The Growing Health Care Crisis in the United States

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The Growing Health Care Crisis in the
United States

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Health Care Crisis
Why do we say that there is a health
care crisis in America today?
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We Are the Richest Country in the World, Yet

• The United States spends more money than any
  other country on health care.
• We spend more per person, than any other country.

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We Are the Richest Country in the World, Yet

• III. Yet we are not the healthiest people in the
  world.

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We Are the Richest Country in the World, Yet

• IV. Many people have no health care coverage.
• V. The number of people without health care
  coverage is rising.

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We Are the Richest Country in the World, Yet

• In addition, many people are underinsured.
• The number of people who are underinsured is
  increasing.

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We Are the Richest Country in the World, Yet

• VIII. The number of people who have
  difficulties paying their bills has increased
  rapidly.

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• I. NATIONAL COST COMPARISON
• In 1997, the United States spent 13.7 of our GDP
  on Health Care.
• Germany spent 10.5
• Canada spent 8.6
• Australia spent 7.8

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• I. NATIONAL COST COMPARISON
• In 2005, the United States spent 15.3 of our GDP
  on Health Care.
• Germany spent 10.7
• Canada spent 9.8
• Source OECD Health at a Glance, 2007

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• II. FAMILY COST COMPARISON HEALTH VOCABULARY
• PREMIUMS
• DEDUCTIBLES
• COPAYMENTS

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• II. FAMILY COST COMPARISON HEALTH VOCABULARY
• PREMIUMS what it costs you to buy insurance
• DEDUCTIBLES what you have to pay before the
  insurance helps you
• COPAYMENTS your share of the medical bill

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• IIA Rising Individual Costs
• The average annual health insurance premium costs
  for a family in 2000 was 6,438 (both individual
  and employer contributions counted).
• The average annual health insurance premium costs
  for a family in 2003 was 9,068.

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• IIB Rising Individual Costs
• In the year 2000, the average co-payment for
  non-preferred drugs was 17.
• In the year 2003, average co-payment for the same
  was 29.

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• III NATIONAL HEALTH COMPARISONS
• INFANT MORTALITY and LONGEVITY
• These are two universal and outstanding measures
  of the health of a population.

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• IIIA NATIONAL HEALTH COMPARISON
• Infant Mortality
• Infant mortality - measures how many children die
  before their first birthday.
• Thirty-three nations have fewer children die this
  young, than the United States.

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• IIIB NATIONAL HEALTH COMPARISON
• Longevity
• Longevity - measures how long people live on
  average.
• Thirty-seven nations have better longevity rates
  than the United States.

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• IIIC Source
• United Nations World Population Prospect
  2005-2010
• Accessed at Wikipedia by
• List of countries by life expectancy
• List of countries by infant mortality rates,
  (2011 revision)

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• IIIC NATIONAL HEALTH COMPARISON
• OVERALL PERFORMANCE
• A World Health Organization report places the US
  performance as 37, with 36 nations doing better.

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• IV. LACK OF INSURANCE
• In 2010, before the Obama Reforms, 47 million
  Americans had no health insurance.
• Most of them are working full time, or are from
  families whose breadwinner is working full time.

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• LACK OF INSURANCE
• Not the same people every year.
• As with poverty, many people churn from health
  insurance coverage to no insurance back to
  coverage

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• V. RISING LACK OF INSURANCE
• The number of Americans without coverage was
  increasing at more than one million a year.
• Many Americans have experienced a period without
  health insurance coverage.

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• VI. UNDERINSURED
• The number underinsured went from 16 to 25
  million between 2004 and 2007.
• To be underinsured means to pay more than 10 of
  your income directly to medical bills.

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• VIII. RISING BURDENS
• In 2005, 58 million people under 65 had problems
  paying their bills.
• In 2007, 72 million had similar problems.

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• Source
• Health Care in Canada A Citizens Guide to
  Policy and Politics
• Katherine Fierlbeck
• University of Toronto Press, (Toronto, 2011)

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WHY IS THE UNITED STATES DOING SO POORLY?
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CAUSES OF THE HEALTH CARE CRISES
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Causes of the Health Care Crisis

1. Age-health care equation
2. Too much new technology
3. Change in service providers
4. Lack of preventative care

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Causes of the Health Care Crisis

• 5) Other
• 6) Pharmaceutical Industry
• 7) Health Insurance Industry

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AGE-HEALTH CARE EQUATION
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Age-Health Care Equation

• As countries become richer, their citizens live
  longer.
• But older people require more medical care.
• As countries become richer, they spend more to
  take care of increasing numbers of more expensive
  elderly.

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• 5 of the patients generate over 50 of all
  health care costs.
• These 5 include the following groups
• The elderly, especially those over 75 years
• Severe accident victims
• Premature babies, special needs infants
• Elderly use 4 times the amount of health care
  than the rest of the population.

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• The Age-Health Care Equation is the single most
  important cause of rising medical expenses in all
  wealthy countries.

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• But the Age-Health Care Equation doesnt explain
  why the US is so much more expensive than other
  wealthy countries.

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NEW TECHNOLOGY
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New Technology

• New Technology is expensive.
• New Technology is used too much.

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New Technology

• New Technology is used too much
• Hospitals, doctors offices compete with each
  other by purchasing the most recent technology.
• Then they have to pay for it

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New Technology

• New Technology is used too much
• Actually, they make everyone pay for it by
  charging patients higher prices, and
• Creating more patients for the equipment

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CHANGE IN SERVICE PROVIDERS
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Change in Service Providers

• Switch from General Practitioners to specialists.
• Rapid increase in the for-profit sector.
• Merger mania among service providers.

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CHANGE IN SERVICE PROVIDERS

• Specialists

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Specialists

• Specialists are more expensive to train and need
  a support staff.
• Specialists order more tests and procedures, and
  prefer expensive surgeries, thus raising costs.

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CHANGE IN SERVICE PROVIDERS

• For-Profit Health Care

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Increase in corporate medicine

• No other country receives as much of its health
  care from for-profit corporations as the United
  States
• 56 of health care money is spent on buying
  health from corporations

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Increase in corporate medicine

• In Canada, only 28 of health care money is spent
  on corporate health care
• In France, only 23

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Consequences of increase in corporate medicine.

• Stockholders and owners must receive their
  profits and dividends.
• CEOs must receive large salaries.
• An additional layer of administrators, is added.

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Consequences of increase in corporate medicine

• These corporations spend lots more on advertising
  and marketing.
• These corporations compete by making hospitals
  ever more luxurious, high tech, and expensive.
  In other words, they buy too much technology.

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Consequences of increase in corporate medicine

• These corporations are more profitable.
• When everything is taken into account, they are
  not necessarily more efficient.
• And they dont automatically provide better care.

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CHANGE IN SERVICE PROVIDERS

• Merger Mania

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Merger Mania

• There has been a wave of mergers among all
  sectors of the medical industry.
• Corporate buyouts take place with borrowed money,
  which has to be repaid, which adds to the costs.

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Change in Service Providers

• Large corporations are not necessarily more
  efficient than state or non profit institutions
  in health care.
• And if they are, any savings goes to the owners,
  not to the rest of society.

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LACK OF PREVENTATIVE CARE
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Lack of Preventative Care

• Part of the problem is individual choice people
  dont always choose a healthy lifestyle.
• And by not choosing to be healthy, it adds to
  their medical costs, and everyone elses.

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Lack of Preventative Care

• Yet our society makes it easy to be unhealthy,
  and hard to be healthy.

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Lack of Preventative Care

• Lack of basic pregnancy /fetal/newborn care.
• Lack of basic, comprehensive care for all
  children.

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Lack of Preventative Care

• Arent working hard enough to prevent
  people from starting to
  smoke
• Lack of sex education.
• Lack of basic nutrition education.

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Lack of Preventative Care

• An ounce of prevention is worth a pound of cure
  more money spent on all types of preventative
  care saves a lot more in the medium and long run.

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OTHER CAUSES
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Other Causes

• Doctors salaries.
• Medical malpractice insurance.

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Other CausesDoctors Salaries

• Doctors in the United States are the highest paid
  in the world.
• But doctor's salaries are only a minor part of
  the problem.

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OTHER CAUSES

• MEDICAL MALPRACTICE INSURANCE

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Other CausesMalpractice Insurance

• Insurance for a doctors or hospital in case they
  are sued. It pays for lawsuits and lawyers.

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Other CausesMalpractice Insurance

• Doubtful if lawsuits have improved medical care
• Money goes to insurance industry, which adds to
  the cost
• Money goes to lawyers, which adds to the
  costs.

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PHARMACEUTICAL INDUSTRY
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Pharmaceutical Industry

• Think of a team with a lot of outstanding
  players, but incompetent coaches, managers and
  owners.
• Pharmaceutical industry has done a lot of good,
  but is also very mismanaged.

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Pharmaceutical Industry

• Money wasted on advertising
• Copy-cat drugs
• Excessively long patents
• Misallocated research
• High profit margins
• Warped the practice of medicine

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Advertising

• The pharmaceutical industry spends almost twice
  as much on advertising and marketing as they do
  on research, on average.
• This represents a pure waste of money for
  society.

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Copy Cat Drugs

• Pharmaceutical companies spend much of their
  research money on copy-cat drugs, drugs that are
  virtually identical to existing drugs.
• We end up with dozens of pain relievers, many of
  them virtually identical.

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Copy Cat Drugs

• The magic number here is 15 a company can copy
  an existing medicine, tweak it until it is only
  15 different, and then sell it as a new drug.
• How do you do that? Add some harmless and
  useless molecules to the molecules that work.

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Long Patents

• Patents are the right to be the sole producer of
  a product. Given as an incentive to inventors.
• The pharmaceutical industry has a 17 year patent
  right, which allows the companies to receive
  monopoly profits.

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Long Patents

• No other developed country has such a long patent
  system.
• This has dramatically driven drug prices upwards.

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Misallocated Research

• In addition to copy-cat drugs, much of the
  research money is spent on drugs of dubious real
  social need
• - Viagra, hair restoration medicines
• Necessary drugs, dont receive a lot of money.
• - avian flu or safe contraceptives

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High Profit Margins

• For the last 60 years, the pharmaceutical
  industry has averaged twice the net profit margin
  that other manufacturing industries have.
• Good for the owners, but adds costs to the
  country.

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Warped Medicine

• The constant lobbying and marketing by the
  pharmaceutical industry has affected how we do
  medicine.
• Psychological problems? Dont find out why, give
  them a pill.
• Health problems? Dont find out why, give them a
  pill.

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Pharmaceutical Industry

• In sum, while the industry has produced many
  amazing and useful drugs, the drive to maximize
  profits has seriously warped it.
• The pharmaceutical industry contributes to the
  problem.

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HEALTH INSURANCE INDUSTRY
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Health Insurance Industry

• Money wasted by doctors/hospitals.
• Money wasted by insurance industries.
• Lobby to block reforms.

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Waste by Doctors

• Doctors and hospitals employ hundreds of
  thousands of people to be paid by the insurance
  companies and/or the patients
• This represents a pure waste of money for
  society.

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Waste by Insurance Companies

• Insurance companies employ hundreds of thousands
  of people to process doctors and patients
  claims.
• This represents a pure waste of money for
  society.

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Fighting Reforms

• The health insurance industry has lobbied to
  block any sort of reforms for quite a while
• This represents a pure waste of money for
  society.

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Health Insurance Companies

• The private, for profit health insurance industry
  is the single most important cause of the
  worsening gap between the United States and other
  wealthy countries.