Health Care Policy Objectives Review Economic Trends and Consumer Satisfaction Review Economic...

Health Care PolicyHealth Care Policy

ObjectivesObjectives

• Review Economic Trends and Consumer Review Economic Trends and Consumer Satisfaction Satisfaction

• Review the components of Health CareReview the components of Health Care

• Compare Health Insurance PlansCompare Health Insurance Plans

Table 1.2National Health Expenditures Per Capita, 1986-2010

Calendar Year

Source: CMS, Office of the Actuary, National Health Statistics Group.

$2,477

$3,183

$3,698

$4,177

$5,039

$6,926

$8,228

$1,872

$5,757

$9,216

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

ActualProjected

National health spending per capita is projected to increase rapidly over the next decade.

0

20

40

60

80

100

1960 1970 1980 1990 2000

Calendar Year

Perc

en

t

Table 1.3Personal Health Care Expenditures by Source of Funds:

Selected Years 1960-2000


Total Private

Total Public

$23.3 $63.1 $214.5 $609.3 $1,130.4

Over the last several decades, the public sector share of health spending has increased, while the share from out-of-pocket spending has declined.

55.2%

39.7% 27.1% 22.5% 17.2%

21.4%15.7%

11.5%

10.0%7.3%

21.4%

22.3%28.3% 33.4%

34.6%

2.0%

2.8%

4.3%5.0%

5.0%

11.5%16.9%

17.6%

19.2%

8.0%

11.9%

11.4% 16.8%

Dollars in Billions

Other PublicMedicareTotal Medicaid, SCHIP expansion and SCHIP

Out-of-PocketOther PrivatePrivate Health Insurance

Table 1.4Sources of Health Insurance Coverage for the

Under 65 Population, 1980-2000

Notes: ESI - Employer Sponsored Insurance. Any Private includes ESI and individually purchased insurance. Any government includes Medicare for the disabled population.

Source: Tabulations of the March Current Population Survey files by Actuarial Research Corporation, incorporating their historical adjustments.

Over the last two decades, private coverage has declined, public coverage has stayed about the same, and the uninsured have grown.

74%

83%

8%

15%

10%

0

10

20

30

40

50

60

70

80

90

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

ESI

Any Private

Medicaid

Any Government Uninsured

74%

69%

16%

14%

9%

Table 1.5Distribution of Personal Health Care Expenditures

by Type of Service, 1960-2000S

ervi

ce

Percent


39.3%

47.3%

41.7%

36.5%

22.9% 21.9%

25.9% 25.3%

0.2%1.1%

2.1%2.9%

11.4%

5.6%6.6%

10.8%

3.6%

8.2% 8.6% 8.2%

22.5%

15.8%15.2%

16.4%

The share of health spending on home health and nursing homes has grown. Physician share has stayed about the same while the hospital share grew and then declined.

Table 1.8Concentration of Health Spending, 1980-1996

Note: Data for 1980 are from the National Medical Care Utilization and Expenditure Survey (NMCUES); for 1987, from the 1987 National Medical Expenditure Survey (NMES); and for 1996, from the 1996 National Medical Expenditure Panel Survey (MEPS).

Source: Berk, Mark and Alan Monheit, “The Concentration of Health Care Expenditures, Revisited,” Health Affairs March/April 2001.

Health spending remains highly concentrated on a small percentage of people. The top1% of people account for more than a quarter of all health spending.

Percent of People

Table 1.12Number of People Employed in Health Care, 1985-2001

Note: Not seasonally adjusted.

Source: Bureau of Labor Statistics, data extracted from web site at data.bls.gov/labjava/outside.jsp?survey=ee. Trends and Indicators in the Changing Health Care Marketplace, 2002 – Chartbook.

Number of people employed in health is growing.

6.3

7.88.2

8.58.8 9 9.2

9.5 9.7 9.9 10 10.1 10.3

0

2

4

6

8

10

12

1985 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Em

plo

ym

en

t in

Mill

ion

s

Health Services Employment as a % of Non-Farm Private Sector Employment

7.8% 8.6% 9.1% 9.4% 9.5% 9.5% 9.4% 9.5% 9.4% 9.3% 9.2% 9.1% 9.3%

Table 1.13Health Care Employment by Occupation, 1983-2000

Source: Dept. of Labor, Bureau of Labor Statistics. Current Population Survey.

Health care employment growth exceeded that of the general economy.

0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200

Managers, Medicine & Health

Medical Scientists

Physicians

Dentists

Optometrists

Health Diagnosing Practitioners

Licensed Practial Nurses

Registered Nurses

Pharmacists

Dietitians

Respiratory Therapists

Occupational Therapists

Physical Therapists

Speech Therapists

Physicians' Assistants

Clinical Laboratory Technologists & Technicians

Dental Hygienists

Health Record Technologists & Technicians

Radiologic Technicians

Employment (Thousands)

1983 1990 2000

Percent Change 1990-02

32.0%

-75.4%

28.7%

14.8%

7.5%

39.4%

61.9%

56.5%

48.6%

23.8%

16.9%

21.6%

26.6%

-15.2%

30.4%

5.0%

24.6%

95.3%

332.2%

13.8% Total Employment

. . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. .

. . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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. . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . .

Table 1.16HMO Enrollment by Ownership Status, 1981-2000

Note: HMO enrollment includes enrollees in both traditional HMOs and point-of-service (POS) plans through: group/commercial plans, Medicare, Medicaid, the Federal Employees Health Benefits Program, direct pay plans, supplemental Medicare plans, and unidentified HMO products.

Source: Trends & Indicators in the Changing Health Care Marketplace, 2002 -- Chartbook.

The proportion of HMO enrollees in for-profit plans grew over the past decade.

74.0%

53.8%47.8%

36.7% 36.3% 36.0% 36.5%

88.0%

46.2%

26.0%

12.0%

63.5%64.0%63.7%63.3%52.2%

0%

20%

40%

60%

80%

100%

1981 1985 1989 1993 1997 1998 1999 2000

% Non-Profit % For-Profit

Total Enrollment (in millions)

10.27 18.89 32.49 42.07 72.23 78.78 80.81 79.66

Table 1.17Concentration of Managed Care Enrollment, 1988-2000

Note: The largest national managed care firms include Blue Cross and Blue Shield plans, Aetna US Healthcare, Kaiser Permanente, United Health, and PacifiCare. HMO enrollment includes enrollees in both traditional HMOs and point of service plans.

Source: Trends & Indicators in the Changing Health Care Marketplace, 2002 – Chartbook.

Two-thirds of managed care enrollees are enrolled in the nation’s 10 largestmanaged care firms.

45.8

54.6 56.2

65.064.1 65.2 66.5

0

10

20

30

40

50

60

70

80

1988 1991 1994 1997 1998 1999 2000

Perc

en

t E

nro

lled

in 1

0 L

arg

est F

irm

s

Table 1.18Managed Care Enrollment by Type of Plan, 1984-2000

Source: Trends & Indicators in the Changing Health Care Marketplace, 2002 – Chartbook.

Mixed model HMO plans have shown rapid growth.

2.1 4.3 2.46.6

8 9.78.7 7

3.55.6 3.9

3.3 7.12.9

13.5 16.227.5

33.56.7

23.1

32.1

0.40.80

10

20

30

40

50

60

70

80

1984 1988 1992 1996 2000

En

rolle

es (in

mill

ion

s)

Staff Group Network IPA Mixed

31.4

38.8

63.3

80.1

15.1

NA19.5%23.3%43.6%13.6%

NA43.0%18.0%25.4%13.6%

17.3%41.7%10.0%24.8%6.2%

36.4%43.4%5.3%

13.7%1.2%

40.0%41.9%8.9%8.8%0.4%

MixedIPANetworkGroupStaff

Those over 65 and those with incomes under $20,000 spend a higher percentage of their income on health than other groups.

Source: Dept. of Labor, Bureau of Labor Statistics, Consumer Expenditure Survey.

Table 1.21Out-of-Pocket Spending for Health Care as a Percent of Income

by Age and Income Level, 2000

By Income LevelBy Age Group

12.9%

5.2%

3.3%2.7%

0

2

4

6

8

10

12

14

16

Under 35 35 to 54 55 to 64 65 andover

Per

cen

t o

f In

com

e S

pen

t o

n H

ealt

h

2.6%4.0%

6.2%

15.2%

0

2

4

6

8

10

12

14

16

Less than$20,000

$20,000 to$49,999

$50,000 to$69,999

$70,000and above

Per

cen

t of

In

com

e S

pen

t on

Hea

lth

Age GroupIncome Level

Table 1.22Growth in the Overall Consumer Price Index (CPI) and

Medical-Specific Consumer Price Index (MCPI), 1993-2001

Source: Dept. of Labor, the Bureau of Labor Statistics.

Medical prices have risen faster than overall consumer prices.

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

1993 1994 1995 1996 1997 1998 1999 2000 2001

CPI MCPI

Health Care PolicyHealth Care PolicyAlmost 45 million Americans were uninsured in 2003 (44.7 million under the age of 65)—growing by 1.4 million from the previous year and a total of over 5 million since 2000.

Both adults and children experienced significant decreases in the share with job-based coverage. The proportion of children with employer-sponsored insurance dropped from 62% in 2000 to 57% by 2003.

The 2001 recession, brief as it was, triggered a sharp downtick in job-based coverage and it continued to affect health insurance coverage even in 2003, as employment was slow to recover, job opportunities shifted, and family incomes declined.

“Health Insurance Coverage in America – Chartbook 2003” Kaiaser

Recent Findings on Public Attitudes Towards Patient’s Rights and Managed Care

Kaiser Foundation 2001


Rank the following organizations, from highest to lowest, according the statement: “I have a favorable opinion of”

Airlines Banks Doctors Health Insurance Companies HMOs Hospitals Oil Companies Pharmaceutical companies Tobacco companies



In general, do you think managed care health plans are doing a good job or a bad job in serving health care consumers?


In the past few years have you or someone you know:

Needed more information about how the health plan operates in order to choose among different plans?

Had difficulty getting a health plan to pay for an emergency room bill?

Had difficulty getting permission from a health plan or regular doctor to see a medical specialist?

Wanted to file an appeal to an independent reviewer when a health plan denied coverage for a particular medical treatment?

Had difficulty getting permission from a health plan or regular doctor to see a gynecologist?

Wanted to sue a health plan for malpractice?

Health Care PolicyHealth Care PolicyDo you think this issue is very important for the

President and the Congress to deal with? Making prescription drugs more affordable for people

age 65 and over Making Medicare more financially sound for future

generations Helping families with the cost of caring for an elderly or

disabled family member who needed long-term care Protecting patient’s rights in HMOs and managed care

plans Increasing the number of Americans covered by health

insurance

Which one of these would you say is the most important issue?







Primary CarePrimary CarePreventive and Treatment measures

Often provided by a physician or nurse practitioner


Secondary CareSecondary Care• Services available both in community

hospitals and physicians’ offices

• Surgeries

• Specialists, e.g.. Cardiologists, GI, Derm


Tertiary CareTertiary Care- Highly specialized care

- Often at large medical centers

Transplants

Open-heart surgery

Neonatal wards

Chemo- & Radiotherapy


ConsumersConsumers

• US PopulationUS Population

• Minors, Aged, Disabled, OthersMinors, Aged, Disabled, Others

• Employed, Not-employed, working poorEmployed, Not-employed, working poor

Family Family

CaregiversCaregivers

Representatives of ConsumersRepresentatives of Consumers

• ActivistsActivists

• Associations - AARPAssociations - AARP


Providers of CareProviders of Care

• PhysiciansPhysicians

• Nurses, PAs, Others (SW, Pharm, RDs, PTs)Nurses, PAs, Others (SW, Pharm, RDs, PTs)

• Diagnostic and Laboratory TechniciansDiagnostic and Laboratory Technicians

• Associations / Trade OrganizationsAssociations / Trade Organizations


Institutions that Provide CareInstitutions that Provide Care

• Hospitals, Medical CentersHospitals, Medical Centers

• Specialty ClinicsSpecialty Clinics

RehabRehab

Drug / Substance AbuseDrug / Substance Abuse

• Long-term care facilitiesLong-term care facilities

• AssociationsAssociations

American Hospital AssociationAmerican Hospital Association


Government : Federal, State, LocalGovernment : Federal, State, Local

• Regulatory RoleRegulatory Role

• Political Process - set regulations, respond to Political Process - set regulations, respond to electorateelectorate

• Reimbursement Reimbursement

Medicare, Medicaid (States)Medicare, Medicaid (States)

• Public Health SystemPublic Health System


Insurance GroupsInsurance Groups

• BluesBlues

• Associations / Trade OrganizationsAssociations / Trade Organizations


Support IndustriesSupport Industries

• Pharmaceutical Companies and DistributorsPharmaceutical Companies and Distributors

• Medical DevicesMedical Devices

• Medical EquipmentMedical Equipment


EmployersEmployers

EconomistsEconomists

Judiciary; Legal SupportJudiciary; Legal Support

Information / Technology IndustryInformation / Technology Industry

• WebMD; WebMD;

Higher EducationHigher Education







Concept Checks: Define HMO PPO Conventional Fee for Service Point of Service (POS)

How do they differ? Be prepared to describe the strengths

and weaknesses of each.


Health Insurance PlansHealth Insurance Plans

Fee-for-ServiceFee-for-Service

Health Maintenance Organizations Health Maintenance Organizations (HMO)(HMO)

Individual Practice Association (IPA) Model HMOIndividual Practice Association (IPA) Model HMO

Preferred Provider Organizations Preferred Provider Organizations (PPO)(PPO)

MedicareMedicare

MedicaidMedicaid

Disability InsuranceDisability Insurance

Hospital Indemnity InsuranceHospital Indemnity Insurance

Long Term CareLong Term Care

Health Care PolicyHealth Care PolicyFee-for-ServiceFee-for-Service

Client may visit any physician, use any hospitalClient may visit any physician, use any hospital

Pay a premium each monthPay a premium each month

Deductible; after deductible provide a copayDeductible; after deductible provide a copay

Patient may need to submit billPatient may need to submit bill

Limited servicesLimited services

Preventive CarePreventive Care

Experimental; Home Health Care; Long-term care; Experimental; Home Health Care; Long-term care; PT; PT;

Health Care PolicyHealth Care PolicyHealth Maintenance Organization Health Maintenance Organization (HMO)(HMO)

• Pay a premium each monthPay a premium each month

• Receive ‘complete’ careReceive ‘complete’ care

• ‘‘Primary Care Doctor’ you must selectPrimary Care Doctor’ you must select

• Some preventive services covered, such as Some preventive services covered, such as well baby check ups, immunizationswell baby check ups, immunizations

• Care must be provided by HMO’s practice Care must be provided by HMO’s practice groupgroup

• Cannot self-refer to a specialistCannot self-refer to a specialist

• No claim forms to fill out / No claim forms to fill out / ● ● Small copaySmall copay

Health Care PolicyHealth Care PolicyPreferred Provider Organizations (PPO)Preferred Provider Organizations (PPO)

• Combination of a fee-for-service and HMOCombination of a fee-for-service and HMO

• Limits choice of doctors / hospitalsLimits choice of doctors / hospitals

• Has arrangements with doctors, hospitals, Has arrangements with doctors, hospitals, and other providers of care who have and other providers of care who have agreed to accept lower fees from the agreed to accept lower fees from the insurer for their services. insurer for their services.

• CopayCopay

• More expensive outside the networkMore expensive outside the network

Which Type Is Right for You?For each group, choose the statement 1 or 2 that

best describes how you feel:

Having complete freedom to choose doctors and hospitals is the most important thing to me in a health plan, even if it costs more.

Holding down my costs is the most important thing to me, even if it means limiting some of my choices.

I travel a lot or have children that live away from me and we may need to see doctors in other parts of the country.

I do not travel a lot and almost all care for my family will be needed in our local area.

Checkup on Health Insurance Choices

Which Type Is Right for You?For each group, choose the statement 1 or 2

that best describes how you feel:

I don't mind a health insurance plan that includes filling out forms or keeping receipts and sending them in for payment.

I prefer not to fill out forms or keep receipts. I want most of my care covered without a lot of paperwork.

In addition to my premiums, I am willing to pay for the cost of routine and preventive care, such as office visits, checkups, and shots. I also like knowing that I can get an appointment for these services when I want one.

Which Type Is Right for You?For each group, choose the statement 1 or 2 that

best describes how you feel:

I want a health plan that includes routine and preventive care. I don't mind if I have to wait for these services to be scheduled for an available appointment with my doctor.

If I need to see a specialist, I probably will ask my doctor for a recommendation, but I want to decide whom to go to and when. I don't want to have to see my primary care doctor each time before I can see a specialist.

I don't mind if my primary care doctor must refer me to specialists. If my doctor doesn't think I need special services, that is fine with me.

Which Type Is Right for You?

If your answers are mostly 1: You want to make your own health care choices, even if it costs you more and takes more paperwork. Fee-for-service may be the best plan for you.

If your answers are mostly 2: You are willing to give

up some choices to hold down your medical costs. You also want help in managing your care. Consider a health maintenance organization.

If your answers are some 1's and some 2's: You might want to look for a plan such as a preferred provider organization that combines some of the features of fee-for-service and a health maintenance organization.

Which Type Is Right for You?

The differences among fee-for-service plans, HMOs, and PPOs are not as clear-cut as they once were. Fee-for-service plans have adopted some

activities used by HMOs and PPOs to control the use of medical services.

And HMOs and PPOs are offering more freedom to choose doctors, the way fee-for-service plans do.


Concept Checks: Define What are the distinctions between

Medicare and Medicaid? Where would you find information on the

inclusion of nutrition services under Medicare and/or Medicaid?

Health Care PolicyHealth Care PolicyMedicareMedicare

• Center for Medicare and Medicaid Center for Medicare and Medicaid Services (CMS) (formerly HCFA)Services (CMS) (formerly HCFA)

• Largest health insurance programLargest health insurance program

• 40 million Americans40 million Americans

• EligibilityEligibility

65 years of age or older65 years of age or older

Some disable persons < 65Some disable persons < 65

End-Stage Renal Disease with dialysis or End-Stage Renal Disease with dialysis or transplanttransplant

Health Care PolicyHealth Care PolicyMedicareMedicare

• Part APart A

Hospital InsuranceHospital Insurance

Funded by SSFunded by SS

• Part BPart B

Supplemental Medical InsuranceSupplemental Medical Insurance

Doctor appointmentsDoctor appointments

Other services and suppliesOther services and supplies

Funded by General Revenues and PremiumsFunded by General Revenues and Premiums

Health Care PolicyHealth Care PolicyMedicaidMedicaid

• Title XIX of the Social Security Act - law in 1965

• Administered by the States


• Eligibility

* Low income families with children

* Aged, blind, disabled individuals who meet criteria

* Infants born to Medicaid eligible pregnant women

* Children < 6 and pregnant women at < 133% of the

Federal poverty level

* Recipients of adoption assistance and foster care

* Certain Medicare beneficiaries


Medicaid is a state administered program and each state sets its own guidelines regarding eligibility and services. Read more about your state Medicaid program.

http://www.cms.hhs.gov/medicaid/consumer.asp


• Each of the States:

1. Establishes its own eligibility standards

2. Determines the type, amount, duration, and scope

of services

3. Sets the rate of payment for services; and

4. Administers its own program

Health Care PolicyHealth Care Policy‘‘Medigap’Medigap’

Insurance that covers expenses outside of Medicare

Health Care PolicyHealth Care Policy Health Insurance PlansHealth Insurance Plans

What the client gets billed depends on the What the client gets billed depends on the health care plan.health care plan.

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