Managed Care & Health Care Reform Cost of Health Care $2.4 trillion in 2008 ($7.900 per person) 17% of GDP US 10.9% Switzerland 10.7% Germany 9.7% Canada 9.5% France

Cost of Health Care (cont.)  4%-5% annual increase in health care spending in US  Employer health insurance increased by 5% Two times rate of inflation  Annual premium for family of 4 = $12,700  Health care spending 4.3 times that spent on national defense

Division of Health Care Costs Hospital care 34% Physician care 20% Together make up 54% of health care costs Home health care3% Public health3% Research3%

Health Insurance Costs  Employer-based health insurance increased by 5% (2008)  Employer health insurance plan for family of 4 = $12,700 (2008)  Workers contributed $3,400 or 12% more in 2008  Average employee contribution increased more than 120% since 2000

Health Insurance Costs (cont.)  Average out-of-pocket costs for deductibles, co-payments for medications, co-insurance for physician and hospital visits rose 115% since 2000  Health insurance expenses fastest growing cost component for employers  Health care costs have increased 10-12% annually; inflation increases 2-3% annually

Impact of Rising Health Care Costs  Increase in bankruptcy filings  Average out-of-pocket medical debt was $12,000  68% of those filing for bankruptcy had health insurance  50% of all bankruptcy a result of medical expenses  Every 30 seconds in US someone files for bankruptcy after serious health problem

Impact of Rising Health Care Costs (cont.)  1.5 million families lose homes to foreclosure every year due to unaffordable medical costs  US has $480 billion in excess spending compared with Western European nations with universal health insurance coverage due to excess administrative costs and poorer quality of care  US spends 6 times more per capita on administration of health care system than Western European nations

The Uninsured 48 million in 2009 projected to increase to 61.1 million in 2020

Characteristics of the Uninsured Born in America79.0% Not a citizen21.0% Blacks 15.0% Hispanic30.0% White48.0% Other7.0%

Uninsured and Work Status Full time46% Part time28% Unemployed26%

Household Income for Uninsured Under $50,000 68% $50,000 − $74,99916 % $74,000 and more16%

Education of Uninsured No high school28.0% High school graduate18.8% Some college, no degree15.0% Associate degree12.1% Bachelor’s degree & higher 8.4%

Employment Private sector60.2% Self-employed12.7% Public sector 5.5% Unemployed21.6%

Uninsured in NC Uninsured increased by 22.5% from 2007−2009 Largest percentage increase in US Estimated number of uninsured (1/09) 1.75 to 1.80 million This is 21.2% to 21.7% of all non-elderly North Carolinians

Five Largest Percent Increase in Uninusred StatePercent Growth in Uninsured ( ) North Carolina22.5 Rhode Island22.3 Indiana22.0 Nevada21.0 Michigan20.2 United States13.7

Health of Uninsured No use of preventive health care Seek treatment when illness more advanced Deficits in cancer screening, cardiovascular risk reduction, and diabetes care Receive inadequate care Less likely to see a physician when needed Less likely to receive routine checkup Higher morbidity and mortality rates

Response of US Government to Health Care Crisis Retrospective payment system Reimbursement per unit of service Prospective payment system Reimbursement based on average value of service

Managed Care Plans Characteristics Prepaid health insurance plans Health care providers accept lower payments Gatekeepers to health care services

Positive Influence of Managed Care Plans Expanded role for nurses Increased emphasis on health promotion and disease prevention Possible control of health care spending

Negative Influences of Managed Care Plans Built incentive to limit referrals to specialists Physicians leaving medicine Most are for-profit organizations Limited ability to sue managed care organizations

Employment Retirement Income Security Act (ERISA) 1974 Protects employer-sponsored pensions from litigation (HMO’S) Racketeering Influence and Corrupt Organizations Act

Other Health Care Reform Efforts Health Insurance Accountability Act (1997) Ensures those with medical conditions can change jobs Guarantees workers at small companies will not be rejected for coverage Provides benefits for self-employed COBRA Prescription Drug Reform (Part D of Medicare)

Consolidated Omnibus Budget Reconciliation Act (COBRA) 1986 Provides insurance when unemployed EventBeneficiary Coverage Termination orEmployee,18 months Reduced hrs.spouse, child Divorce orChild36 months spouse separation

Health Care Reform Options Maintain current Managed Care Plan option Create National Health Insurance Plan (one-payer system or Universal Health Care) Managed Competition

HR3590 Patient Protection and Affordable Act No changes to current health plan if satisfied If no insurance, will have affordable choices Three main objectives of the reform Adopt state-of-the-art health information technology systems Ensure patients receive and providers deliver best care including prevention and chronic disease management Reform health care market to increase competition

HR3590 Patient Protection and Affordable Act  Health insurance  Expansion of coverage  Health insurance market reforms  Consumer choice through health benefit exchanges  Shared responsibility for health care (individuals)  Other provisions Improved access to Medicaid Enhanced support for Children’s Health Insurance Program (CHIP). Improving Medicare for patients and providers Medicare Part D improvements (Prescription drug plan).