Stakeholder Presentation---Payers MGMT E-5520 Jenny Ou October 21, 2010.

Stakeholder Presentation---Payers

MGMT E-5520

Jenny Ou

October 21, 2010

patient

Providers & suppliers:

Hospital

Physician

Pharmaceutical company: prescription

receive treatment

Insurance

Pay copay, coinsurance

Pay a large portion of the medical bill

enroll in

Payers: : the person by whom a bill or note has been or should be paid.

source: Merriam-Webster dictionary

Definition

How does insurance work?

PrivateHMO, POS,PPO Indemnity

individualsemployer & employees government funding

premiums

FICA taxes FICA taxes

PublicMedicare,medicaid,SCHIP

premiumspremiums

insurance plans

patient

profit

nonprofit

Harvard Pilgrim

Our mission is to improve the health of the people we serve and the health of society.

United Healthcare

Our mission is to help people live healthier lives.

Value: Generate shareholder value by growing organically and adding strategic assets that strengthen our position as a leader in the marketplace.

Subgroups of private insurance plans

For-profit VS nonprofit

Subgroups of private insurance plans

HMO, POS, PPO, indemnity

Source: http://atyourservice.ucop.edu/forms_pubs/misc/08retmed_plan_comparison.pdf

Subgroups of public health insurance

•Medicare: for people over 65 or some disabled people

•Medicaid: for low income people

• SCHIP: State children health insurance plan cover uninsured children in families with incomes that are modest but too high to qualify for Medicaid.

The “ sorry” state of health insurance in the US

• High premiums and out-of-pocket payments make insurance unaffordable

• Claims are declined due to pre-existing conditions

• Millions people go uninsured.

Average Family Premium as a Percentage of Median Family Income, 1999–2020

11%12%

13%

14%

16%17%

18%18%18% 18% 19%19%19%20%20%21%

21%22%

22%23%

24%

18%

0%

5%

10%

15%

20%

25%

1999200020012002200320042005200620072008200920102011201220132014201520162017201820192020

Source: K. Davis, Why Health Reform Must Counter the Rising Costs of Health Insurance Premiums, The Commonwealth Fund, August 2009.

Projected

Growth in the Uninsured

Data: Analysis of the U.S. Census Bureau, Current Population Survey Annual Social and Economic Supplement (CPS ASEC), 2001–2008; projections to 2020 based on estimates by The Lewin Group.

Uninsured(15%) Employer

(55%)

Medicaid(10%)

Medicare(13%)

Total population

Military(1%)

Individual(5%)

38 4042 43 43 45

47 46 47 48 49 50 52 53 55 56

6160595857

0

10

20

30

40

50

60

70

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Projected estimates

Uninsured Projected to Rise to 61 million by 2020

Millions uninsured

45.7 Million Uninsured, 2007

The “ sorry” state of health insurance in the US

• High premiums and out-of-pocket payments make insurance unaffordable

• Claims are declined due to pre-existing conditions

• Millions people go uninsured.

Patients & Insurance

• High insurance premiums are eating up people’s income

• Due to uninsured, paitients

do not see a physician when needed

have medical bill problem

do not fill prescription

skip recommended medical test

unable to pay for basic necessaries

Insured All YearUninsured Anytime

During Year

Percent of adults reporting: TotalNo underinsured

indicatorsUnderinsured

Insured 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

More Than One-Quarter of Adults Under Age 65 With Medical Bill Burdens and Debt Were Unable to Pay for Basic Necessities

Source: M. M. Doty, S. R. Collins, S. D. Rustgi, and J. L. Kriss, Seeing Red: The Growing Burden of Medical Bills and Debt Faced by U.S. Families, The Commonwealth Fund, August 2008.

Percent of adults ages 19–64 with medical bill problemsor accrued medical debt

Factors contributing to uninsured…

•Income ( poverty level )

• Employment status

• Age

• Geography

• Race/Ethnicity

Source: The uninsured: a Primer.http://www.kff.org/uninsured/7451.cfm

The Majority of U.S. Workers Get Their Health Insurance Through Employers, 2007

Own employer coverage

(56%)

Other employer coverage

(16%)

Public programs(5%)

*Includes those with individual insurance and “other” responses.Source: M. M. Doty, S.R. Collins, S.D. Rustgi, and J.L. Nicholson, Out of Options: Why So Many Workers in Small Businesses Lack Affordable Health Insurance and How Health Care Reform Can Help: Findings from the Commonwealth Fund Biennial Health Insurance Survey, 2007, The Commonwealth Fund, September 9, 2009. Data: The Commonwealth Fund Biennial Health Insurance Survey (2007).

Uninsured(14%)

Other coverage*(9%)

122.2 Million Full- and Part-Time Workers Ages 19–64

2008 uninsured by age

Source: The uninsured: a Primer.http://www.kff.org/uninsured/7451.cfm

Source: The uninsured: a Primer.http://www.kff.org/uninsured/7451.cfm

Source: The uninsured: a Primer.http://www.kff.org/uninsured/7451.cfm

Health insurance & Employers

• Employers are less likely to purchase health insurance for their employees, esp. in small firms

• Employers can encourage employees a healthy lifestyle to reduce medical cost

Source: U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 1960-2008, Tables 1.1.5, 2.1, 6.11B, 6.11C, & 6.11D.

Source: U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 1960-2008, Tables 6.11B, 6.11C, & 6.11D. Note: Amounts shown are averages of annual figures for each time period.

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 2007 Annual Surveys.

187 210157

560

917

413

$0

$250

$500

$750

$1,000

Total Small firms, 3? 99

employees

Large firms, 200+

employees

2000 2008

Mean deductible for single coverage (PPO, in-network)

Employer-Sponsored Insurance Coverage Declined Among Small Firm Employees, 2003–2007

3525

70

22

24

14 12

74

0

25

50

75

100

2003 2007 2003 2007

Employer Insurance - other

Employer Insurance - own

*Includes both part-time and full-time workers.Note: Subgroups may not sum to totals due to rounding.Source: M. M. Doty, S.R. Collins, S.D. Rustgi, and J.L. Nicholson, Out of Options: Why So Many Workers in Small Businesses Lack Affordable Health Insurance and How Health Care Reform Can Help: Findings from the Commonwealth Fund Biennial Health Insurance Survey, 2007, The Commonwealth Fund, September 9, 2009. Data: The Commonwealth Fund Biennial Health Insurance Survey (2003 and 2007).

Small Firms(fewer than 50 employees)

Percent of working adults ages 19–64*

Large Firms(50 or more employees)

85

4957

84

Health Insurance & Providers/suppliers

•Providers discuss treatment plans based on patients’ insurance plans

• General insurance coverage encourages providers to overuse of high-cost technology and increase fees

• Average physician spends nearly three weeks a year interacting with plans, at an estimated annual cost to practices of $31 billion.

• Generic drugs should be encouraged for treatment to reduce health care cost

Insurance & Government

• More regulations: ex. adverse selection; enacted laws to reduce medical malpractice judgments to reduce premium burdens on providers and lower overall costs

• Monitor tax-Financed health care expenditures

• Healthcare reform

 Sources: Taylor, H. (2002). "How And Why The Health Insurance System Will Collapse." Health Aff 21(6): 195-197.

Flow Of Health Care Financing Funds Among Individuals/Employers, Providers, Government, And Private Insurers

Tax-Financed Expenditures As A Percentage Of Total Health Expenditures, Selected Years 1965–1999

•Health Reform hits main street.

http://healthreform.kff.org/the-animation.aspx

•Current health insurance state in the US http://www.youtube.com/watch_popup?v=TUE90vCLwM0&vq=small#t=284

• Debate about private/public health insurance

http://www.youtube.com/watch_popup?v=nXfGeMNnBsM&vq=medium

•Why is health care so expensive

http://www.youtube.com/watch_popup?v=JYC2DJWU41s&vq=medium#t=199