dollars in billions

26
Exhibit ES-4. Cumulative Impact on National Health Expenditures (NHE) of Insurance Connector Approach Plus Selected Individual Options $31 $1,554 $1,258 $997 $770 $573 $407 $84 $163 $272 $0 $400 $800 $1,200 $1,600 $2,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Cum ulative im pact Annualnetim pact Dollars in billions Note: Selected individual options include improved information, payment reform, and public health. Source: Based on projected expenditures absent policy change and Lewin estimates. Savings to NHE

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Exhibit ES-4. Cumulative Impact on National Health Expenditures (NHE) of Insurance Connector Approach Plus Selected Individual Options. Dollars in billions. Savings to NHE. Note: Selected individual options include improved information, payment reform, and public health. - PowerPoint PPT Presentation

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Page 1: Dollars in billions

Exhibit ES-4. Cumulative Impact on National Health Expenditures (NHE) of Insurance Connector Approach

Plus Selected Individual Options

$31

$1,554

$1,258

$997

$770

$573

$407

$84

$163$272

$0

$400

$800

$1,200

$1,600

$2,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Cumulative impact

Annual net impact

Dollars in billions

Note: Selected individual options include improved information, payment reform, and public health.Source: Based on projected expenditures absent policy change and Lewin estimates.

Savin

gs

to N

HE

Page 2: Dollars in billions

Exhibit ES-5. Total National Health Expenditures, 2008–2017 Projected and Various Scenarios

3.0

3.2

3.4

3.6

3.9

4.1

4.4

2.3

2.8

2.6

2.4

2.9

3.0

3.2

3.4

3.7

3.9

4.1

2.7

3.6

3.4

3.3

3.1

3.0

2.8

2.6

2.52.4

2.9

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Projected under current system

Insurance Connector plus selectedindividual options*

Spending at current proportion (16.2%)of GDP

* Selected individual options include improved information, payment reform, and public health.Source: Based on projected expenditures absent policy change and Lewin estimates.

Dollars in trillions

Page 3: Dollars in billions

Exhibit 1. Projected National Health Expenditures (NHE)by Payer Source, 2005–2016

* Consumer payments include out-of-pocket payments and private health insurance.Source: J. A. Poisal, C. Truffer, S. Smith et al., “Health Spending Projections Through 2016: Modest ChangesObscure Part D’s Impact,” Health Affairs Web Exclusive (Feb. 21, 2007):w242–w253.

Projected

Total 2005 2011 2016

NHE (in billions) $1,987.7 $2,966.4 $4,136.9

NHE as percent of GDP 16.0% 17.5% 19.6%

Payer Source

Private $1,085.0 $1,566.1 $2,123.3

Consumer Payments* 943.8 1,347.0 1,811.9

Other Private Funds 141.2 219.1 311.4

Public 902.7 1,400.3 2,013.6

Federal 643.7 1027.4 1,486.5

State and Local 259.0 372.9 527.1

Page 4: Dollars in billions

Exhibit 2. International Comparison of Health Spending,1980–2005

0

1000

2000

3000

4000

5000

6000

7000 United StatesGermanyCanadaFranceAustraliaUnited Kingdom

0

2

4

6

8

10

12

14

16

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

United StatesGermanyCanadaFranceAustraliaUnited Kingdom

Source: OECD Health Data 2007.

Average spending on healthper capita ($US PPP)

Total health expendituresas percent of GDP

Page 5: Dollars in billions

Exhibit 3. Financial Burden for Low- and Middle-Income Families Is Increasing

2624

16

7

33

24 23

10

0

25

50

<100% FPL 100% to <200% FPL 200% to <400% FPL 400%+ FPL

1996 2003

Percent of nonelderly adults spending 10% or more of disposable incomeon family out-of-pocket medical costs and premiums

Note: Financial burden includes out-of-pocket costs for premiums for private insurance and other health services.Source: J. S. Banthin and D. M. Bernard, “Changes in Financial Burdens for Health Care: National Estimates for thePopulation Younger than 65 Years,” Journal of the American Medical Association, Dec. 13, 2006 296(22):2712–19.

Page 6: Dollars in billions

Exhibit 4. One-Third of Adults Ages 19–64 Are Uninsuredor Underinsured, as Are Two-Thirds of Low-Income Adults

6583

32

19

4

9

26

49

13

0%

20%

40%

60%

80%

100%

Total 200% of poverty or more Under 200% of poverty

Uninsured during year

Underinsured*

Insured, not underinsured

* Underinsured defined as insured all year but experienced one of the following: medical expenses equaled 10% or more of income; medical expenses equaled 5% or more of incomes if low-income (<200% of poverty); or deductibles equaled 5% or more of income.Data: 2003 Commonwealth Fund Biennial Health Insurance Survey (Schoen et al. 2005b).Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006.

Percent

Page 7: Dollars in billions

Exhibit 5. Growth in National Health Expenditures (NHE)Under Various Scenarios

Source: The Commonwealth Fund; data from J. A. Poisal, C. Truffer, S. Smith et al., “Health Spending ProjectionsThrough 2016: Modest Changes Obscure Part D’s Impact,” Health Affairs Web Exclusive (Feb. 21, 2007):w242–w253.

NHE, in trillions of dollars

7

1.75

2.00

2.25

2.50

2.75

3.00

3.25

3.50

3.75

4.00

4.25

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Baseline NHE

One-time savings scenario

Slowing trend scenario

Reduced level & trend scenario

$1.99 Tin 2005

Cumulative savings projections to 2016:One-time savings of 5%: $1.56 trillionSlowing trend by 1% annually: $1.72 trillionCombination of one-time savings and slowing trend: $3.19 trillion

$4.14 T

$3.93 T

$3.77 T

$3.58 T

(19.6% GDP)

(18.6% GDP)

(17.8% GDP)

(16.9% GDP)

Page 8: Dollars in billions

Exhibit 8. Distribution of 10-Year Impact on Spendingfrom Promoting Health Information Technology

-$87.8

$0.2

-$19.3 -$27.2

-$41.4

-$100

-$80

-$60

-$40

-$20

$0

$20

$40

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Dollars in billions

SA

VIN

GS C

OSTS

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Page 9: Dollars in billions

Exhibit 9. Distribution of 10-Year Impact on Spendingfrom Center for Medical Effectiveness

and Health Care Decision-Making

-$367.5

-$97.7-$49.1

-$107.1-$113.6

-$400

-$300

-$200

-$100

$0

$100

$200

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Dollars in billions

SA

VIN

GS C

OSTS

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Page 10: Dollars in billions

Exhibit 10. Distribution of 10-Year Impact on Spendingfrom Patient Shared Decision-Making

-$9.2

-$7.6

-$0.4-$0.2-$1.2

-$10

-$8

-$6

-$4

-$2

$0

$2

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Dollars in billions

SA

VIN

GS C

OSTS

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Page 11: Dollars in billions

-$190.5

-$68.2-$48.9-$38.5-$34.9

-$250

-$200

-$150

-$100

-$50

$0

$50

$100

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Exhibit 11. Distribution of 10-Year Impact on Spendingfrom Reducing Tobacco Use

Dollars in billions

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

SA

VIN

GS C

OSTS

Page 12: Dollars in billions

-$282.6

-$72.5-$101.2

-$57.2-$51.8

-$400

-$300

-$200

-$100

$0

$100

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Exhibit 12. Distribution of 10-Year Impact on Spendingfrom Reducing Obesity

Dollars in billions

SA

VIN

GS C

OSTS

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Page 13: Dollars in billions

Exhibit 13. Distribution of 10-Year Impact on Spendingfrom Positive Incentives for Health

-$19.0

-$11.5

-$4.5 -$5.2

$2.2

-$25

-$20

-$15

-$10

-$5

$0

$5

$10

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Dollars in billions

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

SA

VIN

GS C

OSTS

Page 14: Dollars in billions

Exhibit 14. Distribution of 10-Year Impact on Spendingfrom Hospital Pay-for-Performance

-$34.0

-$4.1-$1.7-$0.8

-$27.4

-$40

-$30

-$20

-$10

$0

$10

$20

Systemwide Federal Gov't State and

Local Gov't

Private Payer Households

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Dollars in billions

SA

VIN

GS C

OSTS

Page 15: Dollars in billions

Exhibit 15. Distribution of 10-Year Impact on Spendingfrom Episode-of-Care Payment

-$229.2

-$377.4

$39.7$90.1

$18.3

-$500

-$400

-$300

-$200

-$100

$0

$100

$200

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Dollars in billions

SA

VIN

GS C

OSTS

Page 16: Dollars in billions

Exhibit 16. Distribution of 10-Year Impact on Spendingfrom Strengthening Primary Care and Care Coordination

-$9.1

-$193.5

-$156.9

-$4.1-$23.4

-$250

-$200

-$150

-$100

-$50

$0

$50

$100

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Dollars in billions

SA

VIN

GS C

OSTS

Page 17: Dollars in billions

Exhibit 17. Distribution of 10-Year Impact on Spending from Limit on Federal Tax Exemptions for Premium Contributions

-$131.1

-$55.2-$19.3

$129.7

-$186.2-$250

-$200

-$150

-$100

-$50

$0

$50

$100

$150

$200

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Dollars in billions

SA

VIN

GS C

OSTS

Page 18: Dollars in billions

Exhibit 18. Distribution of 10-Year Impact on Spendingfrom Reset Benchmark Rates for Medicare Advantage Plans

-$49.6

-$124.0

$0.0 $0.0

$74.4

-$150

-$100

-$50

$0

$50

$100

$150

$200

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Dollars in billions

SA

VIN

GS C

OSTS

Page 19: Dollars in billions

Exhibit 19. Distribution of 10-Year Impact on Spendingfrom Competitive Bidding

-$104.2

-$282.5

$0.0 $0.0

$178.3

-$400

-$300

-$200

-$100

$0

$100

$200

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Dollars in billions

SA

VIN

GS C

OSTS

Page 20: Dollars in billions

Exhibit 20. Distribution of 10-Year Impact on Spendingfrom Negotiated Prescription Drug Prices

-$43.4

$7.5$17.1

$3.5

-$71.5

-$100

-$80

-$60

-$40

-$20

$0

$20

$40

Systemwide Federal

Gov't

State and

Local Gov't

Private

Employer

Households

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Dollars in billions

SA

VIN

GS C

OSTS

Page 21: Dollars in billions

Exhibit 21. Distribution of 10-Year Impact on Spendingfrom All-Payer Provider Payment Methods and Rates

-$122.4

$0.0 $0.0

-$17.7

-$104.7

-$140

-$120

-$100

-$80

-$60

-$40

-$20

$0

$20

$40

$60

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Dollars in billions

SA

VIN

GS C

OSTS

Page 22: Dollars in billions

Exhibit 22. Distribution of 10-Year Impact on Spendingfrom Limit on Payment Updates in High-Cost Areas

-$157.8

-$259.7

$62.1$27.3$12.6

-$300

-$250

-$200

-$150

-$100

-$50

$0

$50

$100

$150

Systemwide Federal Gov't State and

Local Gov't

Private Payer Households

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

Dollars in billions

SA

VIN

GS C

OSTS

Page 23: Dollars in billions

Exhibit 23. Cumulative Changes in AnnualNational Health Expenditures, 2000–2007

0

25

50

75

100

125

2000 2001 2002 2003 2004 2005 2006* 2007*

Net cost of private health insurance administration

Family private health insurance premiums

Personal health care

Workers earnings

Notes: Data on premium increases reflect the cost of health insurance premiums for a family of four/the average premium increase is weighted by covered workers. * 2006 and 2007 private insurance administration and personal health care spending growth rates are projections.Sources: A. Catlin, C. Cowan, S. Heffler et al., “National Health Spending in 2005: The Slowdown Continues,” Health Affairs, Jan./Feb. 2007 26(1):143–53; J. A. Poisal, C. Truffer, S. Smith et al., “Health Spending Projections Through 2016: Modest Changes Obscure Part D’s Impact,” Health Affairs Web Exclusive (Feb. 21, 2007):w242–w253; Henry J. Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits Annual Surveys, 2000–2007 (Washington, D.C.: KFF/HRET).

109%

65%

91%

24%

Percent change

Page 24: Dollars in billions

Exhibit 24. Cumulative Impact on National HealthExpenditures (NHE) of Insurance Connector Approach

Plus Selected Individual Options

$31

$1,554

$1,258

$997

$770

$573

$407

$84

$163$272

$0

$400

$800

$1,200

$1,600

$2,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Cumulative impact

Annual net impact

Dollars in billions

Note: Selected individual options include improved information, payment reform, and public health.Source: Based on projected expenditures absent policy change and Lewin estimates.

Savin

gs

to N

HE

Page 25: Dollars in billions

Exhibit 25. Net Federal Spending withInsurance Connector Alone Compared with Net Federal

with Insurance Plus Savings Options

$50$109

$195

$10$13$31 $0

$50

$100

$150

$200

$250

2008 2012 2017

Federal spending offset

Net federal with insurance plus savings options*Dollars in billions

* Selected options include improved information, payment reform, and public health.Source: Lewin Group modeling estimates of insurance option alone or insurance in combination with savings optionscompared with projected federal spending under current policies.

$82Insurance Alone

$122Insurance Alone

$205Insurance Alone

Page 26: Dollars in billions

Exhibit 26. Total National Health Expenditures, 2008–2017 Projected and Various Scenarios

3.0

3.2

3.4

3.6

3.9

4.1

4.4

2.3

2.8

2.6

2.4

2.9

3.0

3.2

3.4

3.7

3.9

4.1

2.7

3.6

3.4

3.3

3.1

3.0

2.8

2.6

2.52.4

2.9

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Projected under current system

Insurance Connector plus selectedindividual options*

Spending at current proportion (16.2%)of GDP

* Selected individual options include improved information, payment reform, and public health.Source: Based on projected expenditures absent policy change and Lewin estimates.

Dollars in trillions