Massachusetts Health Care Spending Baseline Trends and Projections

1
Massachusetts Health Care Spending Baseline
Trends and Projections

• Executive Office of Health and Human Services
• Division of Health Care Finance and Policy
• February 4, 2009
• Presentation prepared by John Cai, PhD

2
Focus of This Analysis

• Historical per capita health spending and
  estimated projections if we take no action.
• National trends are provided as a benchmark for
  comparison.
• Presentation demonstrates limitations of data
  sources and need for more comprehensive data
  collection and analysis to inform our
  understanding of underlying cost drivers
• DOI Oliver Wyman study of fully-insured HMO
  claims 2002-2006
• DHCFP Chapter 305 annual cost trend report and
  hearings

3
Data Sources

• Health Care Spending
• MA Data Center for Medicare Medicaid Services
  (CMS), Office of the Actuary, National Health
  Statistics Group, State Health Expenditure
  Accounts (SHEA), Massachusetts Personal Health
  Care Expenditures (PHCE), All Payers, State of
  Residence, 1991-2004, 2007.
• US Data Center for Medicare Medicaid Services
  (CMS), Office of the Actuary, National Health
  Statistics Group, National Health Expenditures
  by Type of Service and Source of Funds,
  1960-2007 2008.
• US Projections National Health Expenditure
  Projections 2007-2017, 2008.
• Health Insurance Premiums
• 1996-2006Agency for Healthcare Research and
  Quality (AHRQ), Medical Expenditure Panel
  Survey-Insurance Component (MEPS-IC), health
  insurance premiums per enrolled employee at
  private-sector establishments that offer health
  insurance.
• 2007 MA Massachusetts Division of Health Care
  Finance and Policy, Massachusetts Employer Health
  Insurance Survey 2007. 2005 survey results mirror
  MEPS-IC.
• 2007 US Kaiser/HRET, Survey of
  Employer-Sponsored Health Benefits 2008.

4
MA Per Capita Health Expenditure Trends Basically
Track with US, Though Gap May Be WideningIndex
of Health Expenditures Per Capita, MA and US,
1991-2007
Massachusetts
US
Note The health expenditures are defined by
residence location and as personal health
expenditures by CMS, which exclude expenditures
on administration, public health, and
construction. Source Centers for Medicare
Medicaid Services (CMS), Office of the Actuary,
National Health Statistics Group, 2007. 2006 and
2007 MA data are projected.
5
Per Capita Health Spending Growth Accelerated in
Most Recent Period for both MA and US
Projections
MA 6.5 (US 5.8)
MA 5.7 (US5.9)
1991-2000 average growth rate MA 5.7 (US 5.5)
MA 7.4 (US 5.7)
2000-2004 average growth rate MA 7.4 (US 6.9)
1991 -2000 average growth rate MA 5.0 (US
4.8)
Note The health expenditures are defined by
residence location and as personal health
expenditures by CMS, which exclude expenditures
on administration, public health, and
construction. Source Centers for Medicare
Medicaid Services (CMS), Office of the Actuary,
National Health Statistics Group, 2007. 2005
2017 data are projected.
6
Health Care Expenditures Relative to Other
Economic IndicatorsIndex of Health Expenditures
Per Capita and Others in MA, 1991-2020
Per Capita Health Expenditures 550 in 2020
Per Capita GDP 337 in 2020
Wage Salary 325 in 2020
CPI224 in 2020
Sources Part I. 1991-2007 Per capita health
expenditures Centers for Medicare Medicaid
Services (CMS), Office of the Actuary, National
Health Statistics Group, 2007 (2004-2020 data are
projected). Per capita GDP and wage and salary
Regional Economic Information System, Bureau of
Economic Analysis, U.S. Department of Commerce.
CPI-Urban for Boston area Bureau of Labor
Statistics, U.S. Department of Labor. Part II.
2008-2020 (except for health spending) US Social
Security Administration, The 2008 OASDI Trustees
Report, Supplemental Single-Year Tables,
intermediate projection, www.ssa.gov/OACT/TR/Tr08/
index.html. Per capita GDP index real GDP
annual change GDP price index annual change
population annual change wage index average
annual wage in covered employment.
7
Insurance Premiums Also Began to Rise More
Rapidly After 2000Individual Insurance Premiums
in MA, 1996-2007
2000 - 2007 average growth rate MA 8.9 (US
7.7)
1996 - 2000 average growth rate MA 3.9 (US
7.4)
Sources 1) 1996-2006 MA Agency for Healthcare
Research and Quality (AHRQ), Medical Expenditure
Panel Survey (MEPS)-insurance component. 2) 2007
MA DHCFP Massachusetts Employer Survey 2007. 3)
2007 US Kaiser/HRET, Survey of
employer-Sponsored Health Benefits 2008.