U.S. Healthcare Costs

1
U.S. Healthcare Costs

• The United States spends a larger share of its
  gross domestic product (GDP) on health than does
  any other major industrialized country.
• In 2004, we spent 16 of our GDP compared to
  Switzerlands 12. Other countries are all at
  10 or less
• In 2005, the total amount spent on healthcare in
  the U.S. was 1,987,000,000,000.00 1.987
  trillion
• That is a cost of 6,697.00 per person
• Source National Center for Health Statistics
• Health, United States, 2007

2
Where does all that money go?
3
Factors in the Increasing Costs of Healthcare in
the United States

• Aging Population
• In 2005, 6 of the U.S. population was over age
  75
• Projected to be over 12 by 2050
• Increasing Life Expectancy
• Increased prevalence of chronic/debilitating
  diseases
• Unhealthy Lifestyles
• Insufficient exercise/Overweight/Smoking
• New Healthcare Technologies/Treatments
• Often replace existing technologies at higher
  cost
• Source National Center for Health
  Statistics
• Health, United States, 2007

4
Factors in the Increasing Costs of Healthcare in
the United States

• Cost Shifting
• Almost 47 million Americans (14.8 of the
  population) were uninsured in 2006 - 68 of them
  were employed
• The uninsured are twice as likely as the insured
  to utilize emergency room services
• These costs are shifted to other payers,
  especially private health insurance plans
• Defensive Medicine
• Fear of malpractice charges causes physicians to
  order unnecessary tests
• Increased Consumer Demand
• Direct-to-consumer advertising
• Source PriceWaterhouseCoopers
• The Factors Fueling Rising Healthcare Costs 2006

5
Healthcare Quality

• Even with all the money spent on healthcare,
  quality often falls short of the mark.
• Americans are still not getting the recommended
  levels of care in this country
• On average, adults only get 55 of the
  recommended care for many common conditions
• Source McGlynn, et al
• New England Journal of Medicine 2003

6
Percentage of Recommended Care Received based on
Accepted standards of care
Source McGlynn, et al New England Journal of
Medicine 2003
7
Conclusions Drawn

• While the U.S. spends lots of money on
  healthcare, consumers frequently do not get the
  level of care we expect
• Consumers must equip themselves with resources to
  help them make the best healthcare choices
• Employers who offer healthcare must balance the
  need to maintain competitive compensation
  packages with the need to control healthcare
  costs