comparative systems - 2 © allen c. goodman, 2012
TRANSCRIPT
Comparative Systems - 2
© Allen C. Goodman, 2012
Let’s look at shares
Share s = pq/y.
For share to rise, what must happen?
% s = %p + %q - %y.
Assume first that p is unrelated to income y.
Suppose that when y by 1%, q by 1%.
So:
% s = 0 + 1 - 1 = 0!
So for s to rise, (% q)/(% y) > 1.
Means that income elasticity must be greater than 1.
We did see earlierThat as y, so does p.What does that do?
Let’s look at shares
We saw that elasticities seemed to exceed 1.
So, increasing per capita income seems in line with increasing shares. But US was even higher than that!
What about other countries?
Good summary at following web site:
http://www.scotland.gov.uk/Publications/2006/02/08133407/4
Great Britain's National Health Service (NHS) was established in 1946, and provides health care to all British residents.
It is financed largely (about 83%) through general revenues, with capital and current budget filtering from the national down to the regional, and then to the district level.
UK v. US Percent of GDP Spent on Health Care, 1960-2010
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Year
Per
cen
t
Canada
France
Germany
Japan
United Kingdom
United States
The plan pays physicians on a capitation basis and hospital staff largely on a salaried basis. Doctors may, however, receive additional payments for many services, including maternity services, treatment of temporary residents, the training of assistants, and treatment of the elderly.
UK - NHS
Services are not entirely free.
NHS Charging system for Dental Work
£204 (about $328) for each “course of [dental] treatment”
English patients pay £7.40 (about $11.90 at the August 2011 exchange rate of about $1.61 per £1) for each prescription, but close to 90 percent of prescriptions are exempt from charges
Patients in Scotland, Wales and Northern Ireland are not charged.
UK - NHSThose receiving means-tested benefits and their adult dependents,
children under age 16 (under age 19 if a student), pregnant women, and nursing mothers are exempt from dental and prescription charges. People over the state pension age and certain other groups are exempt from prescription charges.
The general practitioner, or GP, serves as the "gatekeeper" to the health care system. GPs are NOT government employees. Rather they are self-employed and receive about half their incomes from capitation contracts with a Family Practitioner Committee.
How does the United Kingdom keep its health care expenditures this much lower while providing universal access to health care?
Though patients have relatively easy access to primary and emergency care, elective services are rationed either through long waiting lists and by limiting the availability of new technologies.
Performance Under the NHSOn the one hand, the effect of a system such as the NHS that depends
on queuing for access to care is often to postpone, or simply not provide, certain services.
On the other hand, the NHS devotes considerable resources to such high return services as prenatal and infant care. To these populations served, and to the larger public concerned with equitable provision of care to these segments of the population, the universal nature of the service is particularly beneficial.
Over the years, the United Kingdom has spent considerably less on health care than the United States and many other countries. By most measures of mortality and morbidity, the United Kingdom does about as well. Certainly, there are many non-medical factors that are involved in determining disease and death rates in a population, and these factors will also vary across countries.
In addition, despite universal access to care in the United Kingdom, historically there have been considerable regional disparities in funding and in the use of health care.
There is evidence showing that upper class patients have received substantially more care for a given illness than have lower class patients. Thus, even where access is universal, the results are not necessarily equal.
Performance Under the NHS
Table 22-3 Inpatients Waiting 6 Months or More - London Region – 2000-2001
Inpatients waiting 6Inpatients waiting 6 months or more asmonths or more as % of the total number% of the total number of inpatients waitingof inpatients waiting for each specialty
All Trauma & Ear, NoseHealth Authority specialties OrthopedicsUrology and Throat
Barking & Havering 28.5 36.8 19.1 33.5Barnet 24.9 32.8 22.5 31.4Bexley & Greenwich 27.8 37.5 18.8 40.5Brent & Harrow 27.0 32.8 26.0 32.0Bromley 30.5 39.1 16.7 22.5Camden & Islington 21.8 30.4 16.7 24.8Croydon 32.8 51.8 30.6 10.9Ealing, Hammersmith & Hounslow 25.4 34.7 23.9 41.7East London and the City 25.5 29.0 19.4 38.7Enfield & Haringey 32.5 37.1 25.0 38.5Hillingdon 25.7 34.0 18.4 29.2Kensington, Chelsea & Westminster 19.5 24.0 16.9 26.3Kingston & Richmond 23.9 35.5 15.2 41.6Lambeth, Southwark & Lewisham 34.0 36.5 28.5 42.9Merton, Sutton & Wandworth 25.9 36.2 6.7 34.6Redbridge & Waltham Forest 34.5 48.2 35.9 35.9
Source: REPORT BY THE COMPTROLLER AND AUDITOR GENERALHC 221 Session 2001-2002 26 July 2001
Varies a lotVaries a lot
What they say
“The NHS is making sure that you are seen as soon as possible, at a time that is convenient for you. To do this, the NHS Constitution gives you the right to access services within maximum waiting times, or for the NHS to take all reasonable steps to offer you a range of suitable alternative providers if this is not possible.”– You have the right to start your consultant-led treatment
within a maximum of 18 weeks [emphasis added] from referral.
– You have the right to be seen by a specialist within a maximum of two weeks [emphasis added] from GP referral for urgent referrals where cancer is suspected.”
More Evidence
• NHS data reported by the Guardian in July 2011 indicated that in April 2011, over one in ten (10.2%) of NHS patients had waited more than 18 weeks for treatment.
• This represented an increase of 24% over the 8.2% facing similar waits in the same month in 2010 (that is, 10.2 divided by 8.2).
• Despite 29,000 fewer procedures carried out in April 2011 compared with a year earlier, an additional 2,387 patients (of 241,000) had waited more than 18 weeks.
The Canadian Health Care System
The Canadian system of financing and delivering health care is known as Medicare, although it should not be confused with the U.S. Medicare program developed for the elderly.
In Canada, each of the 10 provinces and three territories administers a comprehensive and universal program which is partially supported by grants from the federal government. Various criteria established by the federal government with respect to coverage must be met.
Coverage must be universal, comprehensive and portable, meaning that individuals can transfer their coverage to other provinces as they migrate across the country. There are no financial barriers to access, and patients have free choice in the selection of providers.
Canada's Medicare is not the same as Britain's NHS. Most Canadian physicians are in private practice and have hospital admitting privileges. They are reimbursed by the provinces on a fee-for-service basis under fee schedules negotiated by the provinces and physician organizations. Hospitals are also private institutions although their budgets are approved and largely funded by the provinces.
Canadian and US health care systems also evolved similarly until the 1960s. Even as recently as 1971, both countries spent approximately 7.5% of their GNPs on health care. Since 1971, however, the health care systems have moved in very different directions.
While Canada has had publicly funded national health insurance, the United States has relied largely on private financing and delivery (although governments have been heavily involved through Medicare, Medicaid and numerous regulatory programs).
The Canadian Health Care System
Fuchs and Hahn
Compared Canada to U.S., and Iowa to Manitoba.
Somewhat dated, but indicative.
Let’s look at a couple of slides.
Physicians' Fees
0
1
2
3
4
5
6
Service
Ra
tio
US/Canada
Iowa/Manitoba
What does ratio of 1 mean?
What does ratio of 1 mean?
Ratios of Services
0
0.5
1
1.5
2
2.5
3
3.5
4
Item
RatioUS/Canada
Iowa/Manitoba
Quantities? US lower
Fees? US higher
Availability of Selected Technologies, 2007-9CT Scanners MRI Units Radiation Therapy Lithotriptors Mammographs
# Per Million # Per Million
# Per Million # Per Million # Per Million
Australia 949 42.5 130 5.8 205 9.2 21b 1b 533 23.9
Canada 484 14.4 281 8.4 -- -- 14 0.4 -- --
France 766 11.8 451 7 -- -- -- -- -- --
Japan
12420b 97.3b
5503b 43.1b -- -- -- --
3792b 29.7b
Switz’land 255 32.6 -- -- 129 16.5 -- -- 259 33.1
United Kingdom 510 8.3 365 5.9 319.6 5.2 -- -- 543 8.9
United States 10335c 34.3c 7810c 25.9c 3495 11.3 -- --
12215b 40.2b
Administrative CostsThe centralized system of health care control in Canada has led to attention on the
possible economies associated with administrative and other overhead expenses. Almost all patients in the United States are familiar with the extensive paperwork and
complex billing practices. For providers and third-party payers, the paperwork involves major administrative expenses.
In a 2005 article, Woolhandler, Campbell, and Himmelstein compared 1999 administrative costs per capita and found excess per capita administrative costs of $752, or in aggregate $209 billion, implying that a single payer Canadian style health system would save 71 cents out of every dollar of administrative costs currently .
Re-examining their data, Aaron (2005) argues that looking at per capita numbers overstates the difference. He notes that administrative costs in the U.S. accounted for about 31% of total health care spending, compared to 16.7% in Canada. Even this more conservative calculation points to excess spending of $159 billion per year!
Cutler and Ly (2011)
• Cutler and Ly (2011) partition the $1,589 difference in per capita health care spending between the U.S. and Canada in 2002. Higher administrative costs accounted for $616, or 39 percent, of the difference.
• The authors argue that this figure probably underestimates the amount and share, because nurses also spend substantial time on administrative tasks, but accounts typically consider nursing time as clinical care rather than administration.
Posen and Cutler (2010)
• Multiplying this by 310 million Americans, and accounting for the approximately 20 percent rate of inflation from 2002 to 2011, yields a total of $232 billion dollars in “excess” administrative costs.
• This is between 8 and 9 percent of total U.S. health expenditures. This large cost does not appear to bring commensurate benefits along with it.
So …
The data presented above suggest that the Canadian system appears to do better than the U.S. system in several respects.
Costs are lower, more services are provided,
There is universal access to health care without financial barriers, and
Health status as measured by mortality rates is superior.
Canadians have higher life expectancies and lower infant mortality rates than the United States residents.
However, some have argued that a system which is manageable for a population of about 30 million cannot be easily emulated in a more pluralistic country with a population ten times that level.
So … (2)
Critics of the Canadian system charge that health care is rationed in the sense that all the care that patients demand, or would be provided to meet their best interests, cannot be supplied on a timely basis.
Though specific estimates of such shortages are not available, there is a consensus that the limits on capacity and on new technology result in longer waiting periods for hospital services.
The "safety valve" of a private system, as in the United Kingdom, for those who are willing to pay more, is not readily available, although some Canadians (particularly those near large U.S. border cities such as Buffalo and Detroit) use the United States facilities for this purpose.
So … (3)
June and Dave O’Neill did a pretty interesting comparison – best to date. Three questions:
What difference in health status can be attributed to 2 systems?
A> Most of the differences are life style related, rather than the health systems. We have lower birthweight babies, and we’re more obese. Systems don’t do much about that.
How does access to care vary between countries?
A> In Canada they complain about long waits. In US they complain about high costs.Is inequality in access different in two countries?
A> Relationship of health to income is about the same in both countries.
New StuffHow Health Insurance Design Affects Access To Care And Costs, By Income, In Eleven CountriesBy Cathy Schoen, Robin Osborn, David Squires, Michelle M. Doty, Roz Pierson, and Sandra Applebaum
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.2010.0862
BOX 22-3 “Someone Else Needed It More than I Did”
• While on vacation in Florida one of the authors played golf with a Canadian man who remarked that this was his first round after having had his hip replaced. The surgery had incurred no out-of-pocket costs, and he felt fine.
• When asked how long he had to wait for surgery, he responded that he had waited 18 months.
• How did he feel about it? “It didn’t bother me … someone else needed it more than I did.”
With Obama Reforms
• The law will expand eligibility for Medicaid to those earning 133% of the federal poverty level. It will also provide subsidies for premiums for people up to 400% of poverty and for cost sharing for people up to 250% of poverty.
• Even after the enactment of health reform, the United States will also remain unique among countries in that it covers low-income people in a separate program. This poses the dual challenge of promoting equity across programs and ensuring continuity of insurance. In the other ten countries in our survey, providers were typically paid the same amount regardless of patients’ incomes, which is not currently the case in the United States
Access, Affordability, And Insurance Complexity Are OftenWorse In The United States Compared To Ten Other Countries
• The Survey The 2013 survey of the general population consisted of computer-assisted telephone interviews of random samples of adults ages eighteen and older in eleven countries, using a common questionnaire that was translated and adjusted for country-specific wording as needed.
• Social Science Research Solutions and country contractors conducted the interviews during February–June 2013. For the first time in the survey series, mobile phone numbers were included in all countries. Field times in each country ranged from four to ten weeks; most field times were eight weeks.
doi: 10.1377/hlthaff.2013.0879 HEALTH AFFAIRS 32, NO. 12 (2013): – ©2013 Project HOPE— The People-to-People Health Foundation, Inc.
Stop Here
Health expenditure per capita, public and private, 2005
1. 2004.2. 2004-05.3. Public and private expenditures are current expenditures (excluding investments).
Statlink http://dx.doi.org/10.1787/114254751864
http://titania.sourceoecd.org.proxy.lib.wayne.edu/vl=623485/cl=24/nw=1/rpsv/health2007/g5-1-01.htm
Older, for comparison
Aus. Canada NZ UK US Ger.
Unweighted Sample Size 702 751 704 1770 1527 1503
Overall System View (in%ages)
Only minor changes needed 23 21 27 30 23 16
Fundamental change needed 48 61 52 52 44 54
System needs to be completely rebuilt 26 17 20 14 30 31
Source: Schoen et al. (2005), Exhibit 7
Schoen, Cathy, et al. “Taking the Pulse of Health Care Systems: Experiences of Patients with Health Problems in Six Countries,” Health Affairs Web Exclusive, November 3, 2005, : W509-525.
Health System Views and Experiences Among Sicker Adults in Six Countries, 2005
Macro-econ.
references GDP /
capita, US$ PPP
Total exp. on health / capita, US$
PPP
Expenditure in-
pat.care Tot. exp. in-patient %
THE (2002)
Tot. pharm. & other exp % THE (2002)
% of GDP spent on
health care
Deaths per 1,000 live births (2002)
1970 1990 2002 Female Male
Australia 28168 2504b 40.2b 13.8b4.9 7.8 9.1b
5.0 82.6 77.4Austria 28842 2220 38.2 16.1 4.3 7.1 7.7 4.1 81.7 75.8Belgium 27652 2515 4.0 7.4 9.1 4.9 81.1 75.1
Canada 30429 2931 28.8c 16.7c 7.0 9.0 9.6 5.2b 82.2b 77.1b
Czech Republic15098 1118 37.8 22.6 7.4 4.2 78.7 72.1
Denmark 29228 2583 50.7c 9.8c 8.0 8.5 9.0c4.4 79.5 74.8
Finland 26616 1943 39.2 15.9 5.6 7.9 7.3 3.0 81.5 74.9
France 28094 2736 41.3 20.8 8.6 9.7 4.1c 82.9c 75.8c
Germany 25843 2817 36.1 14.5 6.3 8.7 10.9 4.3 81.3b 75.6b
Greece 19041 1814 15.3 6.1 7.5 9.5 5.9 80.7 75.4Hungary 13891 1079 29.0 27.6 7.8 7.2 76.7 68.4
Iceland 28404 2807 54.6b 14.0b9.9 2.2 82.3 78.5
Ireland 32571 2367 11.0 5.1 6.6 7.3 5.1 80.3 75.2
Italy 25569 2166 41.8c 21.9c8.0 8.5c
4.7 82.9 76.8
Japan 26860 2077b 38.9b 18.8b4.5 5.9 7.8b
3.0 85.2 78.3
Korea 19524 996 21.5 25.6 4.8 5.1 80.0b 72.8b
Luxembourg 49207 3065 40.3 11.6 6.2 5.1 81.5 74.9
Mexico 9026 553 33.2 21.4 6.1 21.4 77.4c 72.4c
Netherlands 28983 2643 40.8 10.4 6.9 8.0 9.1 5.0 80.7 76.0
New Zealand 21943 1857 5.1 6.9 8.5 6.3a 80.9b 76b
Norway 35531 3409 49.0b 9.2b4.4 7.8 10.0c 3.9b
81.5 76.4Poland 10804 654 6.1 7.5 78.7 70.4Portugal 18376 1702 9.3 5.0 80.5 73.8Slovak Republic12256 698 35.0 37.3 5.7 7.6 77.8 69.9Spain 21592 1646 27.6 21.5 3.6 6.6 7.6 3.4 83.1 75.7Sweden 27255 2517 31.2 13.1 6.9 8.5 9.2 2.8 82.1 77.7Switzerland 30725 3446 48.0 10.3 5.6 8.5 11.2 4.5 83.0 77.8
Turkey 6448 446a 24.8a 6.6a38.3 71.0c 66.4c
United Kingdom27959 2160 4.5 6.0 7.7 5.3 80.4b 75.7b
United States 36006 5267 27.6 12.8 6.9 11.9 14.6 6.8 79.8b 74.4b
Table 22-1 Health Care spending and Outcomes in Selected Industrial Countries - 2002
Life Expectancy at Birth, 2002
Copyright OECD HEALTH DATA 2004, 3rd edition; a 2001; b 2001; c 2003
Older, for comparison
Older, for comparison
Aus Canada NZ UK US Germany
Wait for specialist appointment 552 592 552 1207 1179 1181 among those needing to see a specialist
Less than 1 week (Pct) 11 10 17 11 20 27More than 4 weeks 46 57 40 60 23 22
Wait for elective surgery 179 165 181 231 352 235
Less than 1 month (Pct) 48 15 32 25 53 594 months or more 19 33 20 41 8 6
Access problems because of cost in past 2 years (Pct)
Did not Fill prescription 22 20 19 8 40 14 Visit doctor when sick 18 7 29 4 34 15 Get recommended test or follow-up 20 12 21 5 33 14 Any access problems due to cost 34 26 38 13 51 28
Out of pocket expenses in last 2 years
None 10 22 9 65 15 5 More than $1,000 14 14 8 4 34 8
Source: Schoen et al. (2005), Exhibit 6
Schoen, Cathy, et al. “Taking the Pulse of Health Care Systems: Experiences of Patients with Health Problems in Six Countries,” Health Affairs Web Exclusive, November 3, 2005, : W509-525.
Access, Waiting Times, and Costs Among Sicker Adults in Six Countries, 2005
2007
Country Type of Co-Payment Scheme £1 £5 £10 £20
Scotland Fixed Co-Payments 6.5 6.5 6.5 6.5Australia Maximum Co-Payments 1 5 10 12.54New Zealand‡ Fixed Co-Payments 5.61 5.61 5.61 5.61Finland Fixed and Percentage Co-Payments 7.07 7.07 8.54 13.54Denmark Percentage Based Co-Payments 1 5 10 20
A 35p 1.75 3.5 7France† Percentage Based Co-Payments B 65p 3.25 6.5 13
C 1 5 10 20
Spain Percentage Based Co-Payments 40p 2 4 8Ireland Cap Based Co-Payments 1 5 10 20
The fixed co-payment scheme in Scotland means that patients pay £6.50 regardless of the price of the medicationIn Australia, patients pay the full cost up to a maximum of £12.54 per item plus pharmacy feesNew Zealand, patients pay a fixed co-payment of £5.61 per itemIn Finland, patients pay 50% of the excess plus a fixed co-payment of £7.07 (€10)In Denmark, patients pay the full cost of up to an annual limit of £49, after which patients pay a reduced contributionIn France, patients are reimbursed 35%, 65% or 100% of the cost of a medication, depending on the seriousness of the condition and the therapeutic status of the medicationIn Spain, patients pay 40% of the price of the medicationIn Ireland, patients pay the full cost of medication up to a maximum of £60.10 per month (€85)
Drug Copayments – Other Countries
http://www.scotland.gov.uk/Publications/2006/02/08133407/7
Even Newer Stuff – 2011 - Access
Even Newer Stuff – 2011 – Costs