Stakeholder Presentation---Payers MGMT E-5520 Jenny Ou October 21, 2010

patient Providers & suppliers: Hospital Physician Pharmaceutical company: prescription receive treatment Insurance Pay copay, coinsurance Pay a large portion of the medical bill enroll in Payers: : the person by whom a bill or note has been or should be paid. source: Merriam-Webster dictionary Definition

How does insurance work? Private HMO, POS,PPO Indemnity individuals employer & employees government funding premiums FICA taxes Public Medicare,medicaid,SCHIP premiums insurance plans patient profit nonprofit

Harvard Pilgrim Our mission is to improve the health of the people we serve and the health of society. United Healthcare Our mission is to help people live healthier lives. Value: Generate shareholder value by growing organically and adding strategic assets that strengthen our position as a leader in the marketplace. Subgroups of private insurance plans For-profit VS nonprofit

Subgroups of private insurance plans HMO, POS, PPO, indemnity Source:

Subgroups of public health insurance Medicare: for people over 65 or some disabled people Medicaid: for low income people SCHIP: State children health insurance plan cover uninsured children in families with incomes that are modest but too high to qualify for Medicaid.

The “ sorry” state of health insurance in the US High premiums and out-of-pocket payments make insurance unaffordable Claims are declined due to pre-existing conditions Millions people go uninsured.

Average Family Premium as a Percentage of Median Family Income, 1999 – 2020 Source: K. Davis, Why Health Reform Must Counter the Rising Costs of Health Insurance Premiums, The Commonwealth Fund, August Projected

Growth in the Uninsured Data: Analysis of the U.S. Census Bureau, Current Population Survey Annual Social and Economic Supplement (CPS ASEC), 2001–2008; projections to 2020 based on estimates by The Lewin Group. Uninsured (15%) Employer (55%) Medicaid (10%) Medicare (13%) Total population Military (1%) Individual (5%) Projected estimates Uninsured Projected to Rise to 61 million by 2020 Millions uninsured 45.7 Million Uninsured, 2007

The “ sorry” state of health insurance in the US High premiums and out-of-pocket payments make insurance unaffordable Claims are declined due to pre-existing conditions Millions people go uninsured.

Patients & Insurance High insurance premiums are eating up people’s income Due to uninsured, paitients do not see a physician when needed have medical bill problem do not fill prescription skip recommended medical test unable to pay for basic necessaries

Insured All Year Uninsured Anytime During Year Percent of adults reporting:Total No underinsured indicators Underinsured Insured now, time uninsured in past year Uninsured now Unable to pay for basic necessities (food, heat, or rent) because of medical bills 29%16%29%42%40% Used up all of savings Took out a mortgage against your home or took out a loan Took on credit card debt Insured at time care was provided More Than One-Quarter of Adults Under Age 65 With Medical Bill Burdens and Debt Were Unable to Pay for Basic Necessities Source: M. M. Doty, S. R. Collins, S. D. Rustgi, and J. L. Kriss, Seeing Red: The Growing Burden of Medical Bills and Debt Faced by U.S. Families, The Commonwealth Fund, August Percent of adults ages 19–64 with medical bill problems or accrued medical debt

Factors contributing to uninsured… Income ( poverty level ) Employment status Age Geography Race/Ethnicity

Source: The uninsured: a Primer.

The Majority of U.S. Workers Get Their Health Insurance Through Employers, 2007 Own employer coverage (56%) Other employer coverage (16%) Public programs (5%) *Includes those with individual insurance and “other” responses. Source: M. M. Doty, S.R. Collins, S.D. Rustgi, and J.L. Nicholson, Out of Options: Why So Many Workers in Small Businesses Lack Affordable Health Insurance and How Health Care Reform Can Help: Findings from the Commonwealth Fund Biennial Health Insurance Survey, 2007, The Commonwealth Fund, September 9, Data: The Commonwealth Fund Biennial Health Insurance Survey (2007). Uninsured (14%) Other coverage* (9%) Million Full- and Part-Time Workers Ages 19–64

2008 uninsured by age Source: The uninsured: a Primer.

Health insurance & Employers Employers are less likely to purchase health insurance for their employees, esp. in small firms Employers can encourage employees a healthy lifestyle to reduce medical cost

Source: U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, , Tables 1.1.5, 2.1, 6.11B, 6.11C, & 6.11D.

Source: U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, , Tables 6.11B, 6.11C, & 6.11D. Note: Amounts shown are averages of annual figures for each time period.

Deductibles Rise Sharply, Especially in Small Firms, 2000–2008 PPO = preferred provider organization. PPOs covered 57 percent of workers enrolled in an employer-sponsored health insurance plan in Source: The Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits, 2000 and 2007 Annual Surveys. Mean deductible for single coverage (PPO, in-network)

Employer-Sponsored Insurance Coverage Declined Among Small Firm Employees, 2003 – 2007 *Includes both part-time and full-time workers. Note: Subgroups may not sum to totals due to rounding. Source: M. M. Doty, S.R. Collins, S.D. Rustgi, and J.L. Nicholson, Out of Options: Why So Many Workers in Small Businesses Lack Affordable Health Insurance and How Health Care Reform Can Help: Findings from the Commonwealth Fund Biennial Health Insurance Survey, 2007, The Commonwealth Fund, September 9, Data: The Commonwealth Fund Biennial Health Insurance Survey (2003 and 2007). Small Firms (fewer than 50 employees) Percent of working adults ages 19–64* Large Firms (50 or more employees)

Health Insurance & Providers/suppliers Providers discuss treatment plans based on patients’ insurance plans General insurance coverage encourages providers to overuse of high-cost technology and increase fees Average physician spends nearly three weeks a year interacting with plans, at an estimated annual cost to practices of $31 billion. Generic drugs should be encouraged for treatment to reduce health care cost

Insurance & Government More regulations: ex. adverse selection; enacted laws to reduce medical malpractice judgments to reduce premium burdens on providers and lower overall costs Monitor tax-Financed health care expenditures Healthcare reform Sources: Taylor, H. (2002). "How And Why The Health Insurance System Will Collapse." Health Aff 21(6):

Flow Of Health Care Financing Funds Among Individuals/Employers, Providers, Government, And Private Insurers

Tax-Financed Expenditures As A Percentage Of Total Health Expenditures, Selected Years 1965–1999

Health Reform hits main street. animation.aspx Current health insurance state in the US UE90vCLwM0&vq=small#t=284 UE90vCLwM0&vq=small#t=284 Debate about private/public health insurance fGeMNnBsM&vq=medium Why is health care so expensive C2DJWU41s&vq=medium#t=199