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Congressional Budget Office Presentation to the National Health Policy Conference The Outlook for Health Care Spending February 4, 2008.

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Presentation on theme: "Congressional Budget Office Presentation to the National Health Policy Conference The Outlook for Health Care Spending February 4, 2008."— Presentation transcript:

1 Congressional Budget Office Presentation to the National Health Policy Conference The Outlook for Health Care Spending February 4, 2008

2 Excess Cost Growth in Medicare, Medicaid, and All Other Spending on Health Care MedicareMedicaidAll OtherTotal 1975 to 19902.9 2.42.6 1990 to 20051.81.31.41.5 1975 to 20052.42.22.02.1 Percentage Points

3 Projected Spending on Health Care as a Percentage of Gross Domestic Product Percent

4 Federal Spending Under CBO’s Alternative Fiscal Scenario Percentage of Gross Domestic Product

5 Federal Debt Held by the Public as a Percentage of Gross Domestic Product Under CBO’s Long-Term Budget Scenarios

6 Federal Fiscal Imbalance Under CBO’s Long-Term Budget Scenarios Projection PeriodRevenuesOutlaysFiscal Gap Extended-Baseline Scenario 25 Years (2008–2032)20.219.5-0.7 50 Years (2008–2057)21.321.90.6 75 Years (2008–2082)22.123.81.7 Alternative Fiscal Scenario 25 Years (2008–2032)18.621.42.8 50 Years (2008–2057)18.824.15.2 75 Years (2008–2082)19.226.16.9 Percentage of Gross Domestic Product

7 Contribution of Aging to the Fiscal Gap Under CBO’s Alternative Fiscal Scenario Percentage of Gross Domestic Product

8 Medicare Spending per Capita in the United States, by Hospital Referral Region, 2003 Source: www.dartmouthatlas.org. $7,200 to11,600 (74) 6,800 to <7,200 (45) 6,300 to <6,800 (55) 5,800 to <6,300 (60) 4,500 to <5,800 (72) Not Populated

9 The Relationship Between Quality and Medicare Spending, by State, 2004 Composite Measure of Quality of Care Source: Data from AHRQ and CMS.

10 What Additional Services Are Provided in High-Spending Regions? Source: Elliot Fisher, Dartmouth Medical School.

11 Variations Among Academic Medical Centers UCLA Medical Center Massachusetts General Hospital Mayo Clinic (St. Mary’s Hospital) Biologically Targeted Interventions: Acute Inpatient Care CMS composite quality score81.585.990.4 Care Delivery―and Spending―Among Medicare Patients in Last Six Months of Life Total Medicare spending50,52240,18126,330 Hospital days19.217.712.9 Physician visits52.142.223.9 Ratio, medical specialist / primary care2.91.01.1 Use of Biologically Targeted Interventions and Care-Delivery Methods Among Three of U.S. News and World Report’s “Honor Roll” AMCs Source: Elliot Fisher, Dartmouth Medical School.

12 Medicare Advantage Enrollment and Spending is Growing Rapidly 2003 Actual 2007 Estimate 2017 Projection Average Enrollment (in millions) 4.68.114.3 As share of HI Enrollment (percent) 111926 Spending (in billions of dollars) 3372192

13 Source: CBO Note: Coordinated care plans includes HMOs, PPOs, and POS plans. Other group includes 1876 cost plans, healthcare pre-payment plans, and demonstrations. Growth in Medicare Advantage and Other Group Plans, by Plan Type in thousands of enrollees Change: Jan. 2008 - Dec 2005Jan 2007Jan 2008Dec 2005Jan 2007 Coordinated care plans 5,158 6,360 7,057 1,899 697 Private fee for service 209 1,345 2,062 1,853 717 Subtotal, MA 5,367 7,705 9,119 3,752 1,414 Other Group 755 586 449 -307 -138 Total, Medicare Group 6,122 8,291 9,567 3,446 1,276

14 Employer Plans are Driving PFFS Growth  "PFFS plans also are attractive to employers and unions throughout the country, because they can readily provide coverage nationwide, including coverage that is adaptable to seasonal changes in residence. Roughly 15 percent of PFFS enrollment in 2007 derives from employer group and union plans, compared to just 5 percent in 2006. One of the largest additions to PFFS employer group enrollment for 2007 was the Michigan Public School Employees Retirement System, which has close to 100,000 retirees." –Abby L. Block, (Director, Center for Beneficiary Choices, CMS), Testimony on Medicare Advantage Private Fee-For-Service Plans before the W&M Health Subcomm, May 22, 2007  “Dear Provider: Your patient is enrolled in DESERET SECURE, our new Medicare Advantage Private Fee-for-Service plan. Beginning January 1, 2007, Deseret Secure (and Deseret Secure PLUS, which includes a higher prescription drug benefit) replaces all our existing plans for our members on Medicare, including our HCPP and Medicare supplement products." –Letter from Deseret Mutual Benefit Administrators (established in 1970 to serve the employee insurance and retirement needs of employees of the Church of Latter-day Saints).

15 CBO Health Activities  New Hires and Expanded Staffing –New deputy assistant director (Keith Fontenot) in the Budget Analysis Division –Health staff agency wide increase from 30 FTEs to 40 FTEs (Plus 6 new hires) –FY 2009 Plans  Reports and Analysis in 2008 –Critical Topics in Health Reform –Health Options

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