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Context of 'August 21, 2003: Study Finds that Administrative Health Care Costs in US Double that of Canada'

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A study conducted by Harvard University and the Canadian Institute for Health Information finds that administrative costs in America’s health care system are almost twice that of Canada. The study, published in the New England Journal of Medicine, reports that the US health bureaucracy consumes 31 percent of total health care spending. By comparison, Canada’s administrative expenses amount to only 16.7 percent. Steffie Woolhandler of Harvard, who led the team, says if the US were to adopt a single-payer health care system like Canada, the funds saved would be enough to provide insurance for the more than 41 million uninsured Americans. [Woolhandler, Campbell, and Himmelstein, 2003; Toronto Star, 8/21/2003]

Timeline Tags: US Health Care

The Commonwealth Fund, a private organization founded to improve America’s health care system, releases a study that finds the US spends more on health care than any nation on earth, yet “consistently underperforms on most dimensions of performance, relative to other countries.” The report is based on a number of surveys conducted with patients along with information from primary care physicians. “The US spends twice what the average industrialized country spends on health care but we’re clearly not getting value for the money,” says Commonwealth Fund president Karen Davis. Compared with Australia, Canada, Germany, New Zealand, and Britain, “the US health care system ranks last or next-to-last on five dimensions of a high-performance health system: quality, access, efficiency, equity, and healthy lives. The US is the only country in the study without universal health insurance coverage, partly accounting for its poor performance on access, equity, and health outcomes. The inclusion of physician survey data also shows the US lagging in adoption of information technology and use of nurses to improve care coordination for the chronically ill.” These findings are similar to those of studies conducted in 2004 and 2006. “The most notable way the US differs from other countries is the absence of universal health insurance coverage,” the study’s authors note. “Other nations ensure the accessibility of care through universal health insurance systems and through better ties between patients and the physician practices that serve as their long-term ‘medical home.’ It is not surprising, therefore, that the US substantially underperforms other countries on measures of access to care and equity in health care between populations with above-average and below-average incomes.” The study’s executive summary concludes: “For all countries, responses indicate room for improvement. Yet, the other five countries spend considerably less on health care per person and as a percent of gross domestic product than does the United States. These findings indicate that, from the perspectives of both physicians and patients, the US health care system could do much better in achieving better value for the nation’s substantial investment in health.” Britain receives the highest overall ranking in the study, followed by Germany, and then by New Zealand and Australia, which tie for third. Canada is placed fourth. [Commonwealth Fund, 5/15/2007; Agence France-Presse, 5/15/2007]

Entity Tags: United Kingdom, Germany, United States, Karen Davis, New Zealand, Australia, Canada, Commonwealth Fund

Timeline Tags: US Health Care

Researchers for Harvard Medical School and the Cambridge Health Alliance release a report that shows approximately 45,000 Americans a year—122 a day or one every 12 minutes—die as a result of a lack of health insurance and a subsequent inability to receive medical care. The study’s co-author, Harvard medicine professor Dr. David Himmelstein, tells a reporter, “We’re losing more Americans every day because of inaction… than drunk driving and homicide combined.” Lead author Dr. Andrew Wilper, a medical professor at the University of Washington, says: “The uninsured have a higher risk of death when compared to the privately insured, even after taking into account socioeconomics, health behaviors, and baseline health. We doctors have many new ways to prevent deaths from hypertension, diabetes, and heart disease—but only if patients can get into our offices and afford their medications.” The study also shows that Americans aged 64 and below have a 40 percent higher risk of death than those who have coverage. The study is published in the online edition of the American Journal of Public Health, and released by Physicians for a National Health Program, which favors government-backed or “single-payer” health insurance. In 1993, a similar study showed those lacking insurance had a 25 percent higher risk of death. In 2002, the Institute of Medicine estimated that around 18,000 Americans a year died because they lacked coverage. Himmelstein says the sharp rise in risk is due to the swelling ranks of the uninsured. Around 46.3 million people in the United States lacked coverage in 2008, according to the US Census Bureau, an increase over the 45.7 million figure from 2007. Another factor is the dwindling resources where the uninsured can receive care. Public hospitals across the country are either denying uninsured people any care at all, or restricting the care they offer. Co-author Dr. Steffie Woolhandler says the findings show that without proper care, uninsured people are more likely to die from complications associated with preventable diseases such as diabetes and heart disease. The National Center for Policy Analysis, a conservative think tank, calls the study flawed; a spokesman for the Center says: “I think you can’t trust the results. Having said that, we ought to do something for the uninsured.” Woolhandler says the study followed similar protocols to those used by earlier government and private studies. “For any doctor… it’s completely a no-brainer that people who can’t get health care are going to die more from the kinds of things that health care is supposed to prevent,” she says. “Historically, every other developed nation has achieved universal health care through some form of nonprofit national health insurance. Our failure to do so means that all Americans pay higher health care costs, and 45,000 pay with their lives.” [Reuters, 9/17/2009; Harvard Science, 9/17/2009; CBS News, 9/17/2009]

Entity Tags: David Himmelstein, American Journal of Public Health, Cambridge Health Alliance, Steffie Woolhandler, National Center for Policy Analysis, Andrew Wilper, Harvard Medical School, Institute of Medicine, Physicians for a National Health Program

Timeline Tags: US Health Care

America’s Health Insurance Plans (AHIP), the health insurance industry’s largest lobbying organization, releases a study that claims the Democrats’ health care reform initiative would send health insurance costs sharply upward. The study is released the day before the Senate Finance Committee votes on its version of the reform proposal. [The Week, 10/12/2009] AHIP says it intends to circulate the study among lawmakers on Capitol Hill and use it as the basis for new advertisements attacking the health care reform proposals. [Washington Post, 10/12/2009] NBC Washington calls the study “a surgical strike against Democrats’ best hope for passing health reform,” specifically targeting the Finance Committee’s legislative efforts, which it calls the “Baucus bill” for committee chairman Max Baucus (D-MT). Until now, AHIP has operated largely behind the scenes to delay or terminate Congressional efforts to reform US health care; the study marks its most public and overt effort to influence the discussion. According to the study, which was carried out by accounting and services firm PriceWaterhouseCoopers (PWC) and paid for by AHIP, the average cost increase would be $1,700 per family per year by 2013. “[T]he cumulative increases in the cost of a typical family policy… will be approximately $20,700 more than it would be under the current system,” the report claims. “[T]he cost of coverage for both single and family policies in the individual, small group, large group, and self-funded insurance markets” will rise dramatically. AHIP official Karen Ignagni says private insurers would almost certainly pass cost increases to consumers for a number of reasons, including her claim that too many people with pre-existing conditions would sign up for insurance. “The report makes clear that several major provisions in the current legislative proposal will cause health care costs to increase far faster and higher than they would under the current system,” she writes. Baucus calls the study “seriously flawed.” A spokesman for the Finance Committee, Scott Mulhauser, says: “Now that health care reform grows ever closer, these health insurers are breaking out the same, tired playbook of deception to prevent millions of Americans from getting the affordable, accessible care they need. It’s a health insurance company hatchet job, plain and simple.” [America's Health Insurance Plans, 10/11/2009; NBC Washington, 10/12/2009; Washington Post, 10/12/2009] An analysis of the committee’s proposal by the Congressional Budget Office (CBO) shows that while some people’s premiums would go up, the subsidies to be provided by the government would make health insurance considerably less expensive for most consumers. According to the CBO, premiums under the government “exchange” option proposed in the Baucus bill would cost consumers $14,400 per year in 2016, while the average private insurer would charge their customers $21,300 by 2016. [Think Progress, 10/12/2009] Nancy-Anne DeParle, director of the White House Office of Health Reform, says PWC is not the firm to have carried out such a study. “Those guys specialize in tax shelters,” she says. “Clearly this is not their area of expertise.” [Washington Post, 10/12/2009] Almost immediately after the study’s release, critics begin attacking it, calling it deeply flawed and an “industry hit job” (see October 11-12, 2009). And PWC itself will back away from the study’s central claims (see October 12, 2009).

Entity Tags: Scott Mulhauser, Max Baucus, Karen Ignagni, Nancy-Anne DeParle, Senate Finance Committee, Congressional Budget Office, PriceWaterhouseCoopers, America’s Health Insurance Plans

Timeline Tags: US Health Care

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