Physician Drivers: Income insecurity Demanding on-call schedule Rising practice costs Rising malpractice premiums and risk Work-life balance Technology accessibility Turf issues Cost and quality transparency imperatives Source: Sg2 What Stake do Physicians have?
Physicians’ Net Income from Practice of Medicine and Percent Change vs. Private Sector Occupations (1995, 1999, 2003) Average Reported Net Income (dollars) Average Net Income, Inflation Adjusted (1995 dollars) Percent Change in Inflation- Adjusted Income 199519992003199519992003199519992003 All Patient Care Physicians 180,930186,768202,982180,930170,850168,122-5.6%*-1.6%-7.1%* Primary Care Physicians 135,036138,018146,405135,036126,255121,262-6.5*-4.0*-10.2* Specialists210,225218,819235,820210,225200,169195,320-4.8*-2.4-7.1* Medical Specialists 178,840193,161211,299178,840176,698175,011-1.2-2.1 Surgical Specialists 245,162255,011271,652245,162233,276224,998-4.9-3.6-8.2* Private Sector Professional, Technical, Specialty Occupations^ N/A 220.127.116.11 *Rate of change is statistically significant at p<.05. N/A: Not available. ^The Bureau of Labor Statistics (BLS) Employment Cost Index of wages and salaries for private sector “professional, technical and specialty” workers was used by the Center for Studying Health System Change (HSC) to calculate estimates for these workers; significance tests were not available for these estimates. HSC calculated inflation-adjusted estimates using the BLS online inflation calculator (http://18.104.22.168/cgi-bin/cpicalc.pl).http://22.214.171.124/cgi-bin/cpicalc.pl Source: Center for Studying Health System Change, Community Tracking Study Physician Survey, Losing Ground: Physician Income, 1995- 2003, Tracking Report No. 15, June 2006, Table 1, at http://www.hschange.com/CONTENT/851/851.pdf.http://www.hschange.com/CONTENT/851/851.pdf
What Stake do Hospitals have? Hospital Drivers: Performance imperatives Call coverage struggles Recruiting challenges Physician competition Changes in physician productivity Aging workforce Turnover and retention issues Strained referral relationships Lack of physician leadership Source: Sg2
Aggregate Total Community Hospital Margins, 1980-2006 Note: Total Community Hospital Margin calculated as the difference between total net revenue and total expenses, divided by total net revenue. Source: American Hospital Association and Avalere Health, Avalere Health analysis of 2006 American Hospital Association Annual Survey data, for community hospitals, Trendwatch Chartbook 2008, Trends Affecting Hospitals and Health Systems, April 2008, Table 4.1, p. A-32, at http://www.aha.org/aha/trendwatch/chartbook/2008/08appendix4.pdf. http://www.aha.org/aha/trendwatch/chartbook/2008/08appendix4.pdf
Community Hospital Beds per 100,000 Population, 1975-2006 Note: Data are for community hospitals, which represent 85% of all hospitals. Federal hospitals, long term care hospitals, psychiatric hospitals, institutions for the mentally retarded, and alcoholism and other chemical dependency hospitals are not included. Source: Kaiser Family Foundation calculations using hospital bed data from American Hospital Association (AHA), Hospital Statistics, 1994, Table 1, p.7 (1975, 1980 data); personal communication, Health Research and Educational Trust, October 2003 (1985-2001 data); and 2002- 2006 AHA Annual Survey data, Copyright 2003-2008 by Health Forum LLC, an affiliate of the American Hospital Association, and July 1 population data from U.S. Census Bureau at http://www.census.gov/population/estimates/nation/popclockest.txt (1975-1985), http://eire.census.gov/popest/data/national/tables/intercensal/US-EST90INT-01.php (1990-1995), and http://www.census.gov/popest/states/NST-ann-est.html (2000-2006).http://www.census.gov/population/estimates/nation/popclockest.txt http://eire.census.gov/popest/data/national/tables/intercensal/US-EST90INT-01.php http://www.census.gov/popest/states/NST-ann-est.html
What Stake do Insurers have? Provide vital financial protection to patients who, without insurance would either go without or be bankrupted by health care Have added levels of control to an unregulated system of care Have required evidence based medicine to some degree Provide a check and balance in a system of little control-sometimes to their own great advantage Have made a great deal of profit in doing that
UnitedHealth sees rise in revenue, net income by Rebecca Vesely, ModernHealthcare.com, Posted July 21, 2009 - 3:00 pm EDTRebecca Vesely UnitedHealth Group, the largest health insurer by revenue, reported healthy second-quarter earnings, though commercial enrollment continued to drop amid the ongoing recession. Separately, UnitedHealth announced it will buy Health Net's Northeast business for as much as $570 million. The deal includes commercial, Medicaid and Medicare Advantage plans with about 578,000 members and is expected to close within a year.Health Net's Northeast business for as much as $570 million UnitedHealth's revenue in the second quarter rose 6.8% to $21.7 billion, while net income rose to $859 million, from $337 million a year ago. UnitedHealth's revenue in the second quarter rose 6.8% to $21.7 billion, while net income rose to $859 million, from $337 million a year ago. Premium revenue rose 8% to $19.7 billion, because of growth in Medicaid and Medicare business and price increases reflecting higher medical costs. Medicare Advantage enrollment grew by 45,000 beneficiaries for the year-to-date, to a total of 1.74 million members, while revenue in the insurer's division serving seniors rose 13% to $8 billion. Strong enrollment was also seen in Medicaid, with revenue up 45% to $2 billion over a year ago. UnitedHealth has added 635,000 members over a year ago, to a total of 2.75 million enrollees at the end of June. Commercial enrollment was at 25 million at the end of June, a decline of 1.46 million members from a year ago.
What Stake does Government have? Primary responsibility for the welfare of the people in a country divided about whether health care is, or is not, a right Single largest purchaser of health care services
Government buys 45% of care Health Care Average Spending
What Stake does Industry have? Significant portion of the GNP, and GDP Devices, supplies, hospital construction, pharma…the list goes on and on… Employer based insurance costs and national and global economies
What Stake do Patients have? 42 countries have a better infant mortality rate than the United States and this rank has been steadily decreasing since 1960 when the US was 12 th. (healthpaconline.net) Despite spending, Life Expectancy in the US is estimated to fall behind 49 other countries in the world. (CIA Factbook 2009)
Health care procedure utilization rates and spending vary around the country significantly (Dartmouth Atlas) Health care outcomes vary significantly from hospital to hospital (CMS website, Medicare.gov) In 2006, the average family health insurance premium was $11,480 a year, most employer paid (Kaiser Family Foundation) US government reports that as of 2007 46 million people were uninsured, 80% are citizens, 8 in 10 come from working families. (Kaiser Foundation) What Stake do Patients have?
Patients Uninsured- According to the National Center for Health Statistics 40 million Americans stated that they needed but did not receive the following services which they could not afford: –medical care –prescription –mental health services –dental care –eyeglasses
Physicians: –Primary care physician shortages will be exacerbated by reform, more access means greater shortage –Medicare reimbursement levels for physicians are decreasing with P4P on the horizon as well –Medical Malpractice is a significant expense and threat to many physicians, and not contemplated by Reform –Medicaid rates of reimbursement are poor for many physicians, causing them to refuse Medicaid patients entirely What Stake do Physicians have?
Physicians: –Payer mandates, federal and private, for quality, reporting, billing, and evidenced based performance is growing –Scrutiny on doctor owned facilities/testing is increasing –Independent practice becomes more and more difficult What Stake do Physicians have?
NO MARGIN, NO MISSION…. Medicare population fastest growing in demand, with reducing reimbursement each year Medicaid varies by state, but tends to be poor paying against cost of care Majority of payments are on a fixed or semi- fixed basis, yet expenses are not What Stake do Hospitals have?
Multiple regulatory issues that are meant to enhance patient safety; add expense Never events CMS quality reporting HCHAPS-patient satisfaction Community benefit challenges EMTALA What Stake do Hospitals have?
What Stake does Government have? Medicare, Medicaid, Veteran’s Affairs, DOD, employees-Single largest purchaser of health care services given these sectors Welfare of the people The economy and impact of health care costs on international competition, etc
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