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Were for you.

Irrational
Exuberance
a warning that a market
might be over valued
2

The Dot Com Bubble


What would you
have predicted
would happen
next?

Source: Congressional Budget Office: The 2014 Long-Term Budget Outlook in 26 Slides, Slide 19

30,000

25,000

27,288

United States Debt


History and Forecast

21,605
20,000
$ Billion

17,792
15,000

13,359
10,000

4,592

3,734

5,000

Debt Held by Public


Gross Federal Debt

1,507

Source: Congressional Budget Office, The Budget and Economic Outlook: 2015 to 2025, Table 1-1 analysis (January 2015)

2025

2022

2019

2016

2013

2010

2007

2004

2001

1998

1995

1992

1989

1986

1983

1980

1977

1974

1971

1968

1965

16.0

14.0

Changing Nature of
Federal Govt Spending
11.2

12.0

Percentage of GDP

14.9

10.0

9.1

8.0

8.7

9.1
7.4

6.0

Mortality
4.0
Everything Else
2.0
Social Security, Major
Health, & Interest

Productivity

Major Budget Variables


Health Care
Interest
Cost

0.0

2005

2015

Source: Congressional Budget Office, The Budget and Economic Outlook: 2015 to 2025, Figure 1-2 analysis (January 2015)

2025
Year

The Medicare Miracle


Per Beneficiary Medicare Hospital Insurance Cost
$7,000

$6,734

$6,500

$6,000

$5,500

$4,992

$5,179

$5,000

$4,500

$4,000

2014 Report
$3,500

$3,000

2009 Report

$3,272
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, Table V.B1, Page 188
2014 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, Table V.D1, Page 221

11

Subsidized Exchange Enrollees


20

18

19 19

16

16

14

Million People

18 18 18 18

17 17 17

12

10

What does this mean


for employer-sponsored
health coverage?

Source: Congressional Budget Office Insurance Coverage Provisions of the Affordable Care Act - CBOs January 2015 Baseline, Table B-2 analysis
0

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

12

2025

Projected Medicare savings


fund the Medicaid expansion
and Exchange creation

Exchange subsidies are


projected to parallel growth
in the GDP

13

Whats Does It Really Cost?

14

What Can You Buy for $23,215?

15

What Can You Buy for $23,215?

16

What Can You Buy for $23,215?

17

U.S. Median Household Income Is


$53,046

Household
Income After
Health Cost
$29,831
56%

Avg Health Cost


Family of Four
$23,215
44%

18

Source: Whitehouse.gov

19

Public Perception About How Fast Healthcare Costs Are Rising


Going up
slower than
usual
3%
Going up
about the
same
35%

Going up
faster than
usual
52%
Don't
know
10%

kff.org

20

Source: Bureau of Labor Statistics

21

Source: Bureau of Labor Statistics

22

Source: Bureau of Labor Statistics

23

2499 Observations

2499 Observations

2499 Observations
A Deeper Focus

Medicare/Private Hospital Payment Ratio


190%

185%

180%

170%

160%

149%

150%

146%
140% 140%

143%

144%

147%

141%

140%

128%

130%

122%
120%

114%

115%

117%

118%

113%

110%

American Hospital Association, Trendwatch Chartbook 2014, Chart 4.6 analysis

100%

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Medicare v Private Payer Inflation Variance


300%

296%
250%

200%

191%

150%

140%
119%

100%
81%

69%

64%

60%
50%

33%

42%

49%

54%
41%

32%

7%
0%
94

-50%

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

-39%
-60%

-63%
-75%
-100%

47Source
Source: Avalere and American Hospital
Association

Hospital Retail Price Vs Actual Cost


350

Markup
300

Cost

Retail Price

250

200

157
104

114

125

167

178

181

185

193

207

218

139

150

100

50

100

100

100

100

100

100

100

100

100

100

100

100

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

0
Year

Source: MedPAC analysis of American Hospital Association Annual Survey of Hospitals

48

$8,000

49
LAKE GRANBURY MEDICAL CENTER
DALLAS REGIONAL MEDICAL CENTER
MEDICAL CENTER OF MCKINNEY
LAS COLINAS MEDICAL CENTER
SOUTH HAMPTON COMMUNITY HOSPITAL
DENTON REGIONAL MEDICAL CENTER
DOCTORS HOSPITAL
MEDICAL CENTER OF LEWISVILLE
ENNIS REGIONAL MEDICAL CENTER
MEDICAL CENTER OF PLANO
PLAZA MEDICAL CENTER OF FORT WORTH
CENTENNIAL MEDICAL CENTER
TEXOMA MEDICAL CENTER
EAST TEXAS MEDICAL CENTER ATHENS
TEXAS HEALTH PRESBYTERIAN HOSPITAL ROCKWALL
MEDICAL CITY DALLAS HOSPITAL
NORTH HILLS HOSPITAL
METHODIST RICHARDSON MEDICAL CENTER
NOCONA GENERAL HOSPITAL
METHODIST DALLAS MEDICAL CENTER
METHODIST MANSFIELD MEDICAL CENTER
METHODIST CHARLTON MEDICAL CENTER
MEDICAL CENTER OF ARLINGTON
WEATHERFORD REGIONAL MEDICAL CENTER
DALLAS MEDICAL CENTER
HUNT REGIONAL MEDICAL CENTER
BAYLOR MEDICAL CENTER AT GARLAND
BAYLOR MEDICAL CENTER AT IRVING
NAVARRO REGIONAL HOSPITAL
BAYLOR ALL SAINTS MEDICAL CENTER AT FW
BAYLOR REGIONAL MEDICAL CENTER AT PLANO
BAYLOR HEART AND VASCULAR HOSPITAL
BAYLOR UNIVERSITY MEDICAL CENTER
BAYLOR REGIONAL MEDICAL CENTER AT GRAPEVINE
BAYLOR MEDICAL CENTER AT WAXAHACHIE
BAYLOR MEDICAL CENTER AT CARROLLTON
THE HEART HOSPITAL BAYLOR PLANO
DOCTORS HOSPITAL
TEXAS HEALTH PRESBYTERIAN HOSPITAL DALLAS
LAKE POINTE MEDICAL CENTER
WISE REGIONAL HEALTH SYSTEM
TEXAS HEALTH HEART & VASCULAR HOSPITAL ARLINGTON
TEXAS HEALTH PRESBYTERIAN HOSPITAL KAUFMAN
TEXAS HEALTH PRESBYTERIAN HOSPITAL ALLEN
NORTH TEXAS MEDICAL CENTER
TEXAS HEALTH HARRIS METHODIST FORT WORTH
TEXAS HEALTH PRESBYTERIAN HOSPITAL-WNJ
TEXAS HEALTH PRESBYTERIAN HOSPITAL PLANO
TEXAS HEALTH HARRIS METHODIST HOSPITAL STEPHENVILL
TEXAS HEALTH HARRIS METHODIST HURST-EULESS-
TEXAS HEALTH HARRIS METHODIST HOSPITAL AZLE
TEXAS HEALTH HARRIS METHODIST HOSPITAL CLEBURNE
TEXAS HEALTH ARLINGTON MEMORIAL HOSPITAL
TEXAS HEALTH HARRIS METHODIST HOSPITAL SOUTHWEST F
JPS HEALTH NETWORK
TEXAS HEALTH PRESBYTERIAN HOSPITAL DENTON
HUGULEY MEMORIAL MEDICAL CENTER
PARIS REGIONAL MEDICAL CENTER
GLEN ROSE MEDICAL CENTER
UT SOUTHWESTERN UNIVERSITY HOSPITAL
HOPKINS COUNTY MEMORIAL HOSPITAL
PALO PINTO GENERAL HOSPITAL
TEXAS REGIONAL MEDICAL CENTER AT SUNNYVALE

$-

50% Discount
$5,000

Average Submitted Charges


$6,000

North Texas Level II Echocardiogram


$7,000

Average Total Payments

Medicare +40%
$4,000

$3,000

$2,000

$1,000

Holmes Murphy analysis of http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Inpatient.html

$2,500

$2,000

North Texas
Level II Echocardiogram

$2,525

$1,500

$1,262

$1,000

$500

$377

$527

$-

Medicare
Paid

Medicare
+40%

50%
Discount

Weighted
Avg Billed
50

Holmes Murphy analysis http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Outpatient.html

Medicare vs
Private Payer
Texas Study

US States with Counties

Medicare vs BCBSTX Spending 2008-2012


30

25

27
24

23

BCBSTX

20

Medicare
15

10

-1
0

Total Spending

Inpatient Spending

Inpatient Price

-5

Medicare and Private Spending Trends From 2008 to 2012 Diverge in Texas, Franzini, et al

Setting the Stage for


Taxing Health Insurance

53

Finding Additional Funds to Fill the


PPACA Shortfall

54

Can a large
employer afford a
$1 million a year
minimum wage
employee?
55

56

57
Copyright Holmes Murphy

Copyright Holmes Murphy

58

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