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Health Care Coverage: Different Problems, Different Solutions, Everyone’s Issue. Marcia L. Comstock, MD MPH Carol A. Staubach, MPH. Today’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?.

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health care coverage different problems different solutions everyone s issue

Health Care Coverage: Different Problems, Different Solutions, Everyone’s Issue

Marcia L. Comstock, MD MPH

Carol A. Staubach, MPH

today s agenda on the uninsured
Today’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?
cover the uninsured week
Cover 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?
key facts about health insurance
Key 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.
who lacks access to health insurance
Who 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.
who are the uninsured
Who are the Uninsured?

Source: Economic Research Initiative on the Uninsured; based on MEPS 2002 data.

most uninsured people work
Most Uninsured People Work

Note: Numbers may not add up to 100% due to rounding.

Source: Economic Research Initiative on the Uninsured, 2005.

most uninsured people have incomes above the poverty line
Most Uninsured People Have Incomes Above the Poverty Line

Note: Numbers may not add up to 100% due to rounding.

Source: Economic Research Institute of the Uninsured, 2005.

In fact, the fastest growing segment of the population lacking insurance is for individuals and families with annual incomes over $75,000.
the uninsured are more likely to not get care due to cost
The Uninsured* are More Likely to Not Get Care Due to Cost

Source: Centers for Disease Control and Prevention, National Center for Health Statistics, 2005.

*People under age 65 in 2003.

becoming uninsured could happen to you
Becoming Uninsured Could Happen To You!!!

Unexpected changes can affect coverage:

  • Serious illness or injury
  • Worsening of a chronic condition
  • Losing or switching jobs (after federal COBRA protection runs out or is unaffordable)
  • Changes to health insurance policies
what are the consequences of being uninsured
What 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 problems

Are at risk for the huge expenses of catastrophic health care

May have worse health outcomes

~18,000 died last year because they did not have health insurance, according to IOM

what are the consequences of having uninsured people in our community
What are the Consequences of Having Uninsured People in Our Community?
  • A burden on hospitals for uncompensated care
  • Cost-shifting to employers
  • Negative impact on community health
  • Drain on economic development
how did we get here
How 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.

before health insurance
Before Health Insurance…
  • US railroads and wanted to insure productivity of employees
  • Hired contract physicians (surgeons) to care for employees
  • No insurance—healthcare services provided for employees…but in the interest of their employer!
the beginning of health insurance the blues
The Beginning of Health Insurance-”The Blues”

Blue Cross 1st created by President of Baylor University to pay for hospital care

If 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 plan

Law became a national model

It was expanded after a decade to include payment for physician services, “blue shield”

The plans were NFP companies

BODs represented community-citizens, providers, businessmen

Concept of “shared social responsibility”

employer role in healthcare
Employer Role in Healthcare
  • Originally employer-based insurance was not for healthcare. It started as insurance for lost wages when ill
  • Early 1940s: amendments to Tax Codes allow business to offer health insurance to help recruit workers despite wartime wage freezes
  • 1950-1970: growth in cost & utilization of medical services by employees, supported by labor unions
  • Health insurance typically 80/20; co-pays, deductibles
  • 1980s: growth of managed care as response to rising costs-temporarily effective—1st dollar coverage, NOT insurance
  • Late 1990s-resurgence of costs
  • 2000+ move to consumer-directed health plans…..??solution
  • Some employers offer on-site clinics/pharmacies….?Back to the future?
the 5 a s of access
The 5 A’s of Access

Health insurance does not equal access to the right healthcare!

  • Affordability
  • Accessibility
  • Acceptability
  • Assurance
  • Appropriateness
coverage access what does it mean
Coverage & 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 services
  • Access refers to what is 'practically' available and encompasses barriers such as affordability and logistical accessibility
  • Coverage opens the door but does not ensure access!
issues with coverage access
Issues 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
Do you have health insurance?
  • Did you purchase it yourself?
our health care crisis
Our Health Care Crisis
  • Total health care spending represents 16 percent of the gross domestic product
  • Estimated to reach 20 percent by 2015.
  • The US has the highest per worker health care costs in the world
  • Impact
    • Erodes corporate profits
    • Reduces growth of business
  • For small enterprises or those with low profit margins
    • Reduces number of jobs
    • Reduces compensation packages
    • Increases unemployment and uninsurance
what do we get for what we spend
What Do We Get for What We Spend?
  • We spend 33% more than Canada, our nearest competitor on costs
  • We do not have more doctors or nurses or hospital days
  • We do have more MRIs and get more tests-many unnecessary
  • We rank lowest of English speaking countries on patient satisfaction and access and on the doctor-patient relationship
  • We rank well only on access to specialists and non-urgent care! Is this most important?
health care costs and profit margins
Health 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

projections by 2015 can employers really afford it
Projections by 2015Can Employers Really Afford It?

2015 rates:





Cost per employee per year

Comparing Healthcare trend figures at compounded rates: 15%,12%,10% and 8% over a 10 year period. Starting point $7,200 or approximately $600 PEPM.

2005 trends
2005 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%
reaction to premium increases
Reaction to Premium Increases
  • For Employers
    • Cost shifting to employees
    • Cost sharing in premiums
    • Increase co-pays and deductibles
    • Reduce coverage
    • Drop Insurance
  • Employee Response
    • Pay the Increase
    • Drop Coverage
2005 status of employer coverage
2005 Status of Employer Coverage
  • 60% of employers offer insurance, down from 69% in 2000
    • 98% for firms greater than 200
    • 93% for firms between 50 – 199
    • 87% for firms between 25 – 49
    • 72% for firms between 10 – 24
    • 47% for firms between 3 - 9
the small employer
The Small Employer
  • Firms 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
who provides coverage who doesn t
Who 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.
hidden costs of insurance
Hidden Costs of Insurance
  • Employee Retirement Income Security Act of 1974 - Federal governs self-funded plans; states oversee fully insured plans.
    • Rules, regulations and offerings differ from state to state
  • Variables
    • Risk Rating & Underwriting – Some less fair than others
    • Administrative Costs – can be as high as 40% of premium
what is good public policy to promote adequate coverage access for all
What 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?"
Should 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?
voices from communities
Voices 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
harris commonwealth fund opinion leaders survey
Harris-Commonwealth FundOpinion Leaders Survey
  • Covering the uninsured should be Congress’ top priority over the next 5 years
  • The proportion of Americans without health insurance (currently 18% under 65) should be reduced by half to about 8% in 10 years.
the citizens health care working group
The Citizens’ Health Care Working Group
  • Charged by Congress with engaging the public in a dialogue on healthcare
    • What 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
what does the public think
What 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)
what does the public think1
What 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
what does the public think2
What Does the Public Think?

~ 69% think some people should be responsible for paying more than others

Criteria varied: Income most popular response; health behaviors also quite high

Should public policy continue to use tax laws to encourage employer-based health insurance?

Yes 47.9% (29.3-86.8)

No 52.1% (13.2-70.7)

what does the public think3
What Does the Public Think?

Guaranteeing all Americans have health insurance was cited as the number 1 spending priority in nearly all communities

Guaranteeing 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

what does the public think4
What Does the Public Think?


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

what does the public think5
What Does the Public Think?


Mixed reactions:

Expand state government programs for low income (Medicaid, SCHIP)

Require businesses to offer health insurance to all employees

Require all Americans to enroll in basic healthcare coverage, public or private

what does the public think6
What Does the Public Think?


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 clinics

Open up enrollment in federal programs, e.g., Medicare or FEHBP

If you segment the uninsured, it is apparent that different answers are needed for different groups:
  • The working poor
  • Those temporarily uninsured between jobs
  • Those who can afford but do not choose to buy insurance
  • The young and healthy who feel it is not worth the investment for them
potential solution join a purchasing pool
Potential Solution Join a Purchasing Pool
  • Small employers join forces to create purchasing power and reduce individual inequities by virtue of their size
    • Share risks
    • Negotiate competitive prices
    • Gain access to a variety of plans
    • Provide affordable co-pays
    • Streamline and reduce administrative costs
  • COSE – Council of Smaller Enterprises, part of Cleveland Chamber of Commerce
    • Assume role of purchaser
    • At least three health plan alternatives
  • Health Pass – New York Business Group on Health – for employers with less than 50 workers
    • 28 benefit plan designs
    • Provides consulting services
    • Handles all administrative duties
  • PacAdvantage – California – Pacific Business Group on Health – 2 – 50 employees
community and private sector partnerships
Community 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 months
    • County pays 1/3; employer pays 1/3; employee pays 1/3
    • Plans offered are ½ of cost if employer sought plan as an individual employer
  • New Mexico Health Insurance Alliance
another but risky solution self insurance
Another (But Risky) Solution – Self Insurance
  • Financial strategy used primarily by large employers – employer assumes all or part of risks
  • Sets funds aside to pay claims as they come in (Vs paying an insurance company a premium) - actors out administrative costs
  • Exempts the company from state mandates that can be costly and cumbersome for employers who operate in multiple states
  • Increase risk for small firm – one catastrophic medical case could be devastating
    • Purchase Stop Loss Insurance to cover any individual’s medical expenses higher than $25,000
latest health plan solution consumer directed health plans
Latest Health Plan SolutionConsumer Directed Health Plans
  • High Deductibles
  • HSAs
  • Requirements
    • Learn to manage an HSA
    • Learn to be a savvy medical consumer
    • Learn to lead a healthier life
trends in health status cdc
Trends in Health Status - CDC
  • In 10 years
    • Obesity 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

Determinants of Healthcare Costs

Source: Center for Disease Control and Prevention

statistically for every 100 employees
Statistically….For Every 100 Employees
  • 64 are overweight
  • 25 have high blood pressure
  • 18 or more have high cholesterol
  • 6 have diagnosed diabetes
  • 4 have undiagnosed diabetes
  • 16 smoke
  • 8 are heavy drinkers
  • 29 don’t wear safety belts regularly
  • 50 sit all day to do their work
  • 21 have cardiovascular disease

Source: Wellness Council of America 2005

strategies to integrate benefits and work site health management
Strategies to Integrate Benefits and Work Site Health Management
  • WEYCO Inc. - service company for benefit plans and management - 186 Employees
  • Healthcare – eating the bottom line
    • Employers give employees an unrestricted medical card
    • Employees are making unilateral lifestyle decisions that affect the bottom line and other employees’ paycheck
weyco inc
  • Health plans do not emphasize prevention, personal health improvement and compliance
  • Little or no employee involvement in cost
  • Plan Strategy
    • Align plan with Weyco health strategy
    • Involve employees and families in prevention
    • Move to qualified high deductible plans with health savings accounts (HSA) by 2007
weyco inc1
  • Health Strategy – As important as customer service, quality, & safety
    • Personal health improvement
    • Reduce demand to reduce costs
  • Eliminate lifestyles that create risk
    • Illegal drugs and tobacco
    • Excess use of alcohol
    • Unhealthy eating
    • Physical inactivity
weyco inc2
  • Worksite Programs
    • HRA & Biometrics
    • Health Education: Cardio, Strength & Flexibility, Weight Management, Stress Management
    • Web-based info & Telephonic Health Coach
    • Physical Evaluations
    • Screenings
weyco inc3
  • Incentives
    • Employer contributions/credits for participation in preventive exams, personal evaluation, physical evaluation
    • Credits 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 year
    • If employee waives coverage, WEYCO provides $1560.00 in an HRA if employee provide proof of other medical coverage
weyco policy
WEYCO Policy
  • Tobacco-Free Program
    • Stop hiring or retaining tobacco users
    • Ban the use of tobacco on property
    • Tobacco assessments and voluntary testing
    • Company sponsored smoking cessation programs
    • Mandatory testing
    • Random testing for all employees
    • Extend program to spouses
s 1955 health insurance marketplace modernization and affordability act of 2005
S. 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 marketplace
  • Introduced by Senator Michael Enzi (R-WY)
  • approved by the Senate Health, Education, Labor and Pensions (HELP) Committee
critics fears
Critics Fears
  • Legislation, eliminates state jurisdiction and with it almost all state-enacted consumer protections for people buying insurance individually or through their employers
  • States will no longer be able to mandate coverage of benefits, services, or categories of providers for individuals, small groups, or large group
  • Premium rating protections, enacted by states to make small group insurance more affordable to older and sicker workers, will be set aside
  • Insurers 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 
massachusetts universal health care coverage
Massachusetts Universal Health Care Coverage
  • Those without coverage must purchase an “affordable” plan (to be defined) or pay financial penalties
  • Businesses with at least 11 workers will provide insurance or pay $295 per employee per year to the state
  • Residents with coverage must certify their insurance status on state income tax forms, or face tax penalties
  • State will provide sliding-scale subsidies for people who can't afford to buy a health plan on their own
  • Ability to gain consensus
  • Compromise may be a way to break the gridlock and logjam that exists in Washington and in states across the country
  • Details important to the overall acceptability of the new program
    • How much people will have to pay to get insurance
    • What will the affordable plans cover
  • Massachusetts 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
perspective of leaders
Perspective of Leaders
  • Comprehensive proposal in the short-term unlikely…until the REAL crisis strikes…?? By 2008 or 2012 elections
  • To develop a long range plan, create a sense of urgency!
  • Healthcare industry leadership must agree that solving the problem will require compromise
how can we make real progress
How 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 problems
  • Look to communities for solutions
  • Focus on health—not just healthcare
  • Everyone needs to be involved! Our health is too important to leave to others
a vision for patient centered care
A Vision for Patient-Centered Care

"The care we need and no less, the care we want and no more."

Albert Mulley, MD

Chief of Internal Medicine, Massachusetts General Hospital

Marcia L Comstock, MD MPH



117 Lafayette Road

Wayne, PA 19087

Phone: 610-687-2320

Fax: 610-687-5963

Carol A Staubach, MPH

CA Staubach & Associates

305 E. St. Andrews Drive

Media, PA 19063

Phone:  610-891-6034

Fax:      610-891-6035