V e r m o n t Legislative Joint Fiscal Office Growth in Health Care Spending: A comparison of Vermont and the U.S. Nolan Langweil, Legislative Joint Fiscal.

V e r m o n tLegislative Joint Fiscal Office

Growth in Health Care Spending:A comparison of Vermont and the U.S.

Nolan Langweil, Legislative Joint Fiscal Office

January 18, 2008


Data

• CMS, Office of the Actuary (2006 data)

• BISHCA, Expenditure Analysis (2006 data)– Note: FY2005 and earlier uses unadjusted numbers


UNITED STATES

$7,092 Per Capita

VERMONT

$6,321 Per Capita

Per Capita Spending2006


Trends in Growth: 1996-2006

UNITED STATES

• ↑ from $910B to $1.76T• 6.8% average annual

growth

VERMONT

• ↑ from $1.7B to $3.9B• 8.6% average annual

growth



Overall health care expenditure trends for Vermont and the U.S. are fairly comparable.



1) Hospital care2) Physicians & Clinical svcs3) Drugs & Supplies

1) Hospital care2) Physicians & Clinical svcs3) Drugs & Supplies


Growth when comparing third-party payer by sector(EXCLUDES DRUGS)



Growth when comparing third-party payer by sector(INCLUDES DRUGS)



PAYER$(By % of total expenditures)

U.S PAYER VERMONT

21.6% Medicare 18.1%

16.2% Medicaid 23.7%

14.6% Out-of-pocket 12.5%

36.0% Private Insurance (total)

41.4

Other payers include: State & Local, Other Federal, etc.


MEDICARETrends in Growth: 1996-2006

• Largest single payer of health care services in the U.S.– 21% of personal health care spending– Medicaid was second largest (16%)

• 2nd largest payer in Vermont– 18% of health spending– Medicaid was largest (24%)


MEDICARETrends in Growth: 1996-2006

• Both US and VT: Largest increase in $ spent were in 1) Hospital care, 2) physician & clinical svs and 3) Drugs (in that order)

Combined they represent:– US = 84% of total Medicare Spending– VT = 77% of total Medicare Spending– Hospital Care accounted for half of Medicare

spending in both VT and the U.S.

2006


MEDICAREDrugs as % of overall Medicare spending:

2005 2006

U.S. 1.2%($4B)

10.3%($39.4B)

VT <1%($4,000)

11%(78.8M)


MEDICAREMedicare Part D

Before Part D After Part D

Overall Spending on DRUGS by Payer (Vermont):


MEDICAREMedicare Part D

Medicaid & Out-of-pocket drug spending saw decreases

2005 2006

MEDICAID VT = $146M

US = $37B

VT* = $78M

US = $19B

OUT-OF-POCKET

VT = $191M

US = $48.7B

VT = $168M

US = $47.6B

*NOTE: This does not include clawback.


MEDICAID2006

United States• Medicaid spending decreased by 0.9%• First drop in Medicaid spending since program

was created in 1965• Exclude Drugs, and Medicaid PHC spending ↑

5.6%– Still slower than 8% in 2005

• 10 yr avg growth (1996-2006) = 7.1%


MEDICAID2006

Vermont• 10 yr avg growth (1996-2006) = 9.6%• Medicaid spending increased by 2%

– Down from 7% growth in 2005• Drug spending decreased 44% from 2005

– Again exclude Drugs, and Medicaid spending ↑ 11%


MEDICAID2006

Vermont (continued)• In 2005, Drug spending was 16.9% of

Medicaid costs ($146M)• In 2006, Drug spending was 8.4% of

Medicaid costs ($78.7M)• Does not include add’l $15.8M “state &

local” spending on drugs


PRIVATE HEALTH INSURANCE2006

• U.S. - spending ↑ $598.6B to 634.5B– 6% increase (2005 to 2006)– 7.7% - 10 yr avg annual growth (1996-2006)– 36% of personal health care spending

• VT - spending ↑ $1.4 to 1.6B– 16% increase (2005 to 2006)– 9.1% average annual growth– 41% of health care spending


Insurance Premiums (2006)From:


QUESTIONS?

V e r m o n t Legislative Joint Fiscal Office Growth in Health Care Spending: A comparison of Vermont and the U.S. Nolan Langweil, Legislative Joint Fiscal.

Documents

drugs trends

average annual growth

drugs supplies slide

total medicare spending

overall medicare spending

half of medicare spending

average annual growth

health spending medicaid