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Health, Medicine and thePolicymaking Process

Jack O. Lanier, Dr. P.H., MHA, FACHE

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Objectives

Provide an overview of the U.S. Health Care System Describe the changing nature of health care in

America Identify and review selected issues pertaining to at-

risk populations Translate epidemiological data into policy Review the health policymaking process in the U.S.

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Session Objectives

At the end of session, students will be able to:Describe the U.S. health care system and its

componentsExplain the policymaking process

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Americans Satisfaction WithU.S. Healthcare System

The poor: satisfaction due to a combination ofMedicaid, ERs, free clinics

The elderly: covered by a state-run national healthcare system (Medicare and Medicaid)

Children and youth: covered by SCHIP and Medicaid

Poor: 45%Elderly: 61%Everyone else: 34%

Source: Health Care in America. US Forum. Posted April 19, 2005.

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Who Shall Live?Health Economics and Social ChoiceThe problems we face:Cost of careAccess to careDeterminants of health levels

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Who Shall Live?Health Economics and Social ChoiceCost of care

Health care spending inthe United States farexceeds that of othercountries.

Approximately 14% ofgross domestic product,or $1.6 trillion in 2002, isspent on health careservices in the UnitedStates.

Source: http://www.amc2.org/amc2_rising_cost.htm

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Who Shall Live?Health Economics and Social ChoiceAccess to CareGetting the kind of care needed when it is

neededAccess to care as a “right”?

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Who Shall Live?Health Economics and Social ChoiceDeterminants of health levels

Health levels in the U.S. are not as high as inmany other developed nations

Large variations between groups in the U.S.

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Who Shall Live?Health Economics and Social ChoiceThe choices we make:Health or other goals?Medical care or other health programs?Physicians or other medical care providers?How much equality? And how to achieve it?Today or tomorrow?Your life or mine?The jungle or the zoo?

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Health Policymaking in the U.S.

Almost every democratic industrialized countryprovides some manner of health insurance for itspopulace.

Comprehensive health care may be provided by agovernment-run insurance scheme, a voluntaryprivate insurance system, or a mixed system.

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Rewriting the Social Contract

As healthcare, pensions and other socialbenefits erode under economic pressures,

The Challenges continue for:1. Business: GM, Ford, Wal-Mart2. Government: Medicare, Medicaid, Social

Security3. Society: Uninsured, Unemployed, Poverty

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Rewriting the Social ContractThe U.S. Workforce

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Rewriting the Social Contract

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Retirement Pensionsat RiskCompany sponsored pension

plans decliningCompanies short-changing

workersCompany sponsored pension

plans defaulting

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Health Policymaking in the U.S.

A model of the Public Policymaking Process in the United States

Source: Health Policymaking in the United States, third edition, Beaufort B. Longest, Jr., Health Administration Press Admissionof the Foundation of the American College of Healthcare Executives, 2002. 16

Health Care Reform: Medicare andPrescription Drug Coverage 1948: Harry Truman’s push for national health insurance failed 1960: Kerr-Mills health legislation provided federal medical

assistance funding to states for care of the poorest elderly By 1963, five large states (with only 32% of the US

population) were using 90% of the Federally providedfunding

1964: Lyndon Johnson and Democratic majority in Congresspushed for national health insurance policy, and tried toincrease Social Security benefits

1965: Passage of the Social Security Act amendments formedMedicare and Medicaid for senior citizens and the poorrespectively

1990: Hillary Clinton heads up attempt at Medicare reform Present: President George Bush privatizing Social Security and

individualized health savings accounts

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National Survey of Physicians:Health Policy Priorities

Making Medicare financially sound 59%for future generations

Increasing the number of Americans with 57%health insurance

Protecting patients ’ rights in health plans 55%

Helping people aged 65 and over to pay for 49%medications

Regulating the costs of medications 33%

Helping families with the cost of caring forelderly, disabled family 33%

Encouraging medical savings accounts 33%

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Healthcare Reform – Medical Liability

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Special Interest Groups

The American Hospital AssociationThe American Medical AssociationThe Health Insurance Association of AmericaThe Pharmaceutical IndustryOrganized Labor

All of thesegroups, as well asothers notmentioned, haveactive lobbyists….

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The U.S. Health Care System

What is it?Referred to as a patchwork of medical facilities

health providers (doctors, dentists, nurses,pharmacists, allied health professionals),community-based health services entities,professional association organizations, and amyriad of special interest groups at thenational state and local levels.

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U.S. Health Care System

America ’s Health Care Caste System: The U.S. opted for a makeshift system of increasing

complexity and dysfunction Americans spend $5,267 per capita on health care

every year, almost two and half times the industrializedworld’s median of $2,193

The extra spending comes to hundreds of billions ofdollars a year.

What does that extra spending buy us? Americans have fewer doctors per capita than most

Western countries

Source: Steve Verdon. “America’s Health Care System, Part II.” New Yorker. Tuesday, August 23, 2005.

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The Private Sector

Institutional members such ashospitals and nursing homes

Groups of people organizedaccording to their specializedtraining, professional skills, andcredentials

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The U.S. Healthcare System

I. InstitutionsII. ProvidersIII. Changing Nature / FinancingIV. Policy

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I. Institutions / Healthcare Facilities

HospitalsNursing HomesHospiceAmbulatory CareAllied HealthPharmaceutical and

Medical InstrumentManufacturers

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Hospitals

The institution responsible formuch of the major expense isthe hospital system Consists of private,

freestanding hospitalsMany of these hospitals use

only a fraction of the totalnumber of licensed beds

Attempts to consolidatehospitals to make them moreefficient have largely failed

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Hospitals - Continued

Most hospitals in the U.S. are freestanding, mostly not-for-profit, originally organized as community serviceorganizationsMany were developed in health care shortage areas after

World War II under the sponsorship of the federally fundedHill-Burton program

Any facility developed with federal funds had to dedicate asignificant proportion of it services to the poor

These hospitals included the nation’s 125 AcademicMedical Centers as well as the U.S. medical schools Hospitals are normally members of the American Hospital

Association (AHA) U.S. medical scholsl are members of the Association of

American Medical Colleges (AAMC)

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Nursing Homes

The nursing home industry isalso responsible for a largeshare of medical expenses The American Health Care

Association (AHCA) representsalmost 12,000 nursing facilitieswith more than 1.5 million beds

Some hospitals and manycommunity centers have areasdesignated for sub acute(nursing home) care

Costs of private beds in manyinstitutions may be over$150/day, but this is far lessthan a hospital bed (which inVirginia is about $375/day)

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Hospice

Another type of bedded institutions include respitecenters / hospices

The hospice movement has been present for manyyears in Europe, but has only made headway in theU.S. in the last 25 years

Hospices generally providecare to the terminally illpatients, with emphasis placedon pain relief and quality of life

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Ambulatory Care

Ambulatory care is normally provided by physiciansin their offices. This care is also provided in community-based health

clinics. Ambulatory clinics also include surgical daycare

centers developed by surgical specialists who foundtheir income was improved by developing free-standingunits not associated with hospitals. These daycarecenters were not bound by hospital standards or bysurgical suite rotation where senior surgeons hadaccess privileges.

Free-standing radiological centers have also beendeveloped for the same reason.

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Community-Based Facilities

Other clinics have been developed in underservedareas of the country, both central city and rural.

The Health Resources and Services AdministrationBureau of Primary Health Care funds communityhealth centers These centers must be open to all citizens, although

they have a commitment to underserved populations. They must have a board of directors selected from

their clients.

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Community-Based Clinics – Cont.

In addition to these clinics, the bureau also hasstarted providing support funds to look alike clinicswhich serve similar populations in similar areas, andare having difficulty surviving due to service to manypatients unable to pay for care. A local example is the Hayes E. Willis Health Center in

South Richmond, started in 1991 by the Virginia HealthCare Foundation, and now an integral part of the VCUHealth System.

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Allied Health Organizations

Final catch-all group is that of allied healthorganizations

Includes: Physical and occupational therapy clinicsMental health centers Pharmacies Audiology centers And free-standing clinical laboratories

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The Pharmaceutical and MedicalInstrument ManufacturersMerck, Squibb, Burroughs

Welcome and others representedby the PharmaceuticalManufacturers Association(PhRMA)

Drug efficacy and outcomescalled into question

Impact: Medicare eligible,uninsured, underinsured, andvulnerable population groups

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II. Providers

PhysiciansPharmacistsNursesAllied HealthDentists

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Physicians

May belong to local, state, ornational medical associationsor not

Major trade group: AmericanMedical Association

Physicians fall into to majorsubgroups: primary carephysicians and specialtyphysicians

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Pharmacists

May practice in hospitals, grouppractices, communitypharmacies, the pharmaceuticalresearch industry, or the federalgovernment

Trade group: AmericanPharmacists Association (APA)

Majority practice in the privatesector

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Nurses

Wide range of skills: licensed practical nurse associate degree nurse three-year trained nurse four-year college degree nurse

Trade group: American NursingAssociation (ANA)

May be employed whereverthere is a medical/healthcareorganization

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Allied Health

The term allied health covered allhealth-related professions exceptphysicians, nurses, and dentists

Myriad of allied healthprofessional organizations

Includes: physical andoccupational therapists,audiologists, dieticians,counselors, laboratorytechnicians, radiologytechnicians, emergency medicaltechnicians, health careadministrators, etc.

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Dentists

Most work as practitionerswithin their own practices orin small groups

Divided into generalists andspecialists

Trade group: AmericanDental Association (ADA)

Many third party insurers failto cover or include dentalcare

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Key Voluntary Associations

Play a major role in promoting andadvocating the health and well-beingof certain constituent groups

Chronic Disease American Lung Association

American Heart Association American Cancer Society

Polio Foundation / March of Dimes Philanthropy

William and Melinda GatesFoundation

Robert Wood Johnson Foundation

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III. Federal Health Care System

Veterans AdministrationDepartment of DefenseCivil Servants

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Veterans Administration

Facilities 172 hospitals 132 nursing homes Ambulatory care facilities

Clientele Served Veterans eligible from war-

time or military-relatedinjuries

Approximately 5.2 millionpatients

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VA - Continued

Revamped Veterans' Health Care Now a ModelBy Gilbert M. GaulWashington Post Staff WriterMonday, August 22, 2005; Page A01

For years, the Department of Veterans Affairs' sprawling health caresystem was criticized by veterans groups and government investig atorsas a dangerous backwater of medicine.

But in the past decade, largely unnoticed by the public, the system hasundergone a dramatic transformation and now is considered by some tobe a model.

Researchers laud the VA for its use of electronic medical record s, itsfocus on preventive care and its outstanding results. The systemoutperforms Medicare and most private health plans on many quali tymeasures …

Some experts point to the VA makeover as a lesson in how the nation'stroubled health care system might be able to heal itself.

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Department of Defense

Health care system provides care for eligible activeduty and retired military personnel and theirdependents

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Civil Servants

System that provides insurance coverage for civiliansemployed by the Federal Government

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IV. Changing Nature/Financing

DemographicsHealthcare financingConsumer choiceClinical quality

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Demographics

Aging populationDiversityUninsured / Underinsured

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Aging Population

People 65 years of age and older represent thefastest growing segment of the U.S. population

Number of Persons 65 +: 1900 to 2030 (numbers in millions)

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Diversity

By 2010, 32 percent of the U.S. population isexpected to be African-American, Asian, Hispanic, orNative-American

In California, these groups already comprise morethan 50 percent of the population 44 percent of the Los Angeles Population is Hispanic

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Uninsured

Source: Employee Benefit Research Institute estimates from March 1999.

Percentage Uninsured, by State

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Uninsured in Virginia

28.7% of Virginians under the age of 65 went withouthealth insurance for all or part of the two-year periodfrom 2002-2003

Most uninsured Virginians (79.2 percent) aremembers of working families

Families in Virginia with incomes at or below 200% ofthe federal poverty level more likely to be uninsured

Uninsured more likely to be younger than the generalpopulation

Hispanics and non-Hispanic blacks have highestrates of uninsured (60.8% and 42.5%)

Source: The Uninsured: A Closer Look. Families USA, June 2004. www.familiesusa.org

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Healthcare Financing

MedicareMedicaidSocial SecurityPrivate Insurance

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Healthcare Financing

Where does the money go?

37% Hospital30% Doctors/Other Professionals12% Prescription Drugs

13% Administration9% Other

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Medicare

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Medicare - Continued

Prescription drug spending of Medicare patients

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Medicaid

Source: Kaiser Family Foundation, http://www.kff.org/medicaid/kcmu012605nr.cfm

Provides medical coverage for certain groups of low-income individuals (aged, blind, or disabled); membersof families with children; and pregnant women

Jointly funded by federal and state governments

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Medicaid - Continued

Source: http://www.americanvoice2004.org58

Social Security

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Private Insurance

Majority of healthexpenditures coveredby private insurers

Often associated withemployee benefits orindividual personalplans

May entail highpremiums in additionto out-of-pocketexpenses or copays

Source: Agency for Healthcare Research and Quality, US Dept of Health and Human Services, http://www.ahrq.gov/data/

Primary Pay Sources, 1997

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Insurance Premiums

Health costs skyrocketFaced with the largest pricehike since 1990, firms passmore insurance costs on totheir employees.September 22, 2003: 6:05 PM EDTBy Sarah Max, CNN/Money Staff Writer

BEND, Ore. (CNN/Money) – The resultsare in, confirming what a lot of Americanworkers may have already figured out forthemselves. Health insurance costscontinue to climb.

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Consumer Choice

Consumer expectationsCost-sharing trend (shift to individuals bearing more

of the burden)

Source: www.bls.gov/opub/ ted/2004/apr/wk4/art03.htm

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Clinical Quality

Increased concernsabout patient safetyand medical errors

National qualitystandards

Trends towards “payfor performance”

National report card tohelp patients selectphysicians not yetforthcoming

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V. Epidemiology and Health Policy

Newly emerging diseases can spread rapidlythroughout the worldWest Nile Virus

Avian flu SARS

Pattern of globalproblems becominglocal, and localproblems becomingglobal

Soldiers suffering from the Spanish flu in a hospital at CampFunston, Kansas, 1918. Source: National Museum of Health andMedicine, Armed Forces Institute of Pathology, Washington, D.C.

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Role and Paradox of the Hospital

The hospital has emerged as the undisputedprofessional and technological center of the healthcare world, but is prevented from playing the centralcoordinating role which its position logically dictates

Internally, the hospital has been unable to resolve thedeep-rooted conflict between medical staff and layadministration

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Role and Paradox of the Physician

More and better trained doctorsthan ever before, performingmany near-miracles, seeingmore patients, earning moremoney, and with a hearteninginfusion of new humanism…

But, a continuously increasingimbalance between supply anddemand is producingtremendous emotional andfinancial pressures, resentmenton the part of both doctors andpatients, and public depreciationof the medical profession

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Paradox of the Patient

Longer-lived, less disease-ridden, better educated,richer patient than ever before, but…

Needing and demanding more health care than everbefore, increasingly critical of existing health careinstitutions, and determined to change theseinstitutions, by whatever means he can command, inorder to get what he thinks he needs

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Paradox of Financing

Due to expansion of both public and private financingprograms, the financial barrier to health care hasbeen substantially reduced for most Americans

Yet shortcomings in the programs, especiallyMedicaid, the continuing gaps and duplications, andthe ever-rising provider costs, have contributed toinability to provide comprehensive coverage andcontinuing dissatisfaction on the part of bothproviders and consumers

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Questions and Comments