Comparison of Health Systems around the world.

1. Surgery Grand Rounds
Robert Wolfson, MD, MSHA
Healthcare Systems: History, Management & Policy
April 20, 2009

2. Comparative Analysis Of
National Healthcare Systems
www.wolfsonconsulting.com/grandrounds
April 20, 2009

3. Healthcare Crisis!
quot;Report puts U.S. health care with
industrialized world's worst.quot;
(Family Practice News, 2008)
quot;The Coming Healthcare Collapsequot;
Obama Health Plan Unafforable: Income
tax to rise by 90%!
(Robert McIntosh: 4/14/2009, A.P.)
quot;The Healthcare Crisis in Americaquot;
(Families USA – 2007)
4/20/2009 3

4. Healthcare Crisis!
quot;Lack of health insurance causes 18,000
unnecessary deaths every year.quot;
(Institute of Medicine, January 14, 2004)
quot;To Err is Humanquot; (IOM, 1999, 2003)
quot;44,000 – 98,000 People Die Each Year
In Hospitals as a Result of Medical Errorsquot;
16%, or 43 Million Americans
Have No Medical Insurance (CDC)
4/20/2009 4

5. 4/20/2009

6. What’s Going On Here?
Is This Problem Unique to the U.S.?
How Do Healthcare Systems Function In
Other Comparable Nations?
Where Should We Turn For Examples
With Our Healthcare Reform Efforts?
This Morning:
Compare U.S. Healthcare System With Healthcare
Systems In Other Nations
4/20/2009 6

7. Topics
1. Define Terms & Methods
2. Evolution - Health Systems OECD Nations
3. Health System Models & Examples
4. Consistent Differences
5. Current Healthcare Debate
6. Discussion
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8. Terms
I. OECD
II. Healthcare
III. Analytic Methods: quot;Systems Theoryquot;
IV. Healthcare System
V. Individual Madate, Employer Mandate
VI. Single Payer System
4/20/2009 8

9. I. OECD:
Organization for Economic Cooperation and
Development
30 Countries Committed to 'Democracy & the
Market Economy'
Began in 1921, Expanded in 1960's
In the 20th Century, All OECD Countries
Extended Government‟s Role in
Financing & Organization of Health Services
4/20/2009 9

10. OECD - 30 Countries
20 Nations Initially: (1921)
Austria, Belgium, Canada, Denmark, France,
Germany, Greece, Iceland, Ireland, Italy,
Luxembourg, Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland, Turkey, U.K., U.S.A.
+ 10 Later:
Australia, Czech Republic, Finland, Hungary,
Japan, Korea, Mexico, New Zealand, Poland,
& Slav. Repuplic
4/20/2009 10

11. II. Healthcare
All Goods & Services Delivered
Designed to Promote Health
Including:
• Preventive, Curative & Palliative
Interventions
• Directed to Individuals & Populations
4/20/2009 11

12. III. Methods
Healthcare Systems Can be Compared
Using Different Disciplines, or Methods:
1. Sociology:
Distribution of Care per Sociologic Group
2. Economics: Most Data Available
3. Systems Theory:
The Most Comprehensive
4/20/2009 12

13. Systems Theory:
quot;The Study of the Nature of Systems
In Nature, Society and Sciencequot;
A Framework by which One Can Analyze A
Group of Objects,
Working in Concert To Produce a Result
Examples of Systems:
Cell, A Method, quot;Cardiovascular Systemquot;
4/20/2009 13

14. Characteristics of Systems:
1. Separate Objects
Acting as an Integrated Whole
Often Reach Functional Equilibrium:
(Closed Systems)
2. Objects in Systems are often Grouped into
Categories:
Input, Processing, Output, Feedback
3. Parts of Systems Have:
Functional & Structural Relationships to Each Other
4/20/2009 Slide 14

15. IV. Healthcare System
= All Resources Dedicated to Providing
Healthcare Services to Populations, Nations
Include:
Patients, Providers,
Methods, Treatments
Institutions, Organizations, Buildings
Acting as an Integrated Whole to Provide
Healthcare Services to Populations &/or Nations
4/20/2009 15

16. Healthcare Systems
Inputs: Funding, Patients, Physicans
Throughputs:
Healthcare Organizations, Treatments
Outputs: Outcomes, Payments to Providers
Environment: Physical Environment,
Health Of Individuals & Community
Feeback:
Patient Health, Satisfaction, Health of Community
4/20/2009 16

17. Healthcare System Model
Feedback
Input:
Output:
Throughput:
$$$, Patients, Suppli
$$$, Patients
In Pt. & Out Pt.
es,
Clinical Outcomes,
Services,
Information
Information
Information
Environment
People, Wellness, Illness, Risks
17
4/20/2009

18. Terms (cont.)
V. Individual, Employer Mandates:
Individual citizens are required to have
health insurance, one way or another.
Employers are required to provide health
insurance to employees.
VI. Single Payer System
Payment for all Healthcare Expenses
comes from a Single Source or Fund.
4/20/2009 18

19. Evolution of Health Systems
In U.S., Before & During World War II:
Labor Shortage,
Freeze on Prices and Wages
Employers Allowed to Offer Health Insurance
As a Tax Deductable Benefit to Employees
= Subsidy to Employers & Employees
4/20/2009 19

20. Following World War II:
Western European Nations & Japan:
Had to Rebuild From Scratch
Developed National Health Systems
Through Socialist Governments
United States Chose Not to Build
A National Health System, But
Provided Subsidies to Their Healthcare
System
4/20/2009 20

21. U.S. Subsidies
Hospitals:
Hill Burton Act – Funding For Hospitals
Many Hospitals Granted Tax Exempt Status
Training of Health Professionals
Subsidized Through Governmental Grants
Employer-Sponsored Health Insurance:
Remained Tax Decuctible
1960's: Medicare, Medicaid
4/20/2009 21

22. Health System Models
I. National Health Service (NHS)
II. National Health Insurance (NHI)
III. Mixed Funding, Mixed Coverage
Pvt. Insurance + Government Funding
Coverage is Not Universal
4/20/2009 22

23. I. National Health Service (NHS)
quot;Nationalization of Healthcarequot;:
Including Providers, Facilities & Services
Universal Coverage, Single Payer
Financing From:
Income Tax, General Taxes & General Fund
District Budgets
Are Used to Control Spending
4/20/2009 23

24. Characteristics: NHS
Patients seen in Public Hospitals & Clinics
Physicians work for NHS
Countries Include:
Great Britain, Sweden, Norway,
Finland, Spain, Italy, Greece
Private Practices often Allowed
4/20/2009 24

25. United Kingdom:
Population: 61 Million
Life expectancy at birth: 79
Health spending as % GDP: 8.3%
Coverage: Universal
Management: Government
Hospitals: Owned by Government
Physicians: Paid Salary by Government
Receive Fees from Private Insurance, Patients
4/20/2009 25

26. U.K.: Spending
Health Spending per capita per yr.: $2,580
$ 2,245 (87%) From Government
$335 (13%) From Individuals
For Supplemental, Private Insurance,
Payments to Doctors, Self Pay for OTC drugs
Prescription drugs:
1/2 Population Receive Drugs for Free,
Exemptions: Age, Disability and Pregnancy
4/20/2009 26

27. U.K. (cont.)
Notable features:
1. Patients do not receive Bills:
Or Insurance Premiums
2. National Inst. Health & Clinical Excellence:
Advice For Treatments & Drugs to be Covered
3. Challenges:
Inefficiencies, Old Infrastructure, Waiting Times,
Unequal Distribution of Resources Among Districts.
Professor Sir Bruce Keogh, 2/2/09
4/20/2009 27

28. II. National Health Insurance (NHI)
= Nationalization of Health Insurance
May be Single or Multiple Payers, But
There is Universal Coverage with
Employer &/or Individual Mandates
Financing Comes From:
Employment Taxes; Social Security
Less „Budgeted‟
More Flexible form of Financing
Private & Public Hospitals/Clinics Exist
4/20/2009 28

29. NHI: Japan, France
Individuals Buy Coverage:
From Government Plan or Private Insurers
Universal Coverage, Individual Mandate
Consumers Pay Insurance Premiums
Government Provides Subsidies for:
• Elderly
• Those in Need
• Small Businesses
4/20/2009 29

30. Japan:
NHI; Financing: Public & Private Insurance
Universal Coverage;
Individual & Employer Mandate
Funding: From Employment Taxes and Private
Insurance Premiums
~ 4% of Salary => Nonprofit, Community-Based
Insurance Plan.
Public Assistance For Small
Businesses, Elderly & Poor
4/20/2009 30

31. Japan:
Population: 128 million
Life Expectancy at Birth: 82.1
Health Spending as % GDP: 8%
Coverage: Universal
Spending/capita/yr.: $2474
$ 2053 (83%) From Government,
$420 (17%) From Invividuals:
Gov't. Controls on Pharmaceutical Prices
4/20/2009 31

32. Japan (cont.)
Notable features:
Frequent Doctor Visits; Long Hospital Stays.
Insurers Must Cover Everyone; Can't Deny a
Claim.
Biggest challenges:
Rapidly Aging Population. Overuse of Care.
Highest Number of Hospitals/Person in the world.
Shortage of Physicians in Many Specialties &
Rural Areas.
4/20/2009 32

33. NHI, France:
Individual & Employer Mandate;
13.1% of Employees‟ Salary Goes to NIH Fund
Income Tax Fund Coverage for:
Retirees, Unemployed, Disabled, Poor.
87% Have Supplemental Insurance:
Private, for-profit Insurers
Purchased by Employer or Individuals.
4/20/2009 33

34. France:
Population: 61.7 Million
Life expectancy at Birth: 80.3
Health Spending as % GDP: 11.1%
Coverage: Universal
Health Spending per capita/yr.: $3,300
$2,644 (80%) From Government,
$440 (13%) From Individuals for Private Insurance,
$220 Consumer Out-of-Pocket Expenses
4/20/2009 34

35. France: Notable Features
30 Chronic Conditions:
Including Diabetes: Fully Covered
Broad Choice of Physicians, Specialists
Case Management:
Pre/Post Natal Care, Cancer, Other Conditions
Prescription Coverage:
Co-pay Based on Demonstrated Effectiveness
4/20/2009 35

36. France:
Physicians Organized into Unions
Government pays Fee-For-Service
Based on Negotiated Rates
Hospitals:
Government Sets Rates
Challenges:
Increasing Costs, Inefficiencies.
4/20/2009 36

37. Canadian System:
NHI – of sorts.
Funded by Taxes From The General Fund
Single Payer System
Budgets on a Provincial Level
Most Hospitals: Self Managed, Private
“Funding without Organization”
Physicians: Salaried & Fee For Service
Care is Publically Funded, Privately Delivered
4/20/2009 37

38. Canada:
Population: 33 Million
Life expectancy at Birth: 81.1 yrs.
Health Spending as % GDP: 10.3%
Health Spending per capita/yr.: $3460
$2, 422 (70%) From Government
$1100 (30%) Private Spending
Challenges:
Increasing Costs; Waiting Times
4/20/2009 38

39. III. Mixed Funding, Mixed Coverage
U.S.A.
Funding From:
Private Insurance, Individuals & Government
• Multiple Payers
• No Individual or Employer Mandate
• Coverage Not Universal
4/20/2009 39

40. United States:
Population: 302 Million
Life Expectancy at Birth: 78.1
Health Spending as % of GDP: 15.3%
46 Million, or 16% Uninsured
Medical Debt Is The #1 Cause of Bankruptcy
Spending/capita/yr. = $7,000
$3220 (46%) From Government
$3780 (54%) Employer-Employees, Individuals
4/20/2009 40

41. United States:
Highest Infant Mortality: in OECD
Coverage: Almost all people over 65 yrs. Old.
Approx. 80% of people under 65 yrs.old.
Total Health Spending/yr. = $3.16 Trillion
Physician & Hospital Fees:
Predetermined in Government Programs &
Private Insurance
No Price Controls for Uninsured:
Charged approximately 200%
4/20/2009 41

42. United States (cont.)
Notable Features:
Individual Choice; Very Expensive
Advanced Technology, Drugs and Facilities
Insured Patients Choose Doctors & Hospitals
Challenges:
1. The Uninsured
2. Discrepancy between Rich and Poor
Access & Quality of Care
3. Increasing Costs, Quality Concerns
4. Dysfunctional Payment System
4/20/2009 42

43. Common U.S. Values and Opinions:
The „Rugged Individual‟ Spirit
Anti-Entitlement
Anti-Government-Run Programs
“U.S. Has the Best Healthcare the World”
“Universal Coverage => Runaway Costs”
“We‟re Different”
4/20/2009 43

44. Cost of Care Per Capita
7000
United States
Germany
Canada
6000 France
Australia
United Kingdom
5000
4000
3000
2000
1000
0
80
82
84
86
88
90
92
94
96
98
00
02
04
19
19
19
19
19
19
19
19
19
19
20
20
20
4/20/2009 44

45. Cost of Healthcare - % of GDP
16
14
12
10
8
6
United States
Germany
4
Canada
France
Australia
2
United Kingdom
0
80
82
84
86
88
90
92
94
96
98
00
02
04
4/20/2009 45
19
19
19
19
19
19
19
19
19
19
20
20
20

46. Health Spending/person %GDP
$7,000 18.0%
16.0%
$6,000
14.0%
$5,000
12.0%
$4,000 10.0%
8.0%
$3,000 Ave. Annual
Spending/person
6.0%
$2,000
Hlth. Spending
4.0% %GDP
$1,000
2.0%
$0 0.0%
4/20/2009 46

47. Life Expectancy &
Ave. Annual Spending/Person
$7,000 83.0
82.1
$6,000 82.0
81.3
$5,000 81.0
80.3
$4,000 80.0
79.4 Life Expectancy
79.0 79.0
$3,000 79.0
78.1
Ave. Annual
$2,000 78.0
Spending/person
$1,000 77.0
$0 76.0
4/20/2009 47

48. US Health Spending Projections
National Health Expenditures (billions)
$4,500
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
4/20/2009 48

49. Consistent Differences
Non U.S. Healthcare Systems:
Are Significantly Less Expensive
Have Acceptable (Better?) Outcomes
All Have:
1. Individual &/or Employer Mandates
2. Universal Coverage
4/20/2009 49

50. What's Happening Here?
I. Is There a Crisis?
Characteristics of U.S. Healthcare System
Are a Result Of:
History, Structure, & Culture
II. No System Is Perfect
All Have Challenges, Problems
III. Is it Less Expensive:
To Mandate Participation?
To Provide Universal Coverage?
4/20/2009 50

51. Reform Efforts:
I. What Are Our Goals?
Reduce Cost?
Improve Quality?
Cover the Uninsured?
II. Can, or Should We Try
To Accomplish All of Them Concurrently?
How?
4/20/2009 51

52. What Are Our Options?
I. Answers
II. Questions
4/20/2009 52