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James G. Kahn, MD, MPH

James G. Kahn, MD, MPH
Pharmacy Leadership Institute
Kaiser Permanente Development Program
Debate on Health Care Reform
Youtube: http://youtu.be/2ed0qRXMRBE

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Single Payer Health Care Presentation Transcript

  • 1. Single payer health care James G. Kahn, MD, MPH Pharmacy Leadership InstituteKaiser Permanente Development Program Debate on Health Care Reform 13 September 2012
  • 2. The single payer argument When it comes to health care financing, there is a free lunch awaiting us – single payer is cheaper & better. The evidence base: From the OECD and beyond …universal coverage, with one comprehensive benefit package & truly streamlined administration, leads to higher access, greater utilization, better health outcomes, and lower costs.
  • 3. Key features of US Health Care Financing  17.4% of GDP 2009 and rising, $2.5 T, 8,086 per capita  Public – 43% (27% federal, 16% state/local) • CMS (Center for Medicare and Medicaid Services)  Medicare – federal, aged & disabled ($502 B)  Medicaid – state/federal, poor & long term care ($374 B) • Veteran’s Admin, Military, Indian Health Svc, … • State and local safety net  Private – 34% • Employers – 21% • Families – premium contribution – 13%  Families – uninsured services & copays etc – 15%  Other private – 7%Martin Health Affairs 2011
  • 4. U.S. vs Other OECD countries Spending per capita ~50% higher Generally fewer doctor visits and hospital days Difference in spending due to: • price (cost of doctor, procedure, drugs) • Use of high technology • Administrative costs (later) Health care outcomes same or worse
  • 5. Number of Uninsured in the US Source: US Census Bureau, Current Population Surveys50 Millions of people45 15.8% of40 population35302520 1976 1980 1985 1990 2000 2006
  • 6. US standing on health care outcomes Rank of 13 industrialized nations Low birth weight % (U.S. in Red) Infant mortalityYears of potential life lost Age adjusted mortality Life expectancy @ 1 yrLife expectancy @ 40 yrsLife expectancy @ 65 yrsLife expectancy @ 80 yrs Average for all indicators Poorest Best
  • 7. Schoen 2005
  • 8. Billing and Insurance-Related Administrative Costs
  • 9. U.S. Health Care Financing Multi-payer health care financing Funds Payers Providers Public & Private Many "pools"Employer Multiple private payers Doctors & many benefit plans HospitalsPremium contrib. PPO vs capitated, Pharmacies many blends/variants Device vendorsIncome taxes Public: Medicare, Medi-Cal, Skilled Nursing Fac. S-CHiP, VA, Indian Health,. OtherOut-of-pocket ~ 60 safety net programs Admin costs of insurance 15% Admin costs overall 30%
  • 10. $400 billion annually in billing andinsurance-related (BIR) administration = $1300 per person per year ~60% is at providers >$250 billion is “excess” - avoidable
  • 11. Elements of Provider BIR - 1 Complexity of the insurance process: multiple steps, often detailed & demanding: Contracting, maintaining benefits database, patient insurance determination, collection of copayments, formulary and prior authorization procedures, procedure coding, submitting claims, receiving payments, paying subcontracted providers, appealing denials and underpayments, negotiating end- of-year resolution of unsettled claims, and collecting from patients, …
  • 12. Allocation of spending for hospital andphysician care paid through private insurers Insurer cMLR 19.0% Hospital BIR 3.9% PhysicianMedical BIR 5% care 62.0% Medical care admin 10.1%
  • 13. Major types of health reform Free market – empower individuals to buy health insurance / care, subsidize the poor. Often called “consumer driven”. Based on principles of moral hazard and “skin in the game” Improved mixed system – regulate private insurance, expand public insurance (PPACA). “Managed competition” Single payer / universal – use a public fund to pay for privately and publicly delivered care, with everyone covered with good benefit package. Common in OECD countries.
  • 14. By What Criteria Should We Judge Reform Proposals? The IOM Report: 2004: Health care coverage should be universal. Health care coverage should be continuous. Health care coverage should be affordable to individuals and families. The health insurance strategy should be affordable and sustainable for society. Health insurance should enhance health and well-being by promoting access to high-quality care that is effective, efficient, safe, timely, patient-centered, and equitable.US health care meets NONE of these criteria
  • 15. Single payer health care financing Funds Payers Providers Public & PrivateEmployer / Employee Doctors Single public pool, Hospitals one benefit package. PharmaciesIncome taxes FFS or capitated outpt Device vendors Facility budgets inpt Skilled Nursing Fac.Out-of-pocket (modest) Other Admin costs of insurance < 5% Admin costs overall 15-20%
  • 16. Administrative Savings from Single Payer - Principles Universal coverage: no eligibility determination, marketing, underwriting. Single pipe for payment: fully standard benefit package & reimbursement rates; single billing process - transparent, simple, few errors; single fiscal agent per office. Single clinical practice rules: formularies, referrals, guidelines. Not-for-profit: public or private
  • 17. Drastic Process Simplication The 3 Cs Culling (e.g., enrollment and eligibility determination) Consolidation (e.g., benefits, billing, formularies) Community orientation (i.e., not-for- profit payers)
  • 18. Impact of single payer on administrative costs100%80% Medical care60% Other admin Physician BIR Hospital BIR40% Insurer BIR20% This shift = 12.3% 0% Current Single payer
  • 19. Taiwan transformation to single payer  Taiwan established National Health Insurance (NHI) in 1995  NHI covers >98% of population, generally small co-pays.  Cost = 3.4% of GDP, satisfaction = 77.5%, admin cost =1.49%, equitable financial burden  Deaths from “amenable causes” fell faster with NHI, 5.83% per year 1996 - 1999.  Fewer deaths from circulatory disorders and, for men, infections; reversed trend in female cancer deaths.  Effect highest among the young and old, and lowest for working age, consistent with changes in coverage.  Little change in non-amenable causes (0.64% per year).Yue-Chune Lee BMC-HSR 2010