1 Health Highlights: Jan. 26, 2004 Bush Resuscitates Plan to Cap Medical Malpractice Awards President Bush says huge medical malpractice awards are inflating health- care costs for everyone, and he's revived a plan to impose limits on how much juries can award victims, the Associated Press reports. "We can help control rising health-care costs by cutting down on frivolous lawsuits against doctors and hospitals," Bush said in his weekly radio address over the weekend. The president made virtually the same appeal in 2003, but his plan was stalled by Senate Democrats, who argued the measure would help insurance companies at the expense of injured patients. The legislation that Congress failed to pass last year would have limited pain and suffering awards to $250,000 and punitive damages to the same amount or twice a person's actual financial loss. It would have also limited lawyer fees and curtailed a patient's ability to file suit after a certain amount of time had passed, the AP reports.

2 Health-Care Spending Soars Spurred by hospital and prescription drug costs, health- care spending rose 9.3% in 2002, to about $5,440 for every American. Spending on health care outpaced spending in other areas of the U.S. economy for the fourth consecutive year. Leading the surge was spending for prescription drugs, which was15.3% higher than in Hospital spending rose 9.5%, because of higher wages, a higher use of hospital services, and hospitals' ability to negotiate prices with health plans. "This continued acceleration injects pressure into the health care system, and everyone -- from businesses, to government, to consumers -- is affected,"

3 Consumer Health Insurance Health Care Economics

4 Insurance National Health Care Expenditures Cost Control Methods Providers Employers Consumers

5 Insurance History Basic Insurance Hospital benefits Surgical benefits Medical benefits Maternity care Skilled nursing

6 Insurance Major medical coverage Contract provisions Portability Types of plans Fee for service Fixed dollar HMOs, PPOs Medicare

7 Estimated Per Capita Health Expenditures

8 Insurance Newsletter Consumer Guide for CA

9 Costs of Chronic Disease Chronic diseases people have account medical care costs for more than 75% of the nation’s $1.4 trillion medical care costs Total Health Care Expenditures Reminder: $2.6 trillion in 2010 Estimate for 2013: $3.7 trillion Chronic diseases account for 65% of the years of potential life lost before age 65

10 National Health Expenditures in 2002 $1,553,000,000,000 __% increase from 2001 $5,440 per person Up $____ from 2001 Grew ___% faster than economy

11 National Health Expenditures in 2002 Where It Came From $549.6 billion $212.5 billion $249 billion $267 billion

12 National Health Expenditures in 2002 Where the Money Went $586.5 billion $501.5 billion $139.3 billion $162.4 billion

13 Source of Funds for National Health Expenditures

14 Cost Control Measures Hospital mergers Purchasing alliances Integrated managed care systems Networks

15 Cost Control Measures Providers Hospital mergers Purchasing alliances Integrated managed care systems Networks

16 Cost Control Measures Employers Reduce benefits Switch to managed care Cut retiree benefits Require employees & retirees pay more Employee wellness programs

17 Cost Control Measures Employers Chevron Oil Field Research Corporation Program type: “basic” and “traditional” Biosense Program type: “Health and Productivity Management” Goals and Objectives: Healthy People 2005 Major health issues determined with health risk appraisals Data driven programs Collaboration with Employee Assistance Program (EAP), Nurse, Wellness, Work Hardening, Safety

18 Cost Control Measures Employers Summex Corporation Consider first Health plans Sick leave costs Workers comp Disability costs Quick cost reduction programs

19 Cost Control Measures Employers Summex Corporation Quick cost reduction programs Prenatal care Medical self-care Tobacco cessation Stress reduction Injury prevention Long-term cost reduction programs

20 Cost Control Measures Employers Summex Corporation Long-term cost reduction programs Nutrition Exercise Stress

21 Cost Control Measures Employers – Where to Start Level 1: Quality of Life Cost $10 to $50 per employee per year Wellness programs Fun, enjoyable, employee interaction Basic

22 Cost Control Measures Employers – Where to Start Level 2: Traditional Cost $50 to $100 per year per employee About 1.5% of cost of each employees health insurance paid by company Save $3 for every $1 spent Health Fairs Lunch time lectures Events Screenings

23 Cost Control Measures Employers – Where to Start Level 3: Health & Productivity Management Cost $100 to $300 per year per employee About 4% of cost of each employees health insurance paid by company Save $6 for every $1 spent As high as $15 for every dollar Long-term on-going programs Targeted programs (example) Inactivity Cholesterol Blood pressure Smoking

24 Cost Control Measures Employers Resources American College of Sports Medicine Worksite Health Promotion Wellness Councils of America

25 Cost Control Measures Consumers Get MD before needing care Avoid emergency room care Practice medical self-care Regular physicals by age Nutrition, physical activity Brush & floss Safety – seatbelts, smoke alarms

26 Summary Insurance National Health Care Expenditures Cost Control Methods Providers Employers Consumers