Andre Medici
1. United States - A country that does not get what it spends on health
The United States is a country sui generis in their spending on health. And it didn’t start today. In 1960, while the OECD countries spent around 4% of GDP on health, the United States spent 5%. In 2007, the OECD average had reached the 9% but the United States was at 16%. Moreover, while the other countries mentioned have achieved universal health coverage for its population, about 16% of Americans (46 million people) declared themselves without coverage that year and the coverage has not increa sed over the past fifteen years.
Looking more closely a data set of six OECD countries OECD 2007 that includes the United States, it appears that the U.S., spending an average of $ 6.102 U.S. dollars per-capita per year, of which $ 878 go solely to pay for medication, suffered from the worst performance in the indicators of quality, access, efficiency, equity. Suffered also from shorter lives and least productivity when compared with countries that spent between U.S. $ 2,083 (New Zealand) and $ 3.165 (Canada) per capita-year in health.
Even paying more for health, the Americans had worse access. In 2008, the chronic patients in the United States shared with Canadians the fact that only 26% could get medical appointments for the same day, a percentage that ranged between 60% and 36% in the Netherlands, New Zealand, Germany, France and Austria. Given the same set of countries, the U.S. had more problems getting healthcare at night or on weekends and had the biggest reported problems associated with coordination of care and medical errors on prescription and medication administration. Only 28% of doctors have patients electronic medical records, compared with rates higher than 80% in the Netherlands, New Zealand, England and Austria. In short, 54% of Americans with chronic illnesses said they had problems of access to medical care because of the high costs and administrative constraints. That percentage was down to 30% in the other OECD countries mentioned.
As a result, besides spending a lot more and being treated a lot worse, the Americans also die a little earlier than their peers in OECD countries. Life expectancy at birth in the United States in 2006 was 78.1 years, compared with 78.9 on average in other OECD countries. Countries such as Australia, Canada, France, Iceland, Italy, Japan, New Zealand, Norway, Spain, Sweden and Switzerland had in the same year a life expectancy at birth greater than 80 years. The infant mortality rate is also higher in the United States than the average of OECD countries (6.7 per thousand compared with 5.1 per thousand). Mortality rates from causes that could be treated if they had better health care reached 110 per 100 thousand inhabitants in the United States, values higher than those found in at least 14 developed countries.
The United States spends 49% of global health expenditures, but its population is only 5% of the world and yet this care is linked to all the problems mentioned above. Among OECD countries, it is the one with the highest share of private spending and household spending on total health expenditure.
The lower health coverage can be explained by a number of reasons: a) Being that health insurance is voluntary for most of the U.S. population, there is an increase in number of persons without financial access to health plans whose cost increases each year at rates higher than inflation, b) the number of companies that offer health benefits to their employees is shortening over time c) individual health insurance plan markets limit coverage of pre-existing conditions and reassuring the health plans may reject patients based on their individual risk.
As a result, health insurance became too expensive for individuals (and small and medium businesses) and 62% of family bankruptcies in 2007 was associated with the high health costs in the United States.
Among the factors that are associated with higher health costs in the United States there are: (a) high administrative costs (7.4% compared to 4.4% in average OCDE5 (b) high wages and salaries of doctors; (c) high use by professionals of specialized procedures or intensive care as a percentage of health services and (d) low use of processes to reduce cost and risk sharing between insurers and providers such as capitation payments.
2. What can the international experience teach us?
The challenge of the United States is to achieve greater coverage and quality for less money. This situation has aroused discussion in many countries. Some even say they can teach the Americans out of the rut and other blame, once again, the wild capitalism and privatization model for the failure in the American health. But the reality is far from it.
From the economic point of view, health is a unique industry and from the writings of the Nobel Prize Kenneth Arrow in the sixties, health economists have highlighted the economic peculiarities of this sector that do differ from others. Health expenditures are relatively inelastic and the costs of the sector grow primarily due to external factors (income levels and population aging) and internal sector behavioral trends (use of medical technology and management models).
For all these reasons, some countries have learned that without proper regulation they are not likely to increase the economic efficiency of the health sector. This regulation is increasingly complex, and must act not only to reduce market failures but also to avoid major failures of state, under the monopoly of public provision. In this context, it is worth sorting out what other countries may have to teach the United States, according to their degree of development.
a) Developed Countries
European countries, Japan, Australia, Canada and New Zealand, do not usually tell the Americans what to do. In fact, their health systems have also been improved by importing innovations from the U.S. experience in health management (as of diagnostics Related Groups - DRG - and separating the management of health service provision) in order to allow its statist models to correct their flaws through more state-regulated competition. These countries (with the possible exception of Canada), after seeing their models of welfare state skate on gigantism state, learned that corporate governance has its advantages and sought to balance their goals of universal coverage, equity and public ownership with transparency, out-sourcing and market incentives.
From the standpoint of regulation, developed countries have used market incentives and competition managed to avoid the pitfalls of the State in the health sector. They learned to use risk pooling and incentives to control costs and to negotiate better prices using procurement mechanisms for services with different providers. They work in a more structured system of information technology to streamline the use of personnel, material resources and clinical infrastructure.
European countries, for example, have as a basic criterion the regulation of the insurance market to ensure competition and managed risk-adjusted. Many make coverage compulsory and not voluntary and provide subsidies for those who cannot afford an insurance plan.
Many developed countries, where one important exception is the United States, have done better by using public health, primary care and models of health promotion and prevention in order to avoid the catastrophic costs of chronic diseases. They more effectively promote changes in risk behavior of their people, encouraging them to practice healthier habits, reducing sedentary lifestyles and reducing the number of other factors that lead to increased costs of medical care. Countries such as Chile, for example, after the dictatorship, succeeded in establishing a public coverage option for health plans and appropriate regulation to prevent cream skimming, social discrimination and denials of coverage by health plans.
Most developed countries have used models of care and more integrated health networks, as the example of general practitioners in England and the frequent use of regulation in health networks, facilitated by information technology and regulation and control the processes of reference and counter reference in health.
Last but not least, developed countries have advanced greatly in the use of epidemiology and perceptions of users about their health status in setting health priorities, based on studies of burden of disease. In setting priorities for health, they also define the protocols, the lines of care and delivery mechanisms of these services, study their basic costs and establish procedures to purchase public or private services that are based on these parameters.
Many of these studies, processes and ways of integrating medical care, even if they have been developed and tested by institutions and American universities, are not widespread in the country and are implemented on time and on a voluntary basis (as can be seen in the successful Kaiser Permanente experience). In other developed countries where public regulation of the sector is more present and strengthened, this development has been accelerated in recent years.
b) Developing Countries
Some developing countries, proud of their models, say they can teach the Americans what to do, but in fact, the success of these countries is conditional on passing situations without coverage for a reasonable offer of basic health services. Their challenge, therefore, was not to reduce costs through improvements in coverage and quality, but instead increase spending to cover a population largely lacking in services. Much of the struggle of so-called "sanitary reform movements" in developing countries is to increase rather than reduce spending on health.
Developing countries, especially in Latin America showed great strides in increasing the coverage, reducing infant and maternal mortality, structuring primary care and interdisciplinary teams of health and thereby, and improving the primary health care in the last twenty years. But health indicators (with some exceptions such as Chile) are still far from reach developed countries standards of quality. The challenge of quality and the gap of inequality in access are even greater in Latin America, for example, than in the United States.
Innovative models of public administration started a short time ago and can cheapen and improve the quality of the public health services (such as Social Organizations and State Health Foundations in Brazil) but are threatened or numbed by the action of justice and union movements of health professionals, which defend their work stable status and, at least, act against the needs of the poor. These, in the name of combating the specter of privatization of health, have actually privatized public resources in the hands of the corporatism of health professionals, leading the public system to work less and benefit those who have more access to control health time-schedules, access and health information.
They end up arguing (even implicitly) for the use of public institutions of direct administration in favor of the private interest of themselves and not in favor of common sense and for the interest of the neediest population.
Some successful strategies for primary care visits and health in remote areas and models of securing more regulated use in developing countries may be transferable to experiences in the United States, allowing for greater coverage and best supply regulation. However, given the epidemiological differences between the United States and these countries, issues such as quality and training would have to be reworked in the American context for these experiences in order to deliver better results.
3. The reform proposed by President Barak Obama
President Barak Obama was not the first to propose a major reform in the American Health Care System. Other U.S. presidents have also done so, including most recently Bill Clinton.
The Clinton Plan, between the earlier initiatives of health reform, was what came closest to an effective process to tackle the challenges of inequality and lack of access to health care in the United States, but the resistance from various sectors of society did not allow the plan to survive. However, it was the embryo of several reform initiatives and coverage extension initiated at the level of U.S. states, especially that of Massachusetts - the first statewide initiative to propose a plan for universal health coverage with mutual responsibility of the employers and families. These state reforms in recent years have cemented the consensus, albeit partial, that something should be done and some successful experiences - both the public and private sectors - has been able to demonstrate paths that could be taken to achieve greater coverage and quality at lower costs.
The current proposal to reform the U.S. health has been presented in public debate on the need to face five challenges: (a) extending coverage to all, (b) organization of care around the patient, (c) financial incentives to reduce costs, (d) medical care quality and efficiency, (e) public regulation and integration between public and private systems.
a) Making coverage accessible to all
The challenge here is to extend (making mandatory) coverage for all citizens, including the 46 million Americans who do not have health insurance. For this challenge to be won, some measures are being proposed by the Government and discussed by the U.S. Senate. Below is a summary description of the proposals in effect until October of this year.
As for individuals, tax incentives, such as deductions of up to $ 750 per person covered in the income tax would apply. At the same time, individual fines of up to $ 750 per person would also be applicable in case of no coverage be proved, excluding those who, due to lack of income, cannot afford to pay for health insurance;
Private companies, as originally proposed by the government, with more than 50 employees, will have to pay, as of 2013, a fine per employee not covered by health insurance. Small businesses (with fewer than 50 employees) will receive incentives such as tax relief for workers to join their health plans. The Senate has proposed, alternatively, that firms with more than 25 employees would pay 60% of the premium for employee and that the fines for part-time employee not covered would be only $ 375 per employee per year. Small businesses, instead of having tax deductions receive public subsidies to affiliate its employees.
The Health Insurance Market would be subject to regulatory processes on managing private plans and would offer new options, including public sector option and cooperatives. The plans must have a minimum set of benefits that will be reimbursed between 70% and 95% of its actuarial cost estimates. The plans must be differentiated by age groups (three to four groups, including the Senate proposal to create a special health policy for young adults) and should have portability to allow options of exchanging carriers and plans for patients without disqualification coverage.
The state would offer a public choice, based on the creation of a government agency that would offer health plans, and the ability to capture those people not included or accepted in the private health plans because they can not pay or because, due to their level of risk, would be rejected by the private sector. This agency does not subsidize the price of the plans, but would seek efficiency and prevent abuses by the plans in the search for patients that are easily profitable due their lower risk. Like Medicare, the agency does not provide direct health services, but will hire private providers. This could increase coverage for many of the 46 million uninsured and provide some option for their specific health problems, even if they were rejected by the existing health maintenance organizations.
b) Organization of Care around the Patient
The proposal, in this subject, is to create incentives to increase preventive care and healthy behavior of patients and encourage primary care services. In the first instance, the Federal Government proposes to develop a national strategy to promote prevention and health, investing and giving donor resources to support prevention programs in the communities, as well as financial incentives to individuals and health plans to improve strategies for promotion and prevention.
Some elements of the proposal are: (a) to eliminate the user’s co-financing for actions of promotion and prevention programs given that they have proven necessary in the public option, Medicaid and Medicare, (b) encourage the same practice in private health plans and, (c) establishing patients’ health promotion routines and encourage scheduling medical visits for prevention and risk assessment of health.
In the case of primary care services, the proposal is to increase the value of the primary care visits remuneration in Medicare at rates higher than the salaries received by the specialized doctors. Since large amounts of curative services to chronically ill older persons are increasing spending on Medicare, this proposal would encourage further promotion and prevention to reduce program spending in the public and most expensive U.S. health care sector. Some of the amendments proposed by the Senate are to raise bonuses to primary care physicians in up to 10% of the amounts billed during the first five years of reform, along with cuts in payments to other specialized medical services at 0.5%.
c) Financial Incentives to Reduce Costs
In this area, the Government's proposals and the amendments that the Senate is working are pilot projects of innovative payment providers. The innovations in the payment system appear in proposals for family clinics (medical homes), more transparent organizations of providers (more accountable health care organizations) and hospitals dedicated to cross reference and post-acute care.
These innovations will test cheaper and integrated ways to pay providers that, since they will prove functional, are applied to mass public systems such as Medicare and Medicaid. To increase incentives to these experiences, the government could establish special funds (grants) for its financing.
d) Efficiency and Medical Care Quality
Proposals related to this field would be structured as improvements in system productivity, comparative clinical effectiveness and improving the quality of services.
Improvements in productivity may arise aligning financial incentives to the more cost-effective procedures, constantly updating medical protocols and prospective payment systems in accordance with these principles and making up the basket of procedures recommended by these criteria;
Comparative Analysis of Effectiveness would be made possible through the establishment of research centers that allow assessing the clinical outcomes of different types of health interventions, allowing you to select those that best demonstrate proven results for cost incurred.
Improvements in Quality of Service would be achieved through the creation of the Center for Quality Improvement which will identify, evaluate, disseminate and implement best clinical practices, research and define the national health priorities to improve performance of health institutions promoting evaluations indicators and measures for quality in health. To this end, they also will discuss funding to improve the efficiency of services. This policy is expected to work with same way as the criteria used by government to establishes a national strategy for quality development in health.
e) Public regulation and integration between public and private systems
The Public-private mix of health services in the United States has existed since the time when public programs like Medicare and Medicaid came into existence, in the eighties, private health plans in some contexts, to perform the services, either through contracting for risk (capitation) or through direct purchase (fee for service).
However, the Obama plan goes a step further in this process, when establishing regulations in the markets for health standards that define new services, requiring health plans and providers to disseminate results and performance. The Obama plan also creates a public insurance option as a way of marking the market in accordance with the expectations of the government and to force private companies to have a performance close to that established in the new framework of regulating the system.
4. Impact and financial prospects of approval
Although the reform has not yet defined all of its elements and many changes still may modify the current proposed measures, it is expected that it would reduce the number of uninsured from 50 million to 17 million between 2012 and 2019. It is also expected to bring a cost reduction in the expansion of the system.
Without reforms, total spending on health in U.S., estimated at $ 2.5 trillion in 2009, could range between $ 4.4 and $ 5.0 trillion in 2020 (based on trend growth rate of 4.4 % to 6.5% per year), implying an annual increase in health spending between $ 173 and $ 227 billion, representing over 20% of GDP in 2020.
With the reforms, an optimistic scenario, health care spending in the United States would, on average, be reduced by $ 81 billion between 2009 and 2020 ($ 7 billion per year) or raise only $ 239 billion in the same period (U.S. $ 22 billion per year) 9. With this, the per-capita spending on health could stagnate or even shrink, considering as baseline a moderate recovery of the U.S. economy in the same period.
More importantly, is the fact that, besides the reduction of expenditures, it would improve a population's health, increasing coverage, quality, satisfaction and health outcomes and re-placing the country on a track for rapid increased life expectancy, as has occurred in other OECD countries.
However, there are many tough issues in American society to reform health care:
a. Resistance by the population (or a substantial part of the middle class) who believes in a model where the freedom of choice is an unquestionable value and that would be willing to pay more to keep it. Health reforms tend to limit the freedom of customers to choose professionals and health facilities of their choice;
b. Resistance by doctors and other health professionals who prefer a model that does to standardize their knowledge and also give you the freedom to offer alternative treatments, differentiated pricing and charging for it freely. The strength and corporate power of the American middle class causes these providers to handle well the autonomy of their profession by making care lines, protocols, DRGs and clinical evaluations far from their aspirations, especially in the east coast;
c. Resistance by medical companies, for reasons similar to those of physicians, and also by the need to act freely in the sale of services, having the freedom to reject contracts with health insurers or with corporations;
d. Resistance by insurance companies and health management (HMOs) that will not submit to public regulation the several aspects that negatively affect the financial health, such as rates or insurance premiums, use of co-payments, use of pre stocks-to limit the range of services offered or the possibility to refuse patients if they do not make actuarial;
e. Resistance by the health law firms who want to maintain a free market trading of court orders (and their free interpretation by the court) when patients feel the consequences of pain and suffering, psychological and medical errors.
All of these resistors are worth trillions of dollars and have made it increasingly difficult to manage the public pocket and the family finances to pay the amount of resources they represent. The result has been to increase the public deficit as a function of progressive underfinanced public programs such as Medicare and Medicaid, but also the families and underfinanced companies can no longer afford the health plan, reducing the coverage and quality of services delivered by health plans.
But there is an expectation that the proposed reforms can be passed in Congress and at the moment, several conservative segments of American society, including Republicans, have positioned themselves favorably. This fact is associated with some special features of the reform. It keeps the spirit of that health duty to preserve pluralism and competition, and freedom of choice in a capitalist society like the United States. However, it emphasizes the role of the state as regulator of a theme which is notorious for information asymmetry by increasing the COMPLIANCE of basic human rights and implementing the subsidies to socially disadvantaged groups.
In his presidential inaugural speech, Baraka Obama said he was not the first U.S. president to try a Democratic health reform, but he said he would be the first to not give up and ensure that reform is made during his tenure. What is now expected not only in the United States but throughout the World is that this promise is fulfilled.
1. United States - A country that does not get what it spends on health
The United States is a country sui generis in their spending on health. And it didn’t start today. In 1960, while the OECD countries spent around 4% of GDP on health, the United States spent 5%. In 2007, the OECD average had reached the 9% but the United States was at 16%. Moreover, while the other countries mentioned have achieved universal health coverage for its population, about 16% of Americans (46 million people) declared themselves without coverage that year and the coverage has not increa sed over the past fifteen years.
Looking more closely a data set of six OECD countries OECD 2007 that includes the United States, it appears that the U.S., spending an average of $ 6.102 U.S. dollars per-capita per year, of which $ 878 go solely to pay for medication, suffered from the worst performance in the indicators of quality, access, efficiency, equity. Suffered also from shorter lives and least productivity when compared with countries that spent between U.S. $ 2,083 (New Zealand) and $ 3.165 (Canada) per capita-year in health.
Even paying more for health, the Americans had worse access. In 2008, the chronic patients in the United States shared with Canadians the fact that only 26% could get medical appointments for the same day, a percentage that ranged between 60% and 36% in the Netherlands, New Zealand, Germany, France and Austria. Given the same set of countries, the U.S. had more problems getting healthcare at night or on weekends and had the biggest reported problems associated with coordination of care and medical errors on prescription and medication administration. Only 28% of doctors have patients electronic medical records, compared with rates higher than 80% in the Netherlands, New Zealand, England and Austria. In short, 54% of Americans with chronic illnesses said they had problems of access to medical care because of the high costs and administrative constraints. That percentage was down to 30% in the other OECD countries mentioned.
As a result, besides spending a lot more and being treated a lot worse, the Americans also die a little earlier than their peers in OECD countries. Life expectancy at birth in the United States in 2006 was 78.1 years, compared with 78.9 on average in other OECD countries. Countries such as Australia, Canada, France, Iceland, Italy, Japan, New Zealand, Norway, Spain, Sweden and Switzerland had in the same year a life expectancy at birth greater than 80 years. The infant mortality rate is also higher in the United States than the average of OECD countries (6.7 per thousand compared with 5.1 per thousand). Mortality rates from causes that could be treated if they had better health care reached 110 per 100 thousand inhabitants in the United States, values higher than those found in at least 14 developed countries.
The United States spends 49% of global health expenditures, but its population is only 5% of the world and yet this care is linked to all the problems mentioned above. Among OECD countries, it is the one with the highest share of private spending and household spending on total health expenditure.
The lower health coverage can be explained by a number of reasons: a) Being that health insurance is voluntary for most of the U.S. population, there is an increase in number of persons without financial access to health plans whose cost increases each year at rates higher than inflation, b) the number of companies that offer health benefits to their employees is shortening over time c) individual health insurance plan markets limit coverage of pre-existing conditions and reassuring the health plans may reject patients based on their individual risk.
As a result, health insurance became too expensive for individuals (and small and medium businesses) and 62% of family bankruptcies in 2007 was associated with the high health costs in the United States.
Among the factors that are associated with higher health costs in the United States there are: (a) high administrative costs (7.4% compared to 4.4% in average OCDE5 (b) high wages and salaries of doctors; (c) high use by professionals of specialized procedures or intensive care as a percentage of health services and (d) low use of processes to reduce cost and risk sharing between insurers and providers such as capitation payments.
2. What can the international experience teach us?
The challenge of the United States is to achieve greater coverage and quality for less money. This situation has aroused discussion in many countries. Some even say they can teach the Americans out of the rut and other blame, once again, the wild capitalism and privatization model for the failure in the American health. But the reality is far from it.
From the economic point of view, health is a unique industry and from the writings of the Nobel Prize Kenneth Arrow in the sixties, health economists have highlighted the economic peculiarities of this sector that do differ from others. Health expenditures are relatively inelastic and the costs of the sector grow primarily due to external factors (income levels and population aging) and internal sector behavioral trends (use of medical technology and management models).
For all these reasons, some countries have learned that without proper regulation they are not likely to increase the economic efficiency of the health sector. This regulation is increasingly complex, and must act not only to reduce market failures but also to avoid major failures of state, under the monopoly of public provision. In this context, it is worth sorting out what other countries may have to teach the United States, according to their degree of development.
a) Developed Countries
European countries, Japan, Australia, Canada and New Zealand, do not usually tell the Americans what to do. In fact, their health systems have also been improved by importing innovations from the U.S. experience in health management (as of diagnostics Related Groups - DRG - and separating the management of health service provision) in order to allow its statist models to correct their flaws through more state-regulated competition. These countries (with the possible exception of Canada), after seeing their models of welfare state skate on gigantism state, learned that corporate governance has its advantages and sought to balance their goals of universal coverage, equity and public ownership with transparency, out-sourcing and market incentives.
From the standpoint of regulation, developed countries have used market incentives and competition managed to avoid the pitfalls of the State in the health sector. They learned to use risk pooling and incentives to control costs and to negotiate better prices using procurement mechanisms for services with different providers. They work in a more structured system of information technology to streamline the use of personnel, material resources and clinical infrastructure.
European countries, for example, have as a basic criterion the regulation of the insurance market to ensure competition and managed risk-adjusted. Many make coverage compulsory and not voluntary and provide subsidies for those who cannot afford an insurance plan.
Many developed countries, where one important exception is the United States, have done better by using public health, primary care and models of health promotion and prevention in order to avoid the catastrophic costs of chronic diseases. They more effectively promote changes in risk behavior of their people, encouraging them to practice healthier habits, reducing sedentary lifestyles and reducing the number of other factors that lead to increased costs of medical care. Countries such as Chile, for example, after the dictatorship, succeeded in establishing a public coverage option for health plans and appropriate regulation to prevent cream skimming, social discrimination and denials of coverage by health plans.
Most developed countries have used models of care and more integrated health networks, as the example of general practitioners in England and the frequent use of regulation in health networks, facilitated by information technology and regulation and control the processes of reference and counter reference in health.
Last but not least, developed countries have advanced greatly in the use of epidemiology and perceptions of users about their health status in setting health priorities, based on studies of burden of disease. In setting priorities for health, they also define the protocols, the lines of care and delivery mechanisms of these services, study their basic costs and establish procedures to purchase public or private services that are based on these parameters.
Many of these studies, processes and ways of integrating medical care, even if they have been developed and tested by institutions and American universities, are not widespread in the country and are implemented on time and on a voluntary basis (as can be seen in the successful Kaiser Permanente experience). In other developed countries where public regulation of the sector is more present and strengthened, this development has been accelerated in recent years.
b) Developing Countries
Some developing countries, proud of their models, say they can teach the Americans what to do, but in fact, the success of these countries is conditional on passing situations without coverage for a reasonable offer of basic health services. Their challenge, therefore, was not to reduce costs through improvements in coverage and quality, but instead increase spending to cover a population largely lacking in services. Much of the struggle of so-called "sanitary reform movements" in developing countries is to increase rather than reduce spending on health.
Developing countries, especially in Latin America showed great strides in increasing the coverage, reducing infant and maternal mortality, structuring primary care and interdisciplinary teams of health and thereby, and improving the primary health care in the last twenty years. But health indicators (with some exceptions such as Chile) are still far from reach developed countries standards of quality. The challenge of quality and the gap of inequality in access are even greater in Latin America, for example, than in the United States.
Innovative models of public administration started a short time ago and can cheapen and improve the quality of the public health services (such as Social Organizations and State Health Foundations in Brazil) but are threatened or numbed by the action of justice and union movements of health professionals, which defend their work stable status and, at least, act against the needs of the poor. These, in the name of combating the specter of privatization of health, have actually privatized public resources in the hands of the corporatism of health professionals, leading the public system to work less and benefit those who have more access to control health time-schedules, access and health information.
They end up arguing (even implicitly) for the use of public institutions of direct administration in favor of the private interest of themselves and not in favor of common sense and for the interest of the neediest population.
Some successful strategies for primary care visits and health in remote areas and models of securing more regulated use in developing countries may be transferable to experiences in the United States, allowing for greater coverage and best supply regulation. However, given the epidemiological differences between the United States and these countries, issues such as quality and training would have to be reworked in the American context for these experiences in order to deliver better results.
3. The reform proposed by President Barak Obama
President Barak Obama was not the first to propose a major reform in the American Health Care System. Other U.S. presidents have also done so, including most recently Bill Clinton.
The Clinton Plan, between the earlier initiatives of health reform, was what came closest to an effective process to tackle the challenges of inequality and lack of access to health care in the United States, but the resistance from various sectors of society did not allow the plan to survive. However, it was the embryo of several reform initiatives and coverage extension initiated at the level of U.S. states, especially that of Massachusetts - the first statewide initiative to propose a plan for universal health coverage with mutual responsibility of the employers and families. These state reforms in recent years have cemented the consensus, albeit partial, that something should be done and some successful experiences - both the public and private sectors - has been able to demonstrate paths that could be taken to achieve greater coverage and quality at lower costs.
The current proposal to reform the U.S. health has been presented in public debate on the need to face five challenges: (a) extending coverage to all, (b) organization of care around the patient, (c) financial incentives to reduce costs, (d) medical care quality and efficiency, (e) public regulation and integration between public and private systems.
a) Making coverage accessible to all
The challenge here is to extend (making mandatory) coverage for all citizens, including the 46 million Americans who do not have health insurance. For this challenge to be won, some measures are being proposed by the Government and discussed by the U.S. Senate. Below is a summary description of the proposals in effect until October of this year.
As for individuals, tax incentives, such as deductions of up to $ 750 per person covered in the income tax would apply. At the same time, individual fines of up to $ 750 per person would also be applicable in case of no coverage be proved, excluding those who, due to lack of income, cannot afford to pay for health insurance;
Private companies, as originally proposed by the government, with more than 50 employees, will have to pay, as of 2013, a fine per employee not covered by health insurance. Small businesses (with fewer than 50 employees) will receive incentives such as tax relief for workers to join their health plans. The Senate has proposed, alternatively, that firms with more than 25 employees would pay 60% of the premium for employee and that the fines for part-time employee not covered would be only $ 375 per employee per year. Small businesses, instead of having tax deductions receive public subsidies to affiliate its employees.
The Health Insurance Market would be subject to regulatory processes on managing private plans and would offer new options, including public sector option and cooperatives. The plans must have a minimum set of benefits that will be reimbursed between 70% and 95% of its actuarial cost estimates. The plans must be differentiated by age groups (three to four groups, including the Senate proposal to create a special health policy for young adults) and should have portability to allow options of exchanging carriers and plans for patients without disqualification coverage.
The state would offer a public choice, based on the creation of a government agency that would offer health plans, and the ability to capture those people not included or accepted in the private health plans because they can not pay or because, due to their level of risk, would be rejected by the private sector. This agency does not subsidize the price of the plans, but would seek efficiency and prevent abuses by the plans in the search for patients that are easily profitable due their lower risk. Like Medicare, the agency does not provide direct health services, but will hire private providers. This could increase coverage for many of the 46 million uninsured and provide some option for their specific health problems, even if they were rejected by the existing health maintenance organizations.
b) Organization of Care around the Patient
The proposal, in this subject, is to create incentives to increase preventive care and healthy behavior of patients and encourage primary care services. In the first instance, the Federal Government proposes to develop a national strategy to promote prevention and health, investing and giving donor resources to support prevention programs in the communities, as well as financial incentives to individuals and health plans to improve strategies for promotion and prevention.
Some elements of the proposal are: (a) to eliminate the user’s co-financing for actions of promotion and prevention programs given that they have proven necessary in the public option, Medicaid and Medicare, (b) encourage the same practice in private health plans and, (c) establishing patients’ health promotion routines and encourage scheduling medical visits for prevention and risk assessment of health.
In the case of primary care services, the proposal is to increase the value of the primary care visits remuneration in Medicare at rates higher than the salaries received by the specialized doctors. Since large amounts of curative services to chronically ill older persons are increasing spending on Medicare, this proposal would encourage further promotion and prevention to reduce program spending in the public and most expensive U.S. health care sector. Some of the amendments proposed by the Senate are to raise bonuses to primary care physicians in up to 10% of the amounts billed during the first five years of reform, along with cuts in payments to other specialized medical services at 0.5%.
c) Financial Incentives to Reduce Costs
In this area, the Government's proposals and the amendments that the Senate is working are pilot projects of innovative payment providers. The innovations in the payment system appear in proposals for family clinics (medical homes), more transparent organizations of providers (more accountable health care organizations) and hospitals dedicated to cross reference and post-acute care.
These innovations will test cheaper and integrated ways to pay providers that, since they will prove functional, are applied to mass public systems such as Medicare and Medicaid. To increase incentives to these experiences, the government could establish special funds (grants) for its financing.
d) Efficiency and Medical Care Quality
Proposals related to this field would be structured as improvements in system productivity, comparative clinical effectiveness and improving the quality of services.
Improvements in productivity may arise aligning financial incentives to the more cost-effective procedures, constantly updating medical protocols and prospective payment systems in accordance with these principles and making up the basket of procedures recommended by these criteria;
Comparative Analysis of Effectiveness would be made possible through the establishment of research centers that allow assessing the clinical outcomes of different types of health interventions, allowing you to select those that best demonstrate proven results for cost incurred.
Improvements in Quality of Service would be achieved through the creation of the Center for Quality Improvement which will identify, evaluate, disseminate and implement best clinical practices, research and define the national health priorities to improve performance of health institutions promoting evaluations indicators and measures for quality in health. To this end, they also will discuss funding to improve the efficiency of services. This policy is expected to work with same way as the criteria used by government to establishes a national strategy for quality development in health.
e) Public regulation and integration between public and private systems
The Public-private mix of health services in the United States has existed since the time when public programs like Medicare and Medicaid came into existence, in the eighties, private health plans in some contexts, to perform the services, either through contracting for risk (capitation) or through direct purchase (fee for service).
However, the Obama plan goes a step further in this process, when establishing regulations in the markets for health standards that define new services, requiring health plans and providers to disseminate results and performance. The Obama plan also creates a public insurance option as a way of marking the market in accordance with the expectations of the government and to force private companies to have a performance close to that established in the new framework of regulating the system.
4. Impact and financial prospects of approval
Although the reform has not yet defined all of its elements and many changes still may modify the current proposed measures, it is expected that it would reduce the number of uninsured from 50 million to 17 million between 2012 and 2019. It is also expected to bring a cost reduction in the expansion of the system.
Without reforms, total spending on health in U.S., estimated at $ 2.5 trillion in 2009, could range between $ 4.4 and $ 5.0 trillion in 2020 (based on trend growth rate of 4.4 % to 6.5% per year), implying an annual increase in health spending between $ 173 and $ 227 billion, representing over 20% of GDP in 2020.
With the reforms, an optimistic scenario, health care spending in the United States would, on average, be reduced by $ 81 billion between 2009 and 2020 ($ 7 billion per year) or raise only $ 239 billion in the same period (U.S. $ 22 billion per year) 9. With this, the per-capita spending on health could stagnate or even shrink, considering as baseline a moderate recovery of the U.S. economy in the same period.
More importantly, is the fact that, besides the reduction of expenditures, it would improve a population's health, increasing coverage, quality, satisfaction and health outcomes and re-placing the country on a track for rapid increased life expectancy, as has occurred in other OECD countries.
However, there are many tough issues in American society to reform health care:
a. Resistance by the population (or a substantial part of the middle class) who believes in a model where the freedom of choice is an unquestionable value and that would be willing to pay more to keep it. Health reforms tend to limit the freedom of customers to choose professionals and health facilities of their choice;
b. Resistance by doctors and other health professionals who prefer a model that does to standardize their knowledge and also give you the freedom to offer alternative treatments, differentiated pricing and charging for it freely. The strength and corporate power of the American middle class causes these providers to handle well the autonomy of their profession by making care lines, protocols, DRGs and clinical evaluations far from their aspirations, especially in the east coast;
c. Resistance by medical companies, for reasons similar to those of physicians, and also by the need to act freely in the sale of services, having the freedom to reject contracts with health insurers or with corporations;
d. Resistance by insurance companies and health management (HMOs) that will not submit to public regulation the several aspects that negatively affect the financial health, such as rates or insurance premiums, use of co-payments, use of pre stocks-to limit the range of services offered or the possibility to refuse patients if they do not make actuarial;
e. Resistance by the health law firms who want to maintain a free market trading of court orders (and their free interpretation by the court) when patients feel the consequences of pain and suffering, psychological and medical errors.
All of these resistors are worth trillions of dollars and have made it increasingly difficult to manage the public pocket and the family finances to pay the amount of resources they represent. The result has been to increase the public deficit as a function of progressive underfinanced public programs such as Medicare and Medicaid, but also the families and underfinanced companies can no longer afford the health plan, reducing the coverage and quality of services delivered by health plans.
But there is an expectation that the proposed reforms can be passed in Congress and at the moment, several conservative segments of American society, including Republicans, have positioned themselves favorably. This fact is associated with some special features of the reform. It keeps the spirit of that health duty to preserve pluralism and competition, and freedom of choice in a capitalist society like the United States. However, it emphasizes the role of the state as regulator of a theme which is notorious for information asymmetry by increasing the COMPLIANCE of basic human rights and implementing the subsidies to socially disadvantaged groups.
In his presidential inaugural speech, Baraka Obama said he was not the first U.S. president to try a Democratic health reform, but he said he would be the first to not give up and ensure that reform is made during his tenure. What is now expected not only in the United States but throughout the World is that this promise is fulfilled.
