I came across this report on Health Care by the non-partisan Kaiser Family Foundation. Their copy right allows for the coping and distribution of the report. I have created a summary here.
Key Facts
• In 2007, the U.S. spent $2.2 trillion on health care, an average of $7,421 per person.
• The share of economic activity (gross domestic product, or GDP) devoted to health care has increased from 7.2 percent in 1970 to 16.2 percent in 2007.
• Health care costs have grown on average 2.4 percentage points faster than the GDP since 1970.
• Almost half of health care spending is used to treat just 5 percent of the population.
• Although only 10 percent of total health expenditures, spending on prescription drugs has received considerable attention because of its rapid growth (89 percent from 2000 to 2007).
• Many policy experts believe new technologies and the spread of existing ones account for a large portion of medical spending and its growth.
For more facts we should know if we want to offer more than opinions on the health care debate join me after the flip.
Every year we spend a greater proportion of our economy on health care.
Health care expenditures have grown faster than the rest of economy.
Americans spend far more for health care then comparable countries.
Despite this relatively high level of spending, the United States does not appear to achieve substantially better health benchmarks compared to other developed countries.
1% of us need 20% of the medical care, 5% of us about half of the medical care, 20% of us use 80 percent of medical care, and half of us need almost no medical care each year.
Age is a primary indicator of how much health care you will need and women need about one third more than men.
This is where we spend the money. Doctors get about one fifth of money we spend. Spending on medications has nearly doubled in the last 9 years.
Private health insurance is the largest source of health spending, accounting for 35 percent of health spending in 2007. Public programs, including Medicare, Medicaid, and the State Children’s Health Insurance Program, etc., pay for 46 percent of health spending.
Based on the current model, it is projected that the government will pay for over half of medical care by 2018.
Rising health care costs result in families cutting back on care and facing serious financial problems. A recent Kaiser Health Tracking Poll found that more than half (53 percent) of Americans say their family cut back on medical care in the past 12 months because of cost concerns by, for example, relying on home remedies and over-the-counter drugs rather than visiting a doctor (35 percent), skipping dental care (34 percent), and postponing getting health care they needed (27 percent) (Figure 8). One in five (19 percent) said they experienced serious financial problems due to family medical bills, with 13 percent using up all or most of their savings, 12 percent saying they have been contacted by a collection agency, and 7 percent reporting being unable to pay for basic necessities like food, heat, or housing. Beyond actual financial hardship due to medical care, nearly half of Americans (45 percent) report that they are "very worried" about having to pay more for their health care or health insurance, the highest proportion measured in Kaiser polls since late 2006.
Since 1999 inflation has been 29%, wages have increased 34% and health insurance has increased 119%.
(Opinion: Ouch!)
30% of the non-elderly who have incomes under the Federal Poverty Level (FPL) spend 10% or more of their income on health expenses. That is up from 2001. All other groups experienced a drop in the percent of those spending more than 10% of their income on medical.
It is much more difficult to qualify for Medicaid and Chip. The Federal Poverty Level has gone up 27% percent since 1996 while health insurance premiums have doubled. So Families who do not qualify for Medicaid and CHIP have an increasingly difficult time affording health care on their own.
Health care is getting more expensive because:
- Wealthier countries can afford to spend more on health care technologies.
- The U.S. population is getting older and disease prevalence has changed.
- Insurance coverage has increased. Even though 40 million of us are uninsured there are more of us on government insurance programs. Those with coverage consume more health care.
- Americans pay a lower share of health expenses than they used to.
(Opinion: This sounded crazy to me until I read the explanation.)
Another factor that may help explain rising health spending is the falling share of health care expenditures that Americans pay out-of-pocket.16 Between 1970 and 2007, the share of personal health expenditures paid directly out-of-pocket by consumers fell from 40 percent to 14 percent. Although consumers faced rising health insurance premiums over the period which affected their budgets, lower cost sharing at the point of service likely encouraged consumers to use more health care, leading to expenditure growth.
Remember in 1970 we only spent $356 dollars per person per year on health care, now we spend $7,400 per person per year.
- Inefficiencies in medical care delivery and financing.
(Opinion: We don't have a health care system, we have a health care industry. A system implies the efficient working together of components. An industry implies segments that are motivated by self interest.)
Wide variation in the use and cost of services across providers and in different geographic areas has called into question the appropriateness and value of the care received. The role of provider payment has also been cited as contributing to increased costs by, for example, encouraging the use of specialists or profitable equipment. The lack of integrated, efficient systems to electronically store and transmit health data is said to contribute to higher costs and limit the data available to study treatment effectiveness.
The study IMO offers no solution but it does have a conclusion.
Conclusion:
Policymakers face significant challenges, short and longer term, as they think about how the nation will pay for the growing cost of health care. Recent discussions about health care reform include proposals for health care cost containment. But there are many facets to health care reform including expanding coverage for the uninsured, reducing health care costs for individuals and employers, controlling entitlement spending for government programs such as Medicare and Medicaid, and reforming the health care delivery system, to name a few. Successfully improving the efficiency and quality with which care is delivered is an enormous challenge, one that will require substantial investment in research, new information systems, performance incentives, and education, with the hope of transforming how health care is delivered by thousands and thousands of providers dispersed across our largely disaggregated health care system. Coming to terms with the potential of medical technology and its long-run influence on costs is a different type of challenge, but one that is also important. The advances in health care that have occurred over the past half-century have increased how long we live and have reduced the burden of disease for countless people. Developing the philosophical, ethical, and political framework necessary to balance the benefits of future advances with our ability to pay for them is one of the next great challenges for health policy.
Note:
I have not vetted the Kaiser Family Foundation and I do not know what relationship if any it may have to Kaiser Permanente or any other for profit entity.
I have selected this report because of its clear presentation of the facts.
If anyone can point out any errors, omissions, or distortions it would be greatly appreciated.