This single copy is for your personal, non-commercial use only. For permission to reprint multiple copies or to order presentation-ready copies for distribution, contact CJHP at [email protected]
INTERNATIONAL PERSPECTIVES ON PHARMACY PRACTICE
United States Health Care System: A Pharmacy Perspective David M Scott
HEALTH CARE SYSTEMS AND FINANCING he health care delivery system in the United States is described by some as the best in the world. For those who are uninsured or underinsured, however, it is described as the worst in the world. In 1960, about 5% of the gross domestic product paid for health care services; in 2013, this proportion was estimated at 17.4%.1 Given the amount of money that is spent each year, the United States should be doing much better on health indicators such as infant mortality rates and life expectancy. In this article, I will begin by describing national health expenditures in the United States and then go on to describe the country’s health care system, including the public and private health care sectors and the pharmacy workforce, concluding with some thoughts on future directions. As shown in Table 1, more than US$2.9 trillion (US$9255 per person) is spent annually in the United States on health care (data for 2013, the most recent year for which national health expenditures are available).1 Within the framework of President Lyndon B Johnson’s “Great Society” era, the Medicare and Medicaid (public sector) programs were established in 1965 with the belief that health care is a “right” and not a “privilege”. The Patient Protection and Affordable Care Act (known as the ACA or ObamaCare) of 2010 was proclaimed by some as a landmark in health care reform that would transform the US health care delivery system into a program that provides “health care as a right.” Although the ACA does much to reduce major gaps in coverage for many Americans, it does not provide health care as a right. Passage of the ACA has created substantial public debate on what should be covered and who should pay. Since the early 1900s, the United States has periodically considered the need for a nationalized health care program, but each time, this type of reform has been defeated. Instead of a single-payer system, the United States has a mix of public sector and private sector programs. The public sector programs include Medicare, Medicaid, health care delivery to underserved populations (through the Indian Health Service and
Community Health Centers), and other government-sponsored health care (in prisons, public clinics, and hospitals). The private sector includes most community hospitals, professional services (physician, dental, and other), nursing facilities, retail outlets selling medical products (e.g., prescription drugs, durable medical equipment), and health insurance companies (nonprofit organizations [e.g., Blue Cross and Blue Shield], commercial insurance companies [e.g., Aetna, Cigna, Prudential], and managed care providers [e.g., UnitedHealthcare, Humana]). Until recently, public health activities such as health prevention activities have been poorly funded (between 1% and 3% of national health expenditures), but in 2010 they received a significant boost with passage of the ACA. Overall, the largest spending category is for hospital care (32.1%), followed by physician services (20.1%), and prescription drugs (9.3%) (Table 1).1 Table 2 summarizes national health expenditures by type of health insurance. About two-thirds (US$2.1 trillion) of all expenses are paid by private health insurance, and the remainder of insurance is from the public sector (about US$586 billion for Medicare and US$449 billion for Medicaid).2 The complexity of US health care financing results in a situation where costs are massive for both the private sector and the public sector, representing a major concern for policy-makers, employers, and consumers. It might be expected that these high costs would result in the best health outcomes in the world; however, such is not the case. Although health care reform is often discussed, needed change is hampered by powerful lobbies (e.g., health insurance companies, pharmaceutical firms, health care systems). The lobbying groups, combined with Americans’ fear of “big government” and “socialized medicine”, tend to limit meaningful movement toward a single-payer system or another type of health care reform. Health care costs are rising much faster than costs in other sectors of the economy, and a double-digit rate is expected to continue for some time. The US system prides itself on high-quality, high-technology health care, but such care is
C J H P – Vol. 69, No. 4 – July–August 2016
J C P H – Vol. 69, no 4 – juillet–août 2016
T
306
This single copy is for your personal, non-commercial use only. For permission to reprint multiple copies or to order presentation-ready copies for distribution, contact CJHP at [email protected]
Table 1. National Health Expenditures for 1960–2013, by Aggregate Amount and Percent Distribution* Type of Expenditure Total health expenditures Health consumption expenditures Personal health care Hospital care Professional services Physician and clinical services Other professional services Dental services Other health, residential, and personal care† Home health care‡ Nursing facilities and continuing care retirement communities‡§ Retail outlet sales of medical products Prescription drugs Durable medical equipment Other nondurable medical products Government administration¶ Net cost of health insurance** Government public health activities
1960
1970
27.4 24.8 23.4 9.0 8.0 5.6 0.4 2.0 0.5 0.1 0.8
74.9 67.1 63.1 27.2 19.8 14.3 0.7 4.7 1.3 0.2 4.0
5.0 2.7 0.7 1.6 0.1 1.0 0.4
10.6 5.5 1.7 3.3 0.7 1.9 1.4
1980 1990 2000 Amount in US$ Billions 255.8 724.3 1378.0 235.7 675.6 1290.0 217.2 616.8 1165.7 100.5 250.4 415.5 64.6 208.1 390.2 47.7 158.9 290.9 3.5 17.4 37.0 13.4 31.7 62.3 8.5 24.3 64.5 2.4 12.6 32.4 15.3 44.9 85.1 25.9 12.0 4.1 9.8 2.8 9.3 6.4
76.5 177.9 40.3 121.2 13.8 25.2 22.4 31.6 7.2 17.1 31.6 64.2 20.0 43.0 % Distribution 100.0 100.0 93.3 93.6 85.2 84.6 34.6 30.2 28.7 28.3 21.9 21.1 2.4 2.7 4.4 4.5 3.4 4.7 1.7 2.4 6.2 6.2
2010
2013
2604.1 2454.5 2196.2 814.9 694.2 519.0 69.8 105.4 128.5 71.2 143.0
2919.1 2754.5 2468.6 936.9 777.9 586.7 80.2 111.0 148.2 79.8 155.8
344.4 256.2 37.0 51.2 30.5 152.3 75.5
370.0 271.1 43.0 55.9 37.0 173.6 75.4
Total health expenditures 100.0 100.0 100.0 100.0 100.0 Health consumption expenditures 90.6 89.6 92.1 94.3 94.4 Personal health care 85.4 84.3 84.9 84.3 84.6 Hospital care 32.8 36.3 39.3 31.3 32.1 Professional services 29.3 26.4 25.3 26.7 26.6 Physician and clinical services 20.6 19.1 18.7 19.9 20.1 Other professional services 1.4 1.0 1.4 2.7 2.7 Dental services 7.3 6.3 5.2 4.0 3.8 Other health, residential, and personal care† 1.6 1.8 3.3 4.9 5.1 Home health care‡ 0.2 0.3 0.9 2.7 2.7 Nursing facilities and continuing care 3.0 5.4 6.0 5.5 5.3 retirement communities‡§ Retail outlet sales of medical products 18.4 14.1 10.1 10.6 12.9 13.2 12.7 Prescription drugs 9.8 7.3 4.7 5.6 8.8 9.8 9.3 Durable medical equipment 2.7 2.3 1.6 1.9 1.8 1.4 1.5 Other nondurable medical products 5.9 4.4 3.8 3.1 2.3 2.0 1.9 Government administration¶ 0.2 1.0 1.1 1.0 1.2 1.2 1.3 Net cost of health insurance** 3.7 2.5 3.6 4.4 4.7 5.8 5.9 Government public health activities 1.4 1.8 2.5 2.8 3.1 2.9 2.6 *Source: US Department of Health and Human Services, Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group.1 Modified from Table 2, national health expenditures by health insurance for 2013 (national health expenditures by aggregate, annual percentage change, and per capita amounts by type). †Includes expenditures for residential care and medical care in nontraditional settings (i.e., community centres, senior centres, schools, military). ‡Includes freestanding facilities. §Includes care in nursing facilities, continuing care retirement communities, government nursing facilities (state, federal, local). ¶Includes administrative costs (federal, state, local salaries) and insurance programs (Medicare, Medicaid, Children's Health Insurance Program, Defense, Veterans Affairs, Indian Health Service, workers' compensation, maternal and child health, etc.). **Net cost of health insurance is the difference between premiums and benefits paid for private health insurance.
PUBLIC HEALTH CARE SECTOR
expensive, and very few of the high-tech interventions have been clearly shown to be of benefit. Furthermore, individuals in the mainstream of US society do not want to pay for other people’s health care. With recent congressional attempts to reduce funding for public sector programs (specifically the Medicare and Medicaid programs), the gap between “right” and “privilege” will undoubtedly become wider.
Medicare beneficiaries are covered by the Social Security Amendment, passed in 1965 and then amended in 1972, which extended health care services to all persons 65 years of age or older. Medicare Part A covers inpatient hospital care,
C J H P – Vol. 69, No. 4 – July–August 2016
J C P H – Vol. 69, no 4 – juillet–août 2016
Medicare
307
This single copy is for your personal, non-commercial use only. For permission to reprint multiple copies or to order presentation-ready copies for distribution, contact CJHP at [email protected]
Table 2. Type and Source of National Health Expenditures for 2013* Type of Expenditure
Total
Health Insurance Out of Health Private Medicare Medicaid Pocket Insurance Health Insurance
Other Health Insur. Progr.†
Other ThirdParty Payers‡
Public Health Activity
Amount in US$ Billions Total health expenditures for 2013 2919.1 339.4 2102.9 961.7 585.7 449.4 106.1 236.8 75.4 Health consumption expenditures 2754.5 339.4 2102.9 961.7 585.7 449.4 106.1 236.8 75.4 2468.6 339.4 1907.9 846.0 550.5 410.8 100.6 221.2 – Personal health care Hospital care 936.9 32.7 808.7 348.0 242.7 163.5 54.4 95.6 – Professional services 777.9 123.1 588.1 349.5 148.8 62.6 27.1 66.8 – Physician and clinical services 586.7 55.3 472.2 267.6 130.3 50.1 24.1 59.2 – Other professional services 80.2 20.6 52.6 29.3 18.0 5.0 0.3 7.0 – Dental services 111.0 47.1 63.3 52.6 0.5 7.5 2.7 0.5 – Other health, residential, and personal care§ 148.2 7.7 98.7 6.6 5.1 82.6 4.5 41.8 – Home health care¶ 79.8 6.4 70.9 6.3 34.4 29.1 1.1 2.4 – Nursing facilities and continuing care 155.8 45.8 98.5 12.6 34.6 46.9 4.5 11.5 – retirement communities¶** Retail outlet sales of medical products 370.0 123.8 243.0 122.9 85.0 26.1 9.0 3.1 – Prescription drugs 271.1 45.9 222.7 117.9 74.6 21.2 8.9 2.5 – Durable medical equipment 43.0 24.7 17.7 5.0 7.7 4.9 0.1 0.6 – Other nondurable medical products 55.9 53.2 2.7 – 2.7 – –
INTERNATIONAL PERSPECTIVES ON PHARMACY PRACTICE
United States Health Care System: A Pharmacy Perspective David M Scott
HEALTH CARE SYSTEMS AND FINANCING he health care delivery system in the United States is described by some as the best in the world. For those who are uninsured or underinsured, however, it is described as the worst in the world. In 1960, about 5% of the gross domestic product paid for health care services; in 2013, this proportion was estimated at 17.4%.1 Given the amount of money that is spent each year, the United States should be doing much better on health indicators such as infant mortality rates and life expectancy. In this article, I will begin by describing national health expenditures in the United States and then go on to describe the country’s health care system, including the public and private health care sectors and the pharmacy workforce, concluding with some thoughts on future directions. As shown in Table 1, more than US$2.9 trillion (US$9255 per person) is spent annually in the United States on health care (data for 2013, the most recent year for which national health expenditures are available).1 Within the framework of President Lyndon B Johnson’s “Great Society” era, the Medicare and Medicaid (public sector) programs were established in 1965 with the belief that health care is a “right” and not a “privilege”. The Patient Protection and Affordable Care Act (known as the ACA or ObamaCare) of 2010 was proclaimed by some as a landmark in health care reform that would transform the US health care delivery system into a program that provides “health care as a right.” Although the ACA does much to reduce major gaps in coverage for many Americans, it does not provide health care as a right. Passage of the ACA has created substantial public debate on what should be covered and who should pay. Since the early 1900s, the United States has periodically considered the need for a nationalized health care program, but each time, this type of reform has been defeated. Instead of a single-payer system, the United States has a mix of public sector and private sector programs. The public sector programs include Medicare, Medicaid, health care delivery to underserved populations (through the Indian Health Service and
Community Health Centers), and other government-sponsored health care (in prisons, public clinics, and hospitals). The private sector includes most community hospitals, professional services (physician, dental, and other), nursing facilities, retail outlets selling medical products (e.g., prescription drugs, durable medical equipment), and health insurance companies (nonprofit organizations [e.g., Blue Cross and Blue Shield], commercial insurance companies [e.g., Aetna, Cigna, Prudential], and managed care providers [e.g., UnitedHealthcare, Humana]). Until recently, public health activities such as health prevention activities have been poorly funded (between 1% and 3% of national health expenditures), but in 2010 they received a significant boost with passage of the ACA. Overall, the largest spending category is for hospital care (32.1%), followed by physician services (20.1%), and prescription drugs (9.3%) (Table 1).1 Table 2 summarizes national health expenditures by type of health insurance. About two-thirds (US$2.1 trillion) of all expenses are paid by private health insurance, and the remainder of insurance is from the public sector (about US$586 billion for Medicare and US$449 billion for Medicaid).2 The complexity of US health care financing results in a situation where costs are massive for both the private sector and the public sector, representing a major concern for policy-makers, employers, and consumers. It might be expected that these high costs would result in the best health outcomes in the world; however, such is not the case. Although health care reform is often discussed, needed change is hampered by powerful lobbies (e.g., health insurance companies, pharmaceutical firms, health care systems). The lobbying groups, combined with Americans’ fear of “big government” and “socialized medicine”, tend to limit meaningful movement toward a single-payer system or another type of health care reform. Health care costs are rising much faster than costs in other sectors of the economy, and a double-digit rate is expected to continue for some time. The US system prides itself on high-quality, high-technology health care, but such care is
C J H P – Vol. 69, No. 4 – July–August 2016
J C P H – Vol. 69, no 4 – juillet–août 2016
T
306
This single copy is for your personal, non-commercial use only. For permission to reprint multiple copies or to order presentation-ready copies for distribution, contact CJHP at [email protected]
Table 1. National Health Expenditures for 1960–2013, by Aggregate Amount and Percent Distribution* Type of Expenditure Total health expenditures Health consumption expenditures Personal health care Hospital care Professional services Physician and clinical services Other professional services Dental services Other health, residential, and personal care† Home health care‡ Nursing facilities and continuing care retirement communities‡§ Retail outlet sales of medical products Prescription drugs Durable medical equipment Other nondurable medical products Government administration¶ Net cost of health insurance** Government public health activities
1960
1970
27.4 24.8 23.4 9.0 8.0 5.6 0.4 2.0 0.5 0.1 0.8
74.9 67.1 63.1 27.2 19.8 14.3 0.7 4.7 1.3 0.2 4.0
5.0 2.7 0.7 1.6 0.1 1.0 0.4
10.6 5.5 1.7 3.3 0.7 1.9 1.4
1980 1990 2000 Amount in US$ Billions 255.8 724.3 1378.0 235.7 675.6 1290.0 217.2 616.8 1165.7 100.5 250.4 415.5 64.6 208.1 390.2 47.7 158.9 290.9 3.5 17.4 37.0 13.4 31.7 62.3 8.5 24.3 64.5 2.4 12.6 32.4 15.3 44.9 85.1 25.9 12.0 4.1 9.8 2.8 9.3 6.4
76.5 177.9 40.3 121.2 13.8 25.2 22.4 31.6 7.2 17.1 31.6 64.2 20.0 43.0 % Distribution 100.0 100.0 93.3 93.6 85.2 84.6 34.6 30.2 28.7 28.3 21.9 21.1 2.4 2.7 4.4 4.5 3.4 4.7 1.7 2.4 6.2 6.2
2010
2013
2604.1 2454.5 2196.2 814.9 694.2 519.0 69.8 105.4 128.5 71.2 143.0
2919.1 2754.5 2468.6 936.9 777.9 586.7 80.2 111.0 148.2 79.8 155.8
344.4 256.2 37.0 51.2 30.5 152.3 75.5
370.0 271.1 43.0 55.9 37.0 173.6 75.4
Total health expenditures 100.0 100.0 100.0 100.0 100.0 Health consumption expenditures 90.6 89.6 92.1 94.3 94.4 Personal health care 85.4 84.3 84.9 84.3 84.6 Hospital care 32.8 36.3 39.3 31.3 32.1 Professional services 29.3 26.4 25.3 26.7 26.6 Physician and clinical services 20.6 19.1 18.7 19.9 20.1 Other professional services 1.4 1.0 1.4 2.7 2.7 Dental services 7.3 6.3 5.2 4.0 3.8 Other health, residential, and personal care† 1.6 1.8 3.3 4.9 5.1 Home health care‡ 0.2 0.3 0.9 2.7 2.7 Nursing facilities and continuing care 3.0 5.4 6.0 5.5 5.3 retirement communities‡§ Retail outlet sales of medical products 18.4 14.1 10.1 10.6 12.9 13.2 12.7 Prescription drugs 9.8 7.3 4.7 5.6 8.8 9.8 9.3 Durable medical equipment 2.7 2.3 1.6 1.9 1.8 1.4 1.5 Other nondurable medical products 5.9 4.4 3.8 3.1 2.3 2.0 1.9 Government administration¶ 0.2 1.0 1.1 1.0 1.2 1.2 1.3 Net cost of health insurance** 3.7 2.5 3.6 4.4 4.7 5.8 5.9 Government public health activities 1.4 1.8 2.5 2.8 3.1 2.9 2.6 *Source: US Department of Health and Human Services, Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group.1 Modified from Table 2, national health expenditures by health insurance for 2013 (national health expenditures by aggregate, annual percentage change, and per capita amounts by type). †Includes expenditures for residential care and medical care in nontraditional settings (i.e., community centres, senior centres, schools, military). ‡Includes freestanding facilities. §Includes care in nursing facilities, continuing care retirement communities, government nursing facilities (state, federal, local). ¶Includes administrative costs (federal, state, local salaries) and insurance programs (Medicare, Medicaid, Children's Health Insurance Program, Defense, Veterans Affairs, Indian Health Service, workers' compensation, maternal and child health, etc.). **Net cost of health insurance is the difference between premiums and benefits paid for private health insurance.
PUBLIC HEALTH CARE SECTOR
expensive, and very few of the high-tech interventions have been clearly shown to be of benefit. Furthermore, individuals in the mainstream of US society do not want to pay for other people’s health care. With recent congressional attempts to reduce funding for public sector programs (specifically the Medicare and Medicaid programs), the gap between “right” and “privilege” will undoubtedly become wider.
Medicare beneficiaries are covered by the Social Security Amendment, passed in 1965 and then amended in 1972, which extended health care services to all persons 65 years of age or older. Medicare Part A covers inpatient hospital care,
C J H P – Vol. 69, No. 4 – July–August 2016
J C P H – Vol. 69, no 4 – juillet–août 2016
Medicare
307
This single copy is for your personal, non-commercial use only. For permission to reprint multiple copies or to order presentation-ready copies for distribution, contact CJHP at [email protected]
Table 2. Type and Source of National Health Expenditures for 2013* Type of Expenditure
Total
Health Insurance Out of Health Private Medicare Medicaid Pocket Insurance Health Insurance
Other Health Insur. Progr.†
Other ThirdParty Payers‡
Public Health Activity
Amount in US$ Billions Total health expenditures for 2013 2919.1 339.4 2102.9 961.7 585.7 449.4 106.1 236.8 75.4 Health consumption expenditures 2754.5 339.4 2102.9 961.7 585.7 449.4 106.1 236.8 75.4 2468.6 339.4 1907.9 846.0 550.5 410.8 100.6 221.2 – Personal health care Hospital care 936.9 32.7 808.7 348.0 242.7 163.5 54.4 95.6 – Professional services 777.9 123.1 588.1 349.5 148.8 62.6 27.1 66.8 – Physician and clinical services 586.7 55.3 472.2 267.6 130.3 50.1 24.1 59.2 – Other professional services 80.2 20.6 52.6 29.3 18.0 5.0 0.3 7.0 – Dental services 111.0 47.1 63.3 52.6 0.5 7.5 2.7 0.5 – Other health, residential, and personal care§ 148.2 7.7 98.7 6.6 5.1 82.6 4.5 41.8 – Home health care¶ 79.8 6.4 70.9 6.3 34.4 29.1 1.1 2.4 – Nursing facilities and continuing care 155.8 45.8 98.5 12.6 34.6 46.9 4.5 11.5 – retirement communities¶** Retail outlet sales of medical products 370.0 123.8 243.0 122.9 85.0 26.1 9.0 3.1 – Prescription drugs 271.1 45.9 222.7 117.9 74.6 21.2 8.9 2.5 – Durable medical equipment 43.0 24.7 17.7 5.0 7.7 4.9 0.1 0.6 – Other nondurable medical products 55.9 53.2 2.7 – 2.7 – –
