Business, households, and government: health care spending, 1995

For the period 1990-95, we will present data on health care spending by business, households, and government. In addition, we will measure the relative impact of these expenditures on each sector's ability to pay. In 1994 and 1995, health care costs experienced the slowest growth in 3 decades. Combined with healthy revenue growth, slow cost growth helped ease or stabilize the financing burden faced by business, households and government.

Business, households, and government: health spending, 1994

During the 1990s, growth in health care costs slowed considerably, helping to lessen the spending strain on business, government, and households. Although cost growth has slowed, the Federal Government continues to pay an ever-increasing share of the total health care bill. This article reviews important health care spending trends, and for the first time, provides separate estimates of the employer and employee share of the premium costs for employer-sponsored private health insurance. This article also highlights some of the emerging trends in the employer-sponsored insurance market, including managed care, cost-sharing, and employment shifts.

Questions and answers on health insurance benefit issues

This Issue Brief addresses eight topics in the areas of health insurance and health care costs. Using a question and answer format, the discussion draws largely on EBRI research and the EBRI Databook on Employee Benefits, third edition. In 1993, U.S. expenditures on health care were $884.2 billion, and they are projected to reach $2,173.7 billion by 2005, increasing at a projected average annual rate of 7.8 percent. Health care spending accounted for 13.9 percent of Gross Domestic Product (GDP) in 1993 and is projected to reach 17.9 percent of GDP by 2005. Among the factors contributing to the increase in health care costs are the growth in the number of individuals with traditional reimbursement health insurance coverage, the rapid expansion of technology and treatment options, and demographic factors such as the aging of the population. In 1993, employers, both public and private, spent $235.6 billion on group health insurance, accounting for 6.2 percent of total compensation. Group health insurance is the fastest growing component of total compensation, increasing at an average annual rate of 13.7 percent from 1960 to 1993. An increasing number of employees are required to make a cash contribution to their health insurance plan premium. In 1993, 61 percent of full-time employees in medium and large private establishments who participated in an employee only health insurance plan were required to make a contribution to the premium, up from 27 percent in 1979. In 1993, 185.3 million persons under age 65 had health insurance coverage, while 40.9 million people--or about 18.1 percent of the nonelderly population--received neither private health insurance nor publicly financed health coverage. Of those individuals who had health insurance coverage, 60.8 percent, or 137.4 million persons, received their health insurance through an employment-based plan. In 1993, 15.2 percent of the nonelderly population without health insurance coverage were noncitizens. In six states noncitizens represented a higher proportion of the total uninsured population than individuals in the nation as a whole. An increasing number of employers are self-funding their health insurance plans. In 1994, 74 percent of employers with 500 or more employees self-funded their health insurance plans, up from 63 percent in 1993. An estimated 22 million full-time employees in private industry and state and local governments participated in a self-funded employment-based health insurance plan.(ABSTRACT TRUNCATED AT 400 WORDS)

The cost of depression in the workplace

Depressive disorders in employees and their dependents pose a major occupational health challenge, with implications for productivity, competitiveness, disability program utilization and medical care costs. The following article shows just how big an impact depression has had on the benefit programs of a major Midwestern employer--generating over half of all mental healthcare diagnoses and claims and even more days of disability and 12-month recidivism than chronic physical complaints such as heart disease, diabetes, high blood pressure and low back pain.

Health care's new heavyweights

Fresh from delivering the knockout punch to federal health care reform legislation, employers have become the new power brokers in health care. Across the country, they're forcing unprecedented changes in payment and delivery, both individually and through business coalitions. If you're wondering what these new players are looking for, start by asking Helen Darling, who's blazing new trails at Xerox Corp.

Pitney Bowes: using comprehensive cost information to build provider networks

Wishing to develop a work partnership with a managed care organization, Pitney Bowes decided to select its own network providers. The company reached out to the medical community for input and participation in crafting both a clinical and a business partnership that would set new standards for health care delivery in the country. A methodology--described here--was developed for comparing medical plans and selecting providers.

Small group reform politics and the real world: Cleveland's Council of Smaller Enterprises

The Clinton Administration's efforts at health care reform are somewhat hamstrung by a lack of working analogues, i.e., a scarcity of examples of what effective reforms might look like. While several excellent models of effective small group reform exist, the environment in which these living models operate and the tough decisions they have made to adapt to respond to the environment, have rendered them less than perfect. Rather than rely on these working models for guidance on both the promise and the limitations of health care reform, Administration officials appear to have chosen instead to highlight the models' inadequacies and discuss in a very general way how a government-based model might perform better. Instead of being guided by existing reality, government officials have chosen to attempt to reinvent it. The experience of one of the nation's largest and most successful purchasing cooperatives shows that workable reform will come not from broad vision or elegant models but from obsessive attention to the details in the real world.

A community quality initiative for health care reform

In 1989, the Madison Area Employers Health Care Coalition conducted a feasibility study for the purpose of finding solutions to common health care concerns. The study revealed three conclusions: (1) there was little or no price competition among providers; (2) employers lacked useful data and information regarding health care costs and outcomes; and (3) employers and employees lacked basic health care consumerism. These conclusions led to the development of a health care purchasing group in the spring of 1990 with the formation of the Employers Health Care Alliance Cooperative (The Alliance). The conclusions outlined above became the cornerstone of the services offered by The Alliance, which include provider contracting, data collection, and consumer education and advocacy. The Alliance also developed the community quality initiative, a partnership of employers, health care consumers, and providers committed to using continuous quality improvement methods.

Employer's willingness to pay: the case for compulsory health insurance in Tanzania

This article documents employers' expenditure on the arrangements for the health care of their employees in one of the least developed countries; Tanzania. The case for compulsory health insurance is considered in the light of the fact that only 3% of the population is employed in the formal sector and could be covered at first. It is shown from a survey of larger employers, outside government, that they were spending on average 11% of payroll on health care for their employees. This demonstrated their lack of satisfaction with the government health services. Nevertheless, those who could readily be covered by insurance were making considerable use of the more expensive government hospital services. It is argued that a compulsory health insurance scheme could be introduced for the formal sector of employment which would cover a wider range of health services at lower cost. The scheme would also have the desirable economic effect of lowering employers' labour costs while making it possible to improve the standards of the government health services.