National Vital Statistics System
The National Vital Statistics System is the oldest survey and best example of public health intergovernmental data sharing. Vital statistics registries around the country pro- vide uniform data to the national system on the following categories: births, marriages, divorces, deaths, and fetal deaths. Specific data are available through the following systems:
• Birth data
• Mortality data
• Fetal death data
• Linked birth/infant deaths
• National Mortality Followback Survey
• National Maternal and Infant Health Survey National Survey of Family Growth
The National Survey of Family Growth (NSFG) assembles information on marriage and divorce, pregnancy, use of contraception, family life, infertility, and women’s and men’s health. The data is used to plan health programs and services.
National Immunization Survey
The National Immunization Survey is a list-assisted random-digit-dialing survey employed to gather informa- tion on vaccination coverage rates for children between the ages of 19 and 35 months. A mailed survey follows the tele- phone call, and this produces timely estimates of the rates of recommended vaccine doses.
The Longitudinal Studies of Aging
The Longitudinal Studies of Aging (LSOAs) are done as a collaboration between the National Center for Health Sta- tistics (NCHS) and the National Institute on Aging (NIA).
These studies measure changes in functional status, living arrangements, health, and the utilization of health services for persons age 70 and above. They involves two cohorts of Americans moving into old age and on to the oldest ages.
State and Local Area Integrated Telephone Survey The State and Local Area Integrated Telephone Survey (SLAITS) collects in-depth data needed at state and local levels to meet the needs of program planners, policy makers, and government agencies. Some of the topics researched include access to care, utilization of services, health insurance coverage, perceived health status, and measurement of child well-being. The same random- digit-dialing method employed by NIS is utilized on a regional basis.
From National Center for Health Statistics. Surveys and Data Collection Systems. Retrieved July 7, 2008 from http://www.cdc.gov/nchs/express.
htm.
“aggregate consumption, production, investment and inter- national trade, as well as inflation and unemployment”
(Aday, 2005, p. 186). The focus is on the larger view of economic stability and growth. Macroeconomic theory is useful for providing a global or aggregate perspective of the variables affecting the total economic picture (Aday, 2005).
Macroeconomic theory has been useful in providing a large-scale perspective on health care financing, ultimately resulting in various proposals for national health plans, health care rationing, competition, and managed care. For instance, when the United States compares overall health spending with countries across the world, it becomes clear
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that we spend a large percentage of our GDP on health care—more than any other country, and we often have worse indicators of health (e.g., life expectancy, infant mor- tality) (University of Maine, 2001). See Figure 6.4 for a comparison of health care expenditure per capita among 10 industrialized countries.
The economics of health care encompasses both micro- economics and macroeconomics, and an intricate and complex set of interacting variables. Health care economics is con- cerned with supply and demand: Are available resources sufficient to meet the demand for use by consumers? Are the resources expended achieving the desired outcomes? When health care resources are scarce or insufficient to address all needs (for example for programs and services for at-risk populations), how should they be applied?
Supply and Demand in Health Care Economics When you purchase textbooks, for instance, you as the pur- chaser are able to determine the best value for your money (generally based on price, availability, and condition of the book). As a health care consumer, however, can you truly be an efficient and effective purchaser of health care goods and services? How does a patient determine what services are needed, where to buy them, and how to evaluate the quality of the goods and services—much less how to coor- dinate all necessary services? Does health care truly repre- sent a competitive free market, then? For instance, when purchasing a new LCD flat-screen television, consumers often rely on word-of-mouth from friends and relatives, advice from experts, past experiences with brands, and 142
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UNIT 2 Public Health Essentials for Community Health NursingFrom the Case Files II
20th and 21st Century Hospital Care
At the turn of the 20th century, riots occurred in Milwaukee when a child suspected of having smallpox was to be taken to a local hospital by ambulance. One of the child’s siblings had already died of smallpox in the same hospital, and his family did not want the second child to risk death at the same institution. A crowd of 3,000 or more people, carrying clubs, kept the ambulance attendants at bay.
Why was there such concern about hospitalizing a sick child? In the 1890s, when this occurred, hos- pitals were rife with infection, and doctors could do little to halt its spread (Cutler, 2004).
In the early 21st century, are hospitals any safer? The Centers for Disease Control and Preven- tion (CDC) reports that over 1.7 million health care-related infections occur annually, resulting in almost 100,000 deaths (2007). Can you be assured of good care when you or your loved one enters a hospital emergency room (ER)? In the case of a busy trauma center located in South Los Angeles, you might have reason for concern. Martin Luther King/Drew Medical Center was created after the 1965 Watts Riot, and has a history of providing stellar neonatal care—95% of babies under 2 pounds survive—and excellent training for trauma surgeons—one-fourth of U.S. military surgeons have trained there (The Associated Press, 2004). But, numerous incidents of patients in the ER going untreated and unnoticed have been reported. In 2004, a 20-year-old art student entered the ER writhing in pain and vomiting. He was left alone in the crowded ER for 18 hours, whiled his heart rate climbed and his blood pressure fell. He was later found dead, having dropped to the floor cov- ered in his own vomit—he died of gangrene of the bowel (The Associated Press, 2004). Another patient died in the ER after waiting 22 hours to be treated. The patient had a gangrenous leg, a pneu- mothorax, and was in kidney failure. In 2003, two patients died while on cardiac monitors, and the hospital blamed the lapse in care on the nursing shortage. Inpatient care was often no better, though, as a 46-year-old man admitted for meningitis was given chemotherapy medication for 4 days. Even after the pharmacy error was noted, nurses continued to give medications in error (at least 40 inci- dents). The patient subsequently lost vision in one eye. In 2007, a 43-year-old woman was admitted to the now-named Martin Luther King/Harbor Medical Center three times in 3 days complaining of intense stomach pain. Her diagnosis was listed as gallstones and she was prescribed pain medication and released each time. After the third discharge, she remained on the hospital grounds and was even- tually taken to the ER by police, who were notified of a woman screaming for help. According to the police officers, the ER triage nurse refused to help the woman, and she lay on the floor in severe pain for almost an hour. She “spit up a dark-colored substance, which her boyfriend said was blood” and security cameras showed a janitor mopping around her as she lay in agony on the floor (Ornstein, 2007, p. 11). By fall 2007, after the federal government withdrew $200 million in annual funding, the hospital closed its doors (Ornstein, Weber, & Leonard, 2007).
What is different about these two scenarios is the reaction of the public. In the last century, it was an angry mob trying to keep a child out of harm’s way by not allowing ambulance personnel to take him to the hospital. In this century, it was the federal and local government who moved to close what was deemed an unsafe facility. Some in the community are happy to see the closure, especially those who lost loved ones to what they feel was substandard care. Others are sad to see a much- needed neighborhood medical center close—its ER saw almost 50,000 patients in 2006—and won- der where they can go now for care (Ornstein, Weber, & Leonard, 2007).
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CHAPTER 6 Structure and Economics of Community Health Services
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143From the Case Files III
Care for Cardiovascular Patients
In 1950, the role that hypertension and high cholesterol levels played in heart disease was unclear. Only when someone presented with chest pain were they then monitored for blood pressure and cholesterol control. Doctors frequently recommended that their patients cut down on salt con- sumption and lose weight. They were also counseled to “slow down” and “rest around midday,” as there were essentially no effective medications to treat these two problems (Cutler, 2004, p. 50). It was not until the 1960s that the Framingham Heart Study confirmed that hypertension leads to car- diovascular disease, and oral antidiuretic medications were used to control it. In the 1950s and 1960s, epidemiologist Ancel Keys’ research revealed that high cholesterol intake was associated with cardiovascular disease. In the 1950s, cardiac patients were treated with absolute bed rest for a minimum of 6 weeks, morphine for pain, and oxygen. That was the state-of-the-art regimen pre- scribed for President Eisenhower after his heart attack in 1955 (Cutler, 2004).
Today, bed rest is known to promote blood clots, and is ineffective in treating myocardial infarc- tions (MIs)—or heart attacks. Quick, intensive therapy is the standard. Aspirin, heparin, beta (b)- blockers, and thrombolytic medications help to prevent and reduce blood clots, reduce the workload on the heart, and dissolve tiny clots in cardiac vessels (Cutler, 2004). Cardiac catheterization permits physicians to visualize arterial blockages. Percutaneous angioplasty to open the blocked arteries or coronary artery bypass graft (CABG) surgery is now routine. Well-trained emergency medical serv- ice personnel and specialized cardiac intensive care units with highly expert nurses are found in most communities. CPR is promoted and automated external defibrillators (AEDs), which are now placed in schools, shopping malls, government buildings, and other common spaces, have saved the lives of many victims of heart disease (AED.com, 2006; Cutler, 2004). Because of all of these advances in the last 50 years, post-MI death rates have dropped by 75%. Antihypertensive and cholesterol- lowering medications, along with healthier lifestyles that include no smoking, regular exercise, and diets low in sodium and saturated fats, have also reduced the rates of hypertension and hyperlipidemia.
About 25% fewer people develop serious cardiovascular disease today than in 1950 (Cutler, 2004).
With all of these advances over the past half-century, it is reasonable to expect increased health care costs. In return, more lives have been saved and extended. But, how much can we afford to pay in the future? How many more new advances lie ahead? And, what will we receive in return for our investment?
Private spending Out-of-pocket spending Public spending a2003
b2002 (Out-of-pocket)
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
United States
$2,727
$2,210
$2,475
$1,894
$2,350
$1,940 $2,176 $1,917
$1,832 $1,611
$239
$238
$313
$582
$354
$370
$148
$396 $389 $113
$359
$28
$342
$906
$444
$472
$803 $483
$2,572
$6,102
Canada
$3,165
France
$3,158
$3,038 $3,005 $2,876
$2,546 $2,461
$2,249 $3,158
Netherlands Germanya Australiaab United Kingdom
OECD Median
Japana New
Zealand F I G U R E 6.4 Health care expenditure per capita by source of funding in 2004: adjusted for
differences in cost of living. (From Shea, Holmgren, Osborn & Schoen. [2007, May]. Health system per- formance in selected nations: a chartpack.As cited originally in Cylus & Anderson. [2007, April]. Multi- national Comparisons of Health Systems Data, 2006.New York: The Commonwealth Fund, used with permission.)
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rating services like Consumer Reports. Also, we most often plan for large purchases, like newer and bigger televisions, in advance.
With health care, this is seldom the case; health care is typically unpredictable and difficult to research. Even with the growth of health information (and sometimes misinformation) available on the Internet, physicians are still the system’s main gatekeepers, and patients must trust that these care providers have the competence to appropriately diagnose and treat them, and coordinate necessary resources to provide quality health care. Further, they trust that physicians will put the patients’
interests before their own (e.g., give them accurate information about risks and benefits and not induce them to have expensive procedures to enrich the provider) (Dranove, 2000; Newhouse, 2002). Now, enter health insurance companies and managed care into the mix, and you can see why health care purchases are not straightforward and easily understood. In a free-market system, competition is an important factor, but is competition truly possible with employer-based health insurance that limits the choice of plans and providers?
In 1963, economist Kenneth Arrow wrote an influential article about health care economics detailing the lack of information in the medical marketplace (cited in Newhouse, 2002). The main points of the article noted that consumers:
◆ Do not know when or if they will become ill—but they know they will need and want medical treatment, thus the demand for health insurance
◆ Do not know what services will be needed and what works best for their condition—thus the need for physicians
◆ Do not know about the quality of health care good and services—thus the need for government regulation (e.g., licensing, certification) and malpractice lawsuits
◆ Have an asymmetric level of information, compared to the insurer, about the likely demand for health care services, resulting in adverse selec- tion(e.g., high-risk patients are denied insurance or care) and market failure (e.g., inefficiencies and lack of appropriate competition)—although this is less severe in large group insurance plans that spread out the risk
A fundamental problem of the health care economy is that it is difficult for any person or organization (e.g., patient, physician, health plan, government) to be “an efficient and effective purchaser of health care goods and services” (Dra- nove, 2000, p. 9).
One area of health care, however, that seems to more closely follow the free-market supply-and-demand model is LASIK eye surgery. The average cost of this surgery in 1998 was $2,200 per eye. This dropped to $1,350 in 2004 as over 3 million surgeries were performed. Many believe this is due to the lack of third-party reimbursement and the evidence of consumer driven purchases in response to advertising and competition (Tabarrok, 2004).
Health Insurance Concepts
Conventional theories posit that people pay small premiums monthly to offset the risk of large medical bills should they become seriously ill. This represents an indemnity policy,
much like car or homeowners’ insurance, and this is the type of health insurance first offered in the United States. In the past, patients could choose any doctor or hospital and sub- mit the providers’ bills to the insurance company for pay- ment. “Moral hazard” is the term used by economists to explain how health insurance changes the behavior of peo- ple, resulting in more risk-taking and wasteful behaviors.
They liken it to fire insurance without a deductible, noting that a person may be less careful about clearing brush from a house if it costs the owner nothing to have the home replaced. If a person has health insurance, many economists posit, they are less likely to take good care of themselves, and if they don’t pay for their health care (through premi- ums, co-payments, deductibles), they are more likely to mis- use it or overuse it (Gladwell, 2005). In other words, insur- ance has a paradoxical effect and often leads to wasteful and risk-taking behaviors. In this scenario, patients will demand expensive health care, even if it provides only the smallest benefit (Dranove, 2000). The concept of moral hazard is the reason behind larger deductibles and co-payments—it is an effort to control wasteful and excessive use of health care resources.
A newer theory states that consumers purchase health insurance not to avoid risk, but to earn a “claim for addi- tional income (i.e., insurance paying for medical care) if they become ill” and that co-payments and managed care actually work against the system by reducing the amount of income transferred to ill persons or limiting their access to needed services (Nyman, 2003). Some economists argue that moral hazard doesn’t accurately apply to health insurance, as even those with unlimited insurance coverage don’t just
“check into the hospital because it’s free” (Gladwell, 2005,
¶11). Most people do not seek infinite numbers of colono- scopies or surgeries, for instance.
Employer-sponsored Health Insurance
Currently, 63% of those under age 65 receive employer- sponsored health care (only 5% have private nongroup insurance), and in bad economic times, company downsiz- ing and lay-offs lead many people to “feel they are only a pink slip away from being uninsured” (Brink, 2002, p. 63;
Goldman & McGlynn, 2005). Many small businesses do not offer employee health insurance because of the high costs.
Even Wal-Mart, one of the United States’ largest employers, offers high-premium/high-deductible plans (with 6-month waiting periods for full-time workers) that more than half of their employees cannot afford—thus shifting costs to taxpayers because 60% of workers must rely on government insurance or other remedies (United Food & Commercial Workers International Union, 2007). The average Wal-Mart worker pays one-fifth of his paycheck for company health insurance coverage, as many of them work for the minimum wage for fewer than 40 hours per week.
The average worker contributed about 27% of the total cost of group insurance in 2004 (around $10,000 for a fam- ily of four). Few people (between 5% and 7%) purchase indi- vidual insurance, and these small numbers have fallen even more over the past 15 years. Cost keeps many people from purchasing insurance; one study found that premiums for individual insurance rose 25% in a 7-year period (Goldman
& McGlynn, 2005; 2006). The Kaiser Family Foundation 144
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(2006a), in its 2006 Employer Health Benefits Survey, reported an 87% increase in premiums since 2000, and noted an increase to $11,480 for the average family group policy, with the cost to workers at just under $3,000 annually. How- ever, the Foundation also noted that the increase in premiums for 2006 (7.7%) was down from the past 2 years (9.2% and 13.9%, respectively). See Figure 6.5 for trends in health insurance premium costs as compared to wages and overall inflation.
The most chilling fact is that a minimum-wage worker in 2005 earned an average of $10,712, but the cost of an annual premium for a family of four averaged $10,880—
helping to explain the large number of uninsured Americans (Colliver, 2005). Employers are either not offering health insurance or are passing along the higher costs to employees in the form of higher employee premiums, deductibles, co- payments, and stricter enrollment requirements. According to a study by the Agency for Healthcare Research and Qual- ity (Stanton & Rutherford, 2004), even though offers of workplace health insurance increased from 1996 to 2002, eligibility and enrollment rates dropped—mostly because of rising employee costs (e.g., over 65% increases in employee premium contributions). In 2003, about 5 million fewer jobs provided health insurance, even though employers shopped around for the best value and about one-third either changed insurance carriers or changed the type of insurance plan offered to employees (Gabel et al., 2004). The number of small companies offering health plans continues to decline, and state efforts to reform small-group health insurance have been relatively unsuccessful in increasing the numbers of employers offering coverage (Gabel et al., 2004; RAND Health, 2005).
About 25% of Americans who are insured are under- insured, and 33% report problems accessing medical care, as well as paying for it. They often exhaust their savings, run up credit card debt, or else delay necessary medical care to avoid going into debt (RAND Health, 2006; Forbes, 2007).