IBM on HC 2015 – Part I

I had a chance to catch up on a bunch of reading on the plane including an IBM brochure I picked up the other day on “Healthcare 2015 and US Health Plans“. I found it to be a good piece with several good frameworks although it doesn’t take any radical views on the future (which I would have liked to see).

Here were a few of the facts / takeaways from the brochure:

  • US healthcare expenditures per capita are 2.3 times higher than other developed countries and projected to increase 83% over the next 10 years
  • Medical errors cause between 48,000 and 98,000 patient deaths per year
  • Medication errors cost the US over $3.5B per year
  • On top of the 47M uninsured, there are 15.6M underinsured
  • There are five issues that will make change difficult for healthcare:
    • Funding constraints
    • Societal expectations and norms
    • Lack of aligned incentives
    • Inability to balance ST and LT perspectives
    • Inability to access and share information

    “We believe that the U.S. healthcare system will not achieve a comprehensive “win-win” transformation by 2015 because of political gridlock and inability of key stakeholders to work collaboratively to reach solutions for the ‘greater good’.”

  • They do predict that some form of universal coverage will be enacted by 2015 and will be focused on the individual not the employer to address the “job lock” challenge.
  • They see a key role for health plans and call upon them to lead the transformation to a “more patient-centric, value-based, accountable, affordable and sustainable U.S. healthcare system”.
  • They predict that employer-sponsored health benefits for family coverage will increase from $8,167 in 2005 to $17,362 in 2015.
  • In 2006, PPOs (preferred provider organizations) accounted for 60% of private insurance enrollees (up from 41% in 2000).
  • Employers offering coverage has dropped from 69% in 2000 to 61% in 2006 and is predicted to go below 50% by 2015.
  • They talked about employers putting a lifetime cap on retiree benefits which was a new concept to me, but they said that 49% of employers polled in 2005 had a cap (of which 59% of those on the plan had already hit the cap).
  • They talk about lifestyle choices impacting premiums which would lead to increased wellness and preventative programs.
  • There is some scary data about money needed post retirement. They say that half of all bankruptcies are in part due to medical expense. They also say that “a couple retiring in 2016 at 65 years of age would need US$560,000 if they lived an average lifespan. They would need US$1.05 million if they lived to 95 years.” This is specific savings for healthcare costs in addition to Medicare. WOW!! And, they say that 40% of people over 55 have $50,000 or less saved.

ibm-retirement-health-savings.png

 

“The health–wealth intersection is already taking shape. Players from each sector are experimenting with offerings that cross the boundary between the two, such as reverse mortgages to finance nursing-home costs and arrangements that let individuals tap into their life insurance policies to cover medical costs. But the new health–wealth business will evolve and change shape for at least the next couple of decades, as the retail health-care market coalesces and consumers take on more responsibility for their medical needs.”

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