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Health and Wellbeing: Why does
America Fare so Badly?
Steven A. Schroeder, MD
Kinsman Ethics Conference
April 11, 2013
Quick Poll
How many think U.S. has best medical system?
 How many have family happy with their own
medical care?
 How many of you want your family to die in an
ICU?
 How many think that the 2010 Affordable Care
Act was a good thing? A bad thing? Not sure?

NRC/IOM Report: Shorter Lives,
Poorer Health*

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


Lack of universal health coverage
Weaker foundation in primary care
Poor care coordination
Greater obesity (though lower smoking rates)
Less likely to practice safe sex as teens
More car crashes, gun deaths
Greater income inequality
Highest rate of child poverty
* Woolf and Aron. JAMA 2013; 309:771-72
Compared to Peer Countries,
Americans do Worse:*
Infant mortality and low birth weight
 Injuries and homicide
 HIV and AIDS
 Drug-related deaths
 Obesity and diabetes
 Heart disease
 Chronic lung disease
 Disability

* IOM, U.S. Health in International Perspective, 2013
Why Are Americans so
Unhealthy?*
Health systems (large # uninsured)
 Social and economic conditions
--higher poverty levels
--higher: caloric intake, drug abuse, traffic
accidents with alcohol, firearms violence
--Poorer education
--Weaker social safety net
 Physical environments (automobile focused)

* IOM, 2013
Five Iconic American Beliefs
That Impair Population Health*
Individual freedom
 Free enterprise
 Self-reliance
 Role of religion
 Federalism

* IOM 2013 report
Health Status: United States vs. 33 Other OECD Countries
Health Status Measure
U.S.A.
U.S. Rank in
OECD (34)
Best Rank of
OECD
All Women
80.1
22
Japan (85.3)
White women
80.5
19
All men
74.8
22
White men
75.3
19
All women, years
19.8
10
White women, years
19.8
10
All men, years
16.8
9
White men, years
16.9
9
Life Expectancy from
birth (y)-2010*
Sweden (78.4)
Life expectancy from
age 65/-2010*
* White male/female values from 2004
Japan (23)
Iceland (18.1)
Life Expectancy at Birth in Selected OECD Countries, 1960–2009.
Fineberg HV. N Engl J Med 2012;366:1020-1027
Some Good News


US does much better for life expectancy after
age 75
Life expectancy data at all time high—77.6 years
at birth, but …..
– Women: 80.1, men: 74.8
– White women>black women>white men>>>black
men
– Almost all the recent gains were in upper SES groups;
(some declines in poor white women)
– Much of those gains are from less use of tobacco
Determinants
of Health

Genetic predisposition

Behavioral patterns

Environmental
exposures

Social circumstances

Health care
Proportions
(Premature Mortality)
(Premature Mortality)
Genetic
30%
Social
15%
Environment
5%
Behavior
40%
Source: McGinnis JM, Russo PG, Knickman, JR. Health Affairs, April 2002.
Health care
10%
Behavioral Causes of Annual Deaths
in the United States
435
450
400
365
350
300
250
200
150
85
100
50
43
20
*
112
29
*
17
0
Sexual
Behavior
Source:
Alcohol
Motor
Vehicle
Guns
Mokdad et al, JAMA 2004;291:1238-1245
Mokdad et al; JAMA. 2005; 293:293
Flegal KM, Graubard BI, Williamson DF, Gail, MH. Excess deaths associated
with underweight, overweight, and obesity. JAMA 2005;293:1861-1867
Drug
Obesity/ Smoking
Induced Inactivity
suffer from mental
* Also
illness and/or substance
abuse
Health
Health Improves While Disparities Widen
Time
Health Status—Summary


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Doing better
Oregon is #13/50 states (2012)
But at bottom of developed world
We may not get enough credit for functional status
improvements (new joints, etc.)
Major declines in heart disease (multiple reasons)
Major opportunities for improvement in tobacco and
obesity
Can’t improve without more attention to the poor
Hard to improve through medical care alone
Costs of Medical Care: We’re
Number One!
Up to 17.6% of GDP in 2010, $2.8 trillion;
Netherlands 12%; others <
 Poor health value for the dollar
 Tendency to look for painless quick fixes
(electronic medical record, pay for
performance, comparative effectiveness)
 Reluctance to take on the involved sectors
(pharma, device and insurance industries,
hospitals, doctors, unions)

Actual and Projected National
Health Expenditures, Selected Years
Source: Sean Keehan and others (2008). “Health Spending Projections Through 2017: The Baby-Boom Generation is Coming to
Medicare.” Health Affairs Web Exclusive, Feb. 26, pp w146. (www.healthaffairs.org)
Health Expenditures as a Percentage of Gross Domestic Product (GDP) in Selected OECD
Countries, 1960–2009.
Fineberg HV. N Engl J Med 2012;366:1020-1027
2010 Health Expenditures
as a Share of GDP
Source: OECD Health Data 2012
Health Care Spending- Per Capita In $US PPP*
The U.S. Healthcare Value Shortfall
Source: Harvard Business Review, p. 70, April
2010
Years - Estimated Average Life
Expectancy
IOM Estimates of Sources of
Excess Medical Costs*
Unnecessary services
$210b
 Inefficiently delivered services
$130b
 Excess administrative costs
$190b
 Prices that are too high
$105b
 Missed prevention opportunities $ 55
 Fraud
$ 75
Total = $765b, or about 1/3 total expended

* 2010 report, based on 2009 expenditures
Why Is U.S. Medical Care So
Costly?*

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Physician supply? No (but specialty % very high)
Fee for service payment valuations? Yes
Health worker incomes? Yes
Hospital supply/length of stay? No
Proportion intensive care beds? Yes
Rate of expensive procedures, and technology in
general? Yes!!
*Schroeder synthesis
Why Is U.S. Medical Care So Costly
(Part 2)?
Administrative costs? Yes
 Malpractice, including defensive medicine? (Yes,

about $54 b/year; 80% on defensive medicine)


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Aging population? Not really
Patient demand? Yes
Lack of cost competition? No, but may be a cost
containment strategy
Low investment in IT? Maybe
Fraud and abuse? Yes
THE REFERRAL CHAIN IN HEATH CARE
Patient
Family
Generalist
Physician
Specialist
Physician
Tertiary
Hospital
Community
Hospital
Intensive
Care
Intensive
Care
Key
European health care
U.S. health care
Why Does US Medical Cost
Containment Fail?

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Americans (those who are insured) resist limiting
choices
Power of industries—device manufacturers and
drug companies
Power of medical/hospital sectors
Strong patient demand for more (e.g.,
alternative medicine)
Surge of new technologies
Political hot potato, and lack of accountability
focus
Time Magazine Criticizes
Hospitals
Why Not Let Costs Keep Rising?

Opportunity costs
–
–
–
–
Schools
The environment
Jobs and overseas competition (see General Motors)
Other worthy causes
 Business resistance
– Operational costs
– Retiree costs
– Source of labor disputes
 Pressure on public programs (Medicare, Medicaid,
County Hospitals)
 Increases the number of uninsured
 Biggest cause of personal bankruptcies
Health Care Priorities*
We want the best
 We want it right now
 We want choices
 We want someone else to pay for it
 If we can’t get it, we will sue

* Most countries pick 2. U.S. has all 5
Access to Health Care

“Best of systems, worst of systems”
Insurance coverage the major barrier; we
are unique in large % uninsured. 50.7
million uninsured in 2009 (16.7%
population)
 Gradual decline in employer coverage
 Shift of expenses to out of pocket
 Geography, language, literacy, racial
barriers also important

Why U.S. Tolerates Such a Large Number of
Uninsured? Explanations, Rationales and Myths*
1.
2.
3.
4.
5.
6.
7.
The numbers are exaggerated
Uninsurance is often temporary
Many choose to be uninsured
The uninsured get care anyway
We can’t afford to expand coverage
Government is untrustworthy
American political system prevents
major reform
8. (Poor under-represented politically)
*Schroeder SA., The medically uninsured—will they always be with us?, NEJM, 1996;
334:1130-1133.
Major Implementation
Challenges for the ACA

Implementation details tricky and still in
progress:
--state health exchanges
--how does IRS collect penalties?
--states have latitude in defining benefits
--funding for demonstration projects
Obstacles to ACA
Implementation
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Creating the state exchanges: to date only 25/51 states
have opted in
The Medicaid expansion component: a moving target; to
date 23 states have accepted; 13 uncertain; 14 refused
House Republican budget tries to undo much of the ACA
No funding for certain elements of cost savings—health
care workforce task force, IPAB
Other Republican attempts to obstruct, in contrast with
Medicare in 1965, SCHIP in 2000, Medicare Part D in
2003
Legal Challenge to ACA

26 state attorneys general asked Supreme
Court suit to overturn ACA on two
grounds:
--The individual mandate (first enacted in
MA) is unconstitutional. “Can the
government require you to eat broccoli?”
Yes it can.
--The Medicaid expansion is coercive. Yes
it is
Making Sense of all this
In the U.S., entrepreneurialism trumps
solidarity
 Class is the underlying factor in disparities
in health and health care.
 But we tend to conceptualize class as
race. Is this unduly divisive? Does it
demean people of color to have the
implicit equations: White=rich;
color=poor?

Making Sense (2)
Two fundamental issues: (1) opportunity
costs of overspending on health care, and
(2) how to narrow the class gap in health?
 Opportunity costs are huge: education,
environment, infrastructure. Don’t yet
have a safe way politically to even debate
these issues, though OR does it better
than most
 Entrenched interests (18% of GDP) will
fight all attempts to bend the cost curve

Making Sense (3)

Narrowing the health and healthcare gap
will depend on structural reforms
--political campaign finance reform
--revitalize labor (more of a force in
Europe, with many Labor Parties)
--greater voter registration and turnout
--reforms within public health and
medicine