Transcript SCOF Report November 17, 2005

Total health care expenditures, % of GDP
US
1965
1973
5.7%
7.3%
Germany
7.2%
Japan
4.4%
4.7%
Switzerland
4.6%
5.6%
UK
4.1%
4.6%
OECD average
4.2%
5.4%
Total health care expenditures, % of GDP
US
1965
1973
2007
5.7%
7.3%
16.0%
7.2%
10.4%
Germany
Japan
4.4%
4.7%
8.1%
Switzerland
4.6%
5.6%
10.8%
UK
4.1%
4.6%
8.4%
OECD average
4.2%
5.4%
8.8%
Total health care expenditures per capita US$
US
1965
1973
$209
$474
Germany
$409
Japan
$73
$210
Switzerland
$199
$457
UK
$110
$214
OECD average
$106
$280
$1,121
$1,910
US, 2009$
Total health care expenditures per capita US$
US
1965
1973
2007
$209
$474
$7,290
$409
$3,588
Germany
Japan
$73
$210
$2,581
Switzerland
$199
$457
$4,417
UK
$110
$214
$2,992
OECD average
$106
$280
$2,915
$1,121
$1,910
$8,161*
US, 2009$
*US spending per capita in 2009
Public expenditure, % of total health
expenditures
US
1965
1973
22%
38%
Germany
Japan
77%
61%
Switzerland
69%
59%
UK
86%
88%
OECD average
68%
75%
Public expenditure, % of total health
expenditures
US
1965
1973
2007
22%
38%
45%
77%
77%
69%
81%
59%
59%
Germany
Japan
61%
Switzerland
UK
86%
88%
82%
OECD average
68%
75%
73%
Healthcare challenges facing the US
• Cost containment: Health care spending has been
rising much faster than incomes.
• Coverage: 46.3 million were uninsured in 2008,
15% of the US population.
• Access:
64% of the uninsured are low-income
individuals or families.
37% of the poor and 24% of the near-poor are
uninsured.
Why doesn’t the health care market work?
•
•
•
•
Asymmetric information
Adverse selection
Moral hazard--due to third-party payers
Equity: access by the poor
Overview of the recent health care plan
• Access:
1. Projection for 2019: Will extend coverage to 36 million
uninsured, but 18 million will remain uninsured
2. Bans denial of coverage for pre-existing conditions
• Adverse selection: Individual mandates
• Moral hazard: Will remove tax exemption for high-end
insurance plans
• Equity:
1. Will add 16 million to Medicaid
2. Will subsidize coverage for low- and middle-income
individuals and families
• Cost containment:
1. CBO estimate: $938B cost, $138B deficit reduction over
10 years
2. Medicare Advisory Board to monitor costs
3. Pilot projects