Drivers of Health Care Costs in Indiana
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- Eugenia Eaton
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1 Drivers of Health Care Costs in Indiana Seema Verma, MPH Project Director, Indiana State Planning Grant SeemaVerma Consulting Indiana Overview 12.3% Uninsured; small numbers of minorities compared to other States Major loss of manufacturing jobs in the State Stringent Medicaid eligibility (23% of the FPL) Conservative State; Less Government Philosophy 1
2 Key Factors Driving Study Recognition that most options were band-aids Need to understand what forces were driving the number of uninsured up Focus on addressing those issues rather than expanding Medicaid or other government programs (short term solution) Study was driven more externally than internally Build the case for expanding health insurance as part of an overall economic recovery and development Answer the questions: does it cost more to insure Hoosiers, as compared to other Americans? Snapshot High-level, macro economic view of the health care market place in Indiana including the key market issues that are contributing to increasing health care costs in Indiana and growing numbers of uninsured. 2
3 Study Areas Current Indiana Economy Indiana Health Care Sector and Economic Impact Employer Sponsored Coverage in Indiana Indiana s Health Insurance Market Factors that Drive Health care Costs in Indiana How does Indiana Compare to the Nation Sources of Data Variety of Economic Indicators CMS Data on Utilization Medicare Data Public Health Status Data 3
4 Economic Results Highlighted Indiana s economic problems Cautioned that as the economy improves; the number of uninsured will not change, and may continue to rise Manufacturing jobs will be replaced with low paying jobs that don t offer health insurance Key Findings Impact of costs Detracts employers from coming to Indiana Depresses overall employment, wages, and detracts from other benefits, wealth accumulation Increases public burden Health Services employment represents 10% of the Indiana economy, and has grown by 2% in contrast to the overall decline in Indiana s employment Rising premiums represent income to providers. Uncompensated care costs are passed back to insurers Reducing costs by 25% over 10 years will likely represent a loss of jobs to the health care sector, but overall growth in the employment 4
5 General Trends for Indiana Employers Small business offer rate is 44% vs. 98% for large business Part time worker coverage has declined from 26% of 17% Low wage workers pay 31% of premiums as compared to 18% of premiums Indiana Premiums Quantified dramatic increase from Projections from indicate a 45% increase in premiums Somewhat higher than neighboring states but not significant Hoosiers pay a greater percentage of their health care premiums than the nation 5
6 Hospital Care supplier induced demand Hospital Spending - 4% higher than national average Growth at 9%; higher than the nation s average More Procedures Medicare data shows more coronary procedures amortizing fixed cost of technology over fewer procedures 4 Heart Hospitals? Technology Availability 14% to 65% above the national average Hospital Care Continued Bed Supply Bed days substantially lower; indicating more vacancies 11% higher than national average Higher Than Average Length of Stays (LOS) Admissions lower Growth for LOS 9%; national average (1%) 6
7 Practice Patterns Higher than average supply of surgeons, shortages of primary care, dental and mental health Reported nursing shortage, but data reveals more nurses per capita than other States Low supply of physicians assistants Higher Bed Staffing Indicates more reliance on physicians rather than paraprofessionals Low Managed Care Penetration Population Aging Population Unhealthy Population 7
8 Other Areas Pharmacy Costs/Non durables; while increasing Indiana s rates were at or below the national average Hoosiers spent more on nursing home care than the national average, but growth was slower Home health care lower and similar to the nation Dental Limitation of Study CMS DATA IS OLD.1998 IS THE MOST RECENT DATA AVAILABLE. UPDATED DATA NOT EXPECTED TO BE RELEASED UNTIL
9 Take Aways While Indiana s health care costs have historically been at or below the national average, higher than average growth, may propel the State to be higher than average. Problems with the uninsured deeper than access to care Practice Patterns/Hospital Care Take Aways Solidifying/Dispelling Common Beliefs (hospital building, premiums costs Health Care Delivery System needs review Must address quality, cost, access simultaneously Need more holistic approach to addressing health care issues Issues affect all health care consumers and employers; not just uninsured 9
10 Where Do We Go From Here? Committee sharply divided on data Blame Game Hospital Association Unable to make a recommendation Called for further study More updated data needed Legislative Session- Certificate of Need New Administration Press Coverage 10
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