15 posts categorized "Health Care"

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.