understanding the healthcare cost conundrum · 2019-07-16 · what’s driving spending? ~30% of...
TRANSCRIPT
UNDERSTANDING THE
HEALTHCARE COST CONUNDRUM
The Facts
� Healthcare in the US – 18% GDP
� One of every three new jobs, 2007-2017
� US spends two times what other wealthy countries spend
What’s Driving Spending?
~30% of healthcare spending is wasteful
IOM (Institute of Medicine). 2013. Best care at lower cost: The path to continuously learning health care in America. Washington, DC: The National Academies Press.
Source: Factors Associated With Increases in US Health Care Spending, 1996-2013 JAMA. 2017;318(17):1668-1678. doi:10.1001/jama.2017.15927
Price and intensity have been the primary drivers of U.S. spending growth
Healthcareconsolidationtrends
highlyconcentrated
Source:DMCutler,FScottMorton,Hospitals,MarketShare,andConsolidation,JAMA.2013;310(18):1964-1970.
Healthcareconsolidationtrends
Source:Fulton,BD.HealthCareMarketConcentrationTrendsintheUnitedStates:EvidenceandPolicyResponses.HealthAffairs.2017;36(9):1530-1538.
%ofmarketsthatarehighlyconcentrated:
65%ofspecialtyphysicianmarkets
57%ofinsurermarkets
39%ofprimarycaremarkets
HospitalConsolidationàHigherPrices
Source:GaynorM,TownR,Theimpactofhospitalconsolidation–update,RobertWoodJohnsonFoundation,TheSynthesisProject,ISSN2155-3718(June2012).
Hospitalconsolidationleadstosignificantlyhigherpricesinconcentratedmarkets.Estimatedpriceincreases:20-40%
Author/Year Result
Dafny(2009) Merginghospitalshad40%higherpricesthannon-merging
Haas-Wilson,Garmon(2011)
Post-merger,EvanstonNWhospitalhad20%higherpricesthancontrols
Tenn(2011) Summit/Sutterpricesincreased28%-44%comparedtocontrols
• Patientoutcomesareworseinmoreconcentratedmarkets,wherehospitalsorphysiciansfacelesscompetition
• Hospitalownershipofphysicianpracticesledtohigherreadmissionratesandnobetterqualitymeasures
Averageinflation-adjusted,standardizedpaymentratesperinpatienthospitalstay,byprimarypayer,1997-2015
Prices for inpatient hospital stays have grown faster for private insurance than for Medicare or Medicaid
Note:Theaveragepaymentrateswerecomputedasifeachprimarypayerpaidforallnon-maternityadultstaysinagivenyear.Paymentswereadjustedforinflationandstandardizedacrosspayersintermsofpatient’sage,sex,race/ethnicity,geography,householdincomeasapercentageofthefederalpovertylevel,conditions,charges,length-of-stay,andwhetherornotasurgicalprocedurewasperformed.Theywerenotstandardizedforchangesovertimeinthebundlesoftreatmentsandservicesprovidedduringinpatientstays.Source:ThomasM.SeldenanalysisofAHRQ’sMedicalExpenditurePanelSurveyfortheKaiserFamilyFoundation.Updateofearlieranalysis,availablehere:https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2015.0706
$11,840
$19,975
$11,186$11,868
$9,379 $9,071
$-
$5,000
$10,000
$15,000
$20,000
$25,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Privateinsurance Medicare Medicaid
The Cost Shifting Challenge
� Underpayment by Medicare & Medicaid ÷ Cost shift to other payers ÷ Community Benefit
� Would equalizing public & private payment rates reduce cost shift? ÷ One recent study* found hospitals receiving an unexpected 10% increase in Medicare
payment rates… • Added new technology • Increased nursing staff • Increased payroll by 1/3rd
* Skinner J, Chandra A. Health Care Employment Growth and the Future of US Cost Containment. JAMA. 2018;319(18):1861–1862. doi:10.1001/jama.2018.2078
Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group
Drug spending has grown rapidly recently, but most of the health dollar is spent on hospitals and physicians
Source: Kaiser Family Foundation analysis of Consumer Expenditure Survey
The share of household budgets devoted to health expenses has been increasing
Averageportionofhouseholdbudgetdevotedtohealth(nonelderlyfamilies),2002-2012
2.1%
3.1%
4.4%
5.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Out-of-pocketcosts:
Insurancepremiums:
Totalhealthexpenses:
176%
-38%
67%
29%
-50%
0%
50%
100%
150%
200%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Spending on deductibles and coinsurance have far outpaced wages, while copayments have fallen
Source: Truven Health Analytics MarketScan Commercial Claims and Encounters Database, 2005-2015; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 2006-2016 (April to April).
Cumulativeincreasesinhealthcosts,amountspaidbyinsurance,amountspaidforcostsharingandworkers’wages,2005-2015
Coinsurance
Wages
Copayments
22%
8%
7%
7%
6%
5%
Healthcarecosts
Medicare/seniorconcerns
Repealing/oppositiontotheAffordableCareAct
Improvehowhealthcareisdelivered
Increaseaccess/decreasenumberofuninsured
Single-payersystem
NOTE: Only top six responses listed. SOURCE: Kaiser Family Foundation Health Tracking Poll (conducted February 15-20, 2018)
Health care costs is the top health care issue voters want 2018 candidates to talk about
Whilethisyear’selectionisstillalongwayoff,whathealthcareissuedoyoumostwanttohearcandidatestalkaboutduringtheirupcomingcampaigns?(open-end)
AmongRegisteredVoters: