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Increases in Health Insurance Premiums Compared to Other Indicators, 1988-2004

Controlling Healthcare Costs A New Approach. HEREIU Fund Las VegasElizabeth B. GilbertsonDirector Strategic Planning. Overview of The HEREIU Fund. Number of lives: 120,000Total annual medical spend: $235 millionDemographicsLow income immigrant populationMore than 42% Latino, 13% Asian, 10% Af

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Increases in Health Insurance Premiums Compared to Other Indicators, 1988-2004

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    1. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 1999, 2000,2001,2002,2003,2004; KPMG Survey of Employer-Sponsored Health Benefits: 1993, 1996; The Health Insurance Association of America (HIAA): 1998, 1989, 1990;Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 1988-2004; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 1988-2004. Note: Data on premium increases reflect the total cost of health insurance premiums for a family of four. Increases in Health Insurance Premiums Compared to Other Indicators, 1988-2004 Elizabeth Gilbertson, Director of Strategic Planning and Public Policy, Hotel Employees and Restaurant Employees International Union Welfare Fund. Presentation to the Citizens’ Health Care Working Group, Salt Lake City, July 22, 2005. Table shows increases in health insurance premiums compared to other indicators between 1998 and 2004.Elizabeth Gilbertson, Director of Strategic Planning and Public Policy, Hotel Employees and Restaurant Employees International Union Welfare Fund. Presentation to the Citizens’ Health Care Working Group, Salt Lake City, July 22, 2005. Table shows increases in health insurance premiums compared to other indicators between 1998 and 2004.

    2. Controlling Healthcare Costs A New Approach HEREIU Fund Las Vegas Elizabeth B. Gilbertson Director Strategic Planning Presentation to the Citizens’ Health Care Working Group, Salt Lake City, July 22, 2005 by Elizabeth B. Gilbertson. Controlling Healthcare Costs: A New Approach Presentation to the Citizens’ Health Care Working Group, Salt Lake City, July 22, 2005 by Elizabeth B. Gilbertson. Controlling Healthcare Costs: A New Approach

    3. Overview of The HEREIU Fund Number of lives: 120,000 Total annual medical spend: $235 million Demographics Low income immigrant population More than 42% Latino, 13% Asian, 10% African American All located in Southern Nevada 1,800 physicians in network All doctors in the same specialty are paid the same rates Overview of the HEREIU Fund: 120,000 patients, total annual spending $235 million. All patients are in one county in Nevada, mainly low income immigrant population. All physicians in each specialty are being paid the same amount.Overview of the HEREIU Fund: 120,000 patients, total annual spending $235 million. All patients are in one county in Nevada, mainly low income immigrant population. All physicians in each specialty are being paid the same amount.

    4. The MD Restructuring Project Profiled all physicians in the network for efficiency Utilized software with clinical indicators to profile for quality Restructured based on Practice patterns Geography Language & culture Sub-specialty Terminated 50 doctors in 2003 Created Gold Star program for primary care doctors in newly restructured network Bonuses up to 10% of prior 6-month reimbursement New dollars, not withold Profiled all physicians in the network for efficiency. The network was restructured based on various factors and terminated 50 physicians in 2003 and created a gold star group to whom they paid bonuses. The bonus amount was ¼ on efficiency and ¾ on quality.Profiled all physicians in the network for efficiency. The network was restructured based on various factors and terminated 50 physicians in 2003 and created a gold star group to whom they paid bonuses. The bonus amount was ¼ on efficiency and ¾ on quality.

    5. Medical Cost Increases (per Eligible Enrolled Employee – Includes Rx) Restructuring resulted in reduced costs with year 1 savings of $26 millionRestructuring resulted in reduced costs with year 1 savings of $26 million

    6. Health Care Cost Categories Breakdown of Health Care cost categories: MD services, $72.5 million; Prescription drugs, $50.3 million; inpatient hospital, $41 million; outpatient hospital, $17.6 million; Other, $42 million; Lab/X-ray, $13 millionBreakdown of Health Care cost categories: MD services, $72.5 million; Prescription drugs, $50.3 million; inpatient hospital, $41 million; outpatient hospital, $17.6 million; Other, $42 million; Lab/X-ray, $13 million

    7. How Does Health Care Really Happen? Divider page – How does health care really happen?Divider page – How does health care really happen?

    8. The Cost of Health Care 85% of cost of health care is driven by either what doctors do themselves or cause to be done.85% of cost of health care is driven by either what doctors do themselves or cause to be done.

    9. Treatment Patterns Story of how 3 different doctors treat the same patient One case 3 different doctors 3 different treatment plans Story of how 3 different doctors treat the same patient.Story of how 3 different doctors treat the same patient.

    10. Three Different Treatment Patterns The Case Case study of single mildly ill patient with various symptoms.Case study of single mildly ill patient with various symptoms.

    11. Three Different Treatment Patterns Scenario 1: Limited Treatment First doctor care resulted in $30 charges for two office visits.First doctor care resulted in $30 charges for two office visits.

    12. Three Different Treatment Patterns Scenario 2: Intermediate Treatment Next doctor care resulted in higher cost for two visits and various treatments, approximately $90.Next doctor care resulted in higher cost for two visits and various treatments, approximately $90.

    13. Three Different Treatment Patterns Scenario 3: Extensive Treatment Third extensive treatment approach resulted in two visits and extremely high costs, approximately $554.Third extensive treatment approach resulted in two visits and extremely high costs, approximately $554.

    14. Evaluating a Physician’s Treatment Pattern The frequency mix affects the average cost per patient The frequency mix affects the average cost per patient. Dr. A’s treatment pattern.The frequency mix affects the average cost per patient. Dr. A’s treatment pattern.

    15. Evaluating a Physician’s Treatment Pattern The frequency mix affects the average cost per patient The frequency mix affects the average cost per patient. Dr. B’s treatment pattern.The frequency mix affects the average cost per patient. Dr. B’s treatment pattern.

    16. Evaluating a Physician’s Treatment Pattern The frequency mix affects the average cost per patient The frequency mix affects the average cost per patient. Dr. C’s treatment pattern.The frequency mix affects the average cost per patient. Dr. C’s treatment pattern.

    17. The Cost of Health Care Repeat slide; 85% of cost of health care is driven by either what doctors do themselves or cause to be done. Only physician services not highlighted. Repeat slide; 85% of cost of health care is driven by either what doctors do themselves or cause to be done. Only physician services not highlighted.

    18. Four Episode Treatment Groups How the Costs Vary Four episode treatment groups. Chart 1 – Ear infection, Family Practice.Four episode treatment groups. Chart 1 – Ear infection, Family Practice.

    19. Four Episode Treatment Groups How the Costs Vary Four episode treatment groups. Chart 2 – Acute Bronchitis, Family Practice.Four episode treatment groups. Chart 2 – Acute Bronchitis, Family Practice.

    20. Four episode treatment groups. Chart 3 – Urinary Tract Infection, Internal Medicine.Four episode treatment groups. Chart 3 – Urinary Tract Infection, Internal Medicine.

    21. Four episode treatment groups. Chart 4 – knee joint derangement, orthopedic surgery.Four episode treatment groups. Chart 4 – knee joint derangement, orthopedic surgery.

    22. Sources of Savings Year 1 72% of Savings From New MD Network Chart showing sources of savings in year one: 72% from new MD network.Chart showing sources of savings in year one: 72% from new MD network.

    23. Medical Cost Increases (per Eligible Enrolled Employee – Includes Rx) 2 year savings $67 million Chart showing medical cost increases and 2-year savings of $67 millionChart showing medical cost increases and 2-year savings of $67 million

    24. Conclusion Comprehensive benefits maintained Wage increases: Year 1-- 55 cents/hour; Year 2-- 60 cents/hour Critical Success Factor: Need a large data set in a single market Conclusions: Comprehensive benefits maintained; 2-year wage increases; Hard to come by large enough data bases to do this sort of examination. One take away is to make the Medicare data base available for this sort of analysis.Conclusions: Comprehensive benefits maintained; 2-year wage increases; Hard to come by large enough data bases to do this sort of examination. One take away is to make the Medicare data base available for this sort of analysis.

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