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Trends in Health Insurance Costs
Healthcare reform regulations, increasing costs, and more competition are driving employers and their health plans to focus more than ever on opportunities to reduce cost trends. For example, the country experienced a 3.0% growth in per capita gross (allowed) medical and pharmacy costs from 2012 to 2013. Truven Health Analytics anticipates those costs in 2014 and 2015 will increase by 4% to 5% or more. By taking a data-driven approach, payers can manage costs and, ultimately, make their benefit programs sustainable in the context of healthcare reform. They can also maximize opportunities to improve population health and productivity and optimize the delivery of care.
The Truven Health Analytics 50 Top Cardiovascular Hospitals study identifies hospitals that achieve the best performance on a scorecard of performance measures. This year, based on comparisons between the winners and a peer group of similar high-volume hospitals that were not winners, the study found that if all cardiovascular providers performed at the level of this year's winners, approximately 9,500 additional patients could survive, more than $1 billion could be saved, and almost 3,000 additional bypass and angioplasty patients could be complication-free. This is based on an analysis of Medicare patients; if the same standards were applied to all inpatients, the impact would be even greater.
As the healthcare industry continues to embrace the trend toward employed physicians, an external perspective and relevant benchmarks can be beneficial in assessing the comparative performance of your practices. While hospitals and health systems will continue to strategically acquire physician practices, individual hospital trends will not always document that growth because employed providers may be organizationally located in different companies, and the financials will not be shown as part of hospital operations. Still, the physician enterprise will represent a growing percentage of total operating expense for the integrated delivery system. Introducing greater efficiencies and improved productivity to the physician enterprise is critical to the financial health of the organization.
The tax on high-cost health plans, which are often referred to as Cadillac plans, is expected to impact a considerable share of the plans provided by healthcare organizations for their own employees, as much as 39% by 2020. The implications are significant because the excess-benefits tax requires the employer to pay 40% on the value of the portion of the plan that exceeds thresholds set by the Patient Protection and Affordable Care Act. Employers also need to consider that the tax is measured as a direct function of plan cost, and not actuarial plan value, and that a number of factors can drive excise-tax exposure.