Last week, Kaiser Family Foundation (KFF) released its Annual Employer Health Benefits Survey which included a surprise:
The average annual single premium and the average annual family premium each increased by 7% over the last year.
In 2022 as post-pandemic recovery was the focus for employers, the average single premium grew by 2% and the average family premium increased by 1%. Health costs and insurance premiums were not top of mind concerns to employers struggling to keep employees paid and door open. But 7% is an eye-opener.
The rest of the findings in the 2023 KFF Report are unremarkable: they reflect employer willingness to maintain benefits at/near pre-pandemic levels and slight inclination toward expanded benefits beyond mental health:
- “The average annual premium for employer-sponsored health insurance in 2023 is $8,435 for single coverage and $23,968 for family coverage. Comparatively, there was an increase of 5.2% in workers’ wages and inflation of 5.8%2. The average single and family premiums increased faster this year than last year (2% vs. 7% and 1% vs. 7% respectively).
- Over the last five years, the average premium for family coverage has increased by 22% compared to an 27% increase in workers’ wages and 21% inflation.
- For single coverage, the average premium for covered workers is higher at small firms than at large firms ($8,722 vs. $8,321). The average premiums for family coverage are comparable for covered workers in small and large firms ($23,621 vs. $24,104) …
- Most covered workers contribute to the cost of the premium for their coverage. On average, covered workers contribute 17% of the premium for single coverage and 29% of the premium for family coverage, similar to the percentages contributed in 2022…
- 90% of workers with single coverage have a general annual deductible that must be met before most services are paid for by the plan, similar to the percentage last year (88%).
- The average deductible amount in 2023 for workers with single coverage and a general annual deductible is $1,735, similar to last year…
- In 2023, among workers with single coverage, 47% of workers at small firms and 25% of workers at large firms have a general annual deductible of $2,000 or more. Over the last five years, the percentage of covered workers with a general annual deductible of $2,000 or more for single coverage has grown from 26% to 31%.
- While nearly all large firms (firms with 200 or more workers) offer health benefits to at least some workers, small firms (3-199 workers) are significantly less likely to do so. In 2023, 53% of all firms offered some health benefits, similar to the percentage last year (51%).”
My take: these findings show that employers are not prone to drastic changes in health benefits for their employees despite recognition it is expensive and unaffordable to small companies and for many of their own employees. But many large self-insured employers (except those in government, education and healthcare) are poised to make significant changes next year. They recognize themselves as the primary source of profits enjoyed by insurers, hospitals, physicians, drug companies and others. They’re developing multi-year at risk direct contracts, value-based purchasing arrangements, primary care gatekeeping, narrow networks, restricted formularies, alternative care models and more to that leverage their clout. They’re going on offense.
The KFF Benefits Survey is a snapshot of where employer benefits are today, but it’s likely not the same next year. It appears employers are ready to engage the health industry head on.
PS Last week, the feud between Senate Health, Education, Labor and Pensions (HELP) Committee Chair Bernie Sanders and Not-for-Profit Health Systems heated up. On Oct. 10, he released a Majority Staff Report that said NFP hospitals do not deserve their tax exemptions as they spend “paltry amounts” on charity care. “Hospitals have gladly accepted the tax benefits that come with nonprofit status but have failed to provide the required community benefits. Non-profit hospitals spent only an estimated $16 billion on charity care in 2020, or about 57% of the value of their tax breaks in the same year.”
The same day, the American Hospital Association (AHA) released its analysis of hospital Schedule H filings concluding that tax-exempt hospitals provided $130 billion in community benefits in 2020 and called the HELP report “just plain wrong”.
In response to the AHA report, Sanders noted that AHA had not included CEO Compensation for NFPs in its analysis though featured prominently in his Majority Staff Report: “In 2021, the most recent year for which data is available for all of the 16 hospital chains, those companies’ CEOs averaged more than $8 million in compensation and collectively made over $140 million…The disparities between the paltry amounts these hospitals are spending on charity care and their massive revenues and excessive executive compensation demonstrates that they are failing to live up to their end of the non-profit bargain.”
This tit for tat between the Committee Chairman and AHA is notable for 2 reasons: it draws attention to the Schedule H information goldmine about how not-for-profit hospitals operate since they’re now required to attach their S-10 Medicare cost report worksheets. Quantifying charity care in Exhibit 3B (for which there’s no expectation of payment) and the myriad of claimed community benefits including bad debt in Schedule 3C will likely intensify scrutiny of NFPs even more. Second, it draws attention to Executive Pay in hospitals: in this regard the Majority Staff Report commentary on CEO pay is misleading: by combining Column B (wages, bonuses) with Columns C (Deferred compensation) and D (non-taxable benefits), the total is significantly higher than one-year’s actual take-home pay for the CEOs. But it makes headlines!
If not-for-profit systems wish to lead transformational change in U.S. healthcare, not-for-profit system boards and their trade associations must be prepared to address the storm clouds gathering above. The skirmish between the Senate HELP Chair and AHA mirrors an increasingly skeptical public who, with Congress, believe the system is being gamed.
2023 Employer Health Benefits Survey – 10240 Kaiser Family Foundation October 17, 2023 www.kff.org
Executive Charity Major Non-Profit Hospitals Take Advantage of Tax Breaks and Prioritize CEO Pay Over Helping Patients Afford Medical Care Senate HELP Committee October 10, 2023 Executive Charity HELP Committee Majority Staff Report FINAL2 (senate.gov)
Tax-exempt Hospitals Provided Nearly $130 Billion in Total Benefits to their Communities AHA October 10, 2023 www.aha.org
Re: nursing turnover, satisfaction: “Health Care Leaders Are Out of Touch: Nurses view their managers as out of touch with the daily realities of patient care. We categorized their comments about managers into nearly 50 leadership traits. The second most frequently cited trait described managers as being unaware of the challenges that nurses struggle with in the workplace. When nurses discussed how managers understood life at the bedside, their comments were negative 9 times out of 10. Nurses are particularly critical of members of the senior executive team for their disconnectedness. The top team was 10 times more likely than front-line supervisors and middle managers to be criticized for being out of touch…Our results reinforce a separate survey in which nearly half of hospital nurses said they believe management does not listen to their concerns…the nursing shortage in the U.S. is not only about compensation and workload, but rather is being driven by toxic workplace culture and a disconnect between leadership and the front lines. “
Analysis of the free text of 150,000 reviews written by U.S. nurses from the beginning of the pandemic through June 2023 Donald and Charles Sull “The Real Issues Driving the Nursing Crisis MIT Sloan Management Review” October 18, 2023
Re: hospital role in insurance premiums: “Inflation in the economy spiked in 2022. It hit health coverage this year because hospitals tend to renegotiate fees with insurers only every few years, so the increases they sought to cover their own costs are now in turn affecting premiums….One piece of good news for workers is that employers aren’t pushing up deductibles, which are out-of-pocket sums that workers pay for care before coverage kicks in. “
Inflation came for your healthcare this year. Next year is looking to be just as bad. Wall Street Journal Anna Wilde Mathews, Josh Ulick Oct. 18, 2023 www.wsj.com/health/healthcare/health-inflations-big-hike-this-year-in-charts
Re: access to medical records: “In 2022, 73% of individuals reported being offered online access to their medical records by their health care provider or insurer— a 24% increase from 2020—and 57% accessed their online medical records or patient portal at least once in the past year—a 50% increase from 2020:
- About 3 in 4 individuals nationwide reported being offered online access to their medical records by their health care provider or insurer in 2022 – this represents a 24% increase since 2020.
- About 3 in 5 individuals nationwide reported they were offered and accessed their online medical record or patient portal in 2022 — this represents a 50% increase since 2020.”
Individuals’ Access and Use of Patient Portals and Smartphone Health Apps, 2022 ONC October 2023tps://www.healthit.gov/data/data-briefs/individuals-access-and-use-patient-portals-and-smartphone-health-apps-2022
Morning Consult: Opinions about labor unions: Per the Morning Consult poll conducted between Sept. 23-25, 2023 among a sample of 2203 adults: Favorability toward unions falls along expected political party and age lines. Those favorable toward unions are more Democratic (53%), more liberal (40%) and trend younger (11% among Gen Z adults and 35% among millennials). Those unfavorable of unions are more Republican (50%), conservative (61%) and older (24% among Gen Xers and 46% among baby boomers). Other findings:
- A large portion of these adults see labor unions as the main force to protect workers.
- 51% of U.S. adults consider it a priority that a new job has a labor union they can join including 76% of those currently in a labor union. This is especially true among Democrats (65%) and those with a household income under $50,000 (54%).
- While price is a top consideration for U.S. adults when deciding whether or not to purchase a product or service (72%),nearly half said that how well the company treats its employees is a major factor (48%).
“What Americans Think of Labor Unions and Workplaces” Morning Consult October 2023 www.morningconsult.com
Customer Satisfaction: Per the newest American Customer Satisfaction Index:
- Overall satisfaction with health insurers at 76 out of 100—up from 73 in 2022 and the highest the industry has ever received; hospitals were rated at 74 out of 100–up from 71 out of 100 in 2022.
- Consumers report much higher levels of satisfaction with outpatient care, which received a score of 81 out of 100.
- Health insurers experience widespread policyholder satisfaction gains, with all but one provider upping their ACSI score: Humana is highest (up 6% to 82) followed by United (+4 gain to 78); Aetna, (up 4% to 77%). Blue Cross Blue Shield and Centene are at (75, up 3% and 4%, respectively); Kaiser Permanente was (no change at 73, and Cigna at 72.
- “The big story is that satisfaction with nonhospital care jumps 11% to 81. It now sits atop the Index — along with athletic shoes, full-service restaurants, household appliances, soft drinks, and televisions.”
Consumer Satisfaction with Health Insurance Hits Record High, While Nonhospital Care Joins Index Leaders, ACSI® Data Show ACSI October 17, 2023 https://www.theacsi.org/news-and-resources
2023 Physician Compensation and Productivity Survey: Highlights from Per Sullivan Cotter’s survey of 306,765 physicians, advanced practice providers and PhDs:
- Primary care physicians received the biggest total cash compensation boost in the last year, and the anticipated shortages in the field will push compensation even higher. Primary care physicians also had the highest turnover rate of any category in the report, at 8.4%.
- Factors driving physician cash compensation increases include: 1-Demand outpacing supply, 2 Regulatory changes, including Medicare’s proposed conversion factor reduction in 2024 and changes to split and shared billing for 2025; 3-Increased team-based compensation (23% of organizations surveyed used team-based incentives in compensation plans accounting for 11% of physician total cash compensation, up from 8% in 2020) and 4-.the shift to value-based care leading to higher cash compensation (50% of organizations are using value-based or quality incentives with payments ranging from 6% to 8% of total cash compensation for specialists and 8% to 9% for primary care physicians).
2023 Physician Compensation and Productivity Survey www.sullivancotter.com
Study: physician practice expectations: The Association of American Medical Colleges (AAMC) surveyed graduates from an allopathic US medical school from 2019, 2020, and 2021. Findings:
“Of 48,885 (responses rate, 80.7%) from 139 (of 148) medical schools: Of these, 45 687 (93.4%) answered the item about intent to practice in an underserved area: After controlling for other factors, women had higher odds of intent to practice in an underserved area than men American Indian or Alaska Natives. Black or African American, Hispanic, Latino, or of Spanish origin and Native Hawaiian or Other Pacific Islander students had higher odds of intent to practice in an underserved area than those who did not identify with each of those respective racial and ethnic groups. Bisexual or gay or lesbian students had higher odds of intent to practice in an underserved area than heterosexual or straight students.”
Dyrbye et al “US Medical Student Plans to Practice in Underserved Areas” JAMA. Published online October 19, 2023. doi:10.1001/jama.2023.19521
AMN Healthcare’s 2023 Review of Physician and Advanced Practitioner Recruiting Incentives: Highlights:
- Demand for NPs is being driven by a growing number of “convenient care” providers, including retail clinics, urgent care centers and telemedicine platforms, which employ large numbers of NPs. • Average salary offers made to NPs were up 9% year-over-year, from $138,000 last year to $158,000 this year, underscoring the strong demand for advanced practice nurses.
- Only 17% of AMN Healthcare’s search engagements this year were for primary care physicians, the same number as last year, while 19% of search engagements were for APs, also the same as last year.
- The majority of AMN Healthcare’s search engagements this year (64%) were for physician specialists, including radiologists (third on the list of our most requested search engagements), anesthesiologists, psychiatrists, cardiologists, gastroenterologists, orthopedic surgeons, neurologists, oncologists and others, reflecting the needs of an aging population that is reliant on specialty care. • OB/GYNs were 4th on the list of AMN Healthcare’s most requested search engagements this year, up from 5th last year.
Change in Average Starting Salaries for Physician Specialists, 2021/22 vs 2022/23
|Specialty||2022/23||Increase or decrease from 2021/22|
Federal Reserve re: consumer finances: Per the Federal Reserve’s Survey of Consumer Finances released last Wednesday:
- Households’ median net worth, or wealth, climbed 37% from 2019 to 2022, after adjusting for inflation–the largest increase since the survey—which comes out once every three years—began in 1989.
- Rising home and stock prices that far outpaced inflation helped support the net worth increases. Older Americans benefited from higher home values and stock-market gains. Black families saw the largest gains in median net worth, with their wealth rising 60% from 2019 to 2022in contrast with their long, slow recovery from the 2007-09 recession. Still, gaps persist. Black families’ 2022 net worth—at $44,900—remained below other racial and ethnic groups. The net worth of white families was $285,000 in the same year and Hispanic families’ net worth was $61,600.
- Median income, before taxes and adjusted for inflation, rose a modest 3% from 2018 to 2021. Income gains were biggest among the top earners, which meant inequality widened.
CDC: death rate for kids highest in 13 years: The rate of child and teen deaths in the US rose in 2020 increasing in 2021 to its highest rate since 2008 after three decades of decline. Firearm injuries were the primary cause of rising childhood death rates between 2019 and 2021. These deaths homicides, suicides, and accidents —were around 20% of all child and teen deaths in 2020 and 2021. That’s the largest proportion in at least four decades. Other findings:
- In 2021, 65% of firearm-related child deaths were homicides. According to FBI data, 70% of these deaths occurred either on a street or at home, while 0.7% occurred at a school.
- Drug overdoses surpassed cancer as the third most common cause of death for children and teens from 2019 to 2021. Of the 2,079 young Americans who fatally overdosed in 2021, 53% of deaths were attributed to narcotics and hallucinogens. Of those, nearly three quarters involved fentanyl or other synthetic opioids.
- Childhood and teenage flu and pneumonia deaths decreased slightly from 2019 to 2021. The CDC has attributed this to the effectiveness of the flu vaccine as well as mask wearing, hand washing, and other COVID-19 mitigation measures.
CMS: 2024 MA Star ratings: For the 2024 plan year, 42% of Medicare Advantage plans with prescription drug coverage earned at least four out of five stars and will receive bonuses, down from 51% this year. The average star rating fell to 4.04, the lowest since 2017. The share of Medicare Advantage beneficiaries enrolled in five-star plans dropped from 22% this year to 7% in 2024. Because of what CMS
characterizes as consistently poor performance, Elevance Health, Centene and CareFirst BlueCross BlueShield are not permitted to expand the geographic footprints for some products for the 2025 plan year. Analysts anticipate Elevance Health and Centene will lose market share amidst another year of falling star ratings.
FDA warning re: digital health tools: The FDA is following through on its promise to regulate more health software tools, starting with a public reprimand of Johnson & Johnson’s heart pump company, Abiomed which it acquired for $16.6 billion late last year. The FDA published a warning letter last week telling the company it should have submitted its software for approval before putting it on the market and also took issue with Abiomed’s failure to report various problems with its heart pumps. The letter comes a year after the FDA announced its intention to regulate more health software tools including clinical decision support tools, often powered by artificial intelligence, help doctors understand treatment options or predict patient risk.