America s Crisis The Uninsured Donna E Sweet MD

America’s Crisis: The Uninsured Donna E. Sweet, MD, MACP Professor of Medicine The University of Kansas School of Medicine - Wichita

U. S. Uninsured 2003 to 2004 • The number of uninsured rose from 45 million to 45. 8 million-15. 6% of the population • The fourth straight year of increases • The number of uninsured has increased by 6 million since 2000 • Middle-Class losing coverage at fastest rate US Census Bureau, US Dept. of Commerce, AUGUST 29, 2006

U. S. Uninsured 2004 to 2005 • The percentage of people without health insurance coverage rose from 15. 6 % to 15. 9 % 46. 6 million people 1. US Census Bureau, US Dept. of Commerce, AUGUST 29, 2006

Over 46 Million Americans are now without Health Insurance Coverage

Making preventive medicine and existing treatment therapies available to uninsured will… • Increase overall access to health care • Substantially contribute to a reduction in the total burden of illness facing the U. S.

Uninsured Americans Experience Reduced Access to Health Care • Are less likely to have a regular source of care. • Are less likely to have had a recent physician visit. • Are more likely to delay seeking care. • Are more likely to report they have not received needed care. • Are less likely to use preventive services.

Uninsured Americans Experience Poorer Medical Outcomes • Experience a generally higher mortality • specifically higher in-hospital mortality. • May be up to three times more likely than privately insured individuals to experience adverse health outcomes. • Have been found to be up to four times as likely as insured patients to require both avoidable hospitalizations and emergency hospital care.

Infant / Maternal Mortality in the U. S. • US ranks 25 / 29 of the developed countries in infant mortality: • 6. 8 deaths / 1000 live births • (Iceland – 2. 7 / 1000 births) • US ranks 22 / 29 of the developed countries in maternal mortality: • 9. 9 deaths / 1000 births • (Switzerland 1. 4 deaths/100, 000 births) Source: ACP News 2007

On an Average Day in the US… 11, 266 329 Babies are born with a birth defect 1, 393 224 Babies are born preterm (less than 37 weeks gestation) Babies are born very preterm (less than 32 weeks gestation) 1, 156 166 Babies are born to teen mothers (<20 years) Babies are born very low birth weight (less than 1500 grams or 3 ½ pounds) 909 Babies are born low birth weight (less than 2500 grams or 5 ½ pounds) 77 Babies die before reaching their first birthday Source: Perinatal Data Companion 2007 Edition – March of Dimes

Medical Treatment for the Uninsured is… • Often more expensive than preventative, acute, and chronic care of the insured • Often is more likely received in the Emergency Department

The World Health Organization's ranking of the world's health systems 2000 Report 1 France 2 Italy 3 San Marino 4 Andorra 5 Malta 6 Singapore 7 Spain 8 Oman 9 Austria 10 Japan 31 Finland 32 Australia 33 Chile 34 Denmark 35 Dominica 36 Costa Rica 37 United States 38 Slovenia 39 Cuba 40 Brunei

Coverage Clearly Matters • Uninsured adults have a 25% greater risk of premature death • The Institute of Medicine estimates that the number of excess deaths each year among uninsured adults, age 25 -64, is 18, 000 http: //covertheuninsured. org/factsheets/display. php? Fact. Sheet. ID=116

For Comparison… • Estimated annual deaths in the under age 65 population in the U. S. due to the following causes: • • Diabetes Stroke HIV / AIDS Homicide 17, 500 19, 000 14, 100 19, 700 http: //covertheuninsured. org/factsheets/display. php? Fact. Sheet. ID=116

Potential Years of Life Lost Per 100 People for All Causes premature death preventable at any age OECD, 2005

Who Are The Uninsured? Children 25% Unemployed 5% *Out of labor force 20% Employed 50% *Students>18, Homemakers, Disabled, Early retirees Source: Himmelstein & Woolhandler - Tabulation from 1999 CPS

Percentage of Children Without Health Insurance, By Poverty Level, 1997 -2005 Children below 200% of poverty 23% 21% 14% Children above 200% of poverty 6% 5% Notes: Survey method change in 2005 affects comparison with earlier years slightly. Children less than 18 years old. Source: L. Ku, “Medicaid: Improving Health, Saving Lives, ” Center on Budget and Policy Priorities analysis of National Health Interview Survey data, August 2005. 5%

Access Problems for Middle Class Families (Income $25, 000 -$49, 999) NPR/Kaiser Survey, June 2002

Current System Who Profits?

Drug Companies Profits 1996 -2004 % Return on Revenue Fortune 500 rankings for 1995 -2004

Drug Companies’ Cost Structure Health Affairs 2001: 20(5): 136

MEDICAL MALPRACTICE INSURANCE 2000 -2004 Gross Losses Paid Gross Premiums Written Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry, July 2005

Growth of Registered Nurses and Administrators, 1970 -2002 Growth since 1970 Administrators RNs 2500% 2000% 1500% 1000% 500% 0% 1970 1975 1980 1985 1990 Bureau of Labor Statistics & Himmelstein/Woolhandler/Lewontin Analysis of CPS data 1995 2002

Growth of Physicians and Administrators, 1970 -2002 Growth since 1970 Administrators Physicians 2500% 2000% 1500% 1000% 500% 0% 1970 1975 1980 1985 1990 1995 2002 Source: Bureau of Labor Statistics & NCHS Bureau of Labor Statistics & Himmelstein/Woolhandler/Lewontin Analysis of CPS data

port 4/12/99 from SEC fillings Best. Week Life/Health Special Re Administrative Expenses & Profit % of premium 1998

Administrative Expenses & Profit % of premium 2000 International Journal of Health Services 2005: 35(1): 64 -90

company 10 -K, year-end filings with the Securities and Exchange Commission Administrative Expenses & Profit % of premium 2005

Current System Cost

Nations Health Spending person OECD Health Data 2005, OECD, Paris, 2005. 2003

U. S. Health Spending $1741 $1608 $1359 $717 $255 California Health. Care Foundation $1878

U. S. Health Spending % of Gross Domestic Product California Health. Care Foundation

U. S. Health Spending person California Health. Care Foundation

Employer Health Benefits Cumulative Changes 2000 -2006 Employer Health Benefits 2006 Survey, KFF

% of Workers Covered Offering & Not Offering Employers Employer Health Benefits 2006 Survey, KFF

Average Annual Premium Contribution 2006 Employer Health Benefits 2006 Survey, KFF $11, 480 Family $4, 242 Single

Employers’ Health Benefits Cost U. S. Vs. Canada KPMG: WWW. GOV. MB. CA % of Salaries and Wages

Hospital Billing & Administration U. S. Vs. Canada Woolhandler/Himmelstein/Campbell NEJM 2003: 349: 768 UPDATED

A Major Cause of Bankruptcy Over 50% of personal bankruptcies caused by illness and medical costs 75% of those bankrupted by medical bills had insurance at the time they got sick Nortons Bankruptcy Adviser, May 2000 Health Affairs/online/February, 2005

Health Coverage Single Risk Pool

Current System • 1/3 of Americans are uninsured or underinsured • Denies care to millions with illnesses • Premature death rate higher than other wealthy countries • Cost double Canada’s, Germany’s, or Sweden’s and rising faster • Executives and investors making billions • Destruction of the doctor/patient relationship

Current System • Hospitals with empty beds • Enough well trained professionals but rural areas inadequately served • Excellent research • Current spending could cover everyone

Advantages of Single Risk Pool Health Care • Comprehensive Health Coverage for everyone all needed care, no copays or deductible • Greater choice of provider • Health decisions made by patient and provider • Public accountability for quality and cost, but minimal bureaucracy • Eliminates the high overhead cost of multiple private, for-profit insurances. Reduces administrative costs from up to 33% to 1 -5%. • Fee for service with simplified negotiated fee schedule- simplified reimbursement • Improved Health Planning

Funding For a Single Risk Pool Revenue Reimbursements • Federal funds designated for Medicare & Medicaid • State & local government funds • Employer / Employee taxes • Hospitals, operating & capital • Healthcare Providers • Home care agencies • Long term care

2005 Poll Preference Financed by Taxpayers Single Risk Pool 5% Don’t Know 65% Single Pool 30% Current Pew Report, May 2005

Employee Advantages • Choice of employer not based on health care coverage • Employer concerned with job performance not your health condition • Health coverage not based on location

Employer Advantages • Employer would not be responsible for employee health coverage • No bargaining with labor unions over health benefits • No competing on health benefit costs

U. S. Business Competitiveness • In 1994, Jack Smith, former CEO of General Motors, said he "personally favored the Canadian system" of health coverage. • Auto manufacturers and other companies are voting for single-risk pool health care by moving plants to Canada (e. g. , Toyota, Ford, General Motors & Microsoft Support). • In 2005, it was reported that the cost of employee health care to manufacturers adds $1, 500 to the cost of a U. S. -made car. "Critical Condition, " James Steele

National Coalition on Health Care Report Impacts of Health Care Reform Projections Of Costs And Savings (2006 to 2015) 4 Alternative Solutions • Employer & individual mandate: total savings= $320. 5 B • Expansion of existing public programs for the uninsured: total savings= $320. 5 B • Creation of new programs for the uninsured: total savings= $369. 6 B • Establishment of a universal publicly financed program: total savings= $1, 136 B Kenneth E. Thorpe , Ph. D. , Department of Health Policy and Management Rollins School of Public Health, Emory University A report prepared for the National Coalition on Health Care, 2005

Massachusetts' New Healthcare Law • Requires the uninsured to buy their own private coverage • Assumes that private insurers will offer affordable, comprehensive policies • Costlier than promised • Out of reach for most of the uninsured • Increases the cost of state subsidies to the poor • Cost will force more employers to drop coverage • The program is simply not sustainable David U. Himmelstein, M. D. Steffie Woolhandler, M. D. Cambridge, Mass. , April 6, 2006

Canadian Healthcare System • Canadian doctors are in private practice. Doctors are guaranteed payment by the provincial government according to the standard fees. • Services not covered or only partially covered such as prescription drugs, dentistry and optometry are paid by the private sector. Many Canadians have private health insurance, often through their employers, that cover these expenses. • Private clinics offer some of the same services as the public system such as hip replacements and MRI scans. Selling private health insurance that could cover these procedures is legal in several provinces.

Health Savings Account vs Comprehensive

Health Savings Account (HSA) • Plans with very high deductibles-$2000 to $15, 000/family per year • High coinsurance rate-25% to 35% after deductible • Tax free HSA to pay deductible and coinsurance • Only covered services count toward deductible

Early Experience with Health Savings Account HSA Health Plan with deductible Individual Family $1000+ $2000+ Comprehensive Health Plan with no deductible or less than Individual $1000 Family $2000 December 2005 EBRI Issue Brief No. 288

December 2005 EBRI Issue Brief No. 288 Satisfaction With Health Plan

HSA Health Plans Worse Access % Foregoing Needed Care Commonwealth Fund Bienneal Ins Survey, 2003

Problems with HSA Health Plans • Must have a health plan before qualifying for a health saving account • Decreases necessary care • Discourages preventive care/early intervention • Very high administrative cost • Many unable to pay ruinous medical bills • Makes the current health care crisis worse • Enriches a few people • 2005 -Only 1% of health plans have HSA

The American College of Physicians Plan • that ACP believes the final authorizing legislation should include: • Expanded eligibility and funding to cover all • currently eligible children • and to provide coverage to more children from lower income families. • The College said that the current funding levels in the bill are insufficient and noted that they are substantially lower than the budget resolution approved by Congress on May 7.

The American College of Physicians Plan • A federal grant program to support states that redesign their Medicaid and SCHIP programs around the Patient-Centered Medical Home (PCMH). • The PCMH provides patients with care coordinated by a primary care physician. • The potential of this model to improve care and lower costs is supported by the experience of states, like North Carolina, that already are implementing it, and by numerous studies on the beneficial impact of care coordinated by primary care physicians.

The American College of Physicians Plan • Higher taxes on tobacco, such as proposed by Senators Baucus and Grassley. • Given the fact that smoking is the number one cause of preventable deaths in the United States and a huge contributor to the growing numbers of patients with chronic diseases covered by federal government, funds from higher tobacco taxes should be applied to the SCHIP reauthorization and to avert Medicare physician payment cuts.

Martin Luther King, Jr. "Of all the forms of inequality, injustice in health care is the most shocking and inhumane. "