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Healthcare in Other Developed Countries—What’s the Difference Aaron Liberman, Ph.D., LHRM Professor Department of Health Management & Informatics University of Central Florida 1 Conventional Wisdom RE Healthcare in Other Developed Countries CW#1-It’s Socialized Medicine out there & U.S. is Capitalist Society-won’t work here – Reality -Most developed countries use private sector to address large portion of health needs – Beveridge Model - prevalent in UK, Cuba, Spain, Italy-Gov’t pays the bills-closest to Socialism – NHI Model - Canada & Taiwan use private sector for services-but Government pays bills – Bismark Model - France, Germany, Netherlands, Switzerland, Japan use private sector – Self-Pay Model – Prevalent in less developed countries & the U.S. (for uninsured) 2 Conventional Wisdom (continued) CW#2-Care Rationed-Waiting Lists & Limited Choices – Reality of Choices-some countries allow choice of insurance plans (Germany 200) & others providers (France & Canada) – Reality of Waiting Lists-Germany, France, Sweden, Switzerland outperform U.S. on Wait time for Specialists and Wait time for elective procedures 3 Conventional Wisdom (continued) CW#3-Wasteful Systems with Bloated Bureaucracies – Reality-U.S. has highest administrative costs for private insurance. 20% for marketing, administration, & other overhead (commissions)-a for-profit model – Average Overhead in other countries ranges between less than 2% (Taiwan) to 6% (Canada)-a not for profit model 4 Conventional Wisdom (continued) CW#4-Insurance Companies Must be Rigid & Strict (Mean) – Reality-France, Germany, Japan, Switzerland insurance companies must accept ALL applicants & pay ALL claims – Reality- In all models, government exercises oversight—including the U.S. 5 Conventional Wisdom (continued) CW#5-Those Systems are too foreign to work in U.S. – We believe foreign systems all the same – Reality, countless varieties of systems – Some require co-pay (F); others no copay (U.K.) – Some governments set insurance premiums (Germany, France); others allow companies to set premiums (Swiss) 6 Principal Challenge in America Two Fold U.S. System Analogous to Binary Numeral System 0 or 1-you have it (#1) or you don’t (#0) America’s Healthcare System = 250 million people with health insurance (#1) Up to 60 million people without health insurance (#0) Those without must fend for themselves 7 Time for a Reality Check Sampling of health care in developed countries to see how systems are structured & what occurs when a person seeks healthcare 8 Health System of France Every Resident of France is Covered More Docs per capita & More Hospital Beds per capita than America Near the top worldwide in (WHO data): – Disability Adjusted Life Expectancy (DALE) – Infant Mortality – Overall Life Expectancy Source: Unraveling U.S. Healthcare—a Personal Guide 9 Health System of France Citizens purchase insurance from government health plan & from private carriers to cover the costs Insurance carriers (funds) are not-for-profit entities focused on paying claims, not making a profit Delays in reimbursement are illegal No limits on patient choice No ‘in-network’ or ‘out-of network’ madness 10 Health System of France Multi-Payer System with 14 carriers (funds) to select from & a cluster of supplemental plans Functions like a single payer system because Health Ministry dictates what carriers can & cannot do Universal carte d’assurance maladie or Carte Vitale 11 Health System of Germany Home of Bismarck System began in 1883 by Otto von Bismarck, founder of modern German Republic Sickness Insurance Law guarantees medical care to 82 million citizens Choice of doctor + hospital & the krankenkassen must pay the bill Choice of 200 krankenkassen plans 12 Health System of Germany Physicians are private practitioners in private clinics Charges by Krankenkassen fixed by government Vigorous competition for participants based on quality of service Krankenkassen negotiates rates with medical clinics, hospitals+DME & 13 Pharma imports Health System of Germany Freedoms and benefits cost $-German system is most expensive among European countries costing 11% GDP All Germans must belong to a Sickness Fund No one can be turned down due to preexisting condition 14 Health System of United Kingdom Beveridge System-universal coverage, no bills NHS-Lord William Beveridge in 1942 Overarching proposition=no one should be forced to pay a medical bill System allows private supplemental plans for 1% who want them 15 Health System of United Kingdom NHS has more than 1 million FTEs Largest employer in Europe Has $10 co-pay for drugs, but 85% of all prescription costs are waived First line of defense in cost control is network of GPs. GPs are independent practitioners as are pharmacists & dentists Queue is also tool of cost control 16 Health System of United Kingdom NHS controls budget by range of funded medications, tests, procedures America does the same through insurance company decisions re reimbursements for procedures Typical physician pays $4,200 /year for malpractice insurance—1/12 the cost for American counterpart 17 Health System of United Kingdom Medical School tuition in UK =$4,000 per year Medical School tuition in America approximately ten times that amount 18 Japanese System of Healthcare Private sector Bismarck system with private doctors and private hospitals System has a rigid cost control mechanism that favors the patient Typical Japanese citizen visits doctor 15 times per year (U.S. average = 5 times per year Small co-pays charged—no wait lists 19 Japanese System of Healthcare Japanese system = 8% of GDP Monthly limit on patient co-pays of $650 Health plans must accept all who apply and pay every bill submitted by providers 3,500 health plans to choose from Types: (a) large employer plans; (b) small employer plans; (c) Citizens Health Insurance Plan for retirees & self employed 20 Japanese System of Healthcare Financing of healthcare plans involves cost sharing between government, employers, & employees All citizens must participate If a citizen refuses to participate not arrested. On becoming ill, no one pays costs until citizen pays at least one year of owed back premiums 21 Japanese System of Healthcare Reimbursement system restrictions have increased cost control efforts of providers MRI example-providers insisted on lower cost equipment. Result=cost for MRI Scanner in Japan=$150k=1/10th the cost in America 22 Japanese System of Healthcare Mission Statement Japanese Hospital – We welcome each patient with a smiling face, warm sympathy, soft language – We offer a sense of assurance re your health – We will protect your privacy & dignity – Preserving your life & health is the reason we exist TR Reid, The Healing of America, Penguin Books, 2010 23 Canadian System of Healthcare Story of Tommy Douglas of Falkirk, Scotland Emigrated to Canada in 1911. Elected Governor of Saskatchewan in 1944 Turned healthcare system into single payer system covering 1 million residents(Medicare) Popularity resulted in Canada’s provinces converting to this system in toto in 1961 South Korea & Taiwan followed Canadian model as did America with Medicare 1966 24 Canadian System of Healthcare System Guarantees healthcare to all who need it Cost is 50% of U.S. System Result is due to much more efficient payment system + clout of government negotiating contracts for drugs, DME, & healthcare services Wait periods vary - (f) of location & diagnosis 25 Canadian System of Healthcare In 2004, Canadian Broadcasting Corp. poll to select ‘Greatest Canadian of all Time.’ Tommy Douglas won in a landslide beating out likes of Alexander Graham Bell and Wayne Gretzky Canadians pay 0 for Doctors visits, 0 for hospital services, 0 for pharma, 0 for dental surgery in a hospital 26 Canadian System of Healthcare Binding Principles of Canadian System – Administration-each Province’s system operated on not-for-profit basis – Comprehensive-pays for all needed svcs Universal-equality of benefits for all – Access-all citizens pay same fees (age or illness does not differentiate) – Portability-pays for treatment anywhere in Canada & in some foreign countries 27 Canadian System of Healthcare Principal disadvantage of the System = long queues for specialty services Persistent complaining by health practitioners and hospital executives Overall, opinion of vast majority of Canadian citizens suggests they treasure their system of healthcare (upwards of 90% satisfaction) 28 Advantages of a Unified System of Healthcare Single set of rules, Equal access Inherently Fair Easy to Administer-1 set of forms, 1 set of benefits, 1 set of rules, 1 price list Powerful cost control force-1 buyer for all – – – – Medical Supplies Drugs Hospital Fees Physician Services 29 Advantages of a Unified System of Healthcare (continued) Easy use of digital records & smart cards (Carte Vitale en France & Gesundheitskarte auf Deutschland) Eliminates Gamesmanship (egs Big Pharma) Eliminates Cost Shifting as a strategy Creates Incentives for Preventive Healthcare Cost Control means gov’ts negotiate single price of pharma & DME 30 Advantages of a Unified System of Healthcare (continued) Basis of system is being financed as a not-for-profit endeavor – System exists to pay bills, not to make a profit – U.S. is only system that uses the ‘profit motive’ in healthcare reimbursements – 1966 House W&M predicted total Medicare spending by 1990=$12B. It was $110B. This year will be $600B) – U.S. system likely will bankrupt America if not changed (Steven Brill, “Bitter Pill,” Time Magazine March 4, 2013) 31 Problems With U.S. System Summary of Challenges – Cost – Coverage – Quality – Access (The American Way) – Rampant Dishonesty – Which one do we fix first? The trillion dollar question 32 Fixing the Problems Coverage-PPACA has made start; now need to extend coverage to the other 23 million who were left behind Rampant dishonesty-HEAT Task Force is making inroads in that area; needs to expand to Big Pharma & provider dishonesty Cost, Quality, & Access can be fixed once with unified system & single overarching mission-COST EFFECTIVE, QUALITY, & ACCESSIBLE CARE FOR AMERICANS, ONE & ALL!! 33 Let’s Consider Hospitals & Doctors Next On-Line Dashboards report rates of infection, readmission (bounce backs), surgical complications, and errors (egs surgical sponge left in a patient) – An interesting corollary-60% of New Yorkers look up a restaurant’s performance rating before going out for a meal – Do the same for hospitals and doctors Source: WSJ, 9/22-23/2012, pp C1-2, “How to Stop Hospitals from Killing Us,” by Marty Makary, M.D., slides 37-41. 34 Let’s Consider Starting With Hospitals & Doctors Safety Culture Scores – egs of prep to remove fluid from a patient’s right lung. Nurse interrupts and says ‘left’ or ‘right’ chest? Written orders said left. However, intern prepped wrong side of patient. – Staff must be empowered to speak up – No more doctor deference (silence) – Teamwork is a key element 35 Let’s Consider Starting With Hospitals & Doctors Cameras-review tapes of surgical procedures and equate to quality control and errors – Doug Rex, MD, at IU College of Medicine used videotapes of colonoscopies to check thoroughness of procedures & resulted in average length of procedure > by 50% – Quality scores > by 30%. Docs performed better knowing they were watched 36 Let’s Consider Starting With Hospitals & Doctors Open Notes-clinicians prepare progress notes in front of patient so patient has opportunity to correct erroneous assumption(s) – Cardiologist-provides copy of notes made during each annual visit while in the office. This enhances trust in his technique and his judgment 37 Let’s Consider Starting With Hospitals & Doctors Eliminate Gagging-today patients are sometimes asked to sign a gag order agreeing not to say anything negative re their physician – Lawyers make conditional a settlement offer based on willingness of patient not to speak publicly re injury sustained – Gag orders need to be banned by law – Transparency needed to restore public trust 38 LASTLY! Civil discourse re our Disagreements We need to use persuasion to change people’s minds-not demagoguery Persuasion facilitated by understanding both sides of an argument – Show respect – Work honestly with opposition’s ideas – Leave anger & hatred & invectives at home 39 Epilogue What are we waiting for? Thank you! 40