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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!