FIFTY YEARS IN MEDICINE, 1960-2010: WHERE ARE WE HEADED

NOW?

John P. Geyman, M.D.

50th Reunion, Class of 1960

UCSF School of Medicine

Major Trends Over 50 Years1. Expansion of medical industrial complex.2. Service ethic to business “ethic” of marketplace.3. Medicine from cottage industry to employment by systems.4. Increasing sub-specialization; near-collapse of primary care.5. Growing system fragmentation; decreased continuity of care.6. Increasing bureaucracy in multi-payer system.7. Decline in professional sovereignty.

• Increased Costs• Decreased Access• Variable Quality• Increased Fragmentation• Increased Administrative Burden• Technological Imperative• Medicolegal Liability• System Out of Control

Major Problems ofHealth Care System

1. Technological advances2. Aging of population3. Increase in chronic disease4. Inefficiency and redundancy of private insurers5. Profiteering by investor-owned companies, facilities and providers6. Consumer demand7. Defensive medicine

Drivers OfHealth Care Costs

Health Care Costs In U.S.• 17% of GDP

• $2.5 trillion per year

• Increased cost-shifting to individuals/families

• Incremental “reforms” ineffective

Escalating Costs of Care• Double digit increases in health insurance

premiums

• Average family premium now $13,000-$15,000 per year

• 31% of total health costs are administrative

• $8,300 per capita health care spending

Growing UnaffordabilityOf Health Care• “Medical divide” at about $50,000 annual

income

• Median household debt over $100,000

• Median family income $50,000 a year

• Health insurance premiums to consume all of average household income by 2025

Private Health Insurance Industry In U.S.

• 1,300 companies fragment risk pools

• Medical underwriting, favorable risk selection

• $400 billion a year industry

• Minimal regulation, mostly at state level

• Medical-loss ratios range from 70% - 85%

Three Alternatives For Health Care Reform1. Employer mandate

2. Individual mandate (Consumer‑driven health care)

3. Single‑payer system

Problems With Employer‑ Based Approach1. Only 59 percent of employers provide coverage2. Trend toward part‑time work force3. Defined contributions vs. benefits4. Increasing cost‑sharing and unaffordability5. Job lock problem6. Competitive disadvantage in global markets7. A failed track record (eg., Hawaii)

Consumer Choice (“Individual Mandate”)

• Increasingly popular pro-market “solution”• Shifts responsibility for coverage from employers to

consumers• Assumes a free market in health care• Assumes adequate information and options for

consumers• Current examples:

premium support for defined benefitsprivatizing of Medicaremedical savings accounts

Problems With Option 2• Less service for more cost

• Serves for-profit insurance industry

• Coverage by risk selection

• Limited choice for consumers

• “Bad plans can drive out the good ones”

• Is still the most politically popular and likely

Why Incremental "Reforms” Keep Failing1. Favorable risk selection by insurers

2. High administrative costs and profiteering

3. No mechanisms to contain costs

4. Fragmentation of risk pools

5. Decreasing access to necessary care

6. Lack of accountability for value and quality

Annual Health Insurance Premiums And Household Income, 1996-2025

Option 3: Single Payer System

• Socialized insurance, not socialized medicine

• Universal coverage through National Health Program

• Eliminates private health insurance industry

• Hospitals and nursing homes with global budgets

• Physicians reimbursed by fee-for-service

• Blend of federal and state government roles

Fundamental Features of a Universal Healthcare System

• Everyone included• Public financing• Public stewardship• Global budget• Public accountability• Private delivery system

What Would a NHP Look Like?• Everyone receives a health care card assuring

payment for all necessary care• Free choice of physician and hospital• Physicians and hospitals remain independent

and non-profit, negotiate fees and budgets with NHP

• Local planning boards allocate expensive technology

• Progressive taxes go to Health Care Trust Fund• Public agency processes and pays bills

Advantages of National Health Program

• • Assured access for all AmericansAssured access for all Americans

• • Cost savings ($400 billion/year)Cost savings ($400 billion/year)

• • Administrative simplicityAdministrative simplicity

• • Decreased overhead (Medicare 3% vs private Decreased overhead (Medicare 3% vs private insurance 15%-26%)insurance 15%-26%)

• • Distributes risk and responsibility to finance Distributes risk and responsibility to finance carecare

• • Improves access, costs, and quality of careImproves access, costs, and quality of care

Problems with Option 3 • Political acceptance• Lobbying by special interest stakeholders• Disinformation by media coverage• Philosophic concerns about “big government”• Denial of ineffectiveness of market-based

system

How Medicine Wins WithNational Health Insurance

1. Universal access for all of our patients with free choice of physician and hospital.2. Physicians with more time and energy for direct patient care.3. Emphasis on need-based care, not profit-driven practice.4. All patients are “paying patients”. 5. Decreased practice overhead, less “hassle factor”.6. Increased practice satisfaction.7. Increased public respect.

Why Health Care“Reform” 2010 Will Fail

1. No cost containment; not sustainable.2. Subsidies inadequate and cannot be sustained.3. Insufficient accountability in expanded marketplace.4. Rampant underinsurance; actuarial value of 70 percent for “basic coverage”.5. Increasing public backlash as middle class is impacted by soaring costs. 6. Can’t get universal coverage and cost containment without larger role for government.

Approaches To Real Health Care Reform

1. Base policy alternatives on health policy science and documented experience.

2. Enact single-payer national health insurance.3. Accept need to steward limited resources for

care of the whole population.4. Change how physicians are paid: re-negotiation

of fees within global budgets.5. Establish independent, science-based

Comparative Effectiveness Institute empowered to recommend coverage and reimbursement policies.

6. Rebuild primary care and its infrastructure.

How Physicians And Medical Schools Can Lead Toward Reforming Health Care

1. Role modeling and mentoring service ethic over business values and behaviors.2. Advocacy of patients’ interests above providers’

“needs”.3. Take increased responsibility for addressing system

problems.4. Redistribution by specialty of graduate medical

education positions based on system needs.• Increased transparency and elimination of conflicts-

of-interest with industry.• Lead toward comparative effectiveness/cost-

effectiveness research