7
Declining Health Status.
Of 30 advanced countries
included in the 2011 Legatum Prosperity Index Study,
the U.S. ranked 27th for the health of its citizens. Life
expectancy in America is below average, and the obesity
rate is, by far, the worst among the 30 countries. And,
of course, we spend far more on health care per person
than any other nation, with no extra bang for the buck.
Along with obesity, physical inactivity, tobacco use, and
substance abuse all contribute to a declining health status
and an increased use of health care goods and services.
How the Trust
Has Responded
The Trust is affected by the same factors as all
Americans, and always seeks creative solutions.
Investments in Infrastructure.
The Trust continues
to reap the benefit of investments in infrastructure
and programs. For example, the Trustees made a
sizable investment a few years ago in HIPAA-compliant
software, and this has yielded hundreds of thousands
of dollars in savings each year in “reasonable and
customary” payments to health care providers. These
savings preserve the Trust’s assets for future claims and,
in many instances, they also yield lower coinsurance
payments by participants.
Addressing Government Changes.
The Trust must
adhere to all federal guidelines associated with processing
of claims. There are a number of major changes that
began in 2010 and continue to require changes in our
processes. These changes, the most significant since the
2003 introduction of the Medicare Prescription Drug,
Improvement, and Modernization Act (MMA) affect:
• Every aspect of claims payment.
• All health care transactions.
HIPAA and 835 Transactions.
The Trust has realized
additional savings by using new transactions established
as part of HIPAA to electronically communicate with
providers about claims status and payments. The Trust
also implemented the EDI 835 transaction set, called
Health Care Claim Payment and Remittance Advice.
It has been specified by HIPAA 5010 requirements for
the electronic transmission of health care payment and
benefit information.
Claims Payment Trends.
As the graph at the top of
this column depicts, claims payments by the Trust
increased steadily in the 1980s and into the 1990s.
After the mid 1990s, the increase in claims payments
accelerated. This was due, in part, to the elimination
of the age 60 eligibility requirement in 2000, and the
prescription drug benefit the Trust made available in
January 2002. In 2011, prescription drug claims totaled
$12.3 million, or over 33% of the claim payments made.
Health in Decline
Unless Americans change their ways, half of
U.S. adults will be obese by 2030.
Currently, 35.7% of adults and 16.9% of
children age 2 to 19 are obese. Obesity raises
the risk of numerous diseases, from type 2
diabetes, to heart disease, to many cancers.
The recent “F as in Fat” report, from the
Trust for America’s Health, projects as
many as 7.9 million new cases of diabetes a
year and as many as 6.8 million new cases
of chronic heart disease and stroke.
The increasing burden of illness will go right
to the bottom line, adding $66 billion in
annual obesity-related medical costs over and
above today’s $147 billion to $210 billion.
Claims Paid in 2011
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
1967
$99,346
1981
$4,970,850
1991
$11,493,052
2001
$22,623,191
2011
$39,114,804
Total Claims Paid
Medical:
$37,576,804
Life:
$1,538,000
