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Outlook For Health Care Trends

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Milliman & Robertson, Inc. Actuaries and Consultants. Outlook For Health Care Trends. Council on the Economic Impact of Health System Change ... – PowerPoint PPT presentation

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Title: Outlook For Health Care Trends


1
Outlook For Health Care Trends
  • Council on the Economic Impact of Health System
    Change
  • January 11, 2001
  • John P. Cookson

2
Trend Issues
  • Claim Costs vs Premiums
  • Short-term vs Long-term

3
Claim Costs
  • Utilization
  • Intensity and Mix
  • Price
  • Adverse Selection
  • Actual Claim Cost Increases per Capita

4
HEALTH COST INDEX U.S. Region - All Benefits12
- Month Moving Trends
Chart 1
Percent Trend
1
5
Premium Increases
  • Benefit Change
  • Premium Shift
  • Option Shift
  • Lag Claim Costs
  • January 2001 rates
  • September 2000 notification
  • June 2000--accurate data
  • December 2001 prediction and guarantee
  • Underwriting Cycle

6
HEALTH COST INDEX Employment Cost Index vs.
Health Cost Index12 - Month Moving Trends
Chart 3
Percent Trend
3
7
HEALTH COST INDEX Employment Cost Index vs.
Health Cost Index Lagged 18 Months12 - Month
Moving Trends
Chart 4
Percent Trend
4
8
Forecast Models of Costs
  • Population Force of Trend
  • payments to providers
  • remove Medicare
  • includes Uninsured and Medicaid
  • understates Insured
  • can adjust for benefit leverage

9
Insurers Trends Vary Greatly
  • Underwriting
  • Adverse Selection
  • Contracting
  • Care Management

10
Forecast Issues
  • External Variables
  • Inflation
  • Medicare Per Diem vs Total
  • Real Personal Income with Lags
  • Excess Real Growth
  • Explains Low Trends of mid-1990s
  • Explains Current Trends
  • Managed Care Backlash

11
Type of Service
  • Inpatient
  • Outpatient
  • Physician
  • Drug

12
HEALTH COST INDEX U.S. Region - Benefit
Components12 - Month Moving Trends
Chart 2
Percent Trend
2
13
Short-term Trends
  • Nature of Insurance Contracts
  • Trend Miss Significant
  • Underwriting Cycle

14
Long-term Trends
  • More Important From a Policy Standpoint
  • Business Profitability
  • Business Solvency
  • Excess Growth Impact
  • Medicare
  • DOD and Federal and State Annuitants
  • Affordability
  • Needs More Research
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