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 2001. 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 HealthInsurance

Health Care Economics

4

Health Care Economics

Insurance National Health Care Expenditures Cost Control Methods

ProvidersEmployersConsumers

5

Insurance

History Basic Insurance

Hospital benefitsSurgical benefitsMedical benefitsMaternity careSkilled nursing

6

Insurance

Major medical coverage Contract provisions Portability Types of plans

Fee for serviceFixed dollarHMOs, PPOsMedicare

7

Estimated Per Capita Health Expenditures

8

Insurance

Newsletter http://www.healthinsuranceinfo.net/newsyoucanuse/06.html

Consumer Guide for CA http://www.healthinsuranceinfo.net/ca00.html

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 ExpendituresReminder: $2.6 trillion in 2010Estimate 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 personUp $____ from 2001Grew ___% 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 CorporationConsider first

• Health plans• Sick leave costs• Workers comp• Disability costs

Quick cost reduction programs

19

Cost Control Measures

Employers

Summex CorporationQuick 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 CorporationLong-term cost reduction programs

• Nutrition• Exercise• Stress

21

Cost Control Measures

Employers – Where to Start

Level 1: Quality of LifeCost

• $10 to $50 per employee per year

Wellness programsFun, enjoyable, employee interactionBasic

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

ResourcesAmerican College of Sports Medicine

• Worksite Health Promotion• www.acsm.org

Wellness Councils of America• www.welcoa.org

25

Cost Control Measures

Consumers

Get MD before needing careAvoid emergency room care

Practice medical self-careRegular physicals by ageNutrition, physical activityBrush & flossSafety – seatbelts, smoke alarms

26

Summary

Insurance National Health Care Expenditures Cost Control Methods

ProvidersEmployersConsumers