SO215 MIDTERM 1 REVIEW

What are the major groups in the US healthcare system?

the government, patients, providers, insurers, employers

single-payer system

a national health care program in which the financing and insurance functions are taken over by the federal government

EX: Canada or the UK

Multiple-payer system

private insurance: patients-> pay premiums to insurance companies-> pay for treatment -> providers( + pay copays from pts)

main sources of heath coverage in the US

private financing; public financing; uninsured; under- insured; precariously insured

private financing

employer- provided insurance, individually purchased coverage (some of it-- through ACA-- established "exchanges")

public financing

medicaid/ CHIP; medicare; other (military, veterans, indians), but many public plans are administered by private for- profit insurance

the current crisis in healthcare

a) US healthcare is the most expensive in the world and the health care costs for patients, employers, and the government continue to rise

b) even after the passage of the affordable care act (2010), tens of millions of americans lack insurance because of the cost of premiums or eligibility for public programs like medicaid.

c) even those with insurance are often unable to afford healthcare because of high out of pocket expenses (deductibles and co-pays)

premiums

regular payments to have health insurance like membership fees

for insurance sold through workplaces, premiums are shared by employers and workers

out- of pocket- expenses

deductibles and copays

deductibles

annual out of pocket expenses before insurance benefits kicks in

co- pays

fees for doctor's office or emergency room visits, ect. usually $10, $20, $30

in general, how does US healthcare system compare to other countries?

not well, we spend the most by any measure (% GDP- gross domestic product) , per capita expenditures)...

US Ranking in health rates

ranked 26 in life expectancy, 29th in infant mortality, and the highest among OECD countries maternal mortality

what barriers do elderly experience?

even the elderly most of whom are covered my medicare experience to barriers to care.

the 2014 survey of elderly adults in 11 counties ( 15,000 people altogether), including the US, found that americans have harder time accessing care in a timely manner and paying their medical bills.

does malpractice insurance cause the high cost of healthcare?

NO, available data suggests that defensive medicine accounts for no more than 2% of total health care costs

...plus changing the malpractice system would not significantly reduce the number of unnecessary tests and procedures

VERDICT: it is at best a small contributing factor, but it cannot account for the rise in cost or the difference between the US and the industrialized world.

does the US aging population cause the high cost of healthcare?

NO, the US population is younger than that of other countries( that spend less)

why are we spending so much ( and get so relatively little for it)?

1. administrative costs of fragmented system

2. health care providers largely set prices

3. the for- profit basis of the US healthcare system

* we spend A LOT of money, but for WRONG kinds of things*

why has the US failed to enact any national healthcare legislation in the 20th century despite several "windows of opportunities" ( in the early 30s, 1945, in 1971 and in the early 1990s?)

ROTHMAN's views: is the american "liberal state" to blame for the lack of national healthcare legislation?

what is the "proper" role of the state or "proper" role of the government?

what is the relationship between the state and private interests, or the state and professions?

or the fact there was no real threat that socialism could "put down strong roots" in the US?

like in germany in the late 19th century.

When was the Social Security Act passed?

in the 1930s( 1935)

Why was public health insurance not passed when the SSA was passed in 1930s?

Blue Cross provided a solution to the middle class, and successfully argued that private insurance is a great alternative to government intervention

After WW2 the middle class was further cushioned from the cost of healthcare by employer- provided subsidizing health insurance.

In the 1930s the opportunity to pass national healthcare was squandered because....

1, the middle-class did not support national health insurance after being co- opted by the Blues and employer- provided benefits. " it would require empathy, not self- interest, to push for national health insurance, and that empathy... was in short supply"

2. physicians have long considered themselves entrepreneurs and independent proprietors

3. ethos of voluntarism ( by the physicians with their use sliding- scales, and philanthropic efforts of larger communities) was deemed adequate and rendered large-scale government intervention in healthcare unnecessary

In the 1960s the opportunity to pass national healthcare was squandered AGAIN because...

p1. the framing of medicare/ medicaid

- elderly are "unique" because they have greater health needs, lower income and group insurance is not available to most of them; therefore, they are "deserving", while young workers should be accommodated through employer- provided private group plans

p2. careful distancing from the claim that the government "owes" healthcare to anyone, including the elderly ( instead, they have "earned" it the same way they have earned Social Security)

What is the ACA?

1. passed in 2010, the Affordable Care Act has made health insurance accessible to millions of uninsured people.

2. It provided consumers with subsides( premium tax credit) that lower costs for households with incomes between 100% and 400% of the federal poverty level.

3. Expanded the medicaid program to cover all adults with income below 138% of the FPL.

Quadagno VIEW: why no national health care legislation in the US in the 20th century?

American exceptionalism- the US is alone among peer countries with a healthcare system that rations on the basis of the ability to pay (rather than medical need) and has a poor ability to control costs.

Quadagno VIEW: what is so exceptional about the US?

1. values and political culture--> but social security and medicare WERE passed

2. Weak labor and working class movements?--> maybe, but it is not clear why labor unions when mobilized consistently supported market- based solutions

3. Political institutions ( diffused and decentralized structure of politcal power)--> helpful in explaining cross- national variation, but not historical variations

stakeholder mobilization theory

the healthcare financing system in the US was constructed through continuous struggles between reformers and powerful stakeholder groups who mobilized politically against national health insurance or any government programs that might compete with private sector products or lead to government regulation of the market.

Quadagno: examples of powerful stakeholders

1. organized medicine led by the AMA

a. initially opposed third- party payers, but gave in to establish the Blues

b. the private health insurance system that doctors helped to construct eventually undermined their sovereignty/ power

c. as physicians become more open to the idea of national health insurance, private health insurance industry moved to the forefront of anti- national health insurance coalition

2. labor unions

a. suffered a conservative attack from employers in the post WW2 era, and came to view national health insurance as an unachievable goal, so as a way to demonstrate their importance, they concentrated their energy on collective bargaining for their members.

each failed attempt at national health insurance stimulated the growth of private commercial insurance and entrenched a market- based solution to a problem of health care access and affordability

this, in turn, precipitated further growth of health care costs

pivotal moment: 1930s, following the Great Depression of 1929

FDR's New Deal included Social Security Act, nu the mush for national health insurance failed --> the Blued were offered against - private solution

pivotal moment: 1945 - 1950 ( under president Truman) an after WW2 push was mired in anti- socialist fears

institutionalization of employer based plans- also a private solution; in 1940- less than 6 mln had any form of health insurance, by 1950 more than 75 mln did.

pivotal moment: 1960s- medicare ( AFLO- CIO managed to defeat AMA resistance, while labor unions and private insurance, while labor unions and private insurance supported medicare because private plans for the elderly were expensive/ not profitable)

as a result- a boost for private for profit health industry (hospitals, nursing homes) and a rapid growth of cost

pivotal moment: 1970s- another unsuccessful push for national health reform (Health security plan introduced in 1971, precursor of medicare- for- all plus 21 other plans, including AMA Medicredit)

HMO legislation further solidified private solution

pivotal moment: 1990s (Clinton's Health Security plan- managed competition- largely a failure because... )

of organized campaign by the private health insurance industry emboldened by its earlier defeat of Peper's home care bill, but CHIP was passed

what is CHIP?

CHIP provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid

pivotal moment:2010 ACA, following the financial crisis of 2007-8 (the "public option" and long- term care insurance are dropped)

**

pivotal moment: 2020-2022 Covid

**

Who were the MAIN stakeholders opposing national health insurance?

from 1930s to 1970s- organized medicine( AMA, AHA)

- their interest aligned with other powerful groups: employers, health insurance companies and trade unions (= labor unions)

from 1970s and on- private health insurance industry

how do the stakeholders mobilize others? what are their strategies?

- political influence: lobbying and large campaign contributions

- grassroots strategies: organized petition drivers, letter-writing campaigns and protests

- advertisements to shape public opinion

- development of private solutions ( like the blues)

Examples of stakeholder mobilization

Harry and Louise ads- funded by the America's Health Insurance Plans in 1993- 1994 to defeat Clinton's Health Security Plan

Light on the "Ironies of Success"

SUMMARY: a) starting from the early 1900s, the medical profession with the help of the state managed to reduce " ruinous competition" and create a professional monopoly( by 1920), which helped them gain power, autonomy, and increase incomes (particularly after WW2-- the "Golden age of doctroing" or The Gilded Age?)

b) but strong buyers returned in the 1970s and 1980s and transformed American medicine

what is a profession?

has THREE characteristics:

- autonomy to set educational and licensing standards

- technical, specialized knowledge

- public confidence in practitioners' ethics/ service- orientation

1. profession set higher standards for themselves than those that exist in the market

2. Established the principle of self- regulation( doctors can be judged only by each other, and not by laymen) --> sovereignty/ power of professional judgement vs sovereignty of consumer choices

professional dominance

freedom from control by other occupants and groups

ability to control other occupations in the same economic sphere

what did the medical field look like in the end of the 19th century?

1. significant competition, lack of standards, poorly expertise

- surplus of doctors ( too many medical schools!)

- alternative healers

- free dispensaries--> ( new techniques were tried on clinical material and the affluent {wealth} came in disguise)

- cure- alls

- whole- sale contracts and prepaid hospital insurance plans

2, Doctors' incomes were low, similar to that of skilled craftsmen

competition, alternative healers

1. family care- given most common

- medicine was NOT prestigious field

** Regular doctors ( allopaths): cure by opposites and medicine

** Irregular practitioners (homeopaths): cure by similars and herbal medicine

2.Medical care often dangerous

- heroic medicine

- unscientific

- few effective treatments

- lack of antisepsis or anesthesia

definition of lobbying

he act of attempting to persuade business and government officials to pass legislation or engage in an activity that benefits a certain organisation.

timeline of the profession of medicine

- competition need to be addressed from within and from outside regular medicine

1901: AMA creates a pyramidal structure ( membership shot up/ mobilization became possible)

Early 1900s: licensing boards reform

1901: JAMA founded

1904: council on medicine education

1907: first attack on medical schools (4yrs/ 3600 hours curriculum requirement)

1910: flexner report

1920: New american medical profession was born

AMA goals

1. reduce supply of physicians

2. gain control over entry into medicine and defining quality

3. marginalize non- mainstream practitioners

4. keep outsides from setting terms (prices)

5. campaign against patent medicines, "prohibition on advertising to the public or stating on the label the disease for which the drug was indicated."

professionally- driven system: characterized by

1. clinical care of sick patients

2. scientific development

3. autonomy of the profession from society and the state

a) prepaid hospital plans, dispensaries, unregulated drug markets and competing providers threatened professional dominance, and were eliminated as a result of AMA's political pressures

IN SHORT, the AMA helped transform expertise into market power

negatives of a professionally - driven system

1. public health, prevention and equity are downplayed

2. the system is costly, inefficient, wasteful, and inequitable

instead of national healthcare- SOLUTIONS INSTEAD

1. the Blues in 1930s

2. Medicaid and Medicare in the 1960s

3.HMOs in the 1980s- 1990s

** but the middle- class that has been accommodated appeased since the 1930s, have started to feel greater pinch in the 1990s and 2000s as costs greatly climbed high

what are HMOs?

a Health Maintenance Organization, or HMO, is a network of providers from the primary care physician to specialists, who are most times connected to a particular hospital and particular network affiliated medical offices.

By the 1920s, "doctoring" in the US became a profession. What does this mean?

1. it successfully claimed a jurisdiction over a particular field of technical, specialized knowledge.

2. it gained an autonomy to set educational licensing standards, and public confidence in its ethics/ service- orientation. plus it was given the right to self- regulate (be judged only by peers, and not laymen)

Starr claimed what about the system of medicine and healthcare?

starr claimed that while " Market for medical services was originally inseparable from the emergence of professional authority," eventually the medical profession successfully managed to "distinguish themselves from business and make trade by claiming to be above the market and purce commericalism"

becoming a medical profession was about...

turning expertise into a source of market monopoly. this required reliance on the state to restrict competition AND develop public trust

the 3 institutional eras

1. Professional Dominance( 1920- 1965, coming to a climax in the postwar years, "the golden age of doctoring"

2. Federal involvement ( 1966- 1982)

3. Managerial Control and Market Mechanisms (1983- present)

what was the golden age of doctoring?

Professional Dominance in the 1920- 1965, coming to a climax in the postwar years.

End of Professional Dominance- " Golden Age of doctoring, " 1945- 1965"

Motto: " quality of care" as determined by physicians

Actors: independent physicians, professional associations, hospitals, and private insurance companies.

Era of Federal Involvement 1966- 1982

medicare/ medicaid bills passed in the mid- 1960s

motto: " equity of access" to healthcare services

actors: new federal and state agencies; new kinds of healthcare providers (community mental healthcare centers)

Managerial Control and Market Mechanisms , 1983- present

DRG legislation (1983)

motto: " cost control, efficiency"

actors: managed care organizations, purchasing coalitions of employers, consumer advocate groups

what is the DRG legislation system?

designed to control hospital reimbursements by replacing retrospective payments with prospective payments for hospital charges.

threats to medical dominance

1. corporatization

2. increased government control

3. decline of the AMA

4. decline in public support

factors that resulted in decline in public support for medical dominance

a) 1960s social movement and the questioning of authorities

b) media coverage of backlash against managed care

c) frequent changes in primary care doctors undermines trust

d) the role of the internet

agents against medical dominance

1. countervailing powers- efforts by other agents to balance the power of the profession that gained extra power.

agents:

a) big pharma

b) medical device companies

c) insurance companies

d) hospitals

e) alternative healthcare providers and allied health occupations

f) patient- consumer groups

g) public health

h) the government

powers doctors still have:

doctors still:

- set licensure and practice standards

- dominate health care " teams"

- manipulate clinical practices to maintain incomes

- continue holding near- monopoly on prescribing drugs

** plus medicine continues to be a prestigious field

summary of US dominant profession:

the US medical profession, led by the AMA managed to establish itself as a powerful dominant profession in the early and mid-20th century

This largely defined the trajectory of the US healthcare system • Private, market-based solutions to problems of health care provision, access and affordability (the Blues, employer-based health insurance, consumer-directed plans, etc.) instead of broad public solutions

what was the strongest stakeholder resisting national healthcare up until the mid 1960s?

organized medicine( ex: AMA)

in the past 50 years, who emerged as the main stakeholder with the increase in the corporatization of healthcare

corporate medicine ( private insurance industry, pharma, meidcal device industry and, some hospitals)

The US healthcare is the most expensive in the world and costs are rising:

17.5% of GDP, and is projected to get to 34% by 2040 (1 out of every $3 dollars)

It now costs $3.8 trillion or $11,582 per capita (2019)

and the overall quality of healthcare leaves much to be desired

what is the cause of the large bills in heathcare?

1. expenses that have no clinical significance (administration)

2. too many procedures! MOST

3. prices of each procedure to high

what is fee- for -service

a payment model in which doctors, hospitals, and medical practices charge separately for each service they perform

the institute of medicine report

- 30% of healthcare spending is considered wasteful

- half of this waste is a result of higher prices, administrative costs and fraud

- another half is "overkill" or unnecessary services

the US has a what kind of profitable system instead of a healthcare system?

profitable disease- management system

in a consumer market, the price drives demand down... but in healthcare, ...

demand is driven by supply (we get procedures that our doctors prescribe for us), and when providers are paid fee- for- service, particularly when the prices of procedure is high, doctors and hospitals become incentivized to provide more

** MORE is better for doctors and hospitals (who want to stay full)

** MORE is also mistakenly thought to equal "better" by patients

EXAMPLE less is better

the New England Journal of Medicine- a controlled trial of arthroscopic surgery for osteoarthritis of the knee.

{This study provides strong evidence that arthroscopic lavage with or without débridement is not better than and appears to be equivalent to a placebo procedure in improving knee pain and self-reported function.}

why are knee replacements, heart stents, cesarian sections offered to people?

Because we overpay for specialty care compared to primary care, and compared to what these procedures cost elsewhere it is offered to people with milder and milder form of disease ("disease creep"), which leads to overtreatment. this is profitable for providers, but definitely useless and may be even harmful for patients.

Why is McAllen's Medicare expenses are so much more than El Paso's or the national average? GAWANDE

• Not because people are sicker

• Not because the care they receive is better

• Not because prices of services are higher (per service charge should be the same)

BUT because of overutilization

•More diagnostic testing

• More hospital treatment

• More surgery

• More home care

Gawande points at doctors to blame for overutilization, why?

Not at the differences in professional training as much • But "culture of money" - a recently established norm that it was okay for doctors to view their practice as a means to maximize their income.

Two main problems are that doctors are paid for quantity and they are paid as individuals (no one is accountable for the totality of care)

how do we pay providers?

We underpay for (and undervalue!) primary care • That is why doctors' visits are so short, and that is why one is usually not allowed to "load up" several problems in a once-a-year physical visit.

We overpay for specialty care and emergency care

is concierge medicine the answer?

It provides better quality, more responsive after-hours care to some patients (who can afford to pay extra - from a few hundred to a few thousand a year, depending on whether the practice accepts regular insurance or not), and it may offer better work conditions to physicians, but at a great cost to the rest of us, because regular primary care practices get even more overcrowded.

in "The Cost Conundrum", Gawande blames the...

PAYERS-- the government and the private insurers - for what we are paying for, and who is held accountable for the care patients receive (he even ponders whether the patients should "have more skin in the game")

n the "Overkill" GAWANDE argues...

that patients, too, are responsible for overutilization as they believe in doing anything and everything "just to be thorough"

what are the role of patients?

1. Patient-centered medicine

2. Public health

a) preventative screening

b) "prescribing by numbers" ( based on tests for cholesterol, blood pressure, sugar)

**But the line between effective prevention and useless overtreatment is blurry

what are hotspots in healthcare?

the overuse and overpayment in healthcare.

geographic ( cities- McAllen, TX, or states -- NJ is the highest Medicare spending state)

- results of famous Dartmouth Atlas studies suggesting medicare spending varies greatly across the country.

specialities likely to overuse:

1. end- of-life care

2. birth

3. neonatal care

specific procedures/ drugs overused in hotspots

1. knee replacements

2. heart stents

3. drug costs ( 70% of Americans take at least 1 prescription and more than half take 2)

DIAGNOSIS: a small number of sickest patients use a staggering share of health resources, but end up getting bad care.

certain categories of patients over rely on ____________, which is bad for their health and ruinous for our country's finances

emergency care

what is one of the poorest cities in the US and a "hotspot" for healthcare expenses

Camden, NJ: 1% of Camden residents are responsible for 30% of all medical costs in the city • 20% of people -- for 90% of the costs • The most expensive patient raked $3.5 mln in hospital bills over 5 years

• Most of these are very poor people and these costs are paid publicly

•Most of the emergency room visits are for head colds, ear infections, viral infections, asthma, stomach problems - all primary care issues

policies to reduce wasteful care:

1. going after the sickst patients (Camden, NJ+ 10 other cities)

2. changing incentives for providers (mayo clinic)

- doctors are salaried( but there are other ways to reduce their effort on medical decision making)

- collaborative, team- based care provision is favored

both go against individualist entrepreneurial origins of the US medical profession.

Disruptive change

US healthcare industry is based on a growth model: Dr. Brenner

Dr. Brenner: : If there was an outbreak of health and wellbeing and hospitals in Philadelphia lost 5% of their bed/days, they would have to close, they would go under. The business model or a hospital or specialty office is the same as that of an airline or hotel industry where success is based on maximizing occupancy rates and turnover. It is a volume-based delivery system, and the more clicks through the turnstile you make and your relatives make, the more money it makes

what kind of business model does the US have?

volume- based delivery system, and the more clicks through the trunstile you make and your relatives make, the more money it makes.

how does the US hospital charge patients for each procedure?

a la carte: instead of one all- inclusive charge, a typical hospital stay charges is a list of various charges added together

monopoly pricing ( mergers of providers!)

cost of various middle men

a le carte charges:

- doctors bill separately

- recovery room charge

- cost of medical equipment

- even cost of drugs can be added separately

why is the US healthcare system the most expensive and not very efficient?

1. supply drives demand--> over-utilization

- profit motivation can easily replace medical needs

- unnecessary unnecessarily invasive, intense) care can be favored by both doctors and patients

2. quality is opaque for consumers of medical services

3. prices are complex and not known in advance

4. bargaining opportunities for patient- consumers are limited { health and life; emergencies}

5. providers set prices, pricing is non- transparent, markets are not competitive--> overcharging

what does fee- for service in the US result in?

overutilization

ultimately, no one is our healthcare system is truly interested in/ capable of controlling costs:

- insurers should be but ultimately, it is not their money, if prices go up, they increase premiums so they don't care.

- the government should be but they are invested in medicare and medicaid patients which consists of a bit over 30% of americans, they are also incapable

- the patients are, but they cannot because they cannot act as true consumers

why is US system difficult to revamp?

1. the system is backed up by heavily lobbied congress

2. it is very profitable to many actors

- individuals and institutional investors in the pharma and health sectors

- for- profit ( and even non-profit!) hospitals

- certain medical specialties that have seen their incomes soar recently, like radiologists, dermatologists, or orthopedic surgeons

is fee- for- service to blame for the US expensive bills?

YES and NO

Many countries pay doctors fee-for-service, and even Canada (single-payer) pays primary care doctors fee-for-service, but fees are regulated across the board

what is a single payer healthcare system?

essential healthcare for all residents are covered by a single public system (aka the government)

what is the value- based payment/ VBP industry?

pay providers based on the outcomes of the care they deliver, not the volume. VBP models are recognized for their potential to lower costs, increase quality, and promote equity.

VBP industry:

-Hovers over doctors and patients and seeks to influence medical decision-making

-In its shift from fee-for-service to capitation, it shifts risks to the providers and is a reincarnation of managed care

-Because it is a for-profit industry it diverts resources from direct clinical care

-Unlike insurance industry it is invisible to the public

-Includes a heterogeneous mix of corporations that own, contract with, manage, consult with, or sell services to providers