Building the Foundation: Health Care Costs Presentation to the Citizens Health Care Working Group Ma

1
Building the Foundation Health Care
CostsPresentation to the Citizens Health Care
Working GroupMay 13, 2005Richard S. Foster
and Stephen HefflerOffice of the Actuary, CMS
2
National Health Expenditure Accounts
National Health Expenditure Accounts
Projections
Businesses, Households Governments
State Health Accounts-- Provider and
Residence
Health Spending by Age
3
What Are National Health Expenditure Accounts?
Two dimensional matrix of expenditures
Services/products

• Funding sources

Private
Public
National Health Expenditures
Health Services and Supplies
Personal Health Care
4
National Health Expenditures (NHE) as a Share of
GDP, 1965-2003
15.3
Total NHE
7.0
Private Funding
Public Funding
Sources Centers for Medicare Medicaid
Services, Office of the Actuary Data from the
National Health Statistics Group
5
Growth in NHE, 1980-2003
Sources Centers for Medicare Medicaid
Services, Office of the Actuary Data from the
National Health Statistics Group
6
Factors Accounting for Growth in Personal Health
Care Expenditures Per Capita
9.4
2
1
6.9
5.0
Average Annual Percent Change
Selected Calendar Year Periods
1 Utilization includes quality and mix of
services. As a residual, this factor also
includes any errors in measuring prices or total
spending.
2 Excess medical prices are calculated using
the personal health care chain-type index
constructed from the producer price index for
hospital care, nursing home input price index for
nursing home care, and consumer price indexes
specific to each of the remaining personal health
care components.
SOURCE Centers for Medicare Medicaid Services,
Office of the Actuary, National Health Statistics
Group.
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The Nations Health Dollar Where It Came From
2003
1980
Other Public 1 17
Other Private 2 6
Medicaid 10
Medicare 15
Private Insurance 28
Out-of-pocket 24
1 Other Public includes programs such as workers
compensation, public health activity, Department
of Defense, Department of Veterans Affairs,
Indian Health Service, and state and local
hospital and school health. 2 Other Private
includes industrial in-plant, privately funded
construction, and non-patient revenues, including
philanthropy. NOTE Numbers shown may not add
to 100.0 because of rounding. SOURCE Centers
for Medicare Medicaid Services, Office of the
Actuary, National Health Statistics Group.
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Medicare and Medicaid Spending Trends, 1980-2003
Medicaid
Medicare
SOURCE Centers for Medicare Medicaid Services,
Office of the Actuary, National Health Statistics
Group.
9
Per enrollee Private Health Insurance (PHI)
Premium and Benefit Trends, 1980-2003
PHI Premiums
PHI Benefits
SOURCE Centers for Medicare Medicaid Services,
Office of the Actuary, National Health Statistics
Group.
10
The Nations Health Dollar Where It Went
2003
1980
Program Administration and Net Cost 5
Other Spending 22
Prescription Drugs 5
Nursing Home Care 7
Hospital Care 41
Physician and Clinical Services 20
NOTE Other Spending includes dental services,
other professional services, home health,
durable medical products, over-the-counter
medicines and sundries, public health, research
and construction. SOURCE Centers for Medicare
Medicaid Services, Office of the Actuary,
National Health Statistics Group.
11
Hospital and Prescription Drug Spending Trends,
1980-2003
Prescription Drugs
Hospital
SOURCE Centers for Medicare Medicaid Services,
Office of the Actuary, National Health Statistics
Group.
12
Sponsors of Health Care, 2003
Health Services and Supplies 1,614 Billion
Private Health Insurance 601 Billion
Households 513 Billion
Out-of-pocket 230 Billion
Other Private 61 Billion
Businesses 423 Billion
Medicare 283 Billion
Medicaid 267 Billion
Governments 622 Billion
Other Federal 67 Billion
Other Private 57 Billion
Other State and Local 105 Billion
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Health Spending as a Percent of Revenue or Income
Sources Centers for Medicare Medicaid
Services, Office of the Actuary Data from the
National Health Statistics Group
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National Health Expenditure Accounts
National Health Expenditure Accounts
Projections
Businesses, Households Governments
State Health Accounts-- Provider and
Residence
Health Spending by Age
15
Personal Health Care Spendingand Population by
Age, 1999
Population
Personal Health Care
Elderly 12
Children 12
Children 29
Elderly 36
Working-age Adults 52
Working-age Adults 59
Source Centers for Medicare Medicaid Services,
Office of the Actuary, National Health Statistics
Group.
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Where It Came From, 1999
Children, Working-age Adults, and Elderly
Children (Ages 18 and under)
Working-age Adults (Ages 19 to 64)
Elderly (Ages 65 and over)
Other Pub 10
Other Pub 4
Other Pub 8
OOP 18
OOP 18
OOP 15
Medicare 5
Medicaid 27
Medicaid 15
PHI 14
Other Priv 6
Other Priv 3
Medicare 46
Other Priv 8
PHI 42
Medicaid 15
PHI 46
Average per capita PHC spending 1,649
Average per capita PHC spending 3,352
Average per capita PHC spending 11,089
Source Centers for Medicare Medicaid Services,
Office of the Actuary, National Health Statistics
Group.
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Where It Went, 1999
Children, Working-age Adults, and Elderly
Children (Ages 18 and under)
Working-age Adults (Ages 19 to 64)
Elderly (Ages 65 and over)
Home Health 5
All Other 9
All Other 9
All Other 5
Other Pers 5
Dental 8
Dental 7
Nursing Home 3
Other Prof 5
Nondurables 3
Other Prof 4
Hospital 37
Hospital 37
Nursing Home 19
Drugs 7
Drugs 12
Hospital 37
Drugs 8
Physician 33
Physician 28
Physician 19
All Other --- Nondurables 2 Home Health
1 Durables 1 Nursing Home 1
All Other --- Nondurables 3 Other Personal
3 Home Health 2 Durables 1
All Other --- Other Personal 3 Dental 2 Other
Professional 2 Durables 2
Source Centers for Medicare Medicaid Services,
Office of the Actuary, National Health Statistics
Group.
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Per Capita Health Care Expenditures, by State CY
1998 Location-of-Provider (before border-crossing
adjustment)
U.S. Per Capita 3,759
ND 4,182
MN 4,230
NJ 4,038
High (above 4,117)
Medium (3,425-4,117)
Low (below 3,425)
SOURCE Centers for Medicare Medicaid Services,
Office of the Actuary, National Health Statistics
Group. NOTE Personal Health Care spending shown
in this chart represents 88 of National Health
Expenditures.
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Per Capita Health Care Expenditures, by State CY
1998 Location-of-Residence (after border-crossing
adjustment)
U.S. Per Capita 3,759
ND 3,881
MN 3,986
NJ 4,197
High (above 4,117)
Medium (3,425-4,117)
Low (below 3,425)
SOURCE Centers for Medicare Medicaid Services,
Office of the Actuary, National Health Statistics
Group. NOTE Personal Health Care spending shown
in this chart represents 88 of National Health
Expenditures.
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National Health Expenditures (NHE) as a Share of
GDP, 1965-2014
18.7
Total NHE
9.2
Private Funding
Public Funding
Sources Centers for Medicare Medicaid
Services, Office of the Actuary Data from the
National Health Statistics Group
21
Growth in NHE slows from peak, but remains above
lows of the past decade
Sources Centers for Medicare Medicaid
Services, Office of the Actuary Data from the
National Health Statistics Group
22
Public vs. Private Sector Spending Trends,
1980-2014
Public spending
Private spending
Sources Centers for Medicare Medicaid
Services, Office of the Actuary Data from the
National Health Statistics Group
23
Projected Prescription Drug Spending by Payer,
2005 and 2006
2005 (223.5B)
2006 (249.3B)
Medicaid 18
Medicare 2
Medicare 28
Other Public 4
Other Public 4
Medicaid 9
Out-of-pocket 29
Private Insurance 39
Out-of-pocket 20
Private Insurance 47
Sources Centers for Medicare Medicaid
Services, Office of the Actuary Data from the
National Health Statistics Group
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National Health Expenditure Accounts Website

• http//www.cms.hhs.gov/statistics/nhe/