Topic 12: Historical failed attempts at healthcare reform

Environment during clinton plan

During election there was a recession so middle class was concerned about rising healthcare costs. But, once this was actually proposed, the recession wasn't that bad. so people were less concerned about healthcare access. notion of managed competition started being compared to managed care

How do people feel about being able to afford necessary care if seriously ill?

US is lower

who does single payer benefit?

benefit lower income people because taxes paid would be lower than their premiums middle income- could go either way higher income people would not benefit because their taxes would be higher than their premiums (higher burden on them)

Canadian system

called Medicare. free universal coverage for all medically necessary services. national gov't allocates money to provinces and territories and they're responsible for administering the program. hospitals generally receive a budget and province/territory sets up fee schedule for physicians. (gov't is the single payer for all medical services) delivery of healthcare is through private providers and hospitals are privately owned

is managed competition the same as ACA?

conceptually yes, but ACA does not have an intermediary

dissatisfaction with the US healthcare system

dissatisfaction was at an all time high in 1991, just prior to clinton coming on the scene. most people agreed that there were some good things about the healthcare system but fundamental changes were needed, then they believe that we need to completely rebuild it, then the smallest amount think nothing is wrong smaller percentage felt strongly about reform during ACA reform

lessons learned from Clinton

don't be too ambitious or radical Obama strategists focused on healthcare cede control of the progress to Congress

how is growth of health care spending as percentage of GDP determined in Canada?

it's a political decision. the national gov't decides how much to allocate to the provinces/territories

how is growth of health care spending as percentage of GDP determined in the US?

it's essentially how much people are willing to spend in a private market

does Canada adopt tech slower or faster than US- why?

slower difficult to assess whether US has more medical tech because we over-utilize it, or because Canada under-utilizes is

Clinton vs Obama

the ads obama used against hillary were purposeful (probably) to remind people about hillary's involvement in President Clinton's reform plan Ironic that Obama was questioning her about the use of an individual mandate

what do US citizens think of US system compared to Canada?

Overall, they think the US system is worse. They think quality in the US is better/same as Canada, and coverage and cost in the US is worse

three major NHS reforms

1. NICE was formed which establishes guidelines for treatments covered by NHS (cost-effective analyses) 2. Conscious effort to increase amount of spending in system (leading to wait lines and slower adoption of new tech) 3. Health and Social Care Act abolished primary care trusts and established 211 clinical commissioning groups to have GPs in these buy medical services (moving away from hospital fixed budgets and introduce some competition)

financing for 2017-8 single payer in US

1. existing revenues for Medicare/Medicaid/CHIP 2. increasing personal income taxes on top 5% 3. a new payroll tax 4. a new tax on unearned income 5. new tax on stock and bond transactions

why compare us to canada?

1. geographic proximity 2. political similarity 3. health insurance spending was similar before Canada's reform

President Clinton mistakes with reform

1. overly ambition first-term agenda. he wanted the passage in his first 100 days and also was pursing other initiatives, so experts were running thin. 2. the task force drafting legislation was secretive within administration and with Congress 3. choice of First Lady Hillary Clinton to chair the task force was questionable because sexism 4. Clinton wasn't interested in compromising (he said he would guarantee every American insurance or he would veto everything)

Previous attempt at reforming the health care system

1912- President Teddy Roosevelt tried to create national health insurance funded by a payroll tax. it failed. 1945- President Harry Truman tried to add health care benefits to social security program with a payroll tax. people accused him of being communist and it failed. 1964- President Johnson added Medicare and Medicaid programs 1974- Nixon tried to use employer mandate for firms over 25 and covert Medicaid program to subsidized private plans. it failed with Senator Kennedy's single payer proposal. failed. 1993- Clinton attempted large reform but failed

are waiting times longer in the US or Canada?

Canada the study could've just biased data though. maybe longer wait times were for elective procedures. and maybe the treatments shown here aren't representative of the average

Comparison of 4 countries total spending on healthcare as percent of GDP

Canada used to be similar to US but US rose Germany comparable to US. but US rose UK has historically been lower, spending increases in 2000 due to NHS plan to increase spending

managed competition example

Lets say an HMO charges avg premium of $2000 and FFS, charges average premium of $3000. If entire population was in one of these, then the $1000 difference in averages reflects difference in generosity/efficiency. $1000 does not reflect anything about health status/expenditures since entire population is enrolled in one of these. if both plans are offered, prices would change because selection. healthier people would choose HMO sicker would choose FFS. without risk adjustment, HMO would fall to $1000 and and FFS would increase to $4000. Assuming half pop is sick/healthy. average expenditures would change. problems: there is no pooling to cross subsidize sick people and HMO spending money to compete with each other. having plans compete on who can get healthiest enrollees isn't good. so risk adjustment helps manage the competition in a healthy way difference in costs in managed competition would be attributable to the generosity of the plan, not health status of the population (there is an intermediary that makes payments from its pool of money to different insurers)

Bill Clinton's Healthcare reform

Managed competition Health insurance purchasing cooperatives (HIPCs) employer contribution of 80% of premiums global budgets to decrease healthcare spending GDP (a bit inconsistent with managed competition- amount spent on health care would be determined by individual choices)

NHS UK vs US

NHS is most similar to the VA

are payment rates for provides in Canada lower or higher than in the US?

They are lower in Canada

NHS in the UK

enacted in 1948. provides free universal coverage for all medically necessary services. "socialized medicine" because gov't also delivers the health care (not just finances). hospitals owned by gov't, physicians are salaried (but most general practitioners are private) historically used regional "trusts" with budgets from gov't tax revenue can opt out (8%)- people pay premiums to insurers who reimburse providers

managed competition

gov't would be involved in facilitating a choice among competing private health insurance plans - consumers could pay more for more generous plans if they chose them and gov't would mitigate adverse selection by implementing risk adjustment

percent of adult population naming healthcare as one of the two most important issues for gov't to address over time

in 1993, 55% believed health care was one of the two most important things in 2000s, this was around 10-20% during ACA reform, it was around 22% increased to 90s, then decreasing since 90s

Health insurance purchasing cooperatives (HIPCs)

in Clinton's reform plan. would have been nonprofit organizations to coordinate the offering of private health insurance plans and often referred to as sponsored or honest brokers would have established standards for the plans and provided quality information to consumers. also collected employer contributions, federal tax contributions for lower income people, and individual contributions to make risk-adjusted payments to plans would cover 10,000+ people (large employers could become HIPCs)

is administrative cost higher in the US or Canada?

in the US

Single-payer proposals like Canada for US Healthcare system

one bill showed this: all US residents would be eligible, all medically necessary services would be covered, and there wouldn't be any copayments there would be overall conversion to public/nonprofit health system spending: reimbursement rates for physicians would be set, global budget for providers, and drug prices negotiated main way spending would be lower: reduction in admin costs and lower payment rates

German healthcare

organized through use of sickness funds- private, regulated, nonprofit insurers first country to have universal coverage. people used to be assigned to sickness funds based on source of employment but now people have a choice of 134 of them. financed by flat payroll tax, pensions pay for retirees, gov't pays for unemployed each "state" negotiates FFS payment rates with physician and hospital associations. hospitals salary their physicians. sickness funds use reference pricing for pharmaceutical drugs (insurer covers full cost of cheapest drug, so insured can pay difference for other drug) 10-15% opts into parallel private system

Canada vs US

payment rates are lower in Canada they adopt tech slower and longer waiting times

is administrative overhead higher in private insurance or public insurance?

private insurance

in managed competition, what are the payments to insurers based on?

the differences in cost based on the difference in plan generosity and the difference in expenditures resulting from the selection of healthier vs sicker individuals should adequately compensate insurers for the health risk of the population that they enroll and enables insurers to compete on delivering the more efficient/best quality coverage

what's the goal of managed competition?

use intermediary with risk adjusted payments to have private health insurers compete with one another to have lower premiums, not to compete to achieve favorable selection

what happened to clinton reform?

wasn't even put out of the committee for a vote.