This presentation gives an outline of some of the key issues in US healthcare today in a way that the majority of the population can understand.

1. Critical Issues in
Healthcare
A QuickGuide to Pertinent
Healthcare Topics in the United States

2. What is public
health?
• Mission: fulfilling society’s interest in assuring conditions in which
people can be healthy; promote physical and mental health and
prevent disease, injury and disability
• Core functions: Assessment, Policy Development, Assurance
• Vision: Healthy people in healthy communities
• Goals: Prevent epidemics & spread of disease, protect against
environmental hazards, prevent injuries, promote & encourage
healthy behaviors, respond to disasters & assist communities in
recovery, assure the quality and accessibility of health services
• Unique aspects: interdisciplinary approach & methods, emphasis on
preventive strategies, linkage with government and political decision
making, dynamic adaptation to new problems

3. How is health
measured?
• WHO defines health as a state of complete physical, mental and social
wellbeing and not merely the absence of disease or infirmity
• Health is measured through mortality and morbidity
• Crude mortality rate= number of deaths in an region divided by total population
of the same region (usually mid-year population) multiplied by 100,000
• Age-adjusted mortality rate = death rate that controls for effects of age
distributions in populations (by cause)
• Life expectancy = # of years between age and the average age of death
• Years of Potential Life Lost (YPLL) = Estimate of average years a person
would have lived if they hadn’t died prematurely
• Disability-Adjusted Life Year (DALY) = Sum of life years lost due to premature
mortality and the years lost due to disability for incident cases
• Quality Adjusted Life Years (QALY) - Change in utility value induced by
treatment multiplied by duration of treatment effect (places weight on time in
different health states) can be used to determine costs/QALY
• Prevalence = # or rate of cases at a specific time
• Incidence = # or rate of NEW cases occurring during a specific period

4. Determinants of
Health
Evans & Stoddard Field Model of Health and Well-Being

5. Public Health
strategies
• Primary: Seek to prevent occurrence of disease or
injury by reducing risk factors (i.e. laws for seatbelts or
preventing harmful exposures
• Secondary: Preventative screening that seeks to control
or reverse disease processes before signs and and
symptoms develop (i.e. mammograms)
• Tertiary: Prevention strategies that restore individuals
to optimal functioning after a disease or injury is
established.

6. Health Services/
Clinical strategies
• Primary: Clinical preventative services & basic care;
i.e. vaccines
• Secondary: Specialized attention once disease is
present
• Tertiary: Subspecialty care that is designed to cure or
mitigate disease states (i.e. CABG for patients with
CHF)

7. misplaced priorities in
healthcare
• Woolf, et al
• Put resources toward interventions that maximize
health benefits to lessen disease burden on the public
and lower costs- more effective = more attention
• Devote resources to interventions in proportion to their
ability to improve outcomes, OR pay extra for
healthcare- in lives and dollars

8. Woolf’s solutions to
misplaced priorites
• Choosing Effective Services: Most effective services don’t always
get priority (ex: breast cancer screenings (net cost) vs. smoking
cessation (net savings))
• Delivering Care: Focus on restoring quality as much or more
than biomedical advances (big investments on medical advances,
but most patients can’t access them)
• Preventing Disease: Spend heavily on treatment but little on
prevention (ex: chronic diseases- risk reduction and prevention
rather than late-stage disease costs)
• Foster Social Change: Alleviate social distress (determinants of
health) (ex: put resources toward education, health care access,
etc.)

9. How is health care
organized?
• Primary Care – Common health problems and
preventive measures (sore throat, diabetes,
hypertension, vaccines, mammograms, etc)
• Secondary Care – Problems that require more
specialized clinical expertise (usually hospital care)
• Tertiary Care – Management of rare and complex
disorders/cases

10. Regionalized vs. Dispersed
model of care
• Regionalized
• Primary Care is the main focus, most physicians are GPs
• Secondary Care – Specialties, hospital-based clinics
• Tertiary Care – Subspecialties located at few tertiary care medical centers
• Patients defer to GP/PCP FIRST and then see specialists
• Dispersed (US)
• Less structure
• Can go directly to a specialist- not everyone has or uses a PCP/GP and there
is more freedom of choice
• PCPs provide inpatient and outpatient care
• Competing hospitals because they are not geographically separated as in a
regionalized model
• Bulk of hospitals provide secondary and tertiary care

11. Structure of healthcare
services marketplace

12. Challenges in
healthcare
Major Trends
• Pressure over financing of health care
• Impact of aging population
• Rising activism among consumers and providers
• Advances in technology
• Unequal distributions of health resources
• Recognition of non-medical determinants of health
IOM: Safe, Timely, Efficient, Effective, Patient Centered,
Equitable (STEEPE)

13. Berwick’s triple aim
• The US healthcare system is
broken (assessed by our health-
expenditure vs. rankings in life
expectancy, insured
population, and infant
mortality”
• The triple aim is: Increase
Access, Reduce Cost, and
Improve Quality

14. Risk & Insurance
• Risk is the chance of something bad happening
• Patient Perspective: getting sick and not being able to to
pay a provider
• Provider Perspective: providing services to someone who
can’t pay you
• Insurance is a contractual agreement used to distribute
risk over a large base

15. Risk & insurance
• Moral Hazard – “an insulated third party may behave
differently than it would if it were fully exposed to
risk” => Once someone has insurance they may act
more recklessly because they do not feel the risk
• Adverse Selection – The tendency of people with poor
health to apply for and continue health coverage more
than people with good health

16. Risk & insurance
• Community Rating – Distributes risk “within and
across groups.” => Everyone pays the same rate
• Experience Rating – Distributes risk “within” groups.
=> The amount someone pays is based on their level of
risk. Bankers would pay less than coal miners =>
draws healthy people away from community ratings
and is less redistributive

17. How insurance
works
• Insurance purchasers pay premiums to insurance companies for
health insurance plans
• Premiums are deposited into financial reserves which pay for
covered services (for subscribers), and investments/marketing/
administrative costs (for insurance companies)
• Medical Loss Ratio = % of premiums spent on medical services
• States determine how to enforce laws on MLRs (range is 50-80%)
• Health Reform requires plans in individual/small group markets to
maintain a MLR of 80%
• Factors affecting the # of uninsured: Costs of health insurance
can be prohibitive, transition in the US economy from industry
to service provision, unstable economic conditions, changes in
public policy

18. Types of Health
coverage
• Out of Pocket: Individual pays provider through
private funds
• Individual Private Insurance: Individual pays
premium to health plan, plan reimburses care provider
• Employer-Sponsored Insurance: Employee and
employer pay premiums to health plan, plan
reimburses care provider

19. Types of health
coverage
• Managed Care: Manages healthcare delivery to control
costs, typically relying on PCP as gatekeeper
• HMO: Most restrictive, patients must receive care from
specific providers, pain on “per-member, per month” fee
• PPO: Loose-knit, insurers contract with doctors and
hospitals to care for patients at a discount with medical/
utilization review (flexible in choice of provider but
sometimes at a higher cost)
• Alternative Insurance: Indemnity (deductible & copay),
HMO, PPO

20. Government
Insurance
• Medicare: Federal, 65 y/o+, disability, dialysis or
kidney transplant
• Medicaid: Federally aided state-operated, for indigent/
low-income
• Reimbursement Methods: Per service, episode of
illness, per diem, capitation, global

21. Unwarranted variation
in healthcare
• Variation not explained on the basis of illness, patient
preference, or evidence-based medicine
• Estimated 30% of current spending on healthcare is wasted
• Types of Unwarranted Variation:
• Effective Care -> Medically necessary interventions on the basis of
clinical outcomes evidence for which benefits outweigh the risks
• Preference-Sensitive Care -> Variation due to patient choice or
preference, choice of treatment involves tradeoffs
• Supply-Sensitive Care -> Services where supply of resource has
major influence on utilization rates, largely due to differences in
local capacity

22. Accountable care
organizations
• Network of doctors, hospitals, and other healthcare
organizations that share responsibility for providing care
• Major Principles
• Local Accountability: Providers within a community that can
effectively provide/manage full continuum of patient care
• Shared Savings: ACOs that meet quality standards while slowing
spending growth will receive a portion of shared savings
• Performance Measurement: Must collect a core set of performance
measures that include clinical processes, outcomes, and patient
experiences -> measurements are essential to ensure appropriate
care is being delivered

23. Accountable care
organizations
Essential Characteristics
• Provide continuum of
care in integrated system
• Sufficient size to support
performance measure
• Capable of planning
budgets
• Provider inclusiveness
• Ability to manage risk
Challenges
• Critical mass of provider/payer
participation
• Adequate financing
• Clinical support infrastructure
and technical issues
• Changing provider culture and
patient behavior
• Potential to increase provider
concentration and market power