commission on a high performance health system

COMMISSION ON A HIGH PERFORMANCE HEALTH SYSTEM

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2

THE COMMONWEALTH

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ContentsContents

Acknowledgments

Overview

I. Need for Better Accessand Coverage

II. Need for Quality Enhancements

III. Need for GreaterEfficiency

Conclusion. The Time IsRipe for Improvement

References

• 3

• 4

• 6

• 28

• 57

• 80

• 86

3

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Acknowledgments Acknowledgments

This chartbook is a compilation of data that represents the work of many individuals at The Commonwealth Fund. We wish to thank those who kindly provided data, information, research, and assistance:

Anne-Marie J. Audet, M.D., Vice President, Quality ImprovementSara R. Collins, Ph.D., Senior Program OfficerJohn E. Craig, Jr., Executive Vice President and Chief Operating OfficerKaren Davis, Ph.D., PresidentMichelle M. Doty, Ph.D., Senior AnalystPaul D. Frame, Production EditorStuart Guterman, Senior Program DirectorAlice Ho, former Research AssociateChristopher Hollander, Associate Communications DirectorAlyssa L. Holmgren, Research AssociatePhuong Trang Huynh, Ph.D., Associate DirectorCathy Schoen, Senior Vice President, Research and EvaluationStephen C. Schoenbaum, M.D., Executive Vice President for ProgramsIlana Weinbaum, Program Associate

4

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OverviewOverviewThe need for fundamental transformation of the U.S. health care system has become increasingly apparent. Research reveals a fragmented system fraught with waste and inefficiency. Among industrialized nations, the United States spends well over twice the per capita average (Reinhardt et al. 2004). High spending, however, has not translated into better health: Americans do not live as long as citizens of several other industrialized countries, and disparities are pervasive, with widespread differences in access to care based on insurance status, income, race, and ethnicity.

Particularly problematic is the large number of individuals lacking ready access to health services. Over a third of the population is uninsured, unstably insured, or underinsured (Schoen et al. 2005). With health care costs on the rise, affordability is a key concern for many working families. Gaps in insurance coverage and high out-of-pocket spending hinder patients' access to care and lead to skipped medical tests, treatments, and follow-up appointments. In turn, these access problems produce preventable pain, suffering, and death—as well as more expensive care.

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There are also significant issues with the safety and quality of care. As many as 98,000 deaths result annually from medical errors (Kohn et al. 1999), and U.S. adults receive only 55 percent of recommended care (McGlynn et al. 2003). Inefficiencies, such as duplication and use of unnecessary services, are costly and compromise the quality of care. High administrative costs in health insurance and health care delivery are also problems.

The following sections further illustrate the need to improve coverage, quality, and efficiency. The charts presented paint a stark picture of a health system in need of reform. Clearly, moving the nation toward a high performance health system will require collaboration. That is why The Commonwealth Fund has formed the Commission on a High Performance Health System: to identify public and private strategies, policies, and practices that would lead to improvements in the delivery and financing of health care for all Americans.

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I. Need for Better Access and CoverageI. Need for Better Access and CoverageNumber of uninsured individuals are on the rise.

In 2004, 45.8 million individuals in the United States were uninsured (U.S. Census Bureau),* and projections indicate that the number of uninsured individuals may exceed 50 million by the end of the decade (Chart I-1). The following are findings pertaining to the uninsured:

– According to health care opinion leaders, the uninsured should be a top priority for Congress (Chart I-2).

– Between 2000 and 2004, the number of uninsured individuals increased by 5.8 million. Adults ages 18 to 64 comprised all of the increase (Chart I-3).

– Between 1987 and 2003, the working middle class saw the greatest increase in uninsured individuals (Chart I-4).

– Among the uninsured, low-income families and adults are disproportionately represented (Chart I-5).

– Uninsured rates vary widely by state (Chart I-6).

* The CPS asks about insurance coverage in the previous year. An individual is considered "uninsured" if he or she was not covered by any type of health insurance at any time in that year.

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Job-based premium increases, gaps in coverage, and underinsurance contribute to access problems.

In 2003, 45 million U.S. adults were uninsured at some point during the year (Schoen et al. 2005).** Contributing to problems with access are job-based premium increases overtaking wage increases. The year 2004 saw increases in premiums greatly outpace workers' earnings from the previous year (Chart I-7). The Commonwealth Fund Biennial Health Insurance Survey (2003) highlighted the growing problem of underinsurance:***

– 26 percent of U.S. adults 19 to 64 were either uninsured all year or part of the year (Chart I-8).

– Another 9 percent of adults, or 16 million people, were underinsured (Chart I-8).

– Added together, 61 million adults—one-third of adults under 65—were either uninsured or underinsured during the year (Chart I-8).

** Schoen et al. used the term uninsured to refer to individuals who had been uninsured for some time during the past year.*** An underinsured person is defined as one who has insurance all year but has inadequate protection, as indicated by one of three conditions: 1) annual out-of-pocket medical expenses amount to 10 percent or more of income; 2) among low-income adults (with income below 200 percent of the federal poverty level), out-of-pocket expenses amount to 5 percent or more of income; or 3) health plan deductibles equal or exceed 5 percent of income.

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Gaps in insurance coverage make it difficult for people to afford filling prescriptions; seeing a specialist when warranted; undergoing a medical test, treatment, or follow-up; or seeking advice for a medical problem. Of adults who were uninsured at the time of the survey, 61 percent reported encountering at least one of these access problems. Of those who were currently insured but had been uninsured at some point during the past year, a majority reported access problems. For those who had been insured all year, the percentage was much lower but still large (Chart I-9). The Institute of Medicine estimates that in 1999, being uninsured was the sixth-leading cause of death (Chart I-10).

Underinsured adults are also at high risk of going without needed care because of cost, as well as at high risk of experiencing financial stress. Rates on both access and financial indicators for the underinsured approach or equal those reported by the uninsured (Chart I-11). Even for adults covered all year by private insurance, barriers to access exist in several forms, including high out-of-pocket costs (Chart I-12).

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Disparities persist by income and race.

For low-income adults (with income below 200 percent of the poverty level), unstable health coverage is a prevalent concern. Analysis of health insurance coverage and employment patterns over the four years 1996-99 indicates that at some point during this period, 68 percent of low-income adults were uninsured, compared with 26 percent of adults with higher incomes (Chart I-13). In addition to income, access also varies by race and ethnicity. In 2000, 50 percent of Hispanic adults were uninsured for all or part of the year, compared with 35 percent of African Americans and 22 percent of whites (Chart I-14).

Inadequate access leads to reduced productivity and output.

Individuals with no insurance, only sporadic coverage, or insurance that exposes them to catastrophic out-of-pocket costs are more likely to go without care. Receipt of primary and preventive care is associated with job compensation, and workers in the lowest-compensated positions are less likely to have a regular physician and to receive preventive care screens (Chart I-15). The majority of employers believe that health insurance positively affects employee health and morale. In addition, more than one-third of employers link health benefits to enhanced employee productivity (Chart I-16).

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The effects of inadequate access go beyond individual health consequences, as gaps in coverage affect quality of care, health outcomes, and economic productivity. The Institute of Medicine estimated that preventable morbidity and mortality associated with being uninsured translates into a loss of $65 billion to $130 billion annually (Institute of Medicine 2003). Providing all workers with health insurance coverage would facilitate early treatment of acute illnesses and the ongoing management of chronic conditions, increase use of preventive care, and improve worker health and productivity (Davis et al. 2005).

The health of workers has economic implications.

More generally, substantial costs are incurred when workers are too sick to work or function effectively. According to the 2003 Biennial Health Insurance Survey, the majority of Americans experience reduced productivity, sick days, or health problems (Chart I-17). Affordable and comprehensive health insurance coverage and paid sick leave can improve the health of workers and their family members, which in turn could yield economic payoffs for working families and the economy as a whole (Davis et al. 2005). Since employers,and society as a whole, benefit from workers having insurance, it isimportant to strengthen employee coverage (Collins et al. 2005).

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Chart IChart I--1. 46 Million Uninsured in 2004; 1. 46 Million Uninsured in 2004; Projected to Increase SubstantiallyProjected to Increase Substantially

* 1999–2003 estimates reflect the results of follow-up verificationquestions and implementation of Census 2000-based population controls.Note: Projected estimates for 2005–2013 are for nonelderly uninsured based on T. Gilmer andR. Kronick, "It's the Premiums, Stupid: Projections of the Uninsured Through 2013," Health AffairsWeb Exclusive, April 5, 2005. Source: U.S. Census Bureau, March CPS Surveys 1988 to 2005.

31 33 33 35 3539 40 40 41 42 43 44

40 40 41 44

56

45

0

20

40

60

1987 1990 1993 1996 1999* 2002 2005 2008 2011

Millions uninsured

Projected2013

46

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Chart IChart I--2. Uninsured Top Priority for Congress2. Uninsured Top Priority for CongressAccording to Health Care Opinion LeadersAccording to Health Care Opinion Leaders

6%

21%

24%

27%

30%

31%

35%

38%

48%

50%

69%

87%

Control Medicaid costs

Improve quality of nursing homes and LTC

Medicaid reforms to improve coverage

Administrative simplification and standardization

Malpractice reform

Address racial/ethnic disparities in care

Control rising cost of prescription drugs

Medicare payment reform to reward performance onquality and efficiency

Enact reforms to moderate rising costs of medicalcare

Medicare reforms to ensure long-run solvency

Improve quality of medical care, inc. increased use ofIT

Expand coverage to the uninsured

Source: The Commonwealth Fund Health Care Opinion Leaders Survey, November–December 2004.

"Which of the following health care issues should be the toppriorities for Congress to address in the next five years?"

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Chart IChart I--3. Number Uninsured Rose 5.8 Million 3. Number Uninsured Rose 5.8 Million from 2000 to 2004, with Adults Accountingfrom 2000 to 2004, with Adults Accounting

for All of the Increase for All of the Increase

8.6

8.3

30.9

37.5

0 10 20 30 40 50

2000

2004

Under Age 18 Age 18-64

Source: U.S. Census, March 2001 and March 2005 Current Population Surveys.

45.8 Million

40Million

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Chart IChart I--4. Uninsured Rates Increasing4. Uninsured Rates IncreasingMost Sharply for Working Middle ClassMost Sharply for Working Middle Class

47%50%

48%

52%48%

39%

35%

44%

33%

21%

15%18%

25%

8%6%9%

11%

2%5%

4%5%

0%

20%

40%

60%

1987 1989 1991 1993 1995 1997 1999* 2001 2003

LowestQuintile

Second

Third

Fourth

HighestQuintile

* In 1999, CPS added a follow-up verification question for health coverage.Source: Analysis of the March 1988–2004 Current Population Surveys byDanielle Ferry, Columbia University, for The Commonwealth Fund.

Percent of working adults uninsured, by household income quintile 1987-2003

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Other Children5%

Low-Income Parents

17%

Low-Income Adults without

Children33%

Other Adults without Children

22%

Low-Income Children

15%

Other Parents7%

Chart IChart I--5. Two5. Two--Thirds of NonelderlyThirds of NonelderlyUninsured Are LowUninsured Are Low--Income, 2003Income, 2003

Total = 44.7 million

Note: Low-income is defined as below 200% of the federal poverty level($29,360 for a family of three in 2003). Source: Kaiser Commission on Medicaid and Uninsured and Urban Instituteanalysis of the March 2004 Current Population Survey.

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15–17.9%

Less than 12%12–14.9%

18% or more

WA

ORID

MT ND

WY

NV

CAUT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SC

TNNC

KY

FL

VA

OH

MI

WV

PA

NY

AK

MD

MEVT

NH

MARI

CT

DE

DC

HI

CO

GAMS

OK

NJ

SD

Chart IChart I--6. Percent of Nonelderly Uninsured6. Percent of Nonelderly UninsuredPopulation Varies Widely by State, 2001Population Varies Widely by State, 2001––20032003

Source: Health Insurance Coverage in America: 2003 Data Update Highlights,Kaiser Commission on Medicaid and Uninsured/Urban Institute, September 27, 2004.Uninsured rates are two year averages, 2001-2003.

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Chart IChart I--7. Job7. Job--Based Premium Increases Based Premium Increases Greater than Wage IncreasesGreater than Wage Increases

12%

5%

8%

11%13%

14%

11%

1%

9%

14%

18%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

1988 1990 1992 1994 1996 1998 2000 2002 2004

Premiums

Workers' Earnings

Source: "Employer Health Benefits 2004 Annual Survey," Kaiser Family Foundation/Health Research and Educational Trust, September 2004.

Percent change from previous year

2%

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Chart IChart I--8. Significant Percentage of 8. Significant Percentage of Underinsured Adults Indicates Access to Underinsured Adults Indicates Access to

Care Not Just Issue for UninsuredCare Not Just Issue for Uninsured

Insured All Year, Not Underinsured

65%

Underinsured9%

Uninsured All Year13%

Uninsured Part Year13%

Source: C. Schoen et al., "Insured But Not Protected: How Many Adults Are Underinsured?" Health Affairs, June 2005, based on The Commonwealth Fund 2003 Biennial Health Insurance Survey.

Uninsured is defined as uninsured for some time during the past year.

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12 13

2940

51

918

57

3935

18

40

61

2737

0

25

50

75

Did not fill aprescription

Did not seespecialist when

needed

Skipped medicaltest, treatment, or

follow-up

Had medicalproblem, did not

see doctor orclinic

Any of the fouraccess problems

Insured all year Insured now, time uninsured in past year Uninsured now

Chart IChart I--9. Gaps in Insurance Coverage9. Gaps in Insurance CoverageHinder Access to CareHinder Access to Care

Source: S. R. Collins, M. M. Doty, K. Davis et al., The Affordability Crisis inU.S. Health Care: Findings From The Commonwealth Fund Biennial HealthInsurance Survey, The Commonwealth Fund, March 2004.

Percent of adults ages 19–64 reporting the following problems because of cost:

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Chart IChart I--10. Being Uninsured Is a10. Being Uninsured Is aLeading Cause of DeathLeading Cause of Death

Deaths of Adults Ages 25Deaths of Adults Ages 25––64, 199964, 1999

1. Cancer – 156,4852. Heart disease – 115,8273. Injuries – 46,0454. Suicide – 19,5495. Cerebrovascular disease – 18,3696. Uninsured – 18,0007. Diabetes – 16,1568. Respiratory disease – 15,8099. Chronic liver disease and cirrhosis – 15,71410. HIV/AIDS – 14,017

Sources: U.S. Department of Health and Human Services, National Center for Health Statistics, Health, United States, 2002, Table 33, p. 132 – deaths for causes other than uninsured; Instituteof Medicine, Care Without Coverage, Appendix D, p. 162, deaths attributable to higher risks of uninsured adults 25–54.

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Chart IChart I--11. Underinsured and Uninsured 11. Underinsured and Uninsured Adults at High Risk of Access ProblemsAdults at High Risk of Access Problems

and Financial Stressand Financial Stress

25

11 7

35

59

44

28

4654

0

25

50

75

Went without care due tocosts

Contacted by collectionagency about medical bills

Changed way of lifesignificantly to pay

medical bills

Insured, not underinsured Underinsured Uninsured during year

Percent of adults ages 19–64

* Did not fill a prescription; did not see a specialist; skippedrecommended care; or did not see doctor when sick because of costs.Source: C. Schoen et al., "Insured But Not Protected: How ManyAdults Are Underinsured?" Health Affairs Web Exclusive, June 14, 2005.

22

THE COMMONWEALTH

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23

10

2

29

11

0

10

20

30

40

Total Less than$20,000

$20,000–$34,999

$35,000–$59,999

$60,000 ormore

Chart IChart I--12. Adults with Low and Moderate 12. Adults with Low and Moderate Incomes Spend Greatest Share of IncomeIncomes Spend Greatest Share of Income

on Outon Out--ofof--Pocket CostsPocket CostsPercent of adults ages 19–64 insured all year with private insurancewho spent 5 percent or more of income on out-of-pocket costs

Note: Income groups based on 2002 household income.Source: S. R. Collins, M. M. Doty, K. Davis et al., The Affordability Crisis inU.S. Health Care: Findings From The Commonwealth Fund Biennial HealthInsurance Survey, The Commonwealth Fund, March 2004.

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Chart IChart I--13. Low13. Low--Income Adults, Especially Income Adults, Especially Hispanics, Have High Uninsured Rates over Four Hispanics, Have High Uninsured Rates over Four Years; Disparities Persist Across Income LevelsYears; Disparities Persist Across Income Levels

4131

2326

80

666368

2316

1012

64

464247

0

25

50

75

100

Total White AfricanAmerican

Hispanic Total White AfricanAmerican

Hispanic

Any time uninsured Uninsured more than one year

200% or more of poverty

Percent of population 19–64 uninsured, 1996–1999

Under 200% poverty

Source: M. M. Doty and A. L. Holmgren, Unequal Access: Insurance InstabilityAmong Low-Income Workers and Minorities, The Commonwealth Fund, April 2004.Data: 1996 panel of the Survey of Income and Program Participation.

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Chart IChart I--14. Percent of Population 14. Percent of Population Uninsured All Year or PartUninsured All Year or Part--Year VariesYear Varies

by Race and Ethnicity, 2000by Race and Ethnicity, 2000

9 7 917 15 11

213414

1320

16

14

111413

0

25

50

75


Hispanic Total White AfricanAmerican

Hispanic

Uninsured Part YearUninsured All Year

23 20 23

37

2822

35

50

Adults ages 19–64

Percent of population uninsured all year or part-year, 2000

Source: M. M. Doty. Insurance, Access, and Quality of Care Among Hispanic Populations:2003 Chartpack, The Commonwealth Fund, October 2003. Data: MEPS 2000.

Children ages 0–18

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THE COMMONWEALTH

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Chart IChart I--15. Preventive and Primary Care Varies 15. Preventive and Primary Care Varies by Workers' Job Compensation Levelsby Workers' Job Compensation Levels

64

74

54

74

84

66

89 9185

0

10

20

30

40

50

60

70

80

90

100

Regular doctor (ages 19-64) Blood pressure check inpast year (ages 19-64)

Cholesterol check in pastfive years (ages 19-64)

Note: Lowest compensated are all workers with wage rate <$10/hr; mid-compensated are workers with wage rate $10-$15/hour and those >$15/hour but no employer-sponsored insurance; higher compensated are workers with wage rate >$15/hour and employer-sponsored insurance.Source: The Commonwealth Fund Biennial Health Insurance Survey (2003).

Lowest compensated

Mid-compensated

Higher compensated

26

THE COMMONWEALTH

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Chart IChart I--16. Majority of Employers Believe That16. Majority of Employers Believe ThatHealth Benefits Improve Employee Health and MoraleHealth Benefits Improve Employee Health and Morale

6760

39

0

20

40

60

80

Improves employeehealth

Improves employeemorale

Increases employeeproductivity

Source: S. R. Collins et al., Job-Based Health Insurance in the Balance: Employer Views of Coverage in the Workplace, The Commonwealth Fund, March 2004; Commonwealth Fund Supplement to the 2003 National Organization Study.

Employers who say health benefits contributea great deal or quite a bit

Percent of firms offering coverage

27

THE COMMONWEALTH

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Chart IChart I--17. Majority of Americans Experience 17. Majority of Americans Experience Health Problems, Sick Loss, or Reduced Health Problems, Sick Loss, or Reduced

Productivity (all adults ages 19Productivity (all adults ages 19––64)64)

Working with 6 or more sick days or reduced-

productivity days

27%

Working with no sick days or reduced-productivity days

18%

Not working for other non-health reasons

21%

Working with 1 to 5sick days or reduced-

productivity days

21%

Not working due to disability or other health reasons

12%

Note: Numbers may not sum to 100 due to rounding. Excludes self-employed adults and workers with undesignated wage rate. Sick-loss days are days of work missed because self or family member was sick. Reduced-productivity days are days unable to concentrate fully at work because not feeling well or worried about sick family member.

Source: K. Davis et al., Health and Productivity Among U.S. Workers, The Commonwealth Fund, August 2005; The Commonwealth Fund Biennial Health Insurance Survey (2003).

28

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II. Need for Quality EnhancementsII. Need for Quality EnhancementsQuality and cost of health care vary widely across the United States.

There are significant variations in the quality and cost of health care, both within the United States and internationally (Davis et al. 2004; Fisher et al. 2003). U.S. adults often do not receive the level of care that is recommended for a particular condition. One study indicates that overall, individuals received only 55 percent of recommended care, a proportion that varies based on the condition, as detailed below (McGlynn et al. 2003).

– Individuals being treated for breast cancer went without nearly one-fourth of recommended care, while those undergoing treatment forhypertension went without more than one-third of recommended care (Chart II-1).

– The figures for individuals being treated for asthma reflect even lower quality, with individuals receiving approximately half of the recommended care (Chart II-1).

– For those undergoing treatment for diabetes, pneumonia, or ahip fracture, the percentages of recommended care attainedwere even lower (Chart II-1).

29

THE COMMONWEALTH

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The provision of appropriate care varies across the United States(Chart II-2). In a study examining the quality of care provided to Medicare beneficiaries, the authors ranked the states on 22 quality indicators. Substantial discrepancies exist among states ranked in the first quartile and those ranked in the fourth quartile, with northern states and less-populous states performing better (Jencks, Huff, and Cuerdon 2003).

Preventive care is often overlooked.

The 2004 Commonwealth Fund International Health Policy Survey indicates that 49 percent of respondents in the United States do not receive reminders for preventive care (Chart II-3). The proportions of young children and their families who receive preventive and developmental services are relatively low: only 30 to 40 percent of parents of young children reported receiving services such as anticipatory guidance, parental education, psychosocial assessment, or screening for tobacco and substance use (Chart II-4).

30

THE COMMONWEALTH

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Medication errors and medical mistakes compromise quality of care.

Medication errors and medical mistakes also compromise quality of care.A 2002 Commonwealth Fund survey indicates that nearly one-fifth of sicker adults in the United States reported a serious medical mistake or medication error in the past two years (Chart II-5). A 2004 Fund survey found that 15 percent of contacted individuals had received incorrect test results or had experienced delays in receiving notification about abnormal results (Chart II-6). The United States compares unfavorably with other industrialized countries.

Communication affects quality of care.

Communication plays a critical role in quality of care. The 2004 Commonwealth Fund International Health Survey reveals missed opportunities by physicians to communicate effectively, involve patients in treatment decisions, and recognize patients' concerns or preferences (Schoen et al. 2004). In the United States, more than 50 percent of individuals did not feel that their doctor always spends adequate time with them. Approximately 40 percent of U.S. respondents indicated that their doctor does not always listen carefully and does notalways explain things clearly (Chart II-7).

31

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The 2002 International Health Policy Survey examined the views of sicker adults and found that nearly one-third of those surveyed in the United States had in the past two years left a doctor's office without getting an important question answered. An even larger percentage of U.S respondents reported not adhering to a doctor's advice (Chart II-8). Research indicates that minorities face greater difficulty in communicating with physicians (Chart II-9).

Studies point to a link between patient-physician communication and a patient's acceptance of advice, adherence to treatment regimens, and satisfaction. Moreover, the quality of communication may also affect outcomes of care (Stewart 1995; Stewart et al. 2000). In an examination of interpersonal quality of care, middle-age adults gave lower rankings than seniors on the following measures: health providers listened carefully, health providers showed respect, and health providers spent enough time. When asked if the health provider always explained things clearly, only about 60 percent of seniors and middle-aged adults answered affirmatively (Chart II-10*).

* To access Leatherman and McCarthy’s Chartbook on the Quality of Care for MedicareBeneficiaries, please visit http://www.cmwf.org/usr_doc/MedicareChartbk.pdf.

32

THE COMMONWEALTH

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Expanding the use of information technology could facilitate communication and benefit both patients and physicians. The health care sector, however, has been slow to implement information technology, with the percentages of physician groups using electronic medical records remaining low(Chart II-11).

Physicians not as readily accessible as patients would hope.

In the 2004 Commonwealth Fund International Health Policy Survey, only a third of U.S. adults reported they were able to schedule a same-day appointment when sick or in need of medical attention (Chart II-12). Use of the emergency department (ED) as a substitute for regular physician care is a problem: 16 percent of U.S. respondents reported visiting the ED for a nonemergent condition (Chart II-12). Overall ED use in the United States was significant, with approximately one-third of respondents indicating they had used it in the past two years (Chart II-13).

33

THE COMMONWEALTH

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Having a regular physician is important for quality.

When a patient builds a relationship with a physician, the result is enhanced care, increased trust, and patient adherence to treatment regimens (Parchman, M. and S. Burge 2004; Hall et al. 2001). Yet, only 37 percent of individuals in the United States surveyed in a 2004 Commonwealth Fund survey had a physician whom they had seen for more than five years(Chart II-14).

Debates continue regarding disclosure of quality information.

Around the world, there is debate about whether and how to disclose quality-of-care information to the public. The percentage of U.S. hospital CEOs who do not wish to disseminate certain information to the public varies according to the type of information under consideration (Chart II-15). Among consumers, it is apparent that more information is desired. The majority of Americans would like information pertaining to their health and the care they receive (Chart II-16).

34

THE COMMONWEALTH

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Life expectancy and survival rates for certain medical conditions indicate need for improvement.

The United States spends more on health care than most countries, but its results lag behind.

– Five-year survival rates for kidney transplant and colorectal cancer in the United States are relatively low (Charts II-17 and II-18).

– The five-year survival rate for patients diagnosed with cancer varies based on race and ethnicity. Even greater variations exist based on socioeconomic status (Charts II-19 and II-20).

– The United States ranks below a number of other industrialized nations for life expectancy at birth and at age 65 (Charts II-21 and II-22).

35

THE COMMONWEALTH

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Chart IIChart II--1. U.S. Adults Receive Half of 1. U.S. Adults Receive Half of Recommended Care, and Quality Varies Recommended Care, and Quality Varies

Significantly by Medical ConditionSignificantly by Medical Condition

Source: E. McGlynn et al., "The Quality of Health Care Delivered to Adults in the United States,"The New England Journal of Medicine (June 26, 2003): 2635–2645.

55

7665

5445

39

23

0

20

40

60

80

Overall BreastCancer

Hypertension Asthma Diabetes Pneumonia Hip Fracture

Percent of recommended care received

36

THE COMMONWEALTH

FUND

Chart IIChart II--2. Provision of Appropriate Care 2. Provision of Appropriate Care Varies by StateVaries by State

Source: S. F. Jencks, E. D. Huff, and T. Cuerdon, "Change in the Quality of CareDelivered to Medicare Beneficiaries, 1998–1999 to 2000–2001," Journal of theAmerican Medical Association 289 (Jan. 15, 2003): 305–312.

Note: State ranking based on 22 Medicare performance measures.

Performance on Medicare Quality Indicators, 2000Performance on Medicare Quality Indicators, 2000––20012001

First

ThirdFourth

Second

WA

ORID

MT ND

WY

NV

CAUT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SC

TNNC

KY

FL

VA

OH

MI

WV

PA

NY

AK

MD

MEVT

NH

MARI

CT

DE

DCCO

GAMS

OK

NJ

SD

Quartile Rank

HI

37

THE COMMONWEALTH

FUND

Chart IIChart II--3. U.S. Performs Relatively Well3. U.S. Performs Relatively WellBut Emphasis on Prevention is Still LackingBut Emphasis on Prevention is Still Lacking

62 6155

50 49

0

25

50

75

Australia Canada New Zealand UnitedKingdom

United States

Percent who DID NOT receive reminders for preventive care

Source: 2004 Commonwealth Fund International Health Policy Survey.

38

THE COMMONWEALTH

FUND

Chart IIChart II--4. Gaps Exist in Provision of 4. Gaps Exist in Provision of Preventive and Developmental ServicesPreventive and Developmental Services

Percent

Source: C. Bethell et al., Analysis of FAACT Surveys PHDS-Plus ofParents of Medicaid Children in Seven States. Unpublished data 2004.

50 48

69 7160

0

20

40

60

80

100

Parentalanticipatoryguidance

Parentalassessment forpsychosocial

issues

Parental screenfor tobacco and

substanceabuse

Family-centeredcare

Follow-up forchildren at risk

39

THE COMMONWEALTH

FUND

Percent of sicker adults reporting a serious error in past two years

Chart IIChart II--5. Medication or Medical Mistake5. Medication or Medical MistakeCaused Serious Health ConsequencesCaused Serious Health Consequences

in Past Two Yearsin Past Two Years

Source: The Commonwealth Fund 2002 International Health Policy Survey of Sicker Adults.

1315 14

9

18

0

10

20

30


United States

40

THE COMMONWEALTH

FUND

Chart IIChart II--6. Incorrect Test Results and6. Incorrect Test Results andDelays in Notification of Abnormal Results Delays in Notification of Abnormal Results

Raise Safety ConcernsRaise Safety Concerns

8

14 1512

9

0

10

20

30


United States

Percent of adults with test in past two years


41

THE COMMONWEALTH

FUND

Chart IIChart II--7. Opportunities Exist7. Opportunities Existfor Enhanced Doctorfor Enhanced Doctor––PatientPatient

Communication and InteractionsCommunication and Interactions

5869737073Always explains things so you can understand

4458665563Always spends enough time with you

5868746671Always listens carefully

USUKNZCANAUSPercent saying doctor:


42

THE COMMONWEALTH

FUND

Chart IIChart II--8. Significant Share of Adults Report 8. Significant Share of Adults Report Nonadherence, Questions Left UnansweredNonadherence, Questions Left Unanswered

3921273131Did not follow a doctor's advice

3119202521

Left a doctor's office without getting important questions answered

USUKNZCANAUSIn the past two years:


Views of Sicker Adults*

* Sicker adults are individuals who met at least one of four criteria: reported their health asfair or poor; or in the past two years had a serious illness that required intensive medical care, major surgery, or hospitalization for something other than a normal birth.

43

THE COMMONWEALTH

FUND

19%16%

23%

33%27%

0%

20%

40%


Hispanic AsianAmerican

Chart IIChart II--9. Minorities Face Greater Difficulty 9. Minorities Face Greater Difficulty in Communicating with Physiciansin Communicating with Physicians

Base: Adults with health care visit in past two years.* Problems include understanding doctor, feeling doctor listened, had questions but did not ask.

Source: Commonwealth Fund 2001 Health Care Quality Survey.

Percent of adults with one or more communication problems*

44

THE COMMONWEALTH

FUND

Chart IIChart II--10. Interpersonal Quality of Care 10. Interpersonal Quality of Care Lacking for a Number of PatientsLacking for a Number of Patients

56 59 59

46

6559

6654

0

20

40

60

80

100

Health providersalways listened

carefully

Health providersalways explained

things clearly

Health providersalways showed

respect

Health providersalways spentenough time

Source: S. Leatherman and D. McCarthy, Quality of Health Care for Medicare Beneficiaries:A Chartbook, 2005, The Commonwealth Fund. www.cmwf.org; Medical Expenditure PanelSurvey (AHRQ 2005).

Percent of community-dwelling adultsin 2001 who visited doctor's office in past year

Ages 45–64 Age 65+

45

THE COMMONWEALTH

FUND

73%

35%39%

27%27%

59%

79%

6%

16%

63%

8%16%

81%

37%

14%

26%26%

46%

76%71%

Electronic billing* Access to test results* Ordering of tests* Electronic medicalrecords*

All Physicians1 Physician2-9 Physicians10-49 Physicians50+ Physicians

Chart IIChart II--11. Physician Use of Electronic 11. Physician Use of Electronic Technology Could Be ExpandedTechnology Could Be Expanded

* p < .01, Cuzick's test for trend

Base: All respondents (N=1837)

Percent indicating "routine/occasional" use

Source: Commonwealth Fund 2003 National Survey of Physicians and Quality of Care.

46

THE COMMONWEALTH

FUND

Chart IIChart II--12. Substituting Emergency Department (ED) 12. Substituting Emergency Department (ED) for Regular Care More Likely in U.S. and Canadafor Regular Care More Likely in U.S. and Canada

54

918

60

7

41

6

33

16

27

0

25

50

75

Percent of adults who were sick or needed medical attention

AUS CAN NZ UK US

Same-Day Appointment Available

Went to ED for Condition That Could Have Been Treated by Regular

Physician If Available


AUS CAN NZ UK US

47

THE COMMONWEALTH

FUND

Chart IIChart II--13. Emergency Department Use 13. Emergency Department Use Rates Higher in the U.S. and CanadaRates Higher in the U.S. and Canada

Percent with any visits


29

3834

2927

0

25

50

Australia Canada NewZealand

UnitedKingdom

UnitedStates

48

THE COMMONWEALTH

FUND

Chart IIChart II--14. Continuity of Care 14. Continuity of Care with Same Physician Lackingwith Same Physician Lacking

3763565350More than 5 years

91355No regular doctor/place

29182120222 years or less

25172021223 to 5 years

9199979594Has regular doctor/place

USUKNZCANAUSPercent:


49

THE COMMONWEALTH

FUND

Chart IIChart II--15. Type of Information Influences 15. Type of Information Influences Hospital CEOs' Opinions Regarding Public Hospital CEOs' Opinions Regarding Public

DisseminationDissemination

Source: 2003 Commonwealth Fund International Health Policy Survey of Hospital Executives.

299251025Nosocomial infection rates

291016Average waiting times for elective procedures

171025Patient satisfaction ratings

4015251831Medical error rate

15134516Frequency of specific procedures

31%16%18%26%34%Mortality rates for specific conditions

USUKNZCANAUSPercent saying should NOT be released to the public:

50

THE COMMONWEALTH

FUND

3445

2851

40

37

42

354840

0

25

50

75

100

Australia Canada NewZealand

UnitedKingdom

UnitedStates

Percent lacking access to own medical records but would like accessPercent with access to own medical records

Chart IIChart II--16. Majority of Americans Want 16. Majority of Americans Want Information About Their Health and the Information About Their Health and the

Care They ReceiveCare They Receive


80 82 8070

88

51

THE COMMONWEALTH

FUND

Chart IIChart II--17. U.S. Performs Poorly on Kidney 17. U.S. Performs Poorly on Kidney Transplant FiveTransplant Five--Year Relative Survival RateYear Relative Survival Rate

100 104 104 106 113

0

20

40

60

80

100

120

UnitedStates

UnitedKingdom

NewZealand

Australia Canada

Standardized Performance on Quality Indicator100=Worst Result; Higher Score=Better Results

Source: P. S. Hussey, G. F. Anderson, R. Osborn et al., "How Does the Qualityof Care Compare in Five Countries?" Health Affairs 23 (May/June 2004): 89–99.

52

THE COMMONWEALTH

FUND

Chart IIChart II--18. U.S. Lags on Colorectal Cancer 18. U.S. Lags on Colorectal Cancer FiveFive--Year Relative Survival RateYear Relative Survival Rate

100 108 113 116 123

020406080

100120140

UnitedKingdom

UnitedStates

Canada Australia NewZealand

Standardized Performance on Quality Indicator100=Worst Result; Higher Score=Better Results

Source: P. S. Hussey, G. F. Anderson, R. Osborn et al., "How Does the Qualityof Care Compare in Five Countries?" Health Affairs 23 (May/June 2004): 89–99.

53

THE COMMONWEALTH

FUND

61 6258 60

49 5246

54

0

40

80

All races White Black Hispanic

Low poverty, <10% High poverty, 20%+

Percent of male patients diagnosed with cancer, 1988-94

Chart IIChart II--19. Five19. Five--Year Survival Rates forYear Survival Rates forCancer Patients Vary by Race/EthnicityCancer Patients Vary by Race/Ethnicity

and Census Poverty Tractand Census Poverty Tract

Source: G. Singh et al., “Area Socioeconomic Variations in U.S. Cancer Incidence, Mortality,Stage, Treatment and Survival, 1975–1999,” NCI, 2003. Figures 6.3 and 6.4.

54

THE COMMONWEALTH

FUND

63 6359

65

53 5548

60

0

40

80

All races White Black Hispanic

Low poverty, <10% High poverty, 20%+

Percent of women diagnosed with cancer, 1988–1994

Chart IIChart II--20. Five20. Five--Year Survival Rates for Year Survival Rates for Cancer Patients Vary by Race/EthnicityCancer Patients Vary by Race/Ethnicity

and Census Poverty Tractand Census Poverty Tract

Source: G. Singh et al., “Area Socioeconomic Variations in U.S. Cancer Incidence, Mortality,Stage, Treatment and Survival, 1975–1999,” NCI, 2003. Figures 6.3 and 6.4.

55

THE COMMONWEALTH

FUND

Chart IIChart II--21. Life Expectancy at Birth21. Life Expectancy at BirthLower in the United StatesLower in the United States

82.9 81.1 80.7 79.98181.382.182.885.3

74.576.276.375.575.577.277.875.878.4

0102030405060708090

Japan (2003)

France (2003)

Australia (2003)

Canada (2002)

Germany (2003)

OECD Median (2002)

New Zealand (2002)

United Kingdom (2003)

United States (2002)

Female Male

Source: OECD Health Data, 2005.

56

THE COMMONWEALTH

FUND

Chart IIChart II--22. United States Performs 22. United States Performs Poorly on Life Expectancy at Age 65Poorly on Life Expectancy at Age 65

19.6 19.119.519.62020.62121.323

16.116.61616.116.717.217.616.918

0

5

10

15

20

25

Japan (2003)

France (2001)

Australia (2003)

Canada (2002)

New Zealand (2002)

OECD Median (2002)

Germany (2001)

United States (2002)

United Kingdom (2002)

Female Male

Source: OECD Health Data, 2005.

57

THE COMMONWEALTH

FUND

III. Need for Greater EfficiencyIII. Need for Greater Efficiency

After a period of relatively stable growth in the 1990s, health care spending has exploded in recent years. Health care costs are concentrated among the sickest and most vulnerable Americans and are borne by those with private as well as public coverage.

– In 2002, U.S. health expenditures totaled 14.6 percent of gross domestic product, substantially higher than other developed nations. Thispercentage is projected to rise in the next decade (Charts III-1 and III-2).

– Ten percent of patients account for 69 percent of health expenditures (Chart III-3).

– Closer examination of the continued acceleration of health care spending indicates that private insurance premiums have historically outpaced Medicare spending per beneficiary (Chart III-4).

58

THE COMMONWEALTH

FUND

The United States far outpaces other countries in health care spending per capita (Chart III-5). Per capita out-of-pocket health spending in 2002 was more than double the OECD median (Chart III-6). Yet, the United States does not consistently use more services. In international comparisons of hospital discharges and average annual physician visits per capita, the United States sits on the lower end of the spectrum (Charts III-7 and III-8). Still, U.S. hospital expenditures exceed those in France, Canada, and Australia (Chart III-9), and use of expensive specialty services is much higher (Chart III-10).

Administrative costs are rising rapidly.

Health care coordination and administration are two areas that may greatly benefit from initiatives to raise efficiency. Growth in administrative costs has exceeded growth in national health expenditures (Chart III-11).

59

THE COMMONWEALTH

FUND

Enhancements in care coordination could foster cost savings.

A study examining elderly adults hospitalized for heart failure determined that transitional care provided by an advanced practice nurse reduced rehospitalization rates and lowered overall health care costs. Through discharge planning and home follow-up visits, the advanced practice nurse provided needs assessment, care planning, patient education, andtherapeutic support. The average cost of care for the intervention group was 39 percent lower than for the group receiving usual care (Chart III-12).

Lack of care coordination can lead to the unavailability of test results or records at the time of the patient’s appointment; duplication of testing; or provision of conflicting information by the patient’s various physicians. The 2004 Commonwealth Fund International Health Policy Survey found that 31 percent of those surveyed in the United States had experienced at least one of the aforementioned issues (Chart III-13). Individuals lacking insurance are more likely to experience a care coordination problem (Chart III-14).

60

THE COMMONWEALTH

FUND

Substantial variations indicate a need for standardization of practices based on individual patient characteristics and conditions, not on geographic location.

Standardization of practices can create more effective care while decreasing costs. Currently, there are substantial variations within the health care system, including quantity of services and prices.

– Across large Pennsylvania hospitals, charges for medical management of acute myocardial infarction vary eightfold (Chart III-15).

– Medicare spending varies across the states; higher Medicare spending per beneficiary does not necessarily correlate with higher-quality care (Chart III-16).

– Quality and cost vary greatly across hospitals (Chart III-17).– Drug prices are between 34 to 59 percent lower in Canada, France, and

the United Kingdom than in the United States (Chart III-18).– Doctors who practice more evidence-based medicine can be the ones

whose costs per case are lowest, but they can also be the highest (Chart III-19). Strategies are needed to foster high-quality, high-efficiency practices.

61

THE COMMONWEALTH

FUND

Chart IIIChart III--1. U.S. Spends Greater Percentage 1. U.S. Spends Greater Percentage of GDP on Health Care Than Other Nationsof GDP on Health Care Than Other Nations

14.6

10.99.7 9.6 9.1 8.5 8.5 7.8 7.7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

UnitedStates

Germany France Canada Australia(2001)

OECDMedian

NewZealand

Japan(2001)

UnitedKingdom

Source: G. F. Anderson and P. S. Hussey, Multinational Comparisons of HealthSystems Data 2004, The Commonwealth Fund, October 2004. OECD data.

Percent of gross domestic product (GDP) spent on health care, 2002

THE COMMONWEALTH

FUND

62

THE COMMONWEALTH

FUND

1918

161615151413131313131313131313121111

0

5

10

15

20

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

Projected

Chart IIIChart III--2. U.S. Health Expenditures2. U.S. Health Expendituresas Share of GDP Expected to Riseas Share of GDP Expected to Rise

Through Next DecadeThrough Next DecadeExpenditures as percent of gross domestic product (GDP)

Source: Center for Medicare and Medicaid Services, Office of the Actuary, 1998–2003 from CMS Health Accounts data file nhegdp03.zip available at http://www.cms.hhs.gov/statistics/nhe/default.asp; 2004–2014 published in Heffler et al., "U.S. Health Spending Projections for 2004–2014," Health Affairs Web Exclusive (February 23, 2005): W5-74–W5-85.

63

THE COMMONWEALTH

FUND

Chart IIIChart III--3. Health Care Costs3. Health Care CostsConcentrated in Sick FewConcentrated in Sick Few

0%10%20%30%40%50%60%70%80%90%

100%

U.S. Population Health Expenditures

1%5%

10%

55%

69%

27%

Source: A. C. Monheit, "Persistence in Health Expenditures in the Short Run:Prevalence and Consequences," Medical Care 41, supplement 7 (2003): III53–III64.

Distribution of health expenditures for the U.S. population,Distribution of health expenditures for the U.S. population,by magnitude of expenditure, 1997by magnitude of expenditure, 1997

50%

97%

$27,914

$7,995

$4,115

$351

Expenditure Threshold

(1997 Dollars)

64

THE COMMONWEALTH

FUND

Chart IIIChart III--4. Private Insurance Premiums4. Private Insurance PremiumsHave Historically Outpaced Medicare Have Historically Outpaced Medicare

Spending per BeneficiarySpending per Beneficiary

9.0

5.9

10.18.89.6

10.7

02468

1012

1969–2003 1999–2003

Medicare Private Health Insurance FEHBP*

Percent annual growth in per-enrollee spending

Source: Analysis by Office of the Actuary, Centers for Medicare and Medicaid Services, January 2005.

* FEHBP estimates are for 1969–2002 and 1999–2002 from Levit et al.,"Health Spending Rebound Continues in 2002," Health Affairs 23 (Jan/Feb 2004).

65

THE COMMONWEALTH

FUND

Chart IIIChart III--5. Health Care Spending Per Capita 5. Health Care Spending Per Capita in 2002 Illustrates Higher U.S. Spendingin 2002 Illustrates Higher U.S. Spending

Adjusted for differences in cost of livingAdjusted for differences in cost of living

$553

5,267

$3,446

$2,931 $2,817$2,736$2,643$2,517 $2,504

$2,193 $2,160 $2,077$1,857

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

United States

Switzerland

Canada

Germany

France

Netherlands

Sweden

Australia (2001)

OECD Median

United Kingdom

Japan (2001)

New Zealand

Mexico

Source: G. F. Anderson et al., "Health Spending in the United States and the Rest of the Industrialized World," Health Affairs 24 (July/August 2005): 903. OECD Health Data.

66

THE COMMONWEALTH

FUND

Chart IIIChart III--6. Out6. Out--ofof--Pocket Health Care Spending Pocket Health Care Spending Per Capita in 2002 Highest in United States Per Capita in 2002 Highest in United States


$737

$483$445

$347 $342$298 $292 $288 $268 $266

$0

$100

$200

$300

$400

$500

$600

$700

$800

United States

Australia (2001)

Canada

OECD Median

Japan (2001)

New Zealand

Germany

Mexico (2001)

France

Netherlands

Source: OECD Health Data.

67

THE COMMONWEALTH

FUND

252 247

201

159 156

11298 91

206

0

50

100

150

200

250

300

France(2001)

UnitedKingdom

NewZealand

Germany(2001)

OECDMedian

Australia Japan UnitedStates

Canada(2001)

Chart IIIChart III--7. United States on Lower End of Spectrum 7. United States on Lower End of Spectrum for Hospital Discharges per 1,000 Population in 2002for Hospital Discharges per 1,000 Population in 2002

Source: OECD Health Data, 2004, from G. F. Anderson et al., "MultinationalComparisons of Health Systems Data, 2004" (forthcoming).

68

THE COMMONWEALTH

FUND

Chart IIIChart III--8. United States on Lower End of 8. United States on Lower End of Spectrum for Average Annual Number ofSpectrum for Average Annual Number of

Physician Visits per CapitaPhysician Visits per Capita

2.52.9

3.64.4

4.96.26.26.2

6.97.3

14.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Japa

n (200

1)

Germ

any (2

000)

Fran

ce (2

001)

Austra

lia (2

002)

Canad

a (2

001)

OECD Medi

an

Unite

d Kin

gdom

(2000

)

New Z

eala

nd (2

001)

Unite

d Sta

tes

(2001

)

Sweden (2

001)

Mexico

(200

2)


69

THE COMMONWEALTH

FUND

Chart IIIChart III--9. Per9. Per--Day Hospital Expenditures Day Hospital Expenditures High in the United StatesHigh in the United States


$2,434

$902 $870 $848

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

United States(2002)

France (2001) Canada (2001) Australia (2001)


70

THE COMMONWEALTH

FUND

416

158 157130

94 86 73

0

100

200

300

400

500

UnitedStates

Canada(2001)

France(2001)

Australia OECDMedian

NewZealand

UnitedKingdom

Chart IIIChart III--10. United States Uses10. United States UsesMore Expensive Specialty ServicesMore Expensive Specialty Services

Source: OECD Health Data 2004, from G. F. Anderson et al., "MultinationalComparisons of Health Systems Data, 2004" (forthcoming).

Percutaneous transluminal coronary angioplasty(PTCA) interventions per 100,000 population in 2002

71

THE COMMONWEALTH

FUND

Chart IIIChart III--11. Administrative Cost Growth 11. Administrative Cost Growth Outpaces Total Medical Expenditure GrowthOutpaces Total Medical Expenditure Growth

6.2

9.78.5

12.5

9.3

16.3

7.7

13.2

0

5

10

15

20

National Health Expenditure Administrative Costs of Privateand Public Insurance

Annual Growth 1997–2000Annual Growth 2000–2001Annual Growth 2001–2002Annual Growth 2002–2003

* Administrative costs totaled $119.7 billion in 2003, nearly double that of 1997.Source: Smith et al., "Health Spending Growth Slows in 2003," Health Affairs 24 (Jan/Feb 2005).

Percent

72

THE COMMONWEALTH

FUND

Chart IIIChart III--12. Transitional Care Reduces12. Transitional Care ReducesRehospitalization for Heart Failure PatientsRehospitalization for Heart Failure Patients

61

48

0

20

40

60

80

100

162

104

0

50

100

150

200

$12,481

$7,636

$0

$4,000

$8,000

$12,000

$16,000

Percentage of patients who were rehospitalized or died

Number ofhospital readmissions

Average cost of care

Source: Medical records and patient interviews (N=239) (Naylor et al. 2004), S. Leathermanand D. McCarthy, Quality of Health Care for Medicare Beneficiaries: A Chartbook, 2005,The Commonwealth Fund. www.cmwf.org/usr_doc/MedicareChartbk.pdf.

Usual care group Intervention group

Resource use among congestive heart failure patients ages 65+ treated atsix Philadelphia hospitals during 1997–2001 who were randomly assignedto receive a three-month transitional care intervention or usual care

73

THE COMMONWEALTH

FUND

Chart IIIChart III--13. Care Coordination 13. Care Coordination Concerns AboundConcerns Abound

1814141418Received conflicting information from different doctors

3124252628Percent who experienced at least one of the above

144767Duplicate tests: doctor ordered test that had already been done

1713131412Test results or records not available at time of appointment

USUKNZCANAUSPercent saying in the pasttwo years:

Base: Have seen a doctor in past two years


74

THE COMMONWEALTH

FUND

Chart IIIChart III--14. Uninsured in U.S. at Highest Risk 14. Uninsured in U.S. at Highest Risk for Care Coordination Problemfor Care Coordination Problem

3026 26 26

3328

44

0

20

40

60


Total Insured AllYear

UninsuredAnytime

Percent ages 19–64 reporting any of three coordination problems*


*Coordination problems include duplication of tests, conflicting views, and medical record not available at time of appointment.

United States

75

THE COMMONWEALTH

FUND

Chart IIIChart III--15. Charges for Medical Management 15. Charges for Medical Management of Acute Myocardial Infarction Vary Eightfold of Acute Myocardial Infarction Vary Eightfold

Across Large Pennsylvania HospitalsAcross Large Pennsylvania Hospitals

* This hospital demonstrated significantly lower than expected in-hospital mortality rates. Note: Hospital charge equals patient total charge excluding professional fees; all hospitals shown provided advanced cardiac services (angioplasty/stent procedures), had >100 cases, and <5% of cases transferred to another acute care facility. Source: Pennsylvania Health Care Cost Containment Council, Hospital Performance Results, Hospital discharges between January 1, 2003 and December 31, 2003, www.phc4.org.

88,457

64,627

43,636

10,59214,020 14,871

18,596 19,29424,012

29,672

$0

$20,000

$40,000

$60,000

$80,000

$100,000

Lowest mortality hospital

$21,846*

76

THE COMMONWEALTH

FUND

Chart IIIChart III--16. Quality and Medicare Spending 16. Quality and Medicare Spending Vary Across States, 2000Vary Across States, 2000––20012001

Quality Expressed by Percent of Beneficiaries with Quality Expressed by Percent of Beneficiaries with AtrialAtrial FibrillationFibrillation

Sources: K. Baicker and A. Chandra, "Medicare Spending, The Physician Workforce, and Beneficiaries' Quality of Care," Health Affairs Web Exclusive (April 7, 2004).

77

THE COMMONWEALTH

FUND

Chart IIIChart III--17. Cost and Quality Vary Widely17. Cost and Quality Vary WidelyAcross U.S. HospitalsAcross U.S. Hospitals

Coronary Artery Bypass Graft: Observed/Expected Cost vs. Observed/Expected Quality

Outcomes by Hospital

0.0

0.5

1.0

1.5

2.0

0.0 0.5 1.0 1.5 2.0 2.5

Poor Outcomes - Observed/Expected

Cos

t per

Cas

e - O

bser

ved/

Expe

cted

High Quality Low Quality

High Cost

Low Cost

Source: S. Grossbart, "The Business Case for Safety and Quality: What Can Our Databases Tell Us," 5th Annual NPSF Patient Safety Congress, March 15, 2003.

78

THE COMMONWEALTH

FUND

Chart IIIChart III--18. Pharmaceutical Prices in U.S. 18. Pharmaceutical Prices in U.S. Exceed Those in Other CountriesExceed Those in Other Countries

Source: G. F. Anderson, D. Shea, P. S. Hussey et al., "Doughnut Holesand Price Controls,“ Health Affairs Web Exclusive (July 21, 2004).

100

4841

53

100

6052

66

0

20

40

60

80

100

120

United States Canada France United Kingdom

No U.S. discount 20% U.S. discountPrice index

Note: Analysis of IMS health data.

Relative Prices of Thirty Pharmaceuticals in Four Countries, 2003

79

THE COMMONWEALTH

FUND

Chart IIIChart III--19. High Longitudinal Efficiency19. High Longitudinal Efficiencyand Quality Are Compatibleand Quality Are Compatible

(Applies to selections of providers and treatment options)(Applies to selections of providers and treatment options)

Higher LowerMD Longitudinal Efficiency Index

(total cost per case mix-adjusted treatment episode)

MD

Qua

lity

Inde

x(o

utco

mes

or %

adh

eren

ce to

EB

M)

High QualityLow TCO(Dream Suppliers)

High QualityHigh TCO

Low

erH

ighe

r

50th %ile

50th %ile

TCO is total cost of ownership. It refers to the average stream of total health care spending over the course of alongitudinal episode of care, adjusted for case mix/severity of illness incurred for a particular provider's patients.

Source: A. Milstein, "Restorers, Skin-grafters & Calibrators: A Five-Year Forecast for Large Employer Cost Sharing,“data from Regence Blue Shield; Health System Change Patient Cost Sharing Conference, 12/3/2003.

Low QualityHigh TCO(Nightmare Suppliers)

Low QualityLow TCO

80

THE COMMONWEALTH

FUND

Although there are numerous challenges facing the U.S. health care system, transformation is possible. In the minds of health care opinion leaders,* enhanced performance is not unrealistic, and viable policies for improving access, quality, and efficiency are attainable. Currently, 18 percent of the under-65 population is without health insurance. According to a Commonwealth Fund Health Care Opinion Leaders survey released in March 2005, the proportion of uninsured can and should be reduced by more than half in 10 years (Chart IV-1).

Respondents to the survey believe that health expenditures will need to increase somewhat as a percentage of GDP (Chart IV-1). But they also believe that there are effective ways to cut health care costs. According to a survey released in May 2005, these leaders consider pay-for-performance to be the most effective means to reduce health care costs.

Conclusion. The Time Is RipeConclusion. The Time Is Ripefor Improvementfor Improvement

* Health care opinion leaders answering the Fund's survey include widely recognizedU.S. experts in health care policy, finance, and delivery with a variety of perspectivesand expertise.

81

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In addition, a majority of respondents believe enhanced disease management and primary care case management would effectively reduce unnecessary utilization of health care services. Respondents were also enthusiastic about use of evidence-based guidelines, and nearly half rated expanding the use of information technology as an extremely or very effective means of controlling use of unnecessary services (Chart IV-2).

Promising strategies for improving affordability and achieving savings also include the following:

– Management of high-cost care– Selection of medical home and improved access to primary care and

preventive services– Better information on provider quality and total costs of care– Development of networks of high-performing providers under Medicare,

Medicaid, and private insurance– Limits on family premium and out-of-pocket costs as a percent of

income (e.g., 5 percent of income for low-income individuals)– Expanded group coverage and reinsurance

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Medicare, which comprised one-fifth of all personal health care spending in 2003 (MedPAC 2004), is a major payer and therefore an important driver of change. The Centers for Medicare and Medicaid Services (CMS) conducts and sponsors demonstration projects in order to evaluate the effect of new interventions and to inform policy decisions. Large majorities of respondents who participated in an online survey of U.S. health care experts favor leveraging Medicare to speed the adoption of electronic medical records and health information technology (Chart IV-3). Innovations in the private sector are also important for promoting high-quality, high-efficiency, and cost-effective care.

The Commission on a High Performance Health System will seek opportunities to change the delivery and financing of health care to improve system performance and will identify public and private policies and practices that would lead to those improvements. It will explore mechanisms for financing improved health insurance coverage and investments in the nation's capacity for quality improvement, including reinvesting savings from efficiency gains.

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Chart IVChart IV--1. Transformation Is Possible1. Transformation Is Possible

18% 15%

63%

9%8%16%

65%

0%

20%

40%

60%

80%

Proportion of under-65population that has no

health insurance

Total cost of health careas a percentage of GDP

Percent of under-65population with

employer-providedinsurance

Maximum % of income aconsumer should spend

for out-of-pocketexpenses and

premiums

Current Goal

Source: Commonwealth Fund Health Care Opinion Leaders Survey, February 2005.

"What you would see as both an achievable anda desirable target or goal for policy action for the next 10 years?"

Note: Goal percentages represent median responses.

Asked as a current target, not a ten-year

goal

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Chart IVChart IV--2. Health Care Leaders: Pay2. Health Care Leaders: Pay--forfor--PerformancePerformanceIs Most Effective Way to Reduce Health Care CostsIs Most Effective Way to Reduce Health Care Costs

31%

44%

46%

52%

56%

57%

Have patients pay a substantially higher share of theirhealth care costs

Have all payers, including private insurers, Medicare,and Medicaid, adopt common payment methods and

rates

Expand the use of information technology

Use evidence-based guidelines to determine when atest or procedure should be done

Improve disease management and primary care casemanagement

Reward more efficient and high-quality medical-careproviders

Source: Commonwealth Fund Health Care Opinion Leaders Survey, April 2005.

"How effective do you think each of these possible actionswould be to reduce health care costs?"

(Percent saying extremely or very effective)

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Chart IVChart IV--3. Health Policy Experts Suggest 3. Health Policy Experts Suggest Various Changes to MedicareVarious Changes to Medicare

67%

67%

67%

67%

87%

89%

Eliminating the two-year waiting period for coverage ofthe disabled

Having Medicare offer its own comprehensive benefitpackage as an alternative to Medigap or Medicare

Advantage

Raising taxes to ensure Medicare’s long-term solvency

Allowing those under age 65 to contribute to aMedicare savings account

Using Medicare’s leverage to reward providers forperformance on quality and efficiency

Using Medicare leverage to accelerate adoption ofelectronic medical records and health information

technology

Source: Commonwealth Fund Health Care Opinion Leaders Survey, July 2005.

"Do you favor or oppose changing Medicare in the following ways?"(Percent who favor…)

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ReferencesReferencesBaile, W. and J. Aaron. "Patient-Physician Communication in Oncology: Past, Present, and Future." Current Opinion

in Oncology. 17(4). (July 2005): 331.

Collins, S. et al. "Opinion: Proposals for Health Policy." Inquiry. 42. (Spring 2005): 6.

Cutler, D. and M. McClellan. "Is Technological Change in Medicine Worth It?" Health Affairs. 20(5). (Sept/Oct 2001): 11.

Davis, K. et al. Health and Productivity Among U.S. Workers. (New York, The Commonwealth Fund, August 2005).

Davis, K. et al. Mirror, Mirror on the Wall: Looking at the Quality of American Health Care Through the Patient's Lens.(New York, The Commonwealth Fund, Jan. 2004).

Fisher, E. et al. "The Implications of Regional Variations in Medicare Spending: Part I. The Context, Quality, and Accessibility of Care." Annals of Internal Medicine. 138. (Feb 18, 2003): 273.

Gilmer, T. and R. Kronick. "It's the Premiums, Stupid: Projections of the Uninsured Through 2013." Health Affairs Web Exclusive. April 5, 2005.

Glied, S. and S. Little. "The Uninsured and the Benefits of Medical Progress." Health Affairs. 22(4). (July/Aug 2003): 210.

Hall, M. et al. "Trust in Physicians and Medical Institutions: What Is It, Can It Be Measured, and Does It Matter?"The Milbank Quarterly. 79(4). (2001): 613.

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References (cont.)References (cont.)Institute of Medicine. Hidden Costs, Value Lost: Uninsurance in America. (Washington, DC: National

Academies Press, 2003).

Jencks, S., Huff, E. and T. Cuerdon. "Change in the Quality of Care Delivered to Medicare Beneficiaries, 1998-1999 to 2000-2001. JAMA. 289(3). (January 15, 2005): 305.

Kohn, L., Corrigan, J. and M. Donaldson (eds). To Err Is Human: Building a Safer Health System. Washington, DC: National Academy Press; 1999.

Leatherman, S. and D. McCarthy. Quality of Health Care for Medicare Beneficiaries: A Chartbook, 2005. The Commonwealth Fund.

MedPAC. June 2004. "National Health Care and Medicare Spending." In A Data Book: Health Care Spending and the Medicare Program. Washington, DC: MedPAC. www.medpac.gov.

McGlynn et al. "The Quality of Health Care Delivered to Adults in the United States." The New England Journal of Medicine. (June 26, 2003): 2635.

Parchman, M. and S. Burge. "The Patient-Physician Relationship, Primary Care Attributes, and Preventive Services." Family Medicine. 36(1). (January 2004): 22.

Reinhardt, U., Hussey, P. and G. Anderson. "U.S. Health Care Spending in an International Context." HealthAffairs. 23(3). (May/June 2004): 10.

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References (cont.)References (cont.)Schoen, C. et al. "Insured But Not Protected: How Many Adults Are Underinsured?" Health Affairs Web Exclusive.

June 14, 2005.

Schoen, C. et al. "Primary Care and Health System Performance: Adults' Experiences in Five Countries." Health Affairs Web Exclusive. October 28, 2004.

Stewart, M. et al. "The Influence of Older Patient-Physician Communication on Health and Health-Related Outcomes. Clinical Geriatric Medicine. 16(1). (2000): 25.

Stewart, M. "Effective Physician-Patient Communication and Health Outcomes: A Review." CMAJ. 152(9):1,423.

U.S. Census Bureau. Income, Poverty, and Health Insurance Coverage in the United States: 2004. (Washington, DC: U.S. Government Printing Office, 2005).

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Visit the Fund atVisit the Fund atwww.cmwf.orgwww.cmwf.org

Publications:• Chartbooks on quality of care• International surveys (annual)• Other publications on coverage,

access, and quality

commission on a high performance health system

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