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Breaking Down Healthcare Cost in America

While Americans debate how to pay for the rising cost of future healthcare, how are we currently paying for America’s $2.6 trillion healthcare bill? According to the Center for Medicare & Medicaid Services (CMS) 2010 data, $849 billion was paid by private insurance companies covering 188 million people, $938 billion was paid by CMS covering 73 million people, and Americans paid an additional $300 billion out-of-pocket for their healthcare.

 

The “cost per person” model does not help us understand the nation’s healthcare bill because not every person is a patient. If we focus on every American, the charges are not clear. On the surface, it looks like CMS paid 2.6 times more for healthcare than private insurance companies – there is health care business broker speaking about it. However, insurance pays the cost of a patient visit, not the cost of a person. With Stratasan analytics, we can dig deeper into the data to create a more accurate cost model. Using Stratasan’s Health Service Demand, we know Americans visited the doctor’s office 1.3 billion times in 2011. Private insurance covered approximately 650 million of those patient visits and CMS covered 510 million.  It is when we focus on patient visits that the healthcare cost picture begins to come into focus.

The surface level data does not tell the complete story. Although Medicare pays almost 3 times as much per person, they only pay 38% more per visit. Medicare & Medicaid patients visit the doctor twice as often as private insurance patients and they are typically older and/or have a chronic condition. This translates to higher health expenses. While America continues to debate how to pay for future healthcare costs, at least we have a better idea where the costs are coming from and who is paying for it today.

At Stratasan, we have a suite of analytic tools to drill into healthcare data to determine market trends, health demand, costs, and patient migration to name a few. Whether you need help completing your Form 990 Schedule H or you simply want to better understand your patient populations and market strategy, check out our Community Health Needs Assessment.

A Hospital By Any Other Name

Our team at Stratasan often receives strange questions from our clients. Because the depth of our data, the range of our content, and the power of our analytic engines, we can generate meaningful answers. This includes data driven answers to market branding. Just as we trust brands for cars, clothing, and insurance, hospitals are eager to earn patient’s trust in their brand.

In 1946, The Hill Burton Act provided funding and loans to communities to upgrade old hospitals with hospital pneumatic tube carriers along with other technological advances, and build new hospitals as well. Back then, hospitals were brick and mortar buildings with red crosses and white coats. They provided care to their in-patients. Today, many of those hospitals still serve patients but have transformed into comprehensive medical centers offering specialized in-patient and out-patient care in multiple medical disciplines: cardiology, oncology, gastrointestinal, pediatrics, neurology, and hundreds more. These medical centers set themselves apart from the pack calling themselves just that, Medical Centers. Other names like Heart Institute and Cancer Center have emerged to even further brand facilities as the trusted choice. Even with the rise of medical centers, medical facilities still prefer to call themselves hospitals by more than a 2 to 1 margin. In America, there are 4,656 hospitals averaging 138 beds per facility generating over $800billion in revenue and 1,756 medical centers average 224 beds per facility generating nearly $600billion in revenue. Looking out Stratasan’s downtown Nashville window, we see Vanderbilt Monroe Carol Jr. Children’s Hospital just miles away from Centennial Medical Center and Baptist Hospital. The competition for branding is in every city from coast to coast. Clinics such as The Cleveland Clinic and the Mayo Clinic are yet another name trying to brand themselves as the leading choice for patients. Whether it’s a medical center, hospital, or clinic, medical facilities are continually striving to provide quality care and striving to set their brand apart from pack.

Community Health Needs: Contrasting Access with Quality Care

Access to quality healthcare is a hot topic on both a national and local level. Many rural communities have a shortage of doctors while urban populations overwhelm the few providers accepting new patients. To better identify communities that are underserved, The Health Resources and Services Administration (HRSA) annually lists the health provider shortage status of every US County.

Who is #1 and #50? Tennessee is the 2nd most accessible state in America with 41% of its counties having no shortage of healthcare providers. This map shows the status of the HRSA status of every county in America. White indicates that the county has no shortage of health providers; yellow indicates that some of the communities within a county have a shortage of providers; and red indicates there is a health provider shortage throughout the entire county.

Designated Primary Care Shortage Areas

We did not stop at access as the only issue.  We went deeper into the available data and found the HRSA health provider shortage classification is not necessarily indicative of a healthy or unhealthy county. In Tennessee for example, Benton County is the 95th county for health outcomes but HRSA has determined that Benton is not underserved. Fayette County is the 18th healthiest county, yet HRSA has designated the entire county as underserved. This data shows it takes more than access to hospitals and doctors to make a community healthy.

“To engineer a healthy community, it takes a collaborative effort among providers, health plans, industry, government, and public health,” said Dr. Stephanie Bailey, Stratasan’s Community Health and Medical Director and former chief of the Office of Public Health Practice for the CDC.  “Creating a culture of health and participation within all community members is required to move the needle.  Access to care is only part of the story.” As 2012 rapidly approaches, many hospitals will complete their IRS Form 990 Schedule H when fulfilling their Community Health Needs Assessment requirement. These community health assessments will shed a brighter light on access to quality care within communities and neighborhoods through the United States.

If you are looking for assistance in fulfilling your Form 990 Schedule H requirement or looking for proactive measures in understanding your community health needs, give us a call.

Read more about Stratasan’s Community Health Needs Assessment

Uninsured Approaching 50 Million Mark

The Census Bureau just released their latest report on the Uninsured.  Since 2000, the United States has added 13.4 million to the rolls of the uninsured for healthcare.  This is more than the population of Minnesota and Wisconsin combined.  Below, we have created a visualization of the impact of this trend.

Uninsured in America
Current uninsured Americans equal 18 states worth of population

The combined population of middle of our country is now equal to the number of uninsured.  Can you imagine if we, as a country, decided to not provide the same medical services for these 18 states as the rest of the country?  Bottom line: it wouldn’t happen. Due to the same number of people being dispersed throughout our country, we are more tolerant of the problem.

As pointed out in an earlier release by the Kaiser Family Foundation in 2011, approximately 25% of uninsured adults go without needed care due to cost compared to only 4% of those with private insurance.

The percentage of people covered by employment-based health insurance decreased to 55.3 percent in 2010 from 56.1 percent in 2009 (greater than a 1% drop).  48.6 million people (15.9% of population) were currently being covered by Medicaid in 2010.

Government health insurance coverage increased from 93.2 million (30.6%) in 2009 to 95.0 million (31.0%) in 2010.

The last figure for this post is in 2010 there were 7.3 million children under the age of 18 (9.8%) who were without health insurance coverage.

If you have a need for analytics on healthcare and market data, give us a call today.

Sources:
http://www.census.gov/prod/2011pubs/p60-239.pdf
http://www.kff.org/uninsured/upload/7806-04.pdf
http://www.stratasanwp.wpengine.com

Access full map here

 

 

 

 

 

Healthcare Services for Hurricane Irene

Hurricane Irene is projected to hit North Carolina and maintain hurricane force winds all the way to New York City this weekend.  This area of the country is one of the most populated areas of the United States.  The storm’s projected path contains more than 60,000,000 people and 25,000,000 homes.  A little under 14 million are children.  In total, the area represents 302,587 square miles in our study analysis according to the Census and ESRI.

A small bit of good news is there are 459 hospitals and an estimated 135,000 physicians in the affected areas.  Hospitals, Physicians, and Emergency Responders have all been put on alert and are ready to respond.  Based on our experiences with Hurricane Katrina, tetanus shots will be needed for responders and people living in affected areas.

Healthcare Facilities in Affected Area

 

If you are living in a low lying area or near the coast, plan an evacuation route as water rises.  Many areas will be without water and electricity as Hurricane Irene makes landfall.  Stock up on food and water today.

The CDC has recommendations for cleaning up after flood water at the following link.  http://www.bt.cdc.gov/disasters/floods/cleanupwater.asp

Medicare Market Share Analytics 2010

What is the Government Really Worried About?

Recently, we had an opportunity to review the 2009 and 2010 Medicare Market Share Database from the Centers of Medicare Services.  Ordinarily, this might seem like a very tedious assignment, but using some advanced analytics from Stratasan, we were able to look at the data in some new ways.  Below are our findings from the data to get you to think about strategies to deal with Medicare today and in the future.

2010/2009 Medicare Market Share Analytics

In one year, there was an average increase of 5.1% in average charge per Medicare patient and 7.6% increase in Total Patient Charges to $594B.  How many of you were able to increase your prices by 5.1% last year?  I guess not many.  More important, Medicare Patients, Charges, and Patient Days all increased.  All three categories saw increases.  The one area I don’t really understand is Patient Days.  I really thought this area would decrease over the past year.  Not so, it increased by 7.6% from 2009 to 2010.

What’s really scary is that all areas should see another increase this year.  More patients, sicker patients, and slow adoption of HIT will continue to accelerate the price for Medicare patient in the coming years.  Put this on top of the massive number of “Boomers” moving through the healthcare system and the trends point to some tough times ahead for Medicare.

The overall number of Medicare patients increased by 2.4% from 2009 to 2010.  Charges increased by 7.6% and “Days” increased by .93%.  But the raw numbers are really scary.  Medicare patients accounted for 21% in 2009.  In total, US Hospitals experienced $594,139,209,085 in charges according to CMS.  This $594 Billion was spread across 14,929,510 patients and consumed 86,436,835 days of care in our hospitals.The scarcely told story concerns the rapid pace of average hospital expense growth of more than 5.1%.  New technologies in imaging, pharmaceuticals, and HIT will accelerate the cost side of the equation at least through 2015.  According to SHRM (Society for Human Resource Management), the cost to employers is expected to rise by 8.5% in 2012 compared to 8.0% in 2011.

Of course, it should be noted that our last day on Earth is usually our most expensive.  In future blogs, we will discuss the hockey stick curve of healthcare expenses and why Hospitals love the slap shot.  In addition, we will cover the psychographics of Medicare.

Sources: 2009 and 2010 Medicare Service Area Files, CMS, SHRM, ESRI 2010 Population Data.

Outpatient Statistics 2010

This is the third entry in our overview series of healthcare statistics in the United States. If you missed the first two, you can find them here: Physician Office Visit Statistics 2010, and here: Inpatient Statistics 2010.

As the title suggests, this entry will focus in on utilization rates from 2010 for Outpatient visits for the country as a whole.

NOTE: You can click on any of the images below to see the full report image.

The table above illustrates the total number of Outpatient visits for the United States in 2010, broken down by age group.  The overall Outpatient visit rate for the country is one visit for every 2.82 people.

The table above and below should be looked at in comparison to one another. The above graph shows the incident rate broken down by age group while the graph below represents the total volume of Outpatient visits by age group.

Notice how the overall utilization of Outpatient visits is highest in the 45-65 age group, but the rate of visits is highest in the 65-75 age group.  The disparity is due to a smaller population in the older age group.

The table below is an aggregation of the most frequent outpatient procedures.  It reveals the most likely cause for the majority of Outpatient visits.

By looking below at the race and a gender distribution, we are able to get a picture of which segments of the population account for the majority of Outpatient visits.

Let us know what your reactions are to the 2010 Outpatient statistics

If you are interested in running geo-targeted reports around healthcare utilization projections, click here to get started.