WHY THE UNITED STATES NEEDSWHY THE UNITED STATES NEEDS

A NATIONAL HEALTH PROGRAMA NATIONAL HEALTH PROGRAM

Presented byPresented by

Mary E. O’Brien, M.D.Mary E. O’Brien, M.D.Columbia University Health ServiceColumbia University Health Service

Physicians for a National Health ProgramPhysicians for a National Health Program

PNHP MESSAGES

1. An unraveling insurance system is leaving more and more Americans feeling insecure about the high cost of health care and their access to it.

2. Our reliance on private insurance is responsible for the high cost.

3. Current proposals based on private insurance do not address the real problems we face.

PNHP MESSAGES

4.Only a single payer national health care insurance program that is publicly funded like Medicare will ensure comprehensive care for all.

  This program would cover all necessary

medical services such as doctor visits, hospitalization, long-term care, prescription drugs, dental care, mental health, and preventive care .

 

Cumulative Changes in Health Insurance Premiums, Inflation, and Workers’ Earnings, 1999-2008

119%

34%

29%

0%

20%

40%

60%

80%

100%

120%

140%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Health Insurance Premiums

Workers' Earnings

Overall Inflation

Note: Due to a change in methods, the cumulative changes in the average family premium are somewhat different from those reported in previous versions of the Kaiser/HRET Survey of Employer-Sponsored Health Benefits. See the Survey Design and Methods Section for more information, available at http://www.kff.org/insurance/7790/index.cfm.

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2000-2008. Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 2000-2008; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 2000-2008 (April to April).

National Health Expenditures per Capita,

1990-2007

$2,814

$3,266$3,618

$3,937$4,296

$4,789$5,149

$5,560$5,967

$6,319$6,687

$7,062$7,421

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

1990 1992 1994 1996 1998 2000 2001 2002 2003 2004 2005 2006 2007

Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2007; file nhegdp07.zip).

High Cost of Health Insurance Premiums: It’s Even Too Expensive

for the Middle Class Today National Average for Employer-provided Insurance

Single Coverage $4,479 per year Family Coverage $12,016 per year

Note: Median household income = $50,233

Source: Kaiser Family Foundation/HRET Survey of Employee Benefits, 2007;

U.S. Census Bureau, 2008

Source: Stan Dorn, Bowen Garrett, John Holahan, and Aimee Williams, Medicaid, SCHIP and Economic Downturn: Policy Challenges and Policy Responses, prepared for the Kaiser Commission on Medicaid and the Uninsured, April 2008

Impact of Unemployment Growth on Medicaid and SCHIP and the Number Uninsured

1%

Increase in National Unemployment

Rate

=1.0 1.1

Increase in Medicaid

and SCHIP Enrollment

(million)

Increase in Uninsured(million)

&$2.0

$1.4

$3.4

Increase in Medicaid and

SCHIP Spending(billion)

State

Federal

Characteristics of the Uninsured, 2007

400% FPL +10%

200-399% FPL24%

100-199% FPL29%

<100% FPL37%

Family IncomeFamily Work Status

Total = 45 million uninsured

1 or More Full-Time Workers

69%

No Workers

19%

Part-TimeWorkers

12%

Age

0-1820%

19-2929%

30-4427%

45-6424%

The federal poverty level was $21,203 for a family of four in 2007. SOURCE: Kaiser Commission on Medicaid and the Uninsured/Urban Institute analysis of March 2008 CPS.

Medical costs create serious financial problems for millions of us

Source: Health Tracking Poll, Kaiser Family Foundation, April 2008

18,314 Adult Deaths Annually Due to Uninsurance

2. Our reliance on private insurance is responsible for the high cost.

3. Current proposals based on private insurance do not address the real problems we face.

International Comparison: Universal Coverage at Less Cost -- They Must Be Doing Something Right!

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000United StatesGermanyCanadaNetherlandsFranceAustraliaUnited Kingdom

* PPP = Purchasing Power Parity.Data: OECD Health Data 2008, June 2008 version.

Average spending on health per capita ($US PPP*)

All have a strong role for government in funding and regulating their health care system.

U.S. Health Costs are 70% Greater than the Median of Other Countries

Un

ited

Sta

tes

0

10

20

30

40

50

60

70

80

90

100

Perc

en

t

Population Covered by Public System

The Outlier Nation: Our Public System Covers Fewer…

Source: F. Colombo and N. Tapay, Private Health Insurance in OECD Countries, OECD 2004Unite

d States

0

5

10

15

20

25

30

35

40

Pe

rce

nt

Private Health Insurance Percent of Total Cost

While Private Insurance Dominates

Source: F. Colombo and N. Tapay, Private Health Insurance in OECD Countries, OECD 2004Unite

d States

Private Insurers’ High Overhead

16.3%

19.9%

26.5%

3.1%

0%

10%

20%

30%

Medicare Non-Profit Blues CommercialCarriers

Investor-OwnedBlues

International Journal of Health Services 2005; 35(1): 64-90

Medical Care Administration

9%

Insurer Billing8%

Other Insurer Costs and Profit

11%

Hospital Billing4%

Medical Care64%

Physician Billing 5%

Source: James G. Kahn et al, The Cost of Health Insurance Administration in California: Estimates for Insurers, Physicians, and Hospitals, Health Affairs, 2005

Allocation of Spending for Hospital and Physician Care Paid through Private Insurers

Billing and Insurance: Nearly 30% of All Health Care Spending

28%

Only a single payer national health care insurance program that is publicly funded like Medicare will ensure comprehensive care for all.

 This program would cover all necessary medical services such as doctor visits, hospitalization, long-term care, prescription drugs, dental care, mental health, and preventive care .

 

Return to KaiserEDU.org

Ten Percent of All Medicare Beneficiaries Account For More than Two Thirds of Medicare Spending

25%

11%

7%

9%

8%

16%

53%

2%

54%

4%

4%

$25,000 or More

$15,000-$24,999

$10,000-$14,999

$5,000-$9,999

$1,000-$4,999

$0-$999

SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2002 Cost and Use File.

Total Number of Beneficiaries: 41.8 million

Total Medicare Spending: $224.5 billion

6% 10%

69%

Exhibit 13

2002 average = $5,370 per capita

K A I S E R C O M M I S S I O N O N

Medicaid and the Uninsured

Figure 33

Enrollees Expenditures

Medicaid Enrollees and Expendituresby Enrollment Group, 2003

Note: Total expenditures on benefits excludes DSH payments. SOURCE: KCMU estimates based on CBO and OMB data, 2004.

Children 19%

Elderly26%

Disabled43%

Adults 12%Children

48%

Elderly9%

Disabled16%

Adults27%

Total = 52.4 million Total = $252 billion

Rising Health Insurance and Medicaid Rising Health Insurance and Medicaid Costs for City GovernmentCosts for City Government

Conyers: Expanded and Improved Medicare for All“single payer national

health insurance” HR 676Automatic enrollmentComprehensive benefitsFree choice of doctor and hospitalDoctors and hospitals remain independentPublic agency processes and pays billsFinanced through progressive taxesCosts contained through capital planning, budgets, emphasis on primary care

New – Sanders (& McDermott): American Health Security Act S 703 (HR 1200)

1.Automatic enrollment

2.Comprehensive benefits

3.Operated by States using Federal standards

4.Free choice of doctor and hospital

5.Doctors and hospitals remain independent

6.Public agency processes and pays bills

7.Financed through payroll taxes

How Single Payer Could Be Paid For: One Example from a Recent Study of a

California Plan

Federal Government

(existing Medicare,

Medicaid, other)

Business (self-employed) income tax

(12%)

State and Local Govt (existing

Medicaid, other)Surcharge on income (1% above $200,000)

Employee Payroll Tax (4%)

Employer Payroll Tax (8%)

Investment income tax (4%)

Note: Payroll and income taxes between $7,000 and $200,000 only. Source: Health Care for All Californians Act: Cost and Economic Impacts Analysis, The Lewin Group, January 2005

Medical Care Administration

9%

Insurer Billing8%

Other Insurer Costs and Profit

11%

Hospital Billing4%

Medical Care64%

Physician Billing 5%

Source: James G. Kahn et al, The Cost of Health Insurance Administration in California: Estimates for Insurers, Physicians, and Hospitals, Health Affairs, 2005

Allocation of Spending for Hospital and Physician Care Paid through Private Insurers

Billing and Insurance: Nearly 30% of All Health Care Spending

28%

COMPARE THE PUBLIC-OPTIONAND SINGLE PAYER

Public-Option Single-payerCoverage Millions un-insured Universal

and under-insured Automatic enrollment

Cost $1.5 trillion over No additional cost 10 years

How to pay Increase taxes;Redirect $363 billion Cuts to providers administrative waste

Sustainability Use HIT, prevent Global budgeting; disease management capital planning

2. Mandates Won’t Lead to Universal Coverage

Source: Sherry Glied et al, “Consider It Done? The Likely Efficacy of Mandates for Health Insurance,”, Health Affairs, 26(6), Nov/Dec 2007; Insurance Research Council, June 2006

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CurrentlyInsured

Hawaii'sEmployerMandate

Auto Insurance Child Support ChildhoodImmunizations

IndividualIncome Tax

Minimum WageLaws

Mandate

Co

mp

lia

nce

below 65 yrs

Will We Get Real Health Care Reform Before the Premium Takes All our

Income?

Source: American Family Physician, November 14, 2005

Today