rising health care costs: implications for the health and financial security of u.s. families
DESCRIPTION
Rising Health Care Costs: Implications for the Health and Financial Security of U.S. Families. Sara R. Collins, Ph.D. Assistant Vice President The Commonwealth Fund Invited Testimony U.S. Senate Finance Committee Hearing on “High Health Care Costs: A State Perspective?” October 21, 2008. - PowerPoint PPT PresentationTRANSCRIPT
THE COMMONWEALTH
FUND
Rising Health Care Costs:Implications for the Health and
Financial Security of U.S. Families
Sara R. Collins, Ph.D.Assistant Vice President
The Commonwealth Fund
Invited TestimonyU.S. Senate Finance Committee
Hearing on “High Health Care Costs: A State Perspective?”October 21, 2008
Figure 1. 116 Million Working-Age Adults Were Uninsured,Underinsured, Reported a Medical Bill Problem and/or
Did Not Access Needed Health Care Because of Cost, 2007
Source: S. R. Collins, J. L. Kriss, M. M. Doty and S. D. Rustgi, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families, The Commonwealth Fund, August 2007.
Adequate coverage and no bill problem or
problem getting needed care due to cost
61 million35%
Uninsured anytime during the year or underinsured
18 million10%
Medical bill/debt problem and did not get needed
care due to cost54 million
31%
177 Million Adults, Ages 19–64
Medical bill/ debt problem
18 million10%
Did not get needed care due to cost26 million
15%
Figure 2. International Comparison of Spending on Health, 1980–2005
0
1000
2000
3000
4000
5000
6000
7000 United StatesGermanyCanadaFranceAustraliaUnited Kingdom
0
2
4
6
8
10
12
14
16
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
United StatesGermanyCanadaFranceAustraliaUnited Kingdom
Average spending on healthper capita ($US PPP)
Total expenditures on healthas percent of GDP
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006.Updated data from OECD Health Data 2007.
Figure 3. Americans Spend More Out-of-Pocket on Health Care Expenses Than Citizens in Other Industrialized Countries
0
1000
2000
3000
4000
5000
6000
7000
0 100 200 300 400 500 600 700 800 900
1 20032 2003 Total Health Care spending, 2002 OOP SpendingSource: J. Cylus and G. F. Anderson, Multinational Comparisons of Health Systems Data, 2006, The Commonwealth Fund,May 2007.
Out-of-pocket health care spending per capita (US$)
Total health care spending per capita (US$)
United States
Australia2OECD Median
Canada
JapanNew Zealand
Germany1France
Netherlands
Figure 4. Increases in Health Insurance PremiumsCompared with Other Indicators, 1988–2007
12.0
18.0
0.8
4.7
6.1*7.7*
13.9^12.9*
10.9*
8.2*
5.3*
11.2*
8.5
9.2*
0
5
10
15
20
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Health insurance premiums
Workers’ earnings
Overall inflation
National health expenditures per capita
* 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).Source: G. Claxton, J. Gabel et al., "Health Benefits In 2008: Premiums Moderately Higher, While Enrollment In Consumer-Directed Plans Rises In Small Firms," Health Affairs, Sept./Oct. 2008 27(6): w492-502. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2008. S. Keehan, A. Sisko et al., “Health Spending Projections Through 2017: The Baby-Boom Generation Is Coming to Medicare,” Health Affairs, March/April 2008 27(2):w145–w155.
Percent
*
Figure 5. Employer Coverage Continues to BeMajor Source of Coverage for Employees of Larger Firms
But Has Declined Among Small Firms
999791
80
57
69
999490
78
49
63
0
25
50
75
100
Total 3–9
workers
10–24
workers
25–49
workers
50–199
workers
200+
workers
2000 2008
Percent of firms offering health benefits
Source: The Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits, 2000 and 2008Annual Surveys.
Figure 6. Employer-Provided Health Insurance,by Income Quintile, 2000–2006
88% 88% 87% 87% 87% 87% 86%
86% 85% 84% 84% 83% 82% 82%77% 77% 75% 74% 74% 72% 72%
62% 60%57% 55% 54% 54% 53%
22%29% 26% 25% 23% 23% 22%
0%
20%
40%
60%
80%
100%
2000 2001 2002 2003 2004 2005 2006
Highestquintile
Fourth
Third
Second
Lowestquintile
Source: Analysis of the March Current Population Survey, 2001–07, by Elise Gould, Economic Policy Institute.
Percent of population under age 65 with health benefits from employer
Figure 7. Deductibles Rise Sharply, Especially in Small Firms, 2000–2008
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 2007Annual Surveys.
187 210157
560
917
413
$0
$250
$500
$750
$1,000
Total Small firms, 3–199
employees
Large firms, 200+
employees
2000 2008
Mean deductible for single coverage (PPO, in-network)
10
18
35
2621
17
33
53
36 36
0
25
50
75
Total Low income Moderate
income
Middle income High income
2001 2007
Percent of adults ages 19–64 who spent 10% or more of income annuallyon out-of-pocket costs and premiums
Figure 8. High Out-of-Pocket Spending Climbs Across Income Groups, 2001–2007
Note: Income refers to annual income. In 2001 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 2007, 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, J. L. Kriss, M. M. Doty and S. D. Rustgi, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families, The Commonwealth Fund, August 2007.
Figure 9. Forty-Six Million Uninsured in 2007;Increase of 7.2 Million Since 2000
38 4042 43 43 45 47 46
0
10
20
30
40
50
2000 2001 2002 2003 2004 2005 2006 2007
Number of uninsured, in millions
Source: U.S. Census Bureau, March Current Population Survey, 2001–2008.
Adults ages 19–64 with individual coverage or who thought about or tried to buyit in past three years who: Total
Health problem
No health
problem<200% poverty
200%+ poverty
Found it very difficult or impossible to find coverage they needed
34% 48% 24% 43% 29%
Found it very difficult or impossible to find affordable coverage
58 71 48 72 50
Were turned down or charged a higher price because of a pre-existing condition
21 33 12 26 18
Never bought a plan 89 92 86 93 86
Figure 10. Individual Market Is Not anAffordable Option for Many People
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.
Figure 11. The Number of Underinsured Adults Under Age 65 Rose to 25 Million in 2007, Up from 16 Million in 2003
26 2849 48
13 16
9 14
19 24
411
0
20
40
60
80
100
2003 2007 2003 2007 2003 2007
Underinsured*
Uninsured during year
*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 income if low-income (<200% of poverty); or deductibles equaled 5% or more of income.Source: C. Schoen, S. R. Collins, J. L. Kriss, and M. M. Doty, “How Many Are Underinsured? Trends Among U.S. Adults, 2003 and 2007,” Health Affairs Web Exclusive, June 10, 2008. Data: Commonwealth Fund Biennial Health Insurance Surveys (2003 and 2007).
Total Under 200%of poverty
At or above 200% of poverty
Percent of adults ages 19–64
3542
68 72
1727
8
14
5
19
41
26
0
10
20
30
40
50
Deductible $1,000 or more Premium is 5% or more of
family income
Premium is 10% or more of
family income
Insured, not underinsured Underinsured
Figure 12. Health Plan Characteristics of Privately Insured Adults, 2007
Percent of adults (ages 19–64)
Source: C. Schoen, S. R. Collins, J. L. Kriss, and M. M. Doty, “How Many are Underinsured? Trends Among U.S. Adults, 2003and 2007,” Health Affairs Web Exclusive, June 10, 2008. Data: 2007 Commonwealth Fund Biennial Health Insurance Survey.
14
24
4041
29 29
45
6258
43
0
25
50
75
Total Low income Moderate
income
Middle income High income
2001 2007
Figure 13. Cost-Related Problems Getting Needed Care Have Increased Across All Income Groups, 2001–2007
* Did not fill a prescription; did not see a specialist when needed; skipped recommended medical test, treatment, or follow-up;had a medical problem but did not visit doctor or clinic.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 and 2007, 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, J. L. Kriss, M. M. Doty and S. D. Rustgi, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families, The Commonwealth Fund, August 2007.
Percent of adults ages 19–64 who had any of four access problems*in past year because of cost
20
45
3125
31
9
1913 15
29
60
42
34
24
46
37
72
57
45
54
3945 47
60
71
0
25
50
75
Did not fi ll a
prescription
Did not see
specialist
when needed
Skipped
medical test,
treatment, or
follow-up
Had medical
problem, did
not see doctor
or clinic
Any of the four
access
problems
TotalInsured all year, not underinsuredInsured all year, underinsuredInsured now, time uninsured in past yearUninsured now
Figure 14. Uninsured and Underinsured Adults Report High Rates of Cost-Related Problems Getting Needed Care
Percent of adults ages 19–64 who had cost-related access problemsin the past 12 months
Source: S. R. Collins, J. L. Kriss, M. M. Doty and S. D. Rustgi, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families, The Commonwealth Fund, August 2007.
Figure 15. Uninsured and Underinsured Adults with Chronic Conditions Are More Likely to Visit the ER for Their Conditions
33
2633
1519
32
46 43
62 64
0
25
50
75
Skipped doses or did not fill
prescription for chronic condition
because of cost*
Visited ER, hospital, or both for
chronic condition
Total
Insured all year, not underinsured
Insured all year, underinsured
Insured now, time uninsured in past year
Uninsured now
Percent of adults ages 19–64 withat least one chronic condition*
*Adults with at least one chronic condition who take prescription medications on a regular basis.Source: S. R. Collins, J. L. Kriss, M. M. Doty and S. D. Rustgi, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families, The Commonwealth Fund, August 2007.
Figure 16. Chronic Disease Under Control: Diabetes and Hypertension
81
41
63
21
Diabetes under
control*
High blood pressure
under control**
Insured Uninsured
79
31
88
41
0
25
50
75
100
Diabetes under
control*
High blood pressure
under control**
1999-2000 2003-2004
Percent of adults (age 18+)
National Average By Insurance, 1999–2004
*Refers to diabetic adults whose HbA1c is <9.0 **Refers to hypertensive adults whose blood pressure is <140/90 mmHg. Data: J. M. McWilliams, Harvard Medical School analysis of National Health and Nutrition Examination Survey.Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008.
Figure 17. Previously Uninsured Medicare Beneficiarieswith History of Cardiovascular Disease or Diabetes
Have Much Higher Self-Reported Hospital AdmissionsAfter Entering Medicare Than Previously Insured
Source: J. M. McWilliams, E. Meara, A. M. Zaslavsky et al., “Use of Health Services by Previously Uninsured Medicare Beneficiaries,” New England Journal of Medicine, July 12, 2007 357(2):143–53.
Number of hospital admissions per two-year period
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
58 60 62 64 66 68 70 72
Uninsured before age 65 Continuously insured before age 65
2005 2007
In the past 12 months:
Had problems paying or unable to pay medical bills
23%39 million
27%48 million
Contacted by collection agency forunpaid medical bills
13%22 million
16%28 million
Had to change way of life to pay bills14%
24 million18%
32 million
Any of the above bill problems28%
48 million33%
59 million
Medical bills being paid off over time21%
37 million28%
49 million
Any bill problems or medical debt34%
58 million41%
72 million
Figure 18. Medical Bill Problems and Accrued Medical Debt, 2005–2007
Source: S. R. Collins, J. L. Kriss, M. M. Doty and S. D. Rustgi, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families, The Commonwealth Fund, August 2007.
Percent of adults ages 19–64
20
32
4843
34
25
41
53 56
39
0
25
50
75
Total Low income Moderate
income
Middle income High income
2005 2007
Figure 19. Problems with Medical Bills or Accrued Medical Debt Increased, 2005–2007
Note: Income refers to annual income. In 2005 and 2007, 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, J. L. Kriss, M. M. Doty and S. D. Rustgi, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families, The Commonwealth Fund, August 2007.
Percent of adults ages 19–64 with medical bill problems or accrued medical debt
16
41
28
18
27
813
8
1926
61
47
3123
43
31
62
39
29
51
27
47
34 35
60
0
25
50
75
Not able to pay
medical bills
Contacted by
collection
agency*
Had to change
way of life to
pay medical
bills
Medical bills/
debt being paid
off over time
Any medical
bill problem or
outstanding
debt
TotalInsured all year, not underinsuredInsured all year, underinsuredInsured now, time uninsured in past yearUninsured now
Figure 20. Sixty Percent of Underinsured or Uninsured AdultsReported Medical Bill Problems or Debt
* Includes only those individuals who had a bill sent to a collection agency when they were unable to pay it.Source: S. R. Collins, J. L. Kriss, M. M. Doty and S. D. Rustgi, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families, The Commonwealth Fund, August 2007.
Percent of adults ages 19–64 with medical bill problemsor accrued medical debt
Uninsured Anytimein Past Year
TotalInsuredall year
Insured now, time uninsured
in past year
Uninsurednow
How much are the medicalbills that are being paid offover time?
Less than $2,000 51% 57% 46% 38%
$2,000–$3,999 21 20 25 22
$4,000–$7,999 12 11 11 14
$8,000 or more 12 9 13 20
Was this for care receivedin past year or earlier?
Past year 54 57 53 43
Earlier year 37 38 37 44
Both 8 7 9 12
Figure 21. Uninsured Adults Are More Likely to Be Paying Off Large Amounts of Medical Debt Over Time
Source: S. R. Collins, J. L. Kriss, M. M. Doty and S. D. Rustgi, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families, The Commonwealth Fund, August 2007.
Percent of adults ages 19–64 who are paying off medical bills over time
Insured All YearUninsured Anytime
During Year
Percent of adults reporting:
TotalNo
underinsured indicators
UnderinsuredInsured now,
time uninsured in past year
Uninsured now
Unable to pay for basic necessities (food, heat, or rent) because of medical bills
29% 16% 29% 42% 40%
Used up all of savings 39 26 46 46 47
Took out a mortgage against your home or took out a loan
10 9 12 11 11
Took on credit card debt 30 28 33 34 26
Insured at time care was provided
61 80 82 46 24
Figure 22. More Than One-Quarter of AdultsUnder Age 65 with Medical Bill Burdens and Debt
Were Unable to Pay for Basic Necessities
Source: S. R. Collins, J. L. Kriss, M. M. Doty and S. D. Rustgi, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families, The Commonwealth Fund, August 2007.
Percent of adults ages 19–64 with medical bill problemsor accrued medical debt
Figure 23. Adults with Medical Bill Problems Report High Rates of Cost-Related Problems Getting Needed Care
25
61310
14
5648
57
39
75
0
25
50
75
100
Did not fill a
prescription
Skipped a
medical test,
treatment or
follow-up
Had medical
problem, did
not see doctor
or clinic
Did not see
specialist
when needed
Any of four
access
problems
No bill or debt problem Any bill and/or debt problem
Percent of adults ages 19–64 who had the following problems in the past year
Source: The Commonwealth Fund Biennial Health Insurance Survey, 2007.
Note: A negative number indicates spending decreases compared with projected expenditures (i.e., savings); a positive indicatesspending increases.* In some cases, because of rounding, the sum of the payer group impact does not add up to the national health expenditures total.Source: C. Schoen, S. Guterman, A. Shih et al., Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending (New York: The Commonwealth Fund, December 2007).
Total Federal State/Local PrivateNHE* Government Government Payer Households
Producing and Using Better Information
1. Promoting Health Information Technology –$88 –$41 –$19 $0 –$27
2. Center for Medical Effectiveness and Health Care Decision-Making –$368 –$114 –$49 –$98 –$107
3. Patient Shared Decision-Making –$9 –$8 $0 $0 –$1
Promoting Health and Disease Prevention
4. Public Health: Reducing Tobacco Use –$191 –$68 –$35 –$39 –$49
5. Public Health: Reducing Obesity –$283 –$101 –$52 –$57 –$73
6. Positive Incentives for Health –$19 $2 –$12 –$4 –$5
Aligning Incentives with Quality and Efficiency
7. Hospital Pay-for-Performance –$34 –$27 –$1 –$2 –$4
8. Episode-of-Care Payment –$229 –$377 $18 $90 $40
9. Strengthening Primary Care and Care Coordination –$194 –$157 –$4 –$9 –$23
10. Limit Federal Tax Exemptions for Premium Contributions –$131 –$186 –$19 –$55 $130
Correcting Price Signals in the Health Market
11. Reset Benchmark Rates for Medicare Advantage Plans –$50 –$124 $0 $0 $74
12. Competitive Bidding –$104 –$283 $0 $0 $178
13. Negotiated Prescription Drug Prices –$43 –$72 $4 $17 $8
14. All-Payer Provider Payment Methods and Rates –$122 $0 $0 –$105 –$18
15. Limit Payment Updates in High-Cost Areas –$158 –$260 $13 $62 $27
Figure 24. Policy Options and Distribution of 10-Year Impact on Spending Across Payer Groups (in billions)
Figure 25. Savings Can Offset Federal Costs of Insurance for All: Federal Spending Under Two Scenarios
$82
$122
$205
$10$13$31
$0
$50
$100
$150
$200
$250
2008 2012 2017
Federal spending under Building Blocks alone
Net federal with Building Blocks plus savings options*Dollars in billions
* 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 (New York: The Commonwealth Fund, December 2007).