BME 301 Lecture Four. Assignments Due Next Time Complete poll #1 (overdue) WA3 HW2 ds-kortum/BME301...

BME 301

Lecture Four

Assignments Due Next Time

Complete poll #1 (overdue) WA3 HW2 http://www.bme.utexas.edu/faculty/ri

chards-kortum/BME301

http://www.bme.utexas.edu/faculty/richards-kortum/BME301


Review of Lecture Three

Leading causes of mortality: ages 45-60

Developing World1. Heart Disease - ARF2. Cerebrovascular Disease3. Tuberculosis

Developed World1. Heart Disease – IHD2. Respiratory Cancers3. Cerebrovascular Disease

Global health challenges

Start here

What are the problems in health today? Advance to next unit

Screening and Prevention Diagnosis Treatment and Therapy

Definition of Health

Role of WorldHealth

OrganizationHealth Data

Types and Uses

Sensitivity and

SpecificityPPV

Epidemiology Burden of DiseaseQALY, DALY,HRQL

Mortality Ages 15-44

AIDS/HIVAccidents

Interpersonal Violence

Mortality Ages 45-60

Respiratory Cancers

TB

Heart Disease

Cerebrovascular disease

Developing and Developed World

Contrasts

Who pays to solve problems in health care?

How have health care costs changed over time? Advance

to next unit What contributes to increasing health care costs?

InternationalInternational

Start here

United StatesVendor/Purchaser System – choice dependent on ability to pay

Financing of the system

Health Technology Development

Provider of services

Hospitals Nonprofit Private (for profit) Public

Ambulatory Care Private Practice Public Health Services Voluntary Agencies

University Student

Private insuranceHMOPPO

Public (tax based)Medicare/Medicaid

Military Out of pocket expenses

CanadaUniversal Insurance13 provincial systemsHospitals – nonprofit (all government funded)Government sets ceilings on gross revenue for physician private practices.

IndiaPublic – free treatment health centers Private care – for profit usually urban areasWestern and traditional medicineInternational aid – especially in rural areas

Angola27 year civil war“Near absence” of government Displacement and malnutritionInternational aid only source of health care.

Overview of Lecture 4

Who pays to solve problems in healthcare? United States: Multi-payer system Canada: Single payer system Developing world

Angola India

The need for health care reform

Global Attitude Poll Results




How Many $ to Gain a Year of Life?

Need a way to quantify health benefits How much bang do you get for your buck? Ratio

Numerator = Cost Denominator = Health Benefit

Several examples $$/year of life gained $$/quality adjusted year of life gained (QALY) $$/disability free year of life gained (DALY)

Can we use this to make decisions about what we pay for?

League Table

Therapy Cost per QALY

Motorcycle helmets, Seat belts, Immunizations Cost-saving

Anti-depressants for people with major depression

$1,000

Hypertension treatment in older men and women

$1,000-$3,000

Pap smear screening every 4 years (vs none) $16,000

Driver’s side air bag (vs none) $27,000

Chemo in 75 yo women with breast CA (vs none)

$58,000

Dialysis in seriously ill patients hospitalized with renal failure (vs none)

$140,000

Screening and treatment for HIV in low risk populations

$1,500,000

What Happens When You Don’t Have Health Insurance?

United States If you meet certain income guidelines, you are

eligible for Medicaid Texas: TANF (welfare) recipients, SSI recipients

Eligibility rules and coverage vary by state State pays a portion of the costs, federal govt.

matches the rest

http://www.coaccess.com/images/

mcdCard.gif

What Happens When Medicaid Doesn’t Cover a Service?

Oregon – July, 1987 Oregon state constitution required a

balanced state budget, surplus returned to taxpayers

Voted to end Medicaid coverage of transplants

Typically 10 transplants performed per year $100,000-$200,000 per transplant $1.1 M cost to state (federal govt. pays the rest)

Voted to fund Medicaid coverage of prenatal care

Would save 25 infants who die from poor prenatal care

A Tale of Two Children Oregon – August, 1987

Coby Howard 7 year old boy Developed leukemia Required a bone marrow transplant Was denied coverage Mom appealed to legislature, denied coverage Mom began media campaign to raise $$ Raised $70k ($30k short of goal) Coby died in December, 1987

Coby was “forced to spend the last days of his life acting cute” before the cameras

Ira Zarov, attorney for patient in similar circumstances

A Tale of Two Children

Oregon, 1987 David Holliday

2 year old boy Developed leukemia Moved to Washington state, lived in car Washington state

Medicaid covered transplants No minimum residency requirement

US Health Care System

Private Insurance Conventional HMOs

Government Medicare Medicaid SCHIP

Uninsured

Centers for Medicare & Medicaid Services

US Health Care System


WHERE does the money

come from?


Private Insurance34%

Other Public1

12% Other Private2

6%Medicaid and

SCHIP15%

Out-of-pocket15%

Medicare17%

1 Other public includes programs such as workers’ compensation, public health activity, Department of Defense, Department of Veterans Affairs, Indian Health Service, and State and local hospital subsidies and school health.2 Other private includes industrial in-plant, privately funded construction, and non-patient revenues, including philanthropy.

Note: Numbers shown may not sum due to rounding.

Source: CMS, Office of the Actuary, National Health Statistics Group.

CMSPrograms

33%

Medicare, Medicaid, and SCHIP account for one-third of national health spending.

Total National Health Spending = $1.3 Trillion

The Nation’s Health Dollar, CY 2000

Section I. Page 17


28.8% to 33.9%

More than 41.3%

34.0% to 41.3%

Less than 28.8%

Table 3.30Births Financed by Medicaid as a Percent of Total Births

by State, 1998

Note: CO, GA 1997 data; KY, NJ, VT 1996 data.Source: Maternal and Child Health (MCH) Update: States Have Expanded Eligibility and Increased Access to Health Care for Pregnant Women and Children, National Governors Association, February, 2001, Table 23, at http://www.nga.org.

WA

OR

ID

MT ND

WY

NV

CA

UT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SC

TNNC

KY

FL

VA

OH

MI

WV

PA

NY

AK

MD

MEVT

NH

MA

RI

CT

DE

DC

HI

No data

CO

GAMS

OK

NJ

SD

Medicaid pays for about 1 in 3 of the nation’s births.


Table 1.27National Health Spending by Source of Funds by OECD Country, 2000

2% 6%

66%

29%

78%70%

82%

8%

27%

60%

13%

74%64%

11%

74% 69%

10%

15%

1%

69%

43%

15%

63%

6%

33%

13% 13% 7%

35%

11%7%

3%3%

7%

1% 2%6%

6% 2%5% 5% 2%

5%

10% 11% 11% 15% 15% 16% 16% 17% 19% 21% 21% 23% 26%

44%1%

2%6%2%3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

France

Germ

any

Irela

nd

United

State

s

New Zeala

nd

Canada

(199

9)

Denmar

k

Japa

n (199

9)

Austria

Finlan

d

Hungary

Italy

Spain

(199

9)

Korea

(199

9)

Per

cen

t o

f T

ota

l H

ealt

h E

xpen

dit

ure

Out-of-PocketPayments

All Other PrivateFunds

Private Insurance

Social SecuritySchemes

General Government,Excl. Social Security

Source: OECD Health Data 2002 2nd ed.

Source of funding varies significantly by country. For instance, out-of-pocket spending ranges from 10% to 44% of health spending with the U.S. at about the average.


WHERE does the money

come from? 45% GOVERNMENT

40% PRIVATE SOURCES

15% OUT OF POCKET


WHERE does the money go?


Other Spending24%

Nursing HomeCare 7%

Prescription Drugs

9%

Program Administration

andNet Cost

6%

HospitalCare32%

Physician and Clinical Services

22%

Note: Other spending includes dentist services, other professional services, home health, durable medical products, over-the-counter medicines and sundries, public health, research and construction.

Source: CMS, Office of the Actuary, National Health Statistics Group.

Hospital and physician spending accounts for more than half of all health spending.

Total Health Spending = $1.3 Trillion

The Nation’s Health Dollar, CY 2000

Section I. Page 22


Table 1.8Concentration of Health Spending, 1980-1996

Note: Data for 1980 are from the National Medical Care Utilization and Expenditure Survey (NMCUES); for 1987, from the 1987 National Medical Expenditure Survey (NMES); and for 1996, from the 1996 National Medical Expenditure Panel Survey (MEPS).

Source: Berk, Mark and Alan Monheit, “The Concentration of Health Care Expenditures, Revisited,” Health Affairs March/April 2001.

Health spending remains highly concentrated on a small percentage of people. The top1% of people account for more than a quarter of all health spending.

Percent of People


WHERE does the money go?

1/3 HOSPITAL CARE

1/5 DOCTOR’S FEES

1/10 PRESCRIPTION DRUGS

Spending concentrated on a small # of sick people


Do we spend MORE in the US?


Table 1.25Percent of GDP Spent on Health Care by OECD Country, 1960-1999

*For some years, no data was available.**1997 data was used because 1999 was not available.Note: The data is arrayed by spending growth from 1990 to 1999. The medians include all OECD countries.

Source: OECD Health Data 2002.

The U.S. has had a higher share of GDP spent on health than the OECD median forthe past four decades.

5.14.95.4

4.34.34.5

3.6

1.5

3

3.94.5

6.9

5.6

6.37

6.15.65.3

6.9

5.1

3.6

4.5

8.7

7.6

8.8

7.16.6

7

7.6

9.1

5.4

6.4

5.6

11.9

8.58.79

7.57.8

7.1

8.58

6.65.96

10.3

8.78.5

13

10.7

9.2

8.17.97.87.77.47.1

0

2

4

6

8

10

12

14

United

Kingdom

Japan

Spain

Italy

*

Swed

en**

Austria

Austra

lia**

Gre

ece*

Canad

a

Ger

man

y*,**

Switz

erla

nd

United

State

s

Per

cen

t

1960 1970 1980 1990 1999

Median: 3.9% 5.1% 6.8% 7.5% 7.9%


Table 1.23Health Care Spending Per Capita by OECD Country, 1960-1999

*Expenditures in U.S. dollars using purchasing power parity rates.**For some years, no data was available.***1998 data was used because 1999 was not available.Note: The data is arrayed by expenditure levels for 1999. The medians include all OECD countries.Source: OECD Health Data 2002.

U.S. spending is significantly higher than other OECD countries.

$14 $74 $89 $26 $48 $87 $64 $53 $72 $109 $90 $136 $144$83 $144$270

$130 $151$240 $159 $130 $206 $260 $223 $288 $349$328

$444

$850

$522$658 $662

$577$701 $710

$824 $881$1,058

$813$972

$1,492

$1,083

$1,321 $1,300$1,206 $1,245

$1,517$1,676 $1,600

$1,836

$2,739

$1,469$1,666 $1,748

$1,844 $1,882$2,058 $2,061

$2,144 $2,226$2,428 $2,451

$3,080

$4,373

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

Spain

United

Kingdom

Swed

en***

Japan

Italy

**

Austra

lia**

*

Austria

Belgiu

m

France

Canad

a

Ger

man

y

Switz

erla

nd

United

State

s

1960 1970 1980 1990 1999

Median: $64 $146 $591 $1,270 $1,798


Do we spend MORE in the US?

YES

By % of GDP

By absolute amount


How are we insured(OR NOT)?


Table 1.4Sources of Health Insurance Coverage for the

Under 65 Population, 1980-2000

Notes: ESI - Employer Sponsored Insurance. Any Private includes ESI and individually purchased insurance. Any government includes Medicare for the disabled population.

Source: Tabulations of the March Current Population Survey files by Actuarial Research Corporation, incorporating their historical adjustments.

Over the last two decades, private coverage has declined, public coverage has stayed about the same, and the uninsured have grown.

74%

83%

8%

15%

10%

0

10

20

30

40

50

60

70

80

90

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

ESI

Any Private

Medicaid

Any Government Uninsured

74%

69%

16%

14%

9%


Table 5.9Uninsured by State, 1999-2000

*Other includes private non-group and other public insurance (mostly Medicare and military-related). Medicaid includes CHIP.

Source: Census Bureau, March Current Population Survey.

Medium (14% - 18.9%)

High (19%+)

Low (7% - 13.9%)

WA

OR

ID

MT ND

WY

NV

CA

UT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SC

TNNC

KY

FL

VA

OH

MI

WV

PA

NY

AK

MD

MEVT

NH

MA

RI

CT

DE

DC

HI

CO

GAMS

OK

NJ

SD

National average is 16%

The south and west have higher rates of uninsured than the mid-west and east.


Table 3.34Health Insurance Coverage of Children, 1988-2001

*Other includes private non-group and other public insurance.Notes: About 21% of children below poverty (or 2.5 million kids) had no health insurance in 2001.

Source: CMS, Office of Research, Development and Information and U.S. Bureau of the Census, March Current Population Survey.

15.623.9 23.2 19.8 19.9 22.7

13.1

13.7 13.8 15.4 11.7

63.861.6 63.3

62.763.9

5.4 1.7

12.0

57.0

0%

20%

40%

60%

80%

100%

1988 1993 1995 1998 2000 2001

Selected Calendar Year

Pe

rce

nt

of

All

Ch

ildre

nMedicaid Uninsured Employer-Based Other*

The percentage of children without health insurance is declining.


Table 3.35State Children’s Health Insurance Program

Spending and Enrollment, 1998-2001

*Note: Ever enrolled in SCHIP during the year, not a point in time estimate.

Source: CMS, Office of the Actuary for spending data. Center for Medicaid and State Operation, FY 2001 SCHIP Annual Enrollment Report.

Spending Enrollment*

$3.8

$2.8

$1.1

$0.2

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

FY98 FY99 FY2000 FY2001

Do

llar

s in

Mil

lio

ns

4.6 million

3.3 million

2.0 million

1.0 million

0

1

2

3

4

5

CY98 FY99 FY2000 FY2001

The SCHIP program covers a growing number of uninsured low-income children.


Table 4.11Health Plan Enrollment by Plan Type, 1988-2001

Source: Employer Health Benefits, 2001 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust. Trends and Indicators in the Changing Health Care Marketplace, 2002 – Chartbook.

Over the 1990s, managed care grew from about a quarter of employees to the vast majority.

73%

46%

27%

14%

9%

8%

7% 23%

29%

28%

27%

31%

21%

16%

35%

38%

41%

48%

28%

26%

11%

24%

25%

22%

22%

14%

7%

0% 20% 40% 60% 80% 100%

1988

1993

1996

1998

1999

2000

2001

Conventional

HMO

PPO

POS


Table 1.18Managed Care Enrollment by Type of Plan, 1984-2000

Source: Trends & Indicators in the Changing Health Care Marketplace, 2002 – Chartbook.

Mixed model HMO plans have shown rapid growth.

2.1 4.3 2.46.6

8 9.78.7 7

3.55.6 3.9

3.3 7.12.9

13.5 16.227.5

33.56.7

23.1

32.1

0.40.80

10

20

30

40

50

60

70

80

1984 1988 1992 1996 2000

En

rolle

es

(in

mill

ion

s)

Staff Group Network IPA Mixed

31.4

38.8

63.3

80.1

15.1

NA19.5%23.3%43.6%13.6%

NA43.0%18.0%25.4%13.6%

17.3%41.7%10.0%24.8%6.2%

36.4%43.4%5.3%

13.7%1.2%

40.0%41.9%8.9%8.8%0.4%

MixedIPANetworkGroupStaff


Table 1.17Concentration of Managed Care Enrollment, 1988-2000

Note: The largest national managed care firms include Blue Cross and Blue Shield plans, Aetna US Healthcare, Kaiser Permanente, United Health, and PacifiCare. HMO enrollment includes enrollees in both traditional HMOs and point of service plans.

Source: Trends & Indicators in the Changing Health Care Marketplace, 2002 – Chartbook.

Two-thirds of managed care enrollees are enrolled in the nation’s 10 largestmanaged care firms.

45.8

54.6 56.2

65.064.1 65.2 66.5

0

10

20

30

40

50

60

70

80

1988 1991 1994 1997 1998 1999 2000

Pe

rce

nt

En

rolle

d in

10

La

rge

st

Fir

ms


Table 1.16HMO Enrollment by Ownership Status, 1981-2000

Note: HMO enrollment includes enrollees in both traditional HMOs and point-of-service (POS) plans through: group/commercial plans, Medicare, Medicaid, the Federal Employees Health Benefits Program, direct pay plans, supplemental Medicare plans, and unidentified HMO products.

Source: Trends & Indicators in the Changing Health Care Marketplace, 2002 -- Chartbook.

The proportion of HMO enrollees in for-profit plans grew over the past decade.

74.0%

53.8%47.8%

36.7% 36.3% 36.0% 36.5%

88.0%

46.2%

26.0%

12.0%

63.5%64.0%63.7%63.3%52.2%

0%

20%

40%

60%

80%

100%

1981 1985 1989 1993 1997 1998 1999 2000

% Non-Profit % For-Profit

Total Enrollment (in millions)

10.27 18.89 32.49 42.07 72.23 78.78 80.81 79.66


Table 2.9Physician Participation in Managed Care, 1988-1999

Note: Managed care contracts include HMOs, IPA, and PPOs. Data from the American Medical Association.

Source: Trends and Indicators in the Changing Health Care Marketplace, 2002, Kaiser Family Foundation.

There have been large increases in the percentage of physicians participating in managed care contracts as well as the share of practice revenue derived from such contracts.

23%

61%

44%

92%

49%

91%

0

10

20

30

40

50

60

70

80

90

100

% of Physicians in a Practice With atLeast One Managed Care Contract

Average Share of Total PracticeRevenue Derived from Managed Care

1988 1997 1999


How are we insured(OR NOT)?

16% are uninsured (and growing)

State spending to insure children is increasing

Membership in HMOs, PPOs, POS plans increasing

More HMOs are for-profit

Canadian Health Care System

Five Principles Comprehensiveness, Universality, Portability,

Accessibility, Public administration Features

All 10 provinces have different systems (local control)

One insurer - the Provincial government costs shared by federal & provincial govts

Patients can choose their own doctors Doctors work on a fee for service basis, fees are

cappedhttp://www.globalsecurity.org/intell/world/canada/images/canada-

flag.gif

http://www.paintball.net/canada-

map.jpg

Canadian Health Care - History

Before 1946 Canadian system much like current US system

1946 Tommy Douglass, premier of Saskatchewan,

crafted North America’s first universal hospital insurance plan

1949 BC and Alberta followed

1957 Federal govt adopted Hospital Insurance and

Diagnostic Services Act Once a majority of provinces adopted universal

hospital insurance plan, feds would pay half costs 1961

All provinces had hospital insurance plans


1962 Saskatchewan introduced full-blown universal

medical coverage 1965

Federal govt offers cost-sharing for meeting criteria of comprehensiveness, portability, public administration and universality

1971 All Canadians guaranteed access to essential

medical services 1970-1980s

Rising medical costs, low fees to doctors Doctors began to bill patients themselves


1984 Canadian Health Act outlawed “extra

billing” “One-tiered service” Some provinces capped physician incomes Ontario physicians went on strike

1998 Federal government cut contributions to

social programs from $18.5 billion to $12.5 billion Canadian

Today, fed govt pays only about 20% of medical care costs on average

Canadian Health Care – Comparisons to US System

Costs Canada spends 9% of GDP on health care US spends 14% of GDP on health care

Popular? 96% of Canadians prefer their system to

that of US Simplicity

Canadian medicare – 8 pages long US Medicare – 35,000 pages long

Canadian Health Care – Comparisons to US System

Life Expectancy Canadians have 2nd longest expectancy

of all countries US ranks 25th

Infant Mortality Rates Canada – 5.6 deaths per 1000 live births US – 7.8 deaths per 1000 live births

Average physician income Canada - $120,000 US - $165,000

Canadian Health Care - Problems

Portability Quebec and a few others will only pay doctors in

other provinces up to its set fees Many clinics post signs “Quebec medicare not

accepted” Coverage of services

Some provinces charge health insurance premiums (many employers pay, subsidized for low income)

Few provinces offer drug plans (97% of Canadians are covered, private insurance)

Routine dentistry and optical care not covered by any province


Waiting times 12% of Canadians waited >4 months for

non-emergency surgery “You have to wait your turn for a hip

transplant even if there are 3 poorer people in front of you. Which I think is damn fine. In the US, if you’re rich, you get it fast and if you’re poor, you don’t get it at all. That’s how they ration.”

Morton Lowe, MD, coordinator of health sciences UBC

Canadians wait average of 5 months for a cranial MRI

Americans wait an average of 3 days


Emergence of for-profit care In exchange for an extra fee, facilities

offer quicker access to medicare-insured services

Movement toward a two-tiered system like US

Poor Availability of Advanced Technology No way to fund new medical equipment Waiting times high for ultrasound, MRI

Indian Health Care System

Health system is at a crossroads Fewer people are dying Fertility is decreasing Communicable diseases of childhood

being replaced by degenerative diseases in older age

Reliance on private spending on health in India is among the highest in the world More than 40% of Indians need to borrow

money or sell assets when hospitalizedhttp://mospi.nic.in/flag.jpg

Indian Health Care System

Geographic disparities in health spending and health outcomes Southern and western states have better

health outcomes, higher spending on health, greater use of health services, more equitable distribution of services

http://www.indiatouristoffice.org/images/maps/

india-map.gif

Indian Health Care System State Prenatal

CareInstitution

al Deliveries

Immunization Rates

India 28%(2-95%)

34%(5-100%)

54%(3-100%)

Kerala 85% 97% 84%

Gujarat 36% 46% 58%

Bihar 10% 15% 22%

Indian Health Care System: Goals

How to work with private health providers Test new health financing systems Analyze pharmaceutical policies

New international trade regimes Emergence of new infectious diseases How to make HIV drugs affordable in India

Develop strategies to increase number of trained health care workers

Maximize benefits from health research and technology development

Angolan Health Care System

Angola – moving from crisis to recovery 27-year long civil war

Rebels of UNITA and government forces Ended in April, 2002 1 million people died in the conflict (total pop

13M) 4 million fled, many to neighboring countries 3.8 million Angolans have now returned to their

areas of origin Many people have precarious access to food

70% of country’s 13 million live on < than 70 cents per dayhttp://www.flags.net/elements/

small_gifs/AGLA001.GIF

Angola

http://discover.npr.org/features/feature.jhtml?wfId=1144226





UN World Food Programme Provides food to an average of 1.7 million people

per month 740,000 people receive rations through food-for-

work program Infrastructure Needs

500 roads need reconstruction Many key bridges are unstable Millions of landmines scatter the countryside

Corruption Angola produces 900,000 barrels of oil per day Massive corruption has undermined donor

confidence


“A tent and whoever is there.” Overall public health situation is critical

One in four children dies before age 5 Measles – claims 10,000 children per year

UN Agencies conducted vaccination campaigns – National Immunization Days 7 million children vaccinated for measles 5 million children vaccinated against polio Working to implement routine

immunization programs

http://www.c-kemp.de/angola/

einheimische_Praxis.jpg

Summary of Lecture 4

Who pays to solve problems in healthcare? United States: Multi-payer system Canada: Single payer system Developing world

Angola India

The need for health care reform

Assignments Due Next Time

WA3 HW2


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