Health Policy


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Health Policy

  1. 1. US Health Policy <ul><li>What is the cause of the rising cost of health care in the US? </li></ul><ul><li>How does health policy influence economic policy? </li></ul>
  2. 2. Health Care in the US <ul><li>In 2004, 16.8% (48.3 million people) Americans did not have health insurance. </li></ul><ul><li>35% of young adults between the age 19 to 24 were at the greatest risk of being uninsured was. </li></ul><ul><li>Since 2000, health insurance premium have increased by 73%. </li></ul><ul><li>The US is one of the few wealthy industrialized democratic nations without nationalized healthcare. </li></ul>
  3. 3. Types of Systems <ul><li>Primarily Private </li></ul><ul><ul><li>US </li></ul></ul><ul><li>Primarily Public </li></ul><ul><ul><li>UK, Sweden, and Italy </li></ul></ul><ul><li>Hybrid </li></ul><ul><ul><li>Canada, France, Germany </li></ul></ul>
  4. 4. The US Healthcare System <ul><li>Paul Krugman says that the rising cost is due to “our crazy quilt healthcare system, which has a lot to do with the fact that so much of that system is private rather than public…...” </li></ul>
  5. 5. Oxymoron <ul><li>Integrating market mechanisms with reduce cost and increases efficiency. </li></ul><ul><li>Prices will be pushed down because consumers will be looking for the best service at the lowest price. </li></ul><ul><li>Failure of the market! </li></ul>
  6. 6. Alternative Opinions on the Cause of the Rising Cost <ul><li>Humans by nature are freeloaders </li></ul><ul><ul><li>With low co-pays, people have no idea the high fees that are paid by insurance companies. </li></ul></ul><ul><ul><li>People don’t shop for the lowest prices </li></ul></ul><ul><ul><li>People see physicians for minor issues </li></ul></ul>
  7. 7. What Drives US Heath Care <ul><li>Market Forces- </li></ul><ul><ul><li>Private industry </li></ul></ul><ul><ul><ul><li>Profits not care drive pharmaceuticals, insurance, hospitals, medical technology, and some doctors </li></ul></ul></ul><ul><ul><li>Law of supply and demand- </li></ul></ul><ul><ul><ul><li>Increase demand for medical care and limited supply </li></ul></ul></ul><ul><ul><ul><li>Growing baby boomer population </li></ul></ul></ul><ul><ul><ul><li>Increase litigation </li></ul></ul></ul><ul><ul><ul><li>High cost of technology </li></ul></ul></ul>
  8. 8. US Health Care Policy <ul><li>Three pillars of US Health Policy </li></ul><ul><ul><li>Cost </li></ul></ul><ul><ul><li>Access </li></ul></ul><ul><ul><li>Quality </li></ul></ul>
  9. 9. Major Actors: Health Care Purchasers <ul><li>Federal Government </li></ul><ul><ul><li>Congress </li></ul></ul><ul><ul><li>President </li></ul></ul><ul><ul><li>Judiciary </li></ul></ul><ul><ul><li>Bureaucracy </li></ul></ul><ul><li>State and Local Government </li></ul><ul><li>Industries and Firms </li></ul><ul><li>Individuals </li></ul>
  10. 10. Major Actors: Health Care Providers <ul><li>Hospitals </li></ul><ul><li>Elderly care homes </li></ul><ul><li>Physicians </li></ul>
  11. 11. Major Actors: Third Party Payers, Consumers and Interest Groups <ul><li>Third Party Payers </li></ul><ul><li>Consumers/Public Opinion </li></ul><ul><li>Interest Groups </li></ul><ul><ul><li>AARP </li></ul></ul><ul><ul><li>AMA </li></ul></ul><ul><ul><li>American Hospital Association </li></ul></ul><ul><ul><li>Health Insurance Association of America </li></ul></ul>
  12. 12. Existing Government Programs <ul><li>Medicaid- </li></ul><ul><ul><li>State and federal program to subsidize health care for the poor </li></ul></ul><ul><ul><ul><li>To qualify, must exhaust financial assets </li></ul></ul></ul><ul><ul><ul><li>The poor make up 75% of the participants, but they receive little more than a quarter of the health funds. </li></ul></ul></ul><ul><ul><li>Often provides long term nursing home care </li></ul></ul><ul><li>VHA- </li></ul><ul><ul><li>Medical, hospitalization, and nursing care provided to any in current service or retirement </li></ul></ul>
  13. 13. Existing Government Programs <ul><li>Medicare (entitlement program: both employer and employee pay 2.9%)- </li></ul><ul><ul><li>Created by LBJ in 1965 </li></ul></ul><ul><ul><li>Designed to offer support for the elderly (age 65 ) regardless to income </li></ul></ul><ul><ul><ul><li>Seniors and disabled comprise of 10% of the participant, but consume 28% of the govt. health funds. </li></ul></ul></ul><ul><ul><li>Mixed system were payments are public, but services are provided by the private sector </li></ul></ul>
  14. 14. Cartoon
  15. 15. Arguments Against Nationalized Health Care <ul><li>Reduces medical advances and innovation </li></ul><ul><li>Private enterprise is more efficient </li></ul>
  16. 16. Bush’s Health Care Policy <ul><li>More market forces- </li></ul><ul><ul><li>Health savings account (HAS) and high deductible health policy </li></ul></ul><ul><ul><ul><li>Special account to deposit money to pay for current and future medical expenses </li></ul></ul></ul><ul><ul><ul><li>Money can be deposited to a the HSA before tax is paid on it </li></ul></ul></ul><ul><ul><ul><li>The money can be used tax-free for medical expenses </li></ul></ul></ul><ul><ul><ul><ul><li>medical insurance deductible </li></ul></ul></ul></ul><ul><ul><ul><ul><li>co-insurance (the amount after which the insurance begins to pay, but less than the amount at which they pay 100% of expenses </li></ul></ul></ul></ul>
  17. 17. Quiz <ul><li>How does health policy influence economic policy? </li></ul>