Workers' share of health care costs spiked 70% in 10 years, study finds

[high density]

Source: Portland Press Herald

While Congress argues over how to extend health insurance to the growing number of people without it, most Maine businesses and workers struggle with a different problem: how to afford the insurance they have.

The average cost of health coverage through employers' plans in Maine grew nearly 70 percent from 1999 through 2008, according to a study released today by the Robert Wood Johnson Foundation. Maine's median household income grew only 0.2 percent during the same period.

...

Maine employers and their workers have been hit harder than most by the premium increases, the report shows. The average increase nationally was 43 percent to 56 percent depending on type of coverage, compared with 66 percent to 70 percent in Maine, the report shows.

Jason Allen, a Portland-based independent insurance consultant, said medical costs that rise about 14 percent year after year are the primary driver of the rate hikes. Allen and others also pointed to Maine rules that don't exist in other states, such as one that forbids insurance companies from dropping sick people and a long list of medical procedures that insurers must pay for.

Read more: http://www.pressherald.com/news/workers-share-of-health-care-costs-spiked-70_-in-10-years-study-finds_2010-03-16.html

---

This article has a Maine-centric view, but the same story could be told in any state.

Also catch the amazing insight of the consultant here who says that insurance costs more if the insurance company cannot drop sick people.

[Beavker]

1. Well, it sound like the way to fix this would be...

...to do nothing.

Thanks,
GOP

[DJ13]

2. ...... eliminate the insurers as the middlemen

Thats the only fix.

[Stumbler]

3. Why do you hate the free market?!?

:sarcasm:

[awoke_in_2003]

16. Because he hates

America :)

[WriteDown]

4. Even if you took all the insurance company profits from last year...

it only totals 13B or 14B. What needs to happen is for doctors to be paid less and the actual cost of care needs to come down.

[strategery blunder]

5. Of course, insurance companies blow so much on overhead/yachts...

that isn't even counted in their profits. They like to whine that they only make 3% or so in profit margins, but they waste around 30% on overhead while the government can do less than 5%, easily.

Granted your point is true for some greedy specialists and hospitals that bill uninsured at five times the rate that they bill insurance, and other assorted hospital bill padding, but I wouldn't want to see general practitioners earn less--there's already a shortage of GPs as it is, and medical school is expensive!

[WriteDown]

6. Please link to amount of billions in overhead and yachts on their SEC filings. nt

[strategery blunder]

7. LOL nice diversionary tactic.

If you disagree with someone, there is the time-honored tradition of burying them in red tape. You know, like the Republicans are doing with HCR. It's not that excessive overhead expenses aren't documented elsewhere, it's just that you demanded I go through about 200 pages of red tape, per insurer (and I am not schooled in reading SEC reports, either). I actually did do a ctrl/F search for "overhead" on CIGNA's SEC filing, just to pick a random insurer, but it came up only three times, none of which was in an expense table. You would think that overhead is such a basic expense that it would be readily found in a filing... :eyes:

Of course, CEO salaries and bennies would generally be defined as "overhead;" yachts are subsumed therein.

It's finals week, so I don't have the time to go through 200 pages of red tape now. Maybe in a couple of days after I finish, maybe sooner if you tell me where the hell buried in the SEC filing I can actually find where such expenses are documented. If I have to aggregate a bunch of subcategories to get it, that's one thing, but as I said earlier, I'm not schooled in SEC filings.

[WriteDown]

8. No. That would be making ridiculous accusations with no way to back them up.

This is the first time I've heard of SEC filings described as "diversionary tactics."

[strategery blunder]

9. No.

Asking for documentation and sources is perfectly reasonable (I could have done THAT in a matter of minutes); specifying that you expect someone to spend hours going through a filing that is hundreds of pages long is not.

Because you were so specifically demanding, I will fulfill your documentation request on MY schedule, not yours.

[WriteDown]

18. So you've got nothing. Just wild claims...

You can't even cite anecdotes. :eyes:

[strategery blunder]

22. I've got the New England Journal of Medicine.

but OMG! IT'S NOT AN SEC FILING! TEH HORROR!

Yet it was the first hit on google with the query {"health insurance" overhead costs}. From the abstract: "Results In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. After exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada. Canada's national health insurance program had overhead of 1.3 percent; the overhead among Canada's private insurers was higher than that in the United States (13.2 percent vs. 11.7 percent). Providers' administrative costs were far lower in Canada."

I don't even wanna think of how much worse it is ten years after this article was published; American health insurance certainly hasn't improved in that time. :eyes:

http://content.nejm.org/cgi/content/short/349/8/768

Now if you hadn't been so damn specifically demanding about what kind of "documentation" you wanted, I would have happily had that to you just a few minutes after I saw your request for documentation (along with the content of the next paragraph appended). Instead, I saw you were demanding I find it in 200-page-long SEC filings, and that's per insurer. For the record, it's 4:30 in the morning here, and I haven't gone to bed yet because I have so much shit to do, and I don't expect to be able to crash until 8 in the evening! And that's assuming I get some sleep *before* sifting through a few hundred pages of the legalese you demanded.

I will grant that under the influence of all of the stress I had to deal with (ETA: I do believe I mentioned it was finals week), I confused "overhead" with "administrative expenses" (hell, I thought overhead WAS administrative expenses :eyes:) and the 30% figure I had turned out to be for the latter, not the former. However, I stand by single payer being far more efficient, as evidenced by the juxtaposition of Canada's system being cited as costing just over half the administrative expense as American healthcare. Not to mention Canada's public HC system had about 1/10th the overhead of *its* private insurers, and Canada's SP system had about 1/9th the overhead of American insurers at the time.

Perhaps YOU should be more considerate of the fact that people have lives outside of DU, and be more considerate of making excessive demands on the time of other DUers. Asking for sources to back up a claim is reasonable, and I would have done that quickly and easily. Demanding that a claimant prove the claim by finding evidence to support it buried somewhere in a document that you specify that is hundreds of pages long is not.

[WriteDown]

31. ROFL

"Methods For the United States and Canada, we calculated the administrative costs of health insurers, employers' health benefit programs, hospitals, practitioners' offices, nursing homes, and home care agencies in 1999."

So once again, we're not even solely talking about health insurance. Now we're getting into into the health providers themselves. I am glad you can at least admit that you were a little off base.

[strategery blunder]

32. And read the next sentence...

Canada's national health insurance program had overhead of 1.3 percent; the overhead among Canada's private insurers was higher than that in the United States (13.2 percent vs. 11.7 percent).

Yeah, because private health insurance is CLEARLY more efficient than single payer. :eyes:

You're clearly not worth my time while I should be working on capstone projects instead, and your continued dismissive attitude warrants no further attention from me. Even if I did spend (waste) a full day digging your requested "proof" out of SEC reports, you would still laugh at me if your present conduct is any indication whatsoever. Congratulations for being the first person I've added to my previously non-existent ignore list during my six years at DU.

[WriteDown]

34. That's not what it says at all. Why don't you post the direct quote?

I will do it for you.

"Results In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. After exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada. Canada's national health insurance program had overhead of 1.3 percent; the overhead among Canada's private insurers was higher than that in the United States (13.2 percent vs. 11.7 percent). Providers' administrative costs were far lower in Canada."Providers' administrative costs were far lower in Canada."

This is the total of all administrative costs and not just health insurance companies. But you knew that didn't you? Or are you just seeing what you want to see?

Oddly enough they don't even bother to list the amount of the disparity for "providers" whose administrative costs are described as far lower in Canada. And you said that companies use administrative costs as cover to buy yachts. Must be what US doctors are doing.

[No Elephants]

24. Bull puckey. A yacht is not going to show up in an SEC filing. Besides, a yacht is not the issue.

[strategery blunder]

33. Thank you!

I want the time I wasted jumping through his ridiculous hoops looking for crap that isn't in SEC filings (and learning what isn't in there the hard way) back. :banghead:

It's like me demanding you prove a claim you made by finding "proof" in some audit that I specify...when I know full well the audit does not address your claim.

[WriteDown]

36. It sucks when people demand you supply proof. nt

[WriteDown]

35. I just want ANY evidence of these yachts.

Otherwise its a wild, unsubstantiated accusation. I guess some people "just know."

[dflprincess]

17. At least doctors provide a service and you are paying for their expertise

You pay the insurance companies so they can process the paperwork to let you know your claim is not covered - it's how they make their money.

And, while some specialist make obscene amounts of money family practice doctors, internists and pediatricians aren't really overpaid. According to Physicians for a National Health Plan the difference between what doctors in the U.S. make and what doctors in Canada make, is not that much.

http://student.pnhp.org/content/what_about_physician_salaries.php

In general, the income differences between U.S. and Canadian physicians are not vast. Subspecialists do make less money in Canada, although they are still earning high salaries; additionally, primary care physicians are actually making more money in Canada than in the U.S., a force that might help cut down on this country’s current shortage of primary care doctors.

Any drop in income a physician might experience under a single-payer system would be mitigated by a drastic reduction in practice costs. For instance, the average malpractice premium for an Ob/Gyn, the medical specialty with the highest malpractice rates, was $195,000 in Florida for 20045. Comparatively, in the most expensive province in Canada for 2008, the malpractice rate for an Ob/Gyn was $33,563.28 annually, or $161,000 less than Florida’s6.

Administrative overhead would also be much lower with a single-payer system, as it would involve imprinting the patient’s national health program card on a charge slip, checking a box to indicate the complexity of the procedure or service, and sending the slip (or a computer record) to the physician-payment board. This simplification would save thousands of dollars per practitioner in annual office expenses, and mean that each physician takes home more of his or her gross income. A 2003 study in the New England Journal of Medicine quantified this difference, noting that administration accounted for 31% of health care expenditures in the U.S., as compared to 16.7% in Canada; if the U.S. were to lower administrative overhead to Canadian levels, the savings would be approximately $350 billion.

[WriteDown]

19. Every country with socialized medicine pays their doctors significantly less than our doctors...

and that is what we have to move towards. Unfortunately, the amount of family physicians is getting dangerously low as med school students chase the money. http://money.cnn.com/2009/07/16/news/economy/healthcare_doctors_shortage/index.htm

[No Elephants]

25. In isolation, that is a meaningless statement.

How much does it cost those doctors to be trained, compared to here: What are their operating expenses, etc. compared to here? What is the cost of living in those countries, compared to here?

Besides, what's your point? Are you advocating for socialized medicine, in the wildly capitalist society that we have? How is that fair, or any kind of incentive for talented people to become doctors?

Or are you advocating for socialism to replace capitalism?

[WriteDown]

30. All non-issues....

In other countries, specialists don't drive their 7 series BMW home every day at 3:30PM and have off on Fridays for golf.

[No Elephants]

23. No., First, in 2009, a very bad recession year, profits of the top health insurers ALONE

was 12.2 billion dollars, up 56% from the prior year depite the terrible recession

That's an average of 2.44 billion per company for each of the 5 biggest companies.

And, that's pure profit. That's after all expenses related to lobbying, advertising, taxes, salaries, real estate expenses, paper clips, corporate retreats, $2000 wastebaskets or whatever, all pay outs on behalf of patients, etc. etc. ad infinitum.

What in heaven's name is so "only" about that?

And, in the same year, 2.7 million people LOST coverage.

First, lets start with reducing those profits and expenses.

Next, go to PHARMA.

Next, Big Health Care.

Then, we can worry about what the individual doctor makes, because, in most cases, it ain't all that much, given their education costs, their operating expenses and the fact that they are dealing with life and death every minute.

[WriteDown]

37. Let's breaks down your #'s

2.2 x 5 = 11. Let's add another 9B to that to total 20B for all health insurance profits, expenses, etc. Now let's look at actual healthcare spending.

From wiki:
"The Office of the Actuary (OACT) of the Centers for Medicare and Medicaid Services publishes data on total health care spending in the United States, including both historical levels and future projections.<35> In 2007, the U.S. spent $2.26 trillion on health care, or $7,439 per person, up from $2.1 trillion, or $7,026 per capita, the previous year.<36> Spending in 2006 represented 16% of GDP, an increase of 6.7% over 2004 spending. Growth in spending is projected to average 6.7% annually over the period 2007 through 2017. A recently released report on the latest figures showed that the US spent $2.5 trillion, $8,047 per person, on health care in 2009 and that this amount represented 17.3% of the economy, up from 16.2% in 2008.<37> Health insurance costs are rising faster than wages or inflation, and medical causes were cited by about half of bankruptcy filers in the United States in 2001.<38>"

That's Trillion with a "T."

I have no argument that insurance costs could be lower, but I do not discount the fact that our medical establishment is also charging WAY too much.

[guitar man]

10. 112% in 3 years

My share of the premium alone on my "employer provided" insurance have gone up by 112% over the last 3 years. Copays, prescriptions and deductibles have also gone up....more money, less insurance :grr:

[high density]

11. All while our incomes are stagnant or in decline

Will corporate America ever figure out that they need to pay decent wages to people if they want us to buy their stuff?!

[0rganism]

13. that's where "emerging markets" come into play

The more you can sell your stuff to someone in Bangalore or Hong Kong, the less it matters if you can sell to the guy on the other side of town.

We are beginning the second stage of the Great Equalization. Get ready for a lousy 20 years.

[guitar man]

15. Then we should toss them out

If the robber barons don't want to make things here and don't care if they sell them here we should revoke their damn privelige of living here. Toss them out on their asses and tell them not to come back. If they have nothing but contempt for this society and no desire to contribute to it, I say we exile their asses, revoke their citizenship. With extreme prejudice and liberal amounts of tar and feathers! :grr:

[0rganism]

21. in a decade most of them won't live here permanently anyway

Hell, would you want to live somewhere with crumbling roads, collapsing bridges, backed up sewers, toxic atmosphere, half-empty shelves in the grocery stores, overcrowded public schools that don't meet building codes, and a third of the working-age population wandering around jobless with nothing better to do than curse your name? Nah, those guys are gonna pull up stakes and head to one of their cozy chalets in the Italian Alps, or maybe some spacious out-of-the-way ranch in Paraguay, or a gated mansion in Bahrain. They won't give a shit about US residence or citizenship, they'll already have two or three others lined up and ready to go. And thanks to the recent SCOTUS decision, their corporations will still be buying as much influence as they need to squeeze the last bits of fiscal solvency out of the US population.

Your talking about taking away that which has no value to them and never did. :shrug:

[guitar man]

28. yeah you're right

so let's hang them by their heels and beat them senseless instead. :P

[No Elephants]

26. Why only 20 years?

[guitar man]

14. Oh yeah

Thanks for reminding me, I forgot to mention I've had no raise for the last two years either :(

[MellowDem]

12. Even with single payer...

while the potential amount saved from eliminating insurance companies would be sizeable, it wouldn't be enough to cut the huge costs of health care in our country. It's not just private insurance companies that make health care expensive in this country, much more expensive then elsewhere. The main problem with insurance companies is that they deny coverage to about 1/6 of Americans. The costs we have come from having private hospitals, private pharmacy companies, etc. etc. that use the latest technology and invest in developing the best medical technology (and most expensive) in the world, from an incredibly ineffecient system where many many more unneccesary expensive procedures are approved than other countries, and doctors that are paid a whole lot more than doctors elsewhere, partly because of the insane cost of getting a medical degree in the US, but also because the whole system is infused with the profit motive a lot more than in other nations.

Now, with single payer, the government would have an easier hand at negotiating prices with those pharmacy companies and hospitals, and even instituting greater regulations on the system as a whole. But to cut costs we will need those "long lines" and waiting periods that other countries have and a much more efficient system.

[WriteDown]

20. Thank you!

And we may need to assign doctors where they are needed and put their salaries on some sort of scale such as in other countries.

[No Elephants]

27. Gee, if only Stalin were still alive. And how come doctors get to lose their choices,

but no other profession does?

Again, how the heck do you expect to attract talented people to a profession where talent, ambition and dedication often make a difference between life and death?

You're mighty selective with your socialism, too.

As I posted upthread, let's deal first with insurers, with big PHRMA, and with Big Health Care (including the ever merging health centers and hospitals--now also getting "too big to fail") and then, at the bottom of the list, let's worry about depriving the solo practitioner of the money he or she earns. It ain't that much.

BTW, the executive of the health insurance company and the hospital administrator--will they be making more than the brain surgeon?

[WriteDown]

29. I just want to learn some lessons from places like the UK...

Where dr's make significantly less than they do here(which is pretty much everywhere.) Even if you remove all profits from all the entities you listed, it still does not amount to much because the real problem is what medical care is costing. In other words what doctors and hospitals are charging.