Where Are Our Healthcare Dollars Being Spent?

Quite often in the course of working with our clients on practical and innovative approaches to lower their healthcare costs or mitigate pending increases, we are asked two questions:

“Why is healthcare so expensive?” And “where is the money going?”

The first question is so hugely complicated there may not be enough bandwidth on the internet to analyze it and address it in writing. The second question was addressed in a recent study published by the Agency for Healthcare Research and Quality and related in easier to read fashion in a joint Kaiser Health News/Washington Post article.

While this is really big picture stuff, in answering the question on where the money is being spent, they present some interesting (perhaps only to analytical geeks like me) and startling facts worth taking a moment to contemplate:

  • In 2010, Americans spent @ $1.3 TRILLION on healthcare (This addresses direct payments for care provided during the year.  It jumps to $2.8 TRILLION when you include health care goods and services, public health activities, government administration, the net cost of health insurance, and investment related to health care).
  • 1% of the population accounted for 21% of the $1.3 TRILLION spent.
  • 5% accounted for 50% of all healthcare expenditures.  And, 10% are credited with 66% of the healthcare spend.
  • Contrast that with the 50% of the folks in the U.S. that accounted for less than 3% of the costs.

Our BBG world is micro and hyper-intensively focused on helping mid-size and small employers control costs and improve outcomes one employer at a time. We can’t even begin to suggest we know where the big picture solution lies. That’s for folks a lot smarter and better equipped. It does appear clear however, even to this lay person, that to put a dent in this ever growing cost curve, the lion’s share of the resources and efforts must laser focus on solving the 5% accounting for 50% cost equation…

For more on the study or the article, go here:

http://meps.ahrq.gov/mepsweb/data_files/publications/st421/stat421.shtml

And, here: www.kaiserhealthnews.org/stories/2013/october/08/one-percent-of-costliest-patients.aspx

Ezra says, “Healthcare.gov is in defacto shutdown.”

That is the title of Ezra Klein’s piece in yesterday’s Washington Post that indicates while the federal healthcare exchange is said to be open for business, it really isn’t.  Klein interviews highly respected health industry consultant Bob Laszewski who possesses up-close knowledge of the ballyhooed rollout of the federal health insurance exchange healthcare.gov. Laszewski and Klein provide some real, matter-of-fact insight and perspective on the utter chaos surrounding the rollout. Interestingly, while much of the latest news cycle highlights the many glitches associated with the exchange’s front end rollout, the article discusses even bigger problems that may loom on the system’s back end, if and when coverage is purchased and goes into effect.

Caveat emptor.

Read the entire piece at http://m.washingtonpost.com/blogs/wonkblog/wp/2013/10/23/healthcare-gov-is-in-de-facto-shutdown/

Looking for Official ACA Information?

Interested in finding what official online resources are available from the federal government for learning about the various requirements and other aspects of healthcare reform?  With implementation of the major pieces of healthcare reform around the corner and the complexity seemingly growing with each passing day, I was.  A cursory investigation led to these six main government-sponsored websites, no doubt there are many others.  Here are the big six for those who might want a handy reference:

Official Site of the Affordable Care Act
https://www.healthcare.gov/

U.S. Department of Health & Human Services (HHS)
http://www.hhs.gov/healthcare/

The Internal Revenue Service (IRS)
http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions-Home

U.S. Department of Labor  (DOL)
http://www.dol.gov/ebsa/healthreform/

U.S. Small Business Administration
http://www.sba.gov/healthcare

The White House
http://www.whitehouse.gov/healthreform

Confused About 2014 Maximum-Out-of-Pocket Costs?

ACA Prescribed Limits Are Still on Track for Most Plans in 2014

Out-of-Pocket (OOP) maximums of $6,350 for individuals and $12,700 for families will still apply for most customary fully-insured health insurance plans in 2014 (coinciding with renewal/anniversary dates; new plan year effective dates). Many publications and other news sources have created some confusion by reporting that the Affordable Care Act provision limiting maximum out of pocket costs has been delayed until 2015. The delay only impacts those plans that carve out certain benefits (e.g. pharmacy, mental health benefits) for administration by separate third-party providers.  In those cases, a health plan’s medical benefits and its carved out benefit(s) may apply toward separate out-of-pocket maximums in 2014.  This appears to be a one year exception for carve-outs and all plans are expected to aggregate out-of-pocket maximums beginning in 2015.

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