This toolkit, supported by the Robert Wood Johnson Foundation, will help you understand trends in U.S. health spending, and some of the reasons why spending is going up. We also cover some ideas for restraining health care costs. In addition, this resource offers story ideas, selected experts with contact information, selected websites, and a glossary.
The U.S. health care system is often touted as a model for the rest of the world. We are clearly a leader in costs, but how well are we performing in return for our high investment? How do we do compare to benchmarks of achievable performance? And is performance getting better?
Putting the Brakes on Health Care Costs: Would the Candidates’ Plans Work? Are There Better Solutions?
Polls show that health care is the #2 domestic issue facing the next president and Congress. But drilling down, it’s clear that for many consumers, business leaders and government decision-makers, this means: “Reduce my health care costs first, then let’s talk about covering the uninsured.”
Health information technology (IT) wins many honorable mentions. It is viewed by respected analysts and presidential candidates in both parties as a tool with the potential to save lives, improve efficiency and increase the overall quality of our health care delivery system.
Many have proclaimed the Massachusetts health care reform plan a success, noting the greater than expected enrollment rates in the program’s first 18 months. But some observers sound notes of concern.
While the United States delivers some of the best medical care in the world, there are major inefficiencies in our system. We have high rates of medical errors, millions without health insurance coverage, and lower utilization of advanced health information technology than most western European nations. Our costs are the highest anywhere, by any measure.
Comparative effectiveness research holds out the tantalizing prospect of making it easier for patients and their doctors to choose the best treatment, thus improving quality. At the same time, it could also justify denying or reducing payment for a host of treatments or procedures that may be clinically ineffective or unworthy of their high price.
Employer-sponsored coverage rates have been steadily falling, from 66 percent of non-elderly Americans in 2000 to slightly below 60 percent in 2006. Experts cite rising premium costs and workforce changes as factors driving the erosion in such coverage.
As presidential candidates of both major parties woo the American public, particularly in early caucus and primary states, they are gravitating toward a common public concern: the U.S. health care system. Potential voters are well aware of rising premiums and higher out of pocket costs to families, the impact of high health care costs on America’s economic competitiveness and on federal and state budgets, and the ever-growing number of uninsured – now nearly 45 million. A Kaiser Family Foundation poll released in March shows that health care ranks as the second most important issue that the public would like discussed by presidential candidates for the 2008 election.
Biotechnology accounts for only one percent of insurers’ costs, but those costs are growing at a double digit rate. As science produces increasingly sophisticated and expensive medical products and procedures based on the manipulation of living organisms, payers will increasingly struggle with managing their use.
The Medicare prescription drug program offers coverage for prescription drugs through competing private plans, within a framework established by law and through rules established by the Centers for Medicare and Medicaid Services. In contrast, other countries, including Australia, the UK, and Canada, provide similar prescription drug programs, but within different regulatory structures.
Although it’s best known for introducing the Medicare prescription drug program, the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 also made a number of changes to the Medicare managed care program – Medicare Advantage. Among the aims: Keep managed care plans from leaving the program by offering higher payments, and give beneficiaries more reasons to consider joining.
Congress has actively considered whether and how to reorganize the health insurance market for small businesses. In Spring 2006, the Senate debated a legislative proposal, offered by Senators Michael Enzi and Benjamin Nelson, which centers on Small Business Health Plans (SBHPs). SBHPs are a new category of group health plans sponsored by bona-fide professional and other associations. The House has debated and approved related legislation on association health plans.
Toward A High Performance Health System: Public-Private Efforts to Make Health Care Safer and More Effective
The U.S. health care system is the most expensive in the world. Yet it is clear that by many measures, Americans are not receiving commensurate value for the health care dollars they spend. Is it possible to simultaneously improve health coverage and quality, while generating savings for health care consumers, employers, government and health care providers? What are the characteristics of a high performance health system? What realistic steps does the private sector need to take, contrasted with government bodies, to move the U.S. toward such a system? What policy changes would be most helpful to the most vulnerable populations – the uninsured, and those facing disparities in care or coverage due to income, race/ethnicity, health or age?
Wider use of health information technology has been touted as one way to improve the quality of care and reduce medical errors, while reducing the continued rapid growth of health care spending. Providers across the country are already adopting new health IT systems, and many patients have welcomed the trend. Other providers say they can’t afford the large upfront costs involved, and some analysts question whether health IT will save any money at all.
With New Orleans largely evacuated and hundreds of thousands of people separated from their regular health care providers, how will Hurricane Katrina’s evacuees attend to their health and health care needs?
The federal government’s responsibility to provide access to health care for the nation’s 41 million Medicare beneficiaries implies another obligation: to spend taxpayer dollars wisely. This means assuring that the $250 billion+ spent for Medicare goes for services that are safe, timely and effective.
A worldwide discussion is under way on the role of evidence-based medicine in evaluating the relative effectiveness of prescription drugs. Publicly funded health programs, large employers and managed care plans all are working to learn more about how the costs and benefits of one drug compare with those of another. At the same time, these payers of health care want to make sure that their beneficiaries have access to new pharmaceuticals that offer measurable improvements over older products.
President Bush’s FY 2006 budget could have long-lasting effects on several health programs. If enacted as is, the budget would trim $60 billion in the growth in Medicaid spending over the next 10 years. At the same time, the budget offers $11 billion in new money to enroll children in Medicaid and the State Children’s Health Insurance Program. It would provide $74 billion in tax incentives to help the uninsured buy coverage. Some congressional budget leaders have signaled their intention to find budget savings in another entitlement program – Medicare.
The budget season is upon us. The Congressional Budget Office’s January 2005 “Budget and Economic Outlook” provides an overview of where Congress will start, and the President’s budget request will arrive next week. The journey down the sometimes bumpy, sometimes difficult-to-understand road to a federal budget for FY 2006 is beginning.
Health care didn’t prove to be a make-or-break issue in most races during the 2004 election. But post-election polls showed the public still thought our health care system had major problems, and a substantial number of people wanted action from Congress on health issues – especially costs, access and affordable drugs.
Congress made major changes in the Medicare managed care program, now named “Medicare Advantage,” affecting plans and beneficiaries in 2005 and 2006. The Department of Health and Human Services (HHS) has proposed regulations to implement this part of the new law, and comments on the draft regulations are due by October 4, 2004.
Congressional interest in prescription drugs was by no means exhausted once the Medicare drug bill passed in December 2003. A continuing focus on the Hill is whether to encourage reimportation of drugs to the U.S. from other countries, notably Canada. The secretary of Health and Human Services has had the right to authorize reimportation since the Clinton administration, but no secretary has yet exercised the right, citing safety concerns.
Some market-oriented economists have long contended that the best way to get a handle on rising health care costs is to give patients more control over the type of services they consume and the prices they pay for them. There are increasing signs that the market is gravitating in this direction. In the last several years employers have been setting up so-called “consumer-directed” plans, which put more responsibility for selecting the appropriate provider at the right price in the hands of employees—in exchange for potential financial gains.
More than 43 million U.S. residents lacked health coverage in 2002 and unless private or public coverage programs expand, the number of uninsured could continue to rise over the next decade. To address this growing problem, the Institute of Medicine (IOM), with support from The Robert Wood Johnson Foundation, has been conducting a three-year study of the uninsured to assess and consolidate evidence about the health, economic and social consequences of uninsurance for those without insurance, their families, health care systems and institutions, and communities as a whole.
National polls and opinion surveys consistently show that health care is an important issue for voters. In a June 2003 survey by Harris Interactive, health care ranked third after economy/jobs and war/defense as an issue needing government action. A Gallup poll in September 2003 found that 85 percent of respondents considered presidential candidates’ positions on health care issues to be either extremely important or very important in influencing their votes.
Although less well known than Medicare, Medicaid covers even more people. In fact, about 47 million people were expected to have been covered by the program for at least part of last year, including more than one in four children across the country. Medicaid, which is financed by both states and the federal government, also pays for nearly half of all long-term care services.