Health Policy

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Health Policy

• POLS 21 The American Political System

The best doctors in the world are Doctor Diet,
Doctor Quiet, and Doctor Merryman. Jonathan
Swift
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A Portrait of Health Care in America

• The United States spends more on health care than
  other industrialized nation in the world, most of
  whom (unlike the U.S.) provide health insurance
  to all their citizens.
• In 2007, health care spending in the United
  States reached 2.3 trillion, or 7,600 per
  personthats roughly 4 times more than what we
  spend on national defense.
• The U.S. spends more than 15 of its Gross
  Domestic Product (GDP) on health careup from
  just 5 in 1960. That proportion will likely
  reach 20 within the next ten years.

Does all of this money buy us better care?
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A Portrait of Health Care in America

• The infant mortality rate (IMR) is defined as the
  number of deaths of children under age 1 per
  1,000 live births in a given year.
• Life expectancy is measured by the average number
  of additional years a person of a given age could
  expect to live if current mortality trends were
  to continue for the rest of that person's life.
  It is most commonly cited as life expectancy at
  birth.

The United States has improved on both
measuresfrom 26 infant deaths per 1,000 live
births in 1960, to just 6.7 in 2008 and from a
life expectancy of 69.9 years in 1960 to 78.4 in
2008. But we still lag behind other western,
industrialized democracies.
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Life Expectancy and Infant Mortality
Countries that rank higher than the U.S. in life
expectancy

• According to the Organisation for Economic
  Co-operation and Development (OECD), average life
  expectancy in the United States in 2003 was 77.2
  years at birth. Only the Czech Republic, Hungary,
  Korea, Mexico, the Netherlands, Poland, Slovakia,
  and Turkey ranked lower among thirty
  industrialized countries.
• Also in 2003, infant mortality in the United
  States was 7 deaths per 1,000 live births. Only
  Hungary, Mexico, Slovakia, Turkey, had rates that
  were higher.

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Health Care Inequalities
Finally, because many other countries offer
government sponsored health care programs, the
U.S. system of care is more unequal. Some
Americans have access to the worlds
highest-quality care and the best medical
technology, but many poorer Americans are
relegated to an inferior health care system
because health insurance is not universal here.
More than forty-five million Americansnearly 16
of the populationlacked health insurance
coverage altogether in 2004. To understand the
current debate over health care reform demands
that we understand this paradoxthat of high cost
and unsatisfactory performance.
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The Problem

• High cost
• Unsatisfactory performance
• Inequalities in coverage

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Why Have Health Care Costs Skyrocketed?

• Increase in the number of Americans using health
  insurance
• Traditional fee-for-service systems encourage
  unnecessary tests
• Demographic changes have led to an aging
  population that requires more care
• Malpractice lawsuits pass costs along to patients
  and encourage "defensive medicine"
• Technological developments such as MRIs, CAT
  scans and heart transplants are expensive, as are
  prescription drugs

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Financing Health Care
Who pays the cost of health care? Under the
current system, most health care in the U.S. is
financed through employment-based health
insurance, voluntarily provided as a fringe
benefit of your job. Some government-sponsored
health insurance is available, but only to the
elderly, the disabled, and the poor through the
Medicare and Medicaid programs. Tying health
care to employment creates a whole series of
inequalities. It means that people with low
paying jobs that fail to provide health benefits
are left uninsured. It also means that that
losing or changing a job often means losing
insurance. If you are ill or you live with a
chronic medical condition, those costs may not be
covered by a new plan that excludes
pre-existing conditions. Workers can purchase
insurance individually to tide them over between
jobs, but the cost is surprisingly high.
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What is Managed Care?

• Managed care is a term that describes a wide
  variety of health-care systems that manage and
  analyze the cost of subscribers' health care, its
  quality and accessibility. Examples include
  health maintenance organizations (HMOs) and
  preferred provider organizations (PPOs). Both
  have been popular alternatives to traditional
  insurance programs since the late 1980s.
• A Health Maintenance Organization (HMO) is a
  group of doctors and administrators who agree to
  provide a full range of health services to
  members care for a fixed monthly fee. In order
  to save money, patients are limited in their
  choices. But in return they pay just a small fee
  each time they see a doctor, encouraging the kind
  of preventive care that can detect and stop
  diseases early on.
• A Preferred Provider Organization (PPO) is a
  network of independent physicians who are
  affiliated with a plan. If a patient wants care
  from an "in-network" provider, the PPO will pay
  most or all of the cost. If the patient wants
  care from an "out-of-network" providers, the PPO
  will require the patient to pay a much larger
  part of the bill. Unlike HMOs, PPOs do not
  require members to select a primary care
  physician. PPOs pay doctors a discounted rate in
  exchange for a steady flow of patients.

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Managed Care

• A Health Maintenance Organization (HMO) is a
  group of doctors and administrators who agree to
  provide a full range of health services to
  members care for a fixed monthly fee. In order
  to save money, patients are limited in their
  choices. But in return they pay just a small fee
  each time they see a doctor, encouraging the kind
  of preventive care that can detect and stop
  diseases early on.

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Managed Care

• A Preferred Provider Organization (PPO) is a
  network of independent physicians who are
  affiliated with a plan. If a patient wants care
  from an "in-network" provider, the PPO will pay
  most or all of the cost. If the patient wants
  care from an "out-of-network" providers, the PPO
  will require the patient to pay a much larger
  part of the bill. Unlike HMOs, PPOs do not
  require members to select a primary care
  physician. PPOs pay doctors a discounted rate in
  exchange for a steady flow of patients.

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The Health Care Reform Dilemma
Accomplishing all three goals simultaneously is
the true challenge
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Case 1

• Bill Clinton, 1993-1994

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Whatever Happened to Health Care Reform?
This health care system of ours is badly broken
and it is time to fix it. Our health care is too
uncertain and too expensive, too bureaucratic and
too wasteful. It has too much fraud and too much
greed. At long last, after decades of false
starts, we must make this our most urgent
prioritygiving every American health security,
health care that can never be taken away, health
care that is always there. That is what we must
do tonight.
Bill Clinton presenting his proposed health care
reform legislation to the Congress, October 27,
1993.
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Whatever Happened to Health Care Reform?
The idea in the 1,364 page plan was to provide
comprehensive health benefits to all Americans,
regardless of their health or employment
statusmeaning that it would continue without
lifetime limits on benefits and it would continue
without interruption, even if you lose or change
your job. Through a series of regional health
alliances the policy also guaranteed a choice
of at least three different plans, some of higher
cost and some of lower costfunded at least in
part by employer mandatescreating incentives for
cost-conscious decisions. Finally, the plan
called for a cap on premiums in order to contain
costs. At the time, it was said to reflect a
liberals passion to help the needy, a
conservative's faith in free markets, and a
politician's focus on the middle class. In
short, it seemed like a fair political compromise
that could be embraced by the American
people. What happened? Just ask Harry and
Louise
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Harry and Louise
Harry and Louise were a fictional middle aged
couple featured in a television ad campaign who
worried about the details of the Clinton health
care plan while talking around their kitchen
table. Here is an excerpt Gentle music plays
as the camera closes in on a couple sitting at
their kitchen table, surrounded by stacks of
bills, an adding machine and yellow pads. The
words Sometime in the Future flash across the
screen, presumably referring to a period after a
Clinton-health-care bill is passed. But this
was covered by our old plan, says Louise,
looking at a bill. Oh yeah! That was a good
one, wasnt it? says Harry. Dressed as an
everyman in a flannel shirt, he is trying to make
sense of the paperwork spread out on the table.
He punches numbers into the adding machine. He
jots down figures and then crumples up the paper
in frustration. A voice-over says Things are
changing, and not all for the better. The
government may force us to pick from a few health
care plans designed by government bureaucrats.
Having choices we dont like, says Louise,
her brow knotted in concern, is no choice at
all. They choose, says Harry. We lose,
says Louise.
The Harry and Louise ads were sponsored by the
Health Insurance Association of America, who paid
15 million to air them on TV. In six months,
they changed the course of the debate. Between
September1993, when the President released his
proposal, and February 1994, Harry and Louise
were almost single-handedly responsible for a
20-point drop in public opinion regarding the
Clinton plan, which led Sen. Jay Rockefeller
(D-WV), to call it the single most destructive
campaign I've seen in 30 years. In a six month
period, the percent of Americans supporting the
Presidents plan dropped by 18 percentage points.
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Harry and Louise
Gentle music plays as the camera closes in on a
couple sitting at their kitchen table, surrounded
by stacks of bills, an adding machine and yellow
pads. The words Sometime in the Future flash
across the screen, presumably referring to a
period after a Clinton-health-care bill is
passed. But this was covered by our old plan,
says Louise, looking at a bill. Oh yeah! That
was a good one, wasnt it? says Harry. Dressed
as an everyman in a flannel shirt, he is trying
to make sense of the paperwork spread out on the
table. He punches numbers into the adding
machine. He jots down figures and then crumples
up the paper in frustration. A voice-over says
Things are changing, and not all for the better.
The government may force us to pick from a few
health care plans designed by government
bureaucrats. Having choices we dont like,
says Louise, her brow knotted in concern, is no
choice at all. They choose, says Harry.
We lose, says Louise.
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Importing Prescription Drugs
According to the Food and Drug Administration
(FDA) Many Americans have been buying
prescription drugs from foreign countries as a
way to cut costs, but experts at the Food and
Drug Administration warn that this practice comes
with potential safety risks. The safety and
effectiveness of imported drugs have not been
reviewed by the FDA, and their identity and
potency can't be assured. Patients could get the
wrong drug. Or they could get too little or too
much of the right drug. All of these differences
can be dangerous.
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Case 2

• George W. Bush, 2003

Medicare Prescription Drug, Improvement, and
Modernization Act
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Medicare Prescription Drug, Improvement and
Modernization Act of 2003
With this law, we're giving older Americans
better choices and more control over their health
care, so they can receive the modern medical care
they deserve. President Bush, signing the bill
into law December 8, 2003
Theres no doubt in my mind that the drug
industry got everything it wanted and more. It
perhaps should be called the Leave-No-Lobbyist-Be
hind Bill. Senator John McCain (R-AZ)
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Medicare Part D
The Medicare Modernization Act of 2003 (MMA)
created a federally subsidized prescription drug
benefit available to all Medicare beneficiaries.
The drug benefit will be available through
private stand-alone prescription drug plans
(PDPs) or through integrated health plans like
HMOs and PPOs that provide all Medicare-covered
services, including prescription drugs.
Beneficiaries who choose to sign up for the
drug benefit will pay a monthly premium of 32.20
per month on average, in 2006. Beneficiaries will
be responsible for the first 250 in drug
expenses, and then will pay, on average, a 25
percent coinsurance until they reach the benefit
limit (2,250 in 2006). Once they reach the
benefit limit, they will face a gap in
coveragecalled the donut holein which they will
pay 100 percent of their drug costs up to 5,100
in total drug spending (equal to 3,600 in
out-of-pocket spending). Medicare will then pay
95 percent of drug costs above that amount.
Source http//www.kff.org/medicare/rxdrugscalcul
ator.cfm
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The Donut Hole
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Case 3

• Barack Obama, 2010

Health Care and Education Reconciliation Act
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The Perils of Health Care Reform

• Entrenched interests (e.g., business and interest
  groups)
• Partisan rancor
• Low levels of trust in government
• Scare tactics and fear mongering

Obamas strategy Fix whats broken and build
on what works. In other words, think smaller.
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Mr. President, this is a big _at_ deal.
Vice President Joe Biden
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A Summary Citizens

• INDIVIDUAL MANDATE. In 2014, everyone must
  purchase health insurance or face a 695 annual
  fine for each uninsured family member. There are
  some exceptions for low-income people.
• HEALTH EXCHANGES. The uninsured and
  self-employed will be able to purchase insurance
  through competitive health exchanges with
  subsidies available to low-income individuals and
  their families.
• COVERAGE FOR PRE-EXISTING CONDITIONS. Insurance
  companies cannot deny children health insurance
  because of pre-existing conditions. A ban on that
  discrimination for adults will take effect in
  2014.
• EXPANDING MEDICARE. Seniors will get a rebate to
  fill the so-called "donut hole" in Medicare drug
  coverage, which limits prescription medication
  coverage expenditures over 2,250. As of next
  year, 50 percent of the donut hole will be
  filled.
• COVERAGE FOR YOUNG ADULTS. The cut-off age for
  young adults to continue to be covered by their
  parents health insurance rises to the age of 26.

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The bill applies a 10 excise tax on indoor
tanning services.
No, You Cant. John Boehner (R-OH)
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A Summary Businesses

• TAX CREDITS. Businesses with fewer than 50
  employees will get tax credits covering up to 50
  of employee premiums.
• DISCLOSURE. Chain restaurants will be required
  to provide a "nutrient content disclosure
  statement" alongside their items. Expect to see
  calories listed both on in-store and
  drive-through menus of fast-food restaurants
  sometime soon.

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A Summary Insurance Companies

• NO CAPS ON COVERAGE. Lifetime caps on the amount
  of insurance an individual can have will be
  banned. Annual caps will be limited, and banned
  in 2014. Also, insurance companies can no longer
  cut someone when he or she gets sick.
• PREVENTATIVE CARE. New plans must cover checkups
  and other preventative care without co-pays. All
  plans will be affected by 2018.
• APPEALING CLAIMS. Any new plan must now
  implement an appeals process for coverage
  determinations and claims.
• ELIMINATING FRAUD AND WASTE. New screening
  procedures will be implemented to help eliminate
  health insurance fraud and waste.

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If you like your health care plan, you will be
able to keep your health care plan, period."
President Barack Obama Assuring that people can
keep their current plan makes reform more
palatable politically, but it also makes it
worse as policy. Jonathan Cohn
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The Health Care Reform Dilemma
Extends coverage for low-income families, young
adults, etc.
How well did Obama and the Democrats do?
Require citizens to obtain insurance. Targets
waste, fraud, and abuse.
?