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Hospital & Physician Cost Shift Payment Level Comparison of Medicare, Medicaid, and Commercial Payers

Page based on Title Slide from Slide Layout palette. Design is 2_Title with graphic. Title text for Title or Divider pages should be 36 pt titles/28 pt for subtitles . PRESENTER box text should be 22pt. DATE text box is not on master and can be deleted. The date should always be 18 pts.

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Hospital & Physician Cost Shift Payment Level Comparison of Medicare, Medicaid, and Commercial Payers

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  1. Page based on Title Slide from Slide Layout palette. Design is 2_Title with graphic. Title text for Title or Divider pages should be 36 pt titles/28 pt for subtitles . PRESENTER box text should be 22pt. DATE text box is not on master and can be deleted. The date should always be 18 pts. Hospital & Physician Cost ShiftPayment Level Comparison of Medicare, Medicaid, and Commercial Payers • Presented by • John Pickering, FSA, MAAA • Principal & Consulting Actuary December 9, 2008

  2. Page based on Title and Text from Slide Layout palette. Design is 1_Title with photo Subtitles are Part of Title Field, then Modified Manually (see next page) Total Cost Shift Estimate • Cost shift defined as additional amount Medicare and Medicaid would need to pay such that hospitals would realize consistent margins and physicians would be paid equivalent rates from each of the three payers, holding total payment constant • 2006 for hospital, 2007 for physician

  3. Page based on Title and Text from Slide Layout palette. Design is 1_Title with photo Subtitles are Part of Title Field, then Modified Manually (see next page) Employer and Consumer Burden • Cost shift accounts for approximately $1,788 annual health care cost for typical family of four, or 10.7% of the total • Average 2007 PPO plan design

  4. Page based on Title and Text from Slide Layout palette. Design is 1_Title with photo Subtitles are Part of Title Field, then Modified Manually (see next page) 2006 US Hospital Cost Shift Estimate • Redistribution of payment, holding total payment constant • Self-pay & other government not included in above, bring total operating margin down to 3.8% • Evaluated on hospital specific basis

  5. Page based on Title and Text from Slide Layout palette. Design is 1_Title with photo Subtitles are Part of Title Field, then Modified Manually (see next page) Hospital Operating Margins by Year • Based on AHA Survey data

  6. Page based on Title and Text from Slide Layout palette. Design is 1_Title with photo Subtitles are Part of Title Field, then Modified Manually (see next page) 2007 US Physician Cost Shift Estimate • Medicare pays 11% less than the average • Medicaid pays 40% less than the average • Commercial pays 14% more than the average

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