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TRANSCRIPT
1
A Fresh Perspective on Health Care Reform in California
Mike Prosio
Regional Vice President State Affairs
Joe Greenberg
Vice President and General Manager Small Group Business
LegislativeRegulatory Overview
Click to edit Master subtitle style
2012-13 bull CA Conformity legislation bull Medi-Cal Expansion bull Federal Changes
2014
bull Federal Changes bull Proposed State Changes
2012 CA Passes Conformity Legislation
Click to edit Master subtitle style AB 1083 (Monning) Enacts numerous changes to CA law to conform to ACA including
bull Requires all non-grandfathered small group (SG) policies of sold or renewed after 1114 to provide coverage for essential health benefits as described in ACA
bull Establishes 19 ratings regions for individual (IND) and SG market
bull Eliminates preexisting condition requirements and establishes premium rating factors based only on age family size and geographic regions except for grandfathered plans
bull Allows rate variation based upon age of no more than 3 to 1 for adults
bull Does not allow for wellness incentives or for smokersrsquo premiums to vary
bull Repeals CA provisions of law regarding guaranteed issue and rating factors if similar provisions in ACA are repealed
bull Maintains the existing state definition of small employer (2 to 50 eligible employees) until January 1 2014 Defines small employer as 1 to 50 from January 1 2014 until December 31 2015 Defines small employer as 1 to 100 employees effective January 1 2016
2012 CA Passes EHB legislation
Click to edit Master subtitle style SB 951 (Hernandez) Enacts Essential Health Benefits (EHB) requirement in CA law bull Conforms to ACA requiring coverage of following 10 benefits
bullambulatory patient services bullemergency services bullhospitalization benefits bullmaternity and newborn care bullmental health andor substance abuse treatment and services bullprescription drugs bullrehabilitative and habilitative services and devices bulllaboratory services bullpreventive and wellness services and bullpediatric services (including dental and vision care
bullAlso requires coverage of benefit mandates already in CA law as of 1112 including bullHIV testing and AIDS vaccines bullmedically-necessary equipment and supplies for diabetes treatment bullbreast cancer screening mammography and mastectomies bullvarious kinds of cancer screenings and clinical cancer trials
2013 Medi-Cal Expansion and Other
Changes
Click to edit Master subtitle style ABx1 1 (Perez)
bull ABx1 1 (Perez) Expands Medi-Cal coverage effective 1114 to adults who are under age 65 with incomes up to 138 of the federal poverty level (FPL) Bill also simplifies enrollment and wage verification process for those eligible prior to 1114 but not enrolled
bull Over 1M additional Californians expected to sign up for Medi-cal under new law
(18M eligible) 20-25 of Californians receiving Medi-cal bull Significant new costs to state
bullCosts due to increased enrollment of people already eligible $620 million in 2014-15 ($290 million paid by state remainder by feds) bullCost of covering newly eligible population covered 100 by feds for two years
then state share increases
bullMedi-cal reimbursement rates remain among lowest in US 10 cut in 2011
Federal Changes
Click to edit Master subtitle style
July 2013 Large employer (50+) coverage mandate delayed until 2015
November 2013 Feds give states option to let individual keep non-ACA compliant plans an extra year CA does not adopt Federal changes
March 2014 Feds give states option to let small employers keep non-ACA plans until 2017 CA action pending
2014 Pending Legislation and November
Elections
Click to edit Master subtitle style Small Group Extension bull Should the Legislature change CA law to allow SG policies that do not conform with
ACA to continue through 2016
Transparency bullHow much information should businesses and their employees have regarding
provider costs
Rate Regulation Initiative bullQualified for November 2014 ballot bull Should Insurance Commissioner have ability to set rates in IND and SG markets
including Covered CA
Governorrsquos Race and Legislative Battles bullWill GOP mount serious challenge to Governor Brown bullWill Democrats maintain legislative supermajorities in both houses of Legislature
Market Dynamics
Click to edit Master subtitle style
bull Regulatory Changes
bull Business Fundamental Shifts
bull Increased Competition
bull Delivery System Evolution
bull Affordability Cost Trends
Cumulative Premium Increases
Compared to Inflation
Click to edit Master subtitle style Family Coverage California 2002-2012
California Premiums vs Inflation
Since 2002 health insurance premiums in California have increased by 1697 more than five times the 315 increase in the statersquos overall inflation rate
Source California Health Care Foundation (CHCFNORC California Employer Health Benefits Survey 2007-2012 CHCFHSC California Employer Health Benefits Survey 2005-2006 CHCFNORC Health Benefits Survey 2004 KaiserHRET California Health Benefits Survey 2002-2003 California Division of Labor Statistics and Research Consumer Price Index California Average Inflation (April to April) 2002-2011
Projected National Health Expenditures In Billions and as Percent of GDP
Click to edit Master subtitle style
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
$4000
$4500
$5000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Bill
ion
s
GD
P
$47 Trillion 196 GDP
$27 Trillion 179 GDP
2008 version of the National Health Expenditures (NHE) released in January 2010
Per Capita Total Current Health Care Expenditures United States and Selected Countries 2010
Click to edit Master subtitle style
Source Organization for Economic Co-operation and Development OECD Health Data 2012
Focus on the Elderly Healthcare Costs by Age
Click to edit Master subtitle style
Source Fischbeck Paul ldquoUS-Europe Comparisons of Health Risk for Specific Gender-Age Groupsrdquo Carnegie Mellon University September 2009
US is spending much more for older ages
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
LegislativeRegulatory Overview
Click to edit Master subtitle style
2012-13 bull CA Conformity legislation bull Medi-Cal Expansion bull Federal Changes
2014
bull Federal Changes bull Proposed State Changes
2012 CA Passes Conformity Legislation
Click to edit Master subtitle style AB 1083 (Monning) Enacts numerous changes to CA law to conform to ACA including
bull Requires all non-grandfathered small group (SG) policies of sold or renewed after 1114 to provide coverage for essential health benefits as described in ACA
bull Establishes 19 ratings regions for individual (IND) and SG market
bull Eliminates preexisting condition requirements and establishes premium rating factors based only on age family size and geographic regions except for grandfathered plans
bull Allows rate variation based upon age of no more than 3 to 1 for adults
bull Does not allow for wellness incentives or for smokersrsquo premiums to vary
bull Repeals CA provisions of law regarding guaranteed issue and rating factors if similar provisions in ACA are repealed
bull Maintains the existing state definition of small employer (2 to 50 eligible employees) until January 1 2014 Defines small employer as 1 to 50 from January 1 2014 until December 31 2015 Defines small employer as 1 to 100 employees effective January 1 2016
2012 CA Passes EHB legislation
Click to edit Master subtitle style SB 951 (Hernandez) Enacts Essential Health Benefits (EHB) requirement in CA law bull Conforms to ACA requiring coverage of following 10 benefits
bullambulatory patient services bullemergency services bullhospitalization benefits bullmaternity and newborn care bullmental health andor substance abuse treatment and services bullprescription drugs bullrehabilitative and habilitative services and devices bulllaboratory services bullpreventive and wellness services and bullpediatric services (including dental and vision care
bullAlso requires coverage of benefit mandates already in CA law as of 1112 including bullHIV testing and AIDS vaccines bullmedically-necessary equipment and supplies for diabetes treatment bullbreast cancer screening mammography and mastectomies bullvarious kinds of cancer screenings and clinical cancer trials
2013 Medi-Cal Expansion and Other
Changes
Click to edit Master subtitle style ABx1 1 (Perez)
bull ABx1 1 (Perez) Expands Medi-Cal coverage effective 1114 to adults who are under age 65 with incomes up to 138 of the federal poverty level (FPL) Bill also simplifies enrollment and wage verification process for those eligible prior to 1114 but not enrolled
bull Over 1M additional Californians expected to sign up for Medi-cal under new law
(18M eligible) 20-25 of Californians receiving Medi-cal bull Significant new costs to state
bullCosts due to increased enrollment of people already eligible $620 million in 2014-15 ($290 million paid by state remainder by feds) bullCost of covering newly eligible population covered 100 by feds for two years
then state share increases
bullMedi-cal reimbursement rates remain among lowest in US 10 cut in 2011
Federal Changes
Click to edit Master subtitle style
July 2013 Large employer (50+) coverage mandate delayed until 2015
November 2013 Feds give states option to let individual keep non-ACA compliant plans an extra year CA does not adopt Federal changes
March 2014 Feds give states option to let small employers keep non-ACA plans until 2017 CA action pending
2014 Pending Legislation and November
Elections
Click to edit Master subtitle style Small Group Extension bull Should the Legislature change CA law to allow SG policies that do not conform with
ACA to continue through 2016
Transparency bullHow much information should businesses and their employees have regarding
provider costs
Rate Regulation Initiative bullQualified for November 2014 ballot bull Should Insurance Commissioner have ability to set rates in IND and SG markets
including Covered CA
Governorrsquos Race and Legislative Battles bullWill GOP mount serious challenge to Governor Brown bullWill Democrats maintain legislative supermajorities in both houses of Legislature
Market Dynamics
Click to edit Master subtitle style
bull Regulatory Changes
bull Business Fundamental Shifts
bull Increased Competition
bull Delivery System Evolution
bull Affordability Cost Trends
Cumulative Premium Increases
Compared to Inflation
Click to edit Master subtitle style Family Coverage California 2002-2012
California Premiums vs Inflation
Since 2002 health insurance premiums in California have increased by 1697 more than five times the 315 increase in the statersquos overall inflation rate
Source California Health Care Foundation (CHCFNORC California Employer Health Benefits Survey 2007-2012 CHCFHSC California Employer Health Benefits Survey 2005-2006 CHCFNORC Health Benefits Survey 2004 KaiserHRET California Health Benefits Survey 2002-2003 California Division of Labor Statistics and Research Consumer Price Index California Average Inflation (April to April) 2002-2011
Projected National Health Expenditures In Billions and as Percent of GDP
Click to edit Master subtitle style
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
$4000
$4500
$5000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Bill
ion
s
GD
P
$47 Trillion 196 GDP
$27 Trillion 179 GDP
2008 version of the National Health Expenditures (NHE) released in January 2010
Per Capita Total Current Health Care Expenditures United States and Selected Countries 2010
Click to edit Master subtitle style
Source Organization for Economic Co-operation and Development OECD Health Data 2012
Focus on the Elderly Healthcare Costs by Age
Click to edit Master subtitle style
Source Fischbeck Paul ldquoUS-Europe Comparisons of Health Risk for Specific Gender-Age Groupsrdquo Carnegie Mellon University September 2009
US is spending much more for older ages
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
2012 CA Passes Conformity Legislation
Click to edit Master subtitle style AB 1083 (Monning) Enacts numerous changes to CA law to conform to ACA including
bull Requires all non-grandfathered small group (SG) policies of sold or renewed after 1114 to provide coverage for essential health benefits as described in ACA
bull Establishes 19 ratings regions for individual (IND) and SG market
bull Eliminates preexisting condition requirements and establishes premium rating factors based only on age family size and geographic regions except for grandfathered plans
bull Allows rate variation based upon age of no more than 3 to 1 for adults
bull Does not allow for wellness incentives or for smokersrsquo premiums to vary
bull Repeals CA provisions of law regarding guaranteed issue and rating factors if similar provisions in ACA are repealed
bull Maintains the existing state definition of small employer (2 to 50 eligible employees) until January 1 2014 Defines small employer as 1 to 50 from January 1 2014 until December 31 2015 Defines small employer as 1 to 100 employees effective January 1 2016
2012 CA Passes EHB legislation
Click to edit Master subtitle style SB 951 (Hernandez) Enacts Essential Health Benefits (EHB) requirement in CA law bull Conforms to ACA requiring coverage of following 10 benefits
bullambulatory patient services bullemergency services bullhospitalization benefits bullmaternity and newborn care bullmental health andor substance abuse treatment and services bullprescription drugs bullrehabilitative and habilitative services and devices bulllaboratory services bullpreventive and wellness services and bullpediatric services (including dental and vision care
bullAlso requires coverage of benefit mandates already in CA law as of 1112 including bullHIV testing and AIDS vaccines bullmedically-necessary equipment and supplies for diabetes treatment bullbreast cancer screening mammography and mastectomies bullvarious kinds of cancer screenings and clinical cancer trials
2013 Medi-Cal Expansion and Other
Changes
Click to edit Master subtitle style ABx1 1 (Perez)
bull ABx1 1 (Perez) Expands Medi-Cal coverage effective 1114 to adults who are under age 65 with incomes up to 138 of the federal poverty level (FPL) Bill also simplifies enrollment and wage verification process for those eligible prior to 1114 but not enrolled
bull Over 1M additional Californians expected to sign up for Medi-cal under new law
(18M eligible) 20-25 of Californians receiving Medi-cal bull Significant new costs to state
bullCosts due to increased enrollment of people already eligible $620 million in 2014-15 ($290 million paid by state remainder by feds) bullCost of covering newly eligible population covered 100 by feds for two years
then state share increases
bullMedi-cal reimbursement rates remain among lowest in US 10 cut in 2011
Federal Changes
Click to edit Master subtitle style
July 2013 Large employer (50+) coverage mandate delayed until 2015
November 2013 Feds give states option to let individual keep non-ACA compliant plans an extra year CA does not adopt Federal changes
March 2014 Feds give states option to let small employers keep non-ACA plans until 2017 CA action pending
2014 Pending Legislation and November
Elections
Click to edit Master subtitle style Small Group Extension bull Should the Legislature change CA law to allow SG policies that do not conform with
ACA to continue through 2016
Transparency bullHow much information should businesses and their employees have regarding
provider costs
Rate Regulation Initiative bullQualified for November 2014 ballot bull Should Insurance Commissioner have ability to set rates in IND and SG markets
including Covered CA
Governorrsquos Race and Legislative Battles bullWill GOP mount serious challenge to Governor Brown bullWill Democrats maintain legislative supermajorities in both houses of Legislature
Market Dynamics
Click to edit Master subtitle style
bull Regulatory Changes
bull Business Fundamental Shifts
bull Increased Competition
bull Delivery System Evolution
bull Affordability Cost Trends
Cumulative Premium Increases
Compared to Inflation
Click to edit Master subtitle style Family Coverage California 2002-2012
California Premiums vs Inflation
Since 2002 health insurance premiums in California have increased by 1697 more than five times the 315 increase in the statersquos overall inflation rate
Source California Health Care Foundation (CHCFNORC California Employer Health Benefits Survey 2007-2012 CHCFHSC California Employer Health Benefits Survey 2005-2006 CHCFNORC Health Benefits Survey 2004 KaiserHRET California Health Benefits Survey 2002-2003 California Division of Labor Statistics and Research Consumer Price Index California Average Inflation (April to April) 2002-2011
Projected National Health Expenditures In Billions and as Percent of GDP
Click to edit Master subtitle style
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
$4000
$4500
$5000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Bill
ion
s
GD
P
$47 Trillion 196 GDP
$27 Trillion 179 GDP
2008 version of the National Health Expenditures (NHE) released in January 2010
Per Capita Total Current Health Care Expenditures United States and Selected Countries 2010
Click to edit Master subtitle style
Source Organization for Economic Co-operation and Development OECD Health Data 2012
Focus on the Elderly Healthcare Costs by Age
Click to edit Master subtitle style
Source Fischbeck Paul ldquoUS-Europe Comparisons of Health Risk for Specific Gender-Age Groupsrdquo Carnegie Mellon University September 2009
US is spending much more for older ages
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
2012 CA Passes EHB legislation
Click to edit Master subtitle style SB 951 (Hernandez) Enacts Essential Health Benefits (EHB) requirement in CA law bull Conforms to ACA requiring coverage of following 10 benefits
bullambulatory patient services bullemergency services bullhospitalization benefits bullmaternity and newborn care bullmental health andor substance abuse treatment and services bullprescription drugs bullrehabilitative and habilitative services and devices bulllaboratory services bullpreventive and wellness services and bullpediatric services (including dental and vision care
bullAlso requires coverage of benefit mandates already in CA law as of 1112 including bullHIV testing and AIDS vaccines bullmedically-necessary equipment and supplies for diabetes treatment bullbreast cancer screening mammography and mastectomies bullvarious kinds of cancer screenings and clinical cancer trials
2013 Medi-Cal Expansion and Other
Changes
Click to edit Master subtitle style ABx1 1 (Perez)
bull ABx1 1 (Perez) Expands Medi-Cal coverage effective 1114 to adults who are under age 65 with incomes up to 138 of the federal poverty level (FPL) Bill also simplifies enrollment and wage verification process for those eligible prior to 1114 but not enrolled
bull Over 1M additional Californians expected to sign up for Medi-cal under new law
(18M eligible) 20-25 of Californians receiving Medi-cal bull Significant new costs to state
bullCosts due to increased enrollment of people already eligible $620 million in 2014-15 ($290 million paid by state remainder by feds) bullCost of covering newly eligible population covered 100 by feds for two years
then state share increases
bullMedi-cal reimbursement rates remain among lowest in US 10 cut in 2011
Federal Changes
Click to edit Master subtitle style
July 2013 Large employer (50+) coverage mandate delayed until 2015
November 2013 Feds give states option to let individual keep non-ACA compliant plans an extra year CA does not adopt Federal changes
March 2014 Feds give states option to let small employers keep non-ACA plans until 2017 CA action pending
2014 Pending Legislation and November
Elections
Click to edit Master subtitle style Small Group Extension bull Should the Legislature change CA law to allow SG policies that do not conform with
ACA to continue through 2016
Transparency bullHow much information should businesses and their employees have regarding
provider costs
Rate Regulation Initiative bullQualified for November 2014 ballot bull Should Insurance Commissioner have ability to set rates in IND and SG markets
including Covered CA
Governorrsquos Race and Legislative Battles bullWill GOP mount serious challenge to Governor Brown bullWill Democrats maintain legislative supermajorities in both houses of Legislature
Market Dynamics
Click to edit Master subtitle style
bull Regulatory Changes
bull Business Fundamental Shifts
bull Increased Competition
bull Delivery System Evolution
bull Affordability Cost Trends
Cumulative Premium Increases
Compared to Inflation
Click to edit Master subtitle style Family Coverage California 2002-2012
California Premiums vs Inflation
Since 2002 health insurance premiums in California have increased by 1697 more than five times the 315 increase in the statersquos overall inflation rate
Source California Health Care Foundation (CHCFNORC California Employer Health Benefits Survey 2007-2012 CHCFHSC California Employer Health Benefits Survey 2005-2006 CHCFNORC Health Benefits Survey 2004 KaiserHRET California Health Benefits Survey 2002-2003 California Division of Labor Statistics and Research Consumer Price Index California Average Inflation (April to April) 2002-2011
Projected National Health Expenditures In Billions and as Percent of GDP
Click to edit Master subtitle style
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
$4000
$4500
$5000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Bill
ion
s
GD
P
$47 Trillion 196 GDP
$27 Trillion 179 GDP
2008 version of the National Health Expenditures (NHE) released in January 2010
Per Capita Total Current Health Care Expenditures United States and Selected Countries 2010
Click to edit Master subtitle style
Source Organization for Economic Co-operation and Development OECD Health Data 2012
Focus on the Elderly Healthcare Costs by Age
Click to edit Master subtitle style
Source Fischbeck Paul ldquoUS-Europe Comparisons of Health Risk for Specific Gender-Age Groupsrdquo Carnegie Mellon University September 2009
US is spending much more for older ages
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
2013 Medi-Cal Expansion and Other
Changes
Click to edit Master subtitle style ABx1 1 (Perez)
bull ABx1 1 (Perez) Expands Medi-Cal coverage effective 1114 to adults who are under age 65 with incomes up to 138 of the federal poverty level (FPL) Bill also simplifies enrollment and wage verification process for those eligible prior to 1114 but not enrolled
bull Over 1M additional Californians expected to sign up for Medi-cal under new law
(18M eligible) 20-25 of Californians receiving Medi-cal bull Significant new costs to state
bullCosts due to increased enrollment of people already eligible $620 million in 2014-15 ($290 million paid by state remainder by feds) bullCost of covering newly eligible population covered 100 by feds for two years
then state share increases
bullMedi-cal reimbursement rates remain among lowest in US 10 cut in 2011
Federal Changes
Click to edit Master subtitle style
July 2013 Large employer (50+) coverage mandate delayed until 2015
November 2013 Feds give states option to let individual keep non-ACA compliant plans an extra year CA does not adopt Federal changes
March 2014 Feds give states option to let small employers keep non-ACA plans until 2017 CA action pending
2014 Pending Legislation and November
Elections
Click to edit Master subtitle style Small Group Extension bull Should the Legislature change CA law to allow SG policies that do not conform with
ACA to continue through 2016
Transparency bullHow much information should businesses and their employees have regarding
provider costs
Rate Regulation Initiative bullQualified for November 2014 ballot bull Should Insurance Commissioner have ability to set rates in IND and SG markets
including Covered CA
Governorrsquos Race and Legislative Battles bullWill GOP mount serious challenge to Governor Brown bullWill Democrats maintain legislative supermajorities in both houses of Legislature
Market Dynamics
Click to edit Master subtitle style
bull Regulatory Changes
bull Business Fundamental Shifts
bull Increased Competition
bull Delivery System Evolution
bull Affordability Cost Trends
Cumulative Premium Increases
Compared to Inflation
Click to edit Master subtitle style Family Coverage California 2002-2012
California Premiums vs Inflation
Since 2002 health insurance premiums in California have increased by 1697 more than five times the 315 increase in the statersquos overall inflation rate
Source California Health Care Foundation (CHCFNORC California Employer Health Benefits Survey 2007-2012 CHCFHSC California Employer Health Benefits Survey 2005-2006 CHCFNORC Health Benefits Survey 2004 KaiserHRET California Health Benefits Survey 2002-2003 California Division of Labor Statistics and Research Consumer Price Index California Average Inflation (April to April) 2002-2011
Projected National Health Expenditures In Billions and as Percent of GDP
Click to edit Master subtitle style
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
$4000
$4500
$5000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Bill
ion
s
GD
P
$47 Trillion 196 GDP
$27 Trillion 179 GDP
2008 version of the National Health Expenditures (NHE) released in January 2010
Per Capita Total Current Health Care Expenditures United States and Selected Countries 2010
Click to edit Master subtitle style
Source Organization for Economic Co-operation and Development OECD Health Data 2012
Focus on the Elderly Healthcare Costs by Age
Click to edit Master subtitle style
Source Fischbeck Paul ldquoUS-Europe Comparisons of Health Risk for Specific Gender-Age Groupsrdquo Carnegie Mellon University September 2009
US is spending much more for older ages
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Federal Changes
Click to edit Master subtitle style
July 2013 Large employer (50+) coverage mandate delayed until 2015
November 2013 Feds give states option to let individual keep non-ACA compliant plans an extra year CA does not adopt Federal changes
March 2014 Feds give states option to let small employers keep non-ACA plans until 2017 CA action pending
2014 Pending Legislation and November
Elections
Click to edit Master subtitle style Small Group Extension bull Should the Legislature change CA law to allow SG policies that do not conform with
ACA to continue through 2016
Transparency bullHow much information should businesses and their employees have regarding
provider costs
Rate Regulation Initiative bullQualified for November 2014 ballot bull Should Insurance Commissioner have ability to set rates in IND and SG markets
including Covered CA
Governorrsquos Race and Legislative Battles bullWill GOP mount serious challenge to Governor Brown bullWill Democrats maintain legislative supermajorities in both houses of Legislature
Market Dynamics
Click to edit Master subtitle style
bull Regulatory Changes
bull Business Fundamental Shifts
bull Increased Competition
bull Delivery System Evolution
bull Affordability Cost Trends
Cumulative Premium Increases
Compared to Inflation
Click to edit Master subtitle style Family Coverage California 2002-2012
California Premiums vs Inflation
Since 2002 health insurance premiums in California have increased by 1697 more than five times the 315 increase in the statersquos overall inflation rate
Source California Health Care Foundation (CHCFNORC California Employer Health Benefits Survey 2007-2012 CHCFHSC California Employer Health Benefits Survey 2005-2006 CHCFNORC Health Benefits Survey 2004 KaiserHRET California Health Benefits Survey 2002-2003 California Division of Labor Statistics and Research Consumer Price Index California Average Inflation (April to April) 2002-2011
Projected National Health Expenditures In Billions and as Percent of GDP
Click to edit Master subtitle style
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
$4000
$4500
$5000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Bill
ion
s
GD
P
$47 Trillion 196 GDP
$27 Trillion 179 GDP
2008 version of the National Health Expenditures (NHE) released in January 2010
Per Capita Total Current Health Care Expenditures United States and Selected Countries 2010
Click to edit Master subtitle style
Source Organization for Economic Co-operation and Development OECD Health Data 2012
Focus on the Elderly Healthcare Costs by Age
Click to edit Master subtitle style
Source Fischbeck Paul ldquoUS-Europe Comparisons of Health Risk for Specific Gender-Age Groupsrdquo Carnegie Mellon University September 2009
US is spending much more for older ages
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
2014 Pending Legislation and November
Elections
Click to edit Master subtitle style Small Group Extension bull Should the Legislature change CA law to allow SG policies that do not conform with
ACA to continue through 2016
Transparency bullHow much information should businesses and their employees have regarding
provider costs
Rate Regulation Initiative bullQualified for November 2014 ballot bull Should Insurance Commissioner have ability to set rates in IND and SG markets
including Covered CA
Governorrsquos Race and Legislative Battles bullWill GOP mount serious challenge to Governor Brown bullWill Democrats maintain legislative supermajorities in both houses of Legislature
Market Dynamics
Click to edit Master subtitle style
bull Regulatory Changes
bull Business Fundamental Shifts
bull Increased Competition
bull Delivery System Evolution
bull Affordability Cost Trends
Cumulative Premium Increases
Compared to Inflation
Click to edit Master subtitle style Family Coverage California 2002-2012
California Premiums vs Inflation
Since 2002 health insurance premiums in California have increased by 1697 more than five times the 315 increase in the statersquos overall inflation rate
Source California Health Care Foundation (CHCFNORC California Employer Health Benefits Survey 2007-2012 CHCFHSC California Employer Health Benefits Survey 2005-2006 CHCFNORC Health Benefits Survey 2004 KaiserHRET California Health Benefits Survey 2002-2003 California Division of Labor Statistics and Research Consumer Price Index California Average Inflation (April to April) 2002-2011
Projected National Health Expenditures In Billions and as Percent of GDP
Click to edit Master subtitle style
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
$4000
$4500
$5000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Bill
ion
s
GD
P
$47 Trillion 196 GDP
$27 Trillion 179 GDP
2008 version of the National Health Expenditures (NHE) released in January 2010
Per Capita Total Current Health Care Expenditures United States and Selected Countries 2010
Click to edit Master subtitle style
Source Organization for Economic Co-operation and Development OECD Health Data 2012
Focus on the Elderly Healthcare Costs by Age
Click to edit Master subtitle style
Source Fischbeck Paul ldquoUS-Europe Comparisons of Health Risk for Specific Gender-Age Groupsrdquo Carnegie Mellon University September 2009
US is spending much more for older ages
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Market Dynamics
Click to edit Master subtitle style
bull Regulatory Changes
bull Business Fundamental Shifts
bull Increased Competition
bull Delivery System Evolution
bull Affordability Cost Trends
Cumulative Premium Increases
Compared to Inflation
Click to edit Master subtitle style Family Coverage California 2002-2012
California Premiums vs Inflation
Since 2002 health insurance premiums in California have increased by 1697 more than five times the 315 increase in the statersquos overall inflation rate
Source California Health Care Foundation (CHCFNORC California Employer Health Benefits Survey 2007-2012 CHCFHSC California Employer Health Benefits Survey 2005-2006 CHCFNORC Health Benefits Survey 2004 KaiserHRET California Health Benefits Survey 2002-2003 California Division of Labor Statistics and Research Consumer Price Index California Average Inflation (April to April) 2002-2011
Projected National Health Expenditures In Billions and as Percent of GDP
Click to edit Master subtitle style
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
$4000
$4500
$5000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Bill
ion
s
GD
P
$47 Trillion 196 GDP
$27 Trillion 179 GDP
2008 version of the National Health Expenditures (NHE) released in January 2010
Per Capita Total Current Health Care Expenditures United States and Selected Countries 2010
Click to edit Master subtitle style
Source Organization for Economic Co-operation and Development OECD Health Data 2012
Focus on the Elderly Healthcare Costs by Age
Click to edit Master subtitle style
Source Fischbeck Paul ldquoUS-Europe Comparisons of Health Risk for Specific Gender-Age Groupsrdquo Carnegie Mellon University September 2009
US is spending much more for older ages
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Cumulative Premium Increases
Compared to Inflation
Click to edit Master subtitle style Family Coverage California 2002-2012
California Premiums vs Inflation
Since 2002 health insurance premiums in California have increased by 1697 more than five times the 315 increase in the statersquos overall inflation rate
Source California Health Care Foundation (CHCFNORC California Employer Health Benefits Survey 2007-2012 CHCFHSC California Employer Health Benefits Survey 2005-2006 CHCFNORC Health Benefits Survey 2004 KaiserHRET California Health Benefits Survey 2002-2003 California Division of Labor Statistics and Research Consumer Price Index California Average Inflation (April to April) 2002-2011
Projected National Health Expenditures In Billions and as Percent of GDP
Click to edit Master subtitle style
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
$4000
$4500
$5000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Bill
ion
s
GD
P
$47 Trillion 196 GDP
$27 Trillion 179 GDP
2008 version of the National Health Expenditures (NHE) released in January 2010
Per Capita Total Current Health Care Expenditures United States and Selected Countries 2010
Click to edit Master subtitle style
Source Organization for Economic Co-operation and Development OECD Health Data 2012
Focus on the Elderly Healthcare Costs by Age
Click to edit Master subtitle style
Source Fischbeck Paul ldquoUS-Europe Comparisons of Health Risk for Specific Gender-Age Groupsrdquo Carnegie Mellon University September 2009
US is spending much more for older ages
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Projected National Health Expenditures In Billions and as Percent of GDP
Click to edit Master subtitle style
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
$4000
$4500
$5000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Bill
ion
s
GD
P
$47 Trillion 196 GDP
$27 Trillion 179 GDP
2008 version of the National Health Expenditures (NHE) released in January 2010
Per Capita Total Current Health Care Expenditures United States and Selected Countries 2010
Click to edit Master subtitle style
Source Organization for Economic Co-operation and Development OECD Health Data 2012
Focus on the Elderly Healthcare Costs by Age
Click to edit Master subtitle style
Source Fischbeck Paul ldquoUS-Europe Comparisons of Health Risk for Specific Gender-Age Groupsrdquo Carnegie Mellon University September 2009
US is spending much more for older ages
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Per Capita Total Current Health Care Expenditures United States and Selected Countries 2010
Click to edit Master subtitle style
Source Organization for Economic Co-operation and Development OECD Health Data 2012
Focus on the Elderly Healthcare Costs by Age
Click to edit Master subtitle style
Source Fischbeck Paul ldquoUS-Europe Comparisons of Health Risk for Specific Gender-Age Groupsrdquo Carnegie Mellon University September 2009
US is spending much more for older ages
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Focus on the Elderly Healthcare Costs by Age
Click to edit Master subtitle style
Source Fischbeck Paul ldquoUS-Europe Comparisons of Health Risk for Specific Gender-Age Groupsrdquo Carnegie Mellon University September 2009
US is spending much more for older ages
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Developed Countries
USA Report Card
Click to edit Master subtitle style
The Fattest Country 1
Cigarette Consumption 5
Carbon Footprint 1
Drug Use 6
Alcohol Consumption 11
Hospital Cost Per Day 1
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Only In America
Click to edit Master subtitle style
Chronic Disease
Failure to address chronic diseases adequately costs the US economy more than $1 trillion annually
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Example of Hospital Cost Variance How much does a coronary artery bypass cost
Click to edit Master subtitle style
$-
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$110000
$120000
$130000
$140000
$150000
A B C D E F G H I J K L M N O
Hospital
Ave
rage
Co
stA
vera
ge C
ost
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Rapid Growth of Prices for Private Insurers in California
Click to edit Master subtitle style Possible Causes
1 Market power of some health systems
2 Slow growth in reimbursements from Medi-Cal
3 Moderately growing Medicare payments
4 Uncompensated care for uninsured patients
Statewide Absolute Growth in Net Inpatient Revenue per Day per Payer Category California
Hospitals 2000 - 2009
Source State of California Office of Health Planning and Development (OSHPD) Calculations by AHIP Center for Policy and Research
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Click to edit Master subtitle style
So What Can
Employers Do
About It
Next Stepshellip
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Employer Solutions
Click to edit Master subtitle style Increasing co-pays co-insurance
Introducing CDHP and defined contribution plans
Embracing tiered and narrow networks
Redirecting care to high quality lower cost facilities
Investing in health amp wellness programs education and incentives
Introducing reference based pricingbenefits
Leveraging centers of excellence for critical high cost procedures (transplants gastric bypass etc)
Providing employees tools and information to make effective healthcare decisions
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management
Employer Solutions (Continued)
Click to edit Master subtitle style Engaging in accountable care
Leveraging total population management
Evaluating PublicPrivate exchanges
Assessing selflevel funded and ldquopart timerrdquo product options
Embracing mobile applications and tools as well as virtual medicine
Educating employees and engaging them in their own personal health management