A report released by the Nelson A. Rockefeller Institute on Government on October 15 found that state tax collections for the second quarter showed a record drop of 16.6 percent.  The report notes that every state but Vermont saw total tax revenue fall and that 36 states reported revenue declines of 10 percent or more.  The revenue shortages come as many states have already tapped their “rainy day” funds and relied heavily on ARRA funding in their most recent budgets, indicating that states will likely move to cut spending unless revenue increases.

From the report:

Total state tax collections as well as collections from two major sources — sales tax and personal income — all declined for the third consecutive quarter. Overall state tax collections in the April-June quarter of 2009, as reported by the Census Bureau, declined by 16.6 percent from the same quarter of the previous year. We have compiled historical data from the Census Bureau Web site going back to 1962. Both nominal and inflation adjusted figures indicate that the second quarter of 2009 marked the largest decline in state tax collections at least since 1963. The same is true for combined state and local tax collections, which declined by 12.2 percent in nominal terms.

The Nelson A. Rockefeller Institute of Government. (2009). State tax revenues show record drop for second consecutive quarter. Lucy Dadayan and Donald J. Boyd.

Full report: http://www.rockinst.org/pdf/government_finance/state_revenue_report/2009-10-15-SRR_77.pdf

A TriNet Group Inc. survey found 71 percent of small business owners worry that health care reform legislation will increase their health care costs and 56 percent believe it will cause “unnecessary complexity”.  Of those respondents who believe that the legislation will increase cost, 44 percent indicated that they would reduce benefits to recoup their costs while 21 percent said they would first look to cut wages and 20 percent said they would reduce staff.

From the introduction:

Full report: http://www.trinet.com/documents/white_papers/TriNet_WP_2009_HRTrends_Q3.pdf

This National Committee for Quality Assurance (NCQA) report on the state of health care quality, released on October 22, found  that overall health care quality in America—including private and public coverage—has been virtually stagnant since 2008.  Previous NCQA reports have found health care quality had improved significantly every year for the past 12 years and NCQA attributes the reversal to the economy and the fee-for-service (FFS) payment model.  In addition to the overall trends, the NCQA report notes that the percentage of patients receiving quality care for many conditions, including for M/SU conditions, remained under 50 percent while some M/SU conditions displayed quality reductions.

From the Executive Summary:

There are probably multiple reasons for the flat results of 2009. First, and perhaps most important, is the lagging U.S. economy. The current downturn began in the fourth quarter of 2008, but employers and health plans had already begun to shift their focus almost entirely to the cost of coverage. When purchasers are buying on the basis of cost alone, plans naturally follow suit and pay more attention to negotiating discounts and less to improving performance. And the most effective tool — tying payments to performance — is not being utilized enough, especially by the giant Medicare program.

Millions of Americans lost their jobs and insurance; many shifted to Medicaid and the Children’s Health Insurance Program (CHIP); others became uninsured. Several states have made enormous strides in focusing their Medicare and CHIP programs on quality but they are not yet the majority. While more than half of Americans with private insurance are in a HEDIS-reporting plan, only 25 percent of Medicaid beneficiaries and 17 percent of Medicare beneficiaries are.

The National Committee for Quality Assurance. (2009).The State of Health Care Quality 2009.

Full report: http://www.ncqa.org/Portals/0/Newsroom/SOHC/SOHC_2009.pdf

This article assessed the effects of health care cost growth outpacing GDP growth on employment, gross output, and value added to GDP of U.S. industries, finding that excess cost growth adversely affects all three aspects of the economy.

Sood, N., Ghosh, A., Escarce, J. J. (2009). Employer-sponsored insurance, health care cost growth, and the economic performance of U.S. industries. Health Services Research, 44(5): 1449-1464. DOI: 10.1111/j.1475-6773.2009.00985.x http://www.hsr.org/hsr/abstract.jsp?aid=594371976 

Authors: Neeraj Sood, Arkadipta Ghosh, José J. Escarce.

This article presents findings from the Kaiser/HRET Survey of Employer Health Benefits.  The survey found that family premiums increased 5 percent in 2009.  Average annual premiums were $4,824 for single coverage and $13,375 for family coverage. 

Claxton, G., DiJulio, B., Whitmore, H. et al. (2009). Job-based health insurance: costs climb at a moderate pace. Health Affairs, 28(6), w1002-1012. DOI: 10.1377/hlthaff.28.6.w1002 http://content.healthaffairs.org/cgi/content/abstract/28/6/w1002 

Authors:  Gary Claxton, Bianca DiJulio, Heidi Whitmore, Jeremy Pickreign, Megan McHugh, Benjamin Finder, Awo Osei-Anto.