Deloitte Study on Out-of-Pocket HC Costs

The Deloitte Center for Financial Services and the Deloitte Center for Health Solutions recently embarked on a major study examining some of the hidden costs of U.S. health care spending patterns. The Center hypothesized that consumers spend more out-of-pocket than is typically reported in the insurance industry or government reports. This hypothesis was confirmed and the Center found that the cost to consumers was $363 billion heretofore not recognized and, in many cases, these are supplemental to traditional costs for doctors, drugs, hospitals, and insurance coverage — no small matter. Some of the study's key findings include:

• 2009 U.S. total health care expenditures are $2.83 trillion, 14.7 percent ($363 billion) more than calculated by the NHEA
• 55 percent of the $363 billion in additional health care costs are the imputed costs of supervisory care
• Total discretionary costs for health care (direct and indirect) totaled $1,892 per capita in 2009

For the complete study please click on the link below:

http://www.deloitte.com/view/en_US/us/Industries/Banking-Securities-Financial-Services/center-for-financial-services/87e022a77acde210VgnVCM3000001c56f00aRCRD.htm?id=us_email_fsi_032311

Update on Health CO-OPS

On March 21 the 15-member Consumer Operated and Oriented Plan (CO-OP) program Advisory Board submitted recommendations to HHS about the circumstances that would warrant the development of a nonprofit, member-run co-operative health plan (PPACA Section 1322). Among its suggestions:

• HHS should develop flexible criteria that recognize the diversity of market conditions around the country and enable differing models of CO-OPs created and supported by different types of sponsors to develop.
• In awarding loans and grants, preference should be given to applicants with a strong local network and model of integrated care over an application that includes a state-wide network with little emphasis on care coordination.
• HHS should make every effort to help a CO-OP succeed by providing or arranging for needed technical and management support as well as additional funding.

Note: Per Section 1322, $6 billion in loans are available to capitalize eligible prospective CO-OPs: start-up loans to be repaid in five years and grants to meet state insurance solvency/reserve requirements to be repaid in 15 years. Draft regulations for this program are expected later this spring.

Health Insurers Branch Into Other Ventures

Fearing profits will be cut by the new medical loss ratio requirements, HIs are purchasing a variety of businesses including wellness, health management and data companies:

http://www.kaiserhealthnews.org/Stories/2011/March/20/health-insurers-reform-business.aspx

Providers Don't Like CMS Value Based Regs

No one said this was going to be easy.

http://www.healthleadersmedia.com/page-5/QUA-263564/10-Ways-CMSs-ValueBased-Purchasing-Proposal-is-Flawed

ACO Regs: Give Providers the Flexibility to Promote Healthy Behavior through Incentives

This idea really makes sense:

http://www.kaiserhealthnews.org/Columns/2011/March/031511lutesbrill.aspx

Employers Do Not See the Real Costs of Underinsuring Their Workforces

It is more than just the cost of premiums:

http://healthaffairs.org/blog/2011/03/15/what-employers-don%E2%80%99t-spend-for-health-will-cost-them/

Cost of Chronic Conditions

Good chart from McKinsey:

http://www.mckinseyquarterly.com/newsletters/chartfocus/2011_03.htm