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UniversalCoverage:ANobleGoal
DemandsComplex
and
Difficult
Choices
WilliamC.
Hsiao,
PhD,
FSA
K.T.LiProfessorofEconomics
HarvardSchoolofPublicHealth
Barcelona,Spain
May16,2012
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Outline
UniversalCoverage:thedifficultchoices
Efficiencygainsasanapproachto
financeuniversalcoverage
Thestrategy
of
United
States
to
achieve
andsustainuniversalcoveragethrough
efficiencygains.
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Reliance of countries on Out-of-
Pocket Spending (OOP)
Source: WHO estimates for 2010, countries with population > 600,000
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CostGrowth
in
Europe
Source:European
Commission
2010
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Whatis
Universal
Coverage
and
Why?
UniversalCoverage(UC)isallpeoplehaveaccess
to
services
and
do
not
suffer
financial
hardshippayingforthem.
WHO,WHA58.33,May,2005
WhyUC?
Promotingandprotectinghealthisessentialtohumanwelfareandsustainedeconomicandsocial
development.
WHO.TheWorldHealthReport,2010
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UniversalCoverage
Universalcoverageisaneffectivestrategy
to
achieve
noble
goals.
Universalcoverageinvolvesdifficult
choices
and
trade
offs:
Breadth
Scope
Depth
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PerformanceDimensions
of
Health
Systems
HealthOutcomesFinancialRisk
Protection
Public
Satisfaction
Level
Distribution
Source:Hsiao,
1998
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NeedFund
to
Make
UC
aREALITY
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DifficultChoices
Under
Financial
Constraint
Tradeoffs:
Breadth:Expandpopulationcovered?
Scope:Expandhealthservicescovered?
Depth:Expandamountofchargescovered? Reducepatients outofpocket
paymentsuch
as
co
payment
or
under
the
tablepaymentforcoveredservices.
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Howto
Finance
Universal
Coverage?
Expandcoverage
and/or
sustain
UC
requirefunding
How
to
generate
the
funding
for
UC?Additionalornewsourcesof
financingEfficiencygains
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AlternativeFinancingPathways
EfficiencyGains
FinancingSources
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PotentialEfficiency
Gains
WHOWorldHealthReport2010:
Thisreport
estimates
that
from
20%to40%ofallhealthspending
iscurrentlywastedthroughinefficiency.
$1ofefficiencygain=$1ofnewfunding
FinancingsourcesforUC: Additionalfunds
+EfficiencyGains.
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TheCauses
of
Inefficiency
Allocativeinefficiency
Politicsandbureaucraticmanagement
PoorGovernancestructure,patronage
Poormanagement
Corruption
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Potential
Efficiency
Gains:
Drug
Pricing
Sources:Coma
(Catalonia),
Godman
(Austria)
ExpertRev.PharmacoeconomicsOutcomesRes.2009
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AnIllustration
of
Drug
Reference
Pricing
in
Austria
Source:Godman,
Expert
Rev.
Pharmacoeconomics
Outcomes
Res.
2009
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PotentialEfficiency
Gains:
Hospital
Payments
Sources:Farrar,BMJ,2009; Herwartz,Christian
AlbrechtsUniversittKiel,2011;Biorn,Health
CareManagement
Science, 2003
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Kyrgyzstan:ACaseStudyinEfficiencyGains
ThroughComprehensive
Reform
Sources:Balabanova
et
al.
London
School
of
Hygeine
and
Tropical Medicine,
2011;
Kutzin,etal.BulletinoftheWorldHealthOrganization,2009
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Kyrgyzstan:HealthSystem
Performance
Sources:Balabanova
et
al.
London
School
of
Hygeine
and
Tropical Medicine,
2011;
Kutzin,etal.BulletinoftheWorldHealthOrganization,2009
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ProblemsConfronting
USA
50millionAmericansuninsured;another50
70million
inadequately
insured.
Howtoachieveuniversalcoverage?AffordableCareAct(ObamaCare).
Howto
finance
and
sustain
coverage
EfficiencyGains:
Preventionandprimarycare
Medicalhomes;
Accountable
Care
Organizations
Paymentreform: Capitation,Payforperformance
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TheIncreasingCostsofHealthCare
SqueezeOut
OtherPublicSpendingPriorities
22
MASSACHUSETTSSTATEBUDGET,FY2001VS.FY2011
SOURCE: MassachusettsBudgetandPolicyCenterBudgetBrowser.
STATESPENDING(BILLIONSOFDOLLARS) FY2011FY2001
+$5.1B
(+59%)
38%
33%
15%
23%
13%
50%
11%
$4.0B
(20%)
HealthCareCoverage
(StateEmployees/GIC;
Medicaid/HealthReform)
Public
Health
Mental
HealthEducation Infrastructure/
Housing
Human
Services
Local
Aid
Public
Safety
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Massachusetts:
Alternative
Quality
Contract
Sources:
Song,
et
al.
NEJM 2011;
Mechanic,
et
al.
Health
Affairs 2011;
Chernew,etal.HealthAffairs 2011
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Potential
Efficiency
Gains
through
Medical
Homes
Interventions StaffIncreasesandExpanded
VisitTimes
SalaryPaymentforPhysiciansandTimeAllottedforDesktop
Medicine Results
ImprovementsinPatientSatisfaction,Quality,andHospitalizationRates
Estimatedsavings
of
$10.30
per
memberpermonth
MedicalHomePilot
Interventions TransferofCaseandPopulation
ManagementtoPrimaryCarePractice
SharedsavingsIncentivesfor
Physicians Results
18%reductioninhospitaladmissions
36%reductioninhospital
readmissions
ProvenHealthNavigator
Sources:Reid,etal.HealthAffairs,2010;
Gilfillan,etal.AmericanJournalofManagedCare,2010.
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Summary
AchievingUCrequiresprioritysettinganddifficulttradeoffs. Alternativepathwaysare:
Breadth:population
covered.
Scope:essentialservicestobecovered.
Depth:amountofpatientsstillhavetopay.
Efficiencygains+additionalfundingisthestrategyto
mobilize
necessary
financing
for
UC.
Assureadequatesupplyofeffectiveandefficientservicesrequirehealthsystemreformsin
organization,payment,
regulation,
governance
and
management
Recommended