US & Comparative Health Systems PDF

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Warning: TT: undefined function: 32 Warning: TT: undefined function: 32 US Public Health and Health Care SystemLecture 1: Introduction to the US Health Care System Part I The current debates over the US health system are rooted in our history, institutional settings, culture, and interest group dyna...

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US Public Health and Health Care System Lecture 1: Introduction to the US Health Care System Part I 1. The current debates over the US health system are rooted in our history, institutional settings, culture, and interest group dynamics. 2. The framers were divided on the power of the federal government: -

Alexander Hamilton wanted a powerful federal executive branch fueled by a strong President James Madison wanted a large but weak federal government, in which checks and balances and divided government made it hard for federal officials to act Thomas Jefferson and the anti-federalists believed in states’ rights, a weak federal government, and strong a strong bill of rights

3. The first President, George Washington, was a Hamiltonian federalist, but he hoped to calm the fierce battles between the founders by appointing Jefferson as Secretary of State, joining Hamilton as Secretary of the Treasury. But the two men remained strong rivals, and their rivalry led to the formation of the American two-party political system. Hamilton and the Federalists pushed for a national bank, national taxes, a national army and alliance with Great Britain. Jefferson and colleagues (including by now Madison) opposed the nationalist agenda, and sought an alliance with France. 4. In 1800, Jefferson becomes President, and he ushered in a new states’ rights era, in which the federal government had very little authority over domestic economic and social welfare matters. Lecture 2: Introduction to the US Health Care System Part II 1. In a Jeffersonian democracy, federal and state governments did not provide healthcare; the responsibility for taking care of poor and needy folks fell on local governments. 2. Adoption of English Poor Law: local government provides services for “deserving poor” only: individuals who couldn’t work, were elderly, or indigent, who were sent to “alms” or “poor houses.” 3. Medical advances and the subsequent hospital boom took place in the mid-late 1800s and early 1900s, respectively. Part of hospital boom was due to higher confidence in health care—doctors could now treat previously untreatable conditions. The Great Depression then put many hospitals in financial distress -- many hospitals started to go bankrupt. 4. Beginnings of health insurance, as efforts to avoid bankruptcy during the Depression -

Pre-paid hospital insurance experiment at Baylor University Medical Center - If public schoolteachers pay a small premium, they get up to three weeks per year in a hospital for free. Beginning of Blue Cross—Administrative entity in Newark, New Jersey by which people could pay the firm a small premium and go to any hospital in the city. Physicians soon created a similar program, with a separate premium, that allowed for residents of Newark to visit the doctor, called Blue Shield.

5. Two main models for health insurance, after commercial insurance companies began offering similar plans: -

One model was for-profit, could experience rate: charge people different premiums based on expected costs.

Commercially-insured patients would also have to cover the hospital/physician bill, and then get reimbursed—indemnity model. The other (Blue Cross) model was not-for-profit and used community rating: everyone charged the same premium, regardless of expected costs. -

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6.

FDR’s New Deal had 3 components, first 2 were successfully enacted: -

Social Security: Pension program for seniors -- successfully enacted Aid to Dependent Children (later called Aid to Families with Dependent Children, or AFDC): Cash assistance welfare to poor mothers and young children -- successfully enacted National health insurance: stopped by American Medical Association (AMA)—the most influential lobbying group in the US at the time, who would’ve stopped the whole New Deal from passing if included. Primary concerns about income and physician autonomy.

Lecture 3: Medicaid & Medicare Part I 1. The Supreme Court initially struck down the New Deal as unconstitutional – questioning the authority of the Executive Branch. -

Argument 1: Programs like Social Security exceeded the authority of the federal government Argument 2: Newly expanded government was relying on executive agencies, who are being delegated too much power Argument 3: Some New Deal provisions (i.e. minimum wage law) were violating due process rights of employers and employees of determining wages

But in the 1930s, Justice Roberts reinterprets the clause “Congress shall have the authority to regulate interstate commerce” liberally in the constitution - which continued until the ACA. The New Deal signaled a switch from Jeffersonian view (states’ rights, weak federal government) to a Hamiltonian view (powerful executive branch), resulting in more presidential and federal power. FDR viewed as a successful wartime president and reelected 4 times until 1944. 2. FDR is able to create Social Security component of New Deal, but excluded domestic workers and farm laborers (~ 75% of African Americans), small business owners, and federal employees. Politics of interest groups and race were deeply embedded into New Deal -- Southern Democrats were concerned about protecting the plantation economy. 3. Second Bill of Rights: FDR’s radical proposal to reframe what the government owes us as citizens in terms of economic rights: employment, education, housing, health. 4. Truman proposes National Health Insurance, but it does not happen due to fierce interest group opposition (AMA, private insurance) as well as cultural forces (anti-socialism, Cold War). Instead, he makes private health insurance more affordable through the tax code – having employers pay premiums and deduct as business expenses. Results: by the 1960s, 2/3 of Americans have Employer-Sponsored Insurance (ESI); today ~50% of Americans. 5. Truman wants to enact a public insurance safety net, so expands Social Security Act to provide hospital insurance to elderly – social insurance. Republicans counter with welfare medicine program, which would give money to states for cash assistance to deserving welfare poor. In 1950, Congress amends Social Security Act to compromise, gives money to states to provide healthcare to people on welfare. This continues into 1962 to cover indigent disabled and elderly.

6. In 1963, JFK proposes hospital insurance, but is assassinated and Johnson takes over. Now 3 proposals: Johnson’s hospital insurance for the elderly, AMA and Republican welfare medicine, and John Burns’s physician insurance for the elderly. Wilbur Mills and Johnson accomplish a compromise of all 3 in 1965 as Medicare and Medicaid. - Medicare combines hospital insurance (Part A) and physicians’ insurance for elderly (Part B). - Medicaid provides state administration of welfare medicine 7. 1974: Congress creates a budget reconciliation process, which makes it easier to pass legislation -- budget bill cannot be stalled by filibuster & only needs simple majority (if budget-neutral) Lecture 4: Medicaid Part II 1. Federal government incentivizes states to have a health insurance program for low income populations by covering 50-80% of the cost of Medicaid (the richer the state, the lower the federal match). Medicaid is a $600 billion program today. 2. First Era of Medicaid (1980s): states had significant discretion; i.e. whether they would adopt Medicaid, who was eligible, the benefits provided, and how they reimbursed providers. Few federal rules meant variation between benefit packages across states. Reagan’s 3 goals: cut taxes, cut spending on domestic social welfare programs, increase spending on military. In 1982, majority living below the Federal Poverty Line (FPL) were not covered by Medicaid -- was a program for the poorest of the poor. 3. Second Era of Medicaid: In the late 1980s, the federal government began to enact mandates that required states to expand eligibility, the benefit packages they offered, and increase reimbursement to safety net providers. 1st factor: in the South, new Democratic governors had two top priorities: Significantly improve the public education system in their states and reduce rates of infant and maternal mortality. 2nd factor: As of 1807- rule in Senate that any senator could filibuster legislation by talking nonstop to prevent a vote on any bill. But budget reconciliation process created a loophole for budget bills. 3rd factor: Democrats decided to implement health insurance expansion through budget bills, but had to be budget neutral. Congress did this by reasoning that by expanding Medicaid coverage to kids will save money and be budget neutral (which later ended up not being true). Second Era was therefore a period of mandates & expansion: Congress mandated states to cover every child under the age of 18 who was eligible for Medicaid, expanded benefit packages for kids, and required greater reimbursement for safety hospitals. Resulted in major Medicaid growth: program more than doubled in size and tripled in expenditures in 5 years. Increased intergovernmental tension dramatically given states’ mandate -- states had to make budget cuts elsewhere to fund Medicaid. 4. Other factor in rising Medicaid expenditures: hospitals wanted higher reimbursement that the states couldn’t afford. Hospitals then proposed states reimburse them at even higher rates than they had originally asked for (the amount the federal government would base their percentage off of). Then hospitals would give the state a portion of that money back either through taxes or donations, which would lower the total cost for states. Therefore, this increased reimbursement of the hospitals came from increased burden on federal government’s budget. This was not illegal. Lecture 5: Medicaid Part III

US Health Systems – Lecture 5 1. 3rd Medicaid Era – Bill Clinton era: Bill Clinton pushes for national health insurance & effort fails miserably. Gingrich and Republicans take over the House; Congress passes legislation through a budget law to convert Medicaid from an “entitlement program” into a “block grant program’. Block grant: federal government gives capped amount of money to the states, who use the money to their discretion for the program -- people are not entitled to the benefit (e.g. CHIP). Entitlement program: federal government sets eligibility criteria, everyone who meets those criteria is entitled to coverage. Through the Budget Reconciliation Act of 1997 - Congress passes and Clinton signs the CHIP program – it’s a block grant. The number of Americans on public (social) insurance is starting to rise. 2. 4th Medicaid Era – George Bush: 9/11 causes more to sign up for Medicaid (program is countercyclical). Bush claims we need to cut spending on Medicaid and we need to get rid of CHIP. When CHIP is up for renewal, Congress authorizes and Bush vetoes. Medicaid as a countercyclical program: Bush believes that the historic mission of CHIP and Medicaid were to be welfare medicine programs, not national health insurance, Medicaid becomes a method of “crowding out” private insurance, undermining the incentive to buying private insurance. 3. 5th Medicaid era – Obama era: fear of recession, tries to stimulate the economy, reauthorization and extension of the CHIP program. Stimulus bill -- created infrastructure projects (jobs), middle-class tax cuts, increased Medicaid spending (gave states a significant amount of money) PPACA: Medicaid eligibility -- every adult in your state who has income below 138% of the FPL. For the first 3 years of the Medicaid mandate we will pay 100% of the cost (relieving states of fiscal obligation at first), and then scale back to 90% of the cost for the expansion population. States would have a traditional Medicaid program and would have an expansion Medicaid program. The ACA: states’ Medicaid expansion programs -- every state was required to significantly expand its Medicaid program, effective in 2014. 24 states brought lawsuit challenging the ACA including the Medicaid expansion. National Federation of Independent Business Vs Sebellius: the court held that it was unconstitutional to take away federal funding for states’ traditional Medicaid program if they did not comply with the mandate to expand Medicaid. Court held that the ACA required states to expand the Medicaid program, said to the states that if they refused to comply with the mandate, federal regulators could take away their existing funding for traditional Medicaid program -- SCOTUS stated that the threat to withhold Medicaid funding from the traditional Medicaid programs in states if they don’t comply with expansion was coercive. Medicaid expansion was converted from a mandate to an option.

Lecture 6: The Affordable Care Act (ACA) and Insurance Coverage Part I 1. Medicare: an insurance program that is more politically resilient than welfare programs because it cares for “the deserving poor” -- the elderly and disabled. 2. Medicaid vs. Medicare -

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Medicare is a social insurance program; there are no income level requirements (not means-tested). It is available to everyone regardless of income so long as you pay into the Medicare trust fund system while you were working for at least ten years; Medicare is a national program, run by the federal government Medicare is much more limited than Medicaid; doesn’t cover a lot of services, as it was originally a hospital and physician insurance The different parts of Medicare (Part A, B, C, D) are financed differently

3. The First Era of Medicare -

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From 1965-1995 Medicare was the third rail (charged, controversial, untouchable) of American politics; it was a popular program and seen as an earned right Liberals wanted to use it as a basis for eventual universal healthcare and conservatives thought that it was for the deserving poor Prior to the 1980s, hospitals would set a per diem rate with Medicare; these rates were high and encouraged hospitals to keep patients in the hospital. In the 1980s, Congress decided to put in place a system with codes named DRGs (diagnostic related groups) associated with specific amounts of funding based on diagnosis and appropriate treatment. In 1994, the Medicare trust fund had a $100B surplus As the demographics began to change, there were fewer and fewer young healthy people paying in, more people receiving Medicare benefits, and increased hospital costs. It was estimated that Medicare would become insolvent by 2001 or 2002.

Lecture 7: The Affordable Care Act (ACA) and Insurance Coverage Part II 1. Medicare Era 2: Mid to late 1990s: Fierce debate on who had the better plan to save Medicare from "fiscal insolvency," which is still occurring today. After Bill Clinton was re-elected, Congress adopted multiple strategies to financially save Medicare, which had different responses from providers and the public. Who has the better plan to “save” Medicare? (Medicare Part A was expected to go bankrupt by 2002) Options: -

Raise revenue -- raise taxes Cut eligibility (raise the age criteria, or make it harder to pay into the trust fund) Cut benefits Means-test the program (right now, there were no income-level requirements) Use more managed care Convert Medicare from a confined benefit program to a confined contribution program: all beneficiaries provided a voucher (a certain amount of money), a fixed per-person amount payment for Medicare

The adopted plan to “save” Medicare:

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Significant cuts in reimbursement to institutional providers Major effort to get out fraud & abuse program Create Medicare Part C (managed care plans)

2. Medicare Era 3: 1999-2007: The question for this era was what to do with the Medicare surplus, with the potential of including additional benefits. The Al Gore-Bush debate on prescription drug coverage under Medicare was essentially a debate about social insurance versus welfare medicine approach. What do we do with the Medicare surplus? A plausible way of using the Medicare surplus: prescription drug coverage -

Gore proposes that there be a new part of Medicare that covers 50% of the cost of the typical drug needs of a senior (increase the benefit package to cover more prescription drugs) Bush proposes that all Medicare beneficiaries should not get prescription drug coverage - Proposes to give states $48 billion over the next 5 years for states to provide low-income seniors, who were not eligible for Medicaid, the prescription drug coverage -- only help the poorest of the poor elderly (welfare medicine approach)

The Medicare Modernization Act of 2003 was a bipartisan effort to expand Medicare benefits to seniors, leading to the creation of Medicare Part D. 3. Medicare Era 4: 2010 ACA till present: One of the fundamental debates for the ACA was how to finance the Medicaid expansion and other things that the ACA offered. At the same time, Obama wanted to secure support from seniors and pharmaceutical firms for the ACA. Lecture 8: Who Delivers Care? The Health Care Workforce Part I 1. Employer Mandate: In 1974, Hawaii implemented an employer mandate requiring all employers to provide insurance regardless of company size. Several states wanted to replicate Hawaii’s employer mandate but to no avail. 1980s: With the rising cost of health care, employers were prompted to shift the cost of health care to their employees, to stop providing coverage for employees’ spouses and children -- employee-sponsored health insurance started declining. To help, Democrats in Congress wanted to try to expand Medicaid. The states didn’t want this, the expansion would be costly to them. States wanted to follow suit like Hawaii -- focus on employer mandates. But, in the 1980s, the uninsured were primarily people who were self-employed and those who worked for small businesses. The employer mandate would not help the majority of those people (particularly those who were self-employed). 2. ERISA: ERISA contained two components: (1) states could not regulate employee benefit plans, and (2) states could regulate laws that govern the traditional state of insurance. This new law placed a great restriction on the states and had a significant impact on the structure of insurance going forward. As the first wave of the WWII generation began to retire, there was a big push of demands on the pension industry. In 1974, there were hearings about inadequate oversight of the pension industry, inadequate capitalization, inadequate

vesting rules, etc. Congress then passed ERISA (Employee Retirement Income Security Act), a federal law protecting retirees’ pensions, regulating the nation’s pensions, and administered by the US Department of Labor. ERISA has had dramatic impacts on the nation’s health care industry. With ERISA, Congress wanted to preempt the states from being involved in the pension industry. Congress included that the “states are precluded/prohibited from enacting any law or regulation that relates to an employee benefit plan.” States were no longer allowed to regulate pensions. -

Exception: “states are allowed to enact laws or regulations that are part of the traditional regulation of insurance” Traditional insurance: employers pay premium for their employees’ coverage - Non-traditional but what actually ends up happening: employers have their employees self-insure, keep their premiums, and pay the insurance companies to administer self-insurance programs

3. National Health Insurance: During the race for Pennsylvania Senator, Harris Wofford heavily pushed for a national health insurance plan in order to win against Dick Thornburgh. Going forward, other Democrats also proposed national health insurance plans, including Bill Clinton. Wofford’s victory was attributed to his advocacy for national health insurance -- ran an advertising/marketing campaign targeting the middle-class. 4.

2008 Presidential Election: Obama faced three big obstacles in pushing for a comprehensive health insurance plan: -

Large medical spending ($2.7 trillion) Difficult interest groups Institutional groups and forces

At the time of Obama’s election, natio...