Trends in Health Care Spending: A Comparison of Vermont and the U.S.

1. Growth in Health Care Spending:A comparison of Vermont and the U.S. January 18, 2008 Nolan Langweil, Legislative Joint Fiscal Office

2. Data • CMS, Office of the Actuary (2006 data) • BISHCA, Expenditure Analysis (2006 data) • Note: FY2005 and earlier uses unadjusted numbers

3. UNITED STATES $7,092 Per Capita VERMONT $6,321 Per Capita Per Capita Spending 2006

4. UNITED STATES ↑ from $910B to $1.76T 6.8% average annual growth VERMONT ↑ from $1.7B to $3.9B 8.6% average annual growth Trends in Growth: 1996-2006

5. Trends in Growth: 1996-2006 Overall health care expenditure trends for Vermont and the U.S. are fairly comparable.

6. Hospital care Physicians & Clinical svcs Drugs & Supplies Trends in Growth: 1996-2006 • Hospital care • Physicians & Clinical svcs • Drugs & Supplies

7. Trends in Growth: 1996-2006 Growth when comparing third-party payer by sector (EXCLUDES DRUGS)

8. Trends in Growth: 1996-2006 Growth when comparing third-party payer by sector (INCLUDES DRUGS)

9. PAYER$(By % of total expenditures) Other payers include: State & Local, Other Federal, etc.

10. MEDICARETrends in Growth: 1996-2006 • Largest single payer of health care services in the U.S. • 21% of personal health care spending • Medicaid was second largest (16%) • 2nd largest payer in Vermont • 18% of health spending • Medicaid was largest (24%)

11. MEDICARETrends in Growth: 1996-2006 • Both US and VT: Largest increase in $ spent were in 1) Hospital care, 2) physician & clinical svs and 3) Drugs (in that order) Combined they represent: • US = 84% of total Medicare Spending • VT = 77% of total Medicare Spending • Hospital Care accounted for half of Medicare spending in both VT and the U.S. 2006

12. MEDICARE Drugs as % of overall Medicare spending:

13. MEDICAREMedicare Part D Overall Spending on DRUGS by Payer (Vermont): Before Part D After Part D

14. MEDICAREMedicare Part D Medicaid & Out-of-pocket drug spending saw decreases *NOTE: This does not include clawback.

15. MEDICAID2006 United States • Medicaid spending decreased by 0.9% • First drop in Medicaid spending since program was created in 1965 • Exclude Drugs, and Medicaid PHC spending ↑ 5.6% • Still slower than 8% in 2005 • 10 yr avg growth (1996-2006) = 7.1%

16. MEDICAID2006 Vermont • 10 yr avg growth (1996-2006) = 9.6% • Medicaid spending increased by 2% • Down from 7% growth in 2005 • Drug spending decreased 44% from 2005 • Again exclude Drugs, and Medicaid spending ↑ 11%

17. MEDICAID2006 Vermont (continued) • In 2005, Drug spending was 16.9% of Medicaid costs ($146M) • In 2006, Drug spending was 8.4% of Medicaid costs ($78.7M) • Does not include add’l $15.8M “state & local” spending on drugs

18. PRIVATE HEALTH INSURANCE2006 • U.S. - spending ↑ $598.6B to 634.5B • 6% increase (2005 to 2006) • 7.7% - 10 yr avg annual growth (1996-2006) • 36% of personal health care spending • VT - spending ↑ $1.4 to 1.6B • 16% increase (2005 to 2006) • 9.1% average annual growth • 41% of health care spending

19. Insurance Premiums (2006) From:

20. QUESTIONS?