Transcript No Slide Title

What is New Hampshire?
Vesta Roy
Excellence in Public Service Series
January 18, 2007
Dennis Delay
Deputy Director, NHCPPS
“…to raise new ideas and improve policy debates through quality
information and analysis on issues shaping New Hampshire’s future.”
Board of Directors
Martin L. Gross, Chair
John B. Andrews
John D. Crosier
Gary Matteson
Todd Selig
New Hampshire Center
for Public Policy Studies
All of our reports
are available on the web:
Donna Sytek
Georgie A. Thomas
James Tibbetts
www.nhpolicy.org
Brian Walsh
Kimon S. Zachos
Staff
Steve Norton
Dennis Delay
Ryan Tappin
Doug Hall
“…to raise new ideas and improve policy debates through quality
information and analysis on issues shaping New Hampshire’s future.”
Topics for Presentation
New Hampshire’s People
New Hampshire’s Environment
New Hampshire’s Economy
State Budget
Public Education
Public and Private Health Care
Spending
 Corrections and Drug Abuse
Local and County Governance

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1
Starting in the 1960’s, New Hampshire
Population Grew Faster Than the Rest of
New England
Population Growth Index – New England and US
Source: Chart from Fed Bank of Boston
New Hampshire Growth Highest in
I-93 Corridor
Population Change 2000 to 2005
-27 - 50
50 - 100
100 - 200
200 - 300
300 - 1,000
1,000 - 3,000
Source: NH Office of State Planning Estimates
Three NH Counties Had More
Deaths Than Births.
Components of NH County Population Change April 1, 2000 to July 1, 2005
International
Internal
Total Net
Natural Increase
Migration
Migration
Migration
-24
233
5,105
5,338
-276
141
3,992
4,133
390
219
2,966
3,185
-576
64
1,088
1,152
462
676
1,976
2,652
11,613
6,719
2,584
9,303
Merrimack
1,776
834
8,238
9,072
Rockingham
7,374
1,328
9,378
10,706
Strafford
2,671
772
3,487
4,259
462
121
2,047
2,168
23,872
11,107
40,861
51,968
Belknap
Carroll
Cheshire
Coos
Grafton
Hillsborough
Sullivan
Total
Source: US Census Bureau
Most of NH’s Migrants Come
From Massachusetts
NEW HAMPSHIRE NET MIGRATION 2000 to 2005 (Source: NH OSP)
STATE
Entered NH From
Left NH For:
Net Change
MA
92,078
42,692
49,386
ME
14,830
24,868
-10,038
VT
11,175
19,613
-8,438
FL
11,963
11,108
855
NY
10,241
7,379
2,862
CA
7,470
8,435
-965
CT
6,887
5,148
1,739
Foreign
4,182
5,082
-900
PA
4,368
4,707
-339
NJ
4,299
5,414
-1,115
VA
4,056
4,410
-354
TX
3,919
3,490
429
NC
3,328
3,669
-341
RI
2,994
2,573
421
CO
2,487
2,507
-20
SC
1,431
2,535
-1,104
GA
2,160
2,957
-797
216,527
186,310
30,217
TOT**
The New Hampshire population age makeup is shifting,
along with the region and the rest of the US.
Source: US Census Bureau
New Hampshire is estimated to have a relatively high
median age of the population, exceeding the US median
age by 3.1 years
Only Maine and Vermont,
among the New England
States, have higher
population median ages
All New England states
have higher population
median ages than the
United States
The New Hampshire workforce is getting older, but
population growth will continue with high “quality of
life” and job opportunities
160,000
Source: US Census Bureau and
New Hampshire Office of Energy and Planning
140,000
120,000
100,000
80,000
60,000
Census 2000
40,000
July 1, 2005
Projection 2010
20,000
Projection 2015
85 +
80 - 84
75 - 79
70 - 74
65 - 69
60 - 64
55 - 59
50 - 54
45 - 49
40 - 44
35 - 39
30 - 34
25 - 29
20 - 24
15 - 19
10 - 14
05 - 09
00 - 04
0
New England donors give more to secular causes but less
to religious causes
Religious and secular giving, by U.S. Census Region, 2002
(Center on Philanthropy Panel Study Data)
1000
900
New England
Secular Giving: Average/household (inc. non-donors)
800
700
Pacific
600
SE:Atlantic
Mountain:SW
500
Mid-Atlantic
Plains states
400
Oil States
Great Lakes
300
SE:Gulf States
200
100
0
0
200
400
600
Religious giving: average/household (inc. non-donors)
800
1000
1200
Topics for Presentation
New Hampshire’s People
New Hampshire’s Environment
New Hampshire’s Economy
State Budget
Public Education
Public and Private Health Care
Spending
Corrections and Drug Abuse
Local and County Governance
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1
Global Warming? : Average ‘ice out’ day trend for 27 lakes
in the Northeast, 1926-2000
Winter Recreation, Global
Warming and New Hampshire
 Warm slushy winters mean 6,000
fewer jobs, a loss of 4 percent of
North Country winter employment.
 33 percent fewer skiers visit NH.
 Snowmobile registration license
fees drop by almost 30 percent.
 Total loss in ski ticket, fishing
license and snowmobile
registrations is $13 million.
Source: www.carboncoalition.org
Topics for Presentation
New Hampshire’s People
New Hampshire’s Environment
New Hampshire’s Economy
State Budget
Public Education
Public and Private Health Care
Spending
Corrections and Drug Abuse
Local and County Governance

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1
NH Income per person grew
faster than US in 1970-80’s.
Ratio of Personal Income per Capita - NH to US
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
-15.0%
Source: US Bureau of Economic Analysis
..but wealth is not evenly
distributed among counties.
Source: US Bureau of Economic Analysis
New Hampshire Growing Faster
than US or Region Since 2001
Real Gross State Product
Index to 2001=100
115.00
US
110.00
New Hampshire
105.00
New England
100.00
95.00
90.00
85.00
80.00
1997
1998
1999
US
2000
2001
NEW ENGLAND
Source: Bureau of Economic Analysis
2002
2003
New Hampshire
2004
2005
Real Estate Eclipses
Manufacturing in Contribution to
GDP
NH GDP by Selected Components
(Millions of Current Dollars)
9,000
Real Estate,
Rental and
Leasing
8,000
7,000
6,000
Manufacturing
5,000
Retail
FIRE
4,000
Health Care
3,000
2,000
Construction
1,000
Education
0
1997
1998
1999
2000
2001
Source: Bureau of Economic Analysis
2002
2003
2004
2005
New Hampshire affordability better
than the 1980’s.
Critical Ratio of Housing Prices to Income
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1960
1970
1980
1989
1990
United States
2000
2003
2004
New Hampshire
Sources: Census Bureau and Bureau of Economic Analysis
2005
2006
Northern New England Scores
Well
Northern New England Economic Scoreboard for 2006
Ranking among the 50 states
(Rank of '1' is best; for example 1 is lowest tax rate, highest income, etc.)
Categories
Favorable State and Local Tax Climate (low burden on income 2004)
Standard of Living (by poverty rate)
Most Livable State (Morgan Quitno, 2006)
Child and Family Well Being (Annie E. Casey Foundation, 2005)
Healthiest State (Morgan Quitno, 2006)
Safest State (Morgan Quitno, 2006)
Education – College Degree or better (2004)
Education – High School Degree or better (2004)
Per Capita Income (2005)
Smartest State (Morgan Quitno, 2005-6)
ME NH
VT
Rank Rank Rank
43
1
39
27
1
3
17
1
4
7
1
2
4
2
1
2
4
3
40
4
8
27
6
7
37
6
25
5
15
1
Topics for Presentation
New Hampshire’s People
New Hampshire’s Environment
New Hampshire’s Economy
State Budget
Public Education
Public and Private Health Care
Spending
Corrections and Drug Abuse
Local and County Governance
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1
Distribution of 2007 General Fund Appropriations
by Major Components of the Government
Education,
$217,555,760 ,
16%
General
Government,
$292,825,224 ,
21%
Admin of Justice
and Public Prtn,
$217,790,891 ,
16%
Health and
Human Services,
$626,817,876 ,
44%
4
Resource
Protection and
Development,
$43,904,834 , 3%
Transportation,
$2,958,949 , 0%
Comparison of Aggregate
Growth (1997-2007)
Percent Growth Over 10 Years
1997-2007
80%
70%
69.2%
Percent Increase
60%
72.9%
54.1%
55.4%
50%
40%
30%
20%
10%
0%
Gross State
Product
7
Personal Income CPI & Population
Combined
General Fund
Appropriations
Change in Inflation Adjusted Per
Capita Appropriation 1997-2007
Medicaid
Provider
Payments
$40.00
$30.00
Retirement System
School Building Aid
$20.00
Corrections
$10.00
Municipal Revenue Sharing
($10.00)
Ski Operations
State Sewer Aid
($20.00)
Mental Health Services
NH Hospital
($30.00)
10
AFDC Grants
85
83
81
79
77
75
73
71
69
67
65
63
61
59
57
55
53
51
49
47
45
43
41
39
37
35
33
31
29
27
25
23
21
19
17
15
13
9
11
7
5
3
$0.00
1
Change in Per Capita Appropriation
Special Education
Feast and Famine: 1997-2007
Change in General Fund Appropriations
(in $2007 per capita)
$50.00
$32.86
$30.00
$29.17
$15.36
$11.91
$10.20
$10.00
($10.00)
Medicaid
Provider
Payments
Retirement
System
Special
Education
School
Dept of
Building Aid Corrections
Rest of
Budget
($30.00)
($50.00)
($70.00)
($90.00)
($110.00)
11
($90.94)
Summary: NH General
Fund Spending 1997-2007
•Budget up 55.4% in 10 years
•Slightly more than inflation and population growth
… and less than economy.
• Programmatically:
•In real terms: “Feast AND Famine”
•5 entitlement functions driving expenditure growth
•Aside from 5 growth areas, net reduction in real
spending for remainder of budget.
26
General Fund Revenue by
Source FY 2005
Board and
Care Fees
1%
Court Fines & Fees
2%
Securities
Revenue
2%
Estate &
Legacy Tax
1%
Interest &
Dividends Tax
5%
Dog &
Horse Racing
0%
Utility Tax
0%
Park Revenue
0%
Dog & Horse Racing
0%
Business
Profits Tax
15%
Meals &
Rooms Tax
14%
Communications Tax
5%
Tobacco Tax
5%
"Medicaid
Enhancement"
14%
Other
6%
29
Insurance Tax
Real Estate
6%
Transfer Tax
8%
Total:
$1,391.6
million
Liquor Sales
8%
Business
Enterprise Tax
9%
General Fund Revenue ($ million) New
Versus Old Revenues
2005
Revenue Source
Beer Tax
Board and Care Fees
Business Profits Tax
Business Enterprise Tax
Estate & Legacy Tax
Insurance Tax
Securities Revenue
Interest & Dividends Tax
Liquor Sales
Meals & Rooms Tax
Park Revenue
Dog & Horse Racing
Real Estate Transfer Tax
Communications Tax
Tobacco Tax
Utility Tax
Court Fines & Fees
Savings Bank Tax
Other
"Medicaid Enhancement"
Total
33
1990
2005
$12.20
$12.40
$14.50
$15.60
$111.00
$196.60
$0.00
$114.10
$24.30
$11.70
$43.10
$88.70
$0.00
$27.90
$40.70
$67.90
$55.10
$112.60
$83.80
$186.50
$7.30
$0.00
$10.50
$3.50
$32.30
$107.80
$12.80
$70.00
$38.20
$73.20
$8.20
$6.30
$22.60
$25.50
$12.60
$0.00
$33.10
$85.00
$0.00
$186.30
$562.20 $1,391.60
Old
Source
Old Rate
$12.40
$15.60
$196.60
New
Increased
Sources
Rates
$114.10
$9.70
$88.70
$1.90
$27.90
$67.90
$112.60
$163.20
$3.50
$75.50
$10.30
$33.60
$6.30
$25.50
$59.60
$881.00
Compound annual rate of increase:
$23.30
$32.30
$59.70
$39.50
$25.40
$186.30
$413.50
3.4%
$97.10
NH General Fund Revenues
(Current $)
$1,600
$1,400
Millions of Dollars
$1,200
$1,000
New taxes
$800
Increased rates
Mediscam
$600
$543
$400
Taxes and rates
in place in 1988
$200
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
$0
State Fiscal Year
34
$881
NH General Fund Taxes as % of Gross State Product, 1971-2005
3.25%
3.00%
2.75%
2.50%
2.25%
2.00%
1.75%
Includes all regular state GF taxes but
does not include Medicaid enhancement,
tobacco settlement, rebates, etc.
35
Year
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
1971
1.50%
Balancing the NH General Fund, 1979-2007
$1,600
Non-tax Revenue:
Medicaid Enhancement
Tobacco Settlement
Flexible Federal Grant (2003-04)
$1,400
Millions of Dollars
$1,200
$1,000
General Fund
Expenditures
Lynch
$800
Benson
$600
Shaheen
Merrill
$400
Gregg
Regular General Fund Taxes
and Revenues
Sununu
$200
Gallen
36
State Fiscal Year
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
$0
Does New Hampshire Have a
Structural Deficit?
“New Hampshire can be characterized
as having a long-term structural deficit
in the sense that for a given scope of
programs and revenue system,
expenditures grow automatically faster
than revenues.”
KPMG Peat Marwick
February 13, 1992
44
So What?
 Recognize need to scale back on state activities OR
recognize the necessity to raise tax rates or add new
taxes to maintain a constant level of services.
 Results in more detailed review of all state programs
every biennium because there is always a looming
shortfall.
 Reduces possibility of surpluses for investment in
desirable one-time projects.
 Makes long-term strategic planning more difficult.
45
Budget Conclusions?
 Absent significant policy changes, historic growth in
primary drivers of state budget will continue.
Over the past 15 years, ‘natural’ revenue growth has
been outpaced by appropriations  constant changes
to tax structure including increased rates and new
taxes.
Absent significant policy changes which slow growth
in primary drivers, appropriations likely to outstrip
revenue growth  revenue structure changes or
‘tinkering.’
Both revenue and expenditure side driven by
economic changes ….
46
Topics for Presentation
New Hampshire’s People
New Hampshire’s Environment
New Hampshire’s Economy
State Budget
Public Education
Public and Private Health Care
Spending
Corrections and Drug Abuse
Local and County Governance




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
1
Property Taxes By Function 1997-2005
$3,000
Dollars (in millions)
$2,500
County
State School
Local School
Municipal
$192
$180
$178
$2,000
$160
$154
$1,500
$116
$116
$129
$116
$372
$383
$495
$499
$499
$458
$460
$1,000
$1,101
$1,147
$1,206
$932
$1,174
$537
$660
$718
$816
$500
$417
$478
$514
$543
$594
$694
$468
$639
$438
1997
1998
1999
2000
2001
2002
2003
2004
2005
$0
Tax Year
The “Adequacy” Reform Began in 1998
•
•
•
•
•
•
•
Legislature passed HB999 - new state “adequacy”
aid in response to NH Supreme Court ruling in
Claremont II
Old “Foundation Aid” of $66 million was repealed
Raised/introduced taxes for education
Re-introduced statewide property tax for schools in
tax year 1999 at $6.60 rate
Distributed $407 million for school year 1999/2000
Legislature has regularly amended and changed the
amount of aid and the distribution formula.
Reform sought to comply with ‘Claremont II’ thru:
• greater pupil equity
• greater taxpayer equity
Change in Pupil Equity
How have the differences in spending
per pupil among the school districts that
were cited by the Supreme Court
changed since the reform?
Expenditure Per Elementary Pupil 1999-2000
NOTE: These figures do not include capital costs,
debt service, transportation, or food service costs
$22,000
$20,000
$18,000
$16,000
Highest: Waterville Valley $14,922
$ Per Pupil
$14,000
$12,000
$10,000
State Average: $6,254
$8,000
$6,000
$4,000
Lowest: Weare $5,339
$2,000
$0
1
8
15 22 29 36 43 50 57 64 71 78 85 92 99 106 113 120 127 134 141 148 155 162 169 176 183 190 197 204 211 218
Towns sorted in order from low to high
Expenditure Per Elementary Pupil 2004-2005
NOTE: These figures do not include capital costs,
debt service, transportation, or food service costs
$22,000
Highest: Waterville Valley $21,870
$20,000
$18,000
$16,000
$ Per Pupil
$14,000
State Average: $9,406
$12,000
$10,000
$8,000
$6,000
Lowest: Franklin $5,983
$4,000
$2,000
$0
1
8
15 22 29 36 43 50 57 64 71 78 85 92 99 106 113 120 127 134 141 148 155 162 169 176 183 190 197 204 211 218
Towns sorted in order from low to high
Expenditure Per Elementary Pupil 1999, 2001, 2003, 2005
$22,000
$20,000
$18,000
+81.0%
$16,000
$ Per Pupil
$14,000
+66.7%
$12,000
+61.4%
$10,000
$8,000
$6,000
2005
2003
2001
1999
$4,000
Before 1999 reform
$2,000
$0
1
10
19
28
37
46
55
64
73
82
91 100 109 118 127 136 145 154 163 172 181 190 199 208 217
Towns (each year independently sorted in order from low to high)
Expenditure Per Elementary Pupil 1999, 2005
200%
$ Per Pupil as % of State Median
180%
160%
140%
120%
100%
80%
60%
40%
1999
2005
20%
0%
1
9
17 25 33 41 49 57 65 73 81 89 97 105 113 121 129 137 145 153 161 169 177 185 193 201 209 217
Towns (each year independently sorted in order from low to high)
Change in Taxpayer Equity
How have the differences in tax rates
among the towns that were cited by the
Supreme Court changed since the
reform?
Equalized Tax Rates for Education 1998
$35
$30
Equalized Rate (per $1,000)
1998
$25
$20
$15
$10
$5
$0
one dot for each town (sorted low to high)
Equalized Tax Rates for Education 1998, 1999
$35
$30
Equalized Rate (per $1,000)
1998
$25
$20
$15
$10
1999
$5
$0
one dot for each town (sorted low to high separately for each year)
Equalized Tax Rates for Education 1998, 1999
(compared to median town)
Ratio of tax rate to median town tax rate
180%
160%
140%
120%
100%
1999
80%
60%
Taxpayer equity:
1998
40%
20%
In 1998 the tax rate in the sixth highest town was 6.46
times the rate in the sixth lowest town. In 1999 the tax rate
in the sixth highest town was 2.55 times the rate in the
sixth lowest town. Reform greatly increased inter-town
taxpayer equity, primarily by raising the rates in the towns
with lower taxes relative to the median.
0%
one dot for each town (sorted low to high separately for each year)
Equalized Tax Rates for Education 1998, 1999, 2005
(compared to median town)
Ratio of tax rate to median town tax rate
180%
160%
140%
120%
2005
100%
1999
80%
60%
40%
20%
1998
Taxpayer equity:
The change in taxpayer equity brought about by the reform
of 1999 was almost entirely reversed by 2005. If the trends
of 1999-2005 continue for three or four more years, the
relative distribution of tax rates for education will be the
same as they were immediately before reform in 1999.
0%
one dot for each town (sorted from low to high separately for each year)
Change in Pupil Equity
No change in pupil equity ever
occurred.
Change in Taxpayer Equity
The initial increase in taxpayer equity in
1999 has nearly all eroded away.
New Hampshire's high school
dropout rates have begun to
decline
Source: New England Public Policy Center
Topics for Presentation
New Hampshire’s People
New Hampshire’s Environment
New Hampshire’s Economy
State Budget
Public Education
Public and Private Health Care
Spending
Corrections and Drug Abuse
Local and County Governance






1
Expenditures on Personal Health Care and Public Schools in NH
$8,000
Personal Health Care Expenditures
$7,000
Public School Expenditures
$5,000
In 2005, spending
on health care was
3.6 times spending
on public schools
$4,000
$3,000
$2,000
In 1981, spending
on health care was
2.0 times spending
on public schools
$1,000
Year
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
$0
1981
Dollars (in millions)
$6,000
NH Total Health Expenditure as % of Gross State Product (GSP)
20%
18%
16%
During recessions, the expansion of the
economy slows but health care spending
continues to increase, so it consumes
more of the GSP. The "ratcheting" effect
is visible in this chart.
Projected
14%
12%
10%
Actual
8%
6%
4%
2%
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
0%
Year
Estimated Personal Health Care Spending in NH, 2006
(in $ million)
Other Personal
Health Care
Nursing Home Care
Total:
$8,137 million
$384
$679
Durable Equipment
$110
Other Non-durables $170
Prescription Drugs
Home Health Care
$936
$2,747
Hospital Care
$335
$417
Physicians, Clinics,
& Other Professional
Services
Dental Services
$2,359
Are we getting
value?
 “Regions experiencing the largest spending gains
were not those realizing the greatest
improvements in survival. Factors yielding the
greatest benefits to health were not the factors
that drove up costs.” Health Affairs 25 (2006)
 Hospitals and physicians are competing for
profitable services, making costly investments in
the latest medical technologies. These market
forces are largely going unchallenged by insurers
and regulators (Center for Health Systems
Change, Issue Brief No. 97)
 Elliot Fisher’s Work suggest some services are
‘unnecessary.’
% of All Health Care Paid by Sources, 1965-2014
55%
50%
45%
40%
35%
30%
25%
projected
20%
Public Funding
Out-of-Pocket
Insurance
Other Private Sources
15%
10%
5%
Year
Source: National Health Expenditure Accounts, Centers for
Medicare and Mericaid Services
2013
2011
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
1971
1969
1967
1965
0%
Estimated Source of Funds Personal Health Care in US, 2006
Other Public
8%
Public
Sources
46%
Private
Sources
54%
Medicaid
16%
Insurance
36%
Medicare
22%
Out-of-Pocket
14%
Other Private
4%
Note: Some of the spending that is
categorized as private insurance
actually originates from public
funds: insurance for teachers,
postal employees, and other
government workers.
We spend more on health care at
the end of our lives.
Mean Health Care Expenses per Person,
United States, 2004
$10,000
$9,000
$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
$8,906
$5,224
$2,631
$1,285
$1,357
Under 6
6 to 17
18 to 44
45 to 64
65 and
over
Source: www.ahrq.gov Medical Expenditure Panel Survey
Why are These Trends
Important?
Cost-Shifting
•The allocation of unpaid costs of care delivered to one
patient population through above-cost revenue collected
from other patient populations.
•For hospitals, nursing facilities and physicians, the
historical cause of cost shifting has been below-cost
reimbursement rates paid by PUBLIC programs and
uncompensated care losses due to charity care and bad
debt.
Health Insurance Status, NH Residents 2003
Uninsured
10%
Medicaid
5%
Medicare
12%
Military
3%
Employer based
insurance
64%
Purchased insurance
6%
Source: 2004 Current Population Survey, US Bureau of the Census, http://pubdb3.census.gov/macro/032005/health/h05_000.htm
Differences
Among Employers
Provide many employees a health insurance benefit
• Large employers
• Manufacturers
• High wage and full time employers
Provide few employees a health insurance benefit
• Small employers
• Construction, retail sales, hospitality
• Low wage and part time employers
The former are effectively subsidizing the latter through family policies
and cost-shifting by health care providers.
Can you name the employers in your community that are
shifting the health care costs of their employees onto you?
Revenue Structure of a Health Care Provider
170%
160%
If all payers pay 100% of COST, then the provider will break even.
(If all pay 104% of cost, the provider will have a 4% operating margin)
150%
140%
130%
% of Cost Paid
120%
Medicaid
7%
110%
100%
90%
80%
Insurance
45%
70%
60%
Medicare
41%
Self-Pay
7%
50%
40%
30%
20%
10%
0%
0%
% of Gross Charges by Payer
100%
Revenue Structure of a Health Care Provider
170%
160%
150%
140%
Revenue above 100%
130%
% of Cost Paid
120%
Shortfalls
110%
100%
90%
80%
Insurance
45%
70%
60%
Medicare
41%
Self-Pay
7%
50%
40%
30%
20%
10%
0%
0%
% of Gross Charges by Payer
Medicaid
7%
100%
Hospital Cost-Shifting in 2004
(Aggregate of 26 NH Acute Care Hospitals)
250%
self-pay
<1%
206%
Payment as Percent of Cost
200%
Total amount cost-shifted: $300 million
Net operating gain: $131 million
Operating margin: 5.9%
150%
bad debt
& charity
5%
100%
50%
3rd Party Payers (insurance)
44%
Medicare
40%
Medicaid
7%
0%
Percent of Gross Charges
other
4%
Insurance Premium to Pay for
Hospital Service, 2004
Hospital Charge
$10,000
Actual Cost of Service
Cost-shift surcharge (26.5%)
For operating margin (11.5%)
Claim to be paid
Claim to pay
Insurer admin/profit (17.6%)
Premium required
Premium as % of cost of service
$4,854
$1,284
$561
$6,699
$6,699
$1,179
$7,878
162%
26 Acute Care Hospitals
2004 Operating Margins
(post-tax margins shown in green)
5.3%
1.7%
-2.6%
3.7%
Struggling
Region
1.7%
3.4%
0.5%
2.0%
4.0%
1.5%
-1.1%
0.6%
-18.8%
5.5%
8.5%
9.0%
3.7%
Intermediate
Region
4.3%
0.3%
7.4%
17.8%/10.8%
11.1%
12.8%/7.4%
4.9%
11.3%
8.6%
Prosperous
Region
Cost-Shifting
• Cost-shifting also occurs in nursing homes, physician
offices, clinics, and other providers.
• The degree of cost-shifting in nursing homes is greater
than in hospitals, but not yet quantified.
• The degree of cost-shifting in private practices is
unknown because there are no complete financial
reports. Anecdotal evidence would indicate that for some
practices it is greater than in hospitals, while for other
practices it is minimized by declining to serve some
patients.
Growth in Jobs, Healthcare Jobs and Population
(Normalized to 1990)
1.8
1.6
1.4
If all jobs, healthcare
and population grew at the
same rate the lines would
overlap perfectly.
1.2
1
0.8
0.6
0.4
All Jobs
Healthcare
Population
0.2
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Healthcare and the
Economy
Healthcare is clearly an important
contributor to the economic system in
New Hampshire.
This does not ‘eliminate’ the need to
bring focused attention to growth in
health care
• Opportunity Cost (are these really the jobs we want?)
• Question of value still remains primary
Topics for Presentation
New Hampshire’s People
New Hampshire’s Environment
New Hampshire’s Economy
State Budget
Public Education
Public and Private Health Care
Spending
Corrections and Drug Abuse
Local and County Governance






1
NH Prisoner Population, 1981-2005
2,750
2,500
2,250
2,000
Prisoners
1,750
1,500
1,250
1,000
750
500
250
Year
24
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
0
Admissions to NH State Prisons
by Type of Crime, FY 81 - FY 05
1400
1200
Number of Admissions
1000
800
Parole & probation
violations
600
400
Drug manufacture, sale, or
possession
Property crimes
Misc. non-violent crimes
200
Sex offenses
Violent crimes
FY
81
FY
82
FY
83
FY
84
FY
85
FY
86
FY
87
FY
88
FY
89
FY
90
FY
91
FY
92
FY
93
FY
94
FY
95
FY
96
FY
97
FY
98
FY
99
FY
00
FY
01
FY
02
FY
03
FY
04
FY
05
0
25
Teen Drug Abuse in NH Higher
than National Average
Topics for Presentation
New Hampshire’s People
New Hampshire’s Environment
New Hampshire’s Economy
State Budget
Public Education
Public and Private Health Care
Spending
Corrections and Drug Abuse
Local and County Governance






1
One-third of NH residents live in a
town with a traditional town
meeting.
Percentage of NH Population by Form of Governance: 2002
No Meeting
Traditional
Meeting
Official
Ballot
15
171
48
36%
33%
31%
10
102
64
26%
22%
52%
Municipalities
Count of Municipalities
Percent of State Population
School Districts
Count of Districts
Percent of State Population
Nursing homes and human services
account for biggest differences in per
capita NH county spending.
County Expenditures Per Capita by Function
Nursing
Human Services
Corrections
Public Safety
Gen. Govt.
Other
$500
$600
Hillsborough
Rockingham
Grafton
County
Strafford
Carroll
Cheshire
Merrimack
Belknap
Sullivan
Coos
$0
$100
$200
$300
$400
Annual Expenditure per Capita (2002-04 average)
$700
The number of households filing firsttime requests for elderly exemptions
has grown…
Figure 1: New applications for exemptions by age group, 2000-2005
1400
65 -74
75 - 79
80 +
1200
293
265
Number of applicants
1000
212
800
323
270
176
249
600
182
179
121
400
154
153
637
599
528
450
200
310
286
2000
2001
0
2002
2003
2004
2005
..but the Elderly Exemption shifts
a very small part of total tax
burden.
Elderly
Exemptions
Year
Average Tax
Reduction
Total
Exemption
Value
Percent of Total
Tax
Commitment
2000
$1,043
$11,790,112
0.68%
2001
$1,175
$13,228,659
0.70%
2002
$1,259
$14,119,392
0.70%
2003
$1,379
$16,085,368
0.74%
2004
$1,523
$18,135,378
0.78%
2005
$1,596
$18,964,536
0.80%
Questions?
Board of Directors
Martin L. Gross, Chair
John B. Andrews
John D. Crosier
Gary Matteson
Todd Selig
Donna Sytek
New Hampshire Center
for Public Policy Studies
All of our reports
are available on the web:
Georgie A. Thomas
James Tibbetts
Brian Walsh
www.nhpolicy.org
Kimon S. Zachos
Staff
Steve Norton
Dennis Delay
Ryan Tappin
Doug Hall
“…to raise new ideas and improve policy debates through quality
information and analysis on issues shaping New Hampshire’s future.”