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Health Care Coverage: Different Problems, Different Solutions, Everyone


Almost 46 million individuals do not have health insurance. ... Coverage refers to the menu' of what is available through an insurance policy ... – PowerPoint PPT presentation

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Title: Health Care Coverage: Different Problems, Different Solutions, Everyone

Health Care Coverage Different Problems,
Different Solutions, Everyones Issue
  • Marcia L. Comstock, MD MPH
  • Carol A. Staubach, MPH

Todays Agenda on the Uninsured
  • What does it mean?
  • Why should you care?
  • How did we get here?
  • What do you think?
  • What do others think?
  • What can be done?

Cover the Uninsured Week
  • Does insurance coverage equal access?
  • Is each of us our brothers keeper?
  • Should it matter to us as an individual, as a
    member of a family, as a member of society that
    many Americans are not assured access to
    healthcare that promotes and sustains health and

Key Facts About Health Insurance
  • About 246 million people have health insurance
    that pays part of the costs of getting care.
  • Almost 46 million individuals do not have health
  • The likelihood of an individual or family being
    covered depends on many factors, including the
    kind of job they have, their income level, where
    they live, their age, and their health status.

Who Lacks Access to Health Insurance?
  • More than 1 in 7 Americans almost 46 million
    do not have health insurance.
  • They are not necessarily poor.
  • Over 80 are members of working families, often
    they cant afford to buy health insurance.
  • Over 80 of uninsured children live in families
    with at least one working parent.
  • Some uninsured could afford to buy health
    insurance, but choose not to.

Who are the Uninsured?
Source Economic Research Initiative on the
Uninsured based on MEPS 2002 data.
Most Uninsured People Work
Note Numbers may not add up to 100 due to
rounding. Source Economic Research Initiative
on the Uninsured, 2005.
Most Uninsured People Have Incomes Above the
Poverty Line
Note Numbers may not add up to 100 due to
rounding. Source Economic Research Institute of
the Uninsured, 2005.
  • In fact, the fastest growing segment of the
    population lacking insurance is for individuals
    and families with annual incomes over 75,000.

The Uninsured are More Likely to Not Get Care
Due to Cost
Source Centers for Disease Control and
Prevention, National Center for Health
Statistics, 2005. People under age 65 in 2003.
Becoming Uninsured Could Happen To You!!!
  • Unexpected changes can affect coverage
  • Serious illness or injury
  • Worsening of a chronic condition
  • Losing or switching jobs (after federal COBRA
    protection runs out or is unaffordable)
  • Changes to health insurance policies

What are the Consequences of Being Uninsured?
  • People without insurance
  • Are less likely to get health care that they
    need, especially preventive care and treatments
    for chronic health problems
  • Are at risk for the huge expenses of catastrophic
    health care
  • May have worse health outcomes
  • 18,000 died last year because they did not have
    health insurance, according to IOM

What are the Consequences of Having Uninsured
People in Our Community?
  • A burden on hospitals for uncompensated care
  • Cost-shifting to employers
  • Negative impact on community health
  • Drain on economic development

How Did We Get Here?
  • In the beginning.
  • Insurance Coverage by contract in which one
    party agrees to indemnify (guard or secure
    against anticipated loss) or reimburse another
    for any loss that occurs under terms of the

Before Health Insurance
  • US railroads and wanted to insure productivity of
  • Hired contract physicians (surgeons) to care for
  • No insurancehealthcare services provided for
    employeesbut in the interest of their employer!

The Beginning of Health Insurance-The Blues
  • Blue Cross 1st created by President of Baylor
    University to pay for hospital care
  • If everyone paid a small amount (15/wk), those
    that needed hospitalization could be cared for
    (benefit of 25,000)
  • 1932-Texas Legislature passed the enabling
    statute to create the first blues plan
  • Law became a national model
  • It was expanded after a decade to include payment
    for physician services, blue shield
  • The plans were NFP companies
  • BODs represented community-citizens, providers,
  • Concept of shared social responsibility

Employer Role in Healthcare
  • Originally employer-based insurance was not for
    healthcare. It started as insurance for lost
    wages when ill
  • Early 1940s amendments to Tax Codes allow
    business to offer health insurance to help
    recruit workers despite wartime wage freezes
  • 1950-1970 growth in cost utilization of
    medical services by employees, supported by labor
  • Health insurance typically 80/20 co-pays,
  • 1980s growth of managed care as response to
    rising costs-temporarily effective1st dollar
    coverage, NOT insurance
  • Late 1990s-resurgence of costs
  • 2000 move to consumer-directed health
  • Some employers offer on-site clinics/pharmacies.?
    Back to the future?

The 5 As of Access
  • Health insurance does not equal access to the
    right healthcare!
  • Affordability
  • Accessibility
  • Acceptability
  • Assurance
  • Appropriateness

Coverage Access What Does it Mean?
  • Coverage refers to the menu of what is
    available through an insurance policy (limited vs
    comprehensive.) Relates to technical adequacy and
    assurance of services
  • Access refers to what is 'practically' available
    and encompasses barriers such as affordability
    and logistical accessibility
  • Coverage opens the door but does not ensure

Issues with Coverage Access
  • What are we trying to achieve with coverage and
  • Language is important! People dont use these
    terms to mean the same thing.
  • If coverage equals insurance, we need to answer
    the question, insurance for what?
  • We have not been able to reconcile our split
    approach to sponsorship of health insurance, or
    pick one over the other.
  • Coverage means more than insurance. It is
    'protection', 'security' that is defined at the
    individual level

  • Do you have health insurance?
  • Did you purchase it yourself?

The Plight of Employers
Our Health Care Crisis
  • Total health care spending represents 16 percent
    of the gross domestic product
  • Estimated to reach 20 percent by 2015.
  • The US has the highest per worker health care
    costs in the world
  • Impact
  • Erodes corporate profits
  • Reduces growth of business
  • For small enterprises or those with low profit
  • Reduces number of jobs
  • Reduces compensation packages
  • Increases unemployment and uninsurance

What Do We Get for What We Spend?
  • We spend 33 more than Canada, our nearest
    competitor on costs
  • We do not have more doctors or nurses or hospital
  • We do have more MRIs and get more tests-many
  • We rank lowest of English speaking countries on
    patient satisfaction and access and on the
    doctor-patient relationship
  • We rank well only on access to specialists and
    non-urgent care! Is this most important?

Health Care Costs and Profit Margins
Source Cowan CA, McDonnell PA, Levit KR, Zezza
MA. Burden of health care costs businesses,
households and governments. Health Care Financing
Review. 2004
Projections by 2015Can Employers Really Afford
2015 rates 15-29,128 12-22,362 10-18,675
8-15,544 Cost per employee per year
Comparing Healthcare trend figures at compounded
rates 15,12,10 and 8 over a 10 year period.
Starting point 7,200 or approximately 600 PEPM.
2005 Trends
  • 9.2 increase in premiums
  • Previous years 2000 2004 14
  • Smallest employers (under 200) hit with highest
    increases across all sectors 15
  • Manufacturing sector hit with highest increases
    11.2 healthcare and transportation the least
    at less than 8

Reaction to Premium Increases
  • For Employers
  • Cost shifting to employees
  • Cost sharing in premiums
  • Increase co-pays and deductibles
  • Reduce coverage
  • Drop Insurance
  • Employee Response
  • Pay the Increase
  • Drop Coverage

2005 Status of Employer Coverage
  • 60 of employers offer insurance, down from 69
    in 2000
  • 98 for firms greater than 200
  • 93 for firms between 50 199
  • 87 for firms between 25 49
  • 72 for firms between 10 24
  • 47 for firms between 3 - 9

The Small Employer
  • Firms with less than 20 employees make up 89 of
    American business and 19 of the working
  • Firms with 20 499 employees make up 10 of
    businesses and represent 33 of the working

Who Provides Coverage Who Doesnt
  • Firms with higher wages where 65 or more of
    workers earn 20,000 or greater have higher
    coverage rates than where the majority earn
    20,000 or less annually.
  • Nearly 50 of employers not offering health
    benefits, pay annual wages of less than 15,000
    per year to 40 percent or more of their
    employees, compared to 13 percent of companies
    that do offer health benefits.
  • There are a greater proportion of part-time
    workers in smaller firms who do not offer
  • The demographics reflect a larger proportion of
    females, workers under age 30, and minority
  • 65 percent of those small employers not offering
    benefits have annual gross revenues that are less
    than 500,000, 65 percent. For employers with
    1,000,000 in gross revenues or more, only 18
    percent do not offer benefits.
  • Firms in business less than five years are less
    likely to offer benefits.

Hidden Costs of Insurance
  • Employee Retirement Income Security Act of 1974 -
    Federal governs self-funded plans states oversee
    fully insured plans.
  • Rules, regulations and offerings differ from
    state to state
  • Variables
  • Risk Rating Underwriting Some less fair than
  • Administrative Costs can be as high as 40 of

What is good public policy to promote adequate
coverage access for all?
  • Is there a level of health services that everyone
    should be guaranteed?
  • Should it be heavily subsidized by government and
  • Should individuals who can afford to be allowed
    to "buy up?"

  • Should we work toward financial equity
  • What does pluralism mean in healthcare? Pluralism
    that meets the needs of individuals for the kind
    of care and setting that is appropriate to them?
    Pluralism in funding streams?
  • Do we need to ration healthcare? How should it be

Voices from Communities
  • The measure of a health care system is how it
    cares for the have-nots. CEO, Community Health
    Center, California
  • Will the majority of the voting public support
    giving something up to get everyone covered?
    Psychologist, Mississippi
  • Are we willing to ration for ourselves? When we
    get sick, we want everything available.
    Physician representative of the White House
  • More people realize now than in the early 90s
    that the uninsured represent a threat to all of
    us. Physician Leader, NH

Harris-Commonwealth FundOpinion Leaders Survey
  • Covering the uninsured should be Congress top
    priority over the next 5 years
  • The proportion of Americans without health
    insurance (currently 18 under 65) should be
    reduced by half to about 8 in 10 years.

The Citizens Health Care Working Group
  • Charged by Congress with engaging the public in a
    dialogue on healthcare
  • What healthcare benefits and services should be
  • How does the American public want healthcare
  • How should healthcare coverage be financed?
  • What trade-offs is the public willing to make?
  • Recommendations and an action plan will be
    presented to Congress

What Does the Public Think?
  • 95 thinks the US healthcare system is in a state
    of crisis or has major problems
  • gt90 believe it should be public policy that all
    Americans have affordable health care coverage
  • 90 think it would be better to provide a
    defined level of services for everyone, rather
    than providing coverage for particular groups of
    people as it is now (elderly, poor, employees)

What Does the Public Think?
  • gt60 believe the most important reason to have
    health insurance is to pay for high medical costs
  • 30 believe the most important reason to have
    health insurance is to pay for everyday medical
  • 74 believe everyone should be required to
    enroll in basic health coverage, either public or

What Does the Public Think?
  • 69 think some people should be responsible for
    paying more than others
  • Criteria varied Income most popular response
    health behaviors also quite high
  • Should public policy continue to use tax laws to
    encourage employer-based health insurance?
  • Yes 47.9 (29.3-86.8)
  • No 52.1 (13.2-70.7)

What Does the Public Think?
  • Guaranteeing all Americans have health insurance
    was cited as the number 1 spending priority in
    nearly all communities
  • Guaranteeing all Americans get healthcare when
    they need it through public safety net
    programs, (if they cannot afford it) also ranked
    quite high in most places

What Does the Public Think?
  • Not Popular
  • Offer uninsured Americans income tax deductions,
    tax credits or other financial assistance to help
    them purchase private insurance
  • Rely on free market competition among doctors,
    hospitals, other healthcare providers and
    insurance companies rather than having government
    define benefits and set prices

What Does the Public Think?
  • Mixed reactions
  • Expand state government programs for low income
    (Medicaid, SCHIP)
  • Require businesses to offer health insurance to
    all employees
  • Require all Americans to enroll in basic
    healthcare coverage, public or private

What Does the Public Think?
  • Most popular
  • Create a national health insurance program,
    financed by tax payers, in which all Americans
    would get their health insurance (1st in almost
    all cities)
  • Expand neighborhood health clinics
  • Open up enrollment in federal programs, e.g.,
    Medicare or FEHBP

  • If you segment the uninsured, it is apparent that
    different answers are needed for different
  • The working poor
  • Those temporarily uninsured between jobs
  • Those who can afford but do not choose to buy
  • The young and healthy who feel it is not worth
    the investment for them

Solutions for Employers
Potential Solution Join a Purchasing Pool
  • Small employers join forces to create purchasing
    power and reduce individual inequities by virtue
    of their size
  • Share risks
  • Negotiate competitive prices
  • Gain access to a variety of plans
  • Provide affordable co-pays
  • Streamline and reduce administrative costs

  • COSE Council of Smaller Enterprises, part of
    Cleveland Chamber of Commerce
  • Assume role of purchaser
  • At least three health plan alternatives
  • Health Pass New York Business Group on Health
    for employers with less than 50 workers
  • 28 benefit plan designs
  • Provides consulting services
  • Handles all administrative duties
  • PacAdvantage California Pacific Business
    Group on Health 2 50 employees

Community and Private Sector Partnerships
  • Muskegon County, Michigan for those businesses
    with median hourly wage of 11.50 or less and
    have not offered any coverage in previous 12
  • County pays 1/3 employer pays 1/3 employee pays
  • Plans offered are ½ of cost if employer sought
    plan as an individual employer
  • New Mexico Health Insurance Alliance

Another (But Risky) Solution Self Insurance
  • Financial strategy used primarily by large
    employers employer assumes all or part of risks
  • Sets funds aside to pay claims as they come in
    (Vs paying an insurance company a premium) -
    actors out administrative costs
  • Exempts the company from state mandates that can
    be costly and cumbersome for employers who
    operate in multiple states
  • Increase risk for small firm one catastrophic
    medical case could be devastating
  • Purchase Stop Loss Insurance to cover any
    individuals medical expenses higher than 25,000

Latest Health Plan SolutionConsumer Directed
Health Plans
  • High Deductibles
  • HSAs
  • Requirements
  • Learn to manage an HSA
  • Learn to be a savvy medical consumer
  • Learn to lead a healthier life

Employer Costs for Poor Health R. Goetzel,
JOEM, Jan. 2001
Total 9,992
Trends in Health Status - CDC
  • In 10 years
  • Obesity increased 61
  • Diabetes increased 49
  • Serious smoking related illness affects 8.6
    million Americans
  • 92 billion in lost productivity annually
  • 75.5 billion in medical expenditures

Less Healthy People Huge Costs
Determinants of Healthcare Costs
Source Center for Disease Control and Prevention
Statistically.For Every 100 Employees
  • 64 are overweight
  • 25 have high blood pressure
  • 18 or more have high cholesterol
  • 6 have diagnosed diabetes
  • 4 have undiagnosed diabetes
  • 16 smoke
  • 8 are heavy drinkers
  • 29 dont wear safety belts regularly
  • 50 sit all day to do their work
  • 21 have cardiovascular disease
  • Source Wellness Council of America 2005

Strategies to Integrate Benefits and Work Site
Health Management
  • WEYCO Inc. - service company for benefit plans
    and management - 186 Employees
  • Healthcare eating the bottom line
  • Employers give employees an unrestricted medical
  • Employees are making unilateral lifestyle
    decisions that affect the bottom line and other
    employees paycheck

  • Health plans do not emphasize prevention,
    personal health improvement and compliance
  • Little or no employee involvement in cost
  • Plan Strategy
  • Align plan with Weyco health strategy
  • Involve employees and families in prevention
  • Move to qualified high deductible plans with
    health savings accounts (HSA) by 2007

  • Health Strategy As important as customer
    service, quality, safety
  • Personal health improvement
  • Reduce demand to reduce costs
  • Eliminate lifestyles that create risk
  • Illegal drugs and tobacco
  • Excess use of alcohol
  • Unhealthy eating
  • Physical inactivity

  • Worksite Programs
  • HRA Biometrics
  • Health Education Cardio, Strength
    Flexibility, Weight Management, Stress Management
  • Web-based info Telephonic Health Coach
  • Physical Evaluations
  • Screenings

  • Incentives
  • Employer contributions/credits for participation
    in preventive exams, personal evaluation,
    physical evaluation
  • Credits used to reduce employee contributions to
    plan. Employee pays if chooses not to
  • Preventive Exams at 100 - Health Credits if
    exams are completed verified by 12/31 of each
  • If employee waives coverage, WEYCO provides
    1560.00 in an HRA if employee provide proof of
    other medical coverage

WEYCO Policy
  • Tobacco-Free Program
  • Stop hiring or retaining tobacco users
  • Ban the use of tobacco on property
  • Tobacco assessments and voluntary testing
  • Company sponsored smoking cessation programs
  • Mandatory testing
  • Random testing for all employees
  • Extend program to spouses

Recent State Federal Efforts
S. 1955 Health Insurance Marketplace
Modernization and Affordability Act of 2005
  • A bill to amend title I of the Employee
    Retirement Security Act of 1974 and the Public
    Health Service Act to expand health care access
    and reduce costs through the creation of small
    business health plans and through modernization
    of the health insurance marketplace
  • Introduced by Senator Michael Enzi (R-WY)
  • approved by the Senate Health, Education, Labor
    and Pensions (HELP) Committee

Critics Fears
  • Legislation, eliminates state jurisdiction and
    with it almost all state-enacted consumer
    protections for people buying insurance
    individually or through their employers
  • States will no longer be able to mandate coverage
    of benefits, services, or categories of providers
    for individuals, small groups, or large group
  • Premium rating protections, enacted by states to
    make small group insurance more affordable to
    older and sicker workers, will be set aside
  • Insurers will be allowed to sue states that do
    not comply. The bill sets a ceiling on, but no
    floor under, what states can do to protect
    insurance consumers 

Massachusetts Universal Health Care Coverage
  • Those without coverage must purchase an
    affordable plan (to be defined) or pay
    financial penalties
  • Businesses with at least 11 workers will provide
    insurance or pay 295 per employee per year to
    the state
  • Residents with coverage must certify their
    insurance status on state income tax forms, or
    face tax penalties
  • State will provide sliding-scale subsidies for
    people who can't afford to buy a health plan on
    their own

  • Ability to gain consensus
  • Compromise may be a way to break the gridlock and
    logjam that exists in Washington and in states
    across the country
  • Details important to the overall acceptability of
    the new program
  • How much people will have to pay to get insurance
  • What will the affordable plans cover
  • Massachusetts precedent of agreeing to expanding
    coverage with Medicaid waiver program provided
    the building blocks of working together at state
    level to allow this next step

What About the Future??
Perspective of Leaders
  • Comprehensive proposal in the short-term
    unlikelyuntil the REAL crisis strikes?? By 2008
    or 2012 elections
  • To develop a long range plan, create a sense of
  • Healthcare industry leadership must agree that
    solving the problem will require compromise

How Can We Make Real Progress?
  • We need to clarify what we want to achieve
  • Dont assume the federal government will solve
    the problems
  • Look to communities for solutions
  • Focus on healthnot just healthcare
  • Everyone needs to be involved! Our health is too
    important to leave to others

A Vision for Patient-Centered Care
  • "The care we need and no less, the care we want
    and no more."
  • Albert Mulley, MD
  • Chief of Internal Medicine, Massachusetts General

  • Marcia L Comstock, MD MPH
  • COO
  • 117 Lafayette Road
  • Wayne, PA 19087
  • Phone 610-687-2320
  • Fax 610-687-5963

  • Carol A Staubach, MPH
  • CA Staubach Associates
  • 305 E. St. Andrews Drive
  • Media, PA 19063
  • Phone  610-891-6034
  • Fax      610-891-6035
  • email