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Health Economics, Healthcare Finance, and Health Policy: What Every Student Needs to Know About the

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What Every Student Needs to Know About the Health Care Field Before Entering It! ... Components of Health Care Spending and Change From Prior Year (thru 2002) ... – PowerPoint PPT presentation

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Title: Health Economics, Healthcare Finance, and Health Policy: What Every Student Needs to Know About the


1
Health Economics, Healthcare Finance, and Health
Policy What Every Student Needs to Know About
the Health Care Field Before Entering It!
Howard P. Forman Department of Diagnostic
Radiology, Yale School of Medicine Yale School of
Management Yale School of Public
Health Department of Economics, Yale
College Howard.Forman_at_Yale.edu
2
Agenda
  • Why is this important?
  • Key Issues in US Healthcare today
  • Key Crises, Globally
  • What is the current political healthcare agenda?
  • What key facts should students be familiar with?
  • Questions and Discussion

3
Why is this important?
  • Interviewers will ask questions for a host of
    reasons
  • Uninformed, or unsophisticated, answers are
    increasingly hard to defend
  • Need to have some substantive understanding of
    the healthcare climate and basic economics
  • Making a decision to practice medicine without
    understanding some of the basics of health
    services and health economics is dangerous!

4
Key Domestic Crises
  • 45 million people are uninsured and another 30
    million are under-insured
  • As healthcare gets more expensive, more people
    are left behind
  • Medicare Under-funded and getting more costly
  • Medicaid reliant on States Budgets
  • Torts Malpractice Costs
  • New Healthcare Threats Bio-terrorism
  • Vaccines What do you think about the Flu
    Vaccine?
  • Infectious Disease Response issues
  • Moral/Ethical Issues Cloning, Stem Cells

5
Health Care Spending (NHE) 2002Highlights
  • 1.55 Trillion up by 9.3 from prior year. 5440
    per capita up by 8.3 (both are accelerations
    from 8.5 and 7.5 from 2001 data)
  • GDP (nominal) growth 3.6
  • 14.9 of GDP (highest ever, grew by 0.8 this
    year, matching fastest rate of prior year)
  • Healthcare, as percent of GDP, has been growing
    for 4 years now
  • Medicaid and SCHIP (11.7) are both growing
    faster than all other spending components
  • Private spending grew at a 9.3 rate and public
    spending at 9.4 (45.9 of NHE are PUBLIC)
  • This is a multi-year trend of slight increases in
    public sector spending- - - why?

6
Where it came from
7
Where it went
8
Footnotes to Pie Charts
  • 1 "Other Public" includes programs such as
    workers' compensation, public health activity,
    Department of Defense, Department of Veterans
    Affairs, Indian Health Service, and State and
    local hospital subsidies and school health.
  • 2 "Other Private" includes industrial in-plant,
    privately funded construction, and non-patient
    revenues, including philanthropy.
  • 3 "Other Spending" includes dentist services,
    other professional services, home health care,
    durable medical products, over-the-counter
    medicines and sundries, public health, research
    and construction.
  • NOTE Numbers shown may not add to 100 because of
    rounding.

9
Components of Health Care Spending and Change
From Prior Year (thru 2002)
  • Research and Construction 56.7 B 11.9 1
  • Hospital Care 486.5B 9.5
  • Home Health Care 36.1B 7.2
  • Nursing Home Care 103.2 B 4.1
  • Physician Services 339.5 B 7.7
  • Prescription Drugs 162.4 B 15.3
  • Administration 105 16.2
  • Overall 9.3
  • CPI proxy (really CW-GDP-PD) 1.1
  • Population Growth 0.9
  • GDP 3.6
  • Personal Health Deflator (HC-CPI-proxy) 3.9
  • Government administration and net cost of
    private health insurance
  • 1 Research and development expenditures of drug
    companies and other manufacturers and providers
    of medical equipment and supplies are excluded
    from research expenditures but are included in
    the expenditure class in which product falls.

10
National Health Care Expenditures Growth
  • 1996 - 5.2
  • 1997 5.3
  • 1998 4.8
  • 1999 5.6
  • 2000 6.7
  • 2001 8.5
  • 2002 9.3
  • 1970 - 10.6
  • 1980 12.9
  • 1990 11.7
  • 1991 - 9.5
  • 1992 - 8.6
  • 1993 - 7.3
  • 1994 - 5.5
  • 1995 - 5.4

11
(No Transcript)
12
Medicare Highlights(2003)
  • 41.8 million people (35.1 M aged 6.0 M disabled)
    covered
  • Combined expenditures growing faster than GDP
    (from 2.6 of GDP in 2002 to 5.3 in 2035 and
    then 9.3 in 2076)
  • HI sources of income do not increase
    automatically, while SMI do

13
Long Range Total Medicare
14
HI-Medicare Part A (2003)
  • Hospice care (since 1982)
  • Inpatient Hospital services
  • Skilled nursing facility care
  • Home Health Agency (now transitioning to SMI)
  • 22 of beneficiaries actually received HI
    services in 2002
  • BBA- 1997 slowed expenditures depletion now
    predicted for 2019
  • Average expenditure per enrollee increased by 3.4
    after three years of declines (BBA-1997
    effects) Now 3,689
  • Intermediate estimates call for rates of growth
    of 1.4 5.6 per year for the next decade

15
Part A Trust Fund
CMS, 2003
16
Medicare Part B - Supplemental Medical Insurance
(SMI)- 2003
  • Physician services
  • Durable medical equipment (DME)
  • Outpatient medical services
  • Clinical lab tests
  • PT/OT
  • Ambulance transportation
  • Hep B, Flu, Pneumococcal vaccines
  • Pap smear and screening mammography
  • Prescription drugs which can not be
    self-administered including certain anti-cancer
    drugs

17
SMI Part B/2003 Highlights
  • 93 of the 41.8 Million Medicare enrollees are
    enrolled in Part B
  • 11 increase in 2001 (some due to shift of HHC
    services, etc.)
  • SMI benefits will grow 1.5 faster than GDP going
    forward (assumption)
  • 95 of enrollees received services (2000 data)
  • Administrative costs are 2.1 of program costs,
    compared with 1.7 for HI
  • Average benefit per enrollee is 2915, increasing
    10.1 in past year

18
Part B Financing
CMS, 2002
19
Key Global Crises
  • HIV in Lesser Developed Nations
  • Landmines
  • Starvation and Diarrheal Diseases in Children
  • Affording healthcare/prescription drugs

20
Current (2005/6 congressional term) Domestic
Healthcare Agenda
  • Tort Reform Politics vs. Policy
  • Medicare reform Constant and incremental What
    does it mean?
  • Medicare Prescription Drug Benefit - Not til
    2006 for most people
  • Uninsured Problem
  • Influenza Vaccine
  • PBOR

21
Key Issues to be aware of
  • What is Medicare, Medicaid, S-Chip?
  • Bonus points for Medicare part A and B
  • Bonus points for understanding funding of any of
    this..
  • How much does our nation spend on healthcare? How
    much is too much? How does this compare to other
    nations?
  • What is Universal Health Coverage (Insurance)?
    (Why should you not discuss this topic without
    very very serious thought, in advance)?

22
Key Issues, continued
  • What is the Patients Bill of Rights?
  • What are the issues around stem cells/cloning?
  • What is the fastest growing component of
    healthcare costs? Why? What does this mean for
    you as a provider-to-be?
  • Disparities in healthcare, health services, and
    health
  • Ethnic, racial, economic
  • What is the main Health Problem in the US today?
  • What is the main Healthcare Problem in the US
    today?
  • Be Prepared Dont fake it

23
Questions?
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