V e r m o n t Legislative Joint Fiscal Office Growth in Health Care Spending: A comparison of Vermont and the U.S. Nolan Langweil, Legislative Joint Fiscal

V e r m o n tLegislative Joint Fiscal Office

Growth in Health Care Spending:A comparison of Vermont and the U.S.

Nolan Langweil, Legislative Joint Fiscal Office

January 18, 2008


Data

• CMS, Office of the Actuary (2006 data)

• BISHCA, Expenditure Analysis (2006 data)– Note: FY2005 and earlier uses unadjusted numbers


UNITED STATES

$7,092 Per Capita

VERMONT

$6,321 Per Capita

Per Capita Spending2006


Trends in Growth: 1996-2006

UNITED STATES

• ↑ from $910B to $1.76T• 6.8% average annual

growth

VERMONT

• ↑ from $1.7B to $3.9B• 8.6% average annual

growth



Overall health care expenditure trends for Vermont and the U.S. are fairly comparable.



1) Hospital care2) Physicians & Clinical svcs3) Drugs & Supplies

1) Hospital care2) Physicians & Clinical svcs3) Drugs & Supplies


Growth when comparing third-party payer by sector(EXCLUDES DRUGS)



Growth when comparing third-party payer by sector(INCLUDES DRUGS)



PAYER$(By % of total expenditures)

U.S PAYER VERMONT

21.6% Medicare 18.1%

16.2% Medicaid 23.7%

14.6% Out-of-pocket 12.5%

36.0% Private Insurance (total)

41.4

Other payers include: State & Local, Other Federal, etc.


MEDICARETrends in Growth: 1996-2006

• Largest single payer of health care services in the U.S.– 21% of personal health care spending– Medicaid was second largest (16%)

• 2nd largest payer in Vermont– 18% of health spending– Medicaid was largest (24%)


MEDICARETrends in Growth: 1996-2006

• Both US and VT: Largest increase in $ spent were in 1) Hospital care, 2) physician & clinical svs and 3) Drugs (in that order)

Combined they represent:– US = 84% of total Medicare Spending– VT = 77% of total Medicare Spending– Hospital Care accounted for half of Medicare

spending in both VT and the U.S.

2006


MEDICAREDrugs as % of overall Medicare spending:

2005 2006

U.S. 1.2%($4B)

10.3%($39.4B)

VT <1%($4,000)

11%(78.8M)


MEDICAREMedicare Part D

Before Part D After Part D

Overall Spending on DRUGS by Payer (Vermont):


MEDICAREMedicare Part D

Medicaid & Out-of-pocket drug spending saw decreases

2005 2006

MEDICAID VT = $146M

US = $37B

VT* = $78M

US = $19B

OUT-OF-POCKET

VT = $191M

US = $48.7B

VT = $168M

US = $47.6B

*NOTE: This does not include clawback.


MEDICAID2006

United States• Medicaid spending decreased by 0.9%• First drop in Medicaid spending since program

was created in 1965• Exclude Drugs, and Medicaid PHC spending ↑

5.6%– Still slower than 8% in 2005

• 10 yr avg growth (1996-2006) = 7.1%


MEDICAID2006

Vermont• 10 yr avg growth (1996-2006) = 9.6%• Medicaid spending increased by 2%

– Down from 7% growth in 2005• Drug spending decreased 44% from 2005

– Again exclude Drugs, and Medicaid spending ↑ 11%


MEDICAID2006

Vermont (continued)• In 2005, Drug spending was 16.9% of

Medicaid costs ($146M)• In 2006, Drug spending was 8.4% of

Medicaid costs ($78.7M)• Does not include add’l $15.8M “state &

local” spending on drugs


PRIVATE HEALTH INSURANCE2006

• U.S. - spending ↑ $598.6B to 634.5B– 6% increase (2005 to 2006)– 7.7% - 10 yr avg annual growth (1996-2006)– 36% of personal health care spending

• VT - spending ↑ $1.4 to 1.6B– 16% increase (2005 to 2006)– 9.1% average annual growth– 41% of health care spending


Insurance Premiums (2006)From:


QUESTIONS?

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V e r m o n t Legislative Joint Fiscal Office Growth in Health Care Spending: A comparison of Vermont and the U.S. Nolan Langweil, Legislative Joint Fiscal