The US Healthcare System

Impact on Equity, Efficiency and Effectiveness

BASIC SERVICE COMPONENTS OF A HEALTH CARE SYSTEM

Public Health (Including Health Promotion and Disease Prevention)

Emergency medical services (including transportation) Ambulatory care for simple/limited conditions Acute and community hospitals and medical centers Long-term care (either in-home or institutional care) Mental Health Services (both inpatient and ambulatory) Rehabilitation services (both inpatient and ambulatory) Dental services Pharmaceuticals/supplies/medical devices and

equipment

Need vs. Demand and Utilization

Need – an interpretation of an individual’s evaluated requirements for obtaining professional care through the health service system

Demand – seeking out, but not necessarily receiving health services.

Utilization – actual use of services. A result of need and demand

Health Care Spending in the U.S.

In 2003, $1.7 trillion was spent on health care in U.S. In 2003, the United States spent 15.3 percent of its

Gross Domestic Product (GDP) on health care. Compared to other countries: Switzerland – 10.9% Germany – 10.7% Canada – 9.7% France – 9.5%

45 million Americans were uninsured in 2003 Total out-of-pocket spending on health care rose

$13.7 billion, to $230 billion in 2003.

Spending by Service in Health Care 2002

Service Amount Spent 2002 (in billions)

Major cost factors

Hospitals $486.5 (9.5% increase)

Inflation; increase in patient volume

Physicians $339.5 (7.7% increase)

Medicare costs decelerated causing a reduction in the rate of growth in physicians spending

Drugs $162.4 billion (15.4% increase)

Rate “decelerated” from 2001. Out of pocket expenses increased.

Percent of health care expenditures 2002

Prescription Drugs, 15.7

Other health spending, 15.9

Home Health, 2.3

Nursing home care, 5.8

Other personal health care, 13.7

Physician Spending, 21.3

Hospital Care, 24.8

Four Systems of Health Care

Private, insured, middle-income Americans

Poor, unemployed or under-employed Americans

Active duty military personnelVeterans of military service

Private, insured, middle-income Americans

Care is coordinated by physicians in private practice

Care is funded by insurance (personal, non-governmental sources paid for by employer, individual or both)

Characterized as an informal system of care Even though it is an informal system, patient

has considerable control over their care It is also often poorly coordinated Medicare for the middle-income

Employer and Employee Health Insurance Costs

The premiums for employer-based health insurance rose by 11.2 percent in 2004, the fourth consecutive year of double-digit increases.

The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $9,950, or $829 a month in 2004.

Health insurance premium rates have risen five times faster on average than workers' earnings since 2000

Employee spending for health insurance coverage has increased 126 percent between 2000 and 2004

Since 2001, the employees' share of health insurance costs has soared 63 percent for single coverage and 58 percent for family coverage.

Poor, Unemployed/Underemployed Families Without Insurance

There is no formal systemMajority of services are provided by local

government agenciesPatients have no continuity of serviceIn sum, the poor must take whatever

they can getUse of Medicaid and other government

funded services

Military Medical System

A well-organized system of “high quality” care at no direct cost to the recipient

All inclusive and omnipresent System in effect whether personnel want it or

not Emphasis is on keeping personnel well,

prevention and early treatment of injury or illness

It is a closely organized, highly integrated, rational and regionalized approach

Veterans Administration Health Care System

Provides care to retired, disabled or other deserving veterans of military service

History of VA is rooted in controversy Not as complete as other services Large number of male patients VA health system is just one of a system of social

services and benefits for veterans Interest group representation 1990s represented a waning period for veterans and

veteran services (“Snowbirds”) Future for the veteran

Primary Cause of Death 1900

Primary Cause of Death 1997Source: Healthy People 2010