History of the Past / Charting the Future
Arkansas Governor’s Health Care Roundtable
February 7, 2008
Where are we??
• Employer sponsored care remains primary financing strategy in most states • Proportion of uninsured continues to increase (48 million U.S. citizens) • Healthcare costs (public and private) continue to exceed other growth areas • Technology & pharmaceutical advances • Uncompensated care shifted to insured • Safety net providers fragmented • Medicaid / Medicare cost-containment questionable • Children growing responsibility of public sector • Private sector modifying benefits
Health care’s Iron Triangle
Quality
Cost
Access
Healthcare Financing in Transition
• 1910 Flexner Report – Medical education • 1928 Penicillin discovered • 1944 first patient treated • 1941 WWII Wage controls / Employers’ response • 1957 Hill Burton Act stimulates hospitals • 1965 Medicare / Medicaid established • 1973 Federal HMO Act • 1990s Employer / Medicaid HMO expansions • 1997 State Children’s Health Insurance Program • 2003 Medicare Modernization Act
Current patchwork quilt of Arkansas health insurance coverage
Income 300% FPL Private Insurance
200% FPL
ARKids First B
100% FPL
ARKids First A (Medicaid)
0 10
Medicaid for Pregnant Women/Family Planning Medicaid w/ Disability
20 30 40 50 60
70
Medicare
Age
Currently Uninsured: ~520,000
Views of health care: A right or benefit?
Medicaid Benefit:
Governmental obligation Drivers of heath care costs: Changing demographics Illness burden Medical research Technological advancements Consumer expectations
Employer Benefit:
Private sector responsibility
Unable to afford
Increasing health care costs
Unwilling to support
TURMOIL
Cost sharing
Limited benefits
Defined contributions
Dropped coverage
Strategies used to manage health risk
No Community Insurance Individual Fully-Insured Self-Insured Rating Insurance Small Group Large Group
Current patchwork quilt of Arkansas health insurance coverage
Income 300% FPL Private Insurance
200% FPL
ARKids First B
100% FPL
ARKids First A (Medicaid)
0 10
Medicaid for Pregnant Women/Family Planning Medicaid w/ Disability
20 30 40 50 60
70
Medicare
Age
Currently Uninsured: ~520,000
Private employers offering insurance
Employer Size Total Over 1000 employees 100-999 employees 25-99 employees 10-24 employees <10 employees Arkansas 40.8% 94.0% 94.2% 55.8% 43.9% 16.4% United States 56.3% 98.9% 94.2% 82.6% 64.0% 35.7%
2005 Medical Expenditure Panel Survey, AHRQ
2004 Uninsured All Arkansans
Mountain 22.6%
Northwest 16.4% Urban 6.3%
Suburban 16.0%
Rural 15.9%
Delta 15.8%
Uninsured 19-64 years of age
Mountain 31.2%
Northwest 23.7% Urban 8.7%
Suburban 21.5%
Rural 22.8%
Delta 22.8%
Working Uninsured 19-64 years of age
Mountain 26.4%
Northwest 23.0% Urban 8.3%
Suburban 19.1%
Rural 20.2%
Delta 16.5%
Arkansas Hospitals by Type
Obesity Trends* Among U.S. Adults BRFSS, 1990, 1998, 2006
(*BMI ≥30, or about 30 lbs. overweight for 5’4” person) 1990 1998
2006
No Data
<10%
10%–14%
15%–19%
20%–24%
25%–29%
≥30%
Annual Average Total* Costs Linked to Obesity - 2006
$4,500
Pharmacy Medical
$3,000
Total difference $1,297 (54%)
$1,238
$785 $1,500 $2,441 $1,597 $0 No Risk Obese
*Includes medical (inpatient and outpatient) and pharmacy costs for 18-84 year old state employees.
Average Annual Total* Costs Linked to Obesity compared with No Risk by Age Group
$10,000 $9,000 $8,000 $7,000
$3,765
No Risk Obese
$5,391
$8,860 $2,801 $2,160 $1,857
$6,000 $5,000
$1,382
$3,000 $2,000 $1,000 $0
18-24
$1,230
25-34
$1,991
$4,000
35-44
$2,409
45-54
$3,266
55-64
*Includes medical (inpatient and outpatient) and pharmacy costs for state employees.
$4,338
$4,522 (104%)
65-74