Strategies for Increasing Strategies for Increasing Healthcare AccessHealthcare Access

Flávio CasoyFlávio Casoy (adapted from Kao-Ping Chua and Vanessa Calderón)(adapted from Kao-Ping Chua and Vanessa Calderón)

Jack Rutledge FellowJack Rutledge FellowAmerican Medical Student AssociationAmerican Medical Student Association

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15.3

11.610.7

11.1

9.8 9.5

8 8.3

0

2

4

6

8

10

12

14

16

18

UnitedStates

Switzerland Germany France Canada Australia Japan UnitedKingdom

% G

DP

Total Spending on Health Care, 2005Total Spending on Health Care, 2005

Source: OECD Health Data 2007

International perspective International perspective

Health Care Spending per Capita, 2005Health Care Spending per Capita, 2005

Source: OECD Health Data 2007

$6,401

$4,177

$3,287 $3,374 $3,326$3,128

$2,358$2,724

0

1000

2000

3000

4000

5000

6000

7000

UnitedStates

Switzerland Germany France Canada Australia Japan UnitedKingdom

Sp

end

ing

per

Cap

ita,

US

DInternational perspective International perspective

Health status and outcomes Health status and outcomes

Life Expectancy at Birth, 2004-5Life Expectancy at Birth, 2004-5

Source: OECD Health Data 2007

77.8

81.3

79

80.3 80.2

80.9

82

79

75

76

77

78

79

80

81

82

83

UnitedStates

Switzerland Germany France Canada Australia Japan UnitedKingdom

Ye

ars

Health status and outcomes Health status and outcomes

Infant Mortality, 2004-5Infant Mortality, 2004-5

Source: OECD Health Data 2007

6.8

4.23.9

3.6

5.35

2.8

5.1

0

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2

3

4

5

6

7

8

UnitedStates

Switzerland Germany France Canada Australia Japan UnitedKingdom

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OutlineOutline

I.I. Insurance Coverage in the U.S. Insurance Coverage in the U.S. Health Care SystemHealth Care System

II.II. Strategies for Increasing Health Strategies for Increasing Health Care Access: Pros and ConsCare Access: Pros and Cons

Insurance Coverage in Insurance Coverage in the US Health Care the US Health Care

SystemSystem

Health insurance coverage of non-Health insurance coverage of non-elderly populationelderly population

Employer-sponsored

62%Private Non-

group5%

Medicaid/ Other Public

15%

Uninsured18%

Profile of the uninsuredProfile of the uninsured

47.0 million Americans47.0 million Americans 81% from working families81% from working families 52-59% from low-income families 52-59% from low-income families

(200% FPL)(200% FPL) 80% are adults80% are adults 50% are ethnic minorities50% are ethnic minorities 79% are American citizens79% are American citizens

Source: Kaiser Commission on Medicaid and the Uninsured

Source: US Census Bureau

Health insurance coverage of non-Health insurance coverage of non-elderly populationelderly population

Employer-sponsored

62%Private Non-

group5%

Medicaid/ Other Public

15%

Uninsured18%

Employer-sponsored insuranceEmployer-sponsored insurance

Offered by employers as part of benefits Offered by employers as part of benefits packagepackage

Administered by private insurance Administered by private insurance companies (for-profit and non-profit)companies (for-profit and non-profit)

Employer pays bulk of premium; employee Employer pays bulk of premium; employee pays remainderpays remainder

Significant erosion of employer-sponsored Significant erosion of employer-sponsored insurance in recent yearsinsurance in recent years

Health insurance coverage of non-Health insurance coverage of non-elderly populationelderly population

Employer-sponsored

62%Private Non-

group5%

Medicaid/ Other Public

15%

Uninsured18%

Individual insuranceIndividual insurance

Purchased directly by people who do not Purchased directly by people who do not get coverage through their employersget coverage through their employers

Non-group (individual) plansNon-group (individual) plans Premiums based on individual health riskPremiums based on individual health risk High-risk individuals with limited accessHigh-risk individuals with limited access

High DeductiblesHigh Deductibles

Administratively expensiveAdministratively expensive

Health insurance coverage of non-Health insurance coverage of non-elderly populationelderly population

Employer-sponsored

62%Private Non-

group5%

Medicaid/ Other Public

15%

Uninsured18%

MedicareMedicare

Covers elderly (ages 65 and older) and Covers elderly (ages 65 and older) and non-elderly with disabilitiesnon-elderly with disabilities

Administered by the federal government Administered by the federal government (essentially a single-payer system)(essentially a single-payer system)

Financed through:Financed through: Federal income taxesFederal income taxes Payroll taxesPayroll taxes Out-of-pocket payments by enrolleesOut-of-pocket payments by enrollees

MedicareMedicare

Four parts:Four parts: Part A – hospital insurancePart A – hospital insurance Part B – supplemental insurancePart B – supplemental insurance Part C – managed carePart C – managed care Part D – prescription drugsPart D – prescription drugs

Significant coverage gaps - most enrollees Significant coverage gaps - most enrollees obtain supplemental insurance obtain supplemental insurance

Spending growth generally slower than Spending growth generally slower than private insuranceprivate insurance

Aging population and increased Aging population and increased technology presents challenges for the technology presents challenges for the futurefuture

MedicaidMedicaid

Covers certain low-income individuals; not every Covers certain low-income individuals; not every poor person is covered!poor person is covered!

Administered by state governmentsAdministered by state governments

Often out-sourced to non-government administratorsOften out-sourced to non-government administrators

Financed jointly by the state and federal Financed jointly by the state and federal governmentsgovernments

Benefits are fairly comprehensive, but many Benefits are fairly comprehensive, but many providers won’t take care of Medicaid patientsproviders won’t take care of Medicaid patients

Minimum Medicaid Eligibility Minimum Medicaid Eligibility Levels, 2004Levels, 2004

133%133%

100%

42%

74%

0%0%

100%

200%

PregnantWomen

Pre-SchoolChildren

School-Age

Children

Parents Elderly andIndividuals

withDisabilities

ChildlessAdults

Note: The federal poverty level was $10,488 for a single person and $16,079 for a family of three in 2006. SOURCE: Cohen Ross and Cox, 2004 and KCMU, Medicaid Resource Book, 2002.

Income eligibility levels as a percent of the Federal Poverty Level:

State Children’s Health Insurance State Children’s Health Insurance Program (S-CHIP)Program (S-CHIP)

Supplements Medicaid by covering low-Supplements Medicaid by covering low-income children who are ineligible for income children who are ineligible for MedicaidMedicaid

Administered and financed similarly to Administered and financed similarly to MedicaidMedicaid

Similar problems to Medicaid: Similar problems to Medicaid: Low reimbursement rates Low reimbursement rates → some providers → some providers

refuse to accept S-CHIPrefuse to accept S-CHIP Under-enrollmentUnder-enrollment Eligibility varies by specific populations and Eligibility varies by specific populations and

statesstates

Strategies for Increasing Strategies for Increasing Healthcare AccessHealthcare Access

Individual Commodity Public Good

Do nothing; market will fix itself

Tax credits Individual

Mandates

Employer

Mandates

Public Program Expansions:

Medicaid, CHIP, Medicare

National Health

Insurance*

*Health care system adopted by every other industrialized democracy*Health care system adopted by every other industrialized democracy

U.S. syste

m

Tax creditsTax credits

AMA plan - offer tax credits to people to AMA plan - offer tax credits to people to purchase health insurance.purchase health insurance.

Tax credits would be:Tax credits would be: Inversely related to incomeInversely related to income Contingent upon purchase of health insuranceContingent upon purchase of health insurance RefundableRefundable AdvanceableAdvanceable

Financed by repeal of tax subsidyFinanced by repeal of tax subsidy

Tax credits - prosTax credits - pros

Makes health insurance available to Makes health insurance available to more peoplemore people

Keeps current system in placeKeeps current system in place Tax infrastructure already in placeTax infrastructure already in place May increase choice of insurance May increase choice of insurance

plansplans

Tax credits - consTax credits - cons

Not universal Not universal Builds on individual market (inefficient and Builds on individual market (inefficient and

discriminatory)discriminatory) Problems of current system would remainProblems of current system would remain Employers tempted to drop coverageEmployers tempted to drop coverage No cost controlsNo cost controls No guarantee that competition will help No guarantee that competition will help Does not take co-pays and deductibles Does not take co-pays and deductibles

into considerationinto consideration

Individual Commodity Public Good

Do nothing; market will fix itself

Tax credits Individual

Mandates

Employer

Mandates

Public Program Expansions:

Medicaid, CHIP, Medicare

National Health

Insurance*

*Health care system adopted by every other industrialized democracy*Health care system adopted by every other industrialized democracy

U.S. syste

m

Individual mandatesIndividual mandates

Force everyone to have health insurance Force everyone to have health insurance through some mechanism:through some mechanism: Employer-based Employer-based MedicaidMedicaid Individual marketIndividual market

People would pay a penalty for not having People would pay a penalty for not having health insurancehealth insurance

Individual mandates - prosIndividual mandates - pros

Achieves close to universal coverageAchieves close to universal coverage Easily understoodEasily understood Leaves current system in placeLeaves current system in place Appeals to “anti-freeriding” ethicAppeals to “anti-freeriding” ethic

Individual mandates - consIndividual mandates - cons High cost of purchasing health insuranceHigh cost of purchasing health insurance Disproportionately burdensome to low-income Disproportionately burdensome to low-income

individualsindividuals Builds on inefficient individual marketBuilds on inefficient individual market No cost controlsNo cost controls Difficulty and cost of enforcing mandateDifficulty and cost of enforcing mandate Deductibles, co-paysDeductibles, co-pays

Individual mandates - consIndividual mandates - cons

Massachusetts – Individual MandateMassachusetts – Individual Mandate Single, male, 26 year-old, earning 301% Single, male, 26 year-old, earning 301%

FPL - $2,631 per month, in Framingham, FPL - $2,631 per month, in Framingham, MAMA

Premium: $150/monthPremium: $150/month Drugs: $30/generics, 50% for brand namesDrugs: $30/generics, 50% for brand names Co-pay $25 per doctor visit, $100 per EDCo-pay $25 per doctor visit, $100 per ED Procedure, Study, or Hosp stay: $2000 Procedure, Study, or Hosp stay: $2000

Deductible + 20% co-insuranceDeductible + 20% co-insurance $5000 max out of pocket (not counting $5000 max out of pocket (not counting

drugs or visits to doctors or EDs)drugs or visits to doctors or EDs)

Individual Commodity Public Good

Do nothing; market will fix itself

Tax credits Individual

Mandates

Employer

Mandates

Public Program Expansions:

Medicaid, CHIP, Medicare

National Health

Insurance*

*Health care system adopted by every other industrialized democracy*Health care system adopted by every other industrialized democracy

U.S. syste

m

Employer mandatesEmployer mandates

Variation #1: Employers forced to provide Variation #1: Employers forced to provide health benefits to employeeshealth benefits to employees

Variation #2: Play-or-pay – employers Variation #2: Play-or-pay – employers provide health benefits that meets certain provide health benefits that meets certain standards or submit to payroll tax to fund standards or submit to payroll tax to fund public coverage for employees public coverage for employees

Employer mandatesEmployer mandates

Low-wage employers temporarily subsidizedLow-wage employers temporarily subsidized

Expansion of Medicaid for unemployed or Expansion of Medicaid for unemployed or others who don’t get health insurance others who don’t get health insurance through their employer through their employer

Employer mandates - prosEmployer mandates - pros

Achieves close to universal coverageAchieves close to universal coverage Builds on current systemBuilds on current system Levels the playing field for employersLevels the playing field for employers People like getting health insurance People like getting health insurance

from their employer (mostly)from their employer (mostly) Most of new cost is hidden from Most of new cost is hidden from

employeesemployees

Employer mandates - consEmployer mandates - cons Opposition from many businessesOpposition from many businesses Disproportionately burdensome for small Disproportionately burdensome for small

businessesbusinesses Implicit tax on employees (lower wages)Implicit tax on employees (lower wages) Potential layoffs of low-wage jobsPotential layoffs of low-wage jobs Inhibits creation of new jobsInhibits creation of new jobs No cost controlsNo cost controls Disadvantages of employer-based system Disadvantages of employer-based system

(non-portability, economic strain on (non-portability, economic strain on businesses)businesses)

Individual Commodity Public Good

Do nothing; market will fix itself

Tax credits Individual

Mandates

Employer

Mandates

Public Program Expansions:

Medicaid, CHIP, Medicare

National Health

Insurance*

*Health care system adopted by every other industrialized democracy*Health care system adopted by every other industrialized democracy

U.S. syste

m

Public program expansionPublic program expansion

Expand eligibility of Medicaid, S-Expand eligibility of Medicaid, S-CHIP, and other public programs to CHIP, and other public programs to more peoplemore people

Examples:Examples: Expansion by income – cover everyone Expansion by income – cover everyone

under 200% of poverty levelunder 200% of poverty level Expansion by demographic – cover Expansion by demographic – cover

childless adultschildless adults

Public program expansion - prosPublic program expansion - pros

May lead to universal coverage May lead to universal coverage eventually (pincer strategy)eventually (pincer strategy)

Infrastructure largely in place alreadyInfrastructure largely in place already Leaves current system in placeLeaves current system in place Potential political support to expand Potential political support to expand

access to some groups (esp. access to some groups (esp. children)children)

Public program expansion - consPublic program expansion - cons

Not necessarily universal coverageNot necessarily universal coverage Anti-welfare sentimentAnti-welfare sentiment Lack of a political voice of potential Lack of a political voice of potential

beneficiaries beneficiaries Access problems with Medicaid/S-CHIPAccess problems with Medicaid/S-CHIP May be seen as unjustMay be seen as unjust May “take the wind out of the sails” of May “take the wind out of the sails” of

more comprehensive reformsmore comprehensive reforms

Individual Commodity Public Good

Do nothing; market will fix itself

Tax credits Individual

Mandates

Employer

Mandates

Public Program Expansions:

Medicaid, CHIP, Medicare

National Health

Insurance*

*Health care system adopted by every other industrialized democracy*Health care system adopted by every other industrialized democracy

U.S. syste

m

National health insuranceNational health insurance

NHI = having a health insurance plan NHI = having a health insurance plan that is available to everyonethat is available to everyone

Does not specify financing (single Does not specify financing (single payer vs. multi payer)payer vs. multi payer)

Does not specify whether DELIVERY Does not specify whether DELIVERY of health care is public or privateof health care is public or private

Countries with NHI Countries with NHI

… (South Africa)

Industrialized countries without NHI?

only one …

Example of NHI: Single payerExample of NHI: Single payer

Government becomes main reimburser Government becomes main reimburser of health care providersof health care providers

Universal coverage for defined servicesUniversal coverage for defined services Automatic enrollmentAutomatic enrollment Private insurance for “supplemental” Private insurance for “supplemental”

benefitsbenefits Financed by taxes, offset by less Financed by taxes, offset by less

premiumspremiums Delivery remains mostly privateDelivery remains mostly private

Single payer - prosSingle payer - pros

Universal coverageUniversal coverage Greatly reduced administrative costsGreatly reduced administrative costs Coverage is portable (not tied to Coverage is portable (not tied to

employment)employment) Free choice of doctors and hospitalsFree choice of doctors and hospitals Very little uncompensated careVery little uncompensated care Greater potential to control costs Greater potential to control costs More rational and efficient allocation of More rational and efficient allocation of

resources and technologyresources and technology

Single payer - consSingle payer - cons

No choice in insurance plansNo choice in insurance plans Potential for underfunding by hostile Potential for underfunding by hostile

government or recessiongovernment or recession Potential for mismanagementPotential for mismanagement Politically more difficultPolitically more difficult

Special interestsSpecial interests Transition periodTransition period Resistance to taxesResistance to taxes

Individual Commodity Public Good

Do nothing; market will fix itself

Tax credits Individual

Mandates

Employer

Mandates

Public Program Expansions:

Medicaid, CHIP, Medicare

National Health

Insurance*

*Health care system adopted by every other industrialized democracy*Health care system adopted by every other industrialized democracy

U.S. syste

m

Conclusion: How do you Conclusion: How do you evaluate a solution?evaluate a solution?

Every solution has disadvantages, no matter Every solution has disadvantages, no matter what. what. Based on your valuesBased on your values, you can select , you can select which disadvantages are outweighed by the which disadvantages are outweighed by the advantages.advantages.

If you value a profit-driven industry that If you value a profit-driven industry that sees healthcare as a commodity, sees healthcare as a commodity, tax credits tax credits may be appealing.may be appealing.

If you value universality and If you value universality and comprehensivenesscomprehensiveness, NHI may be appealing., NHI may be appealing.

What does AMSA support?What does AMSA support?

For the last 15 or so years, AMSA has For the last 15 or so years, AMSA has supported a public, single, national supported a public, single, national health insurance system to ensure health insurance system to ensure that everyone has access to that everyone has access to affordable, quality heatlhcare. affordable, quality heatlhcare.

Actively fight for sCHIP, Medicare, Actively fight for sCHIP, Medicare, Medicaid, Community Health Medicaid, Community Health Centers, Title VII, and much more….Centers, Title VII, and much more….

More Ways To Get Involved:More Ways To Get Involved:

JOIN MEDICAL STUDENTS JUST LIKE JOIN MEDICAL STUDENTS JUST LIKE YOU – JOIN AMSA!YOU – JOIN AMSA!

www.amsa.orgwww.amsa.org

Attend Your Regional Conference:Attend Your Regional Conference: 1,2,3: Nov 91,2,3: Nov 9thth – Nov 11 – Nov 11thth ~ Portland, ME ~ Portland, ME

OpportunitiesOpportunities

Universal Healthcare Leadership InstituteUniversal Healthcare Leadership Institute September 29-October 1, 2007 (Apps closed)September 29-October 1, 2007 (Apps closed)

SeaCouverSeaCouver Feb 6-10, 2008 (Application Due on Nov 18)Feb 6-10, 2008 (Application Due on Nov 18)

Venezuelan Health Systems Study TourVenezuelan Health Systems Study Tour April 7-13, 2008April 7-13, 2008

Jack Rutledge InternshipJack Rutledge Internship All the timeAll the time

Flávio CasoyFlávio Casoy

American Medical Student AssociationAmerican Medical Student Association

Jack Rutledge Fellow for Universal Health Care and Jack Rutledge Fellow for Universal Health Care and

Eliminating Health DisparitiesEliminating Health Disparities

jrf@amsa.orgjrf@amsa.org

(703) 620-6600 ext. 256(703) 620-6600 ext. 256