Download d. many countries devolve much of the responsibility for

October 2014
FIXING OBAMACARE
REGINA E. HERZLINGER
Nancy R. McPherson Professor of Business Administration,
Harvard Business School, [email protected]
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No health care system is perfect. All systems must make
tradeoffs and balance cost-containment, universality and
equality of access and, and quality concerns, while
ensuring a sufficient supply of physicians, and accepting
different degrees of limitations on the freedom choice of
both consumers and providers.
Different systems make these tradeoffs in different ways.
Many countries have achieved better outcomes than has
the U.S., so there are likely lessons to be learned, even if
we cannot adopt another country’s model in toto.
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HOW DOES THE U.S. HEALTHCARE SYSTEM
COMPARE TO THOSE OF OTHER NATIONS?
(Statistical comparisons and rankings)
1. Healthcare outcomes [what measures do we want to
use?] and Patient/consumer/citizen satisfaction
measures
2. Cost (% of GDP, per capita expenditures, growth rates
relative to GDP growth]
3. Extent and depth of universal coverage and how
achieved
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DIFFERENT SYSTEMS
BALANCE THESE PRIORITIES
IN DIFFERENT WAYS, BUT
THERE ARE A NUMBER OF
COMMON PATTERNS
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A. CULTURAL AND POLITICAL FACTORS HAVE
SHAPED VARIOUS COUNTRIES’ HEALTH-CARE
SYSTEMS
For some commitment to universal coverage based on notions of
solidarity or health care as a human right, e,g. health-care
policies are embedded in a larger commitment to a robust welfare
state in many European countries, rooted in commitment to
social solidarity
In Singapore, for example, the governing party has long
emphasized individual responsibility and the need to discourage
“dependency” on government welfare; reflected in the policies
such as compulsory medical savings accounts, policies that
encourage insurance plans with high deductibles and copayments, discouraging plans that offer “first-dollar” coverage
America’s culture of individualism is well-known, see for example
Robert Bellah’s expressive and utilitarian individualism and as
Americans’ “first language”
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B.
ACHIEVING
UNIVERSAL
(OR
NEAR
UNIVERSAL) ACCESS IN A VARIETY OF WAYS
1. Single payer system in the UK
2. Public sickness funds funded by payroll taxes in Germany
3. Private insurance purchase by individuals -with subsidies for those too
poor to purchase their own -- in Switzerland
4. And Singapore in mixture of compulsory savings accounts, public and
private insurance, in the government’s safety net for the poorest
5. In Turkey, the recent expansion of the Green Card program (akin to
Medicaid) has significantly expanded coverage especially for the poorest
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C. MARKET-BASED REFORMS – CAN INCLUDE A
MIX OF PRIVATIZATION AND EFFORTS TO
CREATE COMPETITION AMONG PUBLIC SECTOR
INSTITUTIONS – IN HOPES OF ACHIEVING
EFFICIENCIES AND CUTTING COSTS
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1. COMPETITION AMONG
INSURERS/PAYERS,
a.private insurers in Switzerland
b.public sickness funds in Germany
2. COMPETITION AMONG PROVIDERS
INTRODUCED
a. UK has recently allowed NHS patients to choose among hospitals; Cooper,
et. al studies by Cooper et. al. suggest that competition has resulted in
positive results, although they stress the importance of competition based
on elements other than price
a. Sweden allowing patients to go outside their county to seek healthcare,
money “follows the patient”
a. In Singapore public hospitals were restructured in the 1980s, granted
significant autonomy in management, introduced competition among
them
a. In Turkey, the rapid expansion of the private sector has been an important
component of health care reforms over the last decade
a. The percentage of private for profit hospitals in Germany has risen from
15% to 32% over last 20 years
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3. COMPETITION, WHETHER AMONG INSURERS OR
PROVIDERS, REQUIRES ONGOING GOVERNMENT
REGULATION TO ENSURE TRANSPARENCY THAT
ALLOWS CONSUMERS TO MAKE INFORMED
CHOICES AND IN THE NAME OF EQUITY
a. In the UK, the government’s he maintains websites with information
about various providers and hospitals; Germany; mandates online posting
of quality data
b. The Swiss government maintains online exchanges to provide consumers
with information about insurers
c. In Sweden, only a small number of individuals exercise their choices,
despite reforms encouraging consumers to choose providers in order to
induce competition; partly because lack of information prevents them
from comparing care
d. In both Switzerland and Germany, the government closely regulates the
insurance markets. Insurance is compulsory, the government prescribes
them benefit packages, forbids insurers from risk selecting, and provides
risk equalization.
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4. PRIVATIZATION IS NOT PANACEA, HOWEVER.
PRIVATE PLAYERS STRUGGLE TO ACHIEVE A
REASONABLE RATE OF RETURN WHILE STILL
MAINTAINING HIGH QUALITY AND
EQUITABLE ACCESS MANDATED BY
GOVERNMENTS.
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D. MANY COUNTRIES DEVOLVE MUCH OF THE
RESPONSIBILITY FOR MANAGEMENT AND
REGULATION OF HEALTH CARE SYSTEM TO
LOCAL/REGIONAL GOVERNMENTS,
1. in Sweden, for example, local governments provide most day to day
management of health care System and 70% of funding comes from local
taxes
2. Swiss cantons and German Lander similarly provide administrative oversight
3. the central government establishes overall framework and regulations,
4. Can lead to different levels of provision and services as different regions make
different choices
5. Also makes Health Care System more responsive to see citizen concerns and
political considerations
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E. EVEN WITH RECENT TRENDS TOWARD
PRIVATIZATION, GOVERNMENT MAINTAINS A STRONG
ROLE – TO ENSURE MINIMAL QUALITY STANDARDS
ARE MEANT AND IN AN EFFORT TO PRESERVE SOME
LEVEL OF EQUITY AND UNIVERSALITY IN ACCESS
1.
2.
3.
4.
Plays a role in setting prices, capping out-of-pocket expenditures
Provide overall regulatory framework
Regulate supply , i.e. number of physicians in a given specialty, number of
beds in order to ensure equality of access
a. German Physician Associations set quotas for each for speciality in
each region,
b. the government of Singapore determines the number of each
speciality that can practice in the country, subsidizing hospitals and
clinics, determining number of beds and distribution in public
hospitals, funding medical schools and regulating admissions
c. the Turkish government mandates that new doctors practice in
underserved regions for a certain amount of time, in order to
overcome significant regional divergences in health care provision
Help to maintain markets, i.e. government websites that allow individuals to
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research and choose providers or insurers;
F. OTHER PATTERNS
1. There is considerable variation as to the
relative size of overall public vs. private
spending on healthcare,
2. Variation on out-of-pocket expenditures
3. means of funding public (general tax
revenues (UK, Sweden) vs. specific payroll
taxes (Germany, Singapore)
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FINAL ASSIGNMENT
Prepare a 1,500 word document with a maximum
of five Exhibits on the public policies that could
improve the cost control, quality, and access in the
U.S. health care system or in one of the BRIC
nations which draws on the examples discussed in
the Study Group