Posts Tagged ‘RAND Health’

Dying for Coverage

Tuesday, July 10th, 2012

More than 26,000 working-age adults die prematurely in the United States every year because they lack health insurance, according to a study published by Families USA.  The consumer advocacy group study, estimates that a record high of 26,100 people aged 25 to 64 died for lack of health coverage in 2010, up from 20,350 in 2005 and 18,000 in 2000.  That adds up to a rate of approximately 72 deaths per day, or three per hour.

The non-profit group based its report on data from the U.S. Census Bureau, the Centers for Disease Control and Prevention (CDC), and a 2002 Institute of Medicine (IOM) study that showed that Americans who lack insurance face a 25 percent higher risk of death than those with coverage.  The findings are in line with a study by the Urban Institute think tank that estimated 22,000 deaths nationwide in 2006.

“Lives are truly on the line,” said Ron Pollack, Executive Director of Families USA, who supports the Patient Protection and Affordable Care Act (ACA).  “If the Affordable Care Act moves forward and we expand coverage for tens of millions of people, the number of avoidable deaths due to being uninsured will decrease significantly.”  Pollack is not the only healthcare advocate to predict that the number of uninsured will continue to rise without reform as healthcare costs accelerate, employers cut benefits, and the social safety net unravels because of fiscal pressures.

The Affordable Care Act was passed by Congress to address an American tragedy and an American shame,” Pollack said.  “The fact remains that for the millions of Americans without health coverage, only the Affordable Care offers the promise of access to affordable coverage and to a longer and healthier life.”

According to the report, the reasons for being uninsured differ, but many without health insurance were denied coverage because of a pre-existing condition.  Others have been priced out of the market at a time when keeping their homes and feeding their families take priority over holding on to insurance in the face of rising premiums.  Some lost their benefits when employers stopped providing coverage.

Census Bureau data show that 50 million Americans lack healthcare coverage, and experts say that these people do without medical care, physician visits and preventive tests including cancer and blood pressure screenings.  “The uninsured get healthcare about half as often as insured Americans, on average,” said Dr. Arthur Kellermann, director of the think tank RAND Health and co-chairman of the committee that wrote the 2002 IOM study.  “There is an overwhelming body of evidence that they get less preventive care, less chronic disease care and poorer quality hospital in-patient care,” he said.

The $2.6 trillion American healthcare system, which totals nearly 18 percent of the economy, is accessible to a majority of working-age Americans only through private health insurance.  But insurance costs – premiums, deductibles, co-pays and co-insurance – are unaffordable for many.

Robert Zirkelbach, spokesman for America’s Health Insurance Plans, the national trade association that represents the insurance industry said the rising cost of care must be addressed.  “Health plans have long supported reforms to give all Americans the peace of mind and financial security that healthcare coverage provides.  The nation must also address the soaring cost of medical care that is adding a financial burden on families and employers and threatening the long-term sustainability of our vital safety net programs.”

Families USA counters that the current delivery system is stacked against Americans who lack insurance.  They pay more for care because they lack the ability to negotiate discounted prices on physician and hospital charges like insurance companies can.

Writing in Forbes, Matthew Herper points out that “This estimate is 19 years old, and this number doesn’t tell us much that’s new about what is wrong with our healthcare system.  If anything, it emphasizes how our total lack of information about what works and what doesn’t is trapping us in an economic and social death spiral around health costs.  If anything, available data seem to point to this estimate being low.  The real story is that we care so little about how much insurance matters to people’s life spans that we haven’t really bothered to find out.  It’s possible that the number is actually higher.  A 2009 article in the American Journal of Public Health actually found a 40 percent increase in the risk of death for those who lack insurance.  The IOM notes this finding, and that using it would have substantially increased the 26,000 number.  So how many people do die from lack of health insurance?  The short answer is that we don’t know, because we don’t look.  We should have data collection systems in place to answer questions about how healthcare is performing.  This should translate into more transparency, so that voters and consumers can find out how well the system is doing.  Instead, we tend not to track data about the healthcare system, and to keep it completely siloed.  And then we wonder why the system doesn’t work.”

Healthcare Costs Wiping Out Your Income Gains

Monday, September 26th, 2011

If Americans’ incomes are not growing, part of the blame can be placed on the high cost of healthcare.  According to the Washington Post’s Sarah Klitt, “All evidence points to American voters not really caring about rising healthcare costs.  But here’s one pretty compelling reason they should:  The escalating cost of healthcare has wiped out nearly all income gains made by the average American family in the past decade.”

Research in the September issue of Health Affairs notes that American physicians are paid more per service than in other countries — in some instances, double the amount.  There is also a larger gap between fees paid for primary care and specialty care, when compared with other industrialized countries.  These higher fees translate to higher incomes for American physicians than those earned by their foreign counterparts, and are the primary driver of higher overall spending on physicians’ services.

The study — by Miriam Laugesen of the Mailman School of Public Health at Columbia University and Sherry A. Glied, also of the Mailman School and presently Assistant Secretary for Planning and Evaluation at the Department of Health and Human Services (HHS) — compared fees paid by public and private payers for primary-care office visits and hip replacement surgery in Australia, Canada, France, Germany, the United Kingdom, and the United States.

The researchers determined that American primary-care physicians on average are paid 27 percent more by public payers for an office visit, and 70 percent more by private payers for an office visit, compared to the typical amount paid in other nations.  The largest difference in fees paid to American physicians versus fees paid to doctors in other countries was for hip replacements.  American physicians earned 70 percent more for these procedures by public payers, and 120 percent more by private payers, than the average fees paid to physicians in other countries.

“The gap between the fees paid for primary care and those for orthopedic services such as hip replacements is significantly bigger in the United States than it is in other countries,” Laugesen said.  “For decades, policymakers and medical leaders in this country have debated financial incentives to spur more doctors to become primary-care physicians.  Our work shows that continuing attention needs to be paid to the difference in payments across specialties, and how we can get better value for those expenditures.”

Additionally, American physicians reported higher salaries when compared with the other countries, despite the fact that there was minimal difference in the volume of services provided.  Laugesen and Glied suggest that the differences may reflect the fact that American physicians are paid more for their skill and time than doctors in other countries.  Whether or not those higher payments have merit is a question that the study did not address.  American primary-care physicians earned the highest average annual incomes ($186,582) while French ($95,585) and Australian ($92,844) primary-care physicians earned the lowest.  American orthopedic surgeons earned the highest average annual incomes at $442,450, followed by $324,138 for surgeons in the UK.  Although UK surgeons earned 50 percent more than surgeons in the other comparison countries, they earned 30 percent less than American orthopedic surgeons.

A study by the RAND Corporation determined that rapidly rising healthcare costs have eaten nearly all the income gains made by middle-income American families over the past 10 years, leaving them with just $95 per month in extra income, after accounting for taxes and price increases.  Had healthcare costs risen only as fast as the cost of other goods and services from 1999 to 2009, the same family would have had an additional $545 per month to spend in 2009.

“Accelerating healthcare costs are a primary reason that the so many American families feel like they are just treading water financially,” said David Auerbach, the study’s lead author and an economist at the RAND Corporation, a non-profit research organization.  “Unless we reverse the trend, Americans increasingly will notice that health costs compromise their other spending options.”

Between 1999 and 2009, healthcare spending in the United States nearly doubled, from $1.3 trillion to $2.5 trillion.  During the same timeframe, the percentage of the nation’s GDP devoted to health care rose from 13.8 percent to 17.6 percent.  Per-capita healthcare spending rose from $4,600 to just over $8,000 a year.

Although the numbers are arresting, they don’t necessarily translate to the daily routine of American families because many healthcare costs are hidden, according to the researchers.  Auerbach and co-author Dr. Arthur L. Kellermann, director of RAND Health, combined information from multiple sources to describe the obligation that rising healthcare costs placed on middle-income families with employer-sponsored health insurance from1999 to 2009.

“The complex way that the United States pays for healthcare often obscures the consequences of healthcare cost growth for most American families,” Kellermann said.  “This makes the challenge of controlling healthcare costs that much harder.”