1. The Big Healthcare Issues
Costs to providers and prices they charge are going up
Cost of health insurance going up
Costs to individuals, businesses & government going up
Impacts international competitiveness and government debt
Huge problem for the future
30 – 40 Million Americans not on any insurance
A moral issue?
Many on insurance have difficulties in coverage or transferability if they change jobs

2. Healthcare Economic Cycle
Patients
Employers
CARE
Providers
Doctors & Nurses
Hospitals
Clinics
Testing & makers
Pharmacies & drug companies
Private Insurance Pool
15%
$2.5 Trillion
& rising fast
85%
US Government
- Medicare (+65)
- Medicaid (poor)
$900 Billion

3. Insurance Risk Pools The Many pay a little for the expensive Few
Incentive to limit the expensive ones in the pool
As a business, income exceeds outflow, or else…
As costs paid to providers rise, so must premiums
Must keep $ promised for benefits in reserve
Can invest some of reserve to make $
Regulated locally by each of 50 states
Some states regulate better than others.
Level of competition varies
Rules and benefits vary

4. Cost Issues for Providers
As a business, income exceeds outflow, or else…
Must pay for salaries, rent, supplies, technology, investors…
Malpractice insurance very expensive
Jury awards emotional and sometimes very high
By law, hospitals must treat regardless of ability to pay. Where do they make up this cost?
Research, testing and licensing of medicines takes many years and costs many millions. Success uncertain
Patient privacy and transferability of records
Increasing technology very expensive develop and use

5. Other Issues Affecting Prices
Fee for service incentive to do more services
Defensive medicine: More testing and procedures
Supply of doctors, nurses, testing and medicine limited: Price goes up
Patients covered by insurance rarely see or pay cost of specific care, so demand goes up
Growing number of older patients
Overall costs per person rising four times inflation rate
Voters want unlimited, inexpensive, high quality health care, with their choice of doctor.
So what is a politician to do?

6. Medicare and Medicaid Costs
Increasing number of customers, and increasing cost per customer

7. Frequently Mentioned Ideas
Government run:
Health care system (“socialized medicine” ?)
Single payer insurance system
“public option” as an alternative to private insurance
Boards to exclude expensive procedures and medicines unless they are REALLY worth the extra money
More preventive care before people get expensive illness
Require all to have insurance, provide help to poor
Expand required coverage and portability of insurance
Standardize technology of transferring patient info
Limit jury awards in malpractice cases
Change fee for service incentives

9. Healthcare Providers Healthcare System? Doctors & Nurses Hospitals
Clinics
Testing
And makers of testing equipment
Pharmacies
And companies that make the medicine