Benchmark Developments
in U.S. Health Care
Chapter Objectives
Acquire knowledge of major legislative,
economic, organizational and professional
influences in health care delivery system
evolution including major features and
implementation timetable of the Patient
Protection and Affordable Care Act of 2010
Understand how benchmark
developments continue to affect medical
education, scientific advancement , costs
and consumer expectations
No Socialized Medicine
AMA continued aggressive protest
against government involvement in
insurance
All insurance plans served hospital,
physician interests.
Growth of Private
Insurance
Post WWII: Government exempted
health insurance benefits from
wage/price controls and exempted
workers health insurance
contributions from taxable income.
Insurance companies raised
premiums without pressure to control
costs
Attention focused on avoiding
infringement on physicians and
Dominant Influence of
Government (1)
Social Security Act of 1935- most
significant U.S. social initiative in U.S.
history:
Federal aid to states for public health,
welfare, maternal/child health,
crippled children
Legislative basis for most subsequent
health and welfare programs including
Medicare & Medicaid.
Dominant Influence of
Government (2)
Post WWII: categorical programs
addressed needs unmet by states,
local government, private sector
Federal subsidies for hospital
construction, research, professional
education
Government programs now almost
50% of total U.S. health care
expenditures
Government Financial
Involvement
Physician, other professional training
subsidies
50%+ of all research funds, National
Institutes of Health
Building, expanding hospitals: 1940s-1970s
Student support
Health planning, regulation
Consumer protection-related agencies (e.g.
FDA, OSHA)
Legislation: Unintended
Effects
Medicare, Medicaid to improve
access: skyrocketed costs with
underestimations of aged
population growth, technology costs
and service utilization
Hill-Burton Act of 1946 to increase
hospital capacity led to vast overcapacity
HMO Act of 1973 to control costs:
raised many access and quality
The Reagan
Administration
1981-1989: Reductions in
government involvement and funding
Block grants to states
Reductions in social program support
Prospective Medicare hospital
reimbursement (DRGs) became the
model for hospital reimbursement
New resource-based physician payment
to contain physician fees is a model in
use till today
Bio-medical Advances
Dramatic technology advances of
1960s and 1970s:
Sabin polio vaccines
Tranquilizers, anti-depressants-librium
and valium
Birth control pills
Heart-lung machines
Improved general anesthesia
Computed tomography scanners
Insurance Companies
Political efforts viewed as self-serving
by eliminating high-risk consumers
from insurance pools and premium
rate increases
Health Insurance Association of
American waged highly successful
media campaign to influence failure
of Clinton Plan
Vigorously opposed ACA public
option that would have curtailed
Consumer Groups
Informed and assertive citizens exert
increasing influence on legislative
decisions.
AARP- 40 million members
Patients Coalition ( 50+ not-for-profit
organizations)
Numerous other consumer advocacy
organizations lobby individually or as
coalitions on health care issues
Pharmaceutical Industry
One of the most well-funded and
influential lobbying organizations in health
care
Anticipated increased drug use by older
population and gains from participation in
Medicare prescription drug program
Succeeded in strongly influencing the
Medicare Part D prescription drug plan by
prohibiting the federal government and
Medicare from negotiating volume price
discounts with drug companies
Aging of America
Many needs for system adaptations
to care for frail older persons
Social & family changes limit
opportunities for informal care-giving
Inadequate caregiver supports
Institutional system offers little to fill
gaps
High costs of institutional care tax
personal and Medicaid resources
New Consumer
Protections (1)
Online insurance policy comparisons
Prohibit coverage denial due to preexisting medical conditions
Eliminate annual and lifetime limits
on coverage
Enhance venues for appealing
coverage denials
New Consumer
Protections (2)
Support states assistance to
consumers in navigating the
reformed system
Prohibit insurance companies from
rescinding coverage or denying
payment due to technical or other
errors in a subscribers original
application for coverage
Summary (1)
CBO estimate of ACA 2012-2021 net cost
for 32 M new insured: ~$ 1.1 trillion; new
revenues from taxes, penalties and other
sources: $ 510 B.
Budget projects are speculative and will
evolve over succeeding years
Lobbying is underway to alter financial
provisions
Major questions in turnover of existing
federal administration in 2016
Summary (2)
ACA includes new programs, grants,
demonstration projects, guidance
documents and regulations with
scores of new rules to be issued
throughout the implementation
period.
Outcomes of the ACA will be
impacted by numerous factors
including the national economy,
political environment, provider and