Medicare: a Single Payer system in “crisis”?A Comparison to other U.S. Health Insurance

Systems

Oliver Fein, M.D.

Chair, New York Metro Chapter

Physicians for a National Health Program

Professor of Clinical Medicine and Health Policy

Associate Dean (Affiliations)

Weill Cornell Medical College

(ofein@med.cornell.edu)

 

Workshop

PNHP National Meeting

New Orleans, LA

November 15, 2014

 

DISCLOSURES

Dr. Oliver Fein has no relevant financial relationships with commercial interests

Dr. Oliver Fein is Chair of the NY-Metro Chapter and past President of Physicians for a National Health Program (PNHP), a non-profit educational and advocacy organization. He receives no financial compensation from PNHP.

PRESENTATION OUTLINE

1. Macroeconomics of Health Care

2. Medicare in Comparison to other

U.S. Health Insurance Programs

 

3. Comparing Traditional Medicare

to Medicare Advantage

NATIONAL HEALTH CARE EXPENDITURES

Billions of dollars (% total for year)

Category 1960 2012*

• Personal Health Care $ 23.3 (85%) $ 2,360.4 (84%)

• Public Health Activities $ 0.4 (1%) $ 75.0 (3%)

• Research and Construction $ 2.6 (10%) $ 160.0 (6%)

• Other $ 1.2 (4%) $ 198.0 (7%)

TOTAL NHE $ 27.5 (100%) $ 2,793.4 (100%)

Per Capita NHE $ 147 $ 8, 915

NHE as percent of GDP 5.2% 17.2%

* Data for 2012 from Health Affairs: January, 2014;33:67-77

PERSONAL HEALTH CARE EXPENDITURES

Billions of dollars (% total for year)

Category 1960 2012*

• Hospital care $ 9.2 (39%) $ 882.3 (37%)

• Physician services $ 5.4 (23%) $ 565.0 (24%)

• Dental $ 2.0 (9%) $ 110.9 (5%)

• Other professional services $ 0.4 (2%) $ 76.4 (3%)

• Prescription drugs $ 2.7 (12%) $ 263.3 (12%)

• Other medical products $ 2.3 (9%) $ 95.0 (4%)

• Nursing home and home health $ 0.9 (4%) $ 367.5 (15%)

• Other $ 0.4 (2%) $ 0 (0%)

Total Personal Health Care $ 23.3 (100%) $2,360.4 (100%)

* Data for 2012 from Health Affairs: January, 2014;33:67-77

WHO PAYS FOR HEALTH CARE?1

Category Billions of Dollars % of Total

NHE (minus investments - $160B) $ 2,633.4 (100%)

Private Funds $ 882.1 (34%)

Private health insurance $ 553.9 (12%)

Out of pocket payments $ 328.2 (13%)

Public Funds $ 1,751.4 (66%)

Medicare $ 572.5 (22%)

Medicaid $ 421.2 (16%)

Other Federal** $ 103.8 (4%)

Other Federal and State*** $ 290.8 (11%)

Public Employee health benefits $ 167.6 (6%)

Tax Subsidies $ 195.5 (7%)

Tax-Financed ($ per capita) $ 5,590*Data for 2012 from Health Affairs: January, 2014, using the methodology described in Health Affairs 2002;21:88-98

**Includes VA, DOD, CHIP

*** Includes IHS, federal public health, Worker’s Comp., SAMSA, School health, etc.

1 Woolhandler S, Himmelstein, DU. Paying for National Health Insurance—and Not Getting It. Health Affairs. 2002:21;88-98

CONCLUSION #1

We are more than half way to a government financed health care system!

US Public Spending for Health ExceedsTotal Spending in Other Nations

Data are for 2011Sources: OECD 2013; Health Affairs 2002 21(4)88

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$8,950

  Medicare Medicaid Private HIEmployer-based

Private HIExchange-based

Number enrolled 

       

Eligibility        

Means-based        

Comprehensive Coverage1. Benefits

       

2. Deductibles (annual)

       

3. Co-payments

Actuarial Value        

Type of Financing 

       

Progressiveness of Financing

       

Administrative Costs

       

Type of MD Payment

       

Network Narrowness

       

COMPARISON OF US HEALTH INSURANCE PROGRAMS

2014 Federal Poverty Guidelines

Federally facilitated marketplaces will use the 2014 guidelines to determine eligibility for Medicaid and CHIP (this is effective February 10, 2014).

 Household Size

 100%  133%  150% 200% 250%

 300% 400%

 1 $11,670 $15,521 $17,505 $23,340$29,175

$35,010 $46,680

 2 15,730  20,921 23,595   31,46039,325

47,190 62,920

 3 19,790  26,321 29,685   39,58049,475

59,370 79,160

 4 23,850  31,721 35,775   47,70059,625

71,550 95,400

 5 27,910  37,120 41,865   55,82069,775

83,730 111,640

 6 31,970  42,520 47,955   63,94079,925

95,910 127,880

 7 36,030  47,920 54,045   72,06090,075

108,090 144,120

 8 40,090  53,320 60,135   80,180100,225

120,270 160,360

Metal Product Deductible Inpatient Cost

Share

Outpatient Cost Share

ED Cost

Share

Max Annual Out of Pocket

Platinum $0 $500 $100 $100 $2,000

Gold $600 $1,000 $100 $150 $4,000

SilverFull PayFPL 200% - 250%FPL 150% - 200%FPL 100% - 150%

$2,000$1,750 250 0

$1,500$1,500

250100

$100$100 75 25

$150$150 75 50

$5,500$4,000$2,000$1,000

Bronze $3,000 50% 50% 50% $6,350

Catastrophic* $6,400 100% 100% 100% $6,400

TABLE 4: HOSPITAL COST SHARE AMOUNTS

Subsidization of Cost Sharing Amounts (for copayments and deductibles): will be made for parties or below 250% of poverty (currently less than $28,725 for a single adults and $58,875 for a family of four).

It is not clear how any provider will be in a position to know any member’s cost share obligations at the time of service.

*Catastrophic policies cover 3 primary care visits per year at no cost. Catastrophic policies also cover the free preventive benefits (https://www.healthcare.gov/what-are-my-preventive-care-benefits/)

Metal Product Primary Care MD

Specialist MD

Surgeon MD

Platinum $15 $35 $100

Gold $25 $40 $100

SilverFull PayFPL 200% - 250%FPL 150% - 200%FPL 100% - 150%

$30$30$15$10

$50$50$35$20

$100$100$ 75$ 25

Bronze 50% 50% 50%

Catastrophic 100% 100% 100%

TABLE 4A: PHYSICIAN SERVICES COST SHARE AMOUNTS

CONCLUSION #2

U.S. Health Insurance system

is very complex

COMPARISON

• Traditional Medicare

 

• Medicare Advantage

CONTACTS AND REFERENCES

• PNHP National: www.pnhp.org

• PNHP-NY Metro: www.pnhpnymetro.org

• Bodenheimer TS, Grumbach K. Understanding Health Policy: A Clinical Approach. McGraw-Hill (2012)

• Fein O, Birn AE. (editors). Comparative Health Systems. Am Jour Public Health (2003) 93: 1-176

• O’Brien ME, Livingston M (editors). 10 Excellent Reasons for National Health Care. New Press (2008)

• Potter W. Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans. Bloomsbury (2010)

• Geyman, J. Health Care Wars: How Market Ideology and Corporate Power are Killing Americans. Copernicus Healthcare, Friday Harbor, Washington (2012)

• Himmelstein, DU, et. al. A Comparison of Hospital Administrative Costs in Eight Nations: US Costs Exceed All Others by Far. Health Aff (2014) 33:1586-1594.