DOCTORS GET LESS AND INSURANCE COMPANIES MORE
DOCTOR AND NURSE
Physicians Get Shrinking Slice of Healthcare Spending
by Robert Lowes
From Medscape
See Dr. Pinna’s comments below…
May 18, 2012 — A new study from the actuarial and consulting firm Milliman lays most of the blame for runaway healthcare costs at the feet of hospitals, not physicians, at least when it comes to privately insured patients.
For a typical family of 4 covered by an employer-sponsored preferred provider organization, annual spending increased 5% for physician services compared with 7.6% for inpatient care from 2011 to 2012, according to the latest Milliman Medical Index of healthcare costs. In addition, spending for hospital outpatient care rose 8.6%.
The higher growth rates for inpatient and outpatient costs have generally characterized the annual Milliman Medical Index since it debuted in 2005, and they explain why physician services no longer account for the largest slice of the healthcare spending pie, as they did in 2005, when they amounted to 37% for the family of 4. In 2012, physician services account for only 32% of total spending.
At the same time, the shares commanded by inpatient and outpatient care have grown to 32% and 18%, respectively, in 2012. The remaining components of spending in the Milliman Medical Index are pharmacy (15%) and other (4%).
From 2011 to 2012, total healthcare spending for the family of 4 increased from $19,393 to $20,728, or 6.9%.
Changes in spending reflect the volume of services, the amount charged for each service, and the combination of services used, according to Milliman.
In the case of inpatient care, use has plateaued in 2012, but the average charge per day has risen.
Benchmark Family Shoulders More of the Cost
The $20,728 in healthcare costs for Milliman’s benchmark family in 2012 breaks down into 3 sources of payment:
- the employer’s share of the monthly premium for an employee’s coverage,
- the employee’s share of the monthly premium, and
- the employee’s out-of-pocket expenses at the time of service.
In 2012, the employer shoulders 58.6% of total healthcare spending, whereas the employee is responsible for 41.4% (24.7% for the monthly premium and 16.7% for out-of-pocket costs). Employees bear a heavier load than they did in 2005, when their share was roughly 38%.
Although total spending increased 6.9% from 2011 to 2012, the rate of increase is the smallest since 2001. Spending growth tailed off in all categories except physician services, which went from 4.4% to 5.0%.
According to Milliman, the Affordable Care Act (ACA) has affected healthcare costs in only a limited way. For patients, it has eliminated cost-sharing for preventive care and maximum benefit limits, as well as kept adults up to age 26 years on the insurance policies of their parents.
The full force of the ACA will not be felt until 2014, when the law’s individual mandate to obtain insurance coverage takes effect, along with the advent of premium subsidies, insurance exchanges, and expanded Medicaid eligibility. However, the future course of healthcare reform depends on how the Supreme Court rules on the constitutionality of the individual mandate, and whether it invalidates just that provision of the law or all of it.
The Milliman report states that the status quo, by and large, will prevail for its insured family of 4 if the high court strikes down either the individual mandate or the entire law, although in the event of the latter, employers may roll back some ACA reforms such as dependent coverage up to age 26 years. If the ACA survives intact, employers could shift even more costs to employees to offset their increased financial obligations under the law. Or they could terminate their insurance coverage of employees “and replace it with cash compensation,” according to Milliman actuaries Lorraine Mayne and Chris Girod, the authors of the report. Forced on the open market, employees might find that insurance premiums are higher than what their employer once charged.
Dr. Pinna says…
What this means that the public pays more, the doctors get less and the insurance
companies, AIDED BY THE GOVERNMENT, as usual, get more.
Because the public is too mentally deficient to realize what they are doing, they
elect people who know how to rob them—and, unfortunately, the people that serve them—
the doctors and medical staff.
Ultimately, health care will deteriorate.
