Healthcare Economics Is it all just dollars and cents? 19 April 2009 James S Eadie MD, FACEP...
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Transcript of Healthcare Economics Is it all just dollars and cents? 19 April 2009 James S Eadie MD, FACEP...
Healthcare EconomicsIs it all just dollars and cents?
19 April 2009
James S Eadie MD, FACEPCo-Chair, ACEP FGA CommitteeGSACEP, Immediate Past PresidentAcademic Faculty, Wilford Hall Medical Center,San Antonio, Texas
Overview
1. How much does the US spend on health care?
2. Where do the dollars go?
3. How fast are the costs growing?
4. What can be done to contain the costs?
5. Is the system really at a “crisis”?
Health Care Economics 101 Quiz
• How much did the US pay for health
care in 2007?
• What is the % GDP spent on health
care?
• What are the most expensive parts of
the health care system?
Health Care Spending – 2007
• >$2.2 Trillion dollars
• 16.2% of GDP, Switzerland next highest 11.4%
• $7,421 per living person
• Spending rose 6.1% (inflation 4.1%)
“Spending is driven by new medical treatments, rising prices and growing utilization.”
Smith et al. Health Affairs Jan 2006
WHO Health Care Rankings
1. France
18. England
25. Germany
30. Canada
36. Costa Rica
37. United States
38. Slovenia
Health Care Spending - 2006
Hospital Care
– 31% of total health care expenditures
– $648.2 billion
Physician Payment
– 21% of total health care expenditures
– $447.6 billion
– Growth from inc. office visits and imaging
Health Care Spending - 2006
Prescription drugs– 10% of total expenditures
– Total: $216.7 billion *
• greater than nursing homes and home health care combined ($177.6 billion)
Health Insurance Admin Costs (private + Gov)
- $204.1 billion
Health Care Spending - 2006
Medicare– $401.3 billion
– 19% of national health expenditures
– Revenue
• 65% from payroll taxes and premiums
• 35% from general taxes
–Key: this competes with Gov. spending
Health Care Spending - 2006
Medicaid– $310.6 billion
– 15% of national health expenditures
– > 20% state budgets
SCHIP – $ 8 billion
Federal Government pays over 46% Health care bills
Federal Budget 2008
Federal Budget 2008 2.979 Trillion dollars
Social Security 612 billon
Medicare/Medicaid 682 billion
Defense 613 billion
Education 59 billion
Debt Interest 249 billion
Projected Growth
• Health Care Projected Growth Rates– 6.2% annually through 2018
– 16.2% GDP2007 to 20.3% GDP2018
• Public Payers– 2016 – will be largest source of funding
– 2018 – over half of all health care spending
• Why? – Baby Boomers – 76 M
Health Care Timeline
1930s – 70sPhysicians /AMA Strong
Pre-1880Physicians limited
authority
Progressive Era1910 - 17
1880 – 1920 Industrial Revolution
Rise in prestige
1980s - PresentCorporations
Competing InterestsLoss of Political Influence
Germany1883
Social Security1935 Clinton
1994
Rapid Health Care Growth 1950s-70s
Medicare1965
Nixon1970s
Truman Plan1945
MedicareDrug Bill
2003
Health Care Reform Issues
• Uninsured and Underinsured
• Quality Initiatives
• Patient Centered Medical Home
• Health IT
• Physician Pay Reform
• Medical Liability
How Do You Slice The Pie?
• Who’s going to take the smaller piece? – Physicians?
– Hospitals?
– Drug Companies?
– Trial Lawyers?
Emergency Medicine’s Slice of Pie
• 119.2 million ED visits 2006
• $ 37.5 billion on emergency care– Only 1.8% of all health care expenditures
• Emergency Medicine is a small fish
• Fixing the “over-utilization” of emergency departments will NOT fix the problem
Are we in Crisis?
“US health care costs have been in “crisis” for roughly 40 years” Brown, NEJM 24 Jan 08
Imminent Collapse rests on 3 indicators
1. There are 47M uninsured – we must have universal coverage
2. Health care costs are extraordinarily high
3. US system is in fact not a system, but incoherent hodge-podge
Are we in Crisis?
1. The Safety Net for the Uninsured
• Community Health Centers
• Emergency Departments
• Public and voluntary hospitals
– Funds come from donations, Medicaid, grants, etc. “11th hour infusion of money”
– President Bush told everyone that they can always go to the emergency room
Are we in Crisis?
2. Health Care Costs are High
• Costs have been skyrocketing since 1965 when Medicare/Medicaid were signed into law
• US system has pushed technology
• Research hospitals, drugs, medicines
• Public health fell to the side
Are we in Crisis?
3. The non-system of US health care will ultimately drive reform
– Clearly deep interest on all parties to bring together the fragmented system, BUT:
– Business, insurance, and providers have different priorities, but all agree:• Big Government is NOT the answer
• Costs of reform should not fall on them
• Their agenda takes precedence
Law of Reform
“There is nothing more difficult to manage, more dubious of success… than to initiate a new order of things. The reformer has enemies in all those who profit from the old order and only lukewarm defenders in all those who would profit from the new order.”
Machiavelli 1513
Every System is Perfectly Designed To
Produce The Results It Produces
Don Berwick, MD
The Institute for Healthcare Improvement