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Overview
Chartbook 2004
In 2003, Congress passed the most sweeping reform to the Medicare program since its inception by adding outpatient prescription drugs to its list of benefits. The Medicare Prescription Drug Improvement and Modernization Act (MMA) made many other changes to the program, including increasing payments to hospitals (primarily those in rural areas) by about $25 billion over the next 10 years and expanding coverage for certain preventive services, such as cardiovascular and diabetes screening tests. However, large federal budget deficits combined with the steep cost of the new legislation have created challenges. And, the effects of the MMA remain to be seen.
Recent trends in health care spending and hospital use reveal that national health expenditures grew over 9 percent between 2001 and 2002, topping $1.5 trillion. Health expenditures reached over 14 percent of the gross domestic product. While hospital services were the largest category of spending, prescription drugs continued to grow at a higher rate.
Hospitals have been under financial pressure in the last five years, both from public and private payers. Since 1999, up to one third of hospitals have had negative total margins. Early data for 2003 show a decline in operating and patient margins, while a sharp gain in non-operating income – due to improvement in the investment environment – pushed up total margins. Meanwhile, the performance of health plans continues to improve.
Every year, hospitals provide valuable health care services to those who need them, but the importance of hospitals goes well beyond the health care services they provide. Unlike many other sectors of the economy that lost vitality and shed jobs during the 2001 recession, the health care sector – and hospitals, in particular – provided an economic mainstay. For example, hospitals support one out of every nine jobs, either directly or indirectly, in the U.S.
The following charts report trends in the hospital field within the context of the broader health care environment. Hospital data are drawn primarily from the American Hospital Association Annual Surveys. The Chartbook begins with a chapter on overall patterns in health care spending, financing, and coverage. The next four chapters examine trends specific to hospital organizational, volume and utilization, financing, and workforce issues. The final chapter contains data on the economic benefits hospitals provide to their communities.
Overview
Overview
3
Chapter 1:Trends in the OverallHealth Care Market
Chartbook 2004
16.0
%
12.6
%
10.1
%
10.4
%
9.4%
7.1%
8.9%
12.1
%
11.6
%
11.8
%
9.5%
8.6%
7.4%
5.5%
5.7%
5.0%
5.1%
5.3% 6.
3% 7.1% 8.
5% 9.3%
0%
5%
10%
15%
20%
81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Chart 1.1:Total National Health Expenditures
1980 - 2002
Chart 1.2:Percent Change in Total National Health
Expenditures1981 - 2002
Bill
ions
Source: Centers for Medicare & Medicaid Services, Office of the Actuary(1) Expressed in 1980 dollars; adjusted using the overall Consumer Price Index for All Urban Consumers
Inflation-adjusted (1)
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
Trends in the Overall Health Care Market
7
Chartbook 2004
8.8
%9.1
%9.8
%10.0
%9.9
%10.1
%10.3
%10.5
%10.9
%11.3
%12.0
%12.7
%13.1
%13.4
%13.3
%13.4
%13.3
%13.1
%13.1
%13.2
%13.3
%14.1
%14.9
%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
$5,500
$6,000
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Chart 1.4:National Health Expenditures
as a Percentage of Gross Domestic Product1980 - 2002
Chart 1.3:Per Capita National Health Expenditures
1980 - 2002
Per
Cap
ita A
mount
Source: Centers for Medicare & Medicaid Services, Office of the Actuary(1) Expressed in 1980 dollars; adjusted using the overall Consumer Price Index for All Urban Consumers
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
Inflation-adjusted (1)
Trends in the Overall Health Care Market
8
Chartbook 2004
1980 2002
Chart 1.5:National Expenditures for Health Services
and Supplies(1) by Category1980 and 2002
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
(1) Excludes medical research and medical facilities construction(2) “Other” includes net cost of insurance and administration, government public health activities, and other personal health care(3) “Other professional” includes dental and other non-physician professional services
Prescription Drugs - 5.2%
Trends in the Overall Health Care Market
Physician Services - 20.2%
Hospital Care - 43.5%
Nursing Home Care - 7.6%
Other(2) - 9.5%
Other Medical Durablesand Non-durables - 5.9%
Home Health Care - 1.0%
Other Professional(3) - 7.3%
$233.5 B $1,496.3 B
Other Medical Durables andNon-durables – 3.4%
Prescription Drugs – 10.9%
Home Health Care - 2.4%
Other Professional(3) - 7.8%
Physician Services - 22.7%
Hospital Care - 32.5%
Other(2) – 13.5%
Nursing Home Care – 6.9%
9
Chartbook 2004
16.2%15.3%
9.5%8.7%
7.2%
4.1%
2.6%
7.3%7.7%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Chart 1.6:Percent Change in National Expenditures
for Health Services and Supplies(1) by Category
2001 - 2002
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
(1) Excludes medical research and medical facilities construction(2) “Other” includes government public health activities and other personal health
care(3) “Other professional” includes dental and other non-physician professional services
10
Trends in the Overall Health Care Market
Prescription Drugs
Other (2) Physician Services Other
Professional (3)
HospitalCare
Nursing HomeCare
Home Health
Care
OtherMedical Durables
and Non Durables
Admin.and NetCost of Priv.
Health Insurance
9.2%All Health Services &Supplies
Chartbook 2004
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
80 90 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Chart 1.7:Percent Change in National Expenditures
forSelected Health Services and Supplies
1992 - 2002
Chart 1.8:National Health Expenditures(1)
1980 - 2013
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
(1) Years 2003 – 2013 are projections
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
Trends in the Overall Health Care Market
11
-5%
0%
5%
10%
15%
20%
25%
92 93 94 95 96 97 98 99 00 01 02
Prescription Drugs
Admin. & Net Cost of Private Health Ins.
Hospital Care
Nursing Home Care
Home Health Care
Bill
ions
Chartbook 2004
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Chart 1.10:Total Prescription Drug Spending
1980 - 2002
Source: Centers for Medicare & Medicaid Services, Office of the Actuary(1) Expressed in 1980 dollars; adjusted using the overall Consumer Price Index for All Urban Consumers
Bill
ion
s
Inflation-adjusted (1)
Trends in the Overall Health Care Market
12
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
$220
$240
90 91 92 93 94 95 96 97 98 99 00 01 02
Chart 1.9:Consumer Out-of-Pocket Payments for National Health
Expenditures1990 - 2002
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
Bill
ion
s
Chartbook 2004
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Chart 1.12:Consumer Out-of-Pocket Spending vs. Private Health Insurance Spending for
Prescription Drugs1980 - 2002
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
Out-of-Pocket
Private Health Insurance
Bill
ion
s
Trends in the Overall Health Care Market
13
0%
5%
10%
15%
20%
25%
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Chart 1.11:Growth in Total Prescription Drug Spending
as a Percentage of Total Growth in National Health Expenditures1980 - 2002
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
Chartbook 2004
80 90 02
15.2%
3.5%
11.6%
13.4%
14.6%
3.4%
11.2%
13.5%
70.9%
13.9%
4.0%
9.7%
13.0%
73.2%
69.6%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Uninsured
Other Government
Medicaid
Medicare
Private
Chart 1.13:Distribution of National Health
Expendituresby Source of Payment1980, 1990, and 2002
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
Chart 1.14:Distribution of Health Insurance Coverage
Percentage of Population Covered by Payer1990, 2001, and 2002(1)
Trends in the Overall Health Care Market
1990 2001 2002
Medicare - 15.2%
Total Medicaid - 10.6%
Other Government - 16.9%
Other Private - 5.9%
Out of Pocket - 23.7%
Private Insurance - 27.8%
$245.8 B $696.0 B $1553.0 B
19.7%
6.1%
33.5%
14.2%
10.6%
15.8%
Out ofPocket
OtherPrivate
PrivateInsurance
OtherGovernment
Total Medicaid
Medicare
Out of Pocket – 13.7%
Other Private - 5.0%
Private Insurance – 35.4%
Other Government - 12.7%
Total Medicaid – 16.0%
Medicare - 17.2%
14
Source: US Census Bureau, Health Insurance Coverage in the United States: 2002
(1) 2001 and 2002 data use population estimates based on Census 2000.
Chartbook 2004
0
5
10
15
20
25
30
35
40
45
50
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 020%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Chart 1.15:Number and Percent Uninsured(1)
1985 - 2002
Source: US Census Bureau, Health Insurance Coverage in the United States: 2002
(1) 1999 - 2002 data use population estimates based on Census 2000
Chart 1.16:Average Percent Uninsured by State
2000-2002
Source: US Census Bureau, Health Insurance Coverage in the United States: 2002
Trends in the Overall Health Care Market
Num
ber
of
Unin
sure
d(M
illio
ns)
Perc
en
t of
Tota
l Popu
lati
on
Number Percent
15
< 10.0%
10.0% - 14.9%15.0% - 19.9%20.0% and above
RI 8.3%DE 9.5%DC 13.2%
Chartbook 2004
Chart 1.17:Medicare Enrollees(1)
1980 - 2002
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
1990 1995 2000 2001
Source: Centers for Medicare & Medicaid Services
(1) Does not include S-CHIP Enrollees
Chart 1.18:Medicaid Enrollees(1)
1990, 1995, 2000, and 2001
Trends in the Overall Health Care Market
16
28.1
28.6
29.1
29.6
30.0
30.6
31.2
31.9
32.4
33.0
33.7
34.4
35.2
35.9
36.5
37.1
37.7
38.1
38.4
38.7
39.2
39.6
0
5
10
15
20
25
30
35
40
45
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 01 02
Mill
ions
Source: Centers for Medicare & Medicaid Services
(1) Hospital insurance (Part A) enrollees only; includes all persons (aged and disabled)
Mill
ions
Aged
Blind/Disabled
Children
Adults
Other Title XIX
25.3 M
36.3 M
46.1 M
42.5 M
Chartbook 2004
Chart 1.19:National SCHIP Enrollment(1)
FY 1999 - FY 2003
Chart 1.20:Percent Change in SCHIP Enrollment By
StateFY 2002 - FY 2003
Source: Centers for Medicare & Medicaid Services
(1) Number of children enrolled at any point in the year
1,959,330
3,333,879
4,622,204
5,353,8125,841,351
FY 1999 FY 2000 FY 2001 FY 2002 FY 2003
Source: Centers for Medicare & Medicaid Services, FY 2003 Number of Children Ever Enrolled in SCHIP by Program Type, January 22, 2004
RI 26%DE 1%DC 16%
1% - 50%0%
Less than 0%
51% - 100%
Over 100%
17
Unknown
Trends in the Overall Health Care Market
Chartbook 2004
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1988 1993 1996 1998 1999 2000 2001 2002 2003
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1988 1993 1996 1999 2000 2001 2002 2003
Conventional
PPO
HMO
POS
(1)
Chart 1.21:Percentage of Employees with Employer-based
CoverageWho Can Choose Conventional, PPO, HMO and POS
Plans1988 - 2003
Source: The Kaiser Family Foundation and Health Research and Educational Trust, Survey of Employer-Sponsored Health Benefits: 1999, 2000, 2001, 2002, 2003; KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996
(1) Point-of-service plans not separately identified
Chart 1.22:Distribution of Employer-sponsored Health Insurance
Enrollment by Type of Plan1988 - 2003
Conventional
PPO
HMO
POS
Trends in the Overall Health Care Market
(1)
Source: The Kaiser Family Foundation and Health Research and Educational Trust, Survey of Employer-Sponsored Health Benefits: 2000, 2002, 2003; KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996
(1) Point-of-service plans not separately identified
18
Chartbook 2004
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
15%
13% 13%
17%17%16%
13%
10%
8%
6%5%
4%4%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
91 92 93 94 95 96 97 98 99 00 01 02 03
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
Chart 1.23:Percentage of Medicare Beneficiaries Enrolled
in Medicare Managed Care1991 - 2003
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
(1) Percentages are risk enrollees divided by enrollees who have both hospital insurance and supplementary medical insurance
Chart 1.24:Percent Growth in Medicare Spending per Beneficiary
vs.Private Health Insurance Spending per Enrollee
1980 - 2002
Trends in the Overall Health Care Market
Private Health Insurance
Medicare
19
(1)
Chartbook 2004
Chart 1.25:Percentage of Medicaid Beneficiaries Enrolled
in Medicaid Managed Care1991 - 2002
Chart 1.26:Percentage of Medicaid Beneficiaries Enrolled
in Medicaid Managed Care by State2002
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
Source: Centers for Medicare & Medicaid Services, Office of the Actuary
25% - 49%50% - 74%
75% - 100%
1% - 24%
0%
Trends in the Overall Health Care Market
RI 68.2%DE 77.1%DC 63.2%
10%12%
14%
23%
29%
40%
48%
54%56% 56% 57% 58%
0%
10%
20%
30%
40%
50%
60%
70%
91 92 93 94 95 96 97 98 99 00 01 02
20
Chartbook 2004
Source: Interstudy Competitive Edge: HMO Industry Report 13.2
Chart 1.28:HMO Plan Median Operating Margins
1990 - 2002
Source: The Kaiser Family Foundation and Health Research and Educational Trust, Employer Health Benefits 2000, 2001, 2002, 2003 Annual Surveys; KPMG Survey of Employer -Sponsored Health Benefits: 1988, 1993, 1996
Chart 1.27:Annual Change in Health Insurance Premiums
1988 - 2003
Trends in the Overall Health Care Market
21
12.0%
8.5%
0.8%
3.7%
4.8%
8.2%
11.0%
12.9%13.9%
0%
2%
4%
6%
8%
10%
12%
14%
16%
1988 1993 1996 1998 1999 2000 2001 2002 2003
2.1% 2.1% 2.2%2.5% 2.4%
1.2%
-0.9%
-3.5%-3.5%
-1.3%
-0.6%
0.2%
1.3%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
90 91 92 93 94 95 96 97 98 99 00 01 02
Chartbook 2004
Source: Milliman USA
Chart 1.29:Blue Cross/Blue Shield Underwriting Gain/Loss
1965 - 2002
Trends in the Overall Health Care Market
22
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01
Cycle Year 1 Cycle Year 2 Cycle Year 3