10 posts categorized "Health Care"

Health insurance premiums vary widely for state workers

Health insurance for employees is a major expense for state governments, but costs vary widely across the nation and Ninth District, particularly for premiums involving workers and their families, according to a new report this week by the Pew Charitable Trusts.

Monthly, employer-paid premiums for employees (only) are relatively similar among Ninth District states, from a low of $427 in North Dakota to a high of $587 in Wisconsin, which is also the only state whose employees share in the premium cost, at $97 per worker. Montana state employees, on average, receive a small credit of $21, according to Pew.

Much bigger differences occur in state health care coverage for workers and their dependents. South Dakota actually spends slightly less (per month, per worker) on family coverage ($493) than on single coverage ($496), and the state also requires a considerable cost share of $183. State-based costs for families in North Dakota are twice as high as in its southern neighbor, and South Dakota workers pay nothing. Premium costs in Minnesota and Wisconsin are higher still. With a total monthly premium of almost $1,700, Wisconsin has the second-highest health care premiums for state workers with dependents in the country, behind only New Hampshire.

State helath care premiums -- 8-13-14

March madness: ACA enrollments racing to sign-up goal

The March 31st deadline to sign-up for private health insurance plans as part of the Affordable Care Act is fast approaching, and enrollments in some states are sprinting toward their projected goals while others are lagging, according to data released last week by the U.S. Department of Health and Human Services.

As of March 1, enrollments in Michigan and Wisconsin are at 90 percent of enrollments projected by HHS before the new law’s launch (see chart). In contrast, fewer than 7,000 people have enrolled in South Dakota, or just 36 percent of its 19,000 projection. Minnesota is the only district state that constructed its own health plan exchange (all others are using the federal healthcare.gov exchange). Enrollment in private plans to date through the MNsure exchange was just 48 percent of the goal of 67,000.

States and the federal government are also keeping a close eye on the number and proportion of young people signing up. For health insurance markets to work efficiently, the number of younger (and healthier, actuarially speaking) enrollees has to balance out the number of older, less healthy enrollees. It was originally estimated that 18 to 34 year olds would make up 35 to 40 percent of all enrollees. So far, it’s just 25 percent, and has remained fairly consistent in monthly reports. Among district states, only about one in five Wisconsin enrollees are in this young age bracket, while South Dakota has one of the highest rates, at 29 percent.

ACA March update -- 3-17-14

The little independent pharmacies that could (with a little help)

With all that booming going on in Williston and the surrounding Bakken region, it’s enough to give everyone a tension headache. Good thing you can pop into the Walmart pharmacy for some relief.

What’s that? No Walmart pharmacy? OK, fine, a Walgreens will do just fine. None of those either?

Turns out that all the oil activity in the Bakken region—and strong overall growth across the state—has been a boon to independent pharmacies, running against the nationwide trend of pharmacy growth mostly among pharmacy chains and supermarket and mass merchant locations like Walmart. In 2007, North Dakota had 80 pharmacies; by 2013, that number had almost doubled to 151 pharmacies, according to the National Community Pharmacists Association, which publishes an annual digest of pharmacy statistics.

But the truly notable part of this pharmacy growth in North Dakota is that it came entirely from independent pharmacies (see chart). The number of pharmacy chain stores dropped by one over this period, and there are no supermarket or mass merchant pharmacies to speak of in the state—in any year. Meanwhile, the number of independent pharmacies grew by almost 150 percent.

This seeming economic anomaly is, in fact, born from “a 40-year-old law [that] tilts heavily toward independent community pharmacies,” according to the NCPA, in email correspondence. In 1964, the state passed a law requiring that majority ownership of a pharmacy be by a licensed pharmacist. Existing chain stores were grandfathered in, but the NCPA noted that “this law prevents national chains from moving in” and has withstood referendums and legal challenges. “So the natural rush of chain pharmacies like CVS and Walgreens that usually accompanies a job surge hasn’t occurred.”

ND pharmacies -- 2-28-14

More evidence that businesses expect to grow, increase hiring

Signs are upbeat that the Ninth District economy will continue to grow, according to a recent poll of more than 300 business contacts from across the district (see methodology below).

For starters, 40 percent plan to increase employment at their firms, and nearly three-quarters of these firms cited expected high sales growth as the most important factor. Only 7 percent plan to decrease employment. In the same survey a year ago, 38 percent planned to increase employment and 10 percent planned to cut jobs.

Other important factors cited for new hiring were overworked staff, improved financial condition of firms and the need for additional skills. The majority of respondents plan to use word of mouth and advertising to get new employees. Twenty-eight percent plan to use a recruiting firm, and surprisingly few (9 percent) plan to raise starting pay.

For those respondents not planning to hire additional people this year, most expected low growth sales and a desire to keep operating costs low. Many reported difficulty finding skilled candidates. Though fiscal policy developments were not a factor for most respondents, 35 percent said they had a detrimental effect on hiring and 4 percent said they would increase hiring plans.

The survey also asked about wages and benefits; 36 percent expected wage growth of 2.5 percent or more, and a similar amount expected positive wage growth of less than 2.5 percent (see Chart 1). Respondents generally believed benefit increases would be larger than those for wages (see Chart 2).

  Ad hoc survey Ch 1-2 -- 2-5-13

Methodology: On Jan. 15, the Minneapolis Fed invited, via email, about 1,000 Beige Book contacts from across the Ninth District to answer the special question in a web-based survey. By Jan. 31, 303 contacts had filled out the survey. The respondents come from a variety of industries (see table below).

Ad hoc survey METHOD TABLE -- 2-5-13

Beige Book, Minneapolis: Ninth District economy slowly improving

The Ninth District economy expanded modestly during late summer and early fall, according the most recent Beige Book released this week by the Federal Reserve Bank of Minneapolis.

Each of the 12 Federal Reserve district banks drafts a similar report, which in sum are a summary of regional economic conditions across the country, in preparation for the Oct. 23-24 Federal Open Market Committee meeting, where interest rates and other monetary policy issues are decided.

In the Ninth District, improved activity was seen in construction and real estate, consumer spending, tourism and professional services. Energy and mining continued to perform at high levels, while agriculture varied widely, with crop farmers generally in better condition than animal producers. On the softer side, manufacturing activity slowed in late summer, and wage increases remained subdued, although stronger increases were reported in some areas. But labor markets tightened somewhat, and price increases were generally modest.

For those interested in other regional, national or historical Beige Book reports on economic conditions, the Minneapolis Fed offers everything in one spot.

Health insurance: Minnesota leads the high-deductible trend

Over the past decade, high-deductible health insurance plans have caught on with firms as a way to reduce the costs of providing health care benefits—primarily by shifting a larger share of medical expenses to employees. These plans include health savings accounts, tax-exempt funds owned by employees that can be used to pay for medical care.

A recent annual survey by America’s Health Insurance Plans, a national trade association, found that HSAs provided coverage for more than 13.5 million people in the United States—about 8 percent of total private insurance enrollment. That’s a marked increase since 2008, and most states in the Ninth District mirror the trend (see chart, at bottom).

The recession and a tepid recovery have had something to do with those increases; cash-strapped employers have turned to high-deductible health plans as an antidote to rising insurance premiums. But the AHIP data reveal considerable variation among Ninth District states in participation in such plans—differences that are difficult to attribute to the downturn or a general rise in premiums.

As of January, 487,000 Minnesotans—roughly 14 percent of private insurance enrollees in the state—were covered by an HSA. In Minnesota and Montana, HSAs accounted for a bigger share of private health insurance coverage than in the country as a whole. However, in other district states, HSA participation rates were lower than the national average.

Some of the divergence in HSA uptake among district states may be a statistical fluke; in this year’s survey, over 2.7 million people nationwide were not assigned to any state because some health plans missed AHIP’s reporting deadline. But health care experts point to differences in health care models and average business size across states as possible explanations.

“Minnesota was an early proponent of high-deductible health plans” in the early 2000s, giving it a head start in HSA growth, said Stephen Parente, a professor of health finance at the University of Minnesota. And Parente notes that a large share of Montana employers are small businesses with fewer than 50 workers. Small firms paying relatively high small-group premiums tend to offer less comprehensive health coverage than big firms.

Less aggressive marketing of HSAs by insurers and a greater emphasis on managed care in clinics may partly account for lower participation rates in Wisconsin and the Dakotas.

HRAs in 9th D -- 6-13-12

Minnesota job vacancies: Good news, with caveats

Job vacancies in Minnesota climbed 48 percent in the fourth quarter of 2011 compared with the same period a year earlier, according to a semi-annual survey recently released by the Minnesota Department of Employment and Economic Development (DEED).

That pencils out to almost 50,000 job openings last quarter—back to fourth quarter levels last seen in 2007, though short of the 65,000 vacancies in 2006. The survey also found that vacancies increased across a wide range of industry sectors (see Chart 1). In all, there were 3.2 unemployed people for each vacancy, compared with 5.8 a year earlier.

While certainly moving in the right direction, job vacancies still have some way to go before spurring the type of employment market many hope for. For example, DEED said 42 percent of the job vacancies were for part-time employment and another 13 percent were for temporary or seasonal work. The median wage offer for all job vacancies was $10.89 an hour—slightly lower than median wages seen in the same quarter of 2007 and 2008.

A breakdown of vacancies also shows that industry sectors with the greatest percentage of growth and the largest number of job vacancies generally offer lower wages (see Charts 1 and 2). This isn’t necessarily a surprise, or even a change. A look back at vacancies in the fourth quarter of 2006 shows a similar relationship regarding industry sector vacancies and median wages (see Chart 2).

Industry sectors like retail and accommodation employ many workers, are generally low-paying and typically see high turnover, which means they are perpetually looking for workers. In fact, health care traditionally has the most vacancies, reflecting the fact that it is a large and still-growing industry despite a sluggish economic recovery. Even though there are many high-paying jobs in the field, median wages for vacant jobs are just $11, a shade higher than the median wage for all vacancies. The biggest difference in job vacancy distribution among industry sectors is in transportation and warehousing, where vacancies remain considerably below 2006 levels (see Chart 2).

MN job vacancies -- Chart 1&2 -- 3-2-12


Long-term care costs: Separate and unequal

A lot of attention is paid today to rising health care costs, especially for entitlement programs like Medicare and Medicaid, which cover much of the health care bills of the elderly and poor, respectively. But blanket statements about rising costs cover up a wide disparity of costs for seemingly similar services in different locations.

Long-term care costs for things like assisted living facilities and nursing homes across the Ninth District can vary by more than 40 percent within a state, according to the Genworth Cost of Care Survey, a six-year-old survey that is reportedly the first to publish costs for these health care services for all 384 U.S. metropolitan statistical areas (MSAs). Genworth Financial is a Fortune 500 financial services company and a major underwriter of long-term care insurance policies.

For example, the median annual cost of assisted living runs about $43,000 (give or take) in Minneapolis and Duluth, according to the survey. That compares with $29,500 in St. Cloud, which lies only about an hour from the Twin Cities (see Chart 1).

But that wasn’t an anomaly. Every district state had a significant gap between the highest and lowest median cost for either assisted living or semi-private nursing home care. Most had disparities for both types of long-term care services. In North Dakota, the biggest disparity is at nursing homes, where median annual costs ranged from $62,000 in Fargo to $82,000 in Bismarck (see Chart 2).

The report’s results are based on completed surveys from 6,300 assisted living facilities and 3,900 nursing homes nationwide. The survey did not reveal how many facilities were surveyed in each MSA, including those in the Ninth District. The report also has no ability to benchmark or otherwise measure the quality of service in relation to annual costs.

Long-term care costs -- 12-29-11

A primer on consumer spending on food and energy

Inflation is up. No, it’s down. Actually it’s both, and how much that matters depends to some degree on where you land on the income scale.

As everyone knows, gas and food prices have been rising. In mid-July, a gallon of Minnesota gas was $1 (almost 40 percent) higher than last year, while food prices in June’s Consumer Price Index (CPI) were up 3.7 percent from a year earlier.

Higher gasoline and food prices mean consumers have less to spend on other goods and services. Fortunately, the prices of other goods and services have increased more modestly. In June, the core rate of inflation, which strips out relatively volatile food and energy prices, was up 1.6 percent from last year. But once food and energy prices are added back in, headline (or total) inflation was up 3.4 percent.

Certainly higher food and energy prices impact consumers, but their impact varies depending on income, according to the Consumer Expenditure Survey (CE). The CE provides information on the buying habits of consumers, including their out-of-pocket expenditures, income and consumer unit (families and single consumers) characteristics. It’s used for a variety of purposes, such as examining the impact of policy changes, studying spending habits and determining the relative importance to place on various consumer goods and services in the CPI.

CE data show that energy and food expenditures account for about 20 percent to 30 percent, depending on household income level (see Chart 1). Within food and energy, gasoline expenditures account for about 3 percent to 5 percent of total expenditures.

Consumer expenditures -- CH1 8-23-11 

In 2009, the largest expenditure for all households was shelter; low-income households spent the largest share of income on shelter—a full quarter of their expenditures. Meanwhile, high-income households tend to spend a larger share of their income on personal pensions and insurance compared with low-income households.

Over the past 20 years, the percent of consumer expenditures in any given category hasn’t changed dramatically. The greatest change was in shelter; the median consumer now allots about 5 percentage points more of expenditures for shelter. That increase is offset by a decline in the share of spending on food and transportation (excluding gasoline and motor oil).

From 1989 to 2009, total expenditure increased 6 percent, adjusted for inflation. Expenditure growth on a percentage basis among individual categories varied widely: Health care increased over 40 percent, followed by shelter at 38 percent (see Chart 2). Meanwhile, expenditure on food decreased 11 percent and transportation (less gasoline and motor oil) dropped 16 percent.

Consumer expenditures -- Ch#2 8-23-11 

As food and energy prices rise, the relative change to consumer expenditures over time helps keep these and other price changes in perspective. For more information about the CPI, look for Phil Davies’ article in the September issue of The Region.

Primary care doctors thin on the ground

Alarmed by a “critical public policy problem”—a scarcity of primary care physicians—the Obama administration recently announced a plan to deploy “mystery shoppers” to phone doctors’ offices to see how difficult it is to get an appointment. Health system officials reasoned that increased medical coverage under health care legislation enacted last year will worsen a shortage of primary care doctors in many parts of the country.

The covert survey plan was nixed after complaints from doctors, but the initiative raises a question about how Ninth District states compare with the nation as a whole in per capita numbers of primary care physicians—medical doctors such as family practitioners, internists and pediatricians who initially see people in need of medical care.

It turns out that primary care physicians are thinner on the ground in every district state compared with the national average, according to 2010 occupational data compiled by the Bureau of Labor Statistics (see chart). Nationwide, there are about 12 primary care physicians for every 10,000 people. Minnesota, a state with a reputation for excellent medical care, has close to 10 primary care doctors for the same population, tops in the district. North Dakota has the lowest concentration, with fewer than four.

Physician ratio chart -- 7-19-11 

Why do people in district states on average have relatively fewer primary care physicians at their service than the typical U.S. resident? The distribution of Health Professional Shortage Areas (HPSAs) gives a clue. These are federally designated areas or population groups in which there are at least 3,500 people for every primary practitioner.

The correlation of HPSAs—areas considered medically underserved by the Health Resources and Services Administration—with rural areas is striking; North Dakota has a number of HPSAs, the vast majority of which lie outside metro areas. (Go here to create HPSA maps for any district state.)

The inference? Few doctors find it profitable professionally or personally to work in rural areas, which dominate the Ninth District landscape. Whether this amounts to a physician “shortage” in an economic sense is uncertain. Rural residents would certainly prefer to have greater access to physicians. But a low physician-population ratio suggests that rural communities and their residents have been unable or unwilling (depending on the household) to pay the fees necessary to attract more frontline doctors to town.