Law, Politics, and Policy Flashcards Preview

Health Systems > Law, Politics, and Policy > Flashcards

Flashcards in Law, Politics, and Policy Deck (189):

Social Contract Theory States

That peole are born with infalliable rights, that government isnt a natural order.

People create a deal with their leaders, and how that deal works is unique to each society.


What is the size of the US Healthcare Industry?

18% of GDP

3 Trillion Dollars


What did Hobbs Think?

If we lived in a state of nature, life would be solitary, poor, brutish and short.

Govt effectively is a police state to keep us from killing one another.


What did John Locke Think?

Hobbes went too far. Thought without government, human rights would be in danger - but gov't is at best a necessary evil, used to collect our individual rights.

Need a limited gov't, with limited tasks
If gov't exceeds authority, we have a right to revolt


Declaration of Independence follows whose view?

John Locke and his Social Contract Theory


Common Themes of State Constitution (4)

What should the relationship between states be?
Should we have a unified system of nations?
Bill of Rights


3 main aspects of the Articles of Confederation

No president
each state has 1 vote
Takes 9/13 states to pass a law, but if you dont like the law, you dont have to follow it

More like a loose association, like the EU

13 separate nations with a firm league of friendship


Who called the Constitutional Convention in Philly, and with what goal?

James Madison

Said it was to amend the articles but really was to have a new constition for a united country


3 Main Issues of Constitutional Convention?

1) How to count slaves
2) Big States vs. Small states
3) Power of the Federal Gov't


What were the issues of slavery in constitutional convention

*south out if slavery illegal
*north thought it was hypocritical to count slaves as population if they werent people in rights
*Leads to 3/5 compromise (states as 3/5 a person)
*No bans on importation of slaves for 20 yrs
*if slave makes it to a free state, he has to be returned to his owner


What were the issues of big states vs little states in the constitutional Convention?

Great compromise: Senate for additonal power for small states, house for larger states

electoral college: every state gets electoral votes of # of house reps x2


Power of the Federal Government (3 views)

1) Anti-federalists
2) Federalists
3) Middle Ground (Madisonian Democratic Republicans)


Anti-Federalists (6)

Limited federal government
In favor of states rights
In favor of term limits
Did not want professional politicians
Mistrusted idea of powerful president (didnt want pres)



Large and strong federal government
Strong Executive Branch (president for life)


Democratic Republicans

Large government with checks and balances
large but weak national government
Should be difficult for the gov't to act
Separation of powers


Why did Madison think he "won"? (3)

Enumerted powers of the Fed, but anything not enumerated is left ot the states

Checks and Balances

Big Gov't that can do anything


Why did Hamilton think he "won"? (3)

*National Law is supreme (supremacy clause in constitution)
*Congress can pass any law necessary to enumerate its powers, and can deal wiht interstate laws (i.e. interstate commerce clause invoked broadly)
*Knew president would emerge as focal point of first govt/


What did Jefferson and Hamilton fight over during Washington's presidency and what did Washington do about it?

1) Hamilton wants national bank, taxes, etc.
2) Jefferson wants us to align with France (true democracy)

Washington makes Jefferson Secretary of State and Hamilton Secretary of the Treasury


What do we get out of Washington's response to Jefferson and Hamilton?

A 2 party system!

Jefferson + Madison = Anti-federalists

John Adams + Hamilton = Federalists


What did Jefferson's election to president represent in 1800?

The first re-aligning election in America

Shift from John Adams' federalist views to Jefferson's states rights views... this mentalityh was pervasive until FDR in 1935


What impact did the Jeffersonian mentality have on PH?

Would have been viewed as unconstitional to create national HC or social welfare (except for a few exceptions like civil war widow's program)

Land of limited federal government in domestic authority


What did we adopt w/ regards to the poor at the time of the constitution

British Welfare System (British Poor laws)

*If we have welfare, it should be municpally focused
*if we help anyone, should be deserving poor
*If hospitals do exists, they're locally owned/operated
*Around this time cities started PH departments and until today its primarily a city issue

Our "Social Welfare System" - local, not federal!


What evolution did we see in HC simulateously to our adoption of the British Poor Law System

Previously had used medicine men, nurses, midwives, faith healthers, etc.

HC for most people was provided in traditional healing techniques

Still saw illness as a moral issue


What changed in HC around the end of the 1800s?

Science boomed, so doctors became king of new HC system bc they understood the science

AMA was created to lobby states to regulate HC so doctors would win and traditional healers would lose


Amount of hospital beds in US in 1900

35,000, mostly public or faith based


Amount of hospital beds in US in 1930



What caused this boom in hospital beds?

economic explosion of 1920s due to urbanization, industrialization, professionalization of medicine

No health insurance at the time, but people could afford to pay out of pocket bc it was the roaring 20s

HC was private sector only - not governmental


What was so terrible about the great depression for HC?

hospitals had been highly leveraged, so a lot went bankrupt

US federal govt wouldnt help bc we were still Jeffersonian in mentality - Hoover's hands were tied.


Describe the hallmarks of the Baylor Hospital Plan

2 factors
1 pro
3 cons

*Have teachers pay between $0.50 and $1.00 a month to prepay for a hospital stay for up to 21 days free of cost.

First pre-paid system in US

Pro: Hospital saved!
Con: Kimball worries about Moral Hazard and Epidemics, Consumers dislike lack of choice (only one hospital)


Who created the Baylor Hospital idea & when?

Justin Kimball - 1930


Blue Cross - hallmarks (5)

1)4 hospitals in Sacramento, CA
2)Can go to any of 4 hospitals if you prepay $1/mo for up to 21 days prepaid
3)BlueCross is only a fiscal intermediary - collects money and pays hospitals
4)Non-profit, could only charge community rate (no price shifting based on pre-existing conditions)
5)Didnt intervene with physician authority


Blue Shield - hallmarks

Like Blue Cross and Baylor, but for physician care.
Way to spread risk around and keep jobs during depression


Why did traditional insurers want to enter the health care market?

see the success of BC and BS, and want to get in the game

plus traditional lines of business weaker due to depression


Issue facing traditional insurers in health care market?

Hospitals wouldnt join bc they already had bc and blue shield!


What gave traditional insurers an upper leg?

didnt have to be non profit - so they could charge different rates depending upon the risk you showed


What type of insurence plan did traditional companies go with?

indemnity insurance plan - you geta bill, you pay it, you submit claim, and insurance pays you back a portion of the bill


BC and BC were __ but Traditional Insurance was ___>

BC and BS were prepaid
but Traditional Insurance was cheaper (bc could vary rates depending on risk and didnt need to charge community rate to keep non-profit status)


Why did BC BS win in the 1930s?

1) didnt have to pay a bill upfront (and it was the depression)
2) doctors would recommend them, and patients trusted docs.

...this wouldnt last always talks, and experience rated/indemnity plans were always cheaper


What happened when FDR was elected?

Shift to Hamiltonian view of government

Need Federal government fueled by strong president

2nd revolution - the biggest since Jefferson in 1800, but flipping the other way.

Federal government will assume bold leadership over stress relief


What was the point of the "New Deal"

Social Contract between feds and the people

Primary responsibility rests with the local govt but the federal government has a social responsibility


What does FDR realize we need?

Federal Income Protection and a Social Welfare System


What was the issue faced by FDR in the courts?

A lot of the new deal was unconstitutional -- > too much delegation to newly created executive agencies

6/9 judges were over the age of 70 --> thought it bad for pres to have power

FDR wanted to pack the supreme court to get rid of this issue - raise it to 15 people.


What saved the Supreme Court?

Owen Roberts and the "switch in time that saved 9"

started voting democratic in court rulings

allowed federal gov't to do what it wants to regulate interstate commerce (civil rights, medicare, medicaid all justified under this clause)

interstate commerce surely at risk during depression --> increases power of fed gov't


FDR's 3 ideas for welfare

1) National Health Insurance
2) Pension Program for Seniors
3) Aid to Families with Dependent Children


1) National Health Insurance under FDR

*AMA fought tooth and nail .. most powerful interest group in US

*thought BCBS was enough because of fears that feds would limit what docs could earn and feds would limit docs autonomy

*doesnt happen!


Pension Program for Seniors under FDR

Social Security Act of 1935
*social insurance program, available to all regardless of income
*earned right, social insurance, uniform benefits
*Federally Run
*Everone puts in and everyone gets out


Aid to Families with Dependent Children

ADFC - also under the Social Security Act of 1935
Welfare program for poor moms and kids
cash assistance welfare program
state run, state administered
state and federally funded
welfare, not an earned right
variation between states


What was FDR starting to work on at the end of his time in office?

a 2nd bill of rights - as the economy healed, some did quite well, but some were left behind


Harry Truman's election

1945 - picks up where FDR left off - wants a "Fair Deal" for Americans

What is the main goal? NHI


What gets in the way of Harry Truman's NHI?

Republicans in control of congress - thought we should buildup private insurance
AMA Against it
Communism now the enemy
Employers start buying it for employees!


How does Truman encourage employer insurance?

Tax breaks:
Deduct price of insurance from income tax
individuals arent taxed on value of premiums paid by companies (not counted as income)
fed effectively subsidizes insurance (forgoes 250bb/yr in process)


How does Employer Sponsored Private HI take off?

Truman gives up, goes that route
now an expected part of employment package (but many are left out)


Since so many people are left out of the employer-sponsored HI market, what does Truman do?

Pushes for public insurance safety net outside of Employer system

-> proposes amendement to SSA to have hospital insurance for the elderly
--> republicans say no bc dont want elderly rich getting it, prefer to give states money to divide amongst poor at own discretion


Whose view wins in 1950?

Repbulican - Congress amends the SS ACT to give money to the states to provide insurance to the poor and indigent on the state level
--> democrats said ok bc better than nothing
--> republicans only did even this bc of election yr politics

"Welfare Medicine vs Social Insurance"


3 Revisions of Social Security Act (where feds give states money)

1950: insurance for poor and indigent

1960: insurance for elderly poor

1962: insurance for poor disabled (AMA actually supports this)

only 5 states were really taking advantage of this $, progress cost less than expected


1964 - Johnson Wins landslide Election!

Major Mandate and following proposals:

Great Society and War on Poverty --> Health Insurance Focus!

3 Proposals:
1) Johnson - Hospital Insurance for the Elderly
2) Republicans -- Give states more $ for poor
3) John Burns -- Physicians Insurance for the Elderly


1965 - what idea of the 3 on table at Johnson's election win?

all three!


Details of Johnson's Proposal

Medicare Part A
Available to Anyone over age of 65 in the US, or with disabilities
Universal benefits for all (Social Insurance of New Deal)


Details of Republicans Proposal

Money for states to help poor --> MEDICAID
Means tested needs based, state discretion, charity stigma
Serves 66 million Americans
Under ACA will have millions more
Expect to cover between 70-80mm annually (25% of US) within 5 years
Costs 450bb annually (NY State most expensive)
Welfare Wing of New Deal


Details of John Burns

Medicare Part B
Major expansion of govt in health insurance
Track New Deal Social Insurance


Medicaid How it works

Fed gives states money (50-80% fed covered)
State designed
State administered
The poorer the state per capita/more feds pay


What characterized uptake of medicare/two visions?

High Eligibility Standards and slow uptake: i.e. AZ last state to join in 1982
Low eligbility model, ie.-- NY spent so much that it outspent what had been set aside for whole program

both led to a capping of budget - feds will only pay for beneficiareis w/in fed eligibility criteria, and for benefits approved by fed


What did medicare cover?

Whatever the states decided, outside of 10-12 required things


What does Regan do when he gets into power?

Cuts core social service programs - cuts welfare, cuts taxes, increases defense


3 tangents that led to medicare increase under Regan?

Mid 1980s - Southern Democrats want new Democratic Party in the south

Fillibusters - any 60 senators can block one, so need 60 votes to pass any law

Budget bill is set so you cant filibuster a budget, and it only takes 50 votes to pass a budget bill


What did the new southern democrats want?

improved education system

try to reduce infant mortality -- to do so lobbied congress to be able to extend medicaid (currently covering only those at 30% of poverty level) to preganant women up to 133% of the poverty level


How did Regan get his early revolution?

David Stockton realized you could pass stuff under budget bills bc they couldnt get filibustered


How did this backfire on Regan?

2 can play that game!

Henry Waxman notices Regan and sees what the south did to expand medicaid -- gets NHI through the back door!


Once they get NHI through the back door, what happens?

mandate all states cover pregnant women and infants up to 100% --> 133% of the poverty level... then all kids up to 100% of poverty level

Delinks medicaid from welfare, become a program for low wage and low income kids


What led to medicare cost jumping in ealry 1990s?

Intragovernmental tension follwoing medicaid mandates... states had to pay for this at the time of recession and lower income and war.

Led to figure manipulation!


What did West Virgina do to figure manipulate?

Have hospitals charge more for a procedure - 100-->140
Feds reimburse States 70 bucks
Hospitals pay states $30 tax or make $30 donation
Hospitals net $110 now, but states only pay $40...

Hospitals and States win, and Feds lose


What did Pennsylvania do to figure manipulate?

Have nursing homes charge 697mm for care
Have state draw down $393mm on line from Feds
Have nursing homes give back 695mm (pocket 2mm)
Have states net 391mm


What other states were mentioned in figure manipulation

NH got away with no income tax bc of games like this

MA got rid of a 450mm budget deficit bc of stuff like this


What are Bills wishes on NHI when he gets into office?

Doesnt like Medicaid Mandates
Doesnt like states leveraging techniques
Wants NHI through front door
Hillary to lead task force
Gets congress to impose limits on leveraging games (i.e. limit large state donations, etc.)
Clinton Loses


What happened in 1994 when Gingrich and the republicans take over the house?

Counter revolution again!


What do the republicans try to do in 1995

Shift Medicaid from entitlement program to block grant program via the budget reconciliation process

Clinton vetos multiple budget bills


1996: Clinton Re-elected - what happens re ADFC and Health Insurance?

ADFC - eliminated and replaced with a block grant for children

NHI wont happen, so instead does CHIP



States given $40bb/10 yrs to provide HI for kids whose families are too rich for medicaid but too poor for private HI

initial enrollment low bc info hard to get and its stigmatized

States want parents to join too bc they think they'll be more likely to get kids if parents can sign up too


Cost Containment Strategies for Medicaid

Cut eligibility (politically difficult, hosptials still on line for uninsured)
Cut Benefits (fierce interest group opposition if their service is on the chopping block, plus cut mental health --> increase er visits)
Impose Co-pays or Premiums (too large, beneficiaries might not seek care --> higher costs LT, too small, beneficiaries may not pay, and hospitals on line)
Move to Managed Care
Impose Employer Mandate requiring covering of all employees


Why does bush not like CHIP?

feels like it crowds out private insurance

thinks feds shouldnt pay for families that make 80k/yr

new rule - feds stay can only go on it if you've been out of private mkt for 1 yr to disincentivize people from leaving private market

Bush repetedly vetoes it -


Medicaid and the ACA

1st Act of Congress in 2009 is to expand CHIP

Expands Medicaid to cover everyone up to 138% of poverty level (as of Jan 2014)

Fed govt will pay for 100% of expansion costs for first few years, and then ramp down to 90% over time

Supreme CT rules states cant be required to expand... only 27 states +DC have expanded.


Medicare Highlights

New Deal Social Insurance
Available to all over age 65 if contributed for 10 yrs or 40 quarters
Can still buy in as long as pay taxes
Still doesnt cover everyone
Federally administered
Earned right


How does the benefit package of Medicare compare to Medicaid?

More limited - meant as hospital and physicians insurance only


What do people do to get more coverage out of Medicaid?

Buy a medigap policy
Either through a private insurer, ex-employer, or Medicaid
30% belong to managed care in addition to Medicaid
18% only has core coverage - very limited


What does Medicare NOT cover?

Long Term Care! (just 100 days following a 3 day stay in the hospital for an acute issue)


Medicare Part A

inpatient hospital stays, skilled nursing facility stays, hoe health visits, hospice care, deductible

Financed through taxes paid by workers and employers under aca (1.45% until the ACA, now higher)


Medicare Part B

physician visits, outpatient services, preventive care, deductible, and cost sharing

voluntary - dont get automatically enrolled... only if you opt in and then you pay $105/mo premium... rest is paid out of general reserves


Medicare Part C

Medicare Advantage - can enroll in a private health plan too, such as an HMO, and receive all Medicare covered benefits (27% of beneficiaries do this, >13mm people)


Medicare Part D

Voluntary, Subsidized prescription drug benefit (more subsidized the less money you have), offered via private stand alone prescription drug plans and medicare advantage prescription drug plans


Mediare and Bipartisanship

POpular Program with bi-partisan support
Docs and beneficiaries all like it
desegregates southern hospitals
Huge surplus in early 90s due to move to capitated payment in 1983


Early 90s - what happens to medicare?

it begins to faulter - will spend more on part A than it takes in that year - by 2002 wont be able to pay bills!


What is contentious in 1996 re-election?

How to reign in costs in Medicare Part A


How does Clinton save medicare upon re-election?

The Balanced Budget Act of 1996!

1) Cuts hospital reimbursement
2) Makes concerted effort to clamp down on fraud and abuse (federal oversight)
3) Get people more involved in manged care "Medicare Advantage" or Medicare Part C (fixed monthly fee)


How does Clinton's plan work out?

Brilliantly! End up having surplus again (even though it bankrupts a lot of hospitals along the way)


1999 - what do they decide to do?

Give a little money back to hospitals


Gore V Bush - what is big debate?

What to do with surplus

both agree that $ should be used to expand benefits to cover prescription drugs

Gore - social insurance - cover 50% of prescription drug cost
Bush - welfare - block grant to states to provide coverage to those without 3rd party coverage


GWB elected - what does he do?

tries to do what he said in election - people wont buy it

1) Will take state financial committment too

2) States will have to administer it themselves

3) 48bb may not be enough if huge demand


Bush - looking for at at home win does what/

Medicare Part D - Medicare Moderinazation Act

Liberal Dems and Conservative Republicans Hate it

But it gets passed bc dems remember lost chance w/ nixon to get NHI done, and they didn't... so not idea, but didnt want to miss again


How does Part D work?

Can seek out and purchase extra drug coverage
Pay a premium to get part D
have to buy from a private company (dems dont like - wanted single payer - republicans said no - thats regulation)
Each company negotiates w/ pharma for rates
Mandatory at age 65 ($30/month) either via plan or medicare advantage plan


Walk through Medicare Part D coverage

$250 deductible
Next 2k of costs plan covers 75%, you pay 25%
next $2850 - responsible yourself (donut hole)
Any costs over $5100 are coverd at 95%


Talk about impact of donut hole1

3mm beneficiaries entered it in 2001, and 1mm exited and got 95% coverage


Why do they have the donut hole?

Gives something to everyone.. but not so much gthat employers who would help their employees are less incentivized to cover retiree health benefits


What happens if you dont sign up for Medicare part D?

Premiums go up by 1% per year that you havent signed up, can get subsidies if you are poor (to prevent adverse seletction)


How can Medicare Part D plans vary?

Plans can vary as long as the actuarial numbers are the same overall (i.e. more expensive but smaller donut hole, or no premium but high deductible)


Medicare from 2005-2007

costs start escalating bc of
prescription drug costs
baby boomers joining
people are living longer so less aging out


In 2009 again, what is state of medicare?

Surplus is projected to be gone by 2017
country in dedp recession
HC huge cost, killing economy
Big biz shifting costs to employees
Small biz cant pay the cost


What are the 3 issues facing Obama with Medicare in 2009?

1) Rising Costs of HC
2) 45mm without Insurance
3) We have the best and worst HC delivery system in the world!


What did Hawaii do in 1974?

Hawaii mandated every employer to provide health insurance for every full time employee


What did Dukakhis want to do ?

He wanted to expand the Hawaii method to MA, because he wanted to run for president. But he couldnt! Hawaii only got state to ever get ERISA waiver.

Plus, MA would have had a small business revolt.


What happened during the race to fill John Heinz' senate seat in PA?

Harris Wofford ran against Richard Thornburg.

Uphill battle, Thornburg ex PA Gov and US Attorney Gen.

Carville and Begala in as campagin managers - realize HC a percolating issue.

State will pay for your lawyer if your a felon but not your doc if you're sick

Makes NHI a huge national issue when Wofford wins!


Clinton Runs for Pres - what are the 3 major concerns of his?

1) HC costs are rising

2) Too many uninsured

3) Have the best and worst HC system in the world.


Ironically what is biggest difference, besides voting for Iraq, between H. Clinton in 2008 and Obama?

H. Clinton wants NHI, Obama says we just gotta cut costs.


Obama in, creates a 3 part stimulus package. It covers:


Tax cuts

Extra money for states to cover medicaid as economy is tanking (less tax income)


Why did Obama choose HC as his long term legacy?

Good way to fuel economy

Effects are LT enough to make a difference

But will be ST enough to make an impact during his time.


What are Obama's 4 main obstacles in NHI reform?

1) Cultural Dynamics (conservatives just wont like it, will be labeled a socialist)

2) Industry Dynamics (knew lots of intererest groups at stake, one $ cut is 1 persons income...but no interest group for uninsured).

3) Institutional Dynamics (he kiiinda had 60 votes, but was on the boarderline... needed every single Democratic vote to avoid a filibuster).

4) Path dependence - had failed before, so more likely to fail again


Name the things Obama did differently from Clinton to push through NHI?

1) Did it immediately as first priority (vs. Clinton focusing on NAFTA) during first 100 days when mandate and honeymoon period were strongest

2) Congress run (vs. Exec branch task force run by H. Clinton) - needed Congress to buy into both success and failure

3) Said "Lets make a deal" (vs. Clinton vetoing anything if he didnt get NHI). - i.e. Lieberman deal

4) Didnt want to take it away from anyone (If you like it you can keep it)


What was the hiccup in getting NHI rolled out in a clean fashion?

Ted Kennedy dies, and Scott Brown (republican) elected in MA - so house needs to pass the Senate Bill (thanks Pelosi)


5 Key provisions of the ACA

1) Medicaid Expansion
2) Insurance Exchange
3) Employer Mandate
4) Federal Regulation
5) Individual Mandate


ACA - Medicaid Expansion

*requires every state to expand Medicaid to 130% of the poverty level
*Financing would be heavily paid
*Supreme court struck this down - unexpected
*Said cant penalize states who refuse to do this by witholding traditional medicaid $, thought too coercive
*Viewed it as a new program, not same progam


ACA - Insurance Exchange

Said every state should create an insurance exchange or purchasing pool to get a better deal through reduced risk

Federal govt will provide subsidies for people up to 400% of the national poverty level.

senate version - house one would have had 1 single national exchange... after the fact 34 states said they didnt want to make their own exchnage leading to rise of

if feds had known day 1 this was an issue they may have averted the disaster

Going to courts right now - Law doesnt say Federal exchange - so is it still legal? Time will tell.


ACA - Insurance Exchange

All companies with 50+ full time employees ahve to provide HI or pay a penalty of 2k per employee

Tough for small biz

Jan 15 - all firms with 100+ employees have to provide HI
Jan 16- all firms with 50+ employees have to provide HI

Boehner suing Obama now becuase law states had to be effective in 2014 in law - so saying he unilaterally changed the law.


ACA - Federally Regulate it

*Cant charge people more bc of health status
*must spend 80% of premiums on benefits, not admin and profit
*Adults up to 26 must be allowed to stay on parents HI
*Makes HI available to those who previously couldnt get it
*Basic benefit package required
*Obama got into trouble here bc "if you like it you can keep it" - but not all old HI met all these criteria


ACA - Individual Mandate

Put into place so HI industry wouldnt go bankrupt
Pay a penalty if you dont have HI - $95 or 1% of income year 1, $395 or 2% of income yr 2, $695 or 3% of income year 3.

Will millenials sign up? We'll see what happens...3mm more people on parent's plans...

Challenged in supreme court - Obama said legal under commerce clause, republicans said illegal bc federal gov't mandating purchase of a private good.

Passed by 4 votes in favor fo commerce clause, and Roberts saying its legal under taxing authority (even tho team Obama stressed it wasnt a tax)

viewed as a light stick (but concept of stick vs carrot is important, will have to see how it works).


Hillburton Act

Goal is to massively expand Hospital INdustry in the US/build up institutionalization of the Hospital Industry

Give $ to local communities to build hopsitals


What characterized the 1950s in terms of HC growth?

period of growth and optimism

tons of money invested in NIH and growth of academic medical centers

period post WWII - we can cure all ills with science and medicine


Unintended Consequence of Hillburton act?

Not enough doctors!


What does that unintended consequence spurn congress to do?

1) Tell medical schools to expand enrollment- feds will give money to med schools to add new wings, or even open new schools)

2) Cheap low interest loans to students going into medicine (doubled in 1960 from 8k drs graduation/yr to 16k...still not enough)

3) Change Immigration laws (get foreign docs in - either those trained abroad, or US citizens who schooled abroad to come back) - took 25% of the medical school slots


Unintended Consequences of the Hillburton fixes?

1) Geographic Maldistribution

2) Specialty Maldistribution


Specialty Maldistribution

New docs are more inclined to be specialists, not generalists

more money, better lifestyle, more research, more prestige, societal trend toward specialization as medicine advances, hospitals encourage them as free up attendings for research


Geographic Maldistribution

All these docs wanted to live in urban areas - no focus on rural areas, esp. given there are so many specialists


3 ways to deal with Geographic Maldistribution

1) National Health Service Corps
2) Community Health Center Movement
3) Public Health Clinics


National Health Service Corps

Pay for schooling for medical students who need help financially and agree to work in rural areas for a few years post graduation

Pros - raises awareness, even if physicians dont stay there forever, any doc better than none, gives kids who cant afford it a shot a med school

Cons - many in for $, dont care, young kids dont have a lot of experience, may not be the best cultural fit, people may look to buy themsleves out of the committment


Community Health Center Movement

Jack Geiger

Boston based physician

Campaignign to get out the vote in Rural MI - realizes no health care!

Gets loan in era of Great society (bypass states, give $ straight to communities in need)

Has both docs and social services and has community buy in (community members on the board)

50% of CHC docs were NHSC docs


Public Health Clinics

PH departments of the era were suppoed to engage in population health of hte community

So they got into primary care service!


What did clinton decide in 1993 as a way to deal with too many specialists and not enough generalists?

1) Cap # of residencies at 105-110% of graduating class each year (remember 25% of residencies go to non us nationals)
2) Mandate 55% of all graduating classes must be generalists (only 14% wanted to be generalists/yr)
3) Have the federal government determine where the residencies will be (20% were in NYC alone)


What did Clinton's effort to control geographic and specialtist issues result in ?

no support - everyone was against except payers and academics, and they wouldnt really support it bc the payers didnt like govt invovlement anyway bc could backfire on them!


Name the 5 major critiques of the US HC system through the 1970s?

1) Geo Maldistribution
2) Specialty Maldistribution
3) Lack of Coordinated Care
4) Rapid rise of Costs
5) Variability in care


What did Jack Wennberg Do?

Founded Dartmouth Atlas

Attempted to understand why HC costs would be so different between 2 seemlingly homogenous communities

Realized it all came down to variation in care due to doc autonomy


What is one system that can cover all of the 5 critiques of the US health care system at this time?

Managed Care - AKA - Kaiser!


What is the Kaiser System?

Henry Kaiser created health clinics for his employees

post ww2 steel went down but figured out the clinics doing well

sold clinic idea - buy kaiser care from his permanente group of physicians...blurs lines between provider and payer


Four main factors of Kaiser Care?

1) Controls Costs
2) Practice Protocol (little variation)
3) Primary Care Gate Keeper for every enroller
4) Emphasizes primary preventive care vs secondary care


Issues for why Docs dont like Kaiser and why consumers dont like kaiser?

Docs: lose autonomy, make less money, have to work in a clinic

Consumers: lack of choice


Who drives the Health Maintenance Organization Act?

Nixon and Paul Ellwood


What are the 3 factors of the Health Maintenance Organization Act?

1) $ to build Kaiser like facilities around the country
2) HMO option must be given by employers as an option to employees
3) State laws that ban Kaiser like systems are no good


Did the HMO Act work?

No! they didnt come!


What happend during the 1970s and 1980s

5 concerns of health care in the US didnt go away


What happened in 1990s?

Dont call them HMO's, call them Managed Care!


Hallmarks of Managed Care

Network of Docs (No clinics)
For Profit
Practice Protocol
Primary Care Gatekeepers


What did they want State Patient Bill of Rights to say?

*If its an emergency, HI will cover it
*Direct access to certain specialties
*48 hrs of hospital care post childbirth
*Right to sue
*Appeals process if care is denied


What was the issue with enacting a State Patient Bill of Rights?



What does ERISA stand for?

Employee Retirement Income Security Act


Two Questions ERISA has to ask to see if states can regulate or if feds do?

1) is it an employee benefit
2) if so, is the law part of the traditional regulation of insurance?

If so, states can regulate


Who isnt covered by ERISA?

Self-Insured companies, bec they are not part of the traditional regulation of insurance - so would fall to the feds - but the feds never really took on this mantle!


Why did big companies lobby against people who wanted to amend ERISA

1) could cause all prices to rise
2) state would need to prove that employees for self-insured plans get worse care than otherwise
3) theyr'e national companies - you cant expect them to adhere to all 50 states rules


What did Gore and Bush fight over re: ERISA at 2000 election?

When it came to patient RX plans... should federal govt enact a patient protection act?

Answer - yes - but how much should they cap the ability to sue at? this was contentious , so law not enacted.


HI industry facing managed care backlash - what did they attempt to do?

Profile all the docs in network!

But - this was hard to do!


What are the obstacles of effective doctor profiling?

1) data collection is difficult
2) How do you determine who provides care?
3) Docs complain it promotes cookbook medicine


How do you overcome the obstacles to efffective doc profiling?

1) if worry capitated means docs wont do everything they should, run shadow claims incentive data
2) do a regional comparison
3) adjust for the patient pop the doctor is dealing with
4) use electronic med ical records
5) look at clinic level, not doc level


How much does Canada and Japan pay for HC as percent of GDP?

11% and 9.6% respectively


How often do US citizens go to docs vs average and germany?

avg 6x/yr
germany 8x/yr


Cost =



Main issue in the US?

We pay more for every service across the board than our peers

We employ more high tech services across the board than our peers


MRI Data

Us - 26.1 units/1mm pop, $1100/use
Germany - 7.5 units/1mm pop, $216/use
Japan - 43 units/1mm pop, $120/use


Cost Containment Stratgies

maybe price*volume is answer, but maybe not.

Other Options!
1) All Payer Model/Regulation
2) Consumer Incentives
3) Provider Incentives - P4P
4) Care Management and Hot Spotting


Regulation/Maryland - All-Payer Insurance

Maryland regulates the price that all hospitals can charge payers

all other countries do this (England NICE), and other coutries look at cost/benefit analysis of $ spent

We didnt go this route in ACA bc of fears of death panels, and Obama was already being called a socialist


Consumer Incentives

Has proven to work (co-pays, deductibles)

However - customers typically choose providers by convenience and word of mouth - how to have a more informed consumer is complicated


Provider Incentives

3 options of P4P - Change how docs act thru behavioral theory

1) Ranking System (Medicare test case)
2) Benchmark Model (England test case)
3) Improvement System (value based purchasing)


Hotspotting, Care Management

Identify patients with highest costs, and work to lower those costs, Coordinate care better
Assign nurse/social worker/health coach whom they see more frequently, Increase accessibility to primary care/clinic in order to avoid unnecessary emergency department visits
Address home/social issues of patients

Groups of providers that agree to coordinate care and to be held accountable for the quality and costs of the services they provide
if there are savings, they are shared between the provider group and medicare


What is LT care?

When you need regular, ongoing long term help with regular activities


How many americans receive long term care?

11-12mm Americans, of which 58% are over the age of 65


How much money is spent on formal LT care?



How much money is "spent" on informal LT care?



Primary Q in LT care?

How do we pay for more LT care services while avoiding the woodwork effect?


Why did the non-system of LT care last for so long?

1) Short time gap between disability and gap with less good medical care
2) fewer women in the workforce
3) not a moible society


What happened in the late 1940s to lead to issues in LT care?

1) Hillburton act - hosptial industry grew and advanced dramatically

2) More elderly went to hospitals for acute care, but didnt have a place to go after, and werent ready to go home

3) Employer Sponsored HI - only cared about current employees, not old employees, so wont cover LT care


Why dont people just buy their own LT care insurance?

Older people more likely to think bout it so expensive bc risk pool is greater
Reimbursement is capped so you wont know if it will cover what you need when you buy it.


History of LT care in the Public Sector

1) SSA had old age insurance, but you couldnt collect it if you were in a nursing home

2) SSA amended in 1950s - could use old age $ to pay for nursing home

3) Hillburton act - congress pays hospitals funding to have nursing home attached to a hospital

4) Medicaid pays for LT care! nursing homes quadrupled in the 7-8 years following Medicaid coverage in 1965.


Why does Medicaid have great nursing home reimbursement but poor home healthcare reimbursement?

easier to regulate institutionally
people more likely to want to remain at home, so eliminatese some of woodwork effect


What will medicare cover?

not LT care, just extended care for 100 days following a 3 day hospital stay for acute care issues


What happens in 1980s for LT care?

Have a crisis!

Institutional bias in medicaid
building more and more nursing homes that no one likes
Nursing homes are providing terrible care for residents
Spending a ton of money on system no one likes


Late 1980s - ideas on how to fix LT care issues

1) Cut reimbursement (but 75-80% is labor, so will make bad system worse)
2) Shift the cost (make self eligible for medicaid by giving up assets early.. made illegal)
3) Change Delivery system (NORC, Assisted living, Onlock)


What is one way that the LT care system was ok with cost shifting?

if you buy public-private partnership LT LT care insurance, if you use it, after 3-4 yrs can give up assets to get on medicaid to pay for the rest.


What is a NORC

Naturally Occurring Retirement Community


Onlok main factors

*San fran day care center
*like HMO for seniors - get capitated monthly fee to take care of all care for elderly person --Capitated Managed Care


What is the Pace Program?

Program for All-Inclusive Care for the Elderly

Takes the Onlok program and expands it nationally, close to 100 sites in 31 states.

Good, but hasnt moved needle nationwide... still only a few hundred people at under 100 locations

Still concerns about effectiveness in other locations


Why doesnt medicare mandate managed care in elderly, even though most expensive and perhaps may need it?

*Politically fraught if elderly get sick and die and they blame it on managed care

*elderly have more lobbying power than do youth


Assisted Living

For those who dont belong in a nursing home, but shouldnt be totally alone either

upper middle class population

marriott big provider here - combines independence w/ services

Medicaid - tricky on if they should pay bc its housing... and also could lead to more woodwork problem...


What did the ACA do for PH?

Created PH Prevention and Trust Fund

However - fund has been raided several time over, lacks political influence


Top 10 trends in the US today for HC

1) Consolidated Health Systems
2) Integrated Health Systems
3) Variety of New Entrants
4) Scope of Practice
5) Changes in reimbursement
6) Wellness programs
7) Care Management
8) Public Health
9) Comparitive Analysis
10) Health Info Technology on Rise