THE COMMONWEALTH FUND 1 Source: KFF/HRET Survey of Employer-Sponsored Health Benefits: 2005. *Estimate is statistically different from the previous year

THE

COMMONWEALTH FUND

1

Source: KFF/HRET Survey of Employer-Sponsored Health Benefits: 2005.*Estimate is statistically different from the previous year shown at p<0.05.^ Estimate is statistically different from the previous year shown at p<0.1.Note: Data on premium increases reflect the cost of health insurance premiums for a family of four. Historical estimates of workers’ earnings have been updated to reflect new industry classifications (NAICS).

12.0

18.0

0.8

13.9^

12.9*10.9*

8.2*

5.3*

11.2*

8.5 9.2*

0

5

10

15

20 Health Insuranc e P remiumsWorkers EarningsOverall Inflation

Figure 1. Increases in Health Insurance Figure 1. Increases in Health Insurance Premiums Compared to Other Indicators, 1988–Premiums Compared to Other Indicators, 1988–

20052005Percent

THE

COMMONWEALTH FUND

2Figure 2. Deductibles Rise Sharply, Especially in Figure 2. Deductibles Rise Sharply, Especially in

Small Firms, Over 2000–2005*Small Firms, Over 2000–2005*

*Out-of-network deductibles are for 2000 and 2004.Source: J. Gabel and J. Pickreign, Risky Business: When Mom and Pop Buy Health Insurance for Their Employees (Commonwealth Fund, April 2004); KFF/HRET Employer Health Benefits 2005 Annual Survey.

210

383

157

319

469

676

254

510

$0

$150

$300

$450

$600

$750

$9002000 2005

In-network Out-networkOut-network In-networkSmall Firms,

3-199 EmployeesLarge Firms,

200+ Employees

PPO in-network and out-of-network deductibles

THE

COMMONWEALTH FUND

3

606366666869

0

25

50

75

2000 2001 2002 2003 2004 2005

Figure 3. Percent of Firms Offering Health Benefits Figure 3. Percent of Firms Offering Health Benefits Declined Over 2000–2005Declined Over 2000–2005

Source: KFF/HRET Employer Health Benefits 2005 Annual Survey.

Percent of firms offering health benefits

THE

COMMONWEALTH FUND

4Figure 4. 46 Million Uninsured in 2004; Figure 4. 46 Million Uninsured in 2004;

Increasing Steadily Since 2000Increasing Steadily Since 2000

Number of uninsured, in millions

31 33 33 35 3539 40 40 41 42 43 44

40 40 4144

56

45

0

20

40

60

1987 1990 1993 1996 1999* 2002 2005 2008 2011

Projected

2013

*1999–2003 estimates reflect the results of follow-up verification questions and implementation of Census 2000-based population controls.Note: Projected estimates for 2004–2013 are for nonelderly uninsured based on T. Gilmer and R. Kronick, “It’s the Premiums, Stupid: Projections of the Uninsured Through 2013,” Health Affairs Web Exclusive, April 5, 2005.Source: U.S. Census Bureau, March CPS Surveys 1988 to 2005.

5

THE COMMONWEALTH

FUND

0

1000

2000

3000

4000

5000

6000

0 100 200 300 400 500 600 700 800 900

a

*Allan Hubbard, Director of the National Economic Council, February 14, 2006.Note: Adjusted for Differences in the Cost of Living, 2003.Source: Bianca K. Frogner and Gerard F. Anderson, “Multinational Comparisons of Health Systems Data, 2005,” The Commonwealth Fund, Forthcoming.

a2002 Out-of-Pocket Health Care Spending per Capita, US$

National Health Expenditures per Capita, US$

United States

Australia

OECD Median

Canada

Japana

New Zealand

GermanyFranceNetherlands

Figure 5. Greater Out-of-Pocket Costs are Not Figure 5. Greater Out-of-Pocket Costs are Not Associated with Lower Health Spending in Associated with Lower Health Spending in

Cross-National ComparisonsCross-National Comparisons

6

THE COMMONWEALTH

FUND

Figure 6. Americans Are Spending More Figure 6. Americans Are Spending More Out-of-Pocket for Health CareOut-of-Pocket for Health Care

0

100

200

300

400

500

600

700

800

900

Source: C. Smith et al., “National Health Spending in 2004: Recent Slowdown Led by Prescription Drug Spending,” Health Affairs 25, no. 1 (January/February 2006); Centers for Medicare and Medicaid Services, National Health Expenditures Data; http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf

Dollars spent per capita (in 2004 dollars)

$577 $583

$774

$667

$788

7

THE COMMONWEALTH

FUND

8

1112

15

0

10

20

1996–97 2001–02

Percent of families with high out-of-pocket medical costsrelative to income, not including premiums

Figure 7. Nearly One of Six Families Spent 10% or Figure 7. Nearly One of Six Families Spent 10% or More of Income (or 5% or More if Low-Income) on More of Income (or 5% or More if Low-Income) on

Out-of-Pocket Medical Costs, 2001–02Out-of-Pocket Medical Costs, 2001–02

*Low-income includes families with incomes <200% of the federal poverty level.Source: M. Merlis, D. Gould and B. Mahato, Rising Out-of-Pocket Spending for Medical Care: A Growing Strain on Family Budgets (New York: The Commonwealth Fund) February 2006.

Spent >10% of income Spent >10% of income, or >5% of income if low-income*

8

THE COMMONWEALTH

FUND

Figure 8. Cost-Sharing Reduces Use of Both Figure 8. Cost-Sharing Reduces Use of Both Essential and Less Essential Drugs and Increases Essential and Less Essential Drugs and Increases

Risk of Adverse EventsRisk of Adverse Events

9

1514

22

0

5

10

15

20

25

Essential Less Essential

E lderly Low Inc ome

Source: R. Tamblyn et al., “Adverse Events Associated With Prescription Drug Cost-Sharing Among Poor and Elderly Person,” JAMA 285, no. 4 (2001): 421–429.

Percent reduction in drugs per day

117

43

9778

0

20

40

60

80

100

120

140

Adverse Events ED V is its

E lderly Low Inc ome

Percent increase in incidence per 10,000

9

THE COMMONWEALTH

FUND

Figure 9. Few Insured People Are Currently Covered by Figure 9. Few Insured People Are Currently Covered by High Deductible Health Plans (HDHP) or Consumer High Deductible Health Plans (HDHP) or Consumer

Directed Health Plans (CDHP) with a Directed Health Plans (CDHP) with a Savings AccountSavings Account

HDHP

9%

CDHP

1%

Comprehens ive

89%

Note: Comprehensive = plan w/ no deductible or <$1000 (ind), <$2000 (fam); HDHP = plan w/ deductible $1000+ (ind), $2000+ (fam), no account; CDHP = plan w/ deductible $1000+ (ind), $2000+ (fam), w/ account.

Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.

10

THE COMMONWEALTH

FUND

Figure 10. FEHBP HDHP/HSAs Plans Enroll 7,500 out Figure 10. FEHBP HDHP/HSAs Plans Enroll 7,500 out of 9 Million Covered Livesof 9 Million Covered Lives

6.4

0.10

5

10

15

20

25

Perc ent of FEHBP plans that

are HDHP /HSAs

Perc ent of FEHBP enrollees

that are in HDHP /HSAs

Note: As of March 2005.Source: Government Accountability Office, Federal Employees Health Benefits Program First-Year Experience with High-Deductible Health Plans and Health Savings Accounts, Washington, DC: GAO, January 2006; OPM, http://www.opm.gov/insure/handbook/FEHBhandbook.pdf

Percent

11

THE COMMONWEALTH

FUND

Figure 11. Enrollees Who Chose HDHPs From the Federal Figure 11. Enrollees Who Chose HDHPs From the Federal Employees Health Benefits Program Are More Likely to Employees Health Benefits Program Are More Likely to

Earn Higher IncomesEarn Higher Incomes

43

23

0

25

50

75

HDHP A ll FEHBP plans

Source: Government Accountability Office, Federal Employees Health Benefits Program First-Year Experience with High-Deductible Health Plans and Health Savings Accounts, Washington, DC: GAO, January 2006.

Percent of FEHBP enrollees with incomes ≥ $75,000

12

THE COMMONWEALTH

FUND

Figure 12. Age Distribution of HDHP and Other Figure 12. Age Distribution of HDHP and Other FEHBP EnrolleesFEHBP Enrollees

0

5

10

15

20

25

30

35

<23 23-34 35-44 45-54 55-64 65-74 75-99 >99

HDHP enrollees A ll FEHBP enrollees

Source: Government Accountability Office, Federal Employees Health Benefits Program First-Year Experience with High-Deductible Health Plans and Health Savings Accounts, Washington, DC: GAO, January 2006.

Percent FEHBP enrollees

13

THE COMMONWEALTH

FUND

Figure 13. Less than Half of Those Enrolled in Figure 13. Less than Half of Those Enrolled in Employer-Based High Deductible Health Plans Had Employer-Based High Deductible Health Plans Had

a Choicea Choice

58

47 45

0

25

50

75

Traditional(n=1016)

CDHP HDHP

Percent of adults with employer-based coverage who were offered a choice of health plans

• CDHP and HDHP owners are less likely to have a choice of plans from their employer

• When they have a choice, the savings account is the leading reason for choosing CDHP, while premium cost is the most frequent reason for choosing HDHP. Traditional plans are chosen for low out-of-pocket costs.(n=134) (n=334)


14

THE COMMONWEALTH

FUND

Figure 14. Enrollees of HDHP/CDHPs Are Less Figure 14. Enrollees of HDHP/CDHPs Are Less Satisfied with Their CoverageSatisfied with Their Coverage

8

28

63

29

3933 32

26

42

0

25

50

75

Extremely or very

satisfied

Somew hat

satisfied

Not satisfied

Comprehens ive HDHP CDHPPercent

*

**

**

*Difference between HDHP/CDHP and Comprehensive is statistically significant at p ≤ 0.05 or better.


15

THE COMMONWEALTH

FUND

Figure 15. Enrollees of HDHP/CDHPs Are Less Figure 15. Enrollees of HDHP/CDHPs Are Less Satisfied with Out-of-Pocket CostsSatisfied with Out-of-Pocket Costs

21

3642

31

12

57

1828

54

0

25

50

75

Extremely or very

satisfied

Somew hat

satisfied

Not satisfied

Comprehens ive HDHP CDHP



Percent

* *

**

*

16

THE COMMONWEALTH

FUND

Figure 16. Enrollees of HDHP/CDHPs Are Less Likely Figure 16. Enrollees of HDHP/CDHPs Are Less Likely To Stay With Their Current Health Plan If They Had To Stay With Their Current Health Plan If They Had

the Opportunity to Changethe Opportunity to Change

11

28

61

33*37*

30*21

33*

46*

0

25

50

75

Extremely or very

likely to s tay

Somew hat likely

to s tay

Not likely to s tay




Percent of adults 21–64

17

THE COMMONWEALTH

FUND

Figure 17. Enrollees of HDHP/CDHPs Are Less Likely Figure 17. Enrollees of HDHP/CDHPs Are Less Likely to Recommend their Plan To a Friend or Co-Workerto Recommend their Plan To a Friend or Co-Worker

2426

5143*

34*

22*31 35*34*

0

25

50

75

Extremely or very

likely

Somew hat likely Not likely





18

THE COMMONWEALTH

FUND

Figure 18. Workers are Less Satisfied When Their Costs Figure 18. Workers are Less Satisfied When Their Costs Go Up – Employer Costs Go Down but at the Risk of Go Up – Employer Costs Go Down but at the Risk of

Alienating WorkersAlienating Workers

431 610

2270

3413

1348323

553

0

1000

2000

3000

4000Deduc tible c ontributionP remium c ontribution

^ “All plans” refers to all conventional HMOs, PPOs, and POS plans in the survey, not just HDHP/HRA or HSA-qualified HDHPs. Source: Calculated based on: G. Claxton et al., “What High Deductible Health Plans Look Like: Findings from a National Survey of Employers, 2005,” Health Affairs Web Exclusive, September, 14, 2005; J. Gabel et al., “Health Benefits in 2005: Premium Increases Slow Down, Coverage Continues to Erode,” Health Affairs, September/October 2004.

All plans^

All plans^

$1,779

$933

$2,823

Dollars

$3,413

Worker contribution Employer contribution

HSA-qualified

HDHP

HSA-qualified

HDHP

19

THE COMMONWEALTH

FUND

Figure 19. Enrollees of HDHP/CDHPs Spend Higher Figure 19. Enrollees of HDHP/CDHPs Spend Higher Percent of Income on Out-of-Pocket Medical Percent of Income on Out-of-Pocket Medical

Expenses and PremiumsExpenses and Premiums

9 132529

35

58

23 26

44

0

20

40

60

80

100 10%+ of inc ome 5-9% of inc ome

Percent of adults 21–64 spending > 5% of income

Total Health Problem<$50,000

Annual Income

12

4231

17

3834

92

66

53

13* 9* 18* 12* 1033* 21

3 4

(n = 61)

(n = 90)



**

*

*

*

**

**

*

*

20

THE COMMONWEALTH

FUND

Figure 20. Enrollees of HDHP/CDHPs Are More Figure 20. Enrollees of HDHP/CDHPs Are More Likely to Delay or Avoid Getting Health Care Likely to Delay or Avoid Getting Health Care

When Sick Due to CostWhen Sick Due to Cost

2621

17

42

313135

48

40

0

25

50

75

Total Health P roblem <$50,000 Annual

Inc ome



(n = 61)

(n = 90)



*

*

*

**

*

21

THE COMMONWEALTH

FUND

Figure 21. Enrollees of HDHP/CDHPs Are More Figure 21. Enrollees of HDHP/CDHPs Are More Likely To Skip Doses to Make Medications Last Likely To Skip Doses to Make Medications Last

32

20 212015

35

26 2829

0

20

40

60

Total Health Problem** <$50,000 Annual

Income

Comprehensive HDHP CDHP

**Health problem defined as fair or poor health or one of eight chronic health conditions.


Percent of adults 21–64 with prescriptions in last twelve months

(n = 50)(n = 85)**

22

THE COMMONWEALTH

FUND

Figure 22. Enrollees of HDHP/CDHPs Are More Figure 22. Enrollees of HDHP/CDHPs Are More Likely to Not Fill a Prescription Due to CostLikely to Not Fill a Prescription Due to Cost

2027

2116

323326

2526

0

25

50

75

Total Health P roblem <$50,000 Annual

Inc ome



(n = 61)(n = 90)

**



23

THE COMMONWEALTH

FUND

Figure 23. People with Higher Deductibles More Likely Figure 23. People with Higher Deductibles More Likely to Have Medical Debt or Problems Paying Medical Bills to Have Medical Debt or Problems Paying Medical Bills

in Past Year, by Size of Deductiblein Past Year, by Size of Deductible

5446

39

24

0

20

40

60

$1,000 or more $500–$999 $1–$499 N one

Percent of adults ages 19–64 with any medical bill problem or outstanding debt*

Size of deductible

^^

^

Note: Adjusted percentages based on logistic regression models; controlling for health status and income.

*Problems paying/not able to pay medical bills, contacted by a collection agency for medical bills,had to change way of life to pay bills, or has medical debt being paid off over time.

^Significant difference at p < .05 or better; referent category = no deductible.

Source: The Commonwealth Fund Biennial Health Insurance Survey (2003).

24

THE COMMONWEALTH

FUND

Figure 24. Increased Health Care Costs Have Figure 24. Increased Health Care Costs Have Reduced SavingsReduced Savings

Has increased spending on health care expenses in the past year caused you to do any of the following? Among those with health insurance coverage who had increases in health care costs in the last year (n=731) (percentage saying yes)

45%

34%

29%

26%

24%

18%

Decrease your contributions to a retirement plan, such as a 401(k),

403(b) or 457 plan, or an IRA

Have difficulty paying for other bills

Decrease your contributions to other savings

Use up all or most of your savings

Borrow money

Have difficulty paying for basic necessities, like food, heat, and housing

Source: EBRI Health Confidence Survey, 2005.

25

THE COMMONWEALTH

FUND

Figure 25. Most Insured Do Not Have Quality and Cost Figure 25. Most Insured Do Not Have Quality and Cost Information to Make Informed ChoicesInformation to Make Informed Choices

Comprehensive HDHP/CDHPHealth plan provides information on quality of care provided by:

Doctors 14% 16%

Hospitals 14 15

Health plan provides information on cost of care provided by:

Doctors 16 12

Hospitals 15 12

Of those whose plans provide info on quality, how many tried to use it for:

Doctors 42 54

Hospitals 25 45

Of those whose plans provide info on cost, how many tried to use it for:

Doctors 15 36 (n = 76)

Hospitals 14 32 (n = 76)


26

THE COMMONWEALTH

FUND

Figure 26. Cost Conscious Decision-Making, by Figure 26. Cost Conscious Decision-Making, by Insurance SourceInsurance Source

27

43

49

19

32*

44*

55*

60*

14

23

0 25 50 75

Checked quality rating ofdoctor or hospital

Checked price of serv ice

Asked doctor torecommend less costly

prescription drugs

Talked to doctor abouttreatment options & costs

Checked whether planwould cover care

Comprehens ive

HDHP /CDHP



Percent of adults 21–64 who received health care in last twelve months

27

THE COMMONWEALTH

FUND

Figure 27. HSAs Won’t Solve the Cost Problem:Figure 27. HSAs Won’t Solve the Cost Problem:Most Costs Are Concentrated in the Very SickMost Costs Are Concentrated in the Very Sick

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, By Magnitude of Expenditure, 1997

50%

97%

$27,914

$7,995

$4,115

$351

Expenditure Threshold (1997

Dollars)

28

THE COMMONWEALTH

FUND

Figure 28. Most Trusted Sources for Information on Figure 28. Most Trusted Sources for Information on Health Care Providers, by Insurance SourceHealth Care Providers, by Insurance Source

10

15

20

4342

25

16

8

4

2

6

2

0 20 40 60

Government or other

agenc y

Ow n health plan

Medic al assoc iation

F amily member or friend

Consumer group

Y our doc tor

Comprehens ive

HDHP /CDHP




29

THE COMMONWEALTH

FUND

Figure 29. Uninsured Rates High Among Adults Figure 29. Uninsured Rates High Among Adults with Low and Moderate Incomes, 2001–2005with Low and Moderate Incomes, 2001–2005

15 17 18

33 37 37

1724 28

9

9 9 9

1615 16

1111

13

9

76 2 33

7 9

0

25

50

75 Insured now , time uninsured in pas t year

U ninsured now

Percent of adults ages 19–64

Note: Income refers to annual income. In 2001 and 2003, low income is <$20,000, moderate income is $20,000–$34,999, middle income is $35,000–$59,999, and high income is $60,000 or more. In 2005, low income is <$20,000, moderate income is $20,000–$39,999, middle income is $40,000–$59,999, and high income is $60,000 or more. Source: S.R. Collins et al., Gaps in Health Insurance Coverage: An All-American Problem, Findings from The Commonwealth Fund Biennial Health Insurance Survey, The Commonwealth Fund, April 2006.

26

52

35

16

4

24

49

28

13

4

Total Low income Moderate income

Middle income

High income2001 2003 2005 2001 2003 20052001 2003 20052001 2003 20052001 2003 2005

28

53

41

18

7

30

THE COMMONWEALTH

FUND

Figure 30. Distribution of Uninsured Figure 30. Distribution of Uninsured Young Adults 19–29 by Poverty Status, 2004Young Adults 19–29 by Poverty Status, 2004

Source: S.R. Collins, C. Schoen, J.L. Kriss, M.M. Doty, B. Mahato, Rite of Passage? Why Young Adults Become Uninsured and How New Policies Can Help, The Commonwealth Fund, updated May 2006.

Less than 100% FPL

40%

100%–199% FPL

29%

200% FPL or more

31%

31

THE COMMONWEALTH

FUND

Figure 31. HSAs Won’t Solve the Uninsured Figure 31. HSAs Won’t Solve the Uninsured Problem: Income Tax Distribution of UninsuredProblem: Income Tax Distribution of Uninsured

55% (0% tax bracket)




1% (30%-39%

tax bracket)

Source: S.A. Glied, The Effect of Health Savings Accounts on Health Insurance Coverage, The Commonwealth Fund, April 2005.

32

THE COMMONWEALTH

FUND

Figure 32. Medicare Physician Group Practice Figure 32. Medicare Physician Group Practice DemonstrationDemonstration

• The Everett Clinic (WA)• Deaconess Billings Clinic• Park Nicollet Health

Services (MN)• Marshfield Clinic (WI)• St. John’s Health System

(MO)

Source: “Medicare Physician Group Practice Demonstration,” www.cms.gov, January 31, 2005.

• Univ. of Michigan Faculty Group Practice

• Geisinger Health System (PA)

• Forsyth Medical (NC)• Middlesex Health (CN)• Dartmouth-Hitchcock

Clinic

• 10 physician group practices

• 3-year project, began April 2005

• Bonus pool based on savings relative to local area

• Practices expected to save 2%, keep up to 80% of additional savings

• Actual bonuses depend on savings and quality targets

33

THE COMMONWEALTH

FUND

Figure 33. Building Quality Into RIte CareFigure 33. Building Quality Into RIte CareHigher Quality and Improved Cost TrendsHigher Quality and Improved Cost Trends

• Quality targets and $ incentives

• Improved access, medical home

– One third reduction in hospital and ER

– Tripled primary care doctors

– Doubled clinic visits

• Significant improvements in prenatal care, birth spacing, lead paint, infant mortality, preventive care

Source: Silow-Carroll, Building Quality into RIte Care, Commonwealth Fund, 2003. Tricia Leddy, Outcome Update, Presentation at Princeton Conference, May 20, 2005.

Cumulative Health Insurance Rate Trend Comparison

0

20

40

60

80

100

120

140

160

RI Commercial Trend

RIte Care Trend

Percent

THE

COMMONWEALTH FUND

34Figure 34. Lacking Health Insurance for Any Period Figure 34. Lacking Health Insurance for Any Period

Undermines Quality and EfficiencyUndermines Quality and Efficiency

59

35

58

2718 16

0

25

50

75

Skipped doses or did not fi ll

presc ription for c hronic c ondition

bec ause of c os t

V is ited ER, hospital, or both for

c hronic c ondition

U ninsured now Insured now , time uninsured in past year Insured all year

Percent of adults ages 19–64 with at least one chronic condition*

* Hypertension, high blood pressure, or stroke; heart attack or heart disease; diabetes; asthma, emphysema, or lung disease. Source: S.R. Collins et al., Gaps in Health Insurance Coverage: An All-American Problem, Findings from The Commonwealth Fund Biennial Health Insurance Survey, The Commonwealth Fund, April 2006.

THE

COMMONWEALTH FUND

35

1510

193026

41

1923

0

25

50

75

T es t results or

rec ords not

available at time of

appointment

Duplic ate tes ts

ordered

Never rec eived

lab/diagnos tic tes t

results or delay in

rec eiving abnormal

results

Any lab tes t/

rec ord problem

Insured all year Uninsured during the year

Figure 35. Adults Without Insurance Have Figure 35. Adults Without Insurance Have More Problems With Lab Tests and RecordsMore Problems With Lab Tests and Records

Source: S.R. Collins et al., Gaps in Health Insurance Coverage: An All-American Problem, Findings from The Commonwealth Fund Biennial Health Insurance Survey, The Commonwealth Fund, April 2006.

Percent of adults ages 19–64 reporting the following problems in past two years:

Documents

THE COMMONWEALTH FUND 1 Source: KFF/HRET Survey of Employer-Sponsored Health Benefits: 2005. *Estimate is statistically different from the previous year