SEVEN STEPS TO A HEALTHIER AMERICA

The health system in the United States is a patchwork quilt, mended together over time to address disparate needs. It is a mix of private interest and government involvement at the federal, state and local levels. What is missing is a shared vision of the desired future of our health care system and broad-based support for that vision. Change is critical and the time to create the environment for change is now. The following principles are the building blocks of a health care system that should provide affordable coverage for everyone's basic health care needs, that should provide care equitably to all, and that should be sufficiently financed to meet long-term needs and responsibilities. Much work needs to be done to change our current system, but these principles can begin that process.

SEVEN STEPS TO A HEALTHIER AMERICA

PRINCIPLE 1.
NO CHILD SHOULD BE WITHOUT HEALTH CARE: America must commit to a health care system that guarantees health insurance coverage by 2008 for every child under the age of 18.

PROBLEM
In 2002, the number of uninsured Americans rose to more than 43 million. The number of children without coverage remained unchanged at 8.5 million. The reason that this rate held firm is that, even as the number of children covered through employment-based health plans dropped, Medicaid and the State Children's Health Program (SCHIP) added eligible children to their rolls. But can Medicaid and SCHIP continue to handle increases in uninsured children? With state governments facing a third year of budget deficits, cutbacks in eligibility for both programs are expected. The future is bleak for children, with the rate of private health insurance coverage slowing and the safety net health coverage offered by Medicaid and SCHIP in jeopardy.

The consequences are significant when children have no health care coverage. Uninsured children are seven times more likely to go without needed medical care than children who have health insurance. One in five parents of uninsured children delayed or skipped needed medical care for their child over the past year because they did not know how to pay for it. Uninsured children are less likely to receive preventive services such as dental care, vision care, and immunizations. And the lack of insurance disproportionately affects minority children: Hispanic children are three times more likely to be without insurance than white children, and African American children are twice as likely. One of five children in this country lives in poverty, and those children are most likely to be without health insurance.

The lack of insurance for children leads to poorer health. Poor health leads to poorer school attendance, lower school achievement, and lower cognitive development. The subsequent impact on society can be enormous. Our children are our future parents, future workers, and future leaders. If we do not provide the basic health care needs that can help them attain their highest level of achievement in their early years, then our society's future is threatened.

SOLUTIONS
America must commit to a health care system that guarantees health insurance coverage for every child under the age of 18 within the next five years. The following proposal, developed jointly by the American Hospital Association and the Catholic Health Association of the United States (CHA), can achieve this goal. The proposal expands existing publicly financed health insurance programs and provides financial assistance to low-income workers. Key to the proposal:

• Universal Coverage for Children: Provide universal coverage for children by extending Medicaid and State Child Health Insurance Program to all children up to age 18. Health insurance premium subsidies would be provided to children living in families with incomes below 150 percent of the federal poverty level; families with higher incomes, up to 250 percent of the poverty level, could "buy-in" to the Medicaid/SCHIP programs.

A greater federal role may be necessary to help states meet the budget demands of an expanded Medicaid and SCHIP program. That additional federal support could come through enhanced federal Medicaid matching funds or federalizing some aspects of the current Medicaid and SCHIP programs for very low-income families.

• Assistance in Paying for Health Coverage through Tax Credits

PRINCIPLE 2.
NO AMERICAN SHOULD BECOME IMPOVERISHED DUE TO A MAJOR ILLNESS OR INJURY: America must commit to providing catastrophic health insurance coverage for all who face a significant health crisis.

PROBLEM
Nearly half of all families that file for bankruptcy in America do so in the aftermath of a serious medical condition, according to bankruptcy law expert and Harvard law professor Elizabeth Warren. A survey by the Brandeis University Access Project revealed more startling facts of the financial stress many families face: Sixty percent reported that they needed help in paying for their medical care. Forty-six percent reported having unpaid bills or being in debt to the facility where they received care. For those using hospital emergency rooms or outpatient departments, two out of three were in debt to those facilities. One-quarter of the respondents with medical debt said their debts would deter them from seeking further care from that same facility. More than half of the respondents receiving a prescription said they needed help to pay for their medications. A Kaiser Family Foundation survey in 2002 found that one of five families had problems paying medical bills, with the uninsured three times as likely to have problems. Of those surveyed by Kaiser, 86 percent said the bills were a serious or somewhat serious problem for their family. And a 2001 Commonwealth Fund survey found that more than 25 percent of families in which one or more members were uninsured reported that they had to change their way of life to pay medical bills. When every member of the family was uninsured that figure rose to nearly 40 percent.

The consequences of deferred care are significant. The uninsured are less likely to receive preventive care, are diagnosed when their diseases are more advanced, and once diagnosed tend to receive less therapeutic care and have higher mortality rates. More than half of the uninsured postponed seeking care in the last 12 months. For both uninsured and insured adults that postpone care, half report they were temporarily disabled by their health problems, and 15 to 20 percent suffered long term disability. A 2003 Institute of Medicine report estimates that the economy looses between $65 billion and $130 billion every year from the diminished health and shorter life spans of Americans who lack health insurance.

SOLUTIONS
The future of our society depends on the well being of its citizenry. Providing access to catastrophic coverage so that families are protected from devastating financial losses and at the same time are ensured access to critical health care is an important step. There are some public programs in place that help families meet catastrophic health care costs. The two most prominent are state-sponsored high-risk pools and state Medicaid medically needy programs. The state high-risk pools are typically available to families or individuals with extraordinary medical need that private insurance will not cover. The state Medicaid medical needy program allows families to qualify for Medicaid if their medical costs consume a certain percentage of their entire family income. State high-risk insurance pools are subject to the vagaries of state appropriations and often have stringent eligibility requirements. State Medicaid medically needy programs are also subject to the vagaries of state funding and with states continuing to face declining revenues and looming deficits, many are choosing to curtail their medical needy programs. How can families be protected from catastrophic medical losses? The solutions should build on current federal and state programs as well as develop new programs.

• The federal government could provide funding to states to establish medical catastrophic pools with federal eligibility criteria. Individuals could purchase coverage through such pools, with federal and state subsidies available to low-income individuals and families.
• The federal government could create a medically needy program administered by the Centers for Medicare & Medicaid Services, in partnership with state Medicaid programs. Individuals and families that qualify could have coverage provided through Medicare and or Medicaid.
• An individual mandate to require catastrophic medical coverage could be imposed and enforced through the tax code. Catastrophic medical savings accounts could be established, along with state pools to make coverage affordable. Low-income families and individuals would have subsidized coverage.

PRINCIPLE 3.
EVERY AMERICAN DESERVES ACCESS TO EMERGENCY MEDICAL SERVICES, REGARDLESS OF THEIR ABILITY TO PAY: America must commit to guaranteed government funding of hospital emergency room and trauma care, ensuring access to anyone requiring emergency medical care, including women in active labor.

PROBLEM
The hospital emergency department (ED) has long been the nation's health care safety net -- guaranteeing access to all regardless of their ability to pay. The ED also plays an essential role in every community's ability to respond to epidemics, disasters, and, more recently, potential terrorist attacks. But hospital EDs face enormous pressures. In a survey conducted last year for the AHA by The Lewin Group, a noted health care consulting firm, 62 percent of hospitals said they perceive their ED as operating at or over capacity. One-third of hospitals experienced "ED diversion," when their EDs could no longer accept all or specific types of patients by ambulance. More than half of urban hospitals reported ED diversions and one in eight reported they were on diversion 20 percent or more of the time. Staff shortages, lack of critical care beds, a growing elderly population, and the demands of the Emergency Medical Treatment and Labor Act (EMTALA) are stretching ED capacity. While federal law, through EMTALA, recognizes hospital emergency departments' essential role, this law places an unfunded mandate on hospitals.

EMTALA requires that a hospital screen every patient seeking emergency services to determine whether an emergency medical condition exists and, if so, to stabilize the patient as much as possible. These regulatory requirements are imposed without any funding to offset the costs of carrying them out. This contributes to the more than $21 billion in uncompensated care hospitals provide each year. And the financial pressure of uncompensated care will only grow as the ranks of the uninsured swell.

SOLUTIONS
Essential medical services that are currently available to everyone -- insured and uninsured -- must be sustained. But many hospitals are in financial jeopardy; many are the sole source of care in their communities. Their failure would put communities at risk because, without them, vital medical services such as trauma care would disappear.

• To ensure that EMTALA-related emergency services remain available, the federal government has an obligation to help hospitals meet their EMTALA responsibilities. The essential role of hospital emergency departments should be recognized by creating a federally funded program to cover the unfunded costs of providing emergency services required under EMTALA.
• Medicaid and Medicare should ensure payment for the screening and stabilization services required by EMTALA, whether through fee-for-service or managed care.
• The federal government should assume responsibility for reimbursing hospitals that provide emergency services to undocumented aliens treated under EMTALA.
• The federal and state government should ensure that access to trauma care is available.

PRINCIPLE 4.
POOR AND OLDER AMERICANS MUST BE ENSURED CONTINUED ACCESS TO HIGH QUALITY HOSPITAL CARE: America must commit to adequate Medicare and Medicaid reimbursement for hospitals, physicians, and other providers. Congress must not reduce Medicare or Medicaid spending to reduce the federal deficit.

PROBLEM
In times of need, Americans depend on their hospitals to be there, 24 hours a day, seven days a week, providing the right care at the right time and in the right place. But severe financial pressures are challenging hospitals' ability to fulfill this expectation. In 2001, 57 percent of hospitals had negative Medicare margins -- that, is, they were paid less than the cost of caring for Medicare patients. Total Medicare margins have dropped every year since 1998. And hospitals that take care of Medicaid and uninsured patients also are facing significant payment shortfalls. According to a recent analysis by The Lewin Group, in 2001 hospitals received, on average, only 84 cents in Medicaid revenue and tax appropriations for every dollar it cost them to care for Medicaid and charity patients.

Many factors contribute to these financial troubles -- most beyond hospitals' control. Health care is experiencing a severe workforce shortage, which is driving up labor costs. Liability insurance premiums are skyrocketing, with one-third of hospitals experiencing increases of 100 percent or more in 2002. Falling credit ratings make it difficult for hospitals to secure the loans they need to maintain and update their physical plants, increase patient safety, and invest in the new technologies they need to meet growing patient demand. In 2002 almost five times more hospitals received bond downgrades than upgrades.

Demand for hospital services is soaring, as the "baby boom" generation begins to age. Since 1997, inpatient admissions have increased 7 percent, and outpatient visits have risen 20 percent. The collision of rising demand and constrained capacity is no more evident than in hospitals' emergency departments (EDs). Hospital EDs are overcrowded, and many frequently must turn away ambulances because they lack the staff and space to care for additional patients. And with more than 43 million Americans uninsured, it is the hospital that serves as the nation's health care safety net. In 2001 alone, hospitals provided $21.5 billion in uncompensated care.

SOLUTIONS
Medicare and Medicaid help get health care coverage to over 90 million elderly, low-income, and disabled Americans. Fifty percent of an average hospital's costs are attributable to serving Medicare and Medicaid patients. Adequate government funding is essential for America's hospitals, and for every community, if we are to ensure that access to health care services is available for everyone who needs it.

No longer can this nation afford to balance government budgets, federal and state, on the backs of hospitals. The budget cutting policies of the past must not be repeated. Federal funding levels should not fall below the Congressional Budget Office baseline levels. Current federal funding levels should be maintained and where needs exist, enhanced.

PRINCIPLE 5.
REMOVE BARRIERS TO COORDINATING HEALTH CARE FOR ALL AMERICANS, ESPECIALLY FOR THE CHRONICALLY ILL: America must commit to providing coverage for case management and other chronic care management services under all forms of insurance, not just managed care, and in doing so, reduce duplication and inefficiency in the delivery of care.

PROBLEM
Chronic diseases are a significant cause of illness and disability, especially as people age, and thus are a significant source of national health care expenditures, especially by the Medicare program. As the U.S. population ages, the importance of caring appropriately for people with chronic illnesses intensifies. Yet, the U.S. health care system is not structured to avoid or delay the onset of chronic illnesses or, when they occur, to manage them in ways that minimize their effect on people's lives and make efficient use of health care resources. This failure is taking a heavy toll on the lives of millions of Americans and on health care in America.

Chronic illnesses include, for example, Alzheimer's disease, heart disease, diabetes, Parkinson's disease, multiple sclerosis, and chronic obstructive pulmonary disease. Patients with chronic illnesses represent the highest-cost and fastest-growing service group in health care:

• More than one in three Americans is at risk of having a chronic condition that limits daily activities. Ninety percent of illness and 80 percent of deaths are related to chronic conditions.
• More than 75 percent of the nation's personal health care expenditures are for chronic care -- the chronically ill consume the vast majority of medical services, accounting for 96 percent of home care visits, 83 percent of prescription drug use, 80 percent of hospital days, and 66 percent of physician visits.
• Total annual medical expenditures for a person with a chronic condition ($6,032) are more than five times higher than those for a healthy person ($1,105). Those with functional limitations or a disability in addition to a chronic condition can face more than double these medical expenditures.
• Approximately 40 percent of health care costs for the chronically ill are financed by the public sector, while only 20 percent of acute care costs are publicly funded. Medical costs for people with chronic conditions will nearly double by 2050.
• More than 25 million family caregivers provide an estimated $196 billion annually in "free" caregiving services to disabled or elderly family members. Between 1990 and 2050, the ratio of caregivers will decrease from 11:1 to 4:1, further straining public resources.
• About 62 percent of Medicare beneficiaries have two or more chronic conditions; 40 percent have three or more. Those with three or more see, on average, 10 different physicians during a typical year.

Our health care system becomes more and more fragmented every day, with covered benefits often leaving gaping holes that make it difficult to manage chronic illness. For the most part, case management is available only within the confines of certain managed care plans -- plans that are seldom available in many areas of the country, especially rural America where many of the elderly live. Medicare does not compensate physicians for coordinating the multiple care plans, treatments, prescriptions, and other services they prescribe for the same chronically ill patient. And the information systems needed to support the coordination of multiple providers and improve the quality and safety of care are beyond the financial reach of many providers.

SOLUTIONS
Preserving and strengthening Medicare and other public programs for the chronically ill requires a fundamental change in how we deliver, finance, and administer care. People with chronic illnesses require the care of a variety of health care providers. They also require a comprehensive array of services that allow for the best combination to effectively manage their illnesses, including coverage of long-term care and outpatient prescription drugs. Most important, they need to be supported by case management services that coordinate the efforts of different providers and help patients and their families access the services they need when they need them. These federal-level improvements can help:

• The Medicare fee-for-service program should cover clinical case management services for the chronically ill.
• Qualified case managers should be given the authority to substitute services where appropriate for Medicare beneficiaries with multiple chronic conditions.
• Federal funds should be made available to help health care providers develop the information systems infrastructure needed to support care coordination within communities and to improve the quality, safety, and efficiency of care for the chronically ill.
• Federal funds should be made available to support education efforts that help patients take a larger role in their own care and monitoring, and that help providers learn more about chronic illness management, pain management, and end-of-life care.

PRINCIPLE 6.
ALL AMERICANS DESERVE HIGH-QUALITY HEALTH CARE: America must commit to supporting public and private partnerships for performance improvement and investing in information technologies that improve quality of care.

PROBLEM
Hospitals and health care professionals strive to provide the best care possible to every patient they serve. And the public is entitled to understand how well providers are doing in providing safe, effective care. An open sharing of information on the quality of care provided is part of the relationship of trust that hospitals want to have with the communities they serve.

But, over the past decade, many different indicators of health care quality have been developed, most of them highly clinical in nature and not easily understood by the average person. And many organizations have launched efforts to provide hospital quality data to the public so that people can get information they need to make better decisions about their care. As a result, hospitals have been inundated by requests for data from a plethora of insurers, employers, government entities, accrediting bodies, consumer groups, and other organizations, each with different data requirements, different methods for analyzing data, and different approaches to identifying high-quality hospitals.

The result has been a confusing and discordant chorus of quality information. A hospital may look terrific in one analysis and average in another, but the reasons for the differences in the ratings are rarely apparent.

The public has been frustrated by the disparities and confusion in hospital ratings. They have not understood some of the more clinical information and are unable to determine which sources of information are credible. Hospitals have been frustrated by the redundant requests for data and the fact that responding to these duplicative requests requires a significant investment of time and dwindling resources.

In addition to the broad issue of quality, concerns about patient safety have been the focus of public attention since the release of the Institute of Medicine's (IOM) report To Err is Human in 1999. Among its critical findings is that too many patients are harmed as a result of unintended mistakes during the course of their medical care. To help prevent such harm, the IOM called for the confidential sharing of information about errors among health care professionals so that the underlying vulnerabilities in health care processes and the flaws in our systems could be identified and addressed. Without confidentiality protection, individual health care providers and health care facilities are unlikely to share information on errors because doing so could tarnish their reputations, leave them vulnerable to lawsuits, and perhaps leave them open to licensing or accreditation sanctions.

As a result, Americans are not getting the information they need to make appropriate decisions about their health care. And hospitals and health care professionals are being forced to waste resources in duplicative and uncoordinated efforts to report data, but are not getting the information they need to improve the safety of the care they provide.

SOLUTIONS
To provide credible and useful information on hospital quality, while also wisely using the resources needed to develop the information, America must commit to supporting public and private partnerships. These partnerships can be extremely effective in identifying the aspects of care that the public needs to know about in order to make better decisions, to select measures that fairly and accurately assess those aspects of care, encourage voluntary reporting of provider performance information to the public, and provide valid information to providers for quality improvement. By bringing together organizations with different perspectives, these partnerships can ensure that the data are presented in a clear, fair, useful, and balanced manner.

In addition to data that can inform the public, hospitals, and health professionals need to develop a much clearer understanding of the factors that contribute to medical errors. As proven in other industries that have wrestled with ways to prevent accidents, improvements in safety can best be achieved through voluntary reporting of medical error information to appropriate entities, with confidentiality protections for reporting individuals and organizations. America must commit to enacting legislation that will afford these confidentiality protections so that the collection, analysis, and use of these reports helps hospitals, doctors, nurses, and other health care professionals make care safer for our patients. And finally, America must commit to funding information technology that can lead to quality of care improvements.

PRINCIPLE 7.
EVERY AMERICAN SHOULD HAVE ACCESS TO IMPORTANT PREVENTATIVE CARE: America must commit to ensuring that critical preventive services are available for every child and every adult through public and private sector initiatives.

PROBLEM
Health care expenditures in the United States are expected to reach $1.66 trillion by the end of 2003. The medical costs of people with chronic diseases such as diabetes, obesity, cardiovascular disease, and asthma account for more than 75 percent of the nation's medical care costs. A small number of chronic disorders, such as diabetes and cardiovascular disease, account for the majority of deaths each year. Medical evidence suggests that many of these chronic diseases are preventable. Yet approximately 129 million adults in the United States are overweight or obese, costing the nation from $60 billion to $117 billion per year. In 2000, an estimated 17 million people had diabetes, costing $132 billion per year. People with diabetes lost more than eight days per year from work, accounting for 14 million disability days. Heart disease and stroke are the first and third leading causes of death in the US; cardiovascular diseases cost more than $300 billion each year. And approximately 23 million adults and 9 million children have been diagnosed with asthma at some point in their lifetime, with costs near $14 billion per year.

Vaccine development, among the greatest public health achievements of the 20th century, is an example of how public health preventive measures can improve and extend life. Immunizations can prevent disability and death that result from infectious diseases and help control infections within communities. For children in the first two years of life, the coverage rate is over 90 percent for the recommended immunizations, except for Hepatitis B and varicella vaccines. But for adults, the immunization rates for such diseases as influenza and pneumonia are much less. Influenza causes on average, 100,000 hospitalizations and 20,000 deaths annually; pneumococcal disease causes 10,000 to 14,000 deaths annually. Much work needs to be done to improve and extend life through preventive health measures.

SOLUTIONS

• All health insurance plans, both private and public, should cover preventive services such as immunizations, mammography, pap smears, colorectal screening, osteoporosis screening, diabetes screening and self-management, and blood lipid profiles.
• Federal and state governments should fund these preventive services for people without health insurance coverage.
• Federal and state government should work collaboratively with employers, insurers, providers, practitioners, community-based programs, and other private sector stakeholders to promote health and prevent disease.