Who Will Control The Future Will The Healthcare System Be U.S. Healthcare System: What Controlled By Those That Provide Is Driving Its High Costs? Care or Those That Pay for Care: What Role Will Government Play? Stuart H. Altman Chaikin Professor of Health Policy Brandeis University Total Health Expenditure as a Share of GDP To Answer This Question It Is Canada Germany Japan First Helpful To Understand ‐‐‐ Switzerland United States % GDP Why Healthcare Is So Expensive 18 16 14 12 How Does The U.S. Compare 10 To Other Countries 8 6 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 Source: OECD Reports Are We More Expensive Because We Use More Services or Are Prices Does The U.S. Use More Higher In U.S. Than Other Hospital Care? Industrialized Countries? 1
In ‐ Patient Acute Care Beds Hospital Discharge Rate in Selected Countries, 2010 in Selected Countries 2010 10 30,000 8.1 9 23,984 Discharges per 100,000 Pop Per 1,000 population 25,000 8 7 5.7 5.5 20,000 6 16,886 15,549 5 13,596 15,000 13,100 3.4 4 10,709 2.6 2.4 8,260 3 10,000 2 5,000 1 0 0 US Australia UK Korea Germany Japan US UK Germany Australia Korea Japan Canada Sources: OECD HEALTH DATA 2012 Source: OECD HEALTH DATA 2012 Average Length of Stay in Hospitals in Selected Countries 2010 (All Causes) What About 0 2 4 6 8 Australia 4.6 United Kingdom 5.4 Physician Services? OECD 4.7 United States 4.3 Canada 4.6 Netherlands 6.0 Switzerland 2.9 Japan 2.7 France 2.7 Germany 2.0 Source: OECD HEALTH DATA 2012 Doctors’ Consultations per Capita in Practicing Physicians in Selected Countries Selected Countries 2010 2010 3.7 4.0 13.1 14.0 12.9 Number of Consultations per Capita 3.5 3.1 Physicians per 1,000 population 12.0 2.7 3.0 2.6 2.4 2.4 10.0 2.0 2.5 8.0 6.5 2.0 5 6.0 1.5 3.9 4.0 2.9 1.0 2.0 0.5 0.0 0.0 US Germany Australia UK NZ Canada Japan US Japan Korea Australia UK Mexico Source: OECD HEALTH DATA 2012 Source: OECD HEALTH DATA 2012 2
Specialist Physicians’ Remunerations, Ration To GDP Per Capital (2009) 10 Do We Pay Our 9 Salaried 8 Self-employed 7 6.4 Physicians More? 5.6 6 5.4 5.0 4.7 5 4 3.2 2.7 3 2 1 0 US (2001) UK Germany (2007) Australia Canada Source: OECD HEALTH DATA 2012 General Practitioners’ (GPs) Remunerations, Ration To GDP Per Capital, 2009 10 9 Salaried Now Let’s Look At Pharmaceuticals 8 Self-employed 7 and Expensive Medical Procedures 6 4.7 5 4.3 3.8 3.6 4 3.4 2.7 2.6 3 2.0 2 1 0 US (2001) UK Germany Australia Canada (2007) Source: OECD HEALTH DATA 2012 Pharmaceutical Expenditures as MRIs in Selected Countries Percentage of Total Health Expenditures, 2010 2010 (Units per million persons) 12.4% 18.0% 35.0 31.6 13.3% 15.2% 16.0% 30.0 14.0% 12.4% 10.4% 12.0% 25.0 10.0% 20.0 8.0% 15.0 6.0% 10.3 4.0% 10.0 5.9 6.0 2.0% 5.0 0.0% 0.0 U.S U.K. Australia Canada Germany US Australia Germany UK Source: OECD HEALTH DATA 2012 Sources: OECD HEALTH DATA 2012 3
Coronary Bypass Surgeries in Selected Hip Replacement Surgeries by Country, Countries 2010 2010 350 90 Procedures per 100,000 pop 295.0 79 Procedures Per 100,000 300 80 70 250 60.5 56.3 Population 203.7 60 181.2 200 161.1 50 143.4 37.2 150 123.5 40 30 100 20 50 10 3.4 7.5 0 0 US Australia Canada Germany UK Mexico NZ US Australia Canada UK Mexico Patients Receiving Hip Replacements Source: OECD HEALTH DATA 2012 Source: OECD HEALTH DATA 2012 CT Scanners in Selected Countries Caesarean sections, 2010 2010 350 329.0 (Units per million persons) 314.0 6.0 300 282.0 45.0 40.7 Per 1000 Live Births 261.8 40.0 239.9 250 234.9 35.0 200 30.0 25.0 150 17.7 20.0 100 15.0 8.2 50 10.0 5.0 0 0.0 US Germany Australia UK NZ Canada US Australia Germany UK Sources: OECD HEALTH DATA 2012 Source: OECD HEALTH DATA 2012 Let’s Look at Price Total Excess Utilization of Health Services Not The Principal Culprit! Differences 4
Healthcare Prices in the U.S. and European Countries Fee Type Procedure Canada France Germany Netherlan Spain UK USA USA USA Why Are Prices So Much Higher In U.S.? ds Average/ High-End Medicare Low-end Scans and CT Scan $83/530 $248 $319 $258 $161 $179 $750* $1,600 $400 Imaging Abdomen Physician Routine Office $30 $31 $22 $32 $15 Primary care $59 $`151 $72 Fees Visit capitation • Everyone In Health Care Earns More In U.S. Specialty Normal $498 $1,023 TBD $622 $1,041 $2,384 $4,847 $1,601** salaries Delivery No Fees • Drugs and Devices are More Expensive Hospital Ave Cost Per $9,043 $9,840 TBD $3,535 $2,261 $3,388 $12.549* $40,680 $12,000 Charges Hospital Stay • Administrative Costs of Mixed Public/Private System Total Bypass $14,111 $11,916 TBD TBD $15,761 $12,868 $56,472* $116,798 $22,092** Hospital and Surgery Much More Expensive Physician Hip $8,483 $8,200 $8,500 $7,600 $9,152 $8,347 $32,093* $67,983 $17,500 Costs Replacement • The Cost of Malpractice System Tests and Pap Smear $27 $14 $26 $16 $20 See note $24 $64 $17 Cultures above Drug Prices Lipitor $33 $53 $48 $63 $32 $40 $125 $334 No Medicare Rx • Newer and More Expensive Delivery System Nexium $65 $67 $37 $102 $36 $41 $154 $424 fees • Provider have increased price leverage through their Non ‐ US fees shown above came from both government sources and data files of IFHP member plans. For countries with multiple health plans or multiple regions with different payment systems, the fees reflect a representative sample of estimated average prices. consolidation and contractual arrangements Canadian scans include the government “reading” fees and the charges used by private scanning facilities for patients who pay their own expenses. There are no government fees associated with MRIs because this equipment is typically purchased by local health authorities and s included with fees for facility ‐ level use. • Health Care In U.S. is BIG Business *Represents USA average fees rather than USA low ‐ end fees. ** Representative Medicare fees from Portland, Oregon market or CMS Medicare average for tests and cultures; all other Medicare fees are averages provided by a global consulting and actuarial firm. Source: International Federation of Health Plans: Fee Report – Europe, Canada and USA Many Provider Groups and Policy Analysts Encouraging So ‐‐‐ How Will or Should “Supply ‐ Side” Approach To the U.S. Proceed to Lower Lowering Spending Growth Healthcare Costs? The Key is Moving Away From Fee ‐ for ‐ Service Payments Accountable Care Organizations (ACOs) and Bundled Payments Supply ‐ Side Approach Give • Allow Providers to Decide What is Appropriate Providers The Dominant Role: Care • Reward Care That is Less Fragmented and Minimizes Duplicative and Wasteful Services • Permit Care Providers To Pay for Services Not Lets Them (YOU) Decide How To Traditionally Considered as Health Care Spend a Predetermined and Services Limited Budget 5
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