Study Finds Health Care Spending Will Rebound When Economy Picks Up

Responses to the question: "For future pr...

Responses to the question: “For future presidential elections, would you support or oppose changing to a system in which the president is elected by direct popular vote, instead of by the electoral college?” Data from Washington Post-Kaiser Family Foundation-Harvard University Survey of Political Independents, conducted May-June 2007, available at (Photo credit: Wikipedia)

The analysis by The Kaiser Family Foundation says the slowdown in
health spending over the past several years was largely driven by the
economic malaise.

Los Angeles Times: Study: Growth In Health Spending, Curbed By Recession, To Rebound

A new study attributes a slowdown in U.S. healthcare spending to the
recent recession and predicts more rapid growth as the economy
strengthens. The report issued Monday by the Kaiser Family Foundation
seeks to shed light on the reasons behind the recent drop-off. The
analysis found that economic factors related to the recession accounted
for 77% of the reduced growth in national healthcare spending, which
totaled an estimated $2.8 trillion in 2012 (Terhune, 4/22).

The Washington Post’s WonkBlog: Here’s Why Health-Care Costs Are Slowing

The answer has huge implications for the federal budget, which now faces
threats of really fast growth in Medicare, Medicaid and other health
programs. If those programs grow like they have for the past few years —
at the same rate as the rest of the economy — then that frees up lots
of funds for whatever other investments the federal government wants to
make (Kliff, 4/22).

The Hill: Study Predicts Rise In Healthcare Cost Growth By 2019

A stronger U.S. economy will contribute to a rise in the growth of
healthcare costs over the next six years, ending the current
record-breaking slowdown, according to a new study. The Kaiser Family
Foundation (KFF) predicted that by 2019, annual healthcare cost growth
will be closer to historic averages — over 7 percent compared to 3.9
percent between 2009 and 2011 (Viebeck,4/22).

CQ HealthBeat: Nation’s Health Spending Problem Remains Unsolved, Kaiser Analysts Say

Speculation that the nation’s health spending problem has somehow been
solved or cut down to size is unrealistic, says a new Kaiser Family
Foundation study that concludes 77 percent of the slowdown stems from
the weak economy. … But the analysts had a bit of good news. They said
the chilling effect on individual health spending due to the weak
economy will continue for a few more years (Reichard, 4/22).

(KHN is an editorially independent project of The Kaiser Family Foundation.)

Meanwhile, a different analysis is released on health issues–

Reuters: S&P Sees Pension Funding Burden Of Nonprofit Healthcare

Pension liabilities, expenses and contributions remain a burden on U.S.
not-for-profit hospitals despite improvements in the investments used to
fund the retirement systems, Standard & Poor’s Ratings Services
said on Monday. Large pension funding demands will likely “be a drag on
the sector for several years,” it added (Lambert and Trokie, 4/22).

This is part of Kaiser Health News‘ Daily Report – a summary
of health policy coverage from more than 300 news organizations. The
full summary of the day’s news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.


Adding Muscle To Plans’ Push For Value-Based Health Care

Dow Chemical corporate headquarters in Midland...

Dow Chemical corporate headquarters in Midland, Michigan (Photo credit: Wikipedia)

The July 24, 2006 issue of Fortune, featuring ...

The July 24, 2006 issue of Fortune, featuring its Fortune 500 list (Photo credit: Wikipedia)

Topics: Health Costs, Insurance, Marketplace

Mar 27, 2013

A survey from Catalyst for Payment Reform, a nonprofit lobbying group comprising highly profitable Fortune 500 giants, found that many of  its members do not feel like they are getting the value for which they are paying.

Medscape: Corporations Demand More Bang For Their Healthcare Buck
A coalition comprising some of the largest and most powerful healthcare buyers in the United States claims its members are not getting the value they are paying for. Only 10.9% of commercial in-network payments to doctors and hospitals goes toward “value-oriented” care, defined as payments that are either tied to performance or designed to cut waste, according to Catalyst for Payment Reform (CPR), a nonprofit lobbying group comprising highly profitable Fortune 500 giants, including 3M, Boeing, Dow Chemical, Verizon, and Walmart, among others (Osterweil, 3/26).

Modern Healthcare: Value-Based Insurance Plans Gain Momentum
The movement among employers to push insurers to adopt health plan benefit designs that improve medical outcomes without raising costs is slowly gathering steam, according to an employer coalition pushing payment reform. While only 11% of payments that commercial insurers made to in-network providers in 2012 were “value-oriented,” according to a survey from Catalyst for Payment Reform, that’s more than halfway to its goal of 20%, which the group hopes to attain by 2020. The numbers suggest there is reason to believe the insurance industry and providers can achieve the coalition’s goal, said Suzanne Delbanco, executive director of the not-for-profit coalition of employer groups, which issued its first-ever National Scorecard on Payment Reform (Block, 3/26).

Related KHN Coverage: Slow Progress On Efforts To Pay Docs, Hospitals For ‘Value,’ Not Volume (Mitchell, 3/26)

A Bridge To Health — And Away From ER Overuse

pie chart of causes of traumatic brain injury

pie chart of causes of traumatic brain injury (Photo credit: Wikipedia)

By Nancy Wang, North Carolina Health News

March 27th, 2013, 6:01 AM

There are patients in almost every hospital emergency room who do not need urgent care. They are there because they don’t have health insurance or a regular physician, or they didn’t know what else to do. Often, they are repeat visitors. It’s a problem that leads to emergency department overuse and contributes to spiraling health care costs.

Nationally, between 13.7 percent and 27.1 percent of all emergency department visits are non-urgent, according to a 2010 Health Affairs study, leading to about $4.4 billion in health care costs.

North Carolina’s Pardee Memorial Hospital, located in Hendersonville, has joined forces with local physicians in an attempt to reverse this cycle – and program data suggest the plan is working.

In 2009, Pardee’s emergency department treated approximately 45,000 patients. Among them the hospital identified 255 as “frequent flyers” – meaning they used the emergency room six or more times and racked up more than $3 million in unpaid medical bills. They were all uninsured, low-income patients, many with a history of substance abuse or mental health issues.

The next year, 44 of these patients agreed to participate in Bridges to Health – an integrated approach that Dr. Steve Crane, a family physician who started the program, calls a “patient-centered medical home on steroids.” It aims to decrease ER expenses by providing this patient population with primary care, behavioral health services and a nurse case manager through bi-weekly health clinic visits.

The program’s free clinic is part medical check-up, part group therapy. While the doctors treat rashes, abdominal pains and other symptoms, the patients also help one another, suggesting where to seek legal assistance or where to eat or sleep inexpensively. As such, the program sets out to address the two main problems seen in these patients: the lack of social support and access to regular primary care.

Advocates of this type of approach believe targeting ER over-users, who generally have limited experience with the health system, will buttress the Affordable Care Act’s provisions designed to expand insurance coverage and access to care.

A 2011 Centers for Disease Control and Prevention survey reported that 46.3 percent of respondent ER patients were in the ER because they had nowhere else to go. The report also found that uninsured adults were more likely than insured adults to go to the ER for this reason.

“Many of these people just went to the ER because they were in pain or scared,” Crane said. “You see them going back so many times because their real issues are not supposed to be treated in the ER and are not taken care of.”

A Targeted Approach

Unlike most free health clinics, where a wide variety of people are seen individually and most people rarely come more than once, Bridges to Health works exclusively with this specific group of ER over-users and each visit is conducted as one large group appointment.

Crane’s program offers these patients a better alternative with long-reaching benefits.

Before enrolling in the program, participants were averaging seven ER visits a year, costing an average of $14, 004 per person . At the end of the first year, participants averaged three visits a year, costing an average of $2,760 per person. This amounted to $404,784 in savings for the Pardee Hospital ER that year.

Additionally, 10 participants found employment and six previously homeless members found stable housing by the end of the first year.

Data for the second year is still being analyzed.

While the results of the program are very promising, Crane cautions that the patient group is small, and that the program only works for participants who come to the clinic meetings.

He and his team, however, are hopeful that programs like Bridges to Health will gain more support because they offer a way to hold down health costs, while improving care. A Bridges to Health pilot is on track to be replicated in Charlotte sometime this year, with a few other North Carolina and Virginia counties hoping to also get on board.

This entry was posted on Wednesday, March 27th, 2013 at 6:01 am.

5 Responses to “A Bridge To Health — And Away From ER Overuse”

  1. Lori says:

    This is a great outcome. We need more programs like this. Finding an additional reason for overuse in the population is lack of competency and inability and/or unwillingness for hospitals to address this in the emergency room. Deeper assessment of our frequent fliers re needed on many levels.

  2. Big issue great article. When the estimates are posted:

    “Before enrolling in the program, participants were averaging seven ER visits a year, costing an average of $14, 004 per person . At the end of the first year, participants averaged three visits a year, costing an average of $2,760 per person. This amounted to $404,784 in savings for the Pardee Hospital ER that year.”

    Are these dollar amounts what the hospital charges or what Medicare Allows? For instance the hospital may charge $2,000 for a CT of the brain but Medicare will pay $220 which is the Medicare Allowable.

  3. walter says:

    As a Republican, I don’t think this idea has even a remote chance of ever going prime time. Like Obamacare, ideas like this are a complete waste of time. We need to repeal Obamacare and we need to repeal stupid ideas like this. We need to return complete control of our healthcare system to the private insurance companies. America’s healthcare system was doing just fine prior to March of 2010. We need to trust the private insurance companies to do what is best for America’s healthcare system. The private insurers have had decades of experience. The private insurers should be allowed to do as they wish and not be regulated by the federal government. The private insurers can be trusted. We need to let the free enterprise system work. We need to let the free market system work. We need to stop federal government interference. In my opinion, emergency room overuse does not exist. In my opinion, nobody is abusing the emergency rooms in America. How can these statistics be accurate? In my view, it’s impossible!

  4. Lynn in SC says:

    In comparing cost you should also include the cost of the “free clinic”. Some entity is carrying that cost.

    Isn’t interesting that it took so long to identify the frequent flyers and most had mental health or substance abuse issues. These folks have been around for years.

    There are institution by institutions with creative solutions if only someone will look at the patients, recognize the patterns, and lead the solution. As long as providers have their vision limited by what is reimbursed and what is not reimbursed they won’t see solutions that are right under their noses because they only see the lack of revenue tied to these patients. .

  5. Evelyn says:

    Walter, ask anybody who works in any field remotely related to health care and they will tell you that you are dead wrong in your stance on emergency room overuse/abuse. My job involves working with only a small fraction of emergency room patients (only those who receive medical equipment while visiting the ED), and it is alarming how many of these people are “frequent flyers,” coming in monthly, sometimes weekly, for every little thing. (I can only imagine how many more patients I don’t look at that are in the same situation.) But a trend quickly becomes apparent: a strong majority of these patients are unemployed, uninsured or on state assistance, and have mental health and/or substance abuse issues. You cannot just ignore these issues. Private insurers will have nothing to do with these issues. And so we all pay, financially and morally.

    Why on earth would somebody lambast a program actually looking for solutions to these very real problems? I’m so sick of the complainers and naysayers. And it’s a little frightening how much faith you put into for-profit corporations. I sincerely hope that you don’t incur some horrible disease or injury that your insurance won’t cover a lick of, because that is another thing I see constantly in the hospital where I work. Then again, thanks to the Affordable Care Act (or “Obamacare”), you might never have to endure that tragedy.

    You do have one saving grace; at least you acknowledge your rant as opinion and not fact.

    Kudos to innovative thinkers like Bridges to Health.

Health Insurance Costs Rise, Driven By Higher Hospital, Doctor Prices

Topics: Health Costs, Insurance, Marketplace, Hospitals

Sep 25, 2012

According to a report by the Health Care Cost Institute, insurance spending jumped in 2011 – a departure from the two previous years.

The Washington Post: Health Insurance Costs Accelerate
U.S. spending on health insurance grew at an accelerated rate in 2011, breaking a two-year trend of smaller cost increases. The culprit, a new study suggests, is not Americans seeking more treatment but rather rapid growth in the price of medical care. Spending for private health insurance surged by 4.6 percent in 2011, according to a report from the Health Care Cost Institute. That growth rate is faster than the rest of the economy and higher than the previous year, which had 3.8 percent growth (Kliff, 9/25).

Kaiser Health News: Capsules: Higher Prices By Providers Drove 2011 Increases, Study Finds
Spending on medical care for Americans with job-based insurance rose 4.6 percent last year, driven mainly by higher prices charged by hospitals and other medical providers, a report out today says. The growth came despite a sluggish economy which some economists thought would translate into more modest spending growth. Still, last year’s per enrollee increase ranks below the 5.8 percent increase in 2009 (Appleby, 9/24).

Modern Healthcare: Healthcare Spending Picked Up In 2011: Report
The Health Care Cost Institute, an insurer-funded not-for-profit research group based in Washington, found per capita healthcare spending on those under age 65 with employer-backed insurance rose 4.6% to $4,547 in 2011. The increase in 2011 follows a rise of 3.8% in 2010 and 5.8% in 2009, based on an analysis of claims data from Aetna, Humana and UnitedHealthcare (Barr, 9/25).

Also in the news –

PBS NewsHour (Video): A PBS Documentary Asks Why Is U.S. Health Care So Expensive?
“Money and Medicine,” a documentary set to air Sept. 25 on PBS, investigates some of the most notorious factors in driving U.S. health care costs. Ray Suarez speaks with director Roger Weisberg about how some of those costs are moving the nation toward financial crisis while still producing relatively mediocre medical results (9/24).

In other marketplace developments –

The Wall Street Journal: Workers Eye ‘Consumer-Directed’ Plans In Bid To Cut Health Costs
It soon will be time for the autumn ritual of open enrollment, as people who get insurance through their employers sign up for next year’s coverage. But this season, which kicks off next week, also will mark a seminal shift—with more workers than ever weighing whether a “consumer-directed” health plan might pay off for them (Marte, 9/24).

Kaiser Health News: Health Plan Open Season Brings Rising Premiums And More Expensive Dependent Coverage
Comparing plans may be easier, though, thanks to new coverage summaries that group health plans and insurers must provide. As employees review their plan options and benefit changes for next year, here are a few changes they can expect (Andrew, 9/24).

This is part of Kaiser Health News’ Daily Report – a summary of health policy coverage from more than 300 news organizations. The full summary of the day’s news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.

English: U.S. Health Insurance Status (Under 65)

English: U.S. Health Insurance Status (Under 65) (Photo credit: Wikipedia)

Targeting Companies That Cut Health Care Costs

Maryland Health Insurance Plan Federal Press A...

Maryland Health Insurance Plan Federal Press Announcement (Photo credit: MDGovpics)

Topics: Health Costs, Delivery of Care, Marketplace, Insurance, Medicare, Politics

Sep 21, 2012

Reuters reports that the health care sector will be “a focal point” for years to come and looks at investments in companies that are likely to make money by helping to reduce costs. Meanwhile, Kaiser Health News examines whether competitive health care models like Medicare Part D and the Federal Employees Health Benefits program are taming costs as effectively as supporters suggest.

Reuters: Targeting The U.S. Healthcare Market
No matter what the outcome of the U.S. election, healthcare looks to be a focal point in the economy for years to come. The United States spent 17.9 percent of its gross domestic product on healthcare in 2010 – more than double what other wealthy nations spend on a per-person basis. In one sign of the growing importance of healthcare to the economy, S&P Dow Jones Indices added health insurer UnitedHealthcare to the Dow Jones industrial average, replacing Kraft Foods (Randall, 9/20).

Kaiser Health News: Is A Competitive Health Care Model All It’s Cracked Up To Be?
Republican vice presidential nominee Paul Ryan says his proposal to overhaul Medicare would use market competition to tame costs in the government health program relied on by almost 50 million people. As models, he often cites the health program for federal employees – including members of Congress — and Medicare’s prescription drug program (Appleby and Werber Serafini, 9/20).

Meanwhile, news outlets report that FEHBP premiums will rise about 4 percent next year –

The Washington Post: FEHBP Premiums To Rise About 4 Percent On Average
Premiums in the health insurance program for federal employees and retirees will rise by just under 4 percent on average in 2013, although rates will hold virtually steady in the largest plan, government officials said Thursday (9/20).

The Hill: Federal Workers’ Health Care Premiums To Rise 3.4 Percent
Members of Congress and other federal workers will see only a modest increase in their healthcare premiums next year. The average premium for federal employees will rise 3.4 percent next year, the Office of Personnel Management (OPM) announced Thursday. The increase translates to an extra $2.75 per paycheck for individuals, or $6.39 for families. Federal workers’ premiums went up 3.8 percent this year — slightly less than the 4 percent increase seen in the private sector (Baker, 9/20).

This is part of Kaiser Health News’ Daily Report – a summary of health policy coverage from more than 300 news organizations. The full summary of the day’s news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.

CMS Eyes Improper Medicare Payments For Power Wheelchairs

English: This is an image of Donald Berwick, w...

English: This is an image of Donald Berwick, who is the Administrator for the US Federal Center for Medicare and Medicaid Services (CMS). CMS is part of the US Department of Health and Human Services. The source website is federally managed by the Department of Health and Human Services. (Photo credit: Wikipedia)

Topics: Delivery of Care, Health Costs, Marketplace, Medicare

Sep 20, 2012

Centers for Medicare & Medicaid Services official testified on Capitol Hill Wednesday that 80 percent of this type of fee-for-service Medicare claim should not have been paid.

CQ HealthBeat: CMS: Medicare Improperly Paid Half-Billion Dollars For Power Wheelchairs
“Although CMS recognizes that many improper payments are not the result of willful fraud, this error rate represents over $492 million in estimated improper payments,” said Deborah Taylor, chief financial officer at CMS. Taylor said Medicare spent about $700 million last year for power wheelchairs. Taylor testified at a Senate Aging Committee hearing on Medicare payments for “power mobility devices,” which include both power wheelchairs and power scooters (Reichard, 9/19).

The Associated Press: Wheelchair Suppliers Say Crack Down On Medicare Fraud Goes Too Far; Insurer Applauds Effort
Wheelchair suppliers raised concerns Wednesday about a new government program that requires Medicare contractors to sign off before power wheelchairs can be delivered to elderly and disabled consumers. … The new program began on Sept. 1 and requires providers in seven states to get confirmation from a government contractor that Medicare will pay for the device before they deliver it. Michael Clark, general counsel for the SCOOTER Store, says the pilot project goes too far and every claim his business has submitted under the new program has been denied (Freking, 9/19).

This is part of Kaiser Health News‘ Daily Report – a summary of health policy coverage from more than 300 news organizations. The full summary of the day’s news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.

Dr. Mark B. McClellan

Dr. Mark B. McClellan (Photo credit: Wikipedia)

ACO ‘Predecessor’ Saved Medicare Money, According To JAMA Study

House Republican Press Conference on Health Ca...

House Republican Press Conference on Health Care Reform House Republican Leader John Boehner (R-OH) (Photo credit: House GOP Leader)

Insight from Donald Berwick

Insight from Donald Berwick (Photo credit: Gates Foundation)

Topics: Health Costs, Delivery of Care, Medicare, Quality, Aging

Sep 12, 2012

The study found that the Medicare Physician Group Practice Demonstration resulted in health care savings.

Reuters: Doctor Incentive Groups May Save Money, With Effort
According to a new study, a precursor to the Accountable Care Organizations that policymakers are hoping will lower health costs and improve quality did reduce spending in some organizations, but not in others. ACOs and the earlier pilot program, known as the Medicare Physician Group Practice Demonstration, emphasize shared savings for groups of health workers and award bonus payments based on their quality of care (Pittman, 9/11).

Kaiser Health News: Capsules: Medicare Pilot Program Shows Cost Savings Treating Dual-Eligibles
Researchers Tuesday released a deeper look at the Physician Group Practice Demonstration, one of the federal government’s first pay-for-performance experiments to improve health care and reduce costs for the Medicare population. They found that it created significant savings — especially for dual eligibles, which is the population who receives health coverage through both Medicare and Medicaid and who are often the health system’s sickest and costliest patients (Kulkarni, 9/11).

The New York Times: New Medical Care Networks Show Savings
The nation’s nine million “dual eligibles,” as they are known, make up 15 percent of the Medicaid population but account for 39 percent of the program’s spending. … The findings come as accountable care organizations are forming around the country. According to the Department of Health and Human Services, more than 150 such groups now serve about 2.4 million Medicare patients  (Goodnough, 9/11).

Modern Healthcare: Spending Varied Widely In Early ACO Test, Report Says
Medicare spending varied widely among 10 physician groups that tested accountable care ahead of healthcare reform, with the most notable reductions among low-income, medically complex seniors, a newly published estimate shows. On average, Medicare spending for low-income seniors also covered by Medicaid, a population known as dual eligibles, declined by $532 annually for elderly patients included in the five-year accountable care pilot (Evans, 9/11).

Medpage Today: ACO Precursor Saved Money
Colla and colleagues also found that most of the overall savings were achieved through reductions in acute care hospitalizations … They also saw a significant variation in savings across practice groups, ranging from an overall mean per-capita annual savings of $866 to an increase in expenditures of $749. The reason for such differences remains unclear, but the researchers suggested that organizations that start out with higher spending levels have greater opportunities to achieve savings (Fiore, 9/11).

In other Medicare news –

The New York Times: As Medicare Fraud Evolves, Vigilance Is Required
Officials are also noticing a huge increase in problems in the home health care and hospice areas. For instance, some Medicare recipients are persuaded to sign up for “free” massages in their homes, and Medicare is fraudulently billed for physical therapy. Or, unscrupulous doctors approve patients for hospice care who are not terminally ill and may be experiencing something as minor as recent weight loss (Konrad, 9/11).

CQ HealthBeat: Medicare Official Reminds Insurers Of Consequences Of Low Ratings
In an effort to discourage participation in low-performing Medicare Advantage health plans, a top Medicare official Tuesday reminded an audience of insurers that seniors who want to enroll in such plans will have to call the company rather than joining online. Jon Blum, deputy administrator of the Centers for Medicare and Medicaid Services, told a conference sponsored by the trade group America’s Health Insurance Plans (AHIP) that Medicare beneficiaries will get warnings about health plans that have received ratings of fewer than three stars for three consecutive years. … The decision to discourage seniors from enrolling in low-rated plans was in a document released in April (Adams, 9/11).

This is part of Kaiser Health News’ Daily Report – a summary of health policy coverage from more than 300 news organizations. The full summary of the day’s news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.

Benefit Security Card .. HALF of the U.S live ...

Benefit Security Card .. HALF of the U.S live in households that receive government benefits (26 May 2012) …item 2..Brevard man gets 4 years in Social Security fraud case (Jun 1, 2012 ) … (Photo credit: marsmet481)