Presentation on theme: "Marcia L. Comstock, MD MPH Carol A. Staubach, MPH"— Presentation transcript:
1Marcia L. Comstock, MD MPH Carol A. Staubach, MPH Health Care Coverage: Different Problems, Different Solutions, Everyone’s IssueMarcia L. Comstock, MD MPHCarol A. Staubach, MPH
2Today’s Agenda on the Uninsured What does it mean?Why should you care?How did we get here?What do you think?What do others think?What can be done?
3Cover the Uninsured Week Does insurance “coverage” equal “access”?Is each of us our “brothers’ keeper”?Should it matter to us as an individual, as a member of a family, as a member of society that many Americans are not assured access to healthcare that promotes and sustains health and productivity?
4Key Facts About Health Insurance About 246 million people have health insurance that pays part of the costs of getting care.Almost 46 million individuals do not have health insurance.The likelihood of an individual or family being covered depends on many factors, including the kind of job they have, their income level, where they live, their age, and their health status.No additional notes needed
5Who Lacks Access to Health Insurance? More than 1 in 7 Americans – almost 46 million – do not have health insurance.They are not necessarily “poor.”Over 80% are members of working families, often they can’t afford to buy health insurance.Over 80% of uninsured children live in families with at least one working parent.Some uninsured could afford to buy health insurance, but choose not to.This estimate of the number uninsured is for one point in time during the year. Other estimates of the number of people with no health insurance at ANY point in time during the year are significantly higher: an estimated 51.6 million in The number of people estimated to have no health insurance at all for more than a year is lower: 29 million people. In addition, millions more who do have health insurance have only very limited coverage.
6Who are the Uninsured?Hispanics and low income adults are most likely to be uninsured.Source: Economic Research Initiative on the Uninsured; based on MEPS 2002 data.
7Most Uninsured People Work No additional notes neededNote: Numbers may not add up to 100% due to rounding.Source: Economic Research Initiative on the Uninsured, 2005.
8Most Uninsured People Have Incomes Above the Poverty Line Many still can’t afford health insurance.Their incomes may be too high to qualify for help.Note: Numbers may not add up to 100% due to rounding.Source: Economic Research Institute of the Uninsured, 2005.
9In fact, the fastest growing segment of the population lacking insurance is for individuals and families with annual incomes over $75,000.
10The Uninsured* are More Likely to Not Get Care Due to Cost No additional notes neededSource: Centers for Disease Control and Prevention, National Center for Health Statistics, 2005.*People under age 65 in 2003.
11Becoming Uninsured Could Happen To You!!! Unexpected changes can affect coverage:Serious illness or injuryWorsening of a chronic conditionLosing or switching jobs (after federal COBRA protection runs out or is unaffordable)Changes to health insurance policiesPeople can keep insurance from an employer for a limited amount of time after leaving a job under COBRA.COBRA (Consolidated Omnibus Budget Reconciliation Act ) provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates.
12What are the Consequences of Being Uninsured? People without insurance:Are less likely to get health care that they need, especially preventive care and treatments for chronic health problemsAre at risk for the huge expenses of catastrophic health careMay have worse health outcomes~18,000 died last year because they did not have health insurance, according to IOMWhat do we mean by catastrophic? Medical care so serious in nature as to require extensive, long-term, and expensive medical treatment
13What are the Consequences of Having Uninsured People in Our Community? A burden on hospitals for uncompensated careCost-shifting to employersNegative impact on community healthDrain on economic development
14How Did We Get Here? In the beginning……. Insurance: Coverage by contract in which one party agrees to indemnify (guard or secure against anticipated loss) or reimburse another for any loss that occurs under terms of the contract.
15Before Health Insurance… US railroads and wanted to insure productivity of employeesHired contract physicians (surgeons) to care for employeesNo insurance—healthcare services provided for employees…but in the interest of their employer!
16The Beginning of Health Insurance-”The Blues” Blue Cross 1st created by President of Baylor University to pay for hospital careIf everyone paid a small amount ($15/wk), those that needed hospitalization could be cared for (benefit of $25,000)1932-Texas Legislature passed the enabling statute to create the first blues planLaw became a national modelIt was expanded after a decade to include payment for physician services, “blue shield”The plans were NFP companiesBODs represented community-citizens, providers, businessmenConcept of “shared social responsibility”
17Employer Role in Healthcare Originally employer-based insurance was not for healthcare. It started as insurance for lost wages when illEarly 1940s: amendments to Tax Codes allow business to offer health insurance to help recruit workers despite wartime wage freezes: growth in cost & utilization of medical services by employees, supported by labor unionsHealth insurance typically 80/20; co-pays, deductibles1980s: growth of managed care as response to rising costs-temporarily effective—1st dollar coverage, NOT insuranceLate 1990s-resurgence of costs2000+ move to consumer-directed health plans…..??solutionSome employers offer on-site clinics/pharmacies….?Back to the future?
18The 5 A’s of AccessHealth insurance does not equal access to the right healthcare!AffordabilityAccessibilityAcceptabilityAssuranceAppropriateness
19Coverage & Access: What Does it Mean? Coverage refers to the ‘menu’ of what is available through an insurance policy (limited vs comprehensive.) Relates to technical adequacy and assurance of servicesAccess refers to what is 'practically' available and encompasses barriers such as affordability and logistical accessibilityCoverage opens the door but does not ensure access!
20Issues with Coverage & Access What are we trying to achieve with coverage and access??Language is important! People don’t use these terms to mean the same thing.If coverage equals insurance, we need to answer the question, insurance for what?We have not been able to reconcile our split approach to “sponsorship” of health insurance, or pick one over the other.Coverage means more than insurance. It is 'protection', 'security' that is defined at the individual level
21Do you have health insurance? Did you purchase it yourself?
23Our Health Care CrisisTotal health care spending represents 16 percent of the gross domestic productEstimated to reach 20 percent by 2015.The US has the highest per worker health care costs in the worldImpactErodes corporate profitsReduces growth of businessFor small enterprises or those with low profit marginsReduces number of jobsReduces compensation packagesIncreases unemployment and uninsurance
24What Do We Get for What We Spend? We spend 33% more than Canada, our nearest competitor on costsWe do not have more doctors or nurses or hospital daysWe do have more MRIs and get more tests-many unnecessaryWe rank lowest of English speaking countries on patient satisfaction and access and on the doctor-patient relationshipWe rank well only on access to specialists and non-urgent care! Is this most important?
25Health Care Costs and Profit Margins Source: Cowan CA, McDonnell PA, Levit KR, Zezza MA. Burden of health care costs: businesses, households and governments. Health Care Financing Review. 2004
26Projections by 2015 Can Employers Really Afford It? 2015 rates:15%-$29,12812%-$22,362;10%-$18,675;8%-$15,544Cost per employee per yearComparing Healthcare trend figures at compounded rates: 15%,12%,10% and 8% over a 10 year period. Starting point $7,200 or approximately $600 PEPM.
272005 Trends 9.2 % increase in premiums Previous years 2000 – 2004 – 14%Smallest employers (under 200) hit with highest increases across all sectors – 15%Manufacturing sector hit with highest increases – 11.2 %; healthcare and transportation the least at less than 8%
28Reaction to Premium Increases For EmployersCost shifting to employeesCost sharing in premiumsIncrease co-pays and deductiblesReduce coverageDrop InsuranceEmployee ResponsePay the IncreaseDrop Coverage
292005 Status of Employer Coverage 60% of employers offer insurance, down from 69% in 200098% for firms greater than 20093% for firms between 50 – 19987% for firms between 25 – 4972% for firms between 10 – 2447% for firms between 3 - 9Large ers get great prices and programs from national health plans bec they have 10s of thousands of lives.Sm to mid size market is 40 millAverage NFIB member has 10 ees; this market extremely sensitive to price; primary concern is risk selectionSl incr in offering in small firms80% of ees in small firms (<100 ees) have no plan choice;½ of companies w/<200 ees offer one health plan; 25% offer 2.40% of ees in firms w/ < 100 ees get ins thru er; 83% of theose in firms w/ > 1000 ees get hlth ins there
30The Small EmployerFirms with less than 20 employees make up 89% of American business and 19% of the working population.Firms with 20 – 499 employees make up 10% of businesses and represent 33% of the working population
31Who Provides Coverage & Who Doesn’t Firms with higher wages where 65% or more of workers earn $20,000 or greater have higher coverage rates than where the majority earn $20,000 or less annually.Nearly 50% of employers not offering health benefits, pay annual wages of less than $15,000 per year to 40 percent or more of their employees, compared to 13 percent of companies that do offer health benefits.There are a greater proportion of part-time workers in smaller firms who do not offer benefits.The demographics reflect a larger proportion of females, workers under age 30, and minority employees.65 percent of those small employers’ not offering benefits have annual gross revenues that are less than $500,000, 65 percent. For employers with $1,000,000 in gross revenues or more, only 18 percent do not offer benefits.Firms in business less than five years are less likely to offer benefits.
32Hidden Costs of Insurance Employee Retirement Income Security Act of Federal governs self-funded plans; states oversee fully insured plans.Rules, regulations and offerings differ from state to stateVariablesRisk Rating & Underwriting – Some less fair than othersAdministrative Costs – can be as high as 40% of premium
34What is good public policy to promote adequate coverage & access for all? Is there a level of health services that everyone should be guaranteed?Should it be heavily subsidized by government and employers?Should individuals who can afford to be allowed to "buy up?"
35Should we work toward financial equity (justice/fairness)? What does pluralism mean in healthcare? Pluralism that meets the needs of individuals for the kind of care and setting that is appropriate to them? Pluralism in funding streams?Do we need to ration healthcare? How should it be done?
37Voices from Communities… “The measure of a health care system is how it cares for the have-nots.” CEO, Community Health Center, California“Will the majority of the voting public support giving something up to get everyone covered?” Psychologist, Mississippi“Are we willing to ration for ourselves? When we get sick, we want everything available.” Physician representative of the White House“More people realize now [than in the early 90s] that the uninsured represent a threat to all of us.” Physician Leader, NH
38Harris-Commonwealth Fund Opinion Leaders Survey Covering the uninsured should be Congress’ top priority over the next 5 yearsThe proportion of Americans without health insurance (currently 18% under 65) should be reduced by half to about 8% in 10 years.
39The Citizens’ Health Care Working Group Charged by Congress with engaging the public in a dialogue on healthcareWhat healthcare benefits and services should be provided?How does the American public want healthcare delivered?How should healthcare coverage be financed?What trade-offs is the public willing to make?Recommendations and an action plan will be presented to Congress
40What Does the Public Think? 95% thinks the US healthcare system is in a state of crisis or has major problems>90% believe it should be public policy that all Americans have affordable health care coverage~90% think it would be better to provide a defined level of services for everyone, rather than providing coverage for particular groups of people as it is now (elderly, poor, employees)
41What Does the Public Think? >60% believe the most important reason to have health insurance is to pay for high medical costs~30% believe the most important reason to have health insurance is to pay for everyday medical expenses~74% believe everyone should be required to enroll in basic health coverage, either public or private
42What Does the Public Think? ~ 69% think some people should be responsible for paying more than othersCriteria varied: Income most popular response; health behaviors also quite highShould public policy continue to use tax laws to encourage employer-based health insurance?Yes 47.9% ( )No 52.1% ( )
43What Does the Public Think? Guaranteeing all Americans have health insurance was cited as the number 1 spending priority in nearly all communitiesGuaranteeing all Americans get healthcare when they need it through public “safety net” programs, (if they cannot afford it) also ranked quite high in most places
44What Does the Public Think? REACTION TO PROPOSALS TO ADDRESS UNINSURED:Not Popular:Offer uninsured Americans income tax deductions, tax credits or other financial assistance to help them purchase private insurance:Rely on free market competition among doctors, hospitals, other healthcare providers and insurance companies rather than having government define benefits and set prices
45What Does the Public Think? REACTION TO PROPOSALS:Mixed reactions:Expand state government programs for low income (Medicaid, SCHIP)Require businesses to offer health insurance to all employeesRequire all Americans to enroll in basic healthcare coverage, public or private
46What Does the Public Think? REACTION TO PROPOSALS:Most popular:Create a national health insurance program, financed by tax payers, in which all Americans would get their health insurance: (1st in almost all cities)Expand neighborhood health clinicsOpen up enrollment in federal programs, e.g., Medicare or FEHBP
48If you segment the uninsured, it is apparent that different answers are needed for different groups: The working poorThose temporarily uninsured between jobsThose who can afford but do not choose to buy insuranceThe young and healthy who feel it is not worth the investment for them
50Potential Solution Join a Purchasing Pool Small employers join forces to create purchasing power and reduce individual inequities by virtue of their sizeShare risksNegotiate competitive pricesGain access to a variety of plansProvide affordable co-paysStreamline and reduce administrative costs
51ExamplesCOSE – Council of Smaller Enterprises, part of Cleveland Chamber of CommerceAssume role of purchaserAt least three health plan alternativesHealth Pass – New York Business Group on Health – for employers with less than 50 workers28 benefit plan designsProvides consulting servicesHandles all administrative dutiesPacAdvantage – California – Pacific Business Group on Health – 2 – 50 employees
52Community and Private Sector Partnerships Muskegon County, Michigan – for those businesses with median hourly wage of $11.50 or less and have not offered any coverage in previous 12 monthsCounty pays 1/3; employer pays 1/3; employee pays 1/3Plans offered are ½ of cost if employer sought plan as an individual employerNew Mexico Health Insurance Alliance
53Another (But Risky) Solution – Self Insurance Financial strategy used primarily by large employers – employer assumes all or part of risksSets funds aside to pay claims as they come in (Vs paying an insurance company a premium) - actors out administrative costsExempts the company from state mandates that can be costly and cumbersome for employers who operate in multiple statesIncrease risk for small firm – one catastrophic medical case could be devastatingPurchase Stop Loss Insurance to cover any individual’s medical expenses higher than $25,000
54Latest Health Plan Solution Consumer Directed Health Plans High DeductiblesHSAsRequirementsLearn to manage an HSALearn to be a savvy medical consumerLearn to lead a healthier life
55Employer Costs for Poor Health R. Goetzel, JOEM, Jan. 2001 Reduced Productivity: Poor Results; Reduced Co-Worker Morale; Training for ReplacementImpact on Competitiveness: Higher % of Profits for Healthcare; Increased Insurance Premiums; Increased Training and Overtime Costs; Risk Management and Safety CostsTotal = $9,992
56Trends in Health Status - CDC In 10 yearsObesity increased 61%Diabetes increased 49%Serious smoking related illness affects 8.6 million Americans$92 billion in lost productivity annually$75.5 billion in medical expenditures
58Determinants of Healthcare Costs Source: Center for Disease Control and Prevention
59Statistically….For Every 100 Employees 64 are overweight25 have high blood pressure18 or more have high cholesterol6 have diagnosed diabetes4 have undiagnosed diabetes16 smoke8 are heavy drinkers29 don’t wear safety belts regularly50 sit all day to do their work21 have cardiovascular diseaseSource: Wellness Council of America 2005
60Strategies to Integrate Benefits and Work Site Health Management WEYCO Inc. - service company for benefit plans and management EmployeesHealthcare – eating the bottom lineEmployers give employees an unrestricted medical cardEmployees are making unilateral lifestyle decisions that affect the bottom line and other employees’ paycheck
61WEYCO, Inc.Health plans do not emphasize prevention, personal health improvement and complianceLittle or no employee involvement in costPlan StrategyAlign plan with Weyco health strategyInvolve employees and families in preventionMove to qualified high deductible plans with health savings accounts (HSA) by 2007
62WEYCO, Inc.Health Strategy – As important as customer service, quality, & safetyPersonal health improvementReduce demand to reduce costsEliminate lifestyles that create riskIllegal drugs and tobaccoExcess use of alcoholUnhealthy eatingPhysical inactivity
63WEYCO Inc. Worksite Programs HRA & Biometrics Health Education: Cardio, Strength & Flexibility, Weight Management, Stress ManagementWeb-based info & Telephonic Health CoachPhysical EvaluationsScreenings
64WEYCO Inc.IncentivesEmployer contributions/credits for participation in preventive exams, personal evaluation, physical evaluationCredits used to reduce employee contributions to plan. Employee pays if chooses not to participate.Preventive Exams at 100% - Health Credits if exams are completed & verified by 12/31 of each yearIf employee waives coverage, WEYCO provides $ in an HRA if employee provide proof of other medical coverage
65WEYCO Policy Tobacco-Free Program Stop hiring or retaining tobacco usersBan the use of tobacco on propertyTobacco assessments and voluntary testingCompany sponsored smoking cessation programsMandatory testingRandom testing for all employeesExtend program to spouses
67S. 1955: Health Insurance Marketplace Modernization and Affordability Act of 2005 A bill to amend title I of the Employee Retirement Security Act of 1974 and the Public Health Service Act to expand health care access and reduce costs through the creation of small business health plans and through modernization of the health insurance marketplaceIntroduced by Senator Michael Enzi (R-WY)approved by the Senate Health, Education, Labor and Pensions (HELP) Committee
68Critics FearsLegislation, eliminates state jurisdiction and with it almost all state-enacted consumer protections for people buying insurance individually or through their employersStates will no longer be able to mandate coverage of benefits, services, or categories of providers for individuals, small groups, or large groupPremium rating protections, enacted by states to make small group insurance more affordable to older and sicker workers, will be set asideInsurers will be allowed to sue states that do not comply. The bill sets a ceiling on, but no floor under, what states can do to protect insurance consumers
69Massachusetts Universal Health Care Coverage Those without coverage must purchase an “affordable” plan (to be defined) or pay financial penaltiesBusinesses with at least 11 workers will provide insurance or pay $295 per employee per year to the stateResidents with coverage must certify their insurance status on state income tax forms, or face tax penaltiesState will provide sliding-scale subsidies for people who can't afford to buy a health plan on their own
70Observations Ability to gain consensus Compromise may be a way to break the gridlock and logjam that exists in Washington and in states across the countryDetails important to the overall acceptability of the new programHow much people will have to pay to get insuranceWhat will the affordable plans coverMassachusetts precedent of agreeing to expanding coverage with Medicaid waiver program provided the building blocks of working together at state level to allow this next step
72Perspective of Leaders Comprehensive proposal in the short-term unlikely…until the REAL crisis strikes…?? By 2008 or 2012 electionsTo develop a long range plan, create a sense of urgency!Healthcare industry leadership must agree that solving the problem will require compromise
73How Can We Make Real Progress? We need to clarify what we want to achieve long-term!Don’t assume the federal government will solve the problemsLook to communities for solutionsFocus on health—not just healthcareEveryone needs to be involved! Our health is too important to leave to others
74A Vision for Patient-Centered Care "The care we need and no less, the care we want and no more."Albert Mulley, MDChief of Internal Medicine, Massachusetts General Hospital
75Marcia L Comstock, MD MPH COOWRGH/FAHCL117 Lafayette RoadWayne, PA 19087Phone:Fax:
76CA Staubach & Associates Carol A Staubach, MPHCA Staubach & Associates305 E. St. Andrews DriveMedia, PA 19063Phone: Fax: