Perspectives of cost
1. Price
2. Health Care Expenditures
3. Providers' cost
price
-from the perspective of consumers and financiers
-examples: the physician's bill or insurance premiums
health care expenditures
-a national perspective of how much we spend on health care services
-reflects consumption of all resources in the delivery of health care
-usually expressed as a promotion of the gross domestic product (GDP)
Providers' Cost
-from the perspective of health care providers
-examples: staff salaries, capital costs, purchase of supplies
9%
The average annual percentage growth in the US National Health Care spending during five-year periods, 1960-2010
most of the time, medical inflation has always been higher than general inflation
Annual percentage Change in CPI and Medical Inflation, 1975-2011
Healthcare is consuming a greater proportion of our GDP
Average Annual Percentage Growth in US National Health Care Spending During Five-Year Periods, 1960-2010
~$8,000 per capita
$2.59 trillion
17.9% of GDP
We spend more than any other country on health care
Reasons for High Cost
-Third-Party Payment
-Imperfect Market
-Growth of Technology
-Increase in the Elderly Population
-Medical Model
-Multipayer System
-Defensive Medicine
-Waste and Abuse
-Practice Variations
Third-Party Payment
the patient and provider have little incentive to be cost conscious
Imperfect Market
The prices charged for health care will be higher than the true economic cost
Growth of Technology
Use of technology escalates costs
Increase in the Elderly Population
The elderly consume more health care
Medical Model
More costly health care to treat health problems that could have been prevented
Multipayer System
High administrative costs because of the complexity of a multipayer system
Defensive Medicine
Unnecessary care and expensive malpractice insurance
Waste and Abuse
Fraud in billing for health care
Practice Variations
Variation in treatment patterns increase costs without appreciably better outcomes
cost containment
-in other countries with a single-payer system, centralized controls contain costs
-cost containment measures in the U.S. can only be applied in a piecemeal fashion
-In addition, cost control efforts have not been very successful because of cost shifting
1. Health Planning
-The government aligns and distributes health care resources that would achieve desired outcomes for all people
-employs supply-side rationing
-has been tried in the U.S. with limited success
2. Price Controls
-Rate-setting mechanisms in public programs to control prices
-Conversion of Medicare reimbursement from a retrospective to prospective system
-these controls have successfully slowed the annual growth of Medicare expenses but there is still cost shifting
3. Competitive Approaches in the Private Sector
-Cost sharing mechanisms which place a larger burden on consumers
-Antitrust laws that prohibit practices that stifle competition
-Competition among insurers and providers
-Managed care and utilization control
4. Electronic Health Records
-Will result in cost-containment benefits as well as a more coordinated health care system
-broad support among policy makers
5. Focus on Prevention
-Current system is inefficient in regards to the treatment of chronic conditions
-improving preventive programs has the potential to reduce costs
Access
-Defined as the ability to obtain needed, affordable, and acceptable health services
-A key determinant of health status and the effectiveness of the health care system
-Data collected by the federal government, states and other research institutions
Dimensions of Access
-Availability
-Accessibility
-Affordability
-Accommodation
-Acceptability
Unequal Access
-barriers to access exist at both the individual and system level
-vulnerable populations particularly at risk
-
Access is best predicted by race, income, and occupation
Access Initiatives
-Expansion of public programs
-Government-funded community health centers
-Free clinics and other safety net providers
-The Affordable Care Act
Quality
-Defined as the degree to which health services increase the likelihood of desired health outcomes and are consistent with professional knowledge
-leaves out the roles of cost and access
Dimensions of Quality
-Micro View
-Macro View
Micro View
-Clinical Aspects
-Interpersonal Aspects
-Quality of Life
Macro View
-Cost
-Access
-Population health measures
Framework of Quality (Donabedian, 1966)
-Purpose: to help define, measure, and improve quality in health care organizations
-structure --> Process --> Outcome
Structure
-Organizational, financial, and professional resources that support the provision of care
-Examples: education of your staff, nurse to patient ratios, profit levels, etc.
Process
-The specific way in which care is provided by staff, both technical and interpersonal
-examples: confirming patient's identity, washing hands, communication, etc.
Outcome
-The effects resulting from the structure of processes of health delivery
-Bottom line measure of effectiveness
-Examples: death rates, re-hospitalizations, morbidity rates, etc.
Quality Improvement Efforts
-Electronic health records
-Clinical practice guidelines
-Risk management
-Public reporting of quality