Managed Care & Health Care ReformCost of Health Care

$2.4 trillion in 2008 ($7.900 per person)

17% of GDP US

10.9% Switzerland

10.7% Germany

9.7% Canada

9.5% France

Cost of Health Care (cont.)

4%-5% annual increase in health care spending in US

Employer health insurance increased by 5%

• Two times rate of inflation

Annual premium for family of 4 = $12,700

Health care spending 4.3 times that spent on national defense

Division of Health Care CostsHospital care 34%

Physician care 20%

• Together make up 54% of health care costs

Home health care 3%

Public health 3%

Research 3%

Health Insurance Costs Employer-based health insurance increased

by 5% (2008)

Employer health insurance plan for family of 4 = $12,700 (2008)

Workers contributed $3,400 or 12% more in 2008

Average employee contribution increased more than 120% since 2000

Health Insurance Costs (cont.) Average out-of-pocket costs for deductibles,

co-payments for medications, co-insurance for physician and hospital visits rose 115% since 2000

Health insurance expenses fastest growing cost component for employers

Health care costs have increased 10-12% annually; inflation increases 2-3% annually

Impact of Rising Health Care Costs Increase in bankruptcy filings

Average out-of-pocket medical debt was $12,000

68% of those filing for bankruptcy had health insurance

50% of all bankruptcy a result of medical expenses

Every 30 seconds in US someone files for bankruptcy after serious health problem

Impact of Rising Health Care Costs (cont.) 1.5 million families lose homes to foreclosure every year

due to unaffordable medical costs

US has $480 billion in excess spending compared with Western European nations with universal health insurance coverage

• due to excess administrative costs and poorer quality of care

US spends 6 times more per capita on administration of health care system than Western European nations

The Uninsured48 million in 2009

projected to increase to 61.1 million in 2020

Characteristics of the UninsuredBorn in America 79.0%

Not a citizen 21.0%

Blacks 15.0%

Hispanic 30.0%

White 48.0%

Other 7.0%

Uninsured and Work StatusFull time 46%

Part time 28%

Unemployed 26%

Household Income for Uninsured

Under $50,000 68%

$50,000 − $74,999 16 %

$74,000 and more 16%

Education of Uninsured

No high school 28.0%

High school graduate 18.8%

Some college, no degree 15.0%

Associate degree 12.1%

Bachelor’s degree & higher 8.4%

Employment

Private sector 60.2%

Self-employed 12.7%

Public sector 5.5%

Unemployed 21.6%

Uninsured in NCUninsured increased by 22.5% from 2007−2009

• Largest percentage increase in US

Estimated number of uninsured (1/09) 1.75 to 1.80 million

• This is 21.2% to 21.7% of all non-elderly North Carolinians

Five Largest Percent Increase in Uninusred

State Percent Growth in Uninsured (2007-2008)

North Carolina 22.5

Rhode Island 22.3

Indiana 22.0

Nevada 21.0

Michigan 20.2

United States 13.7

Health of UninsuredNo use of preventive health care

Seek treatment when illness more advanced

Deficits in cancer screening, cardiovascular risk reduction, and diabetes care

Receive inadequate care

Less likely to see a physician when needed

Less likely to receive routine checkup

Higher morbidity and mortality rates

Response of US Government to Health Care CrisisRetrospective payment system

Reimbursement per unit of service

Prospective payment system

Reimbursement based on average value of service

Managed Care PlansCharacteristics

Prepaid health insurance plans

Health care providers accept lower payments

Gatekeepers to health care services

Positive Influence of Managed Care Plans

Expanded role for nurses

Increased emphasis on health promotion and disease prevention

Possible control of health care spending

Negative Influences of Managed Care Plans

Built incentive to limit referrals to specialists

Physicians leaving medicine

Most are for-profit organizations

Limited ability to sue managed care organizations

Employment Retirement Income Security Act (ERISA) 1974

Protects employer-sponsored pensions from litigation (HMO’S)

Racketeering Influence and Corrupt Organizations Act

Other Health Care Reform EffortsHealth Insurance Accountability Act (1997)

• Ensures those with medical conditions can change jobs

• Guarantees workers at small companies will not be rejected for coverage

• Provides benefits for self-employed

COBRA

Prescription Drug Reform (Part D of Medicare)

Consolidated Omnibus Budget Reconciliation Act (COBRA) 1986

Provides insurance when unemployed

Event Beneficiary Coverage

Termination or Employee, 18 monthsReduced hrs. spouse, child

Divorce or Child 36 monthsspouse separation

Health Care Reform OptionsMaintain current Managed Care Plan option

  Create National Health Insurance Plan (one-payer system or Universal Health Care)

Managed Competition

HR3590 Patient Protection and Affordable Act

No changes to current health plan if satisfied

If no insurance, will have affordable choices

Three main objectives of the reform

• Adopt state-of-the-art health information technology systems

• Ensure patients receive and providers deliver best care including prevention and chronic disease management

• Reform health care market to increase competition

HR3590 Patient Protection and Affordable Act Health insurance Expansion of coverage Health insurance market reforms Consumer choice through health benefit exchanges Shared responsibility for health care (individuals) Other provisions

• Improved access to Medicaid

• Enhanced support for Children’s Health Insurance Program (CHIP).

• Improving Medicare for patients and providers• Medicare Part D improvements (Prescription drug plan).