An Overview of Healthcare Costs, Hospital Finances, and Cost Shifting

1. An Overview ofHealthcare Costs,Hospital Finances,and Cost Shifting

2. All of our reportsare available on the web:www.nhpolicy.org

6. Are we getting more for our money? “Regions experiencing the largest spending gains were not those realizing the greatest improvements in survival. Factors yielding the greatest benefits to health were not the factors that drove up costs.” Health Affairs 25 (2006) Hospitals and physicians are competing for profitable services, making costly investments in the latest medical technologies. These market forces are largely going unchallenged by insurers and regulators (Center for Health Systems Change, Issue Brief No. 97 Unlike many industries, higher costs don’t necessarily mean a better product/outcome.

12. Cost-Shifting

24. Cost-Shifting

25. Health Care is NOT NowA Traditional Market System Consumers have limited, if any, access to information on price or quality. There are institutional monopolies. The seller determines what the consumer will get; supply drives demand. Important health care services are often obtained at a time of personal crisis. Government regulation and programs alter provider behavior.

26. A Philosophical Divide

27. Market-based Reform Consumers (or insurance purchasers) empowered to make health care purchasing decisions What is the cost of this care/service? Is the potential benefit worth the cost? What is the quality of this care/service? Is the potential benefit worth the risk? What are the quality and cost of alternatives? Can I go elsewhere and get higher quality or lower cost?

28. What Are Employers Going To Do ?More of the Same? Seek cheaper insurance plans including Health Savings Accounts Increase co-premiums and co-pays On turnover, add part-time employees ineligible for benefits Drop retiree health benefits

29. What Can Employers Do ? While clearly a sales pitch, the Institute of Management and Administration’s recent study, What Works Now: Employer Strategies and Tactics for Controlling Health Care Costs Companies that don’t analyze cost and utilization data had premium increases 18% above average Companies whose insurance brokers are compensated via sales commissions had premium increases 12% higher than those using flat rate brokers. Continue to evolve informed purchasing of health insurance. Encourage BIA and Chambers of Commerce to continue develop toolsets for large and small employers.

30. What Can Employers Do ? Support efforts to develop insurance models which encourage the cost-effective use of services. Evidence based practice Encourage innovation in the health care market. Develop ‘focus factories.’ Promote wellness programs within those insurance products and within your business.

31. What Can Employers Do ? Support efforts to end direct-to-consumer drug advertising. Those TV ads work or the drug companies wouldn’t be adding more all the time.

32. What Can Employers Do ? Have their local Chamber of Commerce or trade association create a public list of its members with the number of employees who are and are not offered health insurance benefits by each member. Recognize those that are good citizens and put pressure on those that shift their health care costs onto others.

33. What Can Employers Do ? Avoid championing new and improved health services in a community and later express concerns about the costs. Don’t let local providers “compete” on the basis of adding some technology already available a short distance away.

34. What Can Employers Do ? Talk with their state legislators and the NH Congressional delegation about how below cost payments by Medicare and Medicaid result in a hidden tax on insurance premiums through cost-shifting, increasing their cost of doing business.