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Our health system research undertaken with generous support from

Healthcare Costs in NH Presentation to The COMMISSION TO INVESTIGATE COST DRIVERS IN PROVIDING HEALTH CARE (HB 517, Chapter 297:1, Laws of 2007). Our health system research undertaken with generous support from. Steve Norton Executive Director September 12, 2007.

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Our health system research undertaken with generous support from

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  1. Healthcare Costsin NH Presentation toThe COMMISSION TO INVESTIGATE COST DRIVERS IN PROVIDING HEALTH CARE (HB 517, Chapter 297:1, Laws of 2007) Our health system research undertaken with generous support from Steve Norton Executive DirectorSeptember 12, 2007

  2. All of our reportsare available on the web:www.nhpolicy.org New Hampshire Center for Public Policy Studies Board of Directors Martin L. Gross, ChairJohn B. AndrewsJohn D. CrosierGary Matteson Todd I. Selig Donna SytekGeorgie A. ThomasJames E. Tibbetts Brian WalshKimon S. Zachos Executive DirectorStephen Norton Executive Director, Emeritus Doug Hall “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

  3. Topics • Trends in the Cost of Health Care • Health Care Expenditure Drivers • Cost Shifting • The Insurance Market • Health Care and the Economy

  4. Trends in the Cost of Health Care

  5. The Healthcare Finance System

  6. [1] MEPS did not begin to collect premium information for 2-person coverage nationally until 2001 and for New Hampshire until 2002. Sources: Agency for Healthcare Research and Quality, Center for Financing, Access and Cost Trends. 2004 Medical Expenditure Panel Survey (MEPS) -Insurance Component.

  7. Sources: Agency for Healthcare Research and Quality, Center for Financing, Access and Cost Trends. 2004 Medical Expenditure Panel Survey (MEPS) -Insurance Component.

  8. Per Capita Income and Premium Costs

  9. Are we getting value? • The short answer? Not certain. • Some studies suggest that investment in health care have yielded significant benefits (in terms of life years). • Others are less certain: • “Regions experiencing the largest spending gains were not those realizing the greatest improvements in survival. Factors yielding the greatest benefits to health were not the factors that drove up costs.” Health Affairs 25 (2006) • Hospitals and physicians are competing for profitable services, making costly investments in the latest medical technologies. These market forces are largely going unchallenged by insurers and regulators (Center for Health Systems Change, Issue Brief No. 97) • Elliot Fisher’s Work suggest some services are ‘unnecessary.’

  10. Outpatient Knee Arthroscopy Procedures: Average Paid per ProcedureBy HSA: NH CHIS 2005 Incurred Claims - private payer claims ME average rate = $4,614 NH average rate = $4,064

  11. Health Care Expenditure Drivers

  12. Most costs are for those over 40.

  13. Age Distribution: 1970

  14. Age Distribution: 1995

  15. Age Distribution: 2020?

  16. Why are people receiving services?

  17. Cost-Shifting

  18. Demographics and Cost Shifting?

  19. Cost Shifting A Part of Cost Growth • Hospitals’ financial stability, as measured by operating margins, has increased. • Small rural hospitals have largely recovered (critical access designation) • Cost shift has increased significantly, driven by both underpayment of public payers and increases in operating margins. • Cost shift contributes to growth in health care costs borne by businesses and individuals through premium payments. • This phenomenon not limited to hospitals, but data is not available for other providers.

  20. The Insurance Market

  21. Market Share (Premiums) 2003-2006

  22. Cost Summary • Costs increases are about average; however, businesses and individuals face an increasing burden. • Sectors contributing to growth: hospital (#1), physician (#2) and prescription drug (#3). • Technology clearly plays an important role. • Question for New Hampshire? • Average per-capita health costs remain lower than the national average. • Premiums remain higher than the national average …. Why?

  23. Health Care and the Economy

  24. ~ $700 Million

  25. 1.3% Per Year

  26. 3.0% Per Year

  27. If jobs grew at the same rate as population, the lines would overlap at 1.0

  28. Healthcare and the Economy • Healthcare is clearly an important contributor to the economic system in New Hampshire. • This does not ‘eliminate’ the need to bring focused attention to growth in health care • Opportunity Cost (are these really the jobs we want?) • Question of value still remains primary

  29. This presentation is available for downloading on our website: www.nhpolicy.org

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