Hi! Thanks for the very interesting question.
The US healthcare industry has been the subject of much politics but
to some still costs in different fronts continue to escalate. This
summarized article provides a glaring overview of present healthcare
costs to the American public, companies and organizations involved in
this industry. Some documents are in PDF file so you will need the
Adobe Acrobat Reader to read them. In case you haven’t installed it
yet here is a link so you could download The Adobe Acrobat Reader
(http://www.adobe.com/products/acrobat/readstep2.html).
“Today, health care costs are staggering. Total U.S. health care
expenditures are projected to increase from $1.31 trillion in 2000 to
$2.6 trillion in 2010, averaging annual increases of 6.8%. By 2010,
health spending as a share of gross domestic product is estimated to
increase from today's 14.0% to 16.2%. Health spending in the United
States accounts for a larger share of GDP than in any other major
industrialized country. Despite the incredible investment America
continues to make in health care, an astounding 14.3% of Americans
lack health care coverage altogether.”
“Although managed care deserves much of the credit for taming the
rampant, double-digit health care inflation of the '80s and early '90s
(health care costs jumped 11% in 1990 alone), the relief from rising
medical bills that consumers enjoyed for several years is over, and
increases in premiums have both HMOs and employers, especially smaller
ones, scrambling for counter measures. The shift to managed care seems
to have run out of magic in terms of lowering health care costs. While
employers saw health coverage premiums increase only about 2% to 4%
annually from 1994 through 1997, costs have been soaring ever since.
Watson Wyatt Worldwide estimates that these costs rose over 9% in 1998
and again in 1999. In 2002, small employers saw cost increases of as
much as 15% to 20%, while larger firms suffered health benefit cost
increases of 9% to 12% (and some employers of all sizes endured much
higher increases). Health care costs are out of control once again,
and much of the blame lies with rising drug costs. The cost of drug
benefits coverage rose significantly in 2002, by 15% or more in many
cases.”
Employers are trying a variety of ways and solutions so as to cut
costs in this arena of their business.
“Escalating costs have forced employers to ask workers to pay for a
larger share of health care.”
“Smart employers are fighting back-establishing new benefits methods
that can accomplish much more than simply raising workers'
co-payments. For example, many major firms are showing their employees
how to use the Internet to obtain better information about diseases
and prevention. Insurance providers are jumping on the Internet
bandwagon as well. For example, Humana's web-based Emphesys benefits
system puts everything from monthly payments to participating
physicians to claims on the Internet at a substantial decrease in
cost.”
“Employers, exuberant over significantly lower health care expenses,
opted more towards the managed care system. Today, only a small
percentage of Americans who are insured outside of government programs
are covered by unmanaged fee-for-service plans.”
Physicians and hospitals are also in the dilemma of choosing quality
work and financial survival.
“Meanwhile, physicians are caught between the desire for quality care,
on the part of patients and their doctors, and the desire for cost
control on the part of payors, including HMOs, Medicare and Medicaid.
The cost versus care debate has spawned an energetic movement to
improve the quality of health care in the United States, much of it
centered around patients' rights.”
“In addition, millions of dollars in potential profits are being
squandered as hospitals and health systems write off record amounts of
revenues to bad debt. According to estimates by Zimmerman and
Associates, hospitals may have written off up to $20 billion in bad
debt in 2000. Costs are also being forced upward by legislation passed
in response to the overall public mistrust of managed care firms
(discussed later in this chapter). Of course, total health care
expenditures are also driven up by the aging "baby boomer" generation
and the scope and total amount of available health care.”
As regards to the payors, like HMOs, the feeling is that they are in
always in the middle of the conflict between healthcare consumers like
patients and employers plus the role of physicians and hospitals.
“Another major challenge facing the health care industry is the
severely tarnished image of managed care companies in general.
Supporters of managed care contend that its structure offers higher
quality care at a lower cost. Critics of managed care argue that the
system risks lives by allowing plan managers to question, and
sometimes reverse, the decisions made by medical professionals while
emphasizing cost control at the expense of quality, thus sabotaging
the bond of trust that should exist between doctor and patient."
"There is also concern among detractors of managed care about the
trend of mergers creating huge managed care companies. Some
metropolitan markets are dominated by as few as two major health
plans. Critics are equally concerned about the lack of autonomy of
physicians who are forced to deal with the growing power of managed
care giants.”
“While both supporters and critics make valid arguments, sweeping
generalizations about the state of managed care are inherently flawed
since no two managed care plans are exactly alike. Neither society nor
consumers can afford to turn back the clock to the considerably more
expensive, traditional fee-for-service system in which quality
preventive care was largely non-existent, and patient care was
generally provided without regard to cost.”
For more on this very informative article please visit the following
link:
Health Care Industry Trends & Market Analysis
http://www.plunkettresearch.com/health/health_trends.htm
As said earlier, HMOs are in between the conflict between consumers
and private purchasers of healthcare products in services. The trends
that are awaiting them are as follows:
HMOs Reports
http://www.firstmark.com/pdf_files/HMO_rpt.PDF
"Trend rates" for HMO and PPO products are up 26 percent and 19
percent respectively, according to "Health Care Cost Trend Survey,
2002." (Annual trend rate is defined as the expected annual increase
in cost and price projected by the survey's participants.) The survey
of 36 major insurance companies and managed care organizations
concludes that because HMOs and PPOs represent the majority of health
plan enrollment (72 percent in the survey), "these trends are
particularly disturbing."
“Expect double-digit jump in health care costs in 2002, survey says”
by Vicki Lankarge
http://216.239.51.100/search?q=cache:0r2pC2kqeAgC:www.benefitspool.org/sys-tmpl/nss-folder/doubledigitrateincreasesfor2002/Expect_double.doc+HMO+2002+trends&hl=en&ie=UTF-8
In terms of employer health care spending trends are concerned, of
course the projection will keep getting higher and higher.
“According to the Health Care Financing Administration (HCFA),
national health care spending is expected to double from $1 trillion
in 1996 to $2.1 trillion in 2007—from 13.6 percent to 16.6 percent of
gross domestic product.”
“Several factors have contributed to the rebound in health care
spending, according to Sheila Smith, a HCFA economist. In particular,
managed care enrollment gains have occurred at a slower pace. The
study questioned whether managed care in the absence of enrollment
shifts could be expected to have a permanent effect on health care
costs. "The one-time cost savings generated by the shift from
fee-for-service to managed care have already accrued," Smith said.”
“In addition, the HCFA Office of Actuary predicts private-sector
health care spending will outpace public spending as a result of cost
shifting from the Medicare savings produced by the Balanced Budget Act
of 1997. “
“In spite of some savings in managed care, however the raw numbers are
huge. The projected cost of healthcare represents an average increase
of 6.5% between 1998 and 2001. Health care cost began to accelerate in
late 1998. The average cost of health care is expected to grow from
$4,053 in January of 1999 to $7,100 by the year 2007 according a HCVA
study. Over the past two decades, the growth rate for health care has
been twice the rate of increase of the gross national product (GNP).
If this trend continues, we could be spending our entire GNP on health
care by the year 2062.”
Health Care Cost
http://216.239.51.100/search?q=cache:VNeqqfFnL2IC:www.bpcinc.com/articles/ebo/health_care_cost_analysis_and_trends.htm+healthcare+employers+spending+trends&hl=en&ie=UTF-8
US Healthcare companies are also feeling the strike of increase IT
spending specially due to HIPAA regulations standards.
“Healthcare companies are currently spending 5% of their revenue on
IT, with plans to increase spending in 2003 by 5%. Thank regulatory
compliance for the increase, specifically HIPPA, a government
regulation requiring companies to comply with privacy and security
regulations. The basic premise behind it is to simplify the
administration of certain health information to make the electronic
transmission of the information more efficient. Adhering to HIPPA will
force healthcare companies to spend more on applications, which is
currently 23% of their IT budget--a larger share than other service
industries. Other areas of investment will be user management,
infrastructure, outsourced services, security, and business
continuity. Manufacturing Companies Edge Up Spending Only Slightly.”
“Pharmaceutical companies are currently spending 5% on IT, and 62% of
them plan to increase the budget in 2003. IT spending in
Pharmaceutical will take two directions.”
The Decline in 2002 IT Spending: Is It Perception or Reality?
http://www.bettermanagement.com/Library/Library.aspx?a=8&LibraryID=4040
We could also take a look on healthcare spending by the private
sector.
“The figures from the year 2000 show that Americans are, on average,
paying more than $4,600 a year in health insurance, and they are
paying an average of nearly 20% more for prescription drugs.”
“The government report highlights the huge and growing burden of
healthcare in the US - $1.3 trillion, or more than 13% of the
country's gross domestic product (GDP), is spent on health, compared
to an average of less than 9% in Europe.”
“Overall, they rose by nearly 7%, the biggest increase since 1988.”
US health costs reach record high
http://news.bbc.co.uk/1/hi/health/1749526.stm
Other documents you might be interested in are the following:
Health Care Trend Survey from Andersen Consulting
http://www.andersen.com/resource2.nsf/vAttachLU/PBH_HealthcareCostTrendSurvey/$File/Healthcare%20Brochure.pdf
A Forecast of Healthcare Trends (2002 -2006)
http://www.greatboards.org/newdocs/GB_May_2002_Coile_pages_2-4.PDF
Healthcare Financing and Delivery of the Future
http://www.healthcare-informatics.com/issues/2001/02_01/leading.htm
Healthcare Financing (page 1)
http://www.coloradohealthonline.com/CGIA/CGIA_slides.pdf
Managed Care Plans see Better Pricing Environment
http://www.activemedia-guide.com/hc_mgrcare.htm
Search terms used:
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Easterangel-ga |
