Health PolicyHealth PolicyPOLS 21: The American Political POLS 21: The American Political

SystemSystem“The best doctors in the world are Doctor Diet, Doctor Quiet, and Doctor Merryman.’

—Jonathan Swift

A Portrait of Health Care in A Portrait of Health Care in AmericaAmerica

A Portrait of Health Care in A Portrait of Health Care in AmericaAmerica

Does all of this money buy us better care? Does all of this money buy us better care?

A Portrait of Health Care in A Portrait of Health Care in AmericaAmerica

The infant mortality rate (IMR) is defined as the number of deaths of children under age 1 per 1,000 live births in a given year.

Life expectancy is measured by the average number of additional years a person of a given age could expect to live if current mortality trends were to continue for the rest of that person's life. It is most commonly cited as life expectancy at birth.

The United States has improved on both measures—from 26 infant deaths per 1,000 live births in 1960, to just 6.7 in 2008; and from a life expectancy of 69.9 years in 1960 to 78.4 in 2008.

But we still lag behind other western, industrialized democracies.

The ProblemThe Problem

High costHigh cost Unsatisfactory Unsatisfactory

performanceperformance Inequalities in Inequalities in

coveragecoverage

Why Have Health Care Why Have Health Care Costs Skyrocketed?Costs Skyrocketed?

Increase in the number of Americans using health insurance

Traditional fee-for-service systems encourage unnecessary tests

Demographic changes have led to an aging population that requires more care

Malpractice lawsuits pass costs along to patients and encourage "defensive medicine"

Technological developments such as MRIs, CAT scans and heart transplants are expensive, as are prescription drugs

Administrative costs account for 7% of total spentAdministrative costs account for 7% of total spent

Managed CareManaged Care

A Health Maintenance Organization (HMO) is a group of doctors and administrators who agree to provide a full range of health services to members care for a fixed monthly fee. In order to save money, patients are limited in their choices. But in return they pay just a small fee each time they see a doctor, encouraging the kind of preventive care that can detect and stop diseases early on.

Managed CareManaged CareA Preferred Provider Organization (PPO) is a network of independent physicians who are affiliated with a plan. If a patient wants care from an "in-network" provider, the PPO will pay most or all of the cost. If the patient wants care from an "out-of-network" providers, the PPO will require the patient to pay a much larger part of the bill. Unlike HMOs, PPOs do not require members to select a primary care physician. PPOs pay doctors a discounted rate in exchange for a steady flow of patients.

Assuring Access

Preserving Quality

Controlling Cost

The Health Care Reform The Health Care Reform DilemmaDilemma

Accomplishing all three goals simultaneously

is the true challenge

Case #1Case #1Bill Clinton, 1993-1994Bill Clinton, 1993-1994

Whatever Happened to Whatever Happened to Health Care Reform?Health Care Reform?

“This health care system of ours is badly broken and it is time to fix it. Our health care is too uncertain and too expensive, too bureaucratic and too wasteful. It has too much fraud and too much greed. At long last, after decades of false starts, we must make this our most urgent priority—giving every American health security, health care that can never be taken away, health care that is always there. That is what we must do tonight.”

Bill Clinton presenting his proposed health care reform legislation to the Congress, October 27, 1993.

Harry and LouiseHarry and LouiseGentle music plays as the camera closes in on a couple sitting at their kitchen table, surrounded by stacks of bills, an adding machine and yellow pads. The words “Sometime in the Future” flash across the screen, presumably referring to a period after a Clinton-health-care bill is passed.

“But this was covered by our old plan,” says Louise, looking at a bill.

“Oh yeah! That was a good one, wasn’t it?” says Harry. Dressed as an everyman in a flannel shirt, he is trying to make sense of the paperwork spread out on the table. He punches numbers into the adding machine. He jots down figures and then crumples up the paper in frustration. A voice-over says: “Things are changing, and not all for the better. The government may force us to pick from a few health care plans designed by government bureaucrats.”

“Having choices we don’t like,” says Louise, her brow knotted in concern, “is no choice at all.”

“They choose,” says Harry.

“We lose,” says Louise.

Case #2Case #2George W. Bush, 2003George W. Bush, 2003

Medicare Prescription Drug, Improvement, and Modernization Act

Medicare Prescription Drug, Medicare Prescription Drug, Improvement and Modernization Act of Improvement and Modernization Act of

20032003 “With this law, we're giving older Americans better choices and more control over their health care, so they can receive the modern medical care they deserve.”

—President Bush, signing the bill into law December 8, 2003

“There’s no doubt in my mind that the drug industry got everything it wanted and more. It perhaps should be called the ‘Leave-No-Lobbyist-Behind Bill.’”

—Senator John McCain (R-AZ)

The Donut Hole

Case #3Case #3Barack Obama, 2010Barack Obama, 2010

Patient Protection and Affordable Care Act

The Perils of Health Care The Perils of Health Care ReformReform

Entrenched interests (e.g., business Entrenched interests (e.g., business and interest groups)and interest groups)

Partisan rancorPartisan rancor Low levels of trust in governmentLow levels of trust in government Scare tactics and fear mongeringScare tactics and fear mongering

Obama’s strategy: “Fix what’s broken and build on what works.”

In other words, think smaller.

For the uninsured, what For the uninsured, what does health care cost?does health care cost?

“People, for reasons of their own, often fail to do things that would be good for them or good for society.”

—Chief Justice John Roberts

“Mr. President, this is a big @*%^$&# deal.”

— Vice President Joe Biden

If you already have health If you already have health insurance…insurance…

You can add your adult children (up to age 26) to You can add your adult children (up to age 26) to your existing health insurance plan.your existing health insurance plan.

Your insurance company can no long drop you if Your insurance company can no long drop you if you become sick.you become sick.

It cannot limit the coverage you receive over your It cannot limit the coverage you receive over your lifetime.lifetime.

You cannot be denied coverage if you have a pre-You cannot be denied coverage if you have a pre-existing condition.existing condition.

Insurance companies must spent at least 80% of Insurance companies must spent at least 80% of premium payments on medical service (instead of premium payments on medical service (instead of advertising and executive salaries). If they don’t, advertising and executive salaries). If they don’t, you will receive a rebate on the amount you paid.you will receive a rebate on the amount you paid.

If you don’t have health If you don’t have health insurance…insurance…

By 2014, everyone will be required to have health By 2014, everyone will be required to have health insurance. This is called the insurance. This is called the INDIVIDUAL MANDATEINDIVIDUAL MANDATE. . If you opt not to purchase insurance, you will pay If you opt not to purchase insurance, you will pay eventually a penalty of as much as 2.5% of your eventually a penalty of as much as 2.5% of your income. Next year, just 1% of family income.income. Next year, just 1% of family income.

You can buy insurance from a federal or state-run You can buy insurance from a federal or state-run “exchange” that allows you to compare plans.“exchange” that allows you to compare plans.

You may qualify for Medicaid if you income is under You may qualify for Medicaid if you income is under 133% of the poverty threshold. Even if you don’t 133% of the poverty threshold. Even if you don’t qualify for Medicaid, you may be eligible for a tax qualify for Medicaid, you may be eligible for a tax credit if you income is under 400% of the poverty credit if you income is under 400% of the poverty threshold. threshold.

“If you like your health care plan, you will be able to keep your health care plan, period."

— President Barack Obama

Assuring that people can keep their current plan “makes reform more palatable politically,” but it “also makes it worse as policy.”

— Jonathan Cohn

Assuring Access

Preserving Quality

Controlling Cost

The Health Care Reform The Health Care Reform DilemmaDilemma

How well did Obama and the Democrats do?

Require citizens to obtain insurance. Targets waste, fraud, and abuse.

Extends coverage for low-income families, young

adults, etc.

?