What’s Driving Health Care Costs?

http://masscare.org

Universal, Affordable Care for Massachusetts

U.S. Spends Almost Double Next Highest Spending Country

Common Explanations for High Health Care Costs

• Inadequate Prevention • Behavioral factors

– High obesity rate – High smoking rate – High levels of drinking

• Racial and Ethnic Makeup of the U.S. • Aging population • End of life care • Chronic Illnesses

– High cancer rates – High diabetes rates – High heart disease rates

• Overuse of technology (e.g. MRIs, CT scans, etc)

• Use more prescription drugs

• Fee-for-service: overuse of tests and procedures

• Lower cost transparency • More third party insurance payers • More physician visits • More ER and hospitals visits • More Medical Malpractice lawsuits • Worse electronic health records • Higher Cost of drugs • Higher cost of medical devices • Too much hospital bargaining power • More profits • More administration/paperwork • Higher physician/nurse pay

Common Explanations for High Health Care Costs

• Inadequate Prevention • Behavioral factors

– High obesity rate – High smoking rate – High levels of drinking

• Racial and Ethnic Makeup of the U.S. • Aging population • End of life care • Chronic Illnesses

– High cancer rates – High diabetes rates – High heart disease rates

• Overuse of technology (e.g. MRIs, CT scans, etc)

• Use more prescription drugs

• Fee-for-service: overuse of tests and procedures

• Lower cost transparency • More third party insurance payers • More physician visits • More ER and hospitals visits • More Medical Malpractice lawsuits • Worse electronic health records • Higher Cost of drugs • Higher cost of medical devices • Too much hospital bargaining power • More profits • More administration/paperwork • Higher physician/nurse pay

Common Explanations for High Health Care Costs

• Inadequate Prevention • Behavioral factors

– High obesity rate – High smoking rate – High levels of drinking

• Racial and Ethnic Makeup of the U.S. • Aging population • End of life care • Chronic Illnesses

– High cancer rates – High diabetes rates – High heart disease rates

• Overuse of technology (e.g. MRIs, CT scans, etc)

• Use more prescription drugs

• Fee-for-service: overuse of tests and procedures

• Lower cost transparency • More third party insurance payers • More physician visits • More ER and hospitals visits • More Medical Malpractice lawsuits • Worse electronic health records • Higher Cost of drugs • Higher cost of medical devices • Too much hospital bargaining power • More profits • More administration/paperwork • Higher physician/nurse pay

Common Explanations for High Health Care Costs

• Inadequate Prevention • Behavioral factors

– High obesity rate – High smoking rate – High levels of drinking

• Racial and Ethnic Makeup of the U.S. • Aging population • End of life care • Chronic Illnesses

– High cancer rates – High diabetes rates – High heart disease rates

• Overuse of technology (e.g. MRIs, CT scans, etc)

• Use more prescription drugs

• Fee-for-service: overuse of tests and procedures

• Lower cost transparency • More third party insurance payers • More physician visits • More ER and hospitals visits • More Medical Malpractice lawsuits • Worse electronic health records • Higher cost of drugs • Higher cost of medical devices • Too much hospital bargaining power • More profits • More administration/paperwork • Higher physician/nurse pay

Disease Prevalence: U.S. vs. Peer Countries

95%

106%

105%

98%

67%

77%

122%

86%

91%

97%

0% 20% 40% 60% 80% 100% 120% 140%

Heart conditions

Trauma-related disorders

Cancer

Mental disorders

COPD, asthma

Hypertension

Diabetes melitus

Osteoarthritis/joint disorders

Back problems

Other

Disease Prevalence: U.S. vs. Peer Countries

95%

106%

105%

98%

67%

77%

122%

86%

91%

97%

0% 20% 40% 60% 80% 100% 120% 140%

Heart conditions

Trauma-related disorders

Cancer

Mental disorders

COPD, asthma

Hypertension

Diabetes melitus

Osteoarthritis/joint disorders

Back problems

Other

Disease prevalence

= $57 to $70

billion savings

2.7

6.5 5.5

4.6

6.9

8.2

13.2

5.7

4.3

2.9 4

5

0

2

4

6

8

10

12

14

Physician Visits Per Capita, 2009

131

162

84

170

263 237

117 142

177 166 168

138

0

50

100

150

200

250

300

Hospital Stays per 1,000 population, 2009

5.4 5.9

7.7

5.2

7.5

5.6 5.9

4.6 4.5

7.5 6.8

0

1

2

3

4

5

6

7

8

9

Average Length of Hospital Stay in Days, 2009

Nations With Universal Health Care Coverage

How Universal Health Care Is Paid For

You Government Fund

Health Care Providers

Fixed Payroll Tax Negotiated Budget

How U.S. Health Care Is Paid For

You Health Care Providers

Medicaid

Tufts Medical Insurance

Blue Cross

Medicare

Out-of-Pocket Costs

Premiums

Taxes Separate contracts

OECD Data, 2010

Insurance Administration Costs

Hospital Administration Costs

OECD, 2010

Brox. et. al. Arch Internal Medicine, 2003

Aortic Aneurysm Repair Costs

U.S. Pays Higher Prices for the Same Drugs

mt.gov.com, 2010