Be InformedBe Informed

Information to help you make smart health care Information to help you make smart health care decisions and help keep health care affordabledecisions and help keep health care affordable

8710.804-503

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Health Care Costs Are RisingHealth Care Costs Are Rising

Source: Source: Hewitt Associates, 2002. 2003 figure is estimated Hewitt Associates, 2002. 2003 figure is estimated

15.4%13.7%

10.2%9.4%

7.8%

3.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

1998 1999 2000 2001 2002 2003

National Average Annual Health Care Costs IncreasesNational Average Annual Health Care Costs Increases

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Health Care Costs Are RisingHealth Care Costs Are Rising• Why?Why?

– We’re using more prescription drugs, and the cost of We’re using more prescription drugs, and the cost of new drugs is increasing rapidly new drugs is increasing rapidly

• Prescription drug spending rose 13.8 percent in 2001Prescription drug spending rose 13.8 percent in 2001

– We’re using more hospital services and equipmentWe’re using more hospital services and equipment• Outpatient hospital care spending grew 16.3 percent in 2001 Outpatient hospital care spending grew 16.3 percent in 2001 • Inpatient hospital care jumped 7.1 percent in 2001Inpatient hospital care jumped 7.1 percent in 2001

– Medical technologies and treatments are becoming more Medical technologies and treatments are becoming more advanced… and more expensive advanced… and more expensive

– We’re using more specialty careWe’re using more specialty care• Specialty physician services increased 6.7 percent in 2001Specialty physician services increased 6.7 percent in 2001

– We’re over-using emergency rooms for non-urgent needsWe’re over-using emergency rooms for non-urgent needs

Source: Source: Center for Studying Health System Change, “Tracking Health Care Costs,” 2002Center for Studying Health System Change, “Tracking Health Care Costs,” 2002

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What Can We Do?What Can We Do?

• Rising health care costs mean health insurance rates Rising health care costs mean health insurance rates must rise to pay for the services we use… so wmust rise to pay for the services we use… so we all e all have a role to play to help keep health care affordablehave a role to play to help keep health care affordable

– Learn some basics about how our health plan worksLearn some basics about how our health plan works

– Understand the factors that contribute to rising costsUnderstand the factors that contribute to rising costs

– Make smart choices that keep us healthier and Make smart choices that keep us healthier and help reduce our need for medical services and help reduce our need for medical services and prescription drugs prescription drugs

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How Health Care WorksHow Health Care Works

• Employers negotiate benefit packages with insurance Employers negotiate benefit packages with insurance companies to determine: companies to determine: – Services covered Services covered – CopaymentsCopayments– DeductiblesDeductibles– Monthly premiumsMonthly premiums

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Who Pays for Health Care?Who Pays for Health Care?

• For every $1 paid by an employee, on average, For every $1 paid by an employee, on average, employers pay $5employers pay $5

Source: Source: Blue Cross and Blue Shield Association, “Defined Contribution Reports;” Hewitt Associates, 2002Blue Cross and Blue Shield Association, “Defined Contribution Reports;” Hewitt Associates, 2002

$5,456

$4,800$4,355

$3,980$3,692

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

1999 1999 2000 2001 2002

National Average Annual Health Care Costs National Average Annual Health Care Costs Per EmployeePer Employee

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Where Your Health Care Dollar GoesWhere Your Health Care Dollar Goes

• About 90 percent of every health insurance premium About 90 percent of every health insurance premium dollar goes directly to pay for medical caredollar goes directly to pay for medical care

• The rest pays for services such as: The rest pays for services such as: – Claims processingClaims processing– Customer servicesCustomer services– Provider relationsProvider relations– Member Member – CommunicationsCommunications– Reserves for Reserves for future claims future claims

Source: Source: Centers for Medicare and Medicaid Services, “The Nation’s Health Dollar,” 2002 Centers for Medicare and Medicaid Services, “The Nation’s Health Dollar,” 2002

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What You Can DoWhat You Can Do

• If you are given a choice of health plans, choose the If you are given a choice of health plans, choose the plan that meets your specific health, lifestyle and plan that meets your specific health, lifestyle and financial needs – and carefully weigh the copayments, financial needs – and carefully weigh the copayments, deductibles and premiums deductibles and premiums

• Understand the benefits of your health plan; review the Understand the benefits of your health plan; review the benefit booklet carefully; call your health plan if you benefit booklet carefully; call your health plan if you have any questions about what is coveredhave any questions about what is covered

• Talk with your doctor to understand the true costs and Talk with your doctor to understand the true costs and financial consequences of medical services in order to financial consequences of medical services in order to get the most appropriate care; ask about treatment get the most appropriate care; ask about treatment options and the use of lower-cost generic drugsoptions and the use of lower-cost generic drugs

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How Much Things Actually CostHow Much Things Actually Cost

• Health insurance shields many of us from the full impact of Health insurance shields many of us from the full impact of health care costs – we often only pay a portion out of our own health care costs – we often only pay a portion out of our own pockets for medical servicespockets for medical services

• Few of us are aware of how quickly and dramatically these Few of us are aware of how quickly and dramatically these costs are rising costs are rising

• Most Americans don’t knowMost Americans don’t know the costs associated with the costs associated with common medical servicescommon medical services

• For example:For example:

– The average cost of an MRI The average cost of an MRI is $1,890** is $1,890**

– The average cost of heart The average cost of heart bypass surgery is $57,073** bypass surgery is $57,073**

Source: Source: Ingenix, “Medicode National Fee Analyzer,” 2002 Ingenix, “Medicode National Fee Analyzer,” 2002 *Your cost will depend on your benefit plan.*Your cost will depend on your benefit plan.**National average cost**National average cost

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**

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What You Can DoWhat You Can Do

• TalkTalk with your doctor to understand and explore all with your doctor to understand and explore all treatment options treatment options

• Ask how much things cost to make sure you are getting Ask how much things cost to make sure you are getting the most for your health care dollarthe most for your health care dollar

• Check all medical bills and statements to make sure they Check all medical bills and statements to make sure they are accurate – question any bills or items you don’t are accurate – question any bills or items you don’t understandunderstand

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Prescription DrugsPrescription Drugs

• An average of 10 prescriptions were written for every man, An average of 10 prescriptions were written for every man, woman, child in the U.S. in 2001 costing $155 billionwoman, child in the U.S. in 2001 costing $155 billion

• We’re using more: prescription drug spending rose 14 We’re using more: prescription drug spending rose 14 percent from 2001 to 2002, and is projected to continue to percent from 2001 to 2002, and is projected to continue to grow at high ratesgrow at high rates

• Newer drugs are more expensive: About half of the Newer drugs are more expensive: About half of the $22.5 billion increase in spending on prescription drugs was $22.5 billion increase in spending on prescription drugs was driven by 27 drugs (out of almost 9,500)driven by 27 drugs (out of almost 9,500)

• Drug companies spend more on marketing and advertising Drug companies spend more on marketing and advertising brand name drugs than on research and development: brand name drugs than on research and development: $2.5 billion on direct-to-consumer advertising in 2000$2.5 billion on direct-to-consumer advertising in 2000

Sources: The National Association of Chain Drug Stores, “Industry Facts At A Glance,” 2001; Center for Medicare and Medicaid Services, “National Health Statistics,” June 2002; Institute of Health Care Management, “Prescription Drug Expenditures in 2001,” 2002)

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What You Can DoWhat You Can Do

• Generic drugs represent a big opportunity to help Generic drugs represent a big opportunity to help control rising health care costscontrol rising health care costs

• Ask your doctor or pharmacist if a generic equivalent is Ask your doctor or pharmacist if a generic equivalent is available – generic drugs:available – generic drugs:– Are FDA-Approved and Are FDA-Approved and

use chemically-identical use chemically-identical active ingredients active ingredients

– Are just as effective as Are just as effective as name brands name brands

– Mean your out-of-pocket Mean your out-of-pocket costs are lower costs are lower

Source: Source: The National Association of Chain Drug Stores, “Industry Facts At A Glance,” 2001The National Association of Chain Drug Stores, “Industry Facts At A Glance,” 2001*National Average CostNational Average Cost

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Unnecessary Trips to the E.R.Unnecessary Trips to the E.R.

• Each year 11.5 million visits to hospital emergency rooms Each year 11.5 million visits to hospital emergency rooms are for non-emergency careare for non-emergency care

• When someone in our health plan goes to the E.R. When someone in our health plan goes to the E.R. instead of a doctor’s office for non-emergency care, instead of a doctor’s office for non-emergency care, everyone in our health plan pays for it through higher everyone in our health plan pays for it through higher insurance premiums, copayments and deductibles:insurance premiums, copayments and deductibles:

– National average cost for emergency room visit: $383National average cost for emergency room visit: $383

– National average cost for doctor’s office visit: $60National average cost for doctor’s office visit: $60

Source: Source: New England Journal of Medicine, “The Costs of Visits to Emergency Departments,” 1996New England Journal of Medicine, “The Costs of Visits to Emergency Departments,” 1996Source: Source: American Medical Association, “Physician Socioeconomic Statistics,” 2001American Medical Association, “Physician Socioeconomic Statistics,” 2001

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What You Can DoWhat You Can Do

• If you have a non-emergency medical problem, check with If you have a non-emergency medical problem, check with a primary care physician before going to the E.R.a primary care physician before going to the E.R.

• If you don’t have a regular primary care physician, develop If you don’t have a regular primary care physician, develop an ongoing relationship with one – contact your health an ongoing relationship with one – contact your health plan for information on selecting a doctorplan for information on selecting a doctor

• Regular check-ups can Regular check-ups can help prevent small health help prevent small health problems from turning into problems from turning into true emergenciestrue emergencies

Source: Source: New England Journal of Medicine, “The Costs of Visits to Emergency Departments,” 1996.New England Journal of Medicine, “The Costs of Visits to Emergency Departments,” 1996.Source: Source: American Medical Association,” Physician Socioeconomic Statistics, 2001.American Medical Association,” Physician Socioeconomic Statistics, 2001.

*National Average CostNational Average Cost

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What You Can DoWhat You Can Do• Share your family’s health history with a primary care Share your family’s health history with a primary care

physician, and ask about preventive measures to help physician, and ask about preventive measures to help avoid illnesses and manage diseasesavoid illnesses and manage diseases

• Share prescription records with your doctor and tell him or Share prescription records with your doctor and tell him or her about all treatments – including over-the-counter her about all treatments – including over-the-counter medications and herbal remediesmedications and herbal remedies

• WWork with your doctor to keep ork with your doctor to keep track of your child’s immunizations track of your child’s immunizations and keep them up-to-dateand keep them up-to-date

• Talk with your doctor – come Talk with your doctor – come prepared with questions toprepared with questions to make make sure you get the care that’s right sure you get the care that’s right for youfor you

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Step Up Physical ActivityStep Up Physical Activity

• Nearly 50 million adults (between the ages of 20 and Nearly 50 million adults (between the ages of 20 and 74), or 27% of the adult population, are obese74), or 27% of the adult population, are obese

• 61% of the adult population are either obese or 61% of the adult population are either obese or overweightoverweight

Physically Inactive AmericansPhysically Inactive Americans• 14 percent of all deaths in the 14 percent of all deaths in the United States are attributed to United States are attributed to activity patterns and dietactivity patterns and diet

Source:Source: U.S. Department of Health and Human Services, “National Health Interview Survey”, 1997-98 U.S. Department of Health and Human Services, “National Health Interview Survey”, 1997-98

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Step Up Physical ActivityStep Up Physical Activity

• Being physically inactive significantly increases the risk of Being physically inactive significantly increases the risk of developing many chronic diseases and conditions: heart developing many chronic diseases and conditions: heart disease, stroke, colon cancer, diabetes, obesity, arthritis disease, stroke, colon cancer, diabetes, obesity, arthritis and osteoporosis and osteoporosis

• Health care costs related to these conditions totaled more Health care costs related to these conditions totaled more than $600 billion nationally in 2000than $600 billion nationally in 2000

• Increasing regular moderate physical activity among the Increasing regular moderate physical activity among the more than 88 million inactive Americans over the age of more than 88 million inactive Americans over the age of 15 years might reduce annual health care costs by as 15 years might reduce annual health care costs by as much as $76.6 billion much as $76.6 billion

Department of Health and Human Services, “Physical Activity Fundamental to Preventing Disease,” June 2002

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What You Can DoWhat You Can Do• Regular physical activity can help you feel better, look Regular physical activity can help you feel better, look

better and can help improve your overall healthbetter and can help improve your overall health

• Brisk walking for 30 minutes a day, three times a week, Brisk walking for 30 minutes a day, three times a week, can improve personal health and might reduce your can improve personal health and might reduce your need for medical services or prescription medicinesneed for medical services or prescription medicines

• Talk with your doctor to Talk with your doctor to determine the determine the best way to best way to add physical activity to your add physical activity to your daily routinedaily routine

• Check with a local Check with a local community center, senior community center, senior center, school or church for center, school or church for low-cost exercise classeslow-cost exercise classes

Source: Source: National Institutes of Health, “The Bypass Angioplasty Revascularization Investigation,” 1997National Institutes of Health, “The Bypass Angioplasty Revascularization Investigation,” 1997*National Average CostNational Average Cost

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What You Can DoWhat You Can Do

• Regular physical activity can…Regular physical activity can…– Help maintain a healthy weightHelp maintain a healthy weight– Help build and maintain healthy bones, Help build and maintain healthy bones,

muscles, and jointsmuscles, and joints– Help older adults become stronger and better Help older adults become stronger and better

able to move about without fallingable to move about without falling– Help reduce feelings of depression and anxietyHelp reduce feelings of depression and anxiety– Help promote psychological well-beingHelp promote psychological well-being– Help reduce the need for medical treatments Help reduce the need for medical treatments

or prescription medicines or prescription medicines

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What You Can DoWhat You Can Do

Source:Source: U.S. Department of Health and Human Services, National Health Interview Survey, 1997-98 U.S. Department of Health and Human Services, National Health Interview Survey, 1997-98

• Regular physical activity can help reduce…Regular physical activity can help reduce…– The risk of dying prematurely from heart The risk of dying prematurely from heart

disease and other conditions disease and other conditions – The risk of developing diabetes The risk of developing diabetes – The risk of developing high blood pressure The risk of developing high blood pressure – Blood pressure in people who already have Blood pressure in people who already have

high blood pressure high blood pressure – The risk of developing colon and breast The risk of developing colon and breast

cancercancer

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Managing Chronic DiseasesManaging Chronic Diseases

• Rapid increases in rates of chronic diseases like diabetes, Rapid increases in rates of chronic diseases like diabetes, congestive heart failure, asthma and their associated health congestive heart failure, asthma and their associated health problems are major contributors to rising medical costsproblems are major contributors to rising medical costs

• 17 million Americans with diabetes in 2000 - total cost of $98 17 million Americans with diabetes in 2000 - total cost of $98 billion - with about $44 billion of that in direct medical costsbillion - with about $44 billion of that in direct medical costs

• In 2000In 2000, the total costs attributed to obesity amounted to an , the total costs attributed to obesity amounted to an estimated $117 billion – most of the cost is associated with estimated $117 billion – most of the cost is associated with diabetes, heart disease, and hypertension diabetes, heart disease, and hypertension

• 24.7 million Americans diagnosed with asthma, causing:24.7 million Americans diagnosed with asthma, causing:• approximately 500,000 hospitalizations each yearapproximately 500,000 hospitalizations each year• more than 1,997,000 emergency room visits in 2000more than 1,997,000 emergency room visits in 2000• more than $8.1 billion in direct health care costsmore than $8.1 billion in direct health care costs

Source: Centers for Disease Control and Prevention, “Surveillance for Asthma,” 2002 American Lung Association, “Trends in Asthma Morbidity and Mortality,” 2002

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What You Can DoWhat You Can Do• Share your family health history with your primary care Share your family health history with your primary care

physician and discuss preventive measures that can help physician and discuss preventive measures that can help you avoid illnesses and manage diseasesyou avoid illnesses and manage diseases

• Talk with your doctor to make sure you are eating a Talk with your doctor to make sure you are eating a balanced diet and exercising sufficientlybalanced diet and exercising sufficiently

• Because asthma attacks are triggered by environmental Because asthma attacks are triggered by environmental causes, talk with your doctor to find out how to identify causes, talk with your doctor to find out how to identify and avoid triggersand avoid triggers

• Check with your health plan about special programs Check with your health plan about special programs designed to help prevent or manage chronic diseases – designed to help prevent or manage chronic diseases – you can improve your health and may reduce your need you can improve your health and may reduce your need for medical services or drugsfor medical services or drugs

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An Ounce of PreventionAn Ounce of Prevention

•In 2000, failure to wear seatbelts caused:In 2000, failure to wear seatbelts caused:

• 9,200 unnecessary fatalities9,200 unnecessary fatalities

• 143,000 needless injuries143,000 needless injuries

• $26 billion in health care costs$26 billion in health care costs

• In 1999, failure to wear bike helmets caused:In 1999, failure to wear bike helmets caused:

• 500 bike-related fatalities500 bike-related fatalities

• 151,000 nonfatal head injuries 151,000 nonfatal head injuries

• $3 billion in health care costs$3 billion in health care costs

Source:Source: Centers for Disease Control and Prevention, “Injury Fact Book,” 2001Centers for Disease Control and Prevention, “Injury Fact Book,” 2001

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What You Can DoWhat You Can Do• Always buckle your seatbelt snuglyAlways buckle your seatbelt snugly

• Check with local hospitals, police and fire departments Check with local hospitals, police and fire departments for information about the proper installation of car safety for information about the proper installation of car safety seats for infants and small childrenseats for infants and small children

• Wear a bike helmet andWear a bike helmet and sports safety equipmentsports safety equipment

• Make sure your children Make sure your children do too!do too!

SOURCE: National Highway Traffic and Safety Commission, “The Economic Impact,” 2001SOURCE: National Highway Traffic and Safety Commission, “The Economic Impact,” 2001

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Be InformedBe Informed

For more information about making smart health For more information about making smart health decisions and keeping health care affordable, decisions and keeping health care affordable, visit www.bcbstx.comvisit www.bcbstx.com