The World Health Organization (WHO) recommends the use of the conjugate vaccine in the routine immunizations given to children. This includes those with HIV/AIDS. The recommended three or four doses are between 71 and 93% effective at preventing severe pneumococcal disease.
The polysaccharide vaccines, while effective in healthy adults, are not
effective in children less than two years old or those with poor immune
function.
These vaccines are generally safe. With the conjugate vaccine about 10% of babies develop redness at the site of injection, fever, or change in sleep. Severe allergies are very rare.
Whole cell vaccinations were developed alongside characterisation of the subtypes of pneumococcus from the early 1900s.
A pilot Advance Market Commitment
(AMC) to develop a vaccine against pneumococcus was launched by GAVI in
June 2009 as a strategy to address two of the major policy challenges
to vaccine introduction: a lack of affordable vaccines on the market,
and insufficient commercial incentives to develop vaccines for diseases
concentrated in developing countries. Under the terms of an AMC, donors
make a legally binding guarantee that, if a future vaccine is developed
against a particular disease, they will purchase a predetermined amount
at an agreed-upon price. The guarantee is linked to safety and efficacy
standards that the vaccine must meet and is structured in a way to allow
several firms to compete to develop and produce the best possible new
product. AMCs reduce risk to donor governments by eliminating the need
to fund individual research and development projects that may never
produce a vaccine. If no company produces a vaccine that meets the
predetermined standards, governments (and thus their taxpayers) spend
nothing. For the bio-pharmaceutical industry, AMCs create a guaranteed
market, with a promise of returns that would not normally exist. For developing countries,
AMCs provide funding to ensure that those vaccines will be affordable
once they have been developed. It is estimated that the pneumococcal AMC
could prevent more than 1.5 million childhood deaths by 2020.
Doctors Without Borders has criticized GAVI's pneumococcal AMC
for not encouraging innovation, discouraging competition from new
market entrants, and raising vaccine costs. They said that it had
allowed Pfizer and GlaxoSmithKline to maintain a duopoly, while making it more difficult for the Serum Institute of India to sell their cheaper vaccine. The duopoly allowed price discrimination;
somewhat higher prices for GAVI, and unaffordable prices (about ten
time the GAVI price) for middle-income countries too rich for GAVI aid. The pneumococcal program (unlike previous market-shaping programs from GAVI) did not include any mechanism for increasing competition.
The Humanitarian Mechanism makes the pneumococcal vaccine
available to humanitarian actors (but not governments) at a lower than
normal price during humanitarian emergencies.
Belgium
The
national vaccination program started vaccinating newborns in 2004 with
the 7-valent pneumococcal conjugate vaccine (PCV 7). This was changed
into the 13-valent conjugate (PCV 13) in 2011. The switch to the
10-valent conjugate (PCV 10) was made in July 2015 in Flanders and May 2016 in Wallonia.
In late 2020 a start was made with the vaccination of care home
residents with the 23-valant pneumococcal polysaccharide vaccine (PPV
23).
Canada
Health Canada's
general recommendations are 13-valent pneumococcal conjugate vaccine
(PCV 13) vaccine for children aged 2 months to 18 years and 23-valent
pneumococcal polysaccharide vaccine (PPV 23) vaccine for adults.
The national vaccination program started including the pneumococcal vaccine for newborns in April 2006.
The Health Council advised in 2018 that those who are over the
age of 60 should also be vaccinated on a 5-year recurring schedule. The
resulting program from this, NPPV, started at the end of 2020.
Health authorities reported in December 2020 that former COVID-19
patients also have an indication for this vaccine because of the damage
their lungs incurred. Vaccinating this group is not part of the NPPV
program.
South Africa
The
7- and 13-valent pneumococcal conjugate vaccines (PCV7 and PCV13) were
introduced into the national Expanded Program on Immunization (EPI) in
South Africa in 2009 and 2011, respectively. South Africa became the
first African country – and the first nation in the world with a high
HIV prevalence – to introduce PCV7 into its routine immunization
program.
Rates of invasive pneumococcal disease (IPD) – including cases caused
by antibiotic-resistant bacteria – have fallen substantially in South
Africa following the introduction of PCV7. Among children under two
years of age, the overall incidence of IPD declined nearly 70% after PCV
introduction, and rates of IPD caused by bacteria specifically targeted
by the vaccine decreased nearly 90%. Due to the indirect protection conferred by herd immunity, a significant decline in IPD in children and in unvaccinated adults has also been shown.
Pneumovax 23 is used for all ages and, according to the enclosed
patient information leaflet, has a reported 76% to 92% protective
efficacy (pneumococcal types 1, 2, 3, 4, 5, 6B**, 7F, 8, 9N, 9V**, 10A,
11A, 12F, 14**, 15B, 17F, 18C, 19A**, 19F**, 20, 22F, 23F** and 33F**
are included, where ** indicates drug-resistant pneumococcal infections;
these are the 23 most prevalent or invasive pneumococcal types of Streptococcus pneumoniae).
United Kingdom
It
was announced in February 2006, that the UK government would introduce
vaccination with the conjugate vaccine in children aged 2, 4 and 13
months. This included changes to the immunisation programme in general. In 2009, the European Medicines Agency approved the use of a 10 valent pneumococcal conjugate vaccine for use in Europe. The 13-valent pneumococcal vaccine was introduced in the routine immunization schedule of the UK in April 2010.
United States
Diagram with visual representation of the current indications for both the Prevnar and the Pneumovax.
In the United States, a heptavalent pneumococcal conjugate vaccine (PCV 7) (e.g. Prevnar, called Prevenar in some countries)
was recommended for all children aged 2–23 months and for at-risk
children aged 24–59 months in 2000. The normal four-dose series is given
at 2, 4, 6 and 12–14 months of age. In February 2010, a pneumococcal
conjugate vaccine which protects against an additional six serotypes was
introduced (PCV 13/brand name: Prevnar 13) and can be given instead of
the original Prevnar.
On 10 June 2021, a pneumococcal conjugate vaccine which protects
against 20 serotypes was approved with the brand name Prevnar 20.
In April 2023, the FDA approved the use of Prevnar 20 vaccine to
prevent pneumococcal disease in children aged six weeks to 17 years.
Mechanism
Polysaccharide vaccine
The pneumococcal polysaccharide vaccine most commonly used today[citation needed] consists of purified polysaccharides from 23 serotypes (1, 2, 3, 4, 5, 6b, 7F, 8, 9N, 9V, 10A, 11A, 12F, 14, 15B, 17F, 18C, 19A, 19F, 20, 22F, 23F, and 33F). Immunity is induced primarily through stimulation of B-cells which release IgM without the assistance of T cells.
This immune response is less robust than the response provoked by conjugated vaccines,
which has several consequences. The vaccine is ineffective in children
less than 2 years old, presumably due to their less mature immune
systems. Non-response is also common amongst older adults.
Immunity is not lifelong, so individuals must be re-vaccinated at age
65 if their initial vaccination was given at age 60 or younger.
Since no mucosal immunity is provoked, the vaccine does not affect
carrier rates, promote herd immunity, or protect against upper or lower
respiratory tract infections.
Finally, provoking immune responses using unconjugated polysaccharides
from the capsules of other bacteria, such as H. influenzae, has proven
significantly more difficult.
Conjugated vaccine
The pneumococcal conjugate vaccine consists of capsular polysaccharides covalently bound to the diphtheria toxoid CRM197, which is highly immunogenic but non-toxic.
This combination provokes a significantly more robust immune response
by recruiting CRM197-specific type 2 helper T cells, which allow for
immunoglobulin type switching (to produce non-IgM immunoglobulin) and
production of memory B cells.
Among other things, this results in mucosal immunity and the eventual
establishment of lifelong immunity after several exposures.
The main drawbacks to conjugated vaccines are that they only provide
protection against a subset of the serotypes covered by the
polysaccharide vaccines.
depitte, J.; Gove, Sandy; Breiman, Robert F.
Research
Due
to the geographic distribution of pneumococcal serotypes, additional
research is needed to find the most efficacious vaccine for
developing-world populations. In a previous study, the most common
pneumococcal serotypes or groups from developed countries were found to
be, in descending order, 14, 6, 19, 18, 9, 23, 7, 4, 1 and 15. In
developing countries, the order was 6, 14, 8, 5, 1, 19, 9, 23, 18, 15
and 7.
In order to further pneumococcal vaccine research and reduce childhood
mortality, five countries and the Bill & Melinda Gates Foundation
established a pilot Advance Market Commitment for pneumococcal vaccines
worth US$1.5 billion. Advance Market Commitments are a new approach to
public health funding designed to stimulate the development and
manufacture of vaccines for developing countries.
There is currently research into producing vaccines than can be given into the nose rather than by injection. It is believed that this improves vaccine efficacy and also avoids the need for injection.
The development of serotype-specific anticapsular monoclonal
antibodies has also been researched in recent years. These antibodies
have been shown to prolong survival in a mouse model of pneumococcal
infection characterized by a reduction in bacterial loads and a
suppression of the host inflammatory response.
Additional pneumococcal vaccine research is taking place to find a
vaccine that offers broad protection against pneumococcal disease.
As of 2017, pneumonia vaccines target up to 23 forms of the
bacterium that cause pneumonia with a new version under development
covering 72 strains of the bacterium.
2017 marked the 40th anniversary of the WHO Model List of Essential Medicines
Essential medicines, as defined by the World Health Organization (WHO), are the medicines that "satisfy the priority health care needs of the population".
These are the medications to which people should have access at all
times in sufficient amounts. The prices should be at generally
affordable levels. Since 1977, the WHO has published a model list of essential medicines, with the current (2019) list for adult patients containing over 400 medicines. Since 2007, a separate list of medicines intended for child patients has been published.
Both the WHO adult and children's lists contain a notation indicating
that a particular medication is "complementary", thus essentially there
are two lists, the "core list" and the "complementary list". The core list
presents a list of minimum medicine needs for a basic health care
system, listing the most efficacious, safe and cost-effective medicines
for priority conditions. Priority conditions are selected on the basis
of current and estimated future public health relevance, and potential
for safe and cost-effective treatment. The complementary list
presents essential medicines for priority diseases, for which
specialized diagnostic or monitoring facilities are needed. In case of
doubt medicines may also be listed as complementary on the basis of
higher costs or less attractive cost-effectiveness in a variety of
settings. The list is important because it forms the basis of national drugs policy in more than 155 countries, both in the developed and developing world.
Many governments refer to WHO recommendations when making decisions on
health spending. Countries are encouraged to prepare their own lists
taking into consideration local priorities. Over 150 countries have
published an official essential medicines list.
Theory and practice
The definition of essential medicines has changed over time.
The original WHO definition in 1977 was that they were medicines
"of utmost importance, basic, indispensable, and necessary for the
healthcare needs of the population". The concept was mentioned in one of the ten points of the 1978 Alma Ata Declaration on primary health care.
In 2002 definition was changed to:
Essential medicines are those that satisfy the priority health care needs of the population.
And this remains the definition as of 2019.
Selection
Items
are chosen as essential medicines based on how common the disease that
is being treated, evidence of benefit, the degree of side effects and
the cost compared to other options.
Cost-to-benefit ratio
Cost effectiveness
is the subject of debate between producers (pharmaceutical companies)
and purchasers of drugs (national health services). It is estimated that
access to essential medicines could save 10 million people a year.
The
first edition of the "WHO Model List of Essential Medicines for
Children", was published in 2007, while the 7th edition was published in
2019. It was created to make sure that the needs of children were systematically considered such as availability of proper formulations. The first edition contained 450 formulations of 200 different medications.
Number of medications
The number of medications has nearly doubled, from the original 208 in 1977, to more than 340. The range has increased over the years and now[when?] includes an antimigraine drug, antidotes, and antineoplastic drugs. The third list for children from 2011, contains 269 medications.
There were a number of different health care reforms proposed during the Obama administration.
Key reforms address cost and coverage and include obesity, prevention
and treatment of chronic conditions, defensive medicine or tort reform,
incentives that reward more care instead of better care, redundant
payment systems, tax policy, rationing, a shortage of doctors and
nurses, intervention vs. hospice, fraud, and use of imaging technology,
among others.
The first of these reform proposals to be passed by the United States Congress is the Patient Protection and Affordable Care Act,
which originated in the Senate and was later passed by the House of
Representatives in amended form on March 21, 2010 (with a vote of
219–212). President Obama signed the reforms into law on March 23, 2010. Reuters and CNN summarized the reforms and the year in which they take effect.
A variety of specific types of reform have been suggested to improve
the United States health care system. These range from increased use of
health care technology through changing the anti-trust rules governing
health insurance companies and tort-reform to rationing of care.
Different overall strategies have been suggested as well.
The Institute of Medicine reported in September 2012 that approximately $750B per year in U.S. health care costs
are avoidable or wasted. This included: unnecessary services ($210
billion annually); inefficient delivery of care ($130 billion); excess
administrative costs ($190 billion); inflated prices ($105 billion);
prevention failures ($55 billion), and fraud ($75 billion).
During a June 2009 speech, President Barack Obama
outlined his strategy for reform. He mentioned electronic
record-keeping, preventing expensive conditions, reducing obesity,
refocusing doctor incentives from quantity of care to quality, bundling payments
for treatment of conditions rather than specific services, better
identifying and communicating the most cost-effective treatments, and
reducing defensive medicine.
President Obama further described his plan in a September 2009
speech to a joint session of Congress. His plan mentions: deficit
neutrality; not allowing insurance companies to discriminate based on
pre-existing conditions; capping out of pocket expenses; creation of an insurance exchange
for individuals and small businesses; tax credits for individuals and
small companies; independent commissions to identify fraud, waste and
abuse; and malpractice reform projects, among other topics.
In November 2009, then-OMB Director Peter Orszag described aspects of the Obama administration's strategy during an interview: "In order to help contain [ Medicare and Medicaid
] cost growth over the long term, we need a new health care system that
has digitized information...in which that information is used to assess
what’s working and what’s not more intelligently, and in which we’re
paying for quality rather than quantity while also encouraging
prevention and wellness." He also argued for bundling payments and accountable care organizations, which reward doctors for teamwork and patient outcomes.
Mayo Clinic
President and CEO Denis Cortese has advocated an overall strategy to
guide reform efforts. He argued that the U.S. has an opportunity to
redesign its healthcare system and that there is a wide consensus that
reform is necessary. He articulated four "pillars" of such a strategy:
Focus on value, which he defined as the ratio of quality of service provided relative to cost;
Pay for and align incentives with value;
Cover everyone;
Establish mechanisms for improving the healthcare service delivery
system over the long-term, which is the primary means through which
value would be improved.
Writing in The New Yorker, surgeon Atul Gawande
further distinguished between the delivery system, which refers to how
medical services are provided to patients, and the payment system, which
refers to how payments for services are processed. He argued that
reform of the delivery system is critical to getting costs under
control, but that payment system reform (e.g., whether the government or
private insurers process payments) is considerably less important yet
gathers a disproportionate share of attention. Gawande argued that
dramatic improvements and savings in the delivery system will take "at
least a decade." He recommended changes that address the
over-utilization of healthcare; the refocusing of incentives on value
rather than profits; and comparative analysis of the cost of treatment
across various healthcare providers to identify best practices. He
argued this would be an iterative, empirical process and should be
administered by a "national institute for healthcare delivery" to
analyze and communicate improvement opportunities. A report published by the Commonwealth Fund
in December 2007 examined 15 federal policy options and concluded that,
taken together, they had the potential to reduce future increases in
health care spending by $1.5 trillion over the next 10 years. These
options included increased use of health information technology,
research and incentives to improve medical decision making, reduced
tobacco use and obesity, reforming the payment of providers to encourage
efficiency, limiting the tax federal exemption for health insurance
premiums, and reforming several market changes such as resetting the
benchmark rates for Medicare Advantage plans and allowing the Department
of Health and Human Services to negotiate drug prices. The authors
based their modeling on the effect of combining these changes with the
implementation of universal coverage. The authors concluded that there
are no magic bullets for controlling health care costs, and that a
multifaceted approach will be needed to achieve meaningful progress.
During February 2010, President Obama updated his reform
proposal, with modifications to the bills that had passed as of that
time.
Cost overview
Health
insurance premiums for employer-provided family coverage 1999–2014.
The 3% increase in 2014 was tied for lowest over the 16-year period.
Health spending accounted for 17.6% of GDP in the United States in
2010, down slightly from 2009 (17.7%) and by far the highest share in
the OECD, and a full eight percentage points higher than the OECD
average of 9.5%. Following the United States were the Netherlands (at
12.0% of GDP), and France and Germany (both at 11.6% of GDP). The United
States spent $8,233 on health per capita in 2010, two-and-a-half times
more than the OECD average of $3,268 (adjusted for purchasing power
parity). Following the United States were Norway and Switzerland which
spent over $5,250 per capita. Americans spent more than twice as much as
relatively rich European countries such as France, Sweden and the
United Kingdom.
The annual rate of cost increases slowed during 2010 and 2011.
The causes are disputed, ranging from recession-related delays in
visiting doctors to more long-term trends in moderating insurance
premiums and reduced spending on structures and equipment.
The Centers for Medicare and Medicaid Services reported in 2013
that the rate of increase in annual healthcare costs has fallen since
2002. However, costs per capita continue to rise. Per capita cost
increases have averaged 5.4% annually since 2000. Costs relative to GDP
have risen from 13.8% in 2000 to 17.9% by 2009, but remained at that
level in 2010 and 2011.
Several studies have attempted to explain the reduction in the rate of annual increase. Reasons include, among others:
Higher unemployment due to the 2008-2012 recession, which has limited the ability of consumers to purchase healthcare;
Rising out-of-pocket payments;
Deductibles (the amount a person pays before insurance begins to
cover claims) have risen sharply. Workers must pay a larger share of
their own health costs, and generally forces them to spend less; and
The proportion of workers with employer-sponsored health insurance
enrolled in a plan that required a deductible climbed to about
three-quarters in 2012 from about half in 2006.
Increasing healthcare costs also contribute to wage stagnation,
as corporations pay for benefits rather than wages. Bloomberg reported
in January 2013: "If there’s a consensus among health economists about
anything, it’s that employer-provided health benefits come out of wages.
If health insurance were cheaper, or the marketplace were structured so
that most people bought health coverage for themselves rather than
getting it with their jobs, people would be paid more and raises would
be higher."
Best practices
Independent advisory panels
President
Obama has proposed an "Independent Medicare Advisory Panel" (IMAC) to
make recommendations on Medicare reimbursement policy and other reforms.
Comparative effectiveness research would be one of many tools used by
the IMAC. The IMAC concept was endorsed in a letter from several
prominent healthcare policy experts, as summarized by OMB Director Peter
Orszag:
Their support of the IMAC proposal
underscores what most serious health analysts have recognized for some
time: that moving toward a health system emphasizing quality rather than
quantity will require continual effort, and that a key objective of
legislation should be to put in place structures (like the IMAC) that
facilitate such change over time. And ultimately, without a structure in
place to help contain health care costs over the long term as the
health market evolves, nothing else we do in fiscal policy will matter
much, because eventually rising health care costs will overwhelm the
federal budget.
Both Mayo Clinic CEO Dr. Denis Cortese and Surgeon/Author Atul
Gawande have argued that such panel(s) will be critical to reform of the
delivery system and improving value. Washington Post columnist David Ignatius has also recommended that President Obama engage someone like Cortese to have a more active role in driving reform efforts.
Comparative effectiveness research
Medicare spending per person varied significantly across states in 2006.
Overutilization
refers to when a patient overuses a doctor or to a doctor ordering more
tests or services than may be required to address a particular
condition effectively. Several treatment alternatives may be available
for a given medical condition, with significantly different costs yet no
statistical difference in outcome. Such scenarios offer the opportunity
to maintain or improve the quality of care, while significantly
reducing costs, through comparative effectiveness research. According to
economist Peter A. Diamond and research cited by the Congressional Budget Office
(CBO), the cost of healthcare per person in the U.S. also varies
significantly by geography and medical center, with little or no
statistical difference in outcome. Comparative effectiveness research has shown that significant cost reductions are possible. Former OMB Director Peter Orszag
stated: "Nearly thirty percent of Medicare's costs could be saved
without negatively affecting health outcomes if spending in high- and
medium-cost areas could be reduced to the level of low-cost areas."
Pilot programs
Gawande
wrote that Obamacare contains a variety of pilot programs that may have
a significant impact on cost and quality over the long-run, although
these have not been factored into CBO cost estimates. He stated these
pilot programs cover nearly every idea healthcare experts advocate,
except malpractice/tort reform. He described how the U.S. faced a cost
problem with agriculture, with nearly 40% of household disposable income
absorbed by food costs in 1900. With a central oversight panel (the
U.S.D.A.) and many pilot programs, the U.S. was able to vastly improve
the productivity of its food production and reduce these costs over
time. He wrote:
Medicare and Medicaid currently pay
clinicians the same amount regardless of results. But there is a pilot
program to increase payments for doctors who deliver high-quality care
at lower cost, while reducing payments for those who deliver low-quality
care at higher cost. There’s a program that would pay bonuses to
hospitals that improve patient results after heart failure, pneumonia,
and surgery. There’s a program that would impose financial penalties on
institutions with high rates of infections transmitted by health-care
workers. Still another would test a system of penalties and rewards
scaled to the quality of home health and rehabilitation care. Other
experiments try moving medicine away from fee-for-service payment
altogether. A bundled-payment provision would pay medical teams just one
thirty-day fee for all the outpatient and inpatient services related
to, say, an operation. This would give clinicians an incentive to work
together to smooth care and reduce complications. One pilot would go
even further, encouraging clinicians to band together into “Accountable
Care Organizations” that take responsibility for all their patients’
needs, including prevention—so that fewer patients need operations in
the first place. These groups would be permitted to keep part of the
savings they generate, as long as they meet quality and service
thresholds. The bill has ideas for changes in other parts of the system,
too. Some provisions attempt to improve efficiency through
administrative reforms, by, for example, requiring insurance companies
to create a single standardized form for insurance reimbursement, to
alleviate the clerical burden on clinicians. There are tests of various
kinds of community wellness programs. The legislation also continues a
stimulus-package program that funds comparative-effectiveness
research—testing existing treatments for a condition against one
another—because fewer treatment failures should mean lower costs.
Preventive strategies
Increased
use of preventive care (e.g., regular doctor visits) is one way of
reducing health care spending. Official budget scores of universal health care proposals state that most of its savings would be from providing preventative care to the uninsured.
Canadian physicians, who provide universal health care including
preventative care, found that they could lower their total health care
expenditures by 40% simply by increasing appropriate and reducing
inappropriate preventative care measures. A single uninsured cancer patient diagnosed at stage four
can incur over half a million dollars in hospital bills in a few
months, which must be borne by all other health care consumers, when the
same diagnosis at stage one with preventative screening would cost much less.
However, preventive care is typically provided to many people who would
never become ill, and for those who would have become ill, it is
partially offset by the health care costs during additional years of
life.
Preventing obesity and overweight conditions presents a significant opportunity to reduce costs. The Centers for Disease Control
reported that approximately 9% of healthcare costs in 1998 were
attributable to overweight and obesity, or as much as $92.6 billion in
2002 dollars. Nearly half of these costs were paid for by the government
via Medicare or Medicaid. However, by 2008 the CDC estimated these costs had nearly doubled to $147 billion. The CDC identified a series of expensive conditions more likely to occur due to obesity.
The CDC released a series of strategies to prevent obesity and
overweight, including: making healthy foods and beverages more
available; supporting healthy food choices; encouraging kids to be more
active; and creating safe communities to support physical activity. An estimated 25.6% of U.S. adults in 2007 were obese, versus 23.9% in
2005. State obesity rates ranged from 18.7% to 30%. Obesity rates were
roughly equal among men and women. Some have proposed a so-called "fat tax"
to provide incentives for healthier behavior, either by levying the tax
on products (such as soft drinks) that are thought to contribute to
obesity, or to individuals based on body measures, as they do in Japan.
A study released in October, 2010 had a similar cost estimate, of $168
billion, nearly 17% of U.S. medical costs. This is an estimated $2,400
per obese person. The study was performed by researchers at Cornell and
Emory universities.
However, in contrast to yearly costs, lifetime costs can be
highest among healthy people, who live longer. One study in the
Netherlands indicated that: "Until the age of 56, yearly health costs
were highest for obese people and lowest for healthy-living people. At
older ages, the highest yearly costs were incurred by the smoking group.
However, because of differences in life expectancy (life expectancy at
age 20 was 5 years less for the obese group, and 8 years less for the
smoking group, compared to the healthy-living group), total lifetime
health spending was greatest for the healthy-living people, lowest for
the smokers, and intermediate for the obese people."
Eliminate unnecessary tests
During
April 2012, nine physician groups identified 45 tests that were
commonly used but that provided no proven benefits to patients or could
actually be harmful. This was done at the urging of a Dr. Howard Brody,
who published this recommendation in a 2010 article. The nine groups
(medical societies) developed the lists after months of analyses and
reviews of the medical literature by expert committees. The New York Times editorial board wrote: "Eliminating needless care is not rationing. It is sound medicine and sound economics."
One July 2012 proposal advocated that consumers of healthcare
always have "skin in the game" such that their costs rise as more
services are provided.
Address expensive chronic cases
The
CBO reported in May 2005: "Medicare spending is highly concentrated,
with a small number of beneficiaries accounting for a large proportion
of the Medicare program's annual expenditures. In 2001, the costliest 5
percent of beneficiaries enrolled in Medicare's fee-for-service (FFS)
sector accounted for 43 percent of total spending, while the costliest
25 percent...accounted for fully 85 percent of spending...These
high-cost beneficiaries, compared with beneficiaries in the bottom 75
percent in terms of their spending, were slightly older, more likely to
suffer from chronic conditions, such as coronary artery disease and
diabetes, and more likely to die in a given year."
Such concentration offers opportunities to focus on key ailments and
treatment approaches. Peter Orszag wrote in May 2011: "The truth is that
constraining future health care costs will require a variety of
approaches, but in particular it will mean improving the information
that providers have about their patients and best practices, and the
incentives that providers are given to deliver better care, especially
in expensive cases."
Market-based solutions
Privatize Medicare with a voucher system
Rep. Paul Ryan (R) has proposed the Roadmap for America's Future,
which is a series of budgetary reforms. His January 2010 version of the
plan includes the transition of Medicare to a voucher system, meaning
individuals would receive a voucher which could be used to purchase
health insurance in the private market. This would not affect those near
retirement or currently enrolled in Medicare. A series of graphs and charts summarizing the impact of the plan are included. Economists have both praised and criticized particular features of the plan. The CBO also partially scored the bill.
Medicaid recipients could also be provided with tax credits or
subsidies to purchase their own private insurance, reducing incentives
for them to remain in the program.
Insurance company antitrust reforms
Some
conservatives advocate free market reforms such as breaking up state
monopolies on insurance and licensing and allowing consumers to purchase
health insurance licensed by other states.
The GAO reported in 2002 (using 2000 data) the following statistics regarding insurance competition in state markets: "The median
number of licensed carriers in the small group market per state was 28,
with a range from 4 in Hawaii to 77 in Indiana. The median market share
of the largest carrier was about 33 percent, with a range from about 14
percent in Texas to about 89 percent in North Dakota. The five largest
carriers, when combined, represented three-quarters or more of the
market in 19 of the 34 states supplying information, and they
represented more than 90 percent in 7 of these states. Twenty-five of 37
states supplying information identified a Blue Cross and Blue Shield
(BCBS) carrier as the largest carrier offering health insurance in the
small group market, and in all but one of the remaining 12 states, a
BCBS carrier was among the five largest. The median market share of all
the BCBS carriers in the 34 states supplying information was about 34
percent, with a range from about 3 percent in Vermont to about 89
percent in North Dakota; in 9 of these states BCBS carriers combined for
half or more of the market."
The GAO
reported in 2008 (using 2007 data for the most part) the following
statistics: "The median number of licensed carriers in the small group
market per state was 27. The median market share of the largest carrier
in the small group market was about
47 percent, with a range from about 21 percent in Arizona to about 96
percent in Alabama. In 31 of the 39 states supplying market share
information, the top carrier had a market share of a third or more. The
five largest carriers in the small group market, when combined,
represented three quarters or more of the market in 34 of the 39 states
supplying this information, and they
represented 90 percent or more in 23 of these states. Thirty-six of the
44 states supplying information on the top carrier identified a Blue
Cross and Blue Shield (BCBS) carrier as the largest carrier, and in all
but 1 of the remaining 8 states, a BCBS carrier was among the five
largest carriers. The median market share of all the BCBS carriers in
the 38 states supplying this
information was about 51 percent, with a range of less than 5 percent in
Vermont and Wisconsin and more than 90 percent in Alabama and North
Dakota...the median market share of all the BCBS carriers in 38 states
reporting this information in 2008 was about 51 percent, compared to the
44 percent reported in 2005 and the 34 percent reported in 2002 for the
34 states supplying information in each of these years."
Economist Paul Krugman
argued that allowing interstate competition would create a "race to the
bottom," in which "[t]he states with the weakest regulations – for
example, those that allow insurance companies to deny coverage to
victims of domestic violence – would set the standards for the nation as
a whole. The result would be to afflict the afflicted, to make the
lives of Americans with pre-existing conditions even harder."
Reform of doctor's incentives
Critics have argued that the healthcare system has several incentives that drive costly behavior. Two of these include:
Doctors are typically paid for services provided rather than
with a salary. This provides a financial incentive to increase the costs
of treatment provided.
Patients that are fully insured have no financial incentive to
minimize the cost when choosing among alternatives. The overall effect
is to increase insurance premiums for all.
Gawande argued: "Our fee-for-service system, doling out separate
payments for everything and everyone involved in a patient’s care, has
all the wrong incentives: it rewards doing more over doing right, it
increases paperwork and the duplication of efforts, and it discourages
clinicians from working together for the best possible results."
Gawande quoted one surgeon who stated: "We took a wrong turn when
doctors stopped being doctors and became businessmen." Gawande
identified various revenue-enhancing approaches and profit-based
incentives that doctors were using in high-cost areas that may have
caused the over-utilization of healthcare. He contrasted this with
lower-cost areas that used salaried doctors and other techniques to
reward value, referring to this as a "battle for the soul of American
medicine."
One option involves an integrated series of healthcare providers
charging a premium or flat fee to patients to participate in the
network, rather than a fee for each individual service. This modifies
the doctor's incentive from ordering more services to solving the
problem efficiently (i.e., more care to more cost-efficient care). The
provider network would also purchase insurance for catastrophic
(extremely high cost) cases.
Medical malpractice liability costs and tort reform
Critics have argued that medical malpractice costs (insurance and lawsuits, for example) are significant and should be addressed via tort reform.
How much these costs are is a matter of debate. Some have argued that malpractice lawsuits are a major driver of medical costs. A 2005 study estimated the cost around 0.2%, and in 2009 insurer WellPoint Inc. said "liability wasn’t driving premiums."
A 2006 study found neurologists in the United States ordered more
tests in theoretical clinical situations posed than their German
counterparts; U.S. clinicians are more likely to fear litigation which
may be due to the teaching of defensive strategies which are reported
more often in U.S. teaching programs.
Counting both direct and indirect costs, other studies estimate the
total cost of malpractice "is linked to" between 5% and 10% of total
U.S. medical costs.
A 2004 report by the Congressional Budget Office
put medical malpractice costs at 2 percent of U.S. health spending and
"even significant reductions" would do little to reduce the growth of
health care expenses.
A 2009 CBO report estimated that approximately $54 billion could be
saved over ten years by limiting medical malpractice lawsuits. A tort
reform package that includes caps on jury awards of $500,000 for
punitive damages and $250,000 for "pain and suffering" damages would
lower liability insurance premiums by about 10 percent.
In August 2009, physician and former Democratic National Committee Chairman Howard Dean
explained why tort reform was omitted from the Congressional health
care reform bills then under consideration: "When you go to pass a
really enormous bill like that, the more stuff you put in it, the more
enemies you make, right?...And the reason tort reform is not on the bill
is because the people who wrote it did not want to take on the trial
lawyers in addition to everybody else they were taking on. That is the
plain and simple truth."
Others have argued that even successful tort reform might not
lead to lower aggregate liability. For example, the current contingent
fee system skews litigation towards high-value cases while ignoring
meritorious small cases; aligning litigation more closely with merit
might thus increase the number of small awards, offsetting any reduction
in large awards.
A New York study found that only 1.5% of hospital negligence led to
claims; moreover, the CBO observed that "health care providers are
generally not exposed to the financial cost of their own malpractice
risk because they carry liability insurance, and the premiums for that
insurance do not reflect the records or practice styles of individual
providers but more-general factors such as location and medical
specialty."
Given that total liability is small relative to the amount doctors pay
in malpractice insurance premiums, alternative mechanisms have been
proposed to reform malpractice insurance.
In 2004, the CBO studied restrictions on malpractice awards proposed by the George W. Bush
Administration and members of Congress; CBO concluded that "the
evidence available to date does not make a strong case that restricting
malpractice liability would have a significant effect, either positive
or negative, on economic efficiency."
Empirical data and reporting have since shown that some of the highest
medical costs are now in states where tort reform had already caused
malpractice premiums and lawsuits to drop substantially; unnecessary and
injurious procedures are instead caused by a system "often driven to
maximize revenues over patient needs."
One option proposed includes specialized healthcare courts rather
than the jury system. Such courts exist in other disciplines. In
administrative health courts, an expert judge would decide cases based
on best medical practice, writing an opinion that is subject to appeal
to an appellate health court. There would also be a requirement of full
disclosure by hospitals, and all facts would be fed back into the health
care system so providers learn from their mistakes. Such an approach has been opposed by trial lawyer lobbyists.
Addressing the shortage of doctors and nurses
The
U.S. is facing shortages of doctors and nurses that are projected to
grow worse as America ages, which may drive up the price of these
services. Writing in The Washington Post,
cardiologist Arthur Feldman cited various studies that indicate the
U.S. is facing a "critical" shortage of doctors, including an estimated
1,300 general surgeons by 2010.
The American Academy of Family Physicians predicts a shortage of
40,000 primary care doctors (including family practice, internal
medicine, pediatrics and obstetrics/gynecology) by 2020. The number of
medical students choosing the primary care specialty has dropped by 52%
since 1997. Currently, only 2% of medical school graduates choose
primary care as a career. An amendment to the Senate health bill
includes $2 billion in funds over 10 years to create 2,000 new residency
training slots geared toward primary care medicine and general surgery.
Writing in Forbes, a physician argued that this is a "tiny band-aid at
best," advocating full loan repayments and guaranteed positions upon
graduation.
Physicians wrote a NYT Op Ed in May 2011 stating that doctors
typically graduate with an average of $155,000 in debt from Medical
school, with over 80% owing debt of some type. This drives some doctors
into higher paying specialties as opposed to primary care. As
specialists, they prescribe more expensive treatments. About $2.5
billion/year would be required to make Medical school free, which the
writers estimated at one-thousandth the total annual healthcare costs.
Making medical school free would help address the shortage in their
view.
The U.S. had 2.3 doctors per 1,000 people in 2002, ranking 52nd.
Germany and France had approximately 3.4 and ranked in the top 25. The OECD average in 2008 was 3.1 doctors per 1,000 people, while the U.S. had 2.4.
The American Association of Colleges of Nurses cited studies
estimating that a shortage of registered nurses would reach 230,000 by
2025 as America ages, with over 135,000 open positions during 2007. An
additional 30% more nurses would have to graduate annually to keep up
with demand. A study by Price Waterhouse advanced several strategies for
addressing the nursing shortage, including developing more
public-private partnerships, federal and state-level grants for nursing
students and educators, creating healthy work environments, using
technology as a training tool, and designing more flexible roles for
advanced practice nurses given their increased use as primary care
providers.
Newsweek
wrote: "Lately, some policymakers have argued that instead of having a
primary-care doctor, more people—especially young, healthy patients with
simple medical needs—should see a nurse or physician assistant who
administers routine care and kicks more complex problems up to a doctor
when they arise. 'If you're just coming in to have your blood pressure
checked and your pulse taken, you really don't need to see a doctor, and
you might not need to see a nurse, either,' says David Barrett,
president and CEO of the Lahey Clinic in Burlington, Mass. "There are
three-stripe military sergeants with two-year degrees who can provide
excellent primary care. There's absolutely no reason to force all
primary-care providers to have an M.D."
Tax reform
Health insurance premiums paid on behalf of workers are increasingly offsetting compensation.
The Congressional Budget Office has described how the tax treatment of insurance premiums may affect behavior:
One factor perpetuating
inefficiencies in health care is a lack of clarity regarding the cost of
health insurance and who bears that cost, especially employment-based
health insurance. Employers’ payments for employment-based health
insurance and nearly all payments by employees for that insurance are
excluded from individual income and payroll taxes. Although both theory
and evidence suggest that workers ultimately finance their
employment-based insurance through lower take-home pay, the cost is not
evident to many workers...If transparency increases and workers see how
much their income is being reduced for employers’contributions and what
those contributions are paying for, there might be a broader change in
cost-consciousness that shifts demand.
Peter Singer wrote in The New York Times
that the current exclusion of insurance premiums from compensation
represents a $200 billion subsidy for the private insurance industry and
that it would likely not exist without it. In November 2009, The Economist
estimated that taxing employer-provided health insurance (which is
presently exempt from tax) would add $215 billion per year to federal
tax revenue.
Employer-provided health insurance receives uncapped tax
benefits. According to the OECD, it "encourages the purchase of more
generous insurance plans, notably plans with little cost sharing, thus
exacerbating moral hazard".
Consumers want unfettered access to medical services; they also prefer
to pay through insurance or tax rather than out of pocket. These two
needs create cost-efficiency challenges for health care.
Some studies have found no consistent and systematic relationship
between the type of financing of health care and cost containment.
Some have proposed an "excise tax" for high cost 'Cadillac' insurance plans. A study published in Health Affairs
in December 2009 found that high-cost health plans do not provide
unusually rich benefits to enrollees. The researchers found that only
3.7% of the variation in the cost of family coverage in
employer-sponsored health plans is attributable to differences in the
actuarial value of benefits. Only 6.1% of the variation is attributable
to the combination of benefit design and plan type (e.g., PPO, HMO,
etc.). The employer's industry and regional variations in health care
cost explain part of the variation, but most is unexplained. The
researchers conclude ". . . that analysts should not equate high-cost
plans with Cadillac plans, . . . [w]ithout appropriate adjustments, a
simple cap may exacerbate rather than ameliorate current inequities"
Premium tax subsidies to help individuals purchase their own
health insurance have also been suggested as a way to increase coverage
rates. Research confirms that consumers in the individual health
insurance market are sensitive to price. It appears that price
sensitivity varies among population subgroups and is generally higher
for younger individuals and lower income individuals. However, research
also suggests that subsidies alone are unlikely to solve the uninsured
problem in the U.S.
Government action
Address Medicare fraud
The Government Accountability Office lists Medicare as a "high-risk" government program due to its vulnerability to improper payments. Estimates of Medicare fraud or "improper payments" vary. The Office of Management and Budget
reported that $54 billion in "improper payments" were made to Medicare
($24B), Medicaid ($18B) and Medicaid Advantage ($12B) during FY2009.
This was 9.4% of the $573 billion spent in these categories.
GAO reported in 2000: "The Department of Health and Human Services’
Office of Inspector General has reported that $13.5 billion of processed
Medicare fee-for-service claim payments for fiscal year 1999 may have
been improperly paid for reasons that ranged from inadvertent error to
outright fraud and abuse." Fewer than 5% of Medicare claims are audited.
CBO reported in October 2014 that it is difficult to quantify
healthcare fraud related to government programs. CBO reported that:
"According to HHS, since 2009 the HEAT Medicare task
force has filed criminal and civil charges against more than 1,700
defendants who falsely billed the Medicare program for more than $5.5
billion." However, false billing is a partial measure of fraud, as much
of it is undetected.
According to CBS News, Medicare fraud accounts for an estimated
$60 billion in Medicare payments each year, and "has become one of, if
not the most profitable, crimes in America."
Criminals set up phony companies, then invoice Medicare for fraudulent
services provided to valid Medicare patients who never receive the
services. These costs appear on the Medicare statements provided to
Medicare card holders. The program pays out over $430 billion per year
via over 1 billion claims, making enforcement challenging. Its enforcement budget is "extremely limited" according to one Medicare official. U.S. Attorney General Eric Holder said in an interview: "Clearly more auditing needs to be done and it needs to be done in real time."
The Obama administration is providing Medicare with an additional $200
million to fight fraud as part of its stimulus package, and billions of
dollars to computerize medical records and upgrade networks, which
should assist Medicare in identifying fraudulent claims.
During July 2010, President Obama signed into law the Improper Payments Elimination and Recovery Act of 2010,
citing approximately $110 billion in unauthorized payments of all
types, including Medicare and Medicaid. President Obama has directed
his administration to reduce these payments by $50 million annually by
2012, less than 1%.
Reforming or restructuring the private health insurance market is
often suggested as a means for achieving health care reform in the U.S.
Insurance market reform has the potential to increase the number of
Americans with insurance, but is unlikely to significantly reduce the
rate of growth in health care spending.
Careful consideration of basic insurance principles is important when
considering insurance market reform, in order to avoid unanticipated
consequences and ensure the long-term viability of the reformed system. According to one study conducted by the Urban Institute,
if not implemented on a systematic basis with appropriate safeguards,
market reform has the potential to cause more problems than it solves.
Since most Americans with private coverage receive it through
employer-sponsored plans, many have suggested employer "pay or play"
requirements as a way to increase coverage levels (i.e., employers that
do not provide insurance would have to pay a tax instead). However,
research suggests that current pay or play proposals are limited in
their ability to increase coverage among the working poor. These
proposals generally exclude small firms, do not distinguish between
individuals who have access to other forms of coverage and those who do
not, and increase the overall compensation costs to employers.
In October 2009 the Wall Street Journal
reported that while requirements to purchase health insurance were
central to proposals in both the House and Senate, these coverage
mandates were "under fire from both ends of the political spectrum, with
some liberals saying the penalties are too harsh for those who refuse
and conservatives denouncing the whole concept." According to the article, however, "[h]ealth-policy experts . . .say there is a good reason for the mandate." Proposed reforms would prohibit health insurers from denying coverage to individuals with pre-existing medical conditions.
Insurers said that, to keep premiums from rising for everyone, it is
necessary for healthier people to pay into the insurance pools to
balance out the cost of these higher cost individuals.
Arguing against requiring individuals to buy coverage, the Cato Institute
has asserted that the Massachusetts law forcing everyone to buy
insurance has increased costs: "Premiums are growing 21 to 46 percent
faster than the national average, in part because Massachusetts'
individual mandate has effectively outlawed affordable health plans."
They say that "the mandate gives politicians enormous power to dictate
the content of every American's health plan – a power that health care
providers inevitably capture and use to increase the required level of
insurance" and state that providers were successful in persuading
legislators to include an additional 16 benefit mandates in the required
benefit package during the first three years after the coverage mandate
was enacted.
They also say that by prohibiting the use of health status in pricing,
the Massachusetts law "further increase[s] premiums for the young and
healthy" and, as the result of adverse selection, drives more comprehensive health plans out of the market.
The conclusion they draw is that "[T]he most sweeping provision . . .
is an 'individual mandate' that makes health insurance compulsory.
Massachusetts shows that such a mandate would oust millions from their
low-cost health plans and force them to pay higher premiums."
Writing in the New York Times opinion blog "Room for Debate" the single-payer health care advocate Marcia Angell, former editor-in-chief of the New England Journal of Medicine,
said that a coverage mandate would not be necessary within a
single-payer system and that even within the context of current system
she was "troubled by the notion of an individual mandate."
She described the Massachusetts mandates as "a windfall for the
insurance industry" and wrote, "Premiums are rising much faster than
income, benefit packages are getting skimpier, and deductibles and
co-payments are going up."
In April 2009 the Boston Globe
reported that the number of people seeking emergency room care and the
cost of emergency room visits increased after the 2006 mandates went
into effect (comparing 2005 to 2007). The number of visits increased by 7% during that period, while costs rose by 17%.
State officials cautioned that it was too early to determine if the
state's new coverage mandate had failed to reduce the emergency room
use, but several physicians and policymakers said that it was unlikely
that a coverage mandate alone could solve the problems of emergency room
crowding and overuse. In August 2009 the Boston Globe reported that Massachusetts had "the most expensive family health insurance premiums in the country." Premiums in Massachusetts increased by 40 percent from 2003 to 2008, compared to a national average increase of 33%.
The report did not break out the amount of the increase since 2006, but
as the Massachusetts reforms are often taken as a model for national
reform, "advocates on various sides of the issue said the report
underscores the urgency of including cost controls in any large-scale
federal or state overhaul." Karen Davenport, director of health policy at the Center for American Progress,
has argued that "before making coverage mandatory, we need to reform
the health insurance market, strengthen public health insurance
programs, and finance premium subsidies for people who can’t afford
coverage on their own."
Addressing the issue when it was proposed in 1994, CBO
wrote: "A mandate requiring all individuals to purchase health
insurance would be an unprecedented form of federal action. The
government has never required people to buy any good or service as a
condition of lawful residence in the United States." There is also disagreement as to whether federal mandates would be constitutional, and state initiatives opposing federal mandates may lead to litigation and delay.
On June 28, 2012, the U.S. Supreme Court upheld the individual mandate provision as Constitutional.
President Barack Obama
argues that U.S. healthcare is rationed, based on income, type of
employment, and pre-existing medical conditions, with nearly 46 million
uninsured. He argues that millions of Americans are denied coverage or
face higher premiums as a result of pre-existing medical conditions.
Peter Singer and David Leonhardt
have each separately noted that health care rationing is not a choice,
but an economic necessity. All health care resources are finite and have
to be allocated in some way or other. The issue is which way is the
most sensible way to do it.
Former Republican Secretary of Commerce Peter G. Peterson
has also argued that some form of rationing is inevitable and desirable
considering the state of U.S. finances and the trillions of dollars of
unfunded Medicare liabilities. He estimated that 25–33% of healthcare
services are provided to those in the last months or year of life and
advocated restrictions in cases where quality of life cannot be
improved. He also recommended that a budget be established for
government healthcare expenses, through establishing spending caps and
pay-as-you-go rules that require tax increases for any incremental
spending. He has indicated that a combination of tax increases and
spending cuts will be required. All of these issues would be addressed
under the aegis of a fiscal reform commission.
Rationing by price means accepting that there is no triage
according to need. Thus in the private sector it is accepted that some
people get expensive surgeries such as liver transplants or non
life-threatening ones such as cosmetic surgery, when others fail to get
cheaper and much more cost effective care such as prenatal care, which
could save the lives of many fetuses and newborn children. Some places,
like Oregon for example, do explicitly ration Medicaid resources using
medical priorities.
Politicians on the right tend to be fearful of democratically
elected governments becoming involved in rationing decision. Former
House Speaker Newt Gingrich
(R-GA) argued that the reform plans supported by President Obama expand
the control of government over healthcare decisions, which he referred
to as a type of healthcare rationing. Senator Charles Grassley
(R-IA) makes similar arguments claiming for example that people like
the late Senator Edward Kennedy received health care in the U.S. that
would have been denied in countries which have government controlled
health care, a claim that The Economist
magazine said was "dangerous" and went on to say that "The reality is
that America, like Britain, already makes extensive use of rationing.
Better usage of healthcare technology
Automation of patient records
The Congressional Budget Office
has concluded that increased use of health information technology has
great potential to significantly reduce overall health care spending and
realize large improvements in health care quality providing that the
system is integrated. The use of health IT in an unintegrated setting
will not realize all the projected savings.
Treatment registries
One
application of healthcare technology is the creation of registries or
databases to relate treatments to outcomes. Useful treatments could be
identified and those less useful could be avoided to reduce costs.
The payment system refers to the billing and payment for medical
services, which is distinct from the delivery system through which the
services are provided. The over 1,300 U.S. health insurance companies
have different forms and processes for billing and reimbursement,
requiring enormous costs on the part of service providers (mainly
doctors and hospitals) to process payments. For example, the Cleveland
Clinic, considered a low-cost, best-practices hospital system, has 1,400
billing clerks to support 2,000 doctors.
Further, the insurance companies have their own overhead functions and
profit margins, much of which could be eliminated with a single payer
system. Economist Paul Krugman estimated in 2005 that converting from
the current private insurance system to a single-payer system would
enable $200 billion per year in cost savings, primarily via insurance
company overhead. One advocacy group estimated savings as high as $400 billion annually for 2009 and beyond.
Proponents of health care reform argue that moving to a
single-payer system would reallocate the money currently spent on the
administrative overhead required to run the hundreds of insurance companies in the U.S. to provide universal care. An often-cited study by Harvard Medical School and the Canadian Institute for Health Information
determined that some 31 percent of U.S. health care dollars, or more
than $1,000 per person per year, went to health care administrative
costs.
Other estimates are lower. One study of the billing and
insurance-related (BIR) costs borne not only by insurers but also by
physicians and hospitals found that BIR among insurers, physicians, and
hospitals in California represented 20–22% of privately insured spending
in California acute care settings.
Advocates of "single-payer" argue that shifting the U.S. to a
single-payer health care system would provide universal coverage, give
patients free choice of providers and hospitals, and guarantee
comprehensive coverage and equal access for all medically necessary
procedures, without increasing overall spending. Shifting to a
single-payer system, by this view, would also eliminate oversight by
managed care reviewers, restoring the traditional doctor-patient
relationship. Among the organizations in support of single-payer health care in the U.S. is Physicians for a National Health Program (PNHP), an organization of some 17,000 American physicians, medical students, and health professionals.
Reduce costs of imaging technology
During
2009, Medicare spent $11.7 billion for medical imaging, such as CT
scans and MRI's. From 2005 to 2009, usage of scans grew at an annual
rate of 14%, but may have slowed since due to a combination of changing
incentives and saturation of usage. Initially, demanding patients
insisted on scans; doctors feared malpractice suits if they refused; and
doctors and hospitals wanted to maximize revenues. One study indicated
that changing incentives may have reduced cost growth. From 2006 to
2010, the share of workers with deductibles exceeding $1,000 grew from
10 percent to 27 percent. Increased out-of-pocket expenses have made
patients and physicians more cost conscious. Further, a combination of
prior notification, higher patient co-payments and restrained
reimbursements may have contributed to slowing cost growth.
International comparisons of healthcare
have found that the United States spends more per-capita than other
similarly developed nations but falls below similar countries in various
health metrics, suggesting inefficiency and waste. In addition, the
United States has significant underinsurance and significant impending unfunded liabilities from its aging demographic and its social insurance programs Medicare and Medicaid
(Medicaid provides free long-term care to the elderly poor). The fiscal
and human impact of these issues have motivated reform proposals.
According to 2009 World Bank statistics, the U.S. had the highest
healthcare costs relative to the size of the economy (GDP) in the
world, even though estimated 50.2 million citizens (approximately 15.6%
of the September 2011 estimated population of 312 million) lacked
insurance. In March 2010, billionaire Warren Buffett commented that the high costs paid by U.S. companies for their employees' health care put them at a competitive disadvantage.
Further, an estimated 77 million Baby Boomers
are reaching retirement age, which combined with significant annual
increases in healthcare costs per person will place enormous budgetary
strain on U.S. state and federal governments, particularly through Medicare and Medicaid spending (Medicaid provides long-term care for the elderly poor).
Maintaining the long-term fiscal health of the U.S. federal government
is significantly dependent on healthcare costs being controlled.
In addition, the number of employers who offer health insurance has
declined and costs for employer-paid health insurance are rising: from
2001 to 2007, premiums for family coverage increased 78%, while wages
rose 19% and prices rose 17%, according to the Kaiser Family Foundation. Even for those who are employed, the private insurance in the US varies greatly in its coverage; one study by the Commonwealth Fund published in Health Affairs
estimated that 16 million U.S. adults were underinsured in 2003. The
underinsured were significantly more likely than those with adequate
insurance to forgo health care, report financial stress because of
medical bills, and experience coverage gaps for such items as
prescription drugs. The study found that underinsurance
disproportionately affects those with lower incomes — 73% of the
underinsured in the study population had annual incomes below 200% of
the federal poverty level. However, a study published by the Kaiser Family Foundation in 2008 found that the typical large employer preferred provider organization (PPO) plan in 2007 was more generous than either Medicare or the Federal Employees Health Benefits Program Standard Option. One indicator of the consequences of Americans' inconsistent health care coverage is a study in Health Affairs that concluded that half of personal bankruptcies involved medical bills, although other sources dispute this.
There are health losses from insufficient health insurance. A
2009 study found more than 44,800 excess deaths annually in the United
States due to Americans lacking health insurance.
More broadly, estimates of the total number of people in the United
States, whether insured or uninsured, who die because of lack of medical
care were estimated in a 1997 analysis to be nearly 100,000 per year.
A study of the effects of the Massachusetts universal health care law
(which took effect in 2006) found a 3% drop in mortality among people
20–64 years old - 1 death per 830 people with insurance. Other studies,
just as those examining the randomized distribution of Medicaid
insurance to low-income people in Oregon in 2008, found no change in
death rate.
The cost of insurance has been a primary motivation in the reform
of the US healthcare system, and many different explanations have been
proposed in the reasons for high insurance costs and how to remedy them.
One critique and motivation for healthcare reform has been the
development of the medical–industrial complex.
This relates to moral arguments for health care reform, framing
healthcare as a social good, one that is fundamentally immoral to deny
to people based on economic status.
The motivation behind healthcare reform in response to the
medical-industrial complex also stems from issues of social inequity,
promotion of medicine over preventative care.
The medical-industrial complex, defined as a network of health
insurance companies, pharmaceutical companies, and the like, plays a
role in the complexity of the US insurance market and a fine line
between government and industry within it.
Likewise, critiques of insurance markets being conducted under a
capitalistic, free-market model also include that medical solutions, as
opposed to preventative healthcare measures, are promoted to maintain
this medical-industrial complex.
Arguments for a market-based approach to health insurance include the
Grossman model, which is based on an ideal competitive model, but others
have critiqued this, arguing that fundamentally, this means that people
in higher socioeconomic levels will receive a better quality of
healthcare.
Uninsured rate
Another concern is the rate of uninsured people in the US. In June 2014, Gallup–Healthways
Well–Being conducted a survey and found that the uninsured rate is
going down. 13.4 percent of U.S. adults are uninsured in 2014. This is a
decrease from the percentage at 17.1 percent in January 2014 and
translates to roughly 10 million to 11 million individuals who gained
coverage. The survey also looked at the major demographic groups and
found each is making progress towards getting health insurance. However,
Hispanics, who have the highest uninsured rate of any racial or ethnic
group, are lagging in their progress. Under the new health care reform,
Latinos were expected to be major beneficiaries of the new health care
law. Gallup found that the biggest drop in the uninsured rate (2.8
percentage points) was among households making less than $36,000 a year.
Waste and fraud
In December 2011 the outgoing Administrator of the Centers for Medicare & Medicaid Services, Donald Berwick,
asserted that 20% to 30% of health care spending is waste. He listed
five causes for the waste: (1) overtreatment of patients, (2) the
failure to coordinate care, (3) the administrative complexity of the health care system, (4) burdensome rules and (5) fraud.
An estimated 3%–10% of all health care expenditures in the U.S.
are fraudulent. In 2011, Medicare and Medicaid made $65 billion in
improper payments (including both error and fraud). Government efforts
to reduce fraud include $4.2 billion in fraudulent payments recovered by
the Department of Justice and the FBI in 2012, longer jail sentences
specified by the Affordable Care Act, and Senior Medicare Patrols—volunteers trained to identify and report fraud.
International comparisons
The International Federation of Health Plans
provides a comparative annual survey of costs for drugs, devices and
medical services across countries. According to their 2013 report, the
U.S. pays considerably more than other countries in 22 of 23 categories.
For example, the average cost of a hip replacement in the U.S. was
$40,364, with other countries ranging from $3,365 (Argentina) to $27,810
(Australia). An MRI averaged $1,121 in the U.S. versus $280 in France.
The reasons for these differences are driven by higher prices per unit
of service, rather than a higher volume of usage. In other countries,
governments intervene more forcefully in setting prices. In countries
such as Canada and Britain, prices are set by the government. In others,
such as Germany and Japan, they're set by providers and insurers
sitting in a room and coming to an agreement, with the government
stepping in to set prices if they fail.
Congressional proponents argue that drugs manufactured overseas by
U.S. companies could be imported and purchased more cheaply in the U.S.
Drug manufacturers argue that certain foreign countries have price
controls, which they recoup by charging higher prices in the U.S.
Whitehouse spokesman Robert Gibbs said President Obama is supportive of
importing drugs, provided safety concerns related to the drugs can be
addressed. This is because drugs manufactured outside the country may be
held to different standards. According to Bloomberg News, drugmakers
agreed in June 2009 to contribute $80 billion over 10 years, largely to
help the elderly afford medicines, in return for staving off other
profit-endangering proposals such as drug importation.
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