Study: Quality of U.S. healthcare lags despite high spending

Anne Zieger — Fri, 19 Sep 2008 11:30:41 -0400

While American healthcare is perhaps the most expensive on the planet, we aren't getting as much as we should for our investment, according to a new study by the Commonwealth Fund. The report notes that while the U.S. spends more than twice as much on each person compared with most other industrialized nations, we're in last place when it comes to preventing deaths through appropriate medical care. Meanwhile, access to care has gotten worse since the group's first report card in 2006, the report concludes.

Over the last two years, the number of people without adequate health insurance his risen to 75 million, researchers say. Even for those who do have access to care, the cost and quality of such services vary dramatically. At the same time, we spend more of our healthcare dollars on administrative costs, or about 7.5 percent, than other countries, the report notes. (Germany and Switzerland, for example, spend 5 percent.)

What's more, when measured on 37 metrics chosen by the group, care hasn't improved much since the last report, while other countries have made significant strides, researchers said. For example, the U.S. has cut the number of preventable deaths for people under age 75 to 110 for every 100,000 people, compared with 115 deaths five years earlier, but it still ranks last in preventable mortality--falling just below Ireland and Portugal.

To learn more about this study:
- read this piece in the New York Times

Blue plans see 18 percent drop in operating earnings for '07

Anne Zieger — Thu, 19 Jun 2008 13:38:21 -0400

A new analysis by healthcare research and consulting firm the Sherlock Co. found that last year was not a good one for the nation's Blue Cross and Blue Shield plans, which lost money despite increased revenue. The Blue plans posted an overall 18.2 percent decline in operating earnings during 2007, though revenue rose 7.4 percent. Among the 39 plans, six actually showed improved operating margins of 1 point or more, but nine had worsening operating margins of at least 3 percentage points, according to Sherlock.

These results come, in part, because the plans' revenues aren't keeping pace with medical costs. The plans' median premium-rate increase during 2007 was 5.4 percent, but median medical costs per member rose by 6.4 percent. What's more, administrative costs grew at a median rate of 7.6 percent per member. Meanwhile, insured membership among the plans fell by 1.4 percent, to 51.5 million, and operating margins dropped 1 point for 2007, to 3.3 percent.

Given these numbers, it seems likely that the Blues will be among the crowd of insurers who raise rates substantially for next year. Several health plans announcing troubling results this year have already vowed to jack up rates for 2009.

To learn more about this study:
- read this Modern Healthcare article (reg. req.)

Related Articles:
WellPoint profits fall 25 percent during first quarter '08
UnitedHealth suffers financial setback

Administrative Costs

Study: Quality of U.S. healthcare lags despite high spending

Blue plans see 18 percent drop in operating earnings for '07