Be Informed

1. Be Informed Information to help you make smart healthcare decisions and help keep healthcare affordable

2. Healthcare Costs Are Rising National Average Annual Healthcare Costs Increases Source: Hewitt Associates, 2002. 2003 figure is estimated

3. Healthcare Costs Are Rising • Why? • We’re using more prescription drugs, and the cost of new drugs is increasing rapidly • prescription drug spending rose 13.8 percent • We’re using more hospital services and equipment • outpatient hospital care spending grew 16.3 percent in 2001 • inpatient hospital care jumped 7.1 percent • Medical technologies and treatments are becoming more advanced… and more expensive • We’re using more specialty care • specialty physician services increased 6.7 percent • We’re over-using emergency rooms for non-urgent needs Source: Center for Studying Health System Change, “Tracking Health Care Costs,” 2002

4. What Can We Do? • Rising healthcare costs mean health insurance rates must rise to pay for the services we use… so we all have a role to play to keep healthcare affordable • learn some basics about how our health plan works • understand the factors that contribute to rising costs • make smart choices that keep us healthier and help reduce our need for medical services and prescription drugs

5. How Healthcare Works • Employers negotiate benefit packages with insurance companies to determine: • services covered • co-payments • deductibles • monthly premiums • Insurance rates are based on the historical health of the people in the group and the size of the group: • Insurers use historical data and analysis to predict the medical expenses for a company’s employees • Premiums must be high enough to cover the expected cost of healthcare claims, but low enough to be competitive and affordable in the marketplace

6. Who Pays for Healthcare? • For every $1 paid by an employee, on average, employers pay $5 National Average Annual Healthcare Costs Per Employee Source: Blue Cross and Blue Shield Association, “Defined Contribution Reports;” Hewitt Associates, 2002

7. Where your health care dollar goes • About 90 percent of every health insurance premium dollar goes directly to pay for medical care • The rest pays for services such as: • claims processing • customer services • provider relations • member • communications • research • reserves for • future claims Source: Centers for Medicare and Medicaid Services, “The Nation’s Health Dollar,” 2002

8. What You Can Do • If you are given a choice of health plans, choose the plan that meets your specific health, lifestyle and financial needs – and carefully weigh the co-payments, deductibles and premiums • Understand the benefits of your health plan; review the benefit booklet carefully; call your health plan if you have any questions about what is covered • Talk with your doctor to understand the true costs and financial consequences of medical services in order to get the most appropriate care; ask about treatment options and the use of lower-cost generic drugs

9. How Much Things Actually Cost • Health insurance shields many of us from the full impact of healthcare costs – we often only pay a portion out of our own pockets for medical services • Few of us are aware of how quickly and dramatically these costs are rising • Most Americans don’t know • the costs associated with • common medical services • For example: • the average cost of an MRI • is $1,890 • the average cost of heart • bypass surgery is $57,073 Source: Ingenix, “Medicode National Fee Analyzer,” 2002

10. What You Can Do • Talk with your doctor to understand and explore all treatment options • Ask how much things cost to make sure you are getting the most for your healthcare dollar • Check all medical bills and statements to make sure they are accurate – question any bills or items you don’t understand

11. Prescription Drugs • 10 prescriptions are written for every man, woman, child in the U.S. every year, on average, costing $155 billion • We’re using more: prescription drug spending rose 14 percent from 2001 to 2002, and is projected to continue to grow at high rates • Newer drugs are more expensive: About half of the $22.5 billion increase in spending on prescription drugs was driven by 27 drugs (out of almost 9,500) • Drug companies spend more on marketing and advertising brand name drugs than on research and development: $2.5 billion on direct-to-consumer advertising in 2000 Sources: The National Association of Chain Drug Stores, “Industry Facts At A Glance,” 2001; Center for Medicare and Medicaid Services, “National Health Statistics,” June 2002; Institute of Health Care Management, “Prescription Drug Expenditures in 2001,” 2002)

12. What You Can Do • Generic drugs represent a big opportunity to control rising health care costs • Ask your doctor or pharmacist if a generic equivalent is available – generic drugs: • are FDA-Approved and use chemically-identical active ingredients • are just as effective as name brands • mean your out-of-pocket costs are lower Source: The National Association of Chain Drug Stores, “Industry Facts At A Glance,” 2001

13. Unnecessary Trips to the E.R. • Each year 10 million visits to hospital emergency rooms are for non-urgent care • When someone in our health plan goes to the E.R. instead of a doctor’s office for non-urgent care, everyone in our health plan pays for it through higher insurance premiums, co-payments and deductibles: • Average emergency room visit: $383 • Average doctor’s office visit: $60 Source: New England Journal of Medicine, “The Costs of Visits to Emergency Departments,” 1996 Source: American Medical Association, “Physician Socioeconomic Statistics,” 2001

14. What You Can Do • If you have a non-urgent medical problem, check with a primary care physician before going to the E.R. • If you don’t have a regular primary care physician, develop an ongoing relationship with one – contact your health plan for information on selecting a doctor • Regular check-ups can help prevent small health problems from turning into true emergencies Source: New England Journal of Medicine, “The Costs of Visits to Emergency Departments,” 1996. Source: American Medical Association,” Physician Socioeconomic Statistics, 2001.

15. What You Can Do • Share your family’s health history with a primary care physician, and ask about preventive measures to avoid illnesses and manage diseases • Share prescription records with your doctor and tell him or her about all treatments – including over-the-counter medications and herbal remedies • Work with your doctor to keep track of your child’s immunizations and keep them up-to-date • Talk with your doctor – come prepared with questions to make sure you get the care that’s right for you

16. Physically Inactive Americans Step Up Physical Activity • Nearly 50 million adults (between the ages of 20 and 74), or 27% of the adult population, are obese • More than 108 million adults, or 61% of the adult population are either obese or overweight • 14 percent of all deaths in the United States are attributed to activity patterns and diet Source: U.S. Department of Health and Human Services, “National Health Interview Survey”, 1997-98

17. Step Up Physical Activity • Being physically inactive significantly increases the risk of developing many chronic diseases and conditions: heart disease, stroke, colon cancer, diabetes, obesity, arthritis and osteoporosis • Total healthcare costs related to these conditions total more than $600 billion nationally • Increasing regular moderate physical activity among the more than 88 million inactive Americans over the age of 15 years might reduce annual healthcare costs by as much as $76.6 billion

18. What You Can Do • Regular physical activity can help you feel better, look better and can help improve your overall health • Brisk walking for 30 minutes a day, three times a week, can improve personal health and might reduce your need for medical services or prescription medicines • Talk with your doctor to determine the the best way to add physical activity to your daily routine • Check with a local community center, senior center, school or church for low-cost exercise classes Source: National Institutes of Health, “The Bypass Angioplasty Revascularization Investigation,” 1997

19. What You Can Do • Regular physical activity can… • Help maintain a healthy weight • Help build and maintain healthy bones, muscles, and joints • Help older adults become stronger and better able to move about without falling • Help reduce feelings of depression and anxiety • Help promote psychological well-being • Help reduce the need for medical treatments or prescription medicines

20. What You Can Do • Regular physical activity can help reduce… • The risk of dying prematurely from heart disease and other conditions • The risk of developing diabetes • The risk of developing high blood pressure • Blood pressure in people who already have high blood pressure • The risk of developing colon and breast cancer Source: U.S. Department of Health and Human Services, National Health Interview Survey, 1997-98

21. Managing Chronic Diseases • Rapid increases in rates of chronic diseases like diabetes, congestive heart failure, asthma and their associated health problems are major contributors to rising costs • 17 million Americans with diabetes - total cost is $98 billion, with about $44 billion of that in direct medical costs • In 2000, the total costs attributed to obesity amounted to an estimated $117 billion – most of the cost is associated with diabetes, heart disease, and hypertension • 24.7 million Americans diagnosed with asthma, causing : • approximately 500,000 hospitalizations annually • more than 1,997,000 emergency room visits • more than $8.1 billion in direct healthcare costs Source: Centers for Disease Control and Prevention, “Surveillance for Asthma,” 2002 American Lung Association, “Trends in Asthma Morbidity and Mortality,” 2002

22. What You Can Do • Share your family health history with your primary care physician and discuss preventive measures that can help you avoid illnesses and manage diseases • Talk with your doctor to make sure you are eating a balanced diet and exercising sufficiently • Because asthma attacks are triggered by environmental causes, talk with your doctor to find out how to identify and avoid triggers • Check with your health plan about special programs designed to help prevent or manage chronic diseases – you can improve your health and may reduce your need for medical services or drugs

23. An Ounce of Prevention • Last year, failure to wear seatbelts caused: • 9,200 unnecessary fatalities • 143,000 needless injuries • $26 billion in healthcare costs • Failure to wear bike helmets caused: • 500 bike-related fatalities • 151,000 nonfatal head injuries • $3 billion in healthcare costs Source: Centers for Disease Control and Prevention, “Injury Fact Book,” 2001

24. What You Can Do • Always buckle your seatbelt snugly • Check with local hospitals, police and fire departments for information about the proper installation of car safety seats for infants and small children • Wear a bike helmet and sports safety equipment • Make sure your children do too! SOURCE: National Highway Traffic and Safety Commission, “The Economic Impact,” 2001