Transcript Opportunities and Challenges: Mapping the Future Joseph W. Thompson, MD, MPH Surgeon General State of Arkansas Director Arkansas Center for Health Improvement.

Opportunities and
Challenges: Mapping
the Future
Joseph W. Thompson, MD, MPH
Surgeon General
State of Arkansas
Director
Arkansas Center for
Health Improvement
Arkansas Center for Health Improvement
Mission:
Improving health through evidence-based
health policy research, program
development, and public issue advocacy
Core Values:
Initiative, Trust, Commitment, and Innovation
ACHI’s Scope of Work
ACHI Scope
of Work
Health Policy &
System Integration
Health
Care
Finance
Health
Access to Promotion &
Needed
Disease
Quality Care Prevention
ACHI’s Major Initiatives
• Tobacco Settlement Proceeds Act
– All tobacco settlement funds for health
• Optimization for Arkansas Medicaid $$
– Improved efficiency and coverage
• Arkansas Health Insurance Roundtable Plan
– Statewide strategic plan
– Reduction in uninsured children 20% > 10%
– Safety-benefit program
• Child and Adolescent Obesity Initiative
• Arkansas Health Data Initiative
• Arkansas Southern Rural Access Program
• First Arkansas Surgeon General
Challenges and Opportunities
• Hurricanes and pandemics
(and earthquakes)
• Globalization of our economy
• National security threats and responses
• 46 million uninsured U.S. citizens
• Medical and information technology
advances
• Aging population and deteriorating health
• Investment strategies at the federal, state,
local, and personal levels
Healthcare Financing in Transition
• 1910 Flexner Report – Medical education
• 1928 Penicillin discovered
• 1944 first patient treated
• 1941 WWII Wage controls / Employers’ response
• 1957 Hill Burton Act stimulates hospitals
• 1965 Medicare / Medicaid established
• 1973 Federal HMO Act
• 1990s Employer / Medicaid HMO expansions
• 1997 State Children’s Health Insurance Program
• 2003 Medicare Modernization Act
Where are we??
• Employer sponsored care remains primary
financing strategy in most states
• Children growing responsibility of public sector
• Proportion of uninsured continues to increase
(46 million U.S. citizens)
• Healthcare costs (public and private) continue to
exceed other growth areas
• Uncompensated care shifted to insured
• Safety net providers fragmented
• Medicaid / Medicare cost-containment
questionable
• Private sector modifying benefits
Percentage
Increases in health insurance premiums
compared with other indicators 1988–2005
16
Health Insurance Premiums
14
Overall Inflation
12
Workers Earnings
10
8
6
4
2
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1993
1988
0
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 1999–2005; KPMG Survey of Employer-Sponsored Health Benefits: 1993,
1996; The Health Insurance Association of America (HIAA): 1988, 1989, 1990; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average
of Annual Inflation (April to April), 1988–2005; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey
(April to April), 1988–2005.
Increases in health insurance premiums
compared with other indicators 1988–2005
Health Insurance Premiums
15
Overall Inflation
Percentage
Workers Earnings
State Budget
10
5
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1993
1988
0
-5
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 1999–2005; KPMG Survey of Employer-Sponsored Health Benefits: 1993,
1996; The Health Insurance Association of America (HIAA): 1988, 1989, 1990; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average
of Annual Inflation (April to April), 1988–2005; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey
(April to April), 1988–2005. State budget information, National Association of State Budget Officers, Fiscal Survey, December 2005
Views of health care: A right or benefit?
Governmental
responsibility
Drivers of heath care costs:
Changing demographics
Illness burden
Medical research
Technological advancements
Consumer expectations
Unable
to afford
Increasing
health care costs
Medicaid
Benefit:
Employer
Benefit:
Private sector
responsibility
Unwilling
to support
TURMOIL
Cost sharing
Limited
benefits
Defined
contributions
Dropped
coverage
Health care’s Iron Triangle
Quality
Cost
Access
State Uninsured Rates
30.0
Percent uninsured
25.0
20.0
15.0
10.0
5.0
0.0
Current patchwork quilt of Arkansas
health insurance coverage
Income
Private Insurance
300%
FPL
200%
FPL
100%
FPL
ARKids
First B
ARKids
First A
(Medicaid)
0
10
Medicare
Currently Uninsured:
~400,000
Medicaid for
Pregnant
Women/Family
Planning
Medicaid w/ Disability
20
30
40
50
60
70
Age
Obesity Trends* Among U.S. Adults
BRFSS, 1990, 1995, 2005
(*BMI 30, or about 30 lbs overweight for 5’4” person)
1995
1990
2005
No Data
<10%
10%–14%
15%–19%
20%–24%
25%–29%
≥30%
Average cost of medical care for adults (55+) by weight
$8,000
7,235
6,087
$6,000
5,390
5,478
$4,000
$2,000
$0
Underweight Normal weight
Overweight
Obese
Data source: Rhoades JA. Overweight and Obese Elderly and Near Elderly in the United States, 2002: Estimates
for the Noninstitutionalized Population Age 55 and Older. Statistical Brief #68. February 2005. Agency for
Healthcare Research and Quality, Rockville, MD. www.meps.ahrq.gov/papers/st68/stat68.pdf.
Potential savings if Americans had
normal weight (adults, 55+)
Underweight
$0.96 Billion
Overweight
Expected cost of
care for those of
normal weight
$327.16 Billion
$2.04 Billion
Obese
$27.62 Billion
Additional
medical
care costs
Who is the CEO of the
largest employer-based health
insurance plan in your state?
Arkansas Public School Employees /
State Employees Health Insurance Plan
• Largest state-based insurance plan
(~ 120,000 employees)
• Major state influence in plan design / payment
structure / network development
• Self-insured plan with traditional benefit structure
– no preventive coverage
• Aging work force with chronic illnesses
• Escalating health insurance premiums
• Lack of risk management strategies
($1600 / yr for smokers)
• Decisions based on annual actuarial experience –
no long term strategy
Arkansas Public School Employees /
State Employees Health Insurance Plan
• Charge to the plan:
– Incorporate long-term management strategy for
disease prevention / health promotion
• Three phases undertaken:
1) Awareness – Health Risk Appraisal (2004)
• Tobacco, obesity, physical activity, seat belt use,
binge drinking
2) Support – New benefit incorporation (2005)
• first dollar coverage of evidence-based clinical
preventive services
• Tobacco cessation – Rx and counseling
3) Engagement – Healthy discounts
(2006)
State Employees and Public School
Employees Health Risk Assessment 2006
Tobacco Use
(11.4%)
3.4%
4.4%
Obesity
BMI >30.0
(34.7%)
Physical Activity
< 3 days a week
(53.4%)
1.1% 2.4%
11.5%
26.9%
19.6%
Self-report Health Risk Assessment Survey -- Fall 2005, n=46,637
(BMI n=46,599) BMI calculated from self-report height and weight
HRA Respondents
No Risks
$2,954
All Tobacco Users
$3,499
Tobacco
+ Obesity
$3,456
Tobacco +
Obesity +
Phys Inact
Tobacco +
Phys Inact
$3,727
$4,101
All Physically
Inactive
$3,768
Obesity +
Phys Inact
$4,137
All Obese
$3,972
Data Driving Policy
• ~15% of annual total costs ($45.6 million of $302.8
million) are attributable to having one or more of the
three risk factors.
• Recognition of state fiscal exposure for future risks
regardless of state / public school point in time job
• Shift in Board management from fiscal actuary model
to human capital risk management model
• Incorporation of new benefits without return on
investment strategy:
– Tobacco counseling and pharmaceutical coverage
– Three tier obesity benefit:
• Nutrition and weight management
• Intensive medical weight loss management
• Surgical gastroplasty at select center of excellence
Arkansas Public School Employees /
State Employees Health Insurance Plan
•
Premium discounts (January 2006)
- $10 per adult/month for HRA completion
- $10 per adult/month for no-tobacco use
•
Premium discounts (January 2007)
-$20 per adult full risk (tobacco, obesity,
physical inactivity, seat belt use, binge
drinking)
•
ACT 724 (March 2005): up to 3 days leave
each year for employee participation and
point accumulation in Healthy Employee
Lifestyle Program
Incorporation of State Employee Strategy
into Medicaid: New waiver requirements
• Requires implementation of cost-containment
strategy in general Medicaid population
• Proposal to incorporate HRA / risk-management
strategy with annual reduction in tobacco use and
obesity
• Will require integration of State Employee and
Medicaid strategies
• Opportunity for full integration of public- and
private-sector programs for optimal population
health impact
State Uninsured Rates
30.0
Percent uninsured
25.0
20.0
15.0
10.0
5.0
0.0
Arkansas Health Policy Roundtable
21 private-citizen members
• 7 Consumer representatives
• 7 Employer representatives
• 7 Insurance / provider representatives
Rules of engagement:
• Open debate by 21 member decision-makers
• Private electronic vote on positions (21)
Working group of stakeholders
•
•
•
•
•
Provider associations (AMS, AHA, APA)
State agencies (DOH, DHHS, DOI)
Healthcare plans (BCBS, Qualchoice, United)
Consumer interests (State employee union)
Business interests (Farm Bureau, Chamber)
Roundtable Strategies for Action (2000)
•
Expand Existing Medicaid Program through
Tobacco Settlement Funds to:
–
–
•
Establish Arkansas Safety Net Partnership
–
•
•
Act 1044 of 2003 Arkansas General Assembly
Establish Community-Based Purchasing
Pools/Coops
–
•
Low income adults 19-64 years old
Low income pregnant women
Act 925 of 2001 Arkansas General Assembly
Include Scientifically Supported Preventive
Services
Promote employer / employee benefit
education
Roundtable Strategies 2000 (continued)
• Achieve Income Tax Neutrality for Health
Insurance / Health Care Expenditures
(Federal)
• Modify Medicare to include Prescription
Drugs and Expanded Disabled Eligibility
(Federal)
• Tie Medical Savings Accounts to Group
Catastrophic Policies (Federal)
• Increase ARKids enrollment (State)
Percent by age group of all Arkansans
Percentage of insured Arkansans
by age group (2004)
100%
1.5%
10.4%
24.4%
80%
Uninsured
Insured
60%
40%
89.6%
98.5%
75.6%
20%
0%
0–18 yr
19–64 yr
65+ yr
Data source: ACHI. Arkansas Household Survey of Health Insurance Status. Little Rock, AR: ACHI; 2004.
Sources of health insurance
for adult (19–64 years) Arkansans (2004)
Individual
9%
Employer
71%
Group
(non-employer)
4%
Former
employer
1%
14%
15%
Medicaid
8%
Medicare
4%
CHAMPUS
3%
Data source: ACHI. Arkansas Household Survey of Health Insurance Status. Little Rock, AR: ACHI; 2004.
Employment status of uninsured adult
(19–64 yr) Arkansans (2004)
Full-time
employed
34%
Unemployed
39%
45%
16%
Part-time
selfemployed
4%
Part-time
employed
12%
Full-time selfemployed
11%
Data source: ACHI. Arkansas Household Survey of Health Insurance Status. Little Rock, AR: ACHI; 2004.
Percent by age group of all Arkansans
Percentage of uninsured Arkansans by
age group and gender (2004)
Females
(50%)
100%
Insured
Uninsured
80%
19–64
yr
19–64 years
Uninsured
= 24%
unins
ured =
24%
30%
60%
40%
20%
0%
10%
0–18
years
19–44
years
0–18 yr
6.6%
Males
(50%)
0–18 yr
9.2%
19–64 yr
42.8%
17%
2%
45–64
years
65+
years
65+ yr
0.3%
Data source: ACHI. Arkansas Household Survey of Health Insurance Status. Little Rock, AR: ACHI; 2004.
19–64 yr
40.1%
65+ yr
1.0%
Changing Cost Allocations
Annual Family Premiums
Total, Company, and Employee Contributions
Annual Premiums ($)
$10,000
Company
$8,000
$6,000
Employee
$7,309
$9,695
$3,079
31.8%
$6,617
68.2%
23.8% $1,738
$4,000
76.2%
$5,571
$2,000
$0
2001
Year
2004
Medical Debt & Bankruptcy
• $12,000: Average out of pocket medical
debt for those who filed bankruptcy
• 68% of people who file bankruptcy had
health insurance
• 50% of all filed bankruptcies are partly the
result of medical expenses
Goals of the Roundtable
Original Goals (2000)
• Evaluate financing challenges facing Arkansans
• Develop a 5-10 year strategic plan with options
• Through incremental reform:
• Increase Arkansans covered by health insurance
• Promote marketplace stability
• Revised Goals (2005)
• Prepare for major system reform
• Map opportunities for influence
• Ensure rural states are engaged and influential
Mapping the next decade
• What is going to happen?
–
–
–
–
–
Demographic shifts
Economic pressures
Technological advances
Cost increases
Increasing expectations
• What is likely to happen?
– To employer-sponsored healthcare?
– To provider-centered delivery systems?
– To governmental entities responsible?
The New York Times October 16, 2006
Science, Politics, and Pragmatism
• Assimilate, generate, transform data into
information for policymakers
• Anticipate opportunities that are
predictable (e.g., SCHIP Reauthorization)
• Understand alternative viewpoints
• Invite non-traditional partners to the table
• Embrace change – Medicaid / SCHIP have
never been static policy instruments
• Pursue the goal with objective tenacity