The seminar will provide a brief overview about the differences between the United States’ health care system and others around the world. The signature legislation of the Obama administration was the Patient Protection and Affordable Care Act of 2012 ("Obamacare") which the new president Trump and the Republican majority in Congress want to repeal and replace. We will explore why health care insurance and delivery is so expensive in the U.S. and the role that geographic variation in costs and quality play. We'll also talk about quality improvement/patient safey as well as the relative absence of health technology assessment and the application of cost-effectiveness analysis in the U.S. when compared to certain other countries (such as Australia or the United Kingdom).

1. Current Issues in
U.S. Health Policy
Benjamin P. Geisler, M.D., M.P.H.
Massachusetts General Hospital/
Harvard Medical School,
Boston, MA, U.S.A.

2. Disclosures
1. Financial conflict of interest: assisting
medical devices companies in health
economic work
2. Intellectual bias: raised in Continental Europe
under the influence of a “quasi-socialist”
health care system
4/12/2017

3. Objectives
1. To compare the United States’ health care
expenditures and outcomes with others
around the world;
2. To highlight current controversies in the U.S.
health policy debate; and
3. To explore why U.S. care is so expensive and
what can be done about it
4/12/2017

4. 4/12/2017
U.S. Health Care System
In Comparison
Affordable Care Act of 2010 (“Obamacare”)
vs American Health Care Act (“Ryancare”/ ”Trumpcare”)
Why U.S. Care is so Expensive
Geographic Variation and Quality
Improvement/Patient Safety
Health Technology Assessment,
Cost-effectiveness Analysis, and
Cost-conscious Care
Conclusion

5. 4/12/2017
U.S. Health Care System
In Comparison
Affordable Care Act of 2010 (“Obamacare”)
vs American Health Care Act (“Ryancare”/ ”Trumpcare”)
Why U.S. Care is so Expensive
Geographic Variation and Quality
Improvement/Patient Safety
Health Technology Assessment,
Cost-effectiveness Analysis, and
Cost-conscious Care
Conclusion

6. U.S. Health Care Spending an Anomaly
4/12/2017 Source: OECD 2015
0
5
10
15
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
PercentageofHealthExpeendituredbyGDP
Year
Australia
Canada
Germany
Japan
Luxembourg
Norway
Switzerland
United Kingdom
United States

7. U.S. Health Care Spending an Anomaly
4/12/2017 Source: OECD 2015
0
5
10
15
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
PercentageofHealthExpeendituredbyGDP
Year
Australia
Canada
Germany
Japan
Luxembourg
Norway
Switzerland
United Kingdom
United States

8. U.S. Health Care Spending an Anomaly
4/12/2017 Source: OECD 2015
0
5
10
15
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
PercentageofHealthExpeendituredbyGDP
Year
Australia
Canada
Germany
Japan
Luxembourg
Norway
Switzerland
United Kingdom
United States

9. U.S. Health Care Spending an Anomaly
4/12/2017
2014 Health Care Expenditures as Proportion of GDP
Source: World Health Organization 2017

10. U.S. Healthcare Spending an Anomaly
4/12/2017 Source: OECD 2015

11. U.S. Healthcare Spending More Than
Twice That of Australia’s
4/12/2017 Source: OECD 2015

12. Proportion of Households’ HC Spend
of Disposable Income Exceeds GDP
4/12/2017 Source: Bureau of Economic Analysis 2017
0%
5%
10%
15%
20%
25%
30%
1930 1940 1950 1960 1970 1980 1990 2000 2010
PersonalConsumptionExpendituresbyFunction
Food
Housing
Clothing
Health Care

13. 4/12/2017

14. 4/12/2017

15. 4/12/2017 Himmelstein Am J Med 2009
Medical Bankruptcies

16. 4/12/2017
U.S. Health Care System
In Comparison
Affordable Care Act of 2010 (“Obamacare”)
vs American Health Care Act (“Ryancare”/ ”Trumpcare”)
Why U.S. Care is so Expensive
Geographic Variation and Quality
Improvement/Patient Safety
Health Technology Assessment,
Cost-effectiveness Analysis, and
Cost-conscious Care
Conclusion

17. 2007 CBO Projection: in 75yrs 100% of
GDP will be HC Expenditures
4/12/2017 Source: Congressional Budget Office 2007

18. Consequence: Federal Deficit Grows
4/12/2017 Source: Business Insider 2009

19. Patient Protection and Affordable Care
Act of 2010 (“Obamacare”)
Goals
1. Increase health insurance
quality and affordability
2. Lower uninsurance rate
3. Reduce costs of health care
Provisions
• Guaranteed issue (≠pre-existing
conditions)
• Individual/business mandate
• Exchanges for non-employer-
based subsidized coverage
• Medicaid expansion; State
waivers
• Accountable Care Organizations;
bundled payments
• Excise (“cadillac”) tax ; medical
devices tax
• Insurance standards
4/12/2017

20. Patient Protection and Affordable Care
Act of 2010 (“Obamacare”)
Goals
1. Increase health insurance
quality and affordability
2. Lower uninsurance rate
3. Reduce costs of health care
Provisions
• Guaranteed issue (≠pre-existing
conditions)
• Individual/business mandate
• Exchanges for non-employer-
based subsidized coverage
• Medicaid expansion; State
waivers
• Accountable Care Organizations;
bundled payments
• Excise (“cadillac”) tax; medical
devices tax
• Insurance standards
4/12/2017
• Essential benefits incl contracept-
tives, free preventive visits/services
• No lifetime caps for expenditures
• Prohibits discontinuation when sick
• Children can stay until age 26
• Coverage tiers; max out-of-pocket cap
• Admin cap 25%; risk management

21. Largest Drop of Uninsured Patients
Since the Inception of Medicare
4/12/2017
Source: Council of Economic Advisers 2015,

22. Largest Drop of Uninsured Patients
Since the Inception of Medicare
4/12/2017
Source: Council of Economic Advisers 2015,
Congressional Budget Office 2016
“exchanges”: 12 mio.
(subsidized): 10 mio.
Medicaid expansion: 11 mio.
27 mio. (8-9%) remain
without insurance

23. Health Care Cost Curve Bent?
4/12/2017 Source: Gallup 2016

24. Health Care Cost Curve Bent?
4/12/2017
Source: Urban Institute 2016,
Centers for Medicare and Medicaid Services

25. Health Care Cost Curve Bent?
4/12/2017 Source: Bureau of Labor Statistics
-2
0
2
4
6
8
10
12
14
1970 1975 1980 1985 1989 1993 1997 2002 2006 2010 2015
Medical CPI CPI

26. Number of Insurers NOT Associated
with Lower Premiums
• Marginally positive
relationship between
average monthly premiums
and number of insurers per
area (+$5.71 in monthly
premiums per additional
insurer, p<0.001, R2<0.01)
• Identical plans tend to be
offered with marginally
higher premiums in areas
with more insurers (+$3.18
in monthly premiums per
additional insurer, p=0.002,
R2=0.97)
4/12/2017 Source: Cohen F1000 Research 2015; 4:25

27. Public Divided in Views of the ACA
4/12/2017 Source: Kaiser Family Foundation

28. Majority Wants Trump Administration
Make ACA Work
4/12/2017 Source: Kaiser Family Foundation

29. American Health Care Act
(“Ryancare”/”Trumpcare”)
• Repeal mandates, health insurances standards,
prevention and public health
• Replace income-based tax credits with flat tax
credits adjusted for age, encourage health savings
accounts
• Retain guaranteed coverage, non-discriminatory
premiums, children until 26, exchanges
• Convert Federal Medicaid funding to per-capita
allotment with growth limit; States make rules
4/12/2017

30. 4/12/2017

31. 4/12/2017

32. Uninsured Rate Would Go Up,
Federal Deficit Down
4/12/2017 Source: Congressional Budget Office

33. Exchange Premiums Expected to Rise
Under Obamacare.. Along w/ Subsidies
4/12/2017
Source: Kaiser Family Foundation,
Example: 40-year old with $30,000 income

34. Exchange Premiums Expected to Rise
Under Obamacare.. Along w/ Subsidies
4/12/2017 Source: Kaiser Family Foundation
60-year old, $100,000 income 20-year old, $20,000 income

35. Most Who Will Lose >$6K Government
Assistance Voted for Trump
4/12/2017
Sources: LA Times, Kaiser Family Foundation,
Associated Press, Alaska Division of Elections

36. 4/12/2017

37. 4/12/2017
U.S. Health Care System
In Comparison
Affordable Care Act of 2010 (“Obamacare”)
vs American Health Care Act (“Ryancare”/ ”Trumpcare”)
Why U.S. Care is so Expensive
Geographic Variation and Quality
Improvement/Patient Safety
Health Technology Assessment,
Cost-effectiveness Analysis, and
Cost-conscious Care
Conclusion

38. Better Outcomes?
4/12/2017
Source: Ortiz-Ospina and Roser: OurWorldInData.org 2017
based on OECD and World Bank data

39. Better Outcomes?
4/12/2017
Source: Ortiz-Ospina and Roser: OurWorldInData.org 2017
based on OECD and World Bank data

40. Better Outcomes?
4/12/2017
Source: Ortiz-Ospina and Roser: OurWorldInData.org 2017
based on World Bank data

41. Physician Density and Annual Visits?
4/12/2017 Source: OECD 2015

42. Number of Beds and Hospital Stays?
4/12/2017 Source: OECD 2015

43. Imaging?
Installed Imaging Imaging Exams
4/12/2017
Source: Commonwealth Fund International
Health Policy Survey 2017
0
20
40
60
80
100
120
CT MRI PET
0
50
100
150
200
250
300
350
400
CT MRI PET

44. Administrative Costs?
4/12/2017
Source: Securities and Exchange
Commission, Medical Group

45. 4/12/2017
Himmelstein Health Affairs 33;9(2014)1586-94;
Centers for Medicare and Medicaid Services 2007
$-
$100
$200
$300
$400
$500
$600
$700
$800
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Central Admin
Hospital Admin
Expenditures per capita (2010 USD, PPP-adj)
7%
5%
3%
7%
14%
2%
1%
13%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Proportion of Administrative Costs
U.S. Canada

46. 4/12/2017
Administrative Costs?

47. Administrative Costs?
4/12/2017
Source: Securities and Exchange
Commission, Medical Group

48. Prescription Drugs?
4/12/2017
Source: Commonwealth Fund International
Health Policy Survey 2017

49. 4/12/2017 Kesselheimer JAMA 2016;316(8):858-71

50. 4/12/2017 Kesselheimer JAMA 2016;316(8):858-71

51. 4/12/2017 Kesselheimer JAMA 2016;316(8):858-71

52. Who Spends the Money
and What is it Spent on?
4/12/2017 Source: Centers for Medicare and Medicaid Services

53. Concentration on High Spenders
Might Yield Best Results
4/12/2017
Source: Schoenman 2012
National Institute of Health Care Management

54. 4/12/2017 Berwick & Hackbarth JAMA 2012;307(14):1513-16
0
50
100
150
200
250
300
350
400
450
21-47% of all HC Spending Waste

55. 4/12/2017
U.S. Health Care System
In Comparison
Affordable Care Act of 2010 (“Obamacare”)
vs American Health Care Act (“Ryancare”/ ”Trumpcare”)
Why U.S. Care is so Expensive
Geographic Variation and Quality
Improvement/Patient Safety
Health Technology Assessment,
Cost-effectiveness Analysis, and
Cost-conscious Care
Conclusion

56. Geographic Variation and
Spending/Outcomes
4/12/2017 Sourcce: Dartmouth Atlas 2014

57. Geographic Variation and
Spending/Outcomes
4/12/2017
Dartmouth Atlas 2006
Tsugawa JAMA Int Med Online March 13, 2017

58. • New graduates from high-
cost regions spent 29%
more
• Spending persisted after
moving to low-cost
regions for years
– Trainees of high-cost
region still billed 7% more
8-15 years after moving
– Differences disappeared
only after 15 years
4/12/2017 Chen JAMA 2014;31(22)2385-93

59. HC Quality Notoriously
Difficult to Measure
4/12/2017 Source: Institute of Medicine 1999 & 2001

60. HC Quality Notoriously
Difficult to Measure
4/12/2017 Source: Institute of Medicine 1999 & 2001
2.9-3.7% admissions -> DEATH
98,000/year, 5th most frequent cause of death?

61. HC Quality Notoriously
Difficult to Measure
4/12/2017 Source: Institute of Medicine 1999 & 2001
2.9-3.7% admissions -> DEATH
98,000/year, 5th most frequent cause of death?

62. HC Quality Notoriously
Difficult to Measure
4/12/2017 Source: Institute of Medicine 1999 & 2001
2.9-3.7% admissions -> DEATH
98,000/year, 5th most frequent cause of death?

63. HC Quality Notoriously
Difficult to Measure
4/12/2017 Source: Institute of Medicine 1999 & 2001

64. HC Quality Notoriously
Difficult to Measure
4/12/2017 Source: Institute of Medicine 1999 & 2001

65. HC Quality Notoriously
Difficult to Measure
Institute of Medicine Domains
• Safe: Avoiding harm
• Effective: evidence-based, avoiding
under- and misuse
• Patient-centered: respectful of and
responsive to individual patient
preferences, needs, and values; patient
values guide all clinical decisions
• Timely: reducing waits and sometimes
harmful delays for both those who
receive and those who give care
• Efficient: avoiding waste, incl. waste of
equipment, supplies, ideas, and energy
• Equitable: care does not vary in quality
because of personal characteristics such
as gender, ethnicity, geographic
location, and socioeconomic status
4/12/2017 Source: Institute of Medicine 1999 & 2001

66. HC Quality Notoriously
Difficult to Measure
Number of Quality Metrics
By IOM Domain What to Measure?
4/12/2017 Source: National Quality Measures Clearing House
0
200
400
600
800
1000
1200
1400
1600
1800
In use Pilot
Example
Structure Critical care specialist 24/7?
Process Proportion of pts receiving
colonoscopy
Outcome Survival rate for heart attack
Patient
Experience
Treatment options explained
in a way easy to understand?

67. HC Quality Notoriously
Difficult to Measure
Distributions of Stars on CMS’
Hospital Compare Website
Hospital Rankings Incongruent
4/12/2017
Source: Centers for Medicare and Medicaid Services,
US News & World Report
1. Mayo Clinic 
2. Cleveland Clinic 
3. Massachusetts General Hospital 
4. Johns Hopkins
5. UCLA 
6. NY-Presbyterian Columbia and Cornell 
7. UCSF Medical Center 
8. Northwestern 
9. U of Pennsylvania 
10. NYU Langone Medical Center 
11. Washington University 
12. U Pittsburgh 
13. Brigham and Women's 
14. Stanford 
15. Mount Sinai Hospital 
16. Duke 
17. Cedars-Sinai 
18. U of Michigan 
19. Houston Methodist 
20. U of Colorado 
0
10203040
Percent
0 1 2 3 4 5
stars

68. 4/12/2017
U.S. Health Care System
In Comparison
Affordable Care Act of 2010 (“Obamacare”)
vs American Health Care Act (“Ryancare”/ ”Trumpcare”)
Why U.S. Care is so Expensive
Geographic Variation and Quality
Improvement/Patient Safety
Health Technology Assessment,
Cost-effectiveness Analysis, and
Cost-conscious Care
Conclusion

69. 4/12/2017
;
Elsevier 2017
0
50
100
150
200
250
300
Value in Health First author's Country 2012-17

70. Cost-effectiveness Analysis
“Under the Radar”
• Published CEAs a
“powerful focal point for
debate”
• Decision-makers (are)
engaged at “arm’s length”
– Via clinical guidelines, at
which ages/frequencies
– CMS indirectly uses CEA
– Private payors run tech
assessment centers
– USPSTF finds it useful
4/12/2017 Neumann 2005

71. Cost-conscious Care: Choosing Wisely
4/12/2017 Source: Choosing Wisely

72. Cost-conscious Care: Choosing Wisely
4/12/2017 Source: Choosing Wisely

73. 4/12/2017
U.S. Health Care System
In Comparison
Affordable Care Act of 2010 (“Obamacare”)
vs American Health Care Act (“Ryancare”/ ”Trumpcare”)
Why U.S. Care is so Expensive
Geographic Variation and Quality
Improvement/Patient Safety
Health Technology Assessment,
Cost-effectiveness Analysis, and
Cost-conscious Care
Conclusion

74. Conclusions (i)
• U.S. health care spending – compared to other
countries – is an anomaly
– Not explained by higher GDP, insurance rate, better
outcomes
– Explained by higher prices, admin burden, overuse
• Approaches to solutions include
– Generally quality improvement to increase
effectiveness/efficiency, in particular “cost-conscious
care” endeavors such as Choosing Wisely
– Concentration on hospitalizations and high spenders
– Explicit HTA/CEA use currently politically not feasible
4/12/2017

75. Conclusions (ii)
• Affordable Care Act (“Obamacare”) attempted
to address costs and quality problems (which
are linked) comprehensively, focusing on
access to insurance
• Current trajectory unclear under new Trump
administration; many might lose insurance
again; Republicans have majority but have not
yet agreed on how to repeal & replace
4/12/2017

76. • Email: bgeisler@post.harvard.edu
• Twitter: @ben_geisler
• LinkedIn: www.linkedin.com/in/bengeisler
• Facebook: www.facebook.com/hcval
4/12/2017