Harvard University May 29, 2012 Joseph Newhouse

The US Is Not Such an Outlier in Growth Rates* *Data are for the G-7. See notes for sources and further explanation. Average excl US = 4.2%

*Sources: CMS National Health Accounts. Newhouse, JEP 1992(3), Stat Abst, Ec Rpt Pres. GDP Deflator. Steady Increases* in Real US Spending/person/year, by decade Average = 4.2% Medicare and Medicaid enacted Managed care Financial crisis

Inferences from the Two Prior Slides l US specific factors explain its high level of spending l But an explanation of the cost increase needs to hold across countries and decades

Life expectancy: Health US, 2004, National Vital Statistics Report 59: data preliminary. Was It Worth It? l There have been life expectancy gains in all countries : US life expectancy grew 7.4 years, from 70.8 years to 78.2 years l But not all of this gain can be attributed to spending on medical care

* CHD = Coronary Heart Disease. Source: Ford, et al. NEJM, 2007;356: See notes for more. Percentage of Decrease in Deaths from Coronary Heart Disease Attributed to Treatments and Risk-Factor Changes, Almost half of US reduction in CHD*, attributable to treatments; most of risk factor gain is better hypertension and cholesterol control (most of rest is fall in smoking)