Be Informed

1
Be Informed Information to help you make smart
healthcare decisions and help keep healthcare
affordable
2
Healthcare Costs Are Rising
National Average Annual Healthcare Costs Increases
Source Hewitt Associates, 2002. 2003 figure is
estimated
3
Healthcare Costs Are Rising

• Why?
• Were using more prescription drugs, and the cost
  of new drugs is increasing rapidly
• prescription drug spending rose 13.8 percent
• Were using more hospital services and equipment
• outpatient hospital care spending grew 16.3
  percent in 2001
• inpatient hospital care jumped 7.1 percent
• Medical technologies and treatments are becoming
  more advanced and more expensive
• Were using more specialty care
• specialty physician services increased 6.7
  percent
• Were over-using emergency rooms for non-urgent
  needs

Source Center for Studying Health System Change,
Tracking Health Care Costs, 2002
4
What Can We Do?

• Rising healthcare costs mean health insurance
  rates must rise to pay for the services we use
  so we all have a role to play to keep healthcare
  affordable
• learn some basics about how our health plan works
• understand the factors that contribute to rising
  costs
• make smart choices that keep us healthier and
  help reduce our need for medical services and
  prescription drugs

5
How Healthcare Works

• Employers negotiate benefit packages with
  insurance companies to determine
• services covered
• co-payments
• deductibles
• monthly premiums
• Insurance rates are based on the historical
  health of the people in the group and the size of
  the group
• Insurers use historical data and analysis to
  predict the medical expenses for a companys
  employees
• Premiums must be high enough to cover the
  expected cost of healthcare claims, but low
  enough to be competitive and affordable in the
  marketplace

6
Who Pays for Healthcare?

• For every 1 paid by an employee, on average,
  employers pay 5

National Average Annual Healthcare Costs Per
Employee
Source Blue Cross and Blue Shield Association,
Defined Contribution Reports Hewitt
Associates, 2002
7
Where your health care dollar goes

• About 90 percent of every health insurance
  premium dollar goes directly to pay for medical
  care
• The rest pays for services such as
• claims processing
• customer services
• provider relations
• member
• communications
• research
• reserves for
• future claims

Source Centers for Medicare and Medicaid
Services, The Nations Health Dollar, 2002
8
What You Can Do

• If you are given a choice of health plans, choose
  the plan that meets your specific health,
  lifestyle and financial needs and carefully
  weigh the co-payments, deductibles and premiums
• Understand the benefits of your health plan
  review the benefit booklet carefully call your
  health plan if you have any questions about what
  is covered
• Talk with your doctor to understand the true
  costs and financial consequences of medical
  services in order to get the most appropriate
  care ask about treatment options and the use of
  lower-cost generic drugs

9
How Much Things Actually Cost

• Health insurance shields many of us from the full
  impact of healthcare costs we often only pay a
  portion out of our own pockets for medical
  services
• Few of us are aware of how quickly and
  dramatically these costs are rising
• Most Americans dont know
• the costs associated with
• common medical services
• For example
• the average cost of an MRI
• is 1,890
• the average cost of heart
• bypass surgery is 57,073

Source Ingenix, Medicode National Fee
Analyzer, 2002
10
What You Can Do

• Talk with your doctor to understand and explore
  all treatment options
• Ask how much things cost to make sure you are
  getting the most for your healthcare dollar
• Check all medical bills and statements to make
  sure they are accurate question any bills or
  items you dont understand

11
Prescription Drugs

• 10 prescriptions are written for every man,
  woman, child in the U.S. every year, on average,
  costing 155 billion
• Were using more prescription drug spending rose
  14 percent from 2001 to 2002, and is projected to
  continue to grow at high rates
• Newer drugs are more expensive About half of the
  22.5 billion increase in spending on
  prescription drugs was driven by 27 drugs (out of
  almost 9,500)
• Drug companies spend more on marketing and
  advertising brand name drugs than on research and
  development 2.5 billion on direct-to-consumer
  advertising in 2000

Sources The National Association of Chain Drug
Stores, Industry Facts At A Glance, 2001
Center for Medicare and Medicaid Services,
National Health Statistics, June 2002
Institute of Health Care Management,
Prescription Drug Expenditures in 2001, 2002)
12
What You Can Do

• Generic drugs represent a big opportunity to
  control rising health care costs
• Ask your doctor or pharmacist if a generic
  equivalent is available generic drugs

• are FDA-Approved and use chemically-identical
  active ingredients
• are just as effective as name brands
• mean your out-of-pocket costs are lower

Source The National Association of Chain Drug
Stores, Industry Facts At A Glance, 2001
13
Unnecessary Trips to the E.R.

• Each year 10 million visits to hospital emergency
  rooms are for non-urgent care
• When someone in our health plan goes to the E.R.
  instead of a doctors office for non-urgent care,
  everyone in our health plan pays for it through
  higher insurance premiums, co-payments and
  deductibles
• Average emergency room visit 383
• Average doctors office visit 60

Source New England Journal of Medicine, The
Costs of Visits to Emergency Departments, 1996
Source American Medical Association, Physician
Socioeconomic Statistics, 2001
14
What You Can Do

• If you have a non-urgent medical problem, check
  with a primary care physician before going to the
  E.R.
• If you dont have a regular primary care
  physician, develop an ongoing relationship with
  one contact your health plan for information on
  selecting a doctor

• Regular check-ups can help prevent small health
  problems from turning into true emergencies

Source New England Journal of Medicine, The
Costs of Visits to Emergency Departments, 1996.
Source American Medical Association, Physician
Socioeconomic Statistics, 2001.
15
What You Can Do

• Share your familys health history with a primary
  care physician, and ask about preventive measures
  to avoid illnesses and manage diseases
• Share prescription records with your doctor and
  tell him or her about all treatments including
  over-the-counter medications and herbal remedies

• Work with your doctor to keep track of your
  childs immunizations and keep them up-to-date
• Talk with your doctor come prepared with
  questions to make sure you get the care thats
  right for you

16
Step Up Physical Activity

• Nearly 50 million adults (between the ages of 20
  and 74), or 27 of the adult population, are
  obese
• More than 108 million adults, or 61 of the adult
  population are either obese or overweight

• 14 percent of all deaths in the United States are
  attributed to activity patterns and diet

Source U.S. Department of Health and Human
Services, National Health Interview Survey,
1997-98
17
Step Up Physical Activity

• Being physically inactive significantly increases
  the risk of developing many chronic diseases and
  conditions heart disease, stroke, colon cancer,
  diabetes, obesity, arthritis and osteoporosis
• Total healthcare costs related to these
  conditions total more than 600 billion
  nationally
• Increasing regular moderate physical activity
  among the more than 88 million inactive Americans
  over the age of 15 years might reduce annual
  healthcare costs by as much as 76.6 billion

18
What You Can Do

• Regular physical activity can help you feel
  better, look better and can help improve your
  overall health
• Brisk walking for 30 minutes a day, three times a
  week, can improve personal health and might
  reduce your need for medical services or
  prescription medicines

• Talk with your doctor to determine the the best
  way to add physical activity to your daily
  routine
• Check with a local community center, senior
  center, school or church for low-cost exercise
  classes

Source National Institutes of Health, The
Bypass Angioplasty Revascularization
Investigation, 1997
19
What You Can Do

• Regular physical activity can
• Help maintain a healthy weight
• Help build and maintain healthy bones, muscles,
  and joints
• Help older adults become stronger and better able
  to move about without falling
• Help reduce feelings of depression and anxiety
• Help promote psychological well-being
• Help reduce the need for medical treatments or
  prescription medicines

20
What You Can Do

• Regular physical activity can help reduce
• The risk of dying prematurely from heart disease
  and other conditions
• The risk of developing diabetes
• The risk of developing high blood pressure
• Blood pressure in people who already have high
  blood pressure
• The risk of developing colon and breast cancer

Source U.S. Department of Health and Human
Services, National Health Interview Survey,
1997-98
21
Managing Chronic Diseases

• Rapid increases in rates of chronic diseases like
  diabetes, congestive heart failure, asthma and
  their associated health problems are major
  contributors to rising costs
• 17 million Americans with diabetes - total cost
  is 98 billion, with about 44 billion of that in
  direct medical costs
• In 2000, the total costs attributed to obesity
  amounted to an estimated 117 billion most of
  the cost is associated with diabetes, heart
  disease, and hypertension
• 24.7 million Americans diagnosed with asthma,
  causing
• approximately 500,000 hospitalizations annually
• more than 1,997,000 emergency room visits
• more than 8.1 billion in direct healthcare costs

Source Centers for Disease Control and
Prevention, Surveillance for Asthma, 2002
American Lung Association, Trends in
Asthma Morbidity and Mortality, 2002
22
What You Can Do

• Share your family health history with your
  primary care physician and discuss preventive
  measures that can help you avoid illnesses and
  manage diseases
• Talk with your doctor to make sure you are eating
  a balanced diet and exercising sufficiently
• Because asthma attacks are triggered by
  environmental causes, talk with your doctor to
  find out how to identify and avoid triggers
• Check with your health plan about special
  programs designed to help prevent or manage
  chronic diseases you can improve your health
  and may reduce your need for medical services or
  drugs

23
An Ounce of Prevention

• Last year, failure to wear seatbelts caused
• 9,200 unnecessary fatalities
• 143,000 needless injuries
• 26 billion in healthcare costs
• Failure to wear bike helmets caused
• 500 bike-related fatalities
• 151,000 nonfatal head injuries
• 3 billion in healthcare costs

Source Centers for Disease Control and
Prevention, Injury Fact Book, 2001
24
What You Can Do

• Always buckle your seatbelt snugly
• Check with local hospitals, police and fire
  departments for information about the proper
  installation of car safety seats for infants and
  small children
• Wear a bike helmet and sports safety
  equipment
• Make sure your children do too!

SOURCE National Highway Traffic and Safety
Commission, The Economic Impact, 2001