Public Programs: Critical Building Blocks in Health Reform Karen Davis President

THE
COMMONWEALTH
FUND
Public Programs: Critical Building
Blocks in Health Reform
Karen Davis
President
The Commonwealth Fund
[email protected]
Senate Finance Committee Retreat
June 16, 2008
2
U.S. Health System:
What’s Working, What’s Not?
THE
COMMONWEALTH
FUND
Health Insurance Coverage
3
Numbers in millions, 2006
Military
3.4
(1%)
Uninsured
47.0
(16%)
Employer
163.3
(55%)
Individual
16.0
(5%)
Uninsured
46.4
(18%)
Military
3.4
(1%)
Employer
160.8
(62%)
Individual
15.8
(6%)
Medicaid
27.9
(9%)
Medicaid
27.9
(11%)
Medicare
39.1
(13%)
Total population = 296.7
Medicare
6.4
(2%)
Under-65 population = 260.7
Source: S. R. Collins, C. White, and J. L. Kriss, Whither Employer-Based Health Insurance? The Current and Future
Role of U.S. Companies in the Provision and Financing of Health Insurance (New York: The Commonwealth Fund,
Sept. 2007).
Data: Analysis of the Current Population Survey, March 2007, by Bisundev Mahato of Columbia University.
THE
COMMONWEALTH
FUND
Total National Health Expenditures,
$2.11 Trillion – 16% of GDP
Other public
$258 billion
4
Out-of-pocket
$257 billion
12.3% 12.2%
Medicaid
$311 billion
14.8%
34.3%
19.0%
Medicare
$401 billion
Private health
insurance
$723 billion
7.4%
Other private
$155 billion
Note: Data were rounded to the nearest tenth of a percent because rounding to the nearest percent does not reflect
the significant difference in spending between Medicaid and Medicare.
Data source: A. Catlin et al., “National Health Spending In 2006: A Year of Change For Prescription Drugs,” Health
Affairs, Jan./Feb. 2008 27, no. 1: 14-29.
THE
COMMONWEALTH
FUND
5
Employer Health Insurance: Preferred by
Many Working Americans
THE
COMMONWEALTH
FUND
6
Employer Coverage Continues to Be Major Source
of Coverage for Employees of Larger Firms
Percent of firms offering health benefits
2000
100
91
80
75
2007
69
60
76
97 94
99 99
83
57
45
50
25
0
Total
3–9
10–24
25–49
50–199
200+
workers
workers
workers
workers
workers
Source: S. R. Collins, C. White, and J. L. Kriss, Whither Employer-Based Health Insurance? The Current and Future
Role of U.S. Companies in the Provision and Financing of Health Insurance (New York: The Commonwealth Fund,
Sept. 2007). Data: The Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits,
2000 and 2007 Annual Surveys.
THE
COMMONWEALTH
FUND
7
Employees in Large Firms Are Most Likely to
Have Two or More Health Plan Choices
Percent of adults ages 19-64 insured all year with ESI*
100
71
75
56
54
48
45
50
38
25
25
0
Total
<200%
200%+
% FPL
<20
20–99
100–499
500+
Number of employees in firm^
*ESI = employer-sponsored insurance.
Based on adults 19-64 who were who were insured all year through their own employer.
Source: S. R. Collins, J. L. Kriss, K. Davis, M. M. Doty, and A. L. Holmgren, Squeezed: Why Rising Exposure to
Health Care Costs Threatens the Health and Financial Well-Being of American Families, The Commonwealth Fund,
September 2006.
THE
COMMONWEALTH
FUND
Percent of People with ESI* Who Say That Employers Do a
Good Job Selecting Quality Insurance Plans to Offer Their
Workers
8
Percent
100
75
74
75
68
69
70
<20
20–99
75
76
100–499
500+
50
25
0
Total
<200%
200%+
% FPL
Number of employees in firm
*ESI = employer-sponsored insurance. FPL = federal poverty level.
Note: Based on respondents age 19-64 who were covered all year by their own employer’s insurance.
Source: S. R. Collins, J. L. Kriss, K. Davis, M. M. Doty, and A. L. Holmgren, Squeezed: Why Rising Exposure to
Health Care Costs Threatens the Health and Financial Well-Being of American Families, The Commonwealth Fund,
September 2006.
THE
COMMONWEALTH
FUND
Employer-Provided Health Insurance,
by Income Quintile, 2000–2006
9
Percent of population under age 65 with health benefits from employer
100%
90%
88%
88%
87%
80%
86%
85%
84%
70%
77%
77%
60%
50%
62%
60%
75%
57%
87%
84%
74%
55%
87%
83%
74%
54%
87%
82%
86%
82%
72%
72%
54%
53%
Fourth
Third
Second
40%
30%
Highest
Quintile
29%
26%
25%
23%
23%
22%
22%
2004
2005
2006
20%
10%
Lowest
quintile
0%
2000
2001
2002
2003
Source: E. Gould, The Erosion of Employment-Based Insurance: More Working Families Left Uninsured,
EPI Briefing Paper No. 203 (Washington, D.C.: Economic Policy Institute, Nov. 2007).
THE
COMMONWEALTH
FUND
Risk Pooling and Employer Premium Contributions Lower the
Cost of Health Benefits for Adults with Employer Coverage
Relative to Those with Individual Market Coverage
10
Percent of adults ages 19–64 insured all year with private insurance
75
Annual out-of-pocket premium $6,000 or more
Annual out-of-pocket premium $3,000–$5,999
54
50
32
25
20
7
18
5
13
13
Total
Employer
22
0
Individual
Source: S. R. Collins, J. L. Kriss, K. Davis, M. M. Doty, and A. L. Holmgren, Squeezed: Why Rising Exposure to
Health Care Costs Threatens the Health and Financial Well-Being of American Families, The Commonwealth Fund,
September 2006.
THE
COMMONWEALTH
FUND
11
Deductibles Rise Sharply, Especially in
Small Firms, Over 2000–2007
Mean deductible for single coverage (PPO, in-network)
2000
2007
$900
$750
667
$600
461
382
$450
$300
187
210
157
$150
$0
Total
Small firms, 3–199
Large firms, 200+
employees
employees
PPO = preferred provider organization. PPOs covered 57 percent of workers enrolled in an employer-sponsored
health insurance plan in 2007.
Source: The Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits, 2000 and
2007 Annual Surveys.
THE
COMMONWEALTH
FUND
People With Employer Insurance Have More Stable
Coverage Than Those with Individual Market Insurance
12
Retention of initial insurance over a two-year period, 1998–2000
Retained initial
insurance status
2%
One or more spells
uninsured
Other transition
12%
26%
53%
86%
21%
Employer
insurance
Individual
insurance
Source: K. Klein, S. A. Glied, and D. Ferry, Entrances and Exits: Health Insurance Churning, 1998–2000, The
Commonwealth Fund, September 2005. Authors’ analysis of the 1998–2000 Medical Expenditure Panel Survey.
THE
COMMONWEALTH
FUND
13
Adults With Employer Coverage Give Their Health Plans Higher
Ratings Than Those in the Individual Market
Percent of adults ages 19–64 insured all year with private insurance
Very good
75
Excellent
53
54
31
32
50
25
34
20
22
22
Total
ESI
14
0
Individual
Source: S. R. Collins, J. L. Kriss, K. Davis, M. M. Doty, and A. L. Holmgren, Squeezed: Why Rising Exposure to
Health Care Costs Threatens the Health and Financial Well-Being of American Families, The Commonwealth Fund,
September 2006.
THE
COMMONWEALTH
FUND
14
Medicare: Working for Elderly and
Disabled Americans
THE
COMMONWEALTH
FUND
Access to Physicians for Medicare Beneficiaries
and Privately Insured People, 2005
Medicare
Percent
100
90
80
70
60
50
40
30
20
10
0
74
83
67
Routine Care
15
Privately Insured
89 86
75
Illness or
Injury
Never had a delay to
appointment
75 75
Primary care
Specialist
No problem finding
physician
THE
COMMONWEALTH
FUND
Source: MedPAC Report to the Congress: Medicare Payment Policy, March 2006, p. 85.
Access Problems Because of Cost
16
Percent of adults who had any of four access problems1 in past year
due to cost
75
61*
50
25
39
34*
17*
39*
40*
35*
15
0
Ages 19–64 Ages 65+
Medicare,
65+
Employer, Individual,
19–64
19–64
Medicaid,
19–64
Medicare, Uninsured,
19–64
19–64
Note: Adjusted percentages based on logistic regression models; age groups controlled for health status and income;
insurance status controlled for health status, income, and prescription coverage.
1Did not fill a prescription; did not see a specialist when needed; skipped medical test, treatment, or follow-up; did not
see doctor when sick.
* Significant difference at p<.01 or better; referent categories are “ages 19–64” and “Medicare 65+”.
Source: K. Davis and S.R. Collins, “Medicare at Forty,” Health Care Financing Review, Winter 2005–2006 27(2):53–62.
THE
COMMONWEALTH
FUND
17
Rating of Current Insurance
Percent of adults who rated their current insurance as “excellent” or
“very good”
100
80
60
64*
68
47
44*
54*
52*
Medicaid,
19–64
Medicare,
19–64
41*
40
20
0
Ages 19–64
Ages 65+
Medicare,
65+
Employer,
19–64
Individual,
19–64
Note: Adjusted percentages based on logistic regression models; age groups controlled for health status and income;
insurance status controlled for health status, income, and prescription coverage.
* Significant difference at p<.01 or better; referent categories are “ages 19–64” and “Medicare 65+”.
Source: K. Davis and S.R. Collins, “Medicare at Forty,” Health Care Financing Review, Winter 2005-2006 27(2):53-62.
THE
COMMONWEALTH
FUND
Percent of Adults Ages 50–64 Who Are
Very/Somewhat Interested in Receiving Medicare
Before Age 65, by Insurance Status and Income
Percent of adults ages 50–64
and not on Medicare
75
50
25
0
Somewhat interested
94
100
84
73
32
41
Total
68
24
26
Very interested
86
22
81
31
34
58
18
70
64
34
Employer Individual Uninsured
Less
than
$25,000
50
$25,000–
$39,999
73
33
40
$40,000–
$59,999
Source: S. R. Collins, et al., Will You Still Need Me? The Health and Financial Security of Older Americans: Findings
from The Commonwealth Fund Survey of Older Adults, Commonwealth Fund, June 2005.
66
36
30
$60,000
or more
THE
COMMONWEALTH
FUND
19
Medicaid/SCHIP:
Working for Most at Risk Americans
THE
COMMONWEALTH
FUND
Medicaid’s Role for Selected Populations
20
Percent with Medicaid Coverage:
40%
Poor
Near Poor
23%
Families
All Children
27%
51%
Low-Income Children
Low-Income Adults
20%
41%
Births (Pregnant Women)
Aged & Disabled
Medicare Beneficiaries
19%
People with Severe Disabilities
20%
People Living with HIV/AIDS
Nursing Home Residents
44%
65%
Note: “Poor” is defined as living below the federal poverty level, which was $17,600 for a family of 3 in 2008.
SOURCE: Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation, and Urban Institute
estimates; Birth data: NGA, MCH Update.
THE
COMMONWEALTH
FUND
21
Uninsured Nonelderly Adult Rate Has Increased
from 17.3 Percent to 20.0 Percent in Last Six Years
1999–2000
2005–2006
NH
NH ME
VT
WA
NH
WA
ND
MT
VT
MT
MN
OR
ID
NY
WI
SD
MI
WY
PA
IA
NE
CA
OH
IN
NV
UT
IL
CO
MA
KS
MO
WV
VA
KY
NJ
RI
CT
MN
OR
ID
MI
PA
IA
NE
CA
IL
CO
KS
MO
AZ
NM
MS
TX
AL
DE
MD
DC
NC
AZ
GA
NM
OK
SC
AR
MS
LA
TX
AL
GA
LA
FL
AK
VA
NJ
RI
CT
TN
SC
AR
WV
KY
TN
OK
OH
IN
NV
UT
MA
NY
WI
SD
WY
DE
MD
DC
NC
ME
ND
FL
AK
HI
23% or more
19%–22.9%
HI
14%–18.9%
Less than 14%
Source: J. C. Cantor, C. Schoen, D. Belloff, S. K. H. How, and D. McCarthy, Aiming Higher: Results from a State Scorecard
on Health System Performance (New York: The Commonwealth Fund, June 2007). Updated Data: Two-year averages
1999–2000, updated with 2007 CPS correction, and 2005–2006 from the Census Bureau’s March 2000, 2001 and 2006, 2007
Current Population Surveys.
22
Percentage of Uninsured Children Has Declined
Since Implementation of SCHIP, but Gaps Remain
1999–2000
2005–2006
U.S. Average: 11.3%
U.S. Average: 12.0%
WA
VT
NH ME
NH
WA
ND
MT
VT
MT
MN
OR
ID
NY
WI
SD
MI
WY
PA
IA
NE
CA
OH
IN
NV
UT
IL
CO
MA
KS
MO
WV
VA
KY
NJ
RI
CT
MN
OR
ID
MI
PA
IA
NE
CA
IL
CO
KS
MO
AZ
NM
MS
TX
AL
CT
DE
MD
DC
NC
AZ
GA
NM
OK
SC
AR
MS
LA
TX
AL
GA
LA
FL
AK
VA
NJ
TN
SC
AR
WV
KY
TN
OK
OH
IN
NV
UT
MA
RI
NY
WI
SD
WY
DE
MD
DC
NC
ME
ND
FL
AK
HI
16% or more
10%–15.9%
HI
7%–9.9%
Less than 7%
Source: J. C. Cantor, C. Schoen, D. Belloff, S. K. H. How, and D. McCarthy, Aiming Higher: Results from a State Scorecard
on Health System Performance (New York: The Commonwealth Fund, June 2007). Updated Data: Two-year averages
1999–2000, updated with 2007 CPS correction, and 2005–2006 from the Census Bureau’s March 2000, 2001 and 2006, 2007
Current Population Surveys.
Medicaid Enrollees and Expenditures
by Enrollment Group, 2005
Elderly
10%
Disabled
14%
Adults
26%
23
Elderly
28%
Disabled
42%
Children
50%
Adults 12%
Children 18%
Enrollees
Total = 59 million
SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban
Institute estimates based on 2005 MSIS data.
Expenditures on
benefits
Total = $275 billion
THE
COMMONWEALTH
FUND
Medicaid’s Spending on Health Services Is
Lower Than That of Private Coverage
24
Expenditures ($) on health services for people without health
limitations in private coverage and Medicaid
Private
1000
800
809
Medicaid
735
600
413
400
356
400
221
200
279
352
215
198
0
Inpatient
Office-based
Outpatient/ER
Prescription
Dental/other
doctor
Source: Hadley J., Holahan J., Is health care spending higher under Medicaid or private insurance? Inquiry. 2003
Winter;40(4):323-42.
THE
COMMONWEALTH
FUND
Thirty-five Percent of Medicaid Spending
Goes to Long-Term Care
25
Community-based
9.3%
Nursing Home
20.4%
Non-LTC
Medicaid
65.2%
Note: ICF/MR = intermediate care facilities for the mentally retarded
Source: MEDSTAT HCBS
ICF/MR
5.1%
THE
COMMONWEALTH
FUND
Medicaid Financing of Safety-Net Providers
Public Hospital Net Revenues
by Payer, 2004
Medicare
20%
Commerica
l
24%
Health Center Revenues
by Payer, 2006
Self Pay
7%
Self Pay/
Other
7%
Medicaid
35%
26
Other
9%
Private
7%
Medicaid
37%
Medicare
6%
Federal
Grants
22%
State/Local
Subsidies
14%
Total = $29 billion
State/Local
13%
Total = $8.1 billion
SOURCE: Kaiser Commission on Medicaid and the Uninsured, based on America’s Public
Hospitals and Health Systems, 2004, National Association of Public Hospitals and Health
Systems, October 2006. KCMU Analysis of 2006 UDS Data from HRSA.
THE
COMMONWEALTH
FUND
Barriers to Health Care Among Nonelderly
Adults, by Insurance Status, 2006
27
Percent of adults (age 19 – 64) reporting in past 12 months:
No Regular Source
of Care
Postponed
Seeking Care
because of Cost
Needed Care but
Did Not Get It
Could Not Afford
Prescription Drug
54%
10%
10%
6%
3%
4%
11%
26%
Uninsured
23%
9%
14%
23%
Medicaid/Other
Public
Private
NOTE: Respondents who said usual source of care was the emergency room were included among those not having a
usual source of care.
SOURCE: Kaiser Commission on Medicaid and the Uninsured analysis of 2006 NHIS data.
THE
COMMONWEALTH
FUND
28
Children’s Access to Care,
by Health Insurance Status, 2006
Employer/Other Private
Medicaid/Other Public
Uninsured
37%
30%
23%
17%
17%
12%
4%
2%
No Usual Place
of Care
4%
2%
Postponed
Seeking Care
Due to Cost
1%2%
Needed Care
but Did Not Get
it Due to Cost
13%
12%
4%
2%
Last MD
Contact >2
Years Ago
7%
4%
Unmet Dental
Need
Last Dental
Visit >2 Years
Ago
NOTE: MD contact includes MD or any health care professional, including time spent in a hospital. Data is for all children under
age 18, except for dental visit and unmet dental need, which are for children age 2-17. Respondents who said usual source of
care was the emergency room were included among those not having a usual source of care. All estimates are ageadjusted.
SOURCE: Kaiser Commission on Medicaid and the Uninsured analysis of National Center for Health Statistics, CDC. 2007.
Summary of Health Statistics for U.S. Children: NHIS, 2006.
THE
COMMONWEALTH
FUND
Community Care of
North Carolina: Medicaid
29
Asthma Initiative: Pediatric Asthma
Hospitalization rates
(April 2000 – December 2002)
In patient admission rate per 1000
member months
10
9
•
•
•
•
8.2
8
7
•
6
5.3
5
4
•
3
2
•
1
0
Access I
Access II & III
15 networks, 3500 MDs, >750,000
patients
Receive $3.00 PM/PM from the State
Hire care managers/medical
management staff
PCP also get $2.50 PMPM to serve
as medical home and to participate
in disease management
Care improvement: asthma,
diabetes, screening/referral of
young children for developmental
problems, and more!
Case management: identify and
facilitate management of costly
patients
Cost (FY2003) - $8.1 Million; Savings
(per Mercer analysis) $60M
compared to FY2002
Source: L. Allen Dobson, MD, presentation to ERISA Industry Committee, Washington, DC, March 12, 2007
THE
COMMONWEALTH
FUND
30
Payments to Medicare Advantage Plans as a
Share of Medicare Fee-for-Service Costs, 2006
Percent of fee-for-service costs
125
120
115
115
110
110
122
119
120
117
112
110
108
118
110
104
105
123
103
100
95
90
95
HMOs
Bids
Local PPOs
Benchmark
Regional
Payments
PFFS
SNPs
PPOs
Source: Medicare Payment Advisory Commission, Report to the Congress: Medicare Payment Policy
(Washington, DC: MedPAC, March 2007).
THE
COMMONWEALTH
FUND
Total Medicare Private Health Plan Enrollment,
Actual 1999-2007 and Projected 2008-2017
31
Millions
16
Proportion of Medicare beneficiaries in private plans:
2007—19.1%
2017—26.0%
14
14.3
12
10
8
8.3
6.9
5.3
6
4
2
0
1999
2001
2003
2005
2007
2009
2011
2013
Note: Includes local HMOs, PSOs, and PPOs, regional PPOs, PFFS plans, cost contracts, demonstrations,
HCPP, and PACE contracts.
Source: Actual through 2006—Mathematica Policy Research, Inc. “Tracking Medicare Health and
Prescription Drug Plans Monthly Report.” December 1999-2006. Projected 2007 through 2017—
Congressional Budget Office, Fact Sheet for CBO’s March 2007 Baseline: Medicare.
2015
2017
THE
COMMONWEALTH
FUND
MA Enrollment by Type of Plan, April 2007
32
Other
PFFS
10%
18%
Regional PPOs
2%
HMOs
66%
Local PPOs
4%
Source: Mathematica Policy Research. “Tracking Medicare Health and Prescription Drug Plans,
Monthly Report for April 2007” accessed on Kaiser Family Foundation web site, May 31, 2007.
THE
COMMONWEALTH
FUND
Illustrative Array of Plan Designs
Offered on National Basis, 2008
33
Plan
Deductible
Tier 1
Tier 2
Tier 3
Specialty
Tier
Gap
Coverage
Aetna
Essentials
$275
$3
$39
$80
25%
None
Aetna
Premier
$0
$4
$40
$70
33%
Generics
Humana
Standard
$275
25%*
25%*
25%*
25%*
None
Humana
Complete
$0
$4
$25
$54
25%
Preferred
Generics
Medco
Choice
$0
$6
$35
75%
33%
None
Sterling Rx
Plus
$100
$0
$25
25%
25%
None
United/AARP
Preferred
$0
$7
$30
$74.85
33%
None
United/AARP
Saver
$275
$5
$20
$49.68
25%
None
Wellcare
Signature
$0
$0
$45
$107
33%
None
Notes: * No tiers. 25% coinsurance only.
Some values are median amounts for plans that use different tiered cost-sharing arrangements across regions.
Source: J. Hoadley, Medicare Part D: Simplifying the Program and Improving the Value of Information for Beneficiaries, The
Commonwealth Fund, May 2008.
THE
COMMONWEALTH
FUND
What Are the Problems?
Uninsured Rates
Quality of Care
34
Costs of Care
Administrative
Complexity
THE
COMMONWEALTH
FUND
35
Uninsured Rates are Increasing Most for
Working Middle Class Adults
Percent of working adults who are uninsured
50%
48%
47%
39%
33%
50%
48%
44%
Lowest
quintile
Second
35%
25%
25%
Third
21%
15%
18%
9%
6%
0%
52%
5%
2%
1987
1989
1991
1993
8%
11%
5%
4%
1995 1997 1999* 2001
Fourth
Highest
quintile
2003
*In 1999, CPS added a follow-up verification question for health coverage.
Source: Analysis of the March 1988–2004 Current Population Surveys by D. Ferry, Columbia University, for The
Commonwealth Fund.
THE
COMMONWEALTH
FUND
Percent of Children and Adults With EmployerSponsored Coverage, by Poverty
36
Percent with coverage through their own or other employer
100
79
76
80
60
40
20
42
41
19
19
0
Children
Children
Children
Adults*
Adults*
Adults*
<100% FPL
100–199%
200%+ FPL
<100% FPL
100–199%
200%+ FPL
FPL
FPL
FPL = federal poverty level.
*Adults age 19 and over; children are age 18 and under.
Source: Analysis by S. Glied and B. Mahato of Columbia University of the 2006 Current Population Survey.
THE
COMMONWEALTH
FUND
Health Insurance Coverage Getting Worse
for Adults, Better for Children
Percent change between 1999-2000 and
2005-2006 in uninsured adults ages 18-64
WA
VT
Percent change between 1999-2000 and
2005-2006 in uninsured children under 18
NH ME
NH
WA
ND
MT
VT
ID
NY
WI
SD
MI
WY
PA
IA
NE
CA
OH
IN
NV
UT
IL
CO
MA
KS
MO
WV
VA
KY
NJ
RI
CT
MN
OR
ID
MI
PA
IA
NE
CA
IL
CO
KS
MO
AZ
NM
MS
TX
AL
DE
MD
DC
NC
AZ
GA
NM
OK
SC
AR
MS
LA
TX
AL
GA
LA
FL
AK
VA
NJ
RI
CT
TN
SC
AR
WV
KY
TN
OK
OH
IN
NV
UT
MA
NY
WI
SD
WY
DE
MD
DC
NC
ME
ND
MT
MN
OR
37
FL
AK
HI
Decreased -7% to -2.5%
HI
Decreased –2.4 to 0%
Increased 0.1% to 4%
Increased 4.1% to 7%
THE
COMMONWEALTH
FUND
Data: Two-year averages 1999–2000, updated with 2007 CPS correction, and 2005–2006 from the Census Bureau’s March
2000, 2001 and 2006, 2007 Current Population Surveys.
Adults Ages 19–64 Who Are Uninsured and
Underinsured, By Poverty Status, 2007
Insured all year, not underinsured
38
Underinsured*
Uninsured during year
100%
80%
60%
48
11
24
73
14
40%
20%
16
28
58
28
0%
Total
Under 200% of
200% of poverty or
poverty
more
*Underinsured defined as insured all year but experienced one of the following: medical expenses equaled 10% or
more of income; medical expenses equaled 5% or more of incomes if low-income (<200% of poverty); or deductibles
equaled 5% or more of income.
Data: 2007 Commonwealth Fund Biennial Health Insurance Survey (Schoen et al. 2008).
THE
COMMONWEALTH
FUND
Percent of Privately Insured Non-Elderly Adults with
High Out-of-Pocket Burdens by Income, 2001–2004
39
Percent of nonelderly adults with private insurance (group and
non-group) who spend >10% of disposable household income on
out-of-pocket premiums and expenditures on health care services
75
2001
2004
53.8 53.5
50
32.0
25
15.9
37.4
19.1 21.4
18.8
7.2
10.3
0
Total
<100% FPL
100–<200%
200–<400%
FPL
FPL
400%+ FPL
Source: Jessica S. Banthin, Peter Cunningham, and Didem M. Bernard, “Financial Burden Of Health Care, 2001–
2004,” Health Affairs, January/February 2008; 27(1): 188–195.
THE
COMMONWEALTH
FUND
Groups at High Risk of Having
High Financial Burden for Health Care, 2003
56%
60%
40%
40
39%
31%
32%
31%
Fair or Poor
Health
Any Activity
Limitation
33%
31%
20%
0%
Age 55-64
Diabetes
Stroke/Other
Cerebral
Heart Disease
Arthritis
NOTE: High Financial Burden defined as families spending more than 10% of their after-tax income on health care,
including premiums and out-of-pocket health costs.
SOURCE: Kaiser Family Foundation, based on Banthin, JS and DM Bernard. “Changes in Financial Burdens for
Health Care,” JAMA 296(22), December 2006.
THE
COMMONWEALTH
FUND
Underinsured and Uninsured Adults at High Risk of
Going Without Needed Care and Financial Stress
41
Percent of adults (ages 19–64)
Insured, not underinsured
Underinsured
Uninsured during year
68
75
53
45
50
51
31
21
25
0
Went without needed care due to costs*
Have medical bill problem or
outstanding debt**
*Did not fill prescription; skipped recommended medical test, treatment, or follow-up, had a medical problem but did not visit doctor;
or did not get needed specialist care because of costs. **Had problems paying medical bills; changed way of life to pay medical bills;
THE
or contacted by a collection agency for inability to pay medical bills.
COMMONWEALTH
FUND
Source: C. Schoen et al., Insured But Not Protected: How Many Adults Were Underinsured in 2007 and What Are The Trends?,
Health Affairs Web Exclusive, June 10, 2008. Data: 2007 Commonwealth Fund Biennial Health Insurance Survey
Adults Without Insurance Are Less Likely
to Be Able to Manage Chronic Conditions
42
Percent of adults ages 19–64 with at least one chronic condition*
Insured all year
Insured now, time uninsured in past year
Uninsured now
75
58
59
50
27
25
18
35
16
0
Skipped doses or did not fill
Visited ER, hospital, or both for chronic
prescription for chronic condition
condition
because of cost
THE
*Hypertension, high blood pressure, or stroke; heart attack or heart disease; diabetes; asthma, emphysema, or lung disease.
COMMONWEALTH
Source: S. R. Collins, K. Davis, M. M. Doty, J. L. Kriss, A. L. Holmgren, Gaps in Health Insurance: An All-American Problem, FUND
Findings from the Commonwealth Fund Biennial Health Insurance Survey (New York: The Commonwealth Fund, Apr. 2006).
Figure 12.
43
THE
COMMONWEALTH
FUND
Increases in Health Insurance Premiums
Compared with Other Indicators, 1988–2006
Percent
Health insurance premiums
20
Workers earnings
18.0
Overall inflation
15
13.9^
National health expenditures 12.9*
11.2*
per capita
10.9*
12.0
10
8.5
8.2*
9.2*
5.3*
5
7.7*
6.1*
0.8
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
0
44
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2007, and Commonwealth Fund analysis of
National Health Expenditures data.
*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).
THE
COMMONWEALTH
FUND
Only Two Percent of Premiums in Medicare and Medicaid Are
Spent on Non-Medical Expenditures
45
Percent of premiums spent on non-medical expenditures
Non-group
25–40%
15–25%
Small group
Large group
5–15%
Medicaid
2%
Medicare
2%
0
10
20
30
40
Source: K. Davis, B. S. Cooper, and R. Capasso, The Federal Employees Health Benefit Program: A Model for
Workers, Not Medicare (New York: The Commonwealth Fund, Nov. 2003); M. A. Hall, The geography of health
insurance regulation, Health Affairs, March/April 2000; 19(2): 173–184;
50
THE
COMMONWEALTH
FUND
Cumulative Changes in Annual National Health Expenditures
And Other Indicators, 2000–2007
46
Percent change
125
Net cost of private health insurance administration
100
Family private health insurance premiums
109%
Personal health care
91%
Workers earnings
75
65%
50
25
24%
0
2000
2001
2002
2003
2004
2005
2006*
2007*
Notes: Data on premium increases reflect the cost of health insurance premiums for a family of four/the average premium increase is weighted
by covered workers. * 2006 and 2007 private insurance administration and personal health care spending growth rates are projections.
Sources: A. Catlin, C. Cowan, S. Heffler et al., “National Health Spending in 2005: The Slowdown Continues,” Health
THE
Affairs, Jan./Feb. 2007 26(1):143–53; J. A. Poisal, C. Truffer, S. Smith et al., “Health Spending Projections Through 2016:
COMMONWEALTH
Modest Changes Obscure Part D’s Impact,” Health Affairs Web Exclusive (Feb. 21, 2007):w242–w253; Henry J. Kaiser
FUND
Family Foundation/Health Research and Educational Trust, Employer Health Benefits Annual Surveys, 2000–2007
(Washington, D.C.: KFF/HRET).
47
THE
COMMONWEALTH
FUND
48
Lessons from International Experience
THE
COMMONWEALTH
FUND
International Comparison of Spending on Health,
1980–2005
Average spending on health
per capita ($US PPP)
7000
Total expenditures on health
as percent of GDP
United States
Germany
Canada
France
Australia
United Kingdom
6000
49
16
14
5000
12
10
4000
8
3000
6
2000
4
1000
2
United States
Germany
Canada
France
Australia
United Kingdom
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
0
0
Source: K. Davis, C. Schoen, S. Guterman, T. Shih, S. C. Schoenbaum, and I. Weinbaum, Slowing the Growth of
U.S. Health Care Expenditures: What Are the Options?, The Commonwealth Fund, January 2007, updated with 2007
OECD data
THE
COMMONWEALTH
FUND
49
50
LONG, HEALTHY & PRODUCTIVE LIVES
Mortality Amenable to Health Care
Deaths per 100,000 population*
1997/98
150
2002/03
130
116
109
99
100
88
84
81
76
89
65
74
71
77
74
115
113
106
88
50
71
128
97
97
89
115
134
80
82
84
82
84
96
93
90
101
103
103
104
110
d
De
Un
nm
ite
ar
d
k
Ki
ng
do
m
Ir e
la
nd
Po
r tu
Un
ga
ite
l
d
St
at
es
al
an
d
Ze
Ne
w
Fi
nl
an
m
an
y
ria
Ge
r
Au
st
ec
e
Gr
e
No
rw
Ne
ay
th
er
la
nd
s
Sw
ed
en
da
ly
Ca
na
It a
n
Sp
ai
ra
lia
Au
st
pa
n
Ja
Fr
an
ce
0
* Countries’ age-standardized death rates, ages 0–74; includes ischemic heart disease.
See Technical Appendix for list of conditions considered amenable to health care in the analysis.
Source: E. Nolte and C. M. McKee, Measuring the Health of Nations: Updating an Earlier Analysis, Health Affairs,
January/February 2008, 27(1):58–71
THE
COMMONWEALTH
FUND
51
ACCESS: UNIVERSAL PARTICIPATION
Access Problems Because of Costs, 2007
Percent of adults who had any of three access problems* in past year because of costs
50
37
25
25
26
21
12
8
5
0
US 2007
NETH
UK
CAN
GER
NZ
International Comparison, 2007
AUS
* Did not get medical care because of cost of doctor’s visit, skipped medical test, treatment, or follow-up because of cost, or did not
fill Rx or skipped doses because of cost.
THE
AUS=Australia; CAN=Canada; GER=Germany; NET=Netherlands; NZ=New Zealand; UK=United Kingdom; US=United States.
COMMONWEALTH
FUND
Data: 2007 Commonwealth Fund International Health Policy Surveys.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
52
EFFICIENCY
Test Results or Medical Record Not Available at
Time of Appointment, Among Sicker Adults, 2007
Percent reporting test results/records not available at time of appointment in past two years
30
22
20
17
17
18
14
12
9
10
0
US 2007
NETH
GER
NZ
AUS
UK
International Comparison, 2007
CAN
THE
AUS=Australia; CAN=Canada; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom; US=UnitedCOMMONWEALTH
States.
FUND
Data: 2007 Commonwealth Fund International Health Policy Surveys.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
Where is the U.S. on IT?
Only 28% of U.S. Primary Care Physicians Have
Electronic Medical Records; Only 19% Have
Advanced IT Capacity
Percent reporting 7 or more out of
14 functions*
Percent reporting EMR
100
98
92
53
100
89
87
79
75
83
72
75
59
50
42
50
28
25
32
23
19
25
8
0
0
NET
NZ
UK
AUS
GER
US
CAN
NZ
UK
AUS
NET
GER
US
*Count of 14: EMR, EMR access other doctors, outside office, patient; routine use electronic ordering tests,
prescriptions, access test results, access hospital records; computer for reminders, Rx alerts, prompt tests results;
easy to list diagnosis, medications, patients due for care.
Source: 2006 Commonwealth Fund International Health Policy Survey of Primary Care Physicians in Seven Nations: Australia, Canada,
Germany, Netherlands, New Zealand, UK, and US.
CAN
THE
COMMONWEALTH
FUND
54
Percentage of National Health Expenditures Spent on
Insurance Administration, 2005
Net costs of health insurance administration as percent of national health expenditures
10
7.5
8
6.9
5.6
6
4.8
3.9
4
2.8
1.9
2
4.2
4.3
3.3
2.3
0
n
Fi
nd
la
an
p
Ja
om
l ia
d
a
r
ng
st
i
u
K
A
d
ti e
Un
a
tri
s
Au
da
a
n
Ca
e
th
e
N
s
nd
a
rl
Sw
e
itz
nd
a
l
r
G
y
an
m
er
*
e
es
c
t
a
an
St
Fr
d
te
i
Un
a
2004 b2001
* Includes claims administration, underwriting, marketing, profits, and other administrative costs; based on premiums
minus claims expenses for private insurance.
Data: OECD Health Data 2007, Version 10/2007.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, forthcoming July 2008
THE
COMMONWEALTH
FUND
MedCom – The Danish Health Data Network
Source: I. Johansen, “What Makes a High Performance Health Care System and How Do We Get There?
Denmark,” Presentation to the Commonwealth Fund International Symposium, November 3, 2006.
55
THE
COMMONWEALTH
FUND
56
Health Reform: All Private, All Public, or
Mixed Private-Public?
THE
COMMONWEALTH
FUND
57
What are the Options for Health Insurance
Reform?
Tax Incentives and
Individual Insurance
Markets
Mixed Private-Public
Group Insurance with
Shared Responsibility
for Financing
Public Insurance
Covers Everyone
0
+
+
Minimum Standard Benefit Floor
–
+
+
Premium/Deductible/
Out-of-Pocket Costs
Affordable Relative to Income
–
+
+
Easy, Seamless Enrollment
0
+
++
Choice
+
+
+
Pool Health Care Risks Broadly
–
+
++
Minimize Dislocation, Ability to
Keep Current Coverage
+
++
–
Administratively Simple
–
+
++
Work to Improve Health Care
Quality and Efficiency
0
+
+
Principles for Reform
0 = Minimal or no change from current system; – = Worse than current system; + = Better than current system;
++ = Much better than current system
Source: S.R. Collins, et al., A Roadmap to Health Insurance for All: Principles for Reform, Commission on a High
Performance Health System, The Commonwealth Fund, October 2007.
THE
COMMONWEALTH
FUND
Building Blocks for Automatic and Affordable
Health Insurance For All
58
New Coverage for 44 Million Uninsured in 2008
11m
Employer
Group Coverage
TOTAL =
142 m
7m
22m
National
Insurance
Connector
TOTAL =
60 m
38 m
10m
Medicaid/
SCHIP
TOTAL =
42 m
2m
1m
Medicare
TOTAL = 43 m
2m
Improved or More Affordable Coverage for 49 Million Insured
Source: Based on analysis in C. Schoen, K. Davis, and S.R. Collins, "Building Blocks for Reform: Achieving Universal
Coverage With Private and Public Group Health Insurance," Health Affairs 27, no. 3 (2008): 646-657 from Lewin
Group modeling estimates.
THE
COMMONWEALTH
FUND
Building Blocks with Medicare Extra:
Minimal Distribution in Coverage, 2008
Current Law (millions)
Private
Non-Employer
9.6
(3%)
Uninsured
48.3
(16%)
CHAMPUS
3.9
(1%)
Medicaid/
SCHIP
37.8
(13%)
59
Medicare Extra Option (millions)
Employer
157.9
(53%)
Private
Non-Employer
Uninsured
CHAMPUS
3.4
3.7
3.9
(1%)
(1%)
(1%)
Medicaid/
SCHIP
42.1
(14%)
Employer
141.5
(48%)
Medicare
43
(16%)
Individual Purchase
National Connector
14.8
Medicare
40.3
(14%)
New National ConnectorEmployer Purchase
60.3
National Connector
(20%)
42.5
Total population = 297.8 million
Source: The Lewin Group estimates using the Health Benefits Simulation Model, October 2007
THE
COMMONWEALTH
FUND
Savings Can Offset Federal Costs of Insurance
For All: Federal Spending Under Two Scenarios
60
Dollars in billions
Federal spending under Building Blocks alone
Net federal with Building Blocks plus savings options*
$250
$205
$200
$150
$100
$50
$122
$82
$31
$13
$10
$0
2008
2012
2017
* Selected options include improved information, payment reform, and public health.
Data: Lewin Group estimates of combination options compared with projected federal spending under current policy..
Source: Schoen et al. Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending,
The Commonwealth Fund, December 2007.
THE
COMMONWEALTH
FUND
Total National Health Expenditures, 2008–
2017 Projected and Various Scenarios
61
Dollars in trillions
* Selected individual options include improved information, payment reform, and public health.
Source: C. Schoen et al., Bending the Curve: Options for Achieving Savings and Improving Value in
U.S. Health Spending, The Commonwealth Fund, December 2007. Data: Lewin Group estimates.
THE
COMMONWEALTH
FUND
62
Options to Achieve Savings
• Producing and Using
Better Information
• Promoting Health
and Disease
Prevention
• Aligning Incentives
with Quality and
Efficiency
• Correcting Price
Signals in the Health
Care Market
Source: Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending,
Commonwealth Fund, December 2007.
THE
COMMONWEALTH
FUND
63
THE
COMMONWEALTH
FUND
64
Integrated
system
capitation
Outcome
measures; large
% of total
payment
Global DRG fee:
hospital and
physician
inpatient
Less
Feasible
Global DRG fee:
hospital only
Global
ambulatory care
fees
Care
coordination and
intermediate
outcome
measures;
moderate % of
total payment
More
Feasible
Global primary
care fees
Blended FFS
and medical
home fees
Simple process and
structure measures;
small % of total
payment
FFS and DRGs
Small MD
practice;
unrelated
hospitals
Primary care
MD group
practice
Multispecialty MD
group
practice
Hospital
System
Integrated Delivery
System
Continuum of Organization
Source: The Commonwealth Fund, 2008
Continuum of P4P Design
Continuum of Payment Bundling
Organization and Payment Methods
THE
COMMONWEALTH
FUND
65
Agenda for Change
•
Offer Medicare Extra as a choice to small employers and
individuals, eliminate two-year waiting period for disabled, and
buy-in for older adults; financial protection for beneficiaries
•
Expand Medicaid/SCHIP to all individuals under 150 percent of
poverty
•
Spread state innovations in quality and efficiency across
Medicaid programs
•
Offer Medicare global fee payment options to physician group
practices, hospitals, and integrated care systems
•
Level the playing field between Medicare “self-insured” coverage
and Medicare Advantage
•
Accountability for quality and care, transparency, rewards for
results
• Health information technology and information exchange
networks; personal health records for beneficiaries
•
Comparative effectiveness
•
National leadership and public-private collaboration
THE
COMMONWEALTH
FUND
Thank You!
66
Stephen C. Schoenbaum,
M.D., Executive Vice
President and Executive
Director, Commission on a
High Performance Health
System, [email protected]
Tony Shih, M.D.
Assistant Vice
President,
[email protected]
Cathy Schoen, Senior
Vice President for
Research and
Evaluation
[email protected]
Stu Guterman,
Senior program
Director,
[email protected]
Sara Collins,
Assistant Vice
President
[email protected]
Jennifer Kriss,
Associate Program
Officer
[email protected]
THE
COMMONWEALTH
FUND