1. State of health care in the US
Health Economics

2. 3 main problems of health care problems: cost, access, & quality

3. COST

4. HEALTH CARE SPENDING IN THE US
Between 1960 and NOW spending...
from an average of $147 per person to $7 – 8K
from 5.2% of the nation's (GDP) to 15%
grows faster than inflation

5. What is GDP
What is GDP?
Economists use gross domestic product (GDP) to keep track of how an economy is doing.
GDP measures the value of all final goods and services produced in an economy in a given period of time, usually a quarter or a year.
GDP = C + G + I + NX
C = Consumer spending
G = Government spending
I = Sum of all the country’s businesses spending on capital
NX = Nation’s total net exports

6. INFLATION What is inflation?
Inflation is an increase in the price of a basket of goods and services that is representative of the economy as a whole.

7. Costs to consumers Unpredictability of need and cost
Patients have to rely on others for recommendations
Due to INSURANCE, TAX CODE, AND TAXES we don’t see the full cost.
BUYING HEALTH CARE VS. BUYING MCDONALDS

8. BANKRUPTCY Age Range % of Total Bankruptcies 2013, Estimated
Medical Bankruptcy by Age
Age Range
% of Total  Bankruptcies  2013, Estimated
US Medical-Related  Bankruptcies 2013, Estimated
Size of  Household
People Living  in Households  with medical-Related  Bankruptcy  2013, Estimated
18-24
2.3%
14,618
2.41
35,229
25-34
18.7%
120,708
2.86
344,622
35-44
28.9%
186,812
3.35
624,888
45-54
26.4%
170,875
2.81
480,159
55-64
15.8%
102,080
2.18
222,534
65+
8.0%
51,719
1.76
90,767

9. What is driving cost? Technology Prescription drugs Chronic disease
Aging population
Administrative cost
Malpractice
Uninsured

10. Who pays for health care
Someone pays for it – HEALTH CARE IS NOT FREE
Public = Government
Medicare & Medicaid
Other federal, state, local
Private = Employer-sponsored, Individual plans
Out of Pocket = Uninsured or Wealthy
Because most medical care is delivered with third-party payments and the purchaser is in dire need of the services, the typical patient has little interest in price – thus increasing cost

11. Third-party payer First party = patient
Second party = health care provider (i.e. physician)
Third party = health insurance

12. Health care financing v. enrollees
Types of payments
% of national expenditure
Out of pocket
12%
Individual private health insurance 3%
ESHI
31%
Government
47%
Other 7%
Source of coverage
% of population
Uninsured
17%
Individual private health insurance 5%
ESHI
48%
Government
30%