single payer universal health insurance for the usa william c. hsiao, ph.d. fsa k.t. li professor of...
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Single Payer Universal Health Insurance for the USA
William C. Hsiao, Ph.D. FSAK.T. Li Professor of EconomicsHarvard School of Public Health
PNHP 2009 Annual MeetingOctober 24, 2009Cambridge, MA
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Single Payer
Definition:• Single risk pool• Single benefit package• Single payer of providers
• Typically government runs it
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Single-payer and Non-Single Payer-Advanced Nations
Canada, UK, Taiwan, New Zealand,
Germany, Japan
USA Singapore
SinglePayer
Non-SinglePayer
Australia
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A Closer Examination of Single Payer
Single payer is a means to ends. What are the ends? Risk-pooling: pool together health risks of all citizens Equity in distribution of financing burden: uniform
premium rate scaled by income Equity in benefit: single benefits package Manage health expenditure: single payer of providers Manage quality of patient care and some patients’
abuse of services: uniform electronic record Manage providers: uniform electronic records to
create provider profile
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An Example: Taiwan
• Universal coverage, risk pooling, equity in finance:Mandate all employers and individualsEmployers pay 60%, employees 30%, gov’t 10%Poor—100% premium subsidy; farmers, self- employed and veterans--partial subsidy
• Equal access: uniform comprehensive benefit package, includes Chinese medicine, home care.
• Providers: paid on fee-for-services basis with uniform fee schedule
• Single payer—government (Bureau of NHI)
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Taiwanses Single-Payer Organized
• Uniform administrative procedures for patients’ access (Smart Care) and claim payment reduce paper work and administrative expenses
• Uniform electronic patient records improve the continuity and effectiveness of health care and reduce repetition of tests
• Uniform claim records Can produce complete profile of providers’ medical practice and billing; reduce fraud, over-charges, over-treatments and billing.
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Advantages of Single-Payer (Bend the Curve)
• Reduce cost shifting• Reduce Administrative Expenses of:
– Insurance plans– Providers
• Reduce (or eliminate) risk selection and adverse selection
• Manage health expenditure inflation rate– Impose overall budget on health care expenditure– Technology diffusion– Resource allocation– Control aberrant patients and providers
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Behind The Bill: Who Pays What
Official Charge
Official Charge
Official Charge
Official Charge
Official Charge
HMOs and Health Plans
HMOs and Health Plans
HMOs and Health Plans
HMOs and Health Plans
HMOs and Health Plans
Medicaid
Medicaid
Medicaid
Medicaid
Medicaid
Medicare
Medicare
Medicare
Medicare
Medicare
0 50 100 150 200 250 300 350 400 450 500
Payment in Dollars ($)
UCLA Medical Center(Los Angeles)
Oregon Health and Science University(Portland)
Jamaica Hospital(Queens, NY)
Johns HopkinsHospital(Baltimore)
Grinnell RegionalMedical Center(Grinnell, Iowa)
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Disadvantages of Single-Payer (USA)
Patients Fewer choice of insurance plans
Physicians •Income
•Monitor medical practice
Hospitals Revenue
Pharmaceutical and Medical Devise Companies
Rate of diffusion for new products
Profits
Society: Technological Advancement
?
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Technological Advancements
• In manufacturing and service sectors – Improve efficiency about 1-2% annually
• In health sector– Cost 2% more annually
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Political and Technical Feasibility of Single-Payer in the USA
• A Modified German model– Several insurers in a state, each has to offer a
standard benefit package– Uniform fee schedule– Uniform patient and claim electronic records– Integrated delivery system for selected
chronic diseases
• Medicare model with contract to private insurers for administration at state level.
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A Simple Fact: One Person’s Expense Is Another’s Income
Expenditure (Price x Quantity) = Providers’ Income
Premium payment =Insurers’ income and profit
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THANK YOU