Health Care in Crisis The Economic Imperative for Health Care Reform James Kvaal and Ben Furnas February 19, 2009 1 Center for American Progress Health Care in Crisis
U.S. spends twice as much per capita on health care as most other industrialized nations 2006 or most recent $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 $US (PPP) Turkey Mexico Poland Slovak Republic Korea Hungary Czech Republic New Zealand Portugal Spain Greece Japan Italy Finland United Kingdom Ireland Australia Netherlands Sweden Iceland Denmark Germany France Belgium Austria Canada Luxembourg Switzerland Norway United States Source: OECD 2 Center for American Progress Health Care in Crisis
U.S. spends over $650 billion per year for treatments that may not improve care $2,500 Total health care spending $2,000 $1,500 $1,000 $500 $- Waste Source: Based on estimates from Dartmouth Institute For Health Policy and Clinical Practice, CMS 3 Center for American Progress Health Care in Crisis
Rising Medicare and Medicaid costs are the nation's "central fiscal challenge" due to our expensive health system Medicare and Medicaid spending as %GDP 20 15 10 5 0 2007 2022 2037 2052 2067 2082 Effect of Excess Cost Growth Interaction of Aging and Excess Cost Growth Effect of Aging Population Source: CBO 4 Center for American Progress Health Care in Crisis
Public Medicare costs rise and fall with private costs Slowing Public Health Expenditures Requires Systemic Reform (% change from previous year) 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 Public Expenditure Private Expenditure Source: CBO, CMS 5 Center for American Progress Health Care in Crisis
Household expenditure on health care climbing 6.0% 5.8% 5.6% 5.4% 5.2% Health Care as % Of Total Expenditures Trendline 5.0% 1994 1996 1998 2000 2002 2004 2006 Source: BLS 6 Center for American Progress Health Care in Crisis
Premiums costs projected to grow much faster than inflation $30,000 $25,000 $20,000 Projected cost of family premium $15,000 $10,000 $5,000 $0 2006 2008 2010 2012 Cost if grown by regular inflation 2014 2016 2018 Source: CBO 7 Center for American Progress Health Care in Crisis
When Premiums Rise 20%... 3.5 Million Workers Will Lose Their Jobs 3-4 Million Workers Will Get Shifted To Part-Time Work Insured Workers' Incomes Will Drop $1,700 Source: Katherine Baicker and Amitabh Chandra, Harvard University 8 Center for American Progress Health Care in Crisis
American companies spend far more on health care benefits than employers in most other countries 14% 12% 10% 8% 6% 4% 2% 0% United States France* Germany Canada Japan United Kingdom Percent of payroll spent on health benefits (manufacturing sector) * Also finances cash sickness, cash maternity, disability, and survivor benefits. Source: New America Foundation 9 Center for American Progress Health Care in Crisis
Employer-based coverage erodes as health insurance costs rise Health care costs as share of compensation 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1994 1996 1998 2000 2002 2004 2006 2008 65.0% 64.0% 63.0% 62.0% 61.0% 60.0% 59.0% 58.0% 57.0% 56.0% Americans with employer coverage Health care costs as share of compensation % of Americans With Employer Coverage Source: BLS, MEPS 10 Center for American Progress Health Care in Crisis
More and more Americans have no or insufficient insurance 45% 40% Percentage of Americans aged 18-64 35% 30% 25% 20% 15% 10% 5% 0% 2003 2007 Without insurance With inadequate insurance Source: Commonwealth Fund, Census Bureau 11 Center for American Progress Health Care in Crisis
Job and health insurance losses accelerating 14,000 People Became Uninsured Every Day in December and January 50,000,000 8.0% Uninsured Americans 49,000,000 48,000,000 47,000,000 46,000,000 45,000,000 Uninsured Americans Unemployment Rate 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% Unemployment Rate 44,000,000 Mar 07 May 07 Jul 07 Sep 07 Nov 07 Jan 08 Mar 08 May 08 Jul 08 Sep 08 Nov 08 Jan 09 4.0% Source: Based on Urban Institute, Bureau of Labor Statistics, Census Bureau 12 Center for American Progress Health Care in Crisis
The young and uninsured are mostly poor or near-poor Little Evidence That They Can Afford Insurance Percentage of Uninsured 18-34 Year Olds Who Are... Neither 34% Poor 26% Near Poor 40% Source: Census Bureau Note: Note: Poor means income is <100% of the Federal Poverty Line, Near-Poor is <250% 13 Center for American Progress Health Care in Crisis
Having 46 million Americans without health insurance in 2007 cost $104 billion in lost productivity from shorter life-spans An additional $103 billion in lost productivity from poor health A total of $4,500 in lost productivity for every uninsured person Source: New America Foundation 14 Center for American Progress Health Care in Crisis
Almost half of all personal bankruptcies have a major medical cause 53.8% 46.2% Other bankruptcies Bankruptcies with a "major medical cause" Source: David U. Himmelstein, Elizabeth Warren, Deborah Thorne, and Steffie Woolhandler of Harvard University and Ohio University 15 Center for American Progress Health Care in Crisis
More people die each year from complications related to being uninsured than die from Parkinson s, homicides, or HIV/AIDS 25,000 Fatalities (2005) 20,000 15,000 10,000 5,000 Being Uninsured Parkinson's Disease Homicide HIV/AIDS Source: Institute of Medicine, Urban Institute, Center for Disease Control 16 Center for American Progress Health Care in Crisis