Upload
nathaniel-waller
View
14
Download
0
Tags:
Embed Size (px)
DESCRIPTION
Health Care Today: Filling in the Big Picture. John Marshall Law School April 28, 2006. “The Present and Future Organization of Medicine”. - PowerPoint PPT Presentation
Citation preview
ANNA RAPPAPORT CONSULTING
STRATEGIES FOR A SECURE RETIREMENTSM
Health Care Today: Filling in the Big Picture
John Marshall Law School
April 28, 2006
Anna Rappaport presentation at John Marshall Law School April 28, 2006 2
“The Present and Future Organization of Medicine”
“Today medicine stands at a crossroad. No one can fully grasp the content of medical science and medical art or forsee the path which the newer knowledge will follow more than a decade hence. No one can fully comprehend the present position of medical practice in society or anticipate the form it is destined to take.”
From the Milbank Memorial Fund Quarterly, Vol. 12, No. 2, 1934
Anna Rappaport presentation at John Marshall Law School April 28, 2006 3
Stakeholders
Patients/Families
Employed
Patients/FamiliesRetired
Patients/FamiliesDisabled
Patients/Families
UnemployedPublic
Provi
dersEm
ployers
Insurers
Regulators
Anna Rappaport presentation at John Marshall Law School April 28, 2006 4
Agenda
Filling in some facts Mercer survey highlights Defining the future landscape
Anna Rappaport presentation at John Marshall Law School April 28, 2006 5
Filling in Some Facts
How the US compares Reasons for higher spending in the US Claims distribution: A few people account for most of the
cost Illness and injury as contributors to personal bankruptcy Negotiating prices: how the Amish drive down costs Medical errors and the tort system
Anna Rappaport presentation at John Marshall Law School April 28, 2006 6
How the US Compares
9.1% 9.6%
7.8%
6.1%
7.7%
14.6%
10.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Source: “Health Spending in the United States and the Rest of the Industrialized World,” Health Affairs, Volume 34, Number 4, page 905
US Spending is Higher — % of GDP 2002
Anna Rappaport presentation at John Marshall Law School April 28, 2006 7
Reasons for higher spending in the US
Higher incomes and higher medical prices are major factor Price example – 2002 average cost of hospital day
– U.S. $2,434– Canada 870– Less in other OECD countries
Malpractice is not a major factor in difference – cost of defending claims in 2001 = .46% of total health spending
Supply issues: “Surprisingly, Americans have access to fewer health care resources than people in most other OECD countries measured in three major categories: hospital beds per capita, physicians and nurses per capita, and MRI and CT scanners per capita.”
Source: “Health Spending in the United States and the Rest of the Industrialized World,” Health Affairs, Volume 34, Number 4, pages 903-906
Anna Rappaport presentation at John Marshall Law School April 28, 2006 8
Typical Claim DistributionFew People: Majority of the Cost
53%
25%
35%
50%
3%
5%
10%
19%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
% Claimants % Cost
Anna Rappaport presentation at John Marshall Law School April 28, 2006 9
Implications of Claim Distribution
Big difference between different buyers Anti-selection = big issue Voluntary individual market solutions don’t work Risk adjustment key for future
Big question: who will pay for the high cost claimants?
Anna Rappaport presentation at John Marshall Law School April 28, 2006 10
Illness and Injury as Contributors to Personal Bankruptcy
Study focuses on links between personal medical costs and bankruptcy
Studied sample of 1771 bankruptcy filings in 2001 28% of filers reported illness or injury as cause for
bankruptcy Estimate that 1.9 to 2.2 million Americans (debtors and
dependents) experienced medical bankruptcy The overwhelming majority of uninsured medical debtors
had found coverage to be unaffordable of effectively unavailable
Source: Himmelstein, David and others, “Illness and Injury as Contributors to Bankruptcy, 2005,” Health Affairs – Web Exclusive Market Watch
Anna Rappaport presentation at John Marshall Law School April 28, 2006 11
Negotiating Prices: How the Amish Drive Down Costs
Amish and Mennonite are generally uninsured Elders negotiated with Heart of Lancaster Regional Medical
Center (community spent $5 million/year at center) Result:
– Total hip replacement: negotiated $16,578 vs.$37,260 national average
– Adult appendectomy: $5,527 vs. $19,957 – C-section: $5,000 vs. $13,458
50% payment required in cash up-front Elders pledged that community members would not sue for
malpractice
Source: Millman, Joel, “How the Amish Drive Down Medical Costs,” Wall Street Journal, February 21, 2006
Anna Rappaport presentation at John Marshall Law School April 28, 2006 12
Medical Errors and the Tort System
34% of public were personally involved in a situation where a preventable medical error occurred
Consequences to the public experiencing errors– 16% significant loss of time– 16% severe pain– 11% long term disability– 8% death
Reforming the tort liability system will not solve a major part of the health care cost problem as malpractice payments represent only 0.5% of total health spending – US is fairly similar to UK, Canada and Australia in malpractice spending
Sources: (1) Kaiser Family Foundation, “Trends and Indicators in the Health Care Marketplace,” Exhibit 7.17; (2) “Health Spending in the United States and the Rest of the Industrialized World,” Health Affairs, Volume 34, Number 4, page 910
Anna Rappaport presentation at John Marshall Law School April 28, 2006 13
Trends in Employer Plans: Mercer’s 2005 National Survey of Employer-Sponsored Health Plans
About the Survey Largest and most comprehensive annual survey Established in 1986, national probability sample used since
1993 2,999 employers participated All employers with 10 or more employees are surveyed; size
groups examined separately in this presentation include:- small employers – 10-499 employees - large employers – 500+ employees- jumbo employers – 20,000+ employees
Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans”
Anna Rappaport presentation at John Marshall Law School April 28, 2006 14
Trends in Employer Plans: Mercer’s 2005 National Survey of Employer-Sponsored Health Plans
Total health benefit cost increase slows for the third straight year
All Employers18.6%
16.7%17.1%
12.1%
10.1%
8.0%
2.5%
0.2%
6.1%7.3%
8.1%
11.2%
14.7%
10.1%
7.5%6.1%
-1.1%
2.1%
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans”
Anna Rappaport presentation at John Marshall Law School April 28, 2006 15
Strategy will be significant or very significant
StrategySmall
EmployersLarge
EmployersJumbo
Employers
Care management 31% 62% 81%
Consumerism 34% 55% 71%
Data transparency 27% 35% 54%
High-performance networks 26% 33% 51%
Collective purchasing 29% 25% 24%
Scaling back benefits/shifting cost to employees 21% 24% 17%Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans”
Trends in Employer Plans: Mercer’s 2005 National Survey of Employer-Sponsored Health Plans
Employers see care management, consumerism as top cost management strategies for the next five years
Anna Rappaport presentation at John Marshall Law School April 28, 2006 16
Percent of large employers offering program
Program 2005 2004
One or more disease management programs 67% 58%
Health risk assessment 46% 35%
Behavior modification program 30% 21%
Nurse advice lines 64% 59%
Health advocate services 37% 31%
Complex case management 65% ----
Catastrophic case management 66% 59%
End-of-life case management 40% ----
Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans”
Trends in Employer Plans: Mercer’s 2005 National Survey of Employer-Sponsored Health Plans
Growth in use of care management programs
Anna Rappaport presentation at John Marshall Law School April 28, 2006 17
Trends in Employer Plans: Mercer’s 2005 National Survey of Employer-Sponsored Health Plans
ActionAll
EmployersLarge
EmployersJumbo
Employers
Provided access to website on health conditions 41% 69% 84%
Provided access to website on provider quality and cost 40% 49% 53%
Provided utilization modeling tool to help with plan selection 17% 21% 47%
Replaced copayments with coinsurance 10% 22% 50%
Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans”
Actions taken to promote consumerism
Anna Rappaport presentation at John Marshall Law School April 28, 2006 18
Trends in Employer Plans: Mercer’s 2005 National Survey of Employer-Sponsored Health Plans
Consumer-directed health plans concentrated among jumbo employers in 2005
Percent of employers offering plan
2005 2004 2003
All employers 2% 1% <1%
Small employers (10-499) 2% 1% <1%
Large employers (500+) 5% 4% 1%
Jumbo employers (20,000+) 22% 12% 9%
Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans”
Anna Rappaport presentation at John Marshall Law School April 28, 2006 19
29%28%29%
35%38%
41%46%
21%21%23%28%
31%35%
40%
1993 1995 1997 1999 2001 2003 2005
Offer coverage to pre-Medicare-eligibleOffer coverage to Medicare-eligible
Trends in Employer Plans: Mercer’s 2005 National Survey of Employer-Sponsored Health Plans
Decline in retiree medical coverage levels off in 2005
Large Employers
Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans”
Anna Rappaport presentation at John Marshall Law School April 28, 2006 20
47%44%
35%
27%28%
5%
45%
32%
27%
19%21%
5%
10-499 500-999 1,000-4,999
5,000-9,999
10,000-19,999
20,000 ormore
Pre-Medicare-eligibleMedicare-eligible
Number of employees
Source: Mercer Health & Benefits, LLC, “2005 National Survey of Employer-Sponsored Health Plans”
Trends in Employer Plans: Mercer’s 2005 National Survey of Employer-Sponsored Health Plans
Offer retiree coverage in 2005, by employer size
Anna Rappaport presentation at John Marshall Law School April 28, 2006 21
Moving into the Future: Defining Key Issues
QUALITY ACCESS
COST
Choose two — You can’t have all three!Future of employer role depends on total health care system issues
Anna Rappaport presentation at John Marshall Law School April 28, 2006 22
Lessons Learned
The payment system often drives the patterns of care– Ex: if care is paid for in the hospital and not out of the
hospital, care will shift– Ex: if care is paid for if job related and not otherwise,
there will be job related problems Liability system can influence patterns of care—sometimes
improving quality but maybe leading to unnecessary care Costs can increase beyond anyone’s expectations High-cost claimants drive market possibilities Technology can lead to marvelous results, but it also can
cost a lot Sometimes people focused on the latest technology forget
the basics
Anna Rappaport presentation at John Marshall Law School April 28, 2006 23
Big Questions
What rights does the public have to health care? Who will define the risk pools? How do we reduce the number of uninsured? How can we keep costs under control? What role will employers take in financing and providing
health care? What role will state and federal government take in
regulating, financing and providing health care? How will those without employer coverage gain access to
care? How will resources be allocated to public health, acute care
and chronic care?
Anna Rappaport presentation at John Marshall Law School April 28, 2006 24
Big Questions (continued)
How will decisions about individual care be made? What control/management systems will be in place? What will be the role and who will control academic medical
centers? How will managed care evolve? What systems will be used to control that excessive care is
not provided? What is appropriate care at the end of life? Who can make decisions about end of life care and
choosing when to die? Will insurers be allowed to underwrite individuals without
any restrictions? Will risk adjustment methods be developed?
Anna Rappaport presentation at John Marshall Law School April 28, 2006 25
Big Questions (continued)
What liability will be imposed on providers, insurers? What limits will there be on liability? Where will early retirees without employer coverage get
their coverage? Who will define standards for quality of care? Who will set/negotiate prices? Will providers be allowed to charge different prices to
different customers?
Anna Rappaport presentation at John Marshall Law School April 28, 2006 26
Appendix: Additional Data
Anna Rappaport presentation at John Marshall Law School April 28, 2006 27
National Health Expenditures
Percentage of GDP1993 13.4%
2003 14.9
2006 16.0*
2014 18.7*
*Estimate
Per Capita1993 $3,353
2003 5,670
2006 6,830*
2014 11,045*
Source: “US Health Spending Projections for 2004-2014,” Health Affairs, Feb. 2005
Anna Rappaport presentation at John Marshall Law School April 28, 2006 28
Uninsured
A growing problem– 44.7 million – 2003– 40.0 million – 1999
Consequences– 47% postponed seeking care because of cost
(compared to 15% of insured)– 37% did not fill a prescription because of cost
(compared to 13%) Result of uninsured not getting care
– 57% painful temporary disability – 19% long term disability
Source: Kaiser Family Foundation, “Trends and Indicators in the Changing Health Care Marketplace” (Exhibits 7.1, 7.6, 7.7)
Anna Rappaport presentation at John Marshall Law School April 28, 2006 29
Nursing Home Costs
Average $74,000/year Average stay is 2.5 years 11% of 65 year old men and 28% of women will need more
than five years of care at home or in a facility Among benefit claimants with a three year benefit limit, 8%
will exhaust benefits in policy
Source: Jonathon Clements, “Getting Going,” Wall Street Journal. Feb. 22, 2005