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Health Care Final 11-16-11 -   8.1 - Growth in DSHS Medical Programs Costs Compared to Washington's Personal Income

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Health Care Final 11-16-11
Healthy State
Action Plan

8.1 - Growth in DSHS Medical Program Costs Compared to Washington's Personal Income
How does growth in DSHS medical costs compare to personal income growth?

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Data Notes

Data Source:




Washington Per Capita Personal Income: June 2010 Economic and Revenue Forecast Council. Historic data from the U.S. Department of Commerce, Bureau of Economic Analysis and Washington State Office of Financial Management. Data are obtained from the Council on a quarterly basis.

DSHS Medical Programs Per Capita Costs: Agency Financial Reporting Systems (AFRS), based in large part on Medicaid Management Information Systems (MMIS) data, and March 2010 Caseload Forecast Council data. Chain-weighted annual change adjusting for caseload and case mix in per capita costs growth (actual and forecasted).

Measure Definition: DSHS medical programs' per capita costs growth rate compared to Washington's personal income growth rate
Target Rationale: The Governor's Blue Ribbon Commission (BRC) on Health Care Cost and Access directed that the rate of growth in total health care spending will be no more than the rate of growth in personal income.
Link to Agency Strategic Plan: The HRSA 2009-13 strategic plan sets forth as one of its goals that the per capita growth rate of DSHS medical programs will be less than the state's personal per-capita income growth rate 
Relevance: Managing costs within these parameters helps sustain state government's ability to provide affordable health coverage for low-income residents and children.
Notes: (optional)

Lighter, dashed lines represent forecasted data; heavier lines represent actual cost rates.

Also Available
Action Plan: Yes
Extended Analysis: Yes

 Drill Down Measures

 Summary Analysis

During the state fiscal years 2007 through 2010, Washington per capita personal income grew at a faster rate than DSHS medical programs per capita costs.  This was most notable during the 2010 state fiscal year, when per capita costs actually decreased by 5.8%.  We forecast a rebound in state fiscal years 2011 and 2012 after which we forecast a lowering of the rate of increase to 2.6% in state fiscal year 2013.  Averaging the rates over different periods of time dampens fluctuations such as we see during state fiscal year 2009 through state fiscal year 2012. 

DSHS Medical Programs Per Capita Costs Growth (Average Annual)

 Washington's Per Capita Personal    Income Growth (Average Annual)

 SFY 07-11



 SFY 07-13



 SFY 11-13 (forecasted)



 SFY 2013 (forecasted)



DSHS medical programs expenditures have been caseload driven in the past, but moving forward will also be impacted by per capita cost growth. (refer to the TotalExpGrowth tab to the left):

As the growth in per-capita costs dampened in state fiscal year 2009 and 2010, the growth in total expenditures was due to caseload growth.  In state fiscal year 2011, total expenditure growth will be driven both by caseload growth and growth in per capita costs.

 Caseload Growth

Per Capita Costs Growth

 DSHS Medical Programs Total Expenditures Growth (Annual)

 SFY 2010




 SFY 2011 (forecasted)




 SFY 2012 (forecasted)




 SFY 2013 (forecasted)




Medical Eligibility Groups  (refer to the CaseloadGrthbyMEGs and PerCapCostGrthByMEGs tabs to the left):

SFY 11-13  

Caseload Growth (Average Annual)

 Per Capita Costs Growth (Average Annual)













*As in recent GMAP reports, children account for a majority of the growth in DSHS medical programs caseload, but not for its costs growth.

***Per capita costs growth for the Elderly MEG dropped precipitously (-28.8%) in SFY 2010 because DSHS received a retroactive Medicare Part D Clawback credit and thus did not receive Clawback payments for the first four months of CY 2010. Because regular Clawback payments resumed in June 2010, subsequent years growth rate is higher than would otherwise be expected. (refer to the PerCapCostGrthByMEGs and AgedCosts+CL tabs to the left).

DSHS per capita costs growth remained lower than the growth in per capita national health expenditures (NHE) and per capita employer-sponsored coverage in state fiscal years 2009 and 2010, but we expect our growth to be temporarily higher in state fiscal years 2011 and 2012. (refer to the DSHS+NHE+EMP PerCapCostsGrth tab to the left) 

With the exception of 2008, the growth of DSHS medical program's spending has been consistently slower than the growth of national per capita medical spending.  Growth in DSHS per capita costs has historically been slower than the growth in per capita costs of coverage offered by employers.

DSHS per capita costs growth is influenced by many factors. In addition to caseload growth, which may compress per capita costs if new enrollees are not high utilizers of services, various DSHS savings initiatives and assertive utilization controls to reduce waste and inappropriate use have helped keep the growth of DSHS per capita costs below Washington per capita personal income growth. External factors, such as disease treatment standards and new technologies, may also impact DSHS per capita costs growth.