Overview

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Overview
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Overview
Overview
In 2003, Congress passed the most sweeping reform
to the Medicare program since its inception by
adding outpatient prescription drugs to its list
of benefits. The Medicare Prescription Drug
Improvement and Modernization Act (MMA) made many
other changes to the program, including
increasing payments to hospitals (primarily those
in rural areas) by about 25 billion over the
next 10 years and expanding coverage for certain
preventive services, such as cardiovascular and
diabetes screening tests. However, large federal
budget deficits combined with the steep cost of
the new legislation have created challenges.
And, the effects of the MMA remain to be seen.
Recent trends in health care spending and
hospital use reveal that national health
expenditures grew over 9 percent between 2001 and
2002, topping 1.5 trillion. Health expenditures
reached over 14 percent of the gross domestic
product. While hospital services were the
largest category of spending, prescription drugs
continued to grow at a higher rate. Hospitals
have been under financial pressure in the last
five years, both from public and private payers.
Since 1999, up to one third of hospitals have had
negative total margins. Early data for 2003 show
a decline in operating and patient margins, while
a sharp gain in non-operating income due to
improvement in the investment environment
pushed up total margins. Meanwhile, the
performance of health plans continues to improve.
Every year, hospitals provide valuable health
care services to those who need them, but the
importance of hospitals goes well beyond the
health care services they provide. Unlike many
other sectors of the economy that lost vitality
and shed jobs during the 2001 recession, the
health care sector and hospitals, in particular
provided an economic mainstay. For example,
hospitals support one out of every nine jobs,
either directly or indirectly, in the U.S. The
following charts report trends in the hospital
field within the context of the broader health
care environment. Hospital data are drawn
primarily from the American Hospital Association
Annual Surveys. The Chartbook begins with a
chapter on overall patterns in health care
spending, financing, and coverage. The next four
chapters examine trends specific to hospital
organizational, volume and utilization,
financing, and workforce issues. The final
chapter contains data on the economic benefits
hospitals provide to their communities.
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Chapter 1 Trends in the OverallHealth Care
Market
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Trends in the Overall Health Care Market
Chart 1.1Total National Health
Expenditures1980 - 2002
Billions
Inflation-adjusted (1)
Source Centers for Medicare Medicaid Services,
Office of the Actuary (1) Expressed in 1980
dollars adjusted using the overall Consumer
Price Index for All Urban Consumers
Chart 1.2Percent Change in Total National
Health Expenditures1981 - 2002
Source Centers for Medicare Medicaid Services,
Office of the Actuary
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Trends in the Overall Health Care Market
Chart 1.3Per Capita National Health
Expenditures1980 - 2002
Per Capita Amount
Inflation-adjusted (1)
Source Centers for Medicare Medicaid Services,
Office of the Actuary (1) Expressed in 1980
dollars adjusted using the overall Consumer
Price Index for All Urban Consumers
Chart 1.4National Health Expendituresas a
Percentage of Gross Domestic Product1980 - 2002
Source Centers for Medicare Medicaid Services,
Office of the Actuary
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Trends in the Overall Health Care Market
Chart 1.5National Expenditures for Health
Servicesand Supplies(1) by Category1980 and 2002
233.5 B
1,496.3 B
Other(2) - 9.5
Other(2) 13.5
Nursing Home Care - 7.6
Nursing Home Care 6.9
Other Medical Durables and Non-durables - 5.9
Other Medical Durables andNon-durables 3.4
Prescription Drugs - 5.2
Home Health Care - 1.0
Prescription Drugs 10.9
Other Professional(3) - 7.3
Home Health Care - 2.4
Other Professional(3) - 7.8
Physician Services - 20.2
Physician Services - 22.7
Hospital Care - 43.5
Hospital Care - 32.5
Source Centers for Medicare Medicaid Services,
Office of the Actuary (1) Excludes medical
research and medical facilities
construction (2) Other includes net cost of
insurance and administration, government public
health activities, and other personal health
care (3) Other professional includes dental and
other non-physician professional services
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Trends in the Overall Health Care Market
Chart 1.6Percent Change in National
Expenditures for Health Services and Supplies(1)
by Category2001 - 2002
9.2All Health Services Supplies
Prescription Drugs
Other (2)
Physician Services
Other Professional (3)
Hospital Care
Nursing HomeCare
Home Health Care
Other Medical Durablesand Non Durables
Admin.and NetCost of Priv. Health Insurance
Source Centers for Medicare Medicaid Services,
Office of the Actuary (1) Excludes medical
research and medical facilities construction (2)
Other includes government public health
activities and other personal health care (3)
Other professional includes dental and other
non-physician professional services
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Trends in the Overall Health Care Market
Chart 1.7Percent Change in National
Expenditures forSelected Health Services and
Supplies1992 - 2002
Prescription Drugs
Admin. Net Cost of Private Health Ins.
Hospital Care
Nursing Home Care
Home Health Care
Source Centers for Medicare Medicaid
Services, Office of the Actuary
Chart 1.8National Health Expenditures(1)1980 -
2013
Billions
Source Centers for Medicare Medicaid
Services, Office of the Actuary (1) Years 2003
2013 are projections
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Trends in the Overall Health Care Market
Chart 1.9Consumer Out-of-Pocket Payments for
National Health Expenditures1990 - 2002
Billions
Source Centers for Medicare Medicaid
Services, Office of the Actuary
Chart 1.10Total Prescription Drug Spending1980
- 2002
Billions
Inflation-adjusted (1)
Source Centers for Medicare Medicaid
Services, Office of the Actuary (1) Expressed in
1980 dollars adjusted using the overall Consumer
Price Index for All Urban Consumers
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Trends in the Overall Health Care Market
Chart 1.11Growth in Total Prescription Drug
Spendingas a Percentage of Total Growth in
National Health Expenditures1980 - 2002
Source Centers for Medicare Medicaid
Services, Office of the Actuary
Chart 1.12Consumer Out-of-Pocket Spending vs.
Private Health Insurance Spending for
Prescription Drugs1980 - 2002
Billions
Out-of-Pocket
Private Health Insurance
Source Centers for Medicare Medicaid
Services, Office of the Actuary
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Trends in the Overall Health Care Market
Chart 1.13Distribution of National Health
Expendituresby Source of Payment1980, 1990, and
2002
245.8 B
696.0 B
1553.0 B
Out of Pocket
19.7
Out of Pocket 13.7
Out of Pocket - 23.7
Other Private - 5.0
Other Private
6.1
Other Private - 5.9
Private Insurance
Private Insurance 35.4
33.5
Private Insurance - 27.8
Other Government
Other Government - 12.7
14.2
Other Government - 16.9
Total Medicaid
Total Medicaid 16.0
10.6
Total Medicaid - 10.6
15.8
Medicare
Medicare - 17.2
Medicare - 15.2
Source Centers for Medicare Medicaid Services,
Office of the Actuary
Chart 1.14Distribution of Health Insurance
CoveragePercentage of Population Covered by
Payer1990, 2001, and 2002(1)
Source US Census Bureau, Health Insurance
Coverage in the United States 2002 (1) 2001 and
2002 data use population estimates based on
Census 2000.
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Trends in the Overall Health Care Market
Chart 1.15Number and Percent Uninsured(1)1985
- 2002
Number of Uninsured(Millions)
Percent of Total Population
Number Percent
Source US Census Bureau, Health Insurance
Coverage in the United States 2002 (1) 1999 -
2002 data use population estimates based on
Census 2000
Chart 1.16Average Percent Uninsured by
State2000-2002
RI 8.3 DE 9.5 DC 13.2
lt 10.0
10.0 - 14.9
15.0 - 19.9
20.0 and above
Source US Census Bureau, Health Insurance
Coverage in the United States 2002
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Trends in the Overall Health Care Market
Chart 1.17Medicare Enrollees(1)1980 - 2002
Millions
Source Centers for Medicare Medicaid
Services (1) Hospital insurance (Part A)
enrollees only includes all persons (aged and
disabled)
Chart 1.18Medicaid Enrollees(1)1990, 1995,
2000, and 2001
50.0
Other Title XIX
46.1 M
42.5 M
45.0
Adults
40.0
36.3 M
35.0
30.0
25.3 M
Millions
25.0
Children
20.0
15.0
10.0
Blind/Disabled
5.0
Aged
0.0
1990
1995
2000
2001
Source Centers for Medicare Medicaid
Services (1) Does not include S-CHIP Enrollees
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Trends in the Overall Health Care Market
Chart 1.19National SCHIP Enrollment(1) FY 1999
- FY 2003
Source Centers for Medicare Medicaid
Services (1) Number of children enrolled at any
point in the year
Chart 1.20Percent Change in SCHIP Enrollment By
StateFY 2002 - FY 2003
RI 26 DE 1 DC 16
Less than 0
0
1 - 50
51 - 100
Over 100
Unknown
Source Centers for Medicare Medicaid Services,
FY 2003 Number of Children Ever Enrolled in SCHIP
by Program Type, January 22, 2004
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Trends in the Overall Health Care Market
Chart 1.21Percentage of Employees with
Employer-based CoverageWho Can Choose
Conventional, PPO, HMO and POS Plans1988 - 2003
(1)
Source The Kaiser Family Foundation and Health
Research and Educational Trust, Survey of
Employer-Sponsored Health Benefits 2000, 2002,
2003 KPMG Survey of Employer-Sponsored Health
Benefits 1988, 1993, 1996 (1) Point-of-service
plans not separately identified
Chart 1.22Distribution of Employer-sponsored
Health Insurance Enrollment by Type of Plan1988
- 2003
POS
HMO
PPO
Conventional
(1)
Source The Kaiser Family Foundation and Health
Research and Educational Trust, Survey of
Employer-Sponsored Health Benefits 1999, 2000,
2001, 2002, 2003 KPMG Survey of
Employer-Sponsored Health Benefits 1988, 1993,
1996 (1) Point-of-service plans not separately
identified
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Trends in the Overall Health Care Market
Chart 1.23Percentage of Medicare Beneficiaries
Enrolledin Medicare Managed Care1991 - 2003
(1)
Source Centers for Medicare Medicaid Services,
Office of the Actuary (1) Percentages are risk
enrollees divided by enrollees who have both
hospital insurance and supplementary medical
insurance
Chart 1.24Percent Growth in Medicare Spending
per Beneficiary vs.Private Health Insurance
Spending per Enrollee1980 - 2002
Private Health Insurance
Medicare
Source Centers for Medicare Medicaid
Services, Office of the Actuary
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Trends in the Overall Health Care Market
Chart 1.25Percentage of Medicaid Beneficiaries
Enrolledin Medicaid Managed Care1991 - 2002
Source Centers for Medicare Medicaid Services,
Office of the Actuary
Chart 1.26Percentage of Medicaid Beneficiaries
Enrolledin Medicaid Managed Care by State2002
RI 68.2 DE 77.1 DC 63.2
0
1 - 24
25 - 49
50 - 74
75 - 100
Source Centers for Medicare Medicaid Services,
Office of the Actuary
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Trends in the Overall Health Care Market
Chart 1.27Annual Change in Health Insurance
Premiums1988 - 2003
Source The Kaiser Family Foundation and Health
Research and Educational Trust, Employer Health
Benefits 2000, 2001, 2002, 2003 Annual Surveys
KPMG Survey of Employer -Sponsored Health
Benefits 1988, 1993, 1996
Chart 1.28HMO Plan Median Operating
Margins1990 - 2002
3.0
2.5
2.4
2.2
2.1
2.1
2.0
1.3
1.2
1.0
0.2
0.0
-0.6
-1.0
-0.9
-1.3
-2.0
-3.0
-3.5
-3.5
-4.0
90
91
92
93
94
95
96
97
98
99
00
01
02
Source Interstudy Competitive Edge HMO Industry
Report 13.2
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Trends in the Overall Health Care Market
Chart 1.29Blue Cross/Blue Shield Underwriting
Gain/Loss1965 - 2002
Source Milliman USA
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