Download Do You Believe That Providers Will Spend Whatever You Give

Gerard Anderson
Professor
Johns Hopkins University
Health Care Spending per Capita, 1980-2008
Adjusted for Differences in Cost of Living
Source: OECD Health Data 2010
Average Annual Growth Rate of
Real Health Care Spending per Capita, 1998-2008
*1997-2007
Source: OECD Health Data 2010
Percentage of Gross Domestic Product Spent on Health Care, 1998
and 2008
*2007
Source: OECD Health Data 2010
Spending Growth
 If US per capita health spending had been at the OECD per
capita average in 2008 then the US would have spent
$1.3 TRILLION less than it did in 2008
 2 times trade deficit
 2 times base line defense budget
 3 times federal budget deficit
 US rate of increase in spending is similar to other OECD
countries but
 US starts from a much higher base level of spending so same
percentage increase is a much larger dollar increase
 Much faster increase in percent of GDP spent on health
5 Myths
 Unclear what income elasticity Chris used to get such an
odd shaped curve
 Less than $45,000 it is above 1.0 (what most studies find)
 Above $45,000 it is zero (first time this is found!)
 Picking and choosing among outcome measures is
problematic
 Not really fair to only select only some outcome measures
 Some measures the US does much worse
 Not really fair to adjust outcome factors for things that makes
the US look better
 At over twice the per capita spending I would expected
much better outcomes for US
Providers Will Spend Whatever
They Receive From Insurers
 So the real question is who is giving providers so much
money to spend!
Japan
 3rd largest economy in world
 Highest life expectancy in world
 Excellent access to medical services
 238% more MD visits per capita than US
 29% more hospital visits per capita than US
 66% more MRIs per capita than US
 Low cost
 8.5 percent of GDP spent on health
 1/3rd of US health spending per capita
Japanese health system
 Multiple insurers
 Fee for services system
What is Japan’s secret?
Government Sets Overall Rate of
Increase in Provider Payment For
All Insurers and All Insurers Pay the
Same Rate
For past 20 years the government has kept increases in
provider payments to less than 2 percent per year
Who pays the highest rates in US?
 Private insurers pay substantially higher rates to
providers than public insurers!
 One approach is to increase competition!
 However, can anyone tell me the difference between
Wellpoint and United Healthcare?
 Another is to have everyone pay the same price
 Glad that Joe Antos is learning about how Maryland works!
 Systems used by Japan, Germany and most other countries
with multiple health insurers have all insurers paying the
same price
Whatever is Received is Spent!