Total health care expenditures, % of GDP US5.7%7.3% Germany7.2% Japan4.4%4.7% Switzerland4.6%5.6% UK4.1%4.6% OECD average4.2%5.4%

Total health care expenditures, % of GDP US5.7%7.3%16.0% Germany7.2%10.4% Japan4.4%4.7%8.1% Switzerland4.6%5.6%10.8% UK4.1%4.6%8.4% OECD average4.2%5.4%8.8%

Total health care expenditures per capita US$ US$209$474 Germany$409 Japan$73$210 Switzerland$199$457 UK$110$214 OECD average$106$280 US, 2009$$1,121$1,910

Total health care expenditures per capita US$ US$209$474$7,290 Germany$409$3,588 Japan$73$210$2,581 Switzerland$199$457$4,417 UK$110$214$2,992 OECD average$106$280$2,915 US, 2009$$1,121$1,910$8,161* *US spending per capita in 2009

Public expenditure, % of total health expenditures US22%38% Germany77% Japan61%69% Switzerland59% UK86%88% OECD average68%75%

Public expenditure, % of total health expenditures US22%38%45% Germany77% Japan61%69%81% Switzerland59% UK86%88%82% OECD average68%75%73%

Healthcare challenges facing the US Cost containment: Health care spending has been rising much faster than incomes. Coverage: 46.3 million were uninsured in 2008, 15% of the US population. Access: 64% of the uninsured are low-income individuals or families. 37% of the poor and 24% of the near-poor are uninsured.

Why doesn’t the health care market work? Asymmetric information Adverse selection Moral hazard--due to third-party payers Equity: access by the poor

Overview of the recent health care plan Access: 1. Projection for 2019: Will extend coverage to 36 million uninsured, but 18 million will remain uninsured 2. Bans denial of coverage for pre-existing conditions Adverse selection: Individual mandates Moral hazard: Will remove tax exemption for high-end insurance plans Equity: 1. Will add 16 million to Medicaid 2. Will subsidize coverage for low- and middle-income individuals and families Cost containment: 1. CBO estimate: $938B cost, $138B deficit reduction over 10 years 2. Medicare Advisory Board to monitor costs 3. Pilot projects