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Home My WebLink About2005-03-21 Board of Selectmen PacketLOIjS G ISSUE' . B re~ulatlons ♦ Chapter 32 to meat stable n though e~up rollments up eve ♦ .~unicip al 'Workers are older lities cover retirees ♦ 1ylunicipa ement necessary edicare suppl are up ~ .N~. ~ at1°n~ aa,~ pbarmacy costs ~°spital util~ e i Ims too hxg laims ratio to pr ♦C lth lvsurance Program overns ~.ea ter 32-B G Cha ter Iowa of Feadxng Mass General Law' cepted Ly. Ac I)ate . ha ter 32-$ vrovisions. NeceptanCe of C p Basic Chapter 32 no more than getired Employees pay than 50% no More surviving spouses pay O coverage accepted Ag with u~-~-ons rogr Co am alition Bargaini~ of p 'es must take Part medicare Eligible Retir • • bargaining contracts selectmen sign c°ahtl mar. 4,195'7 Mar. 6, 1961 Ma - 4,1969 Feb.16,1992 Aug. 15,1990 Apr 1994 voters voters voters Twn mt99 'Twn NA-99 ,ywTIl eg -Dec ,1993 selectmen plans nrolled OW 400 ~ 375 350 325 300 275 250 - - _ -A 225 200 175 150 125 - '100 F:y 2005 Fy 2005 75 ~ FY 200 Medicare~ 5t FY 2003 Individuate-- - 2 F-Y 2002 p~ amity - 2001 M j ivies 0 T FY 2000 ~ H hM0 Bi__Uamily Health insurance Plan HMO Blue FamilY HMO Blue individual pp0 Family pp0 Individual medicare TOTALS RANCE PLANS IN TOWN INSU RS ENROLLED NU MSE FY 2005, F FY 200 FY 2004. FY 2003, FY 2002, FY 2001, FY 2000, 280 299 241 242 274 247 248 245 237 234 251 217 239 108 105 207 119 108 89 130 123 106 93 124 105 103 359 124 116 354 365 359 340 349 1091 1099 332 1055 1087 1057 1031 1048 SURANCEpROGRAM HEAL-N E~+~~ OF 'N- p-1F ` Nledex insured - 33 l® gE?5 86 81 22 26 Active EM- P ~ 222 $ ,123 16 6 roll. 253 $ 4 Teachers Pay 16 41 Town payroll 67 42 65 RMLD 190 245 C 542 SUBTOTAL 179 19 24 12 2 2~ 63 RetlCeeS. 246 14 23 14 14 0 100 144 Town retirement 11 0 1 24 MTRB 126 2 2 0 - Spouses 29 43 r 366 OTC- retirees 50 54 35 50 1 SUBTOTAL 1 5 0 ~ 8 367 C - wBRA► 93 108 281 1094 245 Total C CROUP AN ts.} EE NBALTN INSnd Sewer pep PNICS of RPwnR RMLp, Water, a DEMpG 9 School TO O NMo ~lnclud F AMID PPO indi "MO pP,X Ill Individual AM►LY ,vivid F 1 YEAR ON PLAri$ Pj l 1 1 11 9 ApE CRpUPS. 1 4 17 $ 4 13. 33,025 11 34 ~ 7 2 40-49 24,445 492 5 _ 22 35 50-54 28, 1 38 3 7 26,23 55-59 - 2 4 1 60-64 5 2 5 SUB TpTRLS 64 3 2A,953 93 1 1 3 1 15'35 78 1 r.5-69 12,382 71 2 7()-74 5611 32 - 9 7 75g 9,511 2 1? 35 90-84 7,955 2 ` = 85-89 .-5 -46 90-95 _ 340 43 inistratcrss g6+ 346r School pdm SUB TOTRts hoQl Teachers and rider $1204a TpTpLS does not include Sc to r B() with pensions u n the are ove Pension C°lum b S a Yearly Pen s are paid by Medea ND Medicare and as those Pens 1on son - jp7 Individual e -~l~ibili~:~'. ~ er 65) edicar ed can be and ~ Normally oVer 65 (if disabl s for 40 quarter ♦ If V aid int° WIedicare spouse is eligible ♦ If ation determines eligibiVity inistr • I securit-Y s Soda • . ' le for Medic-ed1eare S •20 ~°~`th1y forpart If -~,l~ib ree pays $ 7 is and 'B (Red nsion offset ~ ~NYust take both Par rovisi°n or g overnmentpe fall elix i-nation p .29 monthly) 82 wl~a-d e - ♦ Subject to edicar lements l It, M sup care plan t p edex III hea ~ Hospital Utilization by Town of Reading Group June 1, 2003 through May 31, 2004 Inpatient Local Hospitals Amount $642,846 Numbers 67 Boston Hospitals $161,399 11 Outpatient Amount Numbers $717,570 $1241664 835 78 22.0% 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% HEALTH INSURANCE RATE CHANGE HISTORY 4~ r z z - i 1996 1997 1998 1999 2000 2001 YEAR READING MIIA F 2002 2003 2004 2005 -'I NATIONAL TREND NCE RA y HEALTH 1 FELT ON pRE~lUN1S EF . _ 140.0,110 130.0% 120.0% 70.00/6 90.0% 40-00/0 ' 30.0% 2008 2004 20.00/0 400 _ 2 o 2002 10.0% 20x1 2000 0 po/u - 1999 YEAR - ` 1 RE tAP, 1997 1996 (~_--~pp14G___ L WHAT CAN BE DONE TO MITIGATE HEALTH INSURANCE COSTS, ♦ Advocate for Health Reform ♦ Review Co-pays and Deductibles ♦ Health and Wellness Programs o Bid out Program ~en-t & -Fu e accosts -Cu -Med~-c estectox of the Us .gealthcaxe ~s the ~axg ecoA-oxny of cisp .2002 /0 _ S% .~ealtheaze 14 3°fo .$.ausi~g .Faod = 9.90/0 430/() .atianaIDefeuse 0 Nato -3 Source: 6C6S Medical Cest Rafe~ance Gu <1e ent . -veal ,hosts - Cw e More exson p0 tom th expen~ituxes pe $O aid 2 ~.ea1 than 500o/0between 19 $1,W to $5,115 benef „Oo YO,, a Salary or ®N TROE CAN?T WE T~? yyyAE C®S HEAT )+l.L. I--'~ wV10 Pays pollars U S• Healthcare System: si 2 Trillion i °la GOP 1990 -13.7°l0 2000-13.0% pare 1 Federal ernment $307 Billion Gov $390 Billion employer Plans Health Local $312 Billion $191 Billion dawns of health care Ups and spending 10.0 8.0 6.0 4.0 Wage & 10 vedicar price co trot Volunta, &Niedic fd eat 0.0 _2.0 1970 1975 . n 1985 managed car &threa-of National health Gar e 1995 1990 1985 19e0 C Self Pay 1usurers t iVledicaid M Medicare T .t i VT Cket Spend g e~ Out Of pa h Cost' consul no" f Total 14ealt As Share 60.00°i°-/ 50.000/0- ' 44.00% / 30.00% .14.000/0,/ 0.40° 19'0 t 5.40%.....--- 2000* * estimated 1964 Source: TJ•S•g~FA Placing the Blame Definition of Terms • Medical inflation: Anticipated increases in the price of services covered by typical indemnity plan. • Technoloev: Additional costs from the use of the latest and best equipment and technology available. • Cost Shiftina: Shifting of costs by hospitals and doctors to the private sector from the public sector. • Utilization: Anticipated increases in use of outpatient and inpatient services • Catastrophic Cases: Increased claims due to transplant operations, AH)S, premature infants, etc. • Malpractice: Reflects increases in malpractice premiums and the use of "defensive" medicine. Cost Shifting Utilization 29.6% 163/ aF Technology' - 11.2% Catastrophic Cases 8.8% q Medical inflation Malpractice) 32.7% 1.4% 7p 'IN6 (k !TS VI lPy W IgFIVE ~A ^,h P.QESrRJPT1C1N pIERE ARE AsLUr QNA'i WF.F P%, T141T vavc. TuAT waizr, JvlT AS Wekt.. J/, . % -JAI 12 "T v~ LIKE 70 G&T A SftOND` OPiNJOJJ. ~ 17' WILL mAt15E YuV P@E6 X65, J'V-' CONFIRMED 11Y~ LIKE PROLfCKVgc' JN N15 aR1G+NAL REpUEST... F'LauER'f MEADOW, K4LSkce.l z. ~ ".f 5 ' Movc;V e i rUG 'r a ~JE'r 'i Rising Costs are StraiHing Employer- Sponsored Cover ale e 1`- rem-hu a~s S1p 13.9% in 2003 1- iser rzn ijy 3'onadation) 9 fleaith spending expected to rise th u end of decade at4nco ~ s9.4n9 11'er-C p tt :Sperd;Lng, 1986-7010 58,44C i ,v14aa _a ".Boo; 50,000 -e ie,xn ..v as,o4a ; ,e 54,400 ~ ~y^S~Y =t._v 53,000 i M•)._.~Y" .~..w ss 4on . SO t._- - , - .9Ne 1990 1994 1992 1994 -1995 1995 2900 2002 2004 200E 2048 200 Always a skeptic! W17A UD Ol" 11) _ / WAAT KIND OF HEALTH \ I7 INSUfthllce GGYOU OFFEK. rocvrs~cK\ i 1 TOA fI VITAMIN 'stn? 6rA61.6' = - u TL~tlll,~' f I. ~..I .I.. . _ ..s._ MR~Y • Changes in the managed care arena have impacted the ability to control health care costs: ✓ Consumer demand for more freedom in accessing health care services. ✓ Political and regulatory changes have affected relationships between insurers and providers, placing external pressures on both to collaboratively address escalating costs of health care services. MEDICAL PROVIDERS COMPETE FOR HEALTH. CARE DOLLARS I ~ • Environmental Factors Environmental factors contribute to rising health care costs: the aging population; the growth of "direct to consumer" advertising for prescription drugs and new technologies; and growing expectations of an increasingly well- informed health care consumer with access to increasingly useful information on the Web regarding traditional and alternative medicine. WEAL-TN 'ARE COSTS ARE S;'-:` FETING 2!; , DUE L NQG 4a TO VASTLY ~4t~}s~i? P'r~i~SC~lpTlOi~i DF2~U COSTS, DUF IN L RGE PART '(HG ANXIEW OVER W9 KM 1z DRUG, A1DVE)ZTl5rNG GMT BE c0NTRoL1.ED W ITSd oN 't C VrStdA1. "(eSSLAGITOL" FOR MEDfCk- G05T CONLERA/ REOEF' t ASKyaUR poc7tiR. riMl /at t ~14! 11 gc....~eSS SwF i•. . SWkcfrc'LiSt•,4Y:AC'!::JE r b°'{.,7tcoriaNC'U ~C~~I~V-. eM41AasG5iMC EUDL-CT;Ed,dA~E 1 Too N-lany Hospitals: Too Many Beds Ewa 1 jl r .1{ :J Ji ! s 1) ! 1l ,:o r=te 1l ...-1.1 t Il e ~ -11 a. HOSPITALS THAT PERFORM MORE BYPASSES HAVE LOWER DEATH RATES 0 - 5 Operations = 9.5% mortality 200+ Operations = 5.0% mortality r i t~-I i "in here, a pound of cure is way more expensive than an ounce of prevention." • The national trend toward consolidation of health care providers like hospitals, presents new challenges in negotiating cost effective participating provider arrangements. • The trend toward a return to fee-for-service contracting, and the corresponding movement away from risk sharing among health care providers. MEDICARE BENEFICIARIES 1967 19,500,000 1995 37,000,000 2030 70,000,000 (Projected) LIFE EXPECTANCY AT AGE 65 1900 11.9 Years 2000 17.4 Years NZ f 60T A~r,JANVJw,_, IV- mv,-Government Impact new coverage mandates at the federal and state levels continue to result in incremental premium costs. The past few years have brought increased private sector subsidization of government-sponsored health programs like medicare & Medicaid - cost-shifting that is indirectly passed along to health insurers' customers. MEDICARE / MEDICAID COST SHIFTS TO PRIVATE SECTOR Approximate % Government Underpaid Health Care Providers -30 -2 1989 1997 2000+ 2 THE "TRUE" COST OF HEALTH CARE Employee health care and administration 27% Waste, Fraud and Administration 30% Stateantl~Federal _ -:-.ii i" Mandates • 13% Government cost - shitt ° :Medicare O Medicaid 30% Schlllerstrom T "I~C4 i .r r ' .r @•2oe~ EXACTLY WHEN DO YOU e THINK WE SHOULb START DOING SOMETHING ` i ~a ABOUT THISAI MEDICARE/MEDICAID REFORM • Reduce benefits and/or raise taxes to match costs with revenue. • Adequately reimburse medical providers to eliminate "cost-shift" to non- Medicare/1V4edicaid health care purchasers. • Plan now for aging population's impact on long- term program costs. Fitt Schi[Merstrom REAL ISSUES/REALISTIC SOLUTIONS