US Health Spending: Trends and Comparisons
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1 $8,000 Health Spending per Person $7,290 r P e rs o n $6,000 $4,763 $4,000 $3,895 $3,601 $2,992 $2,000 $0 Canada France Norway United OECD (2009) for 2007 Kingdom D o lla rs p e United States US Health Spending: Trends and Comparisons Douglas J. Young MSU Bozeman October 12, 2009
2 How Much Does Health Care Cost? Out of Pocket Costs Health Insurance Premiums Employer Employee Government Spending (Your Taxes) Medicare Medicaid
3 Spent on All Kinds of Health Care Inpatient & Outpatient Physician and Other Professional Services Drugs: Prescription and Over the Counter
4 $8,000 Health Spending per Person $7,290 Perso n o lla rs p er $6,000 $4,000 $2,000 $3,895 $3,601 $4,763 $2,992 D OECD $0 Canada France Norway United United Kingdom States
5 16 Health Spending (Percent of Income) 16.0 f G D P Perce e nt o Canada France Norway United United OECD (2009) Kingdom States
6 US Health Spending Costs on Average $7,290 per Year per Person Costs on Average $29,160 per Year for a Family of Four More than any Other Country So, is the US Healthier?
7 81 Life Expectancy Years OECD (2009) Canada France Norway United United Kingdom States
8 Births r 1,000 0 Live th s p e Dea OECD (2009) Infant Mortality Canada France Norway United United Kingdom States
9 Remaining Life Expectancy at Age 50
10 US Health Outcomes Life Expectancy is Lower than Western European Countries Infant Mortality is Higher Gains in Life Expectancy at Age 50 are Smaller
11 What s going g On? The US Spends More Money And Has Worse Health Outcomes
12 Obesity 34 P20 rcen t of o p ula tio n Pe 0 OECD (2009) Canada France Norway United United Kingdom States
13 Smo kers Daily Per cent OECD (2009) Smoking Canada France Norway United United Kingdom States
14 n l p er P erso Liters of Et hano OECD (2009) Alcohol Consumption Canada France Norway United United Kingdom States
15
16 D o lla r s p e r Pers on , OECD (2009) Pharmaceutical Spending $878 $691 $588 $381 Canada France Norway United States
17 30 25 Magnetic Resonance Imaging (MRI) Units 25.9 Pop'n 20 r M illio n 15 nits per U OECD 2009 Canada France United Kingdom United States
18 Computed Tomography (CT) Scanners Pop'n M illion25 n10 U n its per OECD 2009 Canada France United Kingdom United States
19 Accounting for the (Additional) Cost of Health Care in the US Other 16% Drugs 13% Staff salaries 8% Medical salaries 18% Malpractice insurance 4% Equipment/ devices Health 8% adminsitration Profits/taxes 19% 14% McKinsey and Company
20 l f T o ta Perc ent o Government Health Spending OECD (2007) for 2005 Canada France Norway United United Kingdom States
21 Contributing Factors Unhealthy Behaviors Physician Salaries Prescription Drug Prices Government Rationing (or Not) Moral Hazard: Little Incentive for Providers and Insured to Reduce Costs
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24 Organization of Care Matters Fee for Service: Providers are paid more if they prescribe/use more services Salaried Providers: No incentive to increase utilization Group practices with salaried providers are often cheaper
25 Consumer Incentives Moral Hazard If insured against adverse outcome, incentive to avoid is reduced. If have health insurance, worry less about the cost of services => consume more services.
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27
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29 Federal Reserve Bank of Minnesota
30 Federal Reserve Bank of Minnesota
31 Insurance premiums are rising faster than earnings
32 Federal Reserve Bank of Minnesota
33 Spending Growth was Worth It Yes, spending has grown tremendously. But better health care has accomplished much.
34 Heart Attack Death Rates D eaths pe er 100,00 00 Pop'n Canada France Norway United Kingdom Ui United dstates OECD 2009 "Acute Myocardial Infarction"
35 er 100,,000 Po p'n D e aths p Cerebrovascular Death Rates Canada France Norway United Kingdom United States OECD
36 250 Cancer Death Rates Dea aths pe er 100,0 000 Pop 'n Canada France Norway United Kingdom United States OECD 2009 "Malignant Neoplasms"
37 What s A Life Worth? Health is priceless Well, not really How much are you willing to pay for an air bag, or a better braking system in your car? $300 for an airbag $100,000 per year of life saved.
38 Baucus Plan Covering Uninsured <133% poverty line Medicaid Expansion 17 million, 14 no coverage Family income % 300% poverty line Subsidized insurance 31 million, 25 no coverage COST: $700 billion over 10 years >300% poverty line Unsubsidized insurance 15 million, 8 no coverage
39 Baucus Plan Covering the Cost Tax high cost insurance plans +$215B Penalties on non-coverage +$59B Savings in Medicare/Medicaid +$409B Penalties for avoidable costs +$5B Other tax provisions +$134B Other programs to reduce costs?
40 How can we reduce costs? Baucus Plan: Incentive changes to improve quality & reduce waste
41
42 Projected Federal Spending for Medicare and Medicaid under Various Assumptions about the Growth Differential between Health Care Costs and the Gross Domestic Product per Capita Orszag P and Ellis P. N Engl J Med 2007;357:
43 Summary US Spends A Lot on Health Care Health Outcomes are NOT Better Current Spending Trends are Scary
US Health Spending: Trends and Comparisons
$8,000 Health Spending per Person $7,290 Dollars per Person $6,000 $4,000 $4,763 $3,895 $3,601 $2,992 $2,000 $0 Canada France Norway United OECD (2009) for 2007 Kingdom United States US Health Spending:
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I S S U E kaiser commission on medicaid and the uninsured October 2003 P A P E R OUT-OF-POCKET COST-SHARING OBLIGATIONS FOR LOW-INCOME MEDICARE BENEFICIARIES UNDER THE HOUSE AND SENATE PRESCRIPTION DRUG
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