. Wilson, Roosevelt, Nixon, Clintons all took this on.
    Comment:
    Comment: The reason hospitals don't turn people away for emergencies is that the institutions are required to take anyone if they receive Medicaid or Medicare. If they didn't accept it, they wouldn't have to.
    KH: Charity care, non-profit hospitals, community health centers, etc. in the US. People who don't have access to insurance DO have some safety nets. But even within those, there is a difference in care. In the NYT article about rationing, it shows the outcomes in emergency rooms. The people without insurance died at twice the rate. Probably because the incentive to provide care is different. (see graph showing probability of early diagnosis of different types of cancer)

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  8. Getting to the money question. The economics of it are different than most free markets. Pure Adam Smith economics demand an informed public. The consumer is not as informed in this system as they should be.
    Comment: You can't just ask different doctors how much they would charge for a liver transplant, and then compare. When did we stop saying what we would usually say as consumers - that we won't pay for something that's too expensive?
    KH: Part of that is that you're not the consumer. The insurance company is. But in the State of Utah, there is a cry for a state-wide database that would publish costs of procedures. Interesting strategy.

    Some cost-drivers in the US
    - Fee for service model
    - Cost-shifting: Those who can afford preventative care pay for those who can't
    - Administrative waste: In US, the administrative costs are significantly more than in other countries.
    comment: And a for-profit system
    KH showed a slide showing the profit margins of pharmaceutical companies versus the average profit margins for Fortune 500 companies. Since 1995, they're double and triple.

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  9. Comment: This is part of the issue. The lobbyists keep drugs manufactured elsewhere out of US. So the same drug made somewhere else (or just distributed from somewhere else) is taken out of the competition question.
    KH: Made the comment that people have concerns about the for-profit model for health care. Synonymous with how education used to be for-profit. Now it's public. Different arguments.

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  10. Moving into the options on the table...
    KH: People want reform, but there are different ideas about what that means.
    Obama ran on healthcare reform. Non-committal during the race. McCain was more defined. McCain suggested that healthcare benefits should be taxed rather than taking away the pre-tax benefit. That would increase tax revenues and provide for tax credits for expenditures. Obama gets in. Democrats get super-majority. TARP happens. People get attitude that it's the wrong time to spend money on healthcare. Obama says the crux of our budget problems are linked to healthcare - so he decides to push it anyway.
    Obama surrounds himself with Clintonites. Those people knew the back-door strategy that failed. Rahm Emmanuel is the advisor. He and Obama decide to take the opposite approach. Got industry involved. Tried to get everyone involved who would need to be on board to get it passed. Also invited committees in Senate and House to write bills - so it would come out of Congress, rather than out of the White House. He was pretty hands-off.
    Comment: How much are the bills influenced by these pharmaceutical companies?
    KH: Yes. Legislation affected by interest groups, companies.
    So...
    The House created a "more liberal" bill than the Senate. Final House bill includes insurance market reform to make insurance for the unemployed or self-employed to buy affordable health insurance in the private market. Also de-exempts health insurance companies from anti-trust laws. And a tax levied on pharmaceutical companies (to some degree). The trade-off is that the industry will be highly regulated, but it will also be given a lot of new clients. Increases shared risk - includes a personal mandate - that everyone (with a few exceptions) have to have health insurance. So the government will help subsidize up to 400% of poverty level to get coverage. In addition, for the very poorest, it expands Medicaid up to about 150% of poverty level.

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  11. Comment: Illegal immigrants?
    Both bills exclude illegal immigrants. But both provide for legal immigrants (green card holders). Lots of details, but generally expanded coverage for legal immigrants.
    Comment: Why wouldn't insurance companies love this?
    KH: It will cost them more money to insure people who they're not ensuring right now for a reason. Also, companies just don't like being told what to do. And, actually, the insurance companies have been much less vocal against these plans than they were in 1993.
    House bill includes a public option that would be run by premiums. But tax-dollars would not fund it. Would have to be self-sustaining. Would be non-profit. Presumably lower administration costs. The modeling would likely exclude so many people for different reasons that they it might not have sufficient people to be self-sustaining. Not clear how they would pay providers.
    House bill would get to about 95% coverage. Also has an employer mandate (with some exemptions for small businesses). Also a number of pilot projects that would be funded through this. Pays for it through a sur-tax on...[missed this].
    Comment: Malpractice?
    KH: In the pilot projects. But no big initiatives. This is mainly a coverage bill.
    Senate: Generally more conservative. Requires more of a super-majority. Major differences: Also prohibits denial of coverage based on pre-existing conditions. Also employer mandate. Also has subsidies for moderate income people. Lower expectations on individuals. Expands Medicaid, but less. Similar pilot projects. No public option, but does allow government to create pseudo-public options with non-profit institutions. Paid for by taxes on employer-provided insurances. Levies a tax/surcharge on device-makers. Also essentially budget-neutral.

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  12. Took a lot of horse-trading in the Senate to get the bill. i.e. Nebraska cuts a deal for their state to be exempt.
    Somehow the two houses of Congress have to come to a compromise. The amending of the two bills was close until the MA election. Puts Democrats in position to try different options. Could try to pass in House and then direct to President's desk.
    They're headed for reconciliation right now. Might also try to break it up in a bunch of different little pieces.

    In summary: Both are coverage bills. Many of the ideas in the bills are Republican ideas in the 1990s. Don't do a lot for costs directly. The idea from both proponents is you have to start with coverage. Over time, we can work on other issues. In reality, in the short-term, they will probably raise costs, but it's a matter of opinion.

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  13. Thanks to KaLynne for putting together some data and sharing what she's learned. I definitely enjoy the discussions more when there's a combination of (1) learning new things, and (2) seeing other people's perspective on them.

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