FIX HEALTHCARE AND HEAL THE NATION (Jamie Koufman)

THE PAST, PRESENT, AND FUTURE OF HEALTHCARE IN AMERICA Jamie A. Koufman, M.D., F.A.C.S., Director, Voice Institute of New York www.voiceinstituteofnewyork.com

ALTERNATIVE TITLE FOR THIS PRESENTATION FIX HEALTHCARE AND HEAL THE NATION

2010 U.S. GNP $14,000,000,000,000
Wholesale/Trade 20%
Healthcare 17%
Manufacturing 17%
Retail 14%
Finance/Insurance 13%
Construction 6%
Information 5%
Transportation 3%
Entertainment 1%
Education 1%

HOSPITAL REVENUE & EXPENSES PER ADMISSION (1981-2006)
During this period, inflation was 4-5%
Healthcare costs grew 20-25% per year

U.S. HEALTHCARE COSTS
U.S. healthcare costs increasing faster than any other sector
Per capita healthcare cost in U.S. $8,086 (elsewhere ~$2K)
Hip surgery costing $200K in the U.S. costs $10K in Sweden
No substantive data indicate that U.S. healthcare is superior

WHO* WORLD HEALTH RANKINGS 1 France 2 Italy 3 San Marino 4 Andorra 5 Malta 6 Singapore 7 Spain 8 Oman 9 Austria 10 Japan 11 Norway 12 Portugal 13 Monaco 14 Greece 15 Iceland 16 Luxembourg 17 Netherlands 18 U.K. 19 Ireland 20 Switzerland 21 Belgium 22Colombia 23 Sweden 24 Cyprus 25 Germany 26 Saudi Arabia 27 U.A.E. 28 Israel 29 Morocco 30 Canada 31 Finland 32 Australia 33 Chile 34 Denmark 35 Dominica 36 Costa Rica 37 U.S.A. * World Health Organization (2000)

TWO CONFLICTING REALITIES Americans believe that healthcare is a right and rationing unacceptable -- U.S. consumers don’t act like consumers Nationalized healthcare, “socialized medicine,” is the best (only) alternative to stabilize cost & promote competition

Capitalism cannot solve the healthcare crisis. Healthcare is not a commodity any more than police and fire services; and it should have never been treated as such. - Koyaanisqatsi

THE HISTORY OF HEALTHCARE
The idea of individuals’ pooling resources to minimize risk first began with “funeral societies” in ancient Greece
Some Greek city states even had tax-supported physicians
Medieval craft societies were first precursors of unions
and they often set up welfare funds for the sick and needy
Calling the surgeon or the priest was often a toss up

HISTORY OF HEALTHCARE (cont.)
In 1900, with medicine being primitive/ineffective and at low ($5) cost levels, health insurance just wasn’t needed
Births 26:1000 (mortality 30%), life expectancy 55 years
Services paid/bartered/traded and doctors relatively poor
In the early 1900s, major health risks were related to poor sanitation, infectious diseases, and hazardous workplaces
Penicillin discovered 1928 & sulfa drugs 1935

From the 10 th century, almshouses provided charitable housing/hospitals for the poor; in 1900, mostly elderly
Benjamin Franklin founded first U.S. hospital in 1752
State-sponsored lunatic asylums established in the 1850s
NY Eye & Ear Infirmary first specialty hospital in 1810

City hospitals also founded in the 19 th Century by wealthy
benefactors and religious orders for the general population;
and cities contributed; Boston City Hospital (1864) was:
“ Intended for the use and comfort of poor patients, to whom medical care will be provided at the expense of the city, and to provide accommodations and medical treatment to others.”

SIDE BAR: TOP 10 GREATEST PUBLIC HEALTH ACHIEVEMENTS U.S. (CDC)
Vaccination
Family planning
Safer workplaces
Motor vehicle safety
Safer and healthier foods
Healthier mothers and babies
Control of infectious diseases
Fluoridation of drinking water
Recognition of tobacco as a health hazard
Decline in deaths from heart disease & stroke

HISTORY: HEALTH INSURANCE
In the U.S., compulsory insurance began in 1798 with the Marine Hospital Service; ship owners paid 20 ¢/seaman/mo.
First national health insurance law was in Prussia in 1854
In the 1900s, as the industrial revolution gained momentum, unions and employers required participation in relief funds

HEALTH INSURANCE (cont.)
In the U.S., industrial accidents were insured by workers compensation; by 1915 laws had been passed in 30 states
First U.S. health insurance program was in Texas in 1929
Blue Cross created to cover 21 days of hospitalization for teachers by making monthly payments to Baylor Hospital
Health insurance didn’t really flourish until after WW II

SIDE BAR: PARADOX OF THE FEDERAL SYSTEM
Prior to the Great Depression, States were responsible for social welfare matters but they were reluctant to fund new programs that might economically burden local industries
The result was a built-in block against social welfare legislation by the States or by the Federal Government
Public philosophy changed after the Great Depression

HEALTH INSURANCE: MEDICARE
In 1963, Pres. Johnson declared that healthcare was a right
Medicare established by the Social Security Act of 1965
Financed by FICA (Federal Insurance Contributions Act) and the Self-Employment Contributions Act (about 3%)
2011 Medicare budget for was $530 billion, 5% of GDP
PROJECTED FEDERAL SPENDING ON MEDICARE AND MEDICAID [Source: Congressional Budget Office]

GROSS NATIONAL PRODUCT (GNP) AND TOTAL HEALTHCARE EXPENSES (HCE) († Trillions of dollars; β Billions of dollars) Year GNP † HCE β %GNP 1960 $0.5 $27 6% 1970 1.0 75 8% 1980 2.8 256 9% 1990 5.8 724 12% 2000 9.9 1,400 14% 2010 14.0 2,500 17% Of the wealth created since 1980, a hugely disproportionate share has gone to the wealthiest 5% of the population

HOW DID WE GET TO THIS POINT?
Medicine today is dominated by for-profit managed care
Providers have shown strong proclivity to chase funding
Personal bankruptcy due to illness 62% of total in 2010
Huge problems of quality of care & inequalities of access
Healthcare costs rising in the face of national bankruptcy

HOW DID WE GET TO THIS POINT?
Healthcare “administration” has gone from 2% to 41%
Profound devaluation of the doctor-patient relationship
There are no economic incentives to provide quality care
Privatization equates to unrestrained for-profit companies
Remember, this is a publicly funded healthcare system!

SIDE BAR: ‘MAJOR UPHEAVAL’ IN NEW YORK RACE DRIVEN BY MEDICARE FIGHT [Bloomberg]
A special election was held on May 24, 2011 in Western NY to fill the seat of pre-Weiner “sexter” Christopher Lee
The district had been a Republican stronghold for decades
Democrat, Kathy Hochul, defeated Republican lawmaker, Jane Corwin, on the sole issue of “Medicare privatization”
Voters recognized the vulnerability of health to market forces

FEDERAL BUDGET 2010

IT’S A WHALE OF AN INDUSTRY! $2,500,000,000,000 AND GROWING HEALTHCARE Surprise! The American people are in the boat

LESSONS OF FOUR DECADES OF PRIVATIZATION IN A PUBLICLY FUNDED HEALTCARE SYSTEM
Before 1965, the elderly, poor, and disabled were uninsured
Thus, Medicare provided a financial windfall for providers
In 1972, when Medicare expanded to cover end-stage renal disease, for-profit firms established new dialysis facilities
With soaring health costs in the late 1970s employers began attempting to assert control with HMOs and managed care

In 1983, Medicare attempted cost containment with DRGs
DRGs didn’t control costs but did stimulate management
Hospitals rewarded for “upcoding” and “moving patients”
From 1983-89, number of hospital administrators doubled
Medicare encouraged elderly to join HMOs, which then cherry picked with doctors’ help (“efficiency bonuses”)

Investor-owned firms have eclipsed charitable, public, and professional bodies that used to finance and deliver care
Providers unwilling to subordinate clinical priorities to financial ones have withered -- regardless of efficiency
Public $$ account for most of U.S. healthcare (10% GNP)
Today’s predicament unrelated to “intrusive government”

HEALTHCARE INDUSTRY PROFITS
Humana (11 million enrollees) $ 992,850,000
Aetna (16 million enrollees) $ 1,384,100,000
Wellpoint (34 million enrollees) $ 2,490,700,000
Pfiser Pharmaceutical $10,000,000,000
Johnson & Johnson $13,300,000,000
Executive Compensation? $1-200 million per year

TWO CONFLICTING REALITIES Americans believe that healthcare is a right and rationing unacceptable - U.S. consumers don’t act like consumers Nationalized healthcare, “socialized medicine,” is the best (only) alternative to stabilize cost & promote competition

ARE THERE ANY PLAUSIBLE AND AFFORDABLE SOLUTIONS? IF WE CAN FIX HEALTHCARE WE CAN HEAL THE NATION Most Americans clearly favor free-market systems, but in healthcare, we don’t have a free market … Since the 1970s, the transformation of healthcare has been driven by market power over prices* and perverted (hegemonic) investment strategies. *There is “price inelasticity of demand” for medical services

DOES THE U.K. HAVE SOCIALIZED MEDICINE? (IS THAT SOCIALISM?)
The NHS was created in the 1946 after World War II
The NHS provides free healthcare for all of its citizens
The U.K. National Health Service (NHS) is a sacred cow
Vast majority of U.K. citizens highly satisfied with NHS
England has a private insurance “second tier” (only 15%)

U.K. NATIONAL HEALTH SERVICE
NHS costs UK $170 billion annually or about 6% of GNP
Headline: British Fear American Style Healthcare System
The A-Word: “For a people accustomed to free healthcare for all, regardless of income, the fact that millions of their cousins across the Atlantic have no insurance and can't afford decent treatment is a farce as well as a tragedy.”

THE SWISS HEALTHCARE SYSTEM
Everyone required to have Krankenkasse, health insurance
People entering the Switzerland to work must pay for this
Different insurance companies have different costs and benefits; all are private, and all are government regulated
You are eligible to “social security” after five years

SIDE BAR: YOU SURPRISED THAT THERE IS ALREADY A U.S. NATIONAL HEALTH SERVICE?
It’s a Department of Health & Human Services program
Incentives for primary docs to work in underserved areas
Provides medical student loans as well (up to $170,000)
In FY2010, there were 1,375 applicants and 210 awards
This year, there are sufficient funds for only 120 awards

WE NEED A NATIONAL HEALTH SERVICE IT SHOULD NOT BE AN INSURANCE PROGRAM
National system to provide the poor/all with healthcare
Every neighborhood should have its own health clinic
Med student financing and loans with NHS pay-back
Financial incentives for training primary care physicians
Competitive bidding for almost all goods and services

U.S. POSTAL SERVICE MODEL
U.S. Postal Service is a magnificent government system
A 44 ¢ 1 st class letter will arrive anywhere in U.S. in 2 days
Does it matter that is it operates at a deficit of $5 billion?
44¢ is the standard against which all others must compete
What would happen if the postal system was not there?

A THREE-TIER SYSTEM WOULD BE BOTH CIVILIZED AND AMERICAN
Tier I would provide “basic” healthcare for all Americans
Tier II: Competitive health insurance for any other services
Tier III: Fee-for-service care above and beyond insurance
Tier I would establish a baseline cost structure, economies of scale, discourage redundancy, and restore competition

CONCLUSIONS
For-profit “capitalism” can not fix the healthcare crisis
The two choices are National Healthcare or bankruptcy
NHS will bolster economic development, reboot rational markets creating competitive cost containment, and it
will form the cornerstone of a rational three-tier system
FIX HEALTHCARE AND HEAL THE NATION

CONCLUSIONS (cont.)
In our lifetimes, market forces have evolved a dangerous, powerful, self-perpetuating, for-profit healthcare system
The Medical-Industrial Complex must be deconstructed
How? If we are to remain a democracy, we must limit (deescalate) campaign spending and prohibit lobbying
to reduce the ability of wealth to concentrate power
FIX HEALTHCARE AND HEAL THE NATION

SOME FINAL THOUGHTS FOR YOU, MY YOUNG COLLEAGUES
If you went into medicine for money, you’ll be miserable
Avoid all situations that might create conflicts of interest
“ It is an honor to make a difference in the lives of others”
Make decisions for and with patients as if they were your own family members (your mother, father, sibling, child)
The healthcare and political systems are broken; fix them!

www.voiceinstituteofnewyork.com

FIX HEALTHCARE AND HEAL THE NATION (Jamie Koufman)

by Jamie Koufman on Jun 30, 2011

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FIX HEALTHCARE AND HEAL THE NATION (Jamie Koufman) — Presentation Transcript