[MUSIC] Hello, and welcome back. Now that we have discussed the fragmented US healthcare system, you're probably wondering about some more specific negative outcomes of this fragmentation and how we can fix it. In this lesson I will focus on high cost and waste, and how the US healthcare system can operate more like a real system with result of saving resources. After this lesson you will be able to articulate specific research examples that document high cost and possible waste in the US healthcare system. You will be able to identify linkages between fragmentation and nonsystem like properties that are likely related to these wasteful outcomes. Okay, let's get started with this first chart. Data from the Kaiser Family Family Foundation shows us graphically that relative to the size of it's economies, the US spends a disproportionate amount on healthcare. This plot shows GDP per capita on the x axis and health expenditures per capita on the y axis. Each dot is a country with an advanced economy. The United States spends much more than other countries with strong economies and healthcare. The next chart further illustrates this point with the title, on average other wealthy countries spend about half as much per person on health care than the US spends. Another nice plot is titled, since 1980 the gap has widened between US health expenditures and that of other countries. This shows that the gap is widening. Disaggregating the data, this chart shows that while the US has similar public spending, its private sector spending is triple that of comparable countries. If you look at the US bar again on the far right of the graph, the blue part of the bar shows private spending. The green shows public. And the United States has much more private spending for healthcare than any other country. In fact, we spend more for private elements of healthcare than most countries spend for the public contribution. So these two differences are important to understand in what distinguishes the US from other countries. The dramatic percent of our gross national product deoted to healthcare and the high degree of private non-governmental spending. Although the US spends far more than other countries on healthcare, there is considerable variation within the US with respect to healthcare expenditures. For more than 20 years the Dartmouth Atlas of Health Care has shown variation associated with the cost and quality of healthcare across geographic areas in the United States. Some areas are much more costly than other areas, and there's little evidence that high cost areas provide better quality of care. Indeed, high cost regions seem to provide lower quality care. The reasons for this variation are complex, but evidence is growing to support the hypothesis that specialist-driven medicine leads to fragmented and uncoordinated care. Moreover, many medical conditions and treatments are not guide by scientific evidence and practicing physicians often do not adhere to guidelines when they're available. Continuing on with the hypothesis that the US does not get good value for its healthcare money. I encourage you to review some of the reports by the Commonwealth Fund, considering US healthcare system from a global perspective. As just mentioned, the US spends a lot more money than other countries yet many of its citizens might not get better care or improved health. I will let you analyze the charts for yourselves. Please briefly consider some of the following graphs and their titles. As you look at the data and read the report try to come up with theories about this information. I do acknowledge that I have seen different people with varying backgrounds interpret these data differently. Despite spending more on healthcare, Americans have fewer hospital and physician visits. Americans appear to be greater consumers of medical technology including diagnostic imaging and pharmaceuticals. Healthcare prices are higher in the US compared with other countries. The US invest the smaller share of its economy on social services. Despite its high spending on healthcare, the US has poor population health. The US performs well on cancer care but has high rates of mortality from heart disease and amputations as a result of diabetes. This chart plots life expectancy against health expenditures from 1970 to 2014. With health spending per capita, the US is off the chart, but for life expectancy, we are much lower than other economically advanced nations. I would argue that life expectancy is a key metric associated with quality outcomes of clinical care. If you compare horizontally the USA data point versus all the countries on top or north of it, we really don't have a good quality metric around life expectancy but our cost of care is off the chart. The Kaiser Family Foundation helps us understand cumulative increases in health insurance premiums. The line chart shows cumulative increases in health insurance premiums based on both health insurance premiums in orange and the workers contributions to premiums in blue. These have gone up dramatically since 1999. And on the bottom two lines, you see the workers earnings and the overall inflation have remained relatively flat. If you earn money in this country, if you're a worker, you've really had a lot about bad news since about 1999 where your salary is really going up a small amount, but the money that you and that your employer has to pay for health insurance has gone up dramatically. And this gap is one of the huge economic problems in the US. It's a problem for people trying to pay their bills and pay the rent every month. It's not only a problem but it's getting worse every year, which is even more concerning. We know the US spends a lot of money on healthcare, and some evidence suggests that Americans may not be getting the best value for this money. Although people from different political and professional backgrounds debate about the causes, one area that many people can agree on is that there is massive waste in American health care. In 2009 it was estimated that $765 billion was wasted annually. Unnecessary services was 210 billion. As as example, you were hit on the head and your doctor doesn't really think you need a CT, but because he's afraid you might sue him for malpractice, he gets one anyway. And somebody has to pay for that head CT. It might be several thousand dollars and you're going to get a high dose of radiation simply because they're afraid of malpractice. The report estimates a 130 billion for inefficiently delivered services. This might be where you are in the hospital, your physician gives you the wrong medication, you have a nasty reaction to it and you get sick and you may have to spend four extra days in the hospital recovering from that error. Excess administrative care is estimated to be 190 billion, and the prices that are too high are about 105 billion. This last example is when a health provider or hospital charges too much for things such as a 100 dollar aspirin. The breakdown aslo includs missed prevention opportunites and fraud. There is a lot of aspects to waste, but it's frustrating for many individuals to learn how our system seems to waste resources. To make things worse, we know that medical bills have been one of the biggest causes of US bankruptcies. Bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year and is the most common reason for bankruptcy in the United States. About 56 million adults, 20% of the poplulation between the ages of 19 and 64, will struggle with their healthcare related bills. So maybe they wont go bankrupt, but they are going to struggle to pay their portion of either their health insurance, their copays, or other things that they have to pay. And it's even worse for people without insurance because the bills come directly to them. If you're seriously ill, let's say you're in a car accident and you don't have health insurance, it's a really life changing event. Not only for the illness or injury, but also for what it can do to the person for the rest of their lives due to the cost. It's striking that the death rate at any given year for someone without health insurance is 25% higher than for someone with insurance. And so literally, one of the predictors of death in the US is whether you have insurance or not. Given all the concern with high cost and waste, what can be done? First, let me remind you that most American clinical care is paid or reimbursed based on the volume of services, not the quality of care provided. A physician or hospital can make more by providing more services. And sometimes these services are not needed or are not fairly priced. Yet, if we have poor clinical outcomes in this country, it doesn't mean that we have bad doctors, nurses, and pharmacists, it may have more to do with the social system that these people are involved with. We must move away from a supply driven healthcare system and move towards a patient-centered system that is organized around what patients need. Luckily, the US government is shifting the focus from the volume and profitability of services provided to the patients outcomes achieved. The hospital value-based purchasing program is based on three dimensions. One is measuring and reporting comparative performance. The other is paying based on performance. And then the third is designing health benefits and incentives to encourage individuals to better manage their own health. This is an experiment in transforming and evolving healthcare in the US to be of higher quality and lower cost. Okay great, hopefully you now have a better understanding of opportunities associated with the cost of healthcare. Next we will move to a discussion about what is known from science and what is actually put into practice.
