NATIONAL HEALTH EXPENDITURES

1. NATIONAL HEALTH EXPENDITURES

2. HEALTH CARE SPENDING IN THE UNITED STATES IS PROJECTED TO REACH $2.5 TRILLION IN 2009, • 4.3 TRILLION IN 2018, UP FROM $1.3 TRILLION IN 2000. • CURRENT SPENDING ABOUT 2.7 TRILLION DOLLARS.

3. Comparison of NHE/GDP

4. Some really pretty color charts

5. Percentage of National Health Spending

6. Source of Dollars for National Health Spending

7. Where the money goes

8. Where the money goes - percentage

9. Total National Health Expenditures, 2008–2017 Projected and Various Scenarios Dollars in trillions

11. INTERNATIONAL COMPARISON • 2009 – U.S. SPENT 17.3% OF GDP ON HEALTH • GERMANY SPENT 10.7% • CANADA SPENT 9.7

12. GROWTH IN HEALTH CARE SPENDING IN THE UNITED STATES IS PROJECTED TO BE 5.7% IN 2009. • AVERGE ANNUAL GROWTH IS EXPECTED TO REMAIN THE SAME RATE THROUGH 2017.

13. AS A PERCENTAGE OF GROSS DOMESTIC PRODUCT (GDP), HEALTH CARE SPENDING IS PROJECTED TO INCREASE TO 17.6 PERCENT IN 2009. IT IS EXPECTED THAT HEALTH CARE SPENDING WILL REACH OVER $4.3 TRILLION AND BE 19.5% OF GDP. (2007-17)

14. THE GROWTH IN PRESCRIPTION DRUG SPENDING IS EXPECTED TO DECELERATE FROM 17.3 PERCENT IN 2000 TO 10.1 PERCENT IN 2011. PRESCRIPTION DRUGS WILL STILL REMAIN THE FASTEST GROWING HEALTH SECTOR.

15. IN JUST THREE YEARS, THE MEDICARE AND MEDICAID PROGRAMS WILL ACCOUNT FOR 50% OF ALL NATIONAL HEALTH SPENDING.

16. MEDICARE’S HOSPITAL INSURANCE TRUST FUND IS EXPECTED TO PAY OUT MORE IN HOSPITAL BENEFITS THAN IT RECEIVES IN TAXES AND OTHER DEDICATED REVENUES

17. NURSING HOME SPENDING IS PROJECTED TO ACCELERATE MORE RAPIDLY THAN PREVIOUSLY ANTICIPATED.

18. INSURANCE PREMIUMS FOR EMPLOYER-BASED HEALTH INSURANCE ROSE 7.7% IN 2006 • SMALL EMPLOYERS – 8.8% • BUSINESS WITH LESS THAN 24 EMPLOYEES – 10.5%

19. SINCE 2000 EMPLOYMENT BASED PREMIUMS HAVE INCREASED BY 87%. IN CONTRAST, INFLATION OVER THE SAME PERIOD ACCUMULATED AT 18% HEALTH INSURANCE PREMIUMS ARE THE FASTEST GROWING COMPONENT FOR EMPLOYERS AND MAY OVERTAKE PROFITS BY 2008.

20. THE AVERAGE EMPLOYEE CONTRIBUTION TO COMPANY BASED HEALTH INSURANCE HAS INCREASED 143% SINCE 2000. AVERAGE OUT-OF-POCKET COSTS FOR COPAYMENTS AND DEDUCTIBLES HAVE INCREASED BY 115% SINCE 2000

21. MEDICAL INFLATION WILL INCREASE.

22. COMMERCIAL MANAGED CARE WILL SEE SLOWER MEMBERSHIP GROWTH AND FEWER MEDICAL CONTROLS WHICH WILL CONTRIBUTE TO HIGHER HEALTH CARE COSTS.

23. AFTER 2002, GOVERNMENT SPENDING WILL ACCELERATE AS AGING BABY BOOMERS DEMAND MORE GOVERNMENT SUPPORT FOR THEIR CARE.

24. THE PRIVATE SECTOR’S ABILITY TO HOLD DOWN HEALTH CARE COSTS THROUGH MANAGED CARE HAS REACHED A LIMIT.

25. COST SAVINGS FROM MANAGED CARE RESULTED PRIMARILY FROM LOWER PAYMENTS TO PROVIDERS, NOT BY IMPROVING HEALTH STATUS AND REDUCING UTILIZATION.

26. FINANCIAL STRUGGLES EXPERIENCED BY HMOS WILL RESULT IN HIGH COSTS FOR HEALTH CARE COVERAGE.

27. CONTAINING DRUG COSTS WILL BE ONE OF THE GREATEST CHALLENGES THE HEALTH CARE SYSTEM WILL FACE.

28. PRESCRIPTION DRUG COSTS WILL CONTINUE TO ESCALATE, FUELED BY DIRECT MARKETING TO CONSUMERS AND NEW DRUGS TO IMPROVE LIFESTYLE AND ADDRESS CHRONIC CONDITIONS OF AN AGING POPULATION.

29. THE NEW MEDICARE PRESCRIPTION PLAN HAS BEEN INTRODUCED TO THE PUBLIC WITH MIXED REVIEWS. THE COST FIGURES PROVIDED ARE SUSPECT. A LARGE QUESTION REMAINS ABOUT SENIORS UNDERSTANDING THE NEW SYSTEM AND LEARNING HOW TO USE IT.

30. RISING HEALTH CARE COSTS REDUCE THE AFFORDABILITY OF HEALTH CARE COVERAGE FOR ALL CONSUMERS.

31. EMPLOYERS WILL SHIFT MORE OF THE COST OF HEALTH CARE TO EMPLOYEES SINCE EMPLOYEES ABILITY TO NEGOTIATE LOWER PRICES WITH MANAGED CARE COMPANIES WILL BE LIMITED IN LIGHT OF THE FINANCIAL LOSSES INCURRED BY THE PLANS.

32. SOME EMPLOYERS WILL DECIDE NOT TO OFFER COVERAGE. THE END RESULT WILL BE MORE UNINSURED CITIZENS.

33. IMPACT OF RISING HEALTH CARE COSTS. • PRIMARY REASON PEOPLE DO NOT HAVE HEALTH INSURANCE • 23% OF THE INSURED REPORT THAT LIFESTYLES HAVE BEEN DRAMATICALLY CHANGED DUE TO MEDICAL BILLS.

34. ONE IN FOUR AMERICANS HAVE HAD DIFFICULTY IN PAYING FOR MEDICAL CARE. • 50% OF ALL BANCRUPTCY FILINGS PARTIALLY RESULTANT FROM MEDICAL EXPENSES.

35. IF ONE MEMBER OF A FAMILY IS UNINSURED AND HAD MEDICAL BILLS, IT CAN EFFECT THE ECONOMIC STABILITY OF THE WHOLE FAMILY.

36. ALL OF THESE PROJECTIONS AND ESTIMATES OF THE FUTURE MAY BE CHANGED WITH THE ELECTION OF A NEW ADMINISTRATION IN THE NOVEMBER ELECTION OF 2008. STILL UNDER CONSIDERATION AS WE SPEAK…

37. EXPERTS AGREE THAT OUR HEALTH CARE SYSTEM IS RIDDLED WITH INEFFICIENCIES, EXCESSIVE ADMINISTRATIVE EXPENSES, HIGH PRICES, POOR MANAGEMENT, • AND INAPPROPRIATE CARE, WASTE, AND FRAUD.

38. End of Presentation for 6th Period Lecture for September 26TH 2011 • QUESTIONS? • DISCUSSION?

39. MEDICARE IN DETAIL

40. MEDICARE IS A FEDERAL HEALTH INSURANCE PROGRAM WHICH PROVIDES MEDICAL COVERAGE FOR PEOPLE 65 AND OLDER, FOR CERTAIN DISABLED PEOPLE, AND SOME PEOPLE WITH END-STATE RENAL DISEASE.

41. THE PROGRAM BEGAN IN JULY OF 1966 AND WAS ESTABLISHED BY CONGRESS THROUGH TITLE XVIII OF THE FEDERAL SOCIAL SECURITY ACT.

42. MEDICARE IS MANAGED BY THE CENTERS FOR MEDICARE AND MEDICAID SUPPORT (FORMERLY KNOWN AS HCFA), WHICH IS A BRANCH OF THE HEALTH AND HUMAN SERVICES (HHS) OF THE U.S. FEDERAL GOVERNMENT.

43. HOW BIG IS THE MEDICARE PROGRAM?

44. IN 2007…MEDICARE • PROCESSED MORE THAN 900 MILLION CLAIMS

45. PAID OUT MORE THAN $330 BILLION IN BENEFITS • HAD 42.5 MILLION BENEFICIARIES RECEIVING BENEFITS

46. WHAT IS MEDICARE PART A?

47. PART A OF THE MEDICARE PROGRAM IS HOSPITAL INSURANCE. THIS PROGRAM IS FINANCED BY:

48. TAXES PAID BY EMPLOYERS AND EMPLOYEES THROUGH THE FICA MECHANISM. • SELF-EMPLOYED INDIVIDUAL CONTRIBUTIONS.

49. RAILROAD WORKERS, THEIR EMPLOYERS THROUGH THE RRA. • ORGANIZATIONS WHICH ADMINISTER MEDICARE PART A ARE CALLED “FISCAL INTERMEDIARIES”

50. PART A COVERAGE HELPS PAY FOR (NOT LIMITED TO): • INPATIENT HOSPITAL CARE. • INPATIENT CARE IN A SKILLED NURSING FACILITY FOLLOWING A COVERED HOSPITAL STAY.