Health Care Reform

1
Facing Up

• Health Care Reform
• in America

2
Madison Federalist 10

• According to Madison Federalist 10, what is the
  number one cause of FACTION???
• WHY IS OUR GOVERNMENT SO DEEPLY DIVIDED?
• IS OUR SYSTEM DESTINED FOR FAILURE?
• HEALTH CARE REFORM?? (3800)

3
What is Insurance?

• is the equitable transfer of the risk of a loss,
  from one entity to another in exchange for
  payment.
• It is a form of risk management primarily used
  to hedge against the risk of a contingent,
  uncertain loss
• WHAT??? In English? What does this mean?

4
President Obama and Healthcare Reform

• Health care reform is no longer just a moral
  imperative, its a fiscal imperative. If we want
  to create jobs and rebuild our economy and get
  our federal budget under control, then we have to
  address the crushing
  cost of health
  care this year, in this
  administration.
• President Obama,
  White House
• Forum on Health Care Reform

5
Healthcare Economics Terms to Know

• Gross Domestic Product (GDP) - the total market
  value of all final goods and services produced in
  a country in a given year
• U.S. healthcare spending 15.2 of the GDP
• Opportunity Cost - the cost of an alternative
  that must be foregone in order to pursue another
  action
• Ex. Affordable healthcare for all Americans will
  be expensive
• Scarcity - the tension between our limited
  resources and our unlimited wants and needs

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Healthcare Economics More Terms to Know

• Fiscal Policy - the use of government spending,
  taxes and borrowing to influence the economy
• Mandatory Spending - budgetary spending on
  certain programs like Medicare that is required
  by law
• Constitutes 2/3 of the federal budget
• Discretionary Spending - annual appropriations
  levels made by decisions of Congress i.e.
  spending is optional
• Examples defense spending, NASA

7
Entitlement Programs

• Social Programs like Medicare, Medicaid and
  Social Security are known as entitlement programs
• Entitlements guarantee that Americans receive
  benefits by federal law.
• Entitlement programs are part of the federal
  budget labeled mandatory spending that must be
  funded by law.

8
Federal Spending for Mandatory and Discretionary
Programs
9
Medicare, Medicaid and Social Security Spending,
of GDP, 2000-2080
10
Growth in Healthcare Spending Health Care
Spending as Percentage of GDP
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The Healthcare Problem

• The rising costs of health care and health
  insurance pose a serious threat to the future
  fiscal condition of the U.S.
• Medicare and the federal share of Medicaid are
  projected to be
• 4 of GDP in 2009
• 6 of GDP in 2019
• 12 of GDP by 2050

12
The Healthcare Policy Dilemma

• Policymakers will face difficult
• trade offs between two objectives
• Expanding insurance coverage WHILE
• Controlling both
  total and federal costs
  for healthcare

13
Who Pays for Health Care?

• Most Americans (85) have some form of health
  insurance
• Health insurance - any program that helps pay for
  medical expenses
• Americans fall into three general health care
  payment categories
• private insurance
• government programs
• uninsured

14
Private insurance

• Most Americans (59.3) receive their health
  insurance coverage through an employer under
  group coverage
• Percentage of employer based health insurance is
  declining because of costs
• Since 2001, family coverage premiums have
  increased by 28, while wages
  have only increased by 16

15
Health Care Costs
16
Government Programs

• 27.8 of Americans (83 million) are covered by
  government health care programs
• Federal law mandates public access to emergency
  services regardless of ability to pay
• Public Programs
• Medicaid
• Medicare
• Other programs State
  Childrens Health Insurance Program (SCHIP),
  military system, veterans affairs

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Medicare

• Social health insurance administered by the
  government
• Provides health insurance for U.S. citizens over
  the age of 65
• There is no means test (determination whether an
  individual can pay a portion of their debt)
• Medicare is partially funded by payroll taxes
  a.k.a. F.I.C.A. tax

18
Medicaid

• Health insurance program for low income adults,
  children, and people with certain disabilities
• Means test is required
• Jointly funded by the states and the federal
  government, but administered by the states
• About 60 of the poor are not covered by Medicaid

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The Uninsured

• There are millions of Americans who have
• insufficient or no health care insurance
• 45.7 million (15.3 uninsured in America)
• In 2007, nearly 70 of the uninsured
  lived in families headed by a
  full-time worker
• 8.1 million uninsured children

Source http//www.hr-onesource.com/ppt/01-patton
_healthcare.pdf
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Why Uninsured?

• Rising healthcare costs force many employers to
  drop employee health insurance
• Many working poor make too much to qualify for
  Medicaid, but cant afford health insurance
• Unemployment
• Some healthy people choose to go without health
  insurance
• Some rejected by insurance companies because
  they have pre-existing conditions
• Results
• Many dont go to the doctor
• Increase in emergency room care

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Is it Constitutional?

• According to the Supreme Courtthe Affordable
  Care Act is Constitutional!
• The individual Mandate is a tax!

22
Mr. Franzyshenwhat????

• Short video to sum up all the changes..

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Healthcare in the U.S. Today

• What do
• the statistics tell us?

24

• Graphical
• Analysis

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Sources of Financing of Personal Health Care1960
and 2003
1960 2003
Percent Funded By Percent Funded By
Private Insurance 21 36
Out of Pocket 55 16
Medicare -- 19
Medicaid -- 17
Other Private 2 4
Other Federal 9 4
Other State and Local 13 3
Consists of both federal and state
funding Source National Health Expenditures,
loc. Cit http//aspe.hhs.gov/health/MedicalExpendi
tures/index.shtml
26
Average Percentage Increase in Health
Insurance Premiums Compared to Other Indicators
1988-2007
27
World Health Report (2000)

• The World Health Organization ranked 191
  countries regarding healthcare issues
• The United States ranks 1 in healthcare costs
  and 1 in responsiveness
• The United States ranks 1 in responsiveness
• U.S. 37 in overall performance
• U.S. 72 in overall level of health
• Source http//www.who.int/whr/2000/en/annex01_en.
  pdf

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National Healthcare Quality Report (2008)

• The Commonwealth Fund ranked 19 developed
  countries regarding healthcare issues
• The United States ranks last in terms of quality
  of health care
• The United States 1 in medical innovation
  (producing new drugs medical devices,
  biotechnology)
• U.S. had higher survival rates than most
  countries for many diseases including several
  kinds of cancer
• U.S. had higher infant mortality rates
  than most other developed countries
• Source http//www.commonwealthfund.org/

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More Healthcare Factsfrom the Office of
Management Budget

• Less than 4 cents of every health care
  dollar is spent on prevention and
  public health i.e. more money is spent on acute
  rather than preventative care
• The U.S. spends over 2.2 trillion on health care
  each yearalmost 8000 per person.
• Health insurance premiums have doubled in the
  last 8 years, rising 3.7 times faster than wages
• One fourth of all medical spending goes to
  administrative and overhead costs

Source http//www.whitehouse.gov/omb/fy2010_key_h
ealthcare/
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So....what do these stats mean?

1. Based on the data presented, what are the major
   strengths of healthcare in the United States
   today?
2. What are major weaknesses of the U.S. healthcare
   system?
3. What conclusions can you draw about U.S.
   healthcare relative to other countries?

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