Download Health Care System in the US: An Overview

Health Care System in the US:
An Overview
Yaseen Hayajneh, PhD
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What is a System
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System: “a set or arrangement of things so connected
or related to form a unity or organic whole”
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System: “a collection of components organized to
accomplish a specific function or set of functions”
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Source: Webster’s New World Dictionary, 3rd edition
Source: [IEEE STD 610.12]
A healthcare system is the organization by which
health care is provided.
What are the components of the health care system?
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Health System

The people, institutions and resources,
arranged together in accordance with
established policies, to improve the health of
the population they serve, while responding to
people's legitimate expectations and protecting
them against the cost of ill-health through a
variety of activities whose primary intent is to
improve health.
 Set of elements and their relations in a
complex whole, designed to serve the health
needs of the population.
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Components
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There are four major components that make
up the Healthcare Delivery System:
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Providers
Purchasers
Insurers
Suppliers
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Major Actors in Any Health Care System
1.
Purchasers
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2.
Supply the funds.
Individuals, businesses, and government.
Ultimately individuals are the purchasers.
Government and businesses are major player as the
organize purchasers of health care
Insures
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Receive money from the purchasers and reimburse the
providers.
Assume risk
Government and businesses assume the rule of insurer
when they pay providers directly.
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Major Actors in Any Health Care System
3.
Providers
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4.
Hospitals, physicians, nurses and others.. who
actually provide the care.
HMOs may be viewed as Insurer and provider
Government as provider.
Suppliers
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Pharmaceutical and medical supply industries
Manufacture equipment, supplies and
medications.
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Health Care System Evolution..2
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Stage One: 1800-1900
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Service needs : infectious epidemics
Facilities : inadequate & unsafe hospital care
Technology : minimal
Labor : experience-based training
Stage Two: 1900-1945
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Service needs : acute infections, trauma
Facilities : specialty hospitals emerge
Technology : therapeutic advances
Labor : shift to science-based training
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Health Care System Evolution..1
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Stage Three: 1945-1984
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Service needs : chronic diseases
Facilities : increasing numbers & types of facilities
Technology : therapeutic & diagnostic technologies
Labor : medical specialties, new care givers
Stage Four: 1984 - Present
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Service needs : new & old infectious diseases
Facilities : mergers, integration
Technology : informatics, super drugs
Labor : primary care, multidisciplinary teams, turf issues,
managed care
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National Health Expenditures as a Share Gross Domestic Product
(GDP)
20
Percent of GDP
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Between 2001 and 2011, health spending is
projected to grow 2.5 percent per year
faster than GDP, so that by 2011 it will constitute 17
percent of GDP.
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14
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Buyer’s
10 Revolt
DRGs
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1980
1985
1990
1995
Source: CMS, Office of the Actuary, National Health Statistics Group.
2000
2005
2010
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US Spending (NCHS, 2000)
Other Spending
24%
Hospital
Care
32%
Program
Administration
and
Net Cost
6%
Prescription
Drugs
9%
Nursing Home
Care
7%
Physician and
Clinical Services
22%
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Expenditures for Health Services, All Payers
In recent years, the hospital share of total spending has
decreased while the prescription drug share has
increased.
40
36.5
35
31.7
1990
2000
30
25.2 25
25
23.1
24.3
20
15
9.4
10
5.8
5
1.8
7.6 7.1
2.5
0
Hospital
Phys. & Other
Professionals
Home Health
Prescription
Drugs
Nursing Home
Care
All Other
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Rising HC Costs: Reasons …USA
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Health insurance coverage
Prescription drug use is rising, and the cost of new drugs is
increasing rapidly
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Utilization of hospital services and medical technology is rising
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Outpatient hospital care spending grew 15% from 1998-2001
Inpatient hospital care jumped 5.9 % during the same period
Medical technologies and treatments are becoming more
advanced…and more expensive
Use of specialty care is on the rise
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National prescription drug spending rose 11.1 percent between 1998
and 2001
Specialty physician services increased 6.7 % in 2001
Emergency rooms are over utilized for non-emergency care
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Implications of Rising HC Costs
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Direct Implications
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Increased spending burden on the government
(taxpayers and other resources)
Increased competitive pressures on businesses
Increased financial burden on families and
individuals
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Implications of Rising HC Costs
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Indirect Implications
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Slower workforce growth
Additional part-time versus full-time workers
Reduction in health coverage and other benefits
Slower cash-wage growth
Additional off-shoring pressures (weaker economy)
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Uninsured
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Key Stakeholders
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Who has a vested interest in medical practice?
 What does each player want?
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Physicians and care providers
Insurers/ Managed care providers/ Administrators
Government
Employers
Public
Corporate Suppliers: drugs, equipment, hospitals
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Physicians
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Desire Dominance / income – focus on quality of care.
Past strategies:
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Unbundle services when reimbursed for each; reduce or concentrate
services when paid per capita. Expand services, substitute
(radiology, labs, personnel), create complementary services (MDinduced demand)
Care was a social contract- Now more commercialized
When unregulated, mal-distributions in practice
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Desire specialty training with about 80 percent in specialties.
Currently have an oversupply.
Desire urban, metropolitan practice (Boston- Washington belt)
- 20% public lives in shortage area
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Government Policy-makers
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Mainly focus on cost and quality concerns
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Work by regulatory action: incentive, command, oversight.
Initiated DRGs, examine/compare hospital mortality rates, fund
research, clinical trials
Less concern about access to care
Influenced by other “players”
Regulated? issues
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Who oversees regulators?
Political appointees vs. staff may differ in policy
People flow into regulatory positions from other interest groupscreate bias in policy?
May be increasingly starved for funds, role minimized in “weak state”
environment
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Managed care providers/insurers
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Early insurers community based: served middle class
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Acted as a safety valve by reducing clamor for national health care
1970s –first managed care-with long term case management- can
reduce costs, increase quality.
Financially managed care tries to limit liability for care and costs,
increase margins (profits)
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Monitor medical providers’ excess usage – withhold pay
Shift clientele -“cherry pick” healthy clients
Shift to obedient practitioners- > 2/3 new MDs under contract
Factor substitution, stop unprofitable services where possible
Short-term prevention not often cost-effective; do not benefit in future
from better health, lower costs
Short term employer/MD/client contacts (much flux) reduce long term
management, preventive care.
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Employers
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Have been main provider of family health care,
with exception of elderly and poor
 Want to reduce/eliminate health care costs
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Shift employee profile (younger/healthier)
Ask employees pay more of the cost
Reduce health coverage for workers, family
In their best interest to have flexible contracts
negotiated with providers
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A costly Benefit
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Public
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Want quality, affordable, continuity of care
Erosion of trust: are providers competent, act in our interest?
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Social trust: is health care alienating?
Interpersonal trust:
Increasing number of uninsured
Right to care?: where there is a shortfall of a necessary condition
of life, public welfare served by providing assistance: food, shelter
Public good? Generally public apathy
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Individual externalities- one benefits from care of neighbor
Economies of scale: small areas (ex: post offices subsidized)
Market avoids pre-existing conditions; workers stop changing jobs
U.S. one of two industrialized countries without some commitment to
publicly- supported health care
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