Introduction to US Healthcare - Part 3

By | October 30, 2013

Back to Part 2

Health Insurance

Affordable Care Act

Does having health insurance help you stay healthier?

  • Many health reform plans focus on increasing coverage.
  • It is difficult to discern if it is the actual health insurance that improves the health of a person.
  • Oregon health insurance study: Randomly hand out (via a lottery system) Medicare/Medicaid. Result: yes, health insurance increases health.

ACA

  • We have 58 million uninsured in this country, let's give them access to health insurance for improvement in health and for financial security
  • Expands private insurance plans and medicaid
  • As a result of ACA, by 2020, we will have 29 million uninsured
  • All health insurance plans must now cover high quality preventive care and requires a certain quality of health insurance that is sold (this creates the link of having health insurance improves health because all plans are somewhat equated).

Uninsured

  • If a person shows up to the hospital without insurance, the hospital is required to treat them
  • If that person is eligible for Medicaid, they will be enrolled

Problems going forward

  • Increase enrollment into insurance plans people are eligible
  • Matching the right plan with the right person

Employer Sponsored Health Plans

The majority of people get their health insurance from their employers.

Overview

  • Employer sponsored health plans started heavily after world war 2
  • Health insurance is a benefit that workers get that is excluded from taxing.
  • Having employer health insurance as opposed to buying your own
    • Advantages
      • not taxable
      • employers only care about the entire compensation bill (not how it's divided between benefits/salary)
      • group insurance more affordable then individual insurance
      • providing insurance that is not subject to adverse selection (e.g., setting higher premiums for people who need more healthcare)
    • Disadvantages
      • conflict between needing to work and needing the insurance (e.g., being sick but needing to work)

Trend over time

  • Lower rates of employer sponsored health plans
  • The cost of healthcare over time is rising, so insurance premiums are as well
  • Essentially all plans cover the same benefits. The most variation in plans comes from the provider network (e.g., which providers does the plan include) and in cost-sharing (e.g., cost of deductibles)

Before ACA

  • Over time, there have been many polices that have impacted employer sponsored health plans
  • E.g., in the 1970s, Hawaii required all employers to provide health insurance

After ACA

  • Employees will have new demands for health insurance because employees will have better outside options which might cause small employers to drop coverage
  • At the same time, the new mandates (large firms having to offer insurance) will increase demands for employer sponsored plans

United States

  • Employer sponsored plans is popular in the US whereas in other countries, government plans dominate whereby health insurance is paid for via taxation

Government Sponsored Health Plans

History

  • Government has been involved in healthcare since around 1910 (working compensation laws if worker was hurt on the job)
  • Hospitals in big cities took care of the poor in their city paid by tax dollars in the 1920s
  • 1935: Social Security Act said that people on welfare would get a card that allowed them to use healthcare services that the county or city would pay for
  • 1960: Universal health care coverage for the elderly was under discussion. Welfare eligibility became easier (and included the elderly).
  • 1965: Passage of Medicaid

Federal involvement

  • 1960s: federal government stepped in and funded medical research to students, developed NIH, and then Medicaid was developed (via Johnson)
  • Medicaid was part 3 of Medicare
  • There was lots of concern that Medicare would intrude on the doctor-patient relationship
  • Medicare took most of its model from BlueCross and BlueShield
  • Republicans want to privatize Medicare
  • The federal government set up the rules, and each state determines the specifics

HMO

  • Attractive to healthy people
  • Medicare Advantage is the HMO version of Medicare and covers much more than Medicare

Public Health

  • Medicare did not originally include prevention
  • It also later included provisions to help disabled children prior to their illness becoming worse
  • Public Health has been only about 2 or 3 percent of healthcare

Quality Measures in the US Healthcare

Quality

  • Can be defined many different ways
  • Most normally thought of: "Are we delivering the right care to the right patients at the right time?"
  • Normally thought of as a clinical measurement (e.g., if there is a vaccine - did the patient get it at the right time?)
  • Every year, we expect higher performance

Future

  • Make quality controls more clinical and individualized to improve the health of the population
  • Americans only received about 50% of recommended care but also too much care is bad for patients

Too much care

  • E.g., if a patient comes in and has a back problem and the doctor orders an MRI and finds something (which may in fact be normal) may lead to procedures or tests that can cause infections or other problems, etc.

Veterans Administration

  • They take incredible strides in improving quality of care
  • There is a direct correlation between measuring care and the quality of care and there is actually the highest quality of care in the VA

ACA - Quality

  • Access and quality are linked, and by the ACA improving access to care, quality is improved

Health Disparities

Basics

  • Health Disparity - an inequity resulting in unequal health outcomes
  • Coined by the surgeon general during the Clinton administration
  • Health disparities can arise from two sources: (1) stereotyping, discrimination, etc. or overt bias and (2) systemic factors such as access to healthcare
  • In 2006, Massachusets was the first state to require patients to idenfity with their specific demographics in order to tailor treatment to them

How to measure

  • Recently, as we have studied quality of care, we have identified inequalities of care
  • We can measure disparities specifically (e.g., screening for cancer) and how it differs based on ethnicity, income, location, etc.
  • We can also look at survival rates and outcomes of different ethnicities

ACA enacted in 2010

  • Improving coordination of care improves disparity problems

Ways to improve

  • Educate providers
  • Have diverse work forces within the healthcare system
  • Patients should be more comfortable discussing the cost of care
  • Patients should share with their providers that they can/can't follow certain treatment regimens

Accountable care organizations

  • Brings hospitals and medical groups to work in a more coordinated way to deliver the care the patients they receive
  • Moves away from the fragmented fee-for-service model and pays for a bundled payment (e.g., pay for a hip replacement)

Value-Based Insurance Design

Basics

  • Given how much we are spending, we are underachieving
  • We should focus more on how we spend, not how much we spend
  • We are now moving from a volume based system to a value based system
  • The focus should be on giving the right healthcare to the right person at the right time
  • The concept: Drugs that save lives should be lower cost than those that are more minor

How to implement it

  • There are so many stakeholders in US Healthcare (it is the world's largest private industry) and it is tough to sync everyone
  • Focus on value creation; make sure providers and patients are aligned to do the same thing

ACA

  • Many components that promote the concept of getting better quality for more money
  • Value Based Insurance Design has made its way into the ACA. For example, no cost sharing for things like flue shots, screening for depression, etc.
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