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Achieving a High Performing Achieving a High Performing Health Care System:Health Care System:
Applying Lessons from Other Applying Lessons from Other Countries to U.S. Health CareCountries to U.S. Health Care
David C. Dale MD, FACPDavid C. Dale MD, FACP
J. Fred Ralston, Jr. MD, FACPJ. Fred Ralston, Jr. MD, FACP
Robert B. DohertyRobert B. Doherty
American College of PhysiciansAmerican College of Physicians
Based on a Presentation to the National Congress on Based on a Presentation to the National Congress on the Un and Underinsuredthe Un and Underinsured
December 11, 2007December 11, 2007
Introduction
What is the American College of What is the American College of Physicians?Physicians?
• 124,000 Doctors of Internal Medicine 124,000 Doctors of Internal Medicine and Medical Studentsand Medical Students
• The Second Largest Medical The Second Largest Medical Organization in the USAOrganization in the USA
• The Largest Medical Specialty The Largest Medical Specialty SocietySociety
What Did We Do?
Analyzed the US Health Care SystemAnalyzed the US Health Care System
Evaluated According to Commonwealth Evaluated According to Commonwealth Fund Criteria for Measuring PerformanceFund Criteria for Measuring Performance
Analyzed Health Care Systems in 12 Other Analyzed Health Care Systems in 12 Other CountriesCountries
Compared the US Health Care System to Compared the US Health Care System to Systems in Other CountriesSystems in Other Countries
Determined Lessons From Other CountriesDetermined Lessons From Other Countries
Issued Recommendations for Achieving a Issued Recommendations for Achieving a High Performance Health Care SystemHigh Performance Health Care System
Why Did We Do It?
ACP has Advocated for Universal Health ACP has Advocated for Universal Health Insurance Coverage Since 1990Insurance Coverage Since 1990
Previous Efforts By ACP and Others Have Previous Efforts By ACP and Others Have Focused on Improving Specific Aspects of Focused on Improving Specific Aspects of Health CareHealth Care
Systemic Changes Are NeededSystemic Changes Are Needed
Goal to Achieve a High Performance Health Goal to Achieve a High Performance Health Care System With Universal AccessCare System With Universal Access
Lessons Can Be Learned from Successful Lessons Can Be Learned from Successful Health Care Systems in Other Countries Health Care Systems in Other Countries
The Cost of Health Care in the US
National Health Expenditures in 2005 =National Health Expenditures in 2005 =
• $2.0 Trillion $2.0 Trillion
• $6,697 per person $6,697 per person
• 16% of GDP16% of GDP
Health Insurance Costs Continue to RiseHealth Insurance Costs Continue to Rise
• Health Spending is Rising Faster Than Inflation Health Spending is Rising Faster Than Inflation and Economic Growthand Economic Growth
• Employers Are Reducing or Dropping CoverageEmployers Are Reducing or Dropping Coverage
• Health Spending is Projected to Reach $4.0 Health Spending is Projected to Reach $4.0 Trillion (20% of GDP) by 2015 Trillion (20% of GDP) by 2015
Paying for Health Care in the US
Other6%
Other Gov't13%
Out-of-Pocket
13%
Medicaid16%
Medicare17%
Private Ins.35%
Health Insurance Coverage in the US
250 Million Have Health Insurance 250 Million Have Health Insurance (84.2%)(84.2%)
47 Million (15.8%) Uninsured All Year47 Million (15.8%) Uninsured All Year
89.5 Million (34.6%) Uninsured 1 Month 89.5 Million (34.6%) Uninsured 1 Month or Moreor More
Another 16 Million Under-InsuredAnother 16 Million Under-Insured
People Without Health Insurance are:
Less Likely to Receive Preventive Services Less Likely to Receive Preventive Services and Medicationsand Medications
Less Likely to Have Access to Regular Less Likely to Have Access to Regular Care by a Personal PhysicianCare by a Personal Physician
Less Able to Obtain Needed Health Care Less Able to Obtain Needed Health Care ServicesServices
More Likely to Suffer Complications for More Likely to Suffer Complications for Preventable IllnessesPreventable Illnesses
More Likely to Die PrematurelyMore Likely to Die Prematurely
Chronic Health Conditions
120 Million Americans (45%) Have at Least 1 120 Million Americans (45%) Have at Least 1 Chronic ConditionChronic Condition
60 Million Have Multiple Chronic Conditions60 Million Have Multiple Chronic Conditions
83% of Medicare Beneficiaries Have 1 or More83% of Medicare Beneficiaries Have 1 or More
23% of Medicare Have 5 or More23% of Medicare Have 5 or More
By 2015, 150 Million Will Have at Least 1 By 2015, 150 Million Will Have at Least 1 Chronic ConditionChronic Condition
The Increasing Elderly Population
0
10000
20000
30000
40000
50000
60000
70000
2000 2010 2020 2030 2040 2050
65-84 years old 85 and older
Source: U.S. Census Bureau, “U.S. Interim Projections by Age, Sex, Race, and Hispanic Origin,” <http://www.census.gov/ipc/www/usinterimproj/>
As Patients Age They Require More Visits to the Doctor
Physician Workforce
The Supply of Primary Care Physicians Will The Supply of Primary Care Physicians Will Not Keep Pace with the Aging PopulationNot Keep Pace with the Aging Population
Already Anecdotal Evidence of ShortagesAlready Anecdotal Evidence of Shortages
As the Population Over Age 65 Increases More Doctors Will be Needed
High Student Debt and a Dysfunctional High Student Debt and a Dysfunctional Payment System are Deterring Physicians Payment System are Deterring Physicians from Primary Care Careers from Primary Care Careers
The Physician Workforce Is Also Aging: 250,000 Active Physicians Are Over Age 55
Interest in Entering Primary Care has been Declining Among Graduating Seniors
(Percentages 1999-2006)
0
2
4
6
8
10
12
14
1999 2000 2001 2002 2003 2004 2005 2006
GIMIM SSFPPED
Source: AAMC Medical School Graduation Questionnaires: All School Reports 2000-2006, Choice of Specialty/Subspecialty.
http://www.aamc.org/data/gq/allschoolsreports/2006.pdf
Equity and Utilization
Wide Variations in CostsWide Variations in Costs
Wide Differences in Volume and Intensity Wide Differences in Volume and Intensity of Services Among Areasof Services Among Areas
Outcomes No Better in High Cost AreasOutcomes No Better in High Cost Areas
Disparities in Access and Quality Based Disparities in Access and Quality Based on Race and Incomeon Race and Income
The System is Costly and Inefficient
Payers Are Straining to Reduce CostsPayers Are Straining to Reduce Costs
Cost Sharing IncreasingCost Sharing Increasing
Rise of Consumer-Directed Health PlansRise of Consumer-Directed Health Plans
Increasing Out-of-Pocket CostsIncreasing Out-of-Pocket Costs
High Administrative CostsHigh Administrative Costs
High Regulatory BurdenHigh Regulatory Burden
A big caveat
Any solution for the United States will be Any solution for the United States will be unique to our political and social culture, unique to our political and social culture, demographics, and form of governmentdemographics, and form of government
• Larger and more diverse population Larger and more diverse population
• Tradition of individualism and distrust of the Tradition of individualism and distrust of the federal governmentfederal government
• Constitution limits the power of the federal Constitution limits the power of the federal government, requires that authority be shared government, requires that authority be shared between federal and state governments, and between federal and state governments, and protects commercial and individual free speechprotects commercial and individual free speech
• Deeply rooted system of employer-based Deeply rooted system of employer-based coverage, tied to a powerful industry invested in coverage, tied to a powerful industry invested in maintaining private insurance and employer-maintaining private insurance and employer-based coveragebased coverage
So why study other countries’ experiences?
Goal should Goal should notnot be be to replicateto replicate other other countries’ experiencescountries’ experiences
But to identify approaches that the But to identify approaches that the evidenceevidence shows are more likely to be shows are more likely to be effectiveeffective
So that they can So that they can informinform the political debate the political debate in the United Statesin the United States
AndAnd be adaptedbe adapted to the unique to the unique circumstances in the U.S. circumstances in the U.S.
Lesson: All high performing systems have universal coverage
UniversalUniversal: every person is guaranteed, : every person is guaranteed, by law, access to affordable coverage by law, access to affordable coverage through a public or private plan and is through a public or private plan and is required to obtain coveragerequired to obtain coverage
Some have a system funded solely by Some have a system funded solely by the national or provincial governments the national or provincial governments (single payer) (single payer)
Others use a mix of public and private Others use a mix of public and private funding (pluralistic); coverage is funding (pluralistic); coverage is compulsory and guaranteedcompulsory and guaranteed
Canada
UK
Japan Taiwan
Australia Belgium Denmark
France Germany
Netherlands New
Zealand Switzerland
Lesson: Global budgets and price controls can restrain costs but can have negative consequences
Global budgets can restrain costs. Global budgets can restrain costs. but do not improve efficiency but do not improve efficiency unless the budget is reasonable unless the budget is reasonable and the target region is small and the target region is small enough to motivate individual enough to motivate individual providers providers
Price controls can restrain costs, Price controls can restrain costs, but may lead to but may lead to
• delays for elective procedures, cost-delays for elective procedures, cost-shifting and shifting and
• creation of parallel private sector creation of parallel private sector markets markets
Canada
Germany
New Zealand Taiwan United
Kingdom
Belgium Canada Japan
UK
Japan
New Zealand UK
Recommendation: U.S. must provide universal coverage
Guarantee by law that all people within the Guarantee by law that all people within the United States have equitable access to United States have equitable access to appropriate health care without appropriate health care without unreasonable financial barriersunreasonable financial barriers
• Health insurance coverage and benefits should Health insurance coverage and benefits should be continuous and not dependent on place of be continuous and not dependent on place of residence or employment status residence or employment status
U.S. should consider adopting either a U.S. should consider adopting either a single payer or pluralistic model with single payer or pluralistic model with guaranteed coverageguaranteed coverage
Single payer or pluralistic systems are both capable of achieving universal coverage
Single-payer systems can achieve Single-payer systems can achieve universal access to health care without universal access to health care without barriers based on ability to paybarriers based on ability to pay
Pluralistic systems can assure universal Pluralistic systems can assure universal access, but must provide (1) a legal access, but must provide (1) a legal guarantee that all individuals have access guarantee that all individuals have access to coverage and (2) sufficient government to coverage and (2) sufficient government subsidies and funded coverage for those subsidies and funded coverage for those who cannot afford to purchase coverage who cannot afford to purchase coverage through the private sector through the private sector
Either has tradeoffs that the public will need to weigh in making a choice
Single-payer: more equitable, lower administrative Single-payer: more equitable, lower administrative costs, lower per capita health care expenditures, costs, lower per capita health care expenditures, high levels of consumer/patient satisfaction and high levels of consumer/patient satisfaction and high performance on measures of quality and high performance on measures of quality and accessaccess
• May create shortages of services, delays in obtaining May create shortages of services, delays in obtaining elective procedures and limit individuals’ choices elective procedures and limit individuals’ choices
Pluralistic with guaranteed coverage: allows Pluralistic with guaranteed coverage: allows individuals the freedom to purchase supplemental individuals the freedom to purchase supplemental coverage and servicescoverage and services
• More likely to result in inequities in coverage and More likely to result in inequities in coverage and higher administrative costs higher administrative costs
Lesson: Primary care is the foundation of high performing delivery systems
Societal investment in medical education, Societal investment in medical education, can help achieve a workforce that has the can help achieve a workforce that has the right proportion of primary care physicians right proportion of primary care physicians and specialists, is well-trained, and is large and specialists, is well-trained, and is large enough to assure accessenough to assure access
Investment in primary and preventive care Investment in primary and preventive care can result in better health outcomes, can result in better health outcomes, reduce costs, and help assure an adequate reduce costs, and help assure an adequate supply of primary care physicians supply of primary care physicians
These efforts can be enhanced by assuring These efforts can be enhanced by assuring that all residents have equitable access to that all residents have equitable access to a patient-centered medical home modela patient-centered medical home model
France Germany
United Kingdom
Australia, Canada, Denmark
France NetherlandsNew Zealand Switzerland
UK
Denmark
Recommendation: U.S. policy should support the value of primary care
Federal government should intervene to Federal government should intervene to avert the impending catastrophic shortage avert the impending catastrophic shortage of primary care physicians of primary care physicians
U.S. should set specific targets for U.S. should set specific targets for producing generalists and specialists and producing generalists and specialists and enact policy to achieve those targetsenact policy to achieve those targets
Support care that builds upon the Support care that builds upon the relationship between patients and their relationship between patients and their primary care physicians and financially primary care physicians and financially supports the patient-centered medical supports the patient-centered medical homehome
Lesson: High performing systems encourage patients to be prudent purchasers and engage in healthy behaviors
Cost-sharing Cost-sharing with co-payment with co-payment schedules based on incomeschedules based on income can help can help restrain costs while assuring that restrain costs while assuring that poorer individuals are still able to poorer individuals are still able to access servicesaccess services
Incentives to encourage personal Incentives to encourage personal responsibility can be effective in responsibility can be effective in influencing healthy behaviors, influencing healthy behaviors, improved health outcomes and improved health outcomes and responsible utilization, without responsible utilization, without punishing people who fail to adopt punishing people who fail to adopt recommended behaviors or lifestyles recommended behaviors or lifestyles
Belgium
France
Japan
New Zealand
Switzerland
Australia Belgium Japan
New Zealand Netherlands Switzerland
Taiwan
Recommendation: The U.S. should use financial incentives for individuals to be prudent purchasers
Patients should have ready access to Patients should have ready access to health information necessary for informed health information necessary for informed decision-makingdecision-making
Cost-sharing provisions should be Cost-sharing provisions should be designed to encourage patient cost-designed to encourage patient cost-consciousness without deterring patients consciousness without deterring patients from receiving needed and appropriate from receiving needed and appropriate services or participating in their careservices or participating in their care
Lesson: High performing systems continuously measure how well they do and link payment to performance
Performance measures, Performance measures, financial incentives financial incentives linked to quality, and linked to quality, and active monitoring of active monitoring of performance are key performance are key elements of health elements of health systems that provide systems that provide high quality carehigh quality care
Australia
New Zealand
United Kingdom
Lesson: The best payment systems recognize the value of care coordinated by primary care physicians
Effective payment systems:Effective payment systems:
• Provide adequate payment for Provide adequate payment for primary care servicesprimary care services
• Create incentives for quality Create incentives for quality improvement and reporting improvement and reporting
• Recognize geographic or local Recognize geographic or local payment differencespayment differences
• Provide incentives for care Provide incentives for care coordination coordination
Canada Denmark Germany
United Kingdom
Belgium
United Kingdom
Denmark Netherlands
Recommendation: U.S. should align payments to physicians with quality and care coordination
Provide financial incentives for physicians Provide financial incentives for physicians to achieve evidence-based performance to achieve evidence-based performance standardsstandards
Revise existing volume-based payment Revise existing volume-based payment systems used by Medicare and most systems used by Medicare and most private insurers to private insurers to
• create care coordination payments for create care coordination payments for physicians working with health care teams to physicians working with health care teams to provide patient care management provide patient care management
• maintain a fee-for-service component for maintain a fee-for-service component for separately-identifiable visitsseparately-identifiable visits
(modeled on a bundled and hybrid payment (modeled on a bundled and hybrid payment model used in Denmark and the Netherlands)model used in Denmark and the Netherlands)
Lesson: High performing systems invest in HIT, have uniform billing, and lower administrative costs
Adoption of a uniform billing system Adoption of a uniform billing system and electronic processing of claims and electronic processing of claims improves efficiency and reduces improves efficiency and reduces administrative expensesadministrative expenses
An inter-operable health information An inter-operable health information infrastructure will enable physicians infrastructure will enable physicians to obtain instantaneous information to obtain instantaneous information at the point of medical decision-at the point of medical decision-making and enhance electronic making and enhance electronic communications among physicians, communications among physicians, hospitals, pharmacies, diagnostic hospitals, pharmacies, diagnostic testing laboratories, and patients testing laboratories, and patients
GermanyGermany
CanadaCanada
TaiwanTaiwan
United Kingdom United Kingdom and most othersand most others
DenmarkDenmark
Taiwan Taiwan
NetherlandsNetherlands
Lesson: High performing systems invest in research and comparative effectiveness
Insufficient investments in research Insufficient investments in research and medical technology result in and medical technology result in reliance on outdated technologies and reliance on outdated technologies and medical equipment, and delay patients’ medical equipment, and delay patients’ access to advances in medical scienceaccess to advances in medical science
Some countries with national health Some countries with national health insurance programs have achieved insurance programs have achieved better results (benefit and cost) better results (benefit and cost) through evidence-based evaluations of through evidence-based evaluations of new drugs and technology new drugs and technology
Canada
United Kingdom
UKUK
AustraliaAustralia
Recommendation: The U.S. should invest in research to foster continued innovation and improvements in health care
Funding should come from both Funding should come from both public and private sourcespublic and private sources
Increase investment in basic health Increase investment in basic health research to advance medical research to advance medical knowledge knowledge
Increase funding for health services Increase funding for health services and comparative effectiveness and comparative effectiveness researchresearch
Summary
The U.S. can learn much by studying what works The U.S. can learn much by studying what works well in other countries and by applying those “best well in other countries and by applying those “best practices” to the U.S.’s distinctive political system, practices” to the U.S.’s distinctive political system, values and culturevalues and culture
No single system studied is perfect—each has No single system studied is perfect—each has trade-offs. In general:trade-offs. In general:
• Single payer systems have lower administrative costs, Single payer systems have lower administrative costs, high quality, and satisfaction but cost controls may high quality, and satisfaction but cost controls may create shortages and delayscreate shortages and delays
• Pluralistic systems can be designed to achieve Pluralistic systems can be designed to achieve universal coverage with individual freedom to universal coverage with individual freedom to purchase additional services, but are less equitable purchase additional services, but are less equitable and have higher administrative costsand have higher administrative costs
The evidence shows that either option merits The evidence shows that either option merits consideration by the U.S.consideration by the U.S.
Conclusion:A high performing U.S. health care system would be one that:
Achieves universal coverage (single payer Achieves universal coverage (single payer or pluralistic with guaranteed coverage)or pluralistic with guaranteed coverage)
Is built on a foundation of primary care, Is built on a foundation of primary care, supported by workforce and payment supported by workforce and payment policiespolicies
Provides patients with access to a patient-Provides patients with access to a patient-centered medical home centered medical home
Pays physicians for care coordination and Pays physicians for care coordination and quality instead of volumequality instead of volume
Conclusion:A high performing U.S. health care system would be one that:
Creates positive and non-punitive Creates positive and non-punitive incentives for individuals to be “prudent incentives for individuals to be “prudent purchasers” and engage in healthy purchasers” and engage in healthy behaviorbehavior
Measures and reports on its own Measures and reports on its own performanceperformance
Has uniform billing and lower Has uniform billing and lower administrative costsadministrative costs
Has high levels of public and private Has high levels of public and private investment in research (basic, health investment in research (basic, health services, and comparative)services, and comparative)
The 47 million (uninsured) question:
What can we do together to assure What can we do together to assure that the 2008 elections creates a that the 2008 elections creates a debate on how to achieve a high debate on how to achieve a high performing health care system. . . performing health care system. . .
. . . So that the next President and . . . So that the next President and Congress have a political mandate to Congress have a political mandate to learn from other health systems and learn from other health systems and adapt their best practices to the United adapt their best practices to the United States?States?