1. Healthcare in the
United States
Presented by: Philip Geanacopoulos 2012.11.30

2. What We Will Cover Today
1. Big Picture Orientation
2. What Makes the US System Different
3. What is Health Insurance in the US
4. Diabetes and Associated Costs
5. Who Pays, Who Wins and Who Loses
6. What’s the Problem
7. Some Positives

3. What We Will Cover Today
1. Big Picture Orientation
2. What Makes the US System Different
3. What is Health Insurance in the US
4. Diabetes and Associated Costs
5. Who Pays, Who Wins and Who Loses
6. What’s the Problem
7. Some Positives

4. Some Statistics About the
US Government For 2012:
US Tax Revenue $2.469 trillion
Federal Budget $3.796 trillion
New Debt -$1.327 trillion
Total US Government Debt -$14.7 trillion
1 trillion dollars = $1,000,000,000,000万亿

5. Let’s Pretend It’s a
Household Budget
Annual Family Income $24,690
Money the Family Spent $37,796
New Debt on Credit Card -$13,270
Outstanding Balance on CC -$147,210

6. Where Does All That Money Go
Medicare/Medicaid $755 billion
Social Security $778 billon
Defense $700 billion
Health, Education, Transport $646 billion
Debt Interest $227 billion
Other $545 billion
Total $3.7 trillion

7. Definition
GDP – Gross Domestic Product
• The total monetary value of all the finished goods and
services produced within a country in a specific time
period, typically one year

8. GDP – Top 5 Economies
$18
$16
$15.31 trillion
$14
$12
USA
China $10
Japan $8 $8.23 trillion
Germany $6 $5.82trillion
France $4 $3.61 trillion
$2.85 trillion
$2
$0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: World Bank (2012); GDP in trillions

9. US Healthcare System Spending

10. Total National Health Spending
Continues to Increase
3 $8,402 $9,000
National Health Expenditures (trillions) $8,149
$7,911
$7,628 $8,000
Per Capita Health Spending $7,251
2.5 $6,868 2.6
$6,488 2.5 $7,000
$6,114
2.4
2.3
2 $5,687 2.2 $6,000
$5,241 2.0
$4,878 1.9
$4,601 $5,000
$4,367 1.8
1.5 $4,169 1.6
1.5 $4,000
1.4
1.3
1 1.1 1.2 $3,000
$2,000
0.5
$1,000
0 $0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
% GDP 13.7% 13.7% 13.8% 13.8% 14.5% 15.4% 15.9% 16.0% 16.1% 16.2% 16.4% 16.8% 17.9% 17.9%

11. U.S. Spends More than
Expected Based on Its Wealth
$9,000
United States
Per Capita Health Spending, 2011
$8,000
$7,000
Chile, Mexico, Poland,
$6,000 Estonia, Hungary, Slova Switzerland Norway
$5,000 k Republic, Czech Luxembourg
Republic, Korea, Israel,
$4,000 Slovenia, New Zealand
$3,000
$2,000 Spain, Italy, France, Finland, United
Kingdom, Belgium, Germany, Iceland, Sweden, D
$1,000 enmark, Canada, Austria, Ireland, Netherlands
$0
$10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000
Per Capita Income, 2011

12. Per Capita Spending on Healthcare

13. What Does $8,402 Per Person Buy?
Public Investment, $483 16% of spending
Health, $267
Administration, $ ($1,320) is not
570 related to personal
health care services
Rx, DME & Hospital
Other Medical Care, $2,637
Products, $1,106
Home 84% of spending
Healthcare, $1,10 ($7,080) is for
7
Doctor & Clinical personal health
Services, $1,670 care services
Dentists & Other
Health
Professionals, $56
0

14. U.S. Health Spending is a Dramatic
Outlier Internationally
United States
Netherlands
17.9
France
Germany
Denmark
Switzerland
Canada
Austria
Belgium
New Zealand
Sweden
United Kingdom
Iceland
Norway
Spain Most developed
Italy
Ireland countries spent
Slovenia
Finland ~9.5 to 12% of
Slovak Republic
Chile GDP on health
Czech Republic
Israel
care in 2009
Luxembourg
Poland
Hungary
Estonia
Korea
Mexico % GDP, 2010
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

15. U.S. Pays More for Hospital Services
Composite Index, 29 Inpatient Services
Comparative Price Levels, Hospital Services, 2009
United States 164
Italy 140
Australia 123
France 121
U.S. hospital
Sweden 114
prices 64%
Canada 113
higher than
Finland 98
OECD average
Portugal 85
Israel 62
Slovenia 59
Korea 57
0 20 40 60 80 100 120 140 160 180
OECD – Organization for Economic Co-operation and Development

16. U.S. Pays More for Hospital Services
Select Countries & Services
(US$, 2009)
$35,000
$34,358
Australia
$30,000
Canada
$25,000 France
Sweden
$20,000 United States $21,218
$17,406
$15,000
$11,162
$10,000 $7,962 $8,917
$4,451 $4,558
$5,000
$2,591 $3,093
$0
Normal Delivery Appendectomy Heart Surgery Hip Replacement Hernia Repair

17. U.S. Physicians Earn More
Particularly Specialists
$500,000
Australia Canada France Germany UK US
442,450
$450,000
$400,000
$350,000
324,138
$300,000
$250,000
186,582 187,609
208,634
202,771
$200,000
159,532 154,380
$150,000 125,104 131,809
92,844 95,585
$100,000
$50,000
$0
Primary Care Physicians Orthopedic Surgeons

18. U.S. Pays Physicians More for the Same Services
Especially Private Payers and Specialty Care
Primary Care - Office Visit Fees Specialty Care – Hip Replacement
$140 133 $4,500
129
3,996
$4,000
$120
104 $3,500
$100
$3,000
$80 $2,500
66 2,160
59 60 1,943
$60 $2,000
46 45
1,634
1,340
$1,500 1,251
$40 34 32 34 1,046
$1,000 1,181
674
$20
$500 652
$0 $0
Public Payers Private Payers Public Payers Private Payers
Australia Canada France Germany UK US Australia Canada France Germany UK US

19. What We Will Cover Today
1. Big Picture Orientation
2. What Makes the US System Different
3. What is Health Insurance in the US
4. Diabetes and Associated Costs
5. Who Pays, Who Wins and Loses
6. What’s the Problem
7. Some Positives

20. What Makes the
US System Difference
• All major developed countries except for the United
States offer national health care programs.
• These programs provide universal access through
health care delivery systems that are managed by the
respective governments and provide a defined set of
healthcare services to all citizens.

21. What Makes the
US System Difference
• No Central Governing Agency
• Technology-Driven and Focuses on Short-Term Treatment
• High on Cost, Unequal in Access, and Average in Outcomes
• Imperfect Market Conditions
• Government as Subsidiary to the Private Sector
• Market Justice vs. Social Justice
• Multiple Players and Balance of Power
• Quest for Integration and Accountability

22. What Makes the
US System Difference
• The US invests in research and innovations in new
medical technology.
• The US accounts for three quarters of the world’s
biotechnology revenues and 82% of the world R&D
spending in biotechnology.
• Growth in science and technology helps create
demand for new services.

23. $1.9 million da Vinci
Surgical System

24. Seeing a Doctor

25. HIPAA
Health Insurance Portability and Accountability Act:
• A US law designed to provide privacy standards to
protect patients' medical records and other health
information provided to health plans, doctors, hospitals
and other health care providers.
• These standards provide patients with access to their
medical records and more control over how their
personal health information is used and disclosed.

26. What We Will Cover Today
1. Big Picture Orientation
2. What Makes the US System Different
3. What is Health Insurance in the US
4. Diabetes and Associated Costs
5. Who Pays, Who Wins and Loses
6. What’s the Problem
7. Some Positives

27. Definitions
Health Insurance
• A contract between an insurance provider and an
individual and used for insuring against the risk of
incurring medical expenses
Uninsured
• A person without health insurance
Private Self-Purchase
• A person who pays out of their own pocket for health
services

28. Definitions
Medicaid
• A health program for low income people and families paid
by the federal government and respective states
Medicare
• A national social insurance program administered by the
federal government that guarantees access to health
insurance for Americans ages 65 and older; and younger
people with disabilities as well as people with end stage renal
diseases
- Total government spending for both programs in 2011 was
$755 billion

29. Definitions
Employer Based Health Insurance
• A health program where employers pay the cost of
health insurance for their employees
• Employees share some of the expenses through
payments including premiums, co-payments and
deductibles
Private Health Insurance Plan
• Health coverage for an individual and usually more
expensive than Employer Based Health Insurance

30. Who is Able to
Access Healthcare
People Who:
1. Have health insurance through an employer
2. Are covered under a government program
3. Can afford to buy health insurance out-of-pocket
4. Are able to pay for services privately

31. Health Insurance in the US
Private Health
Uninsured
Insurance
8%
16%
Medicaid
18%
49%
Employer -
Based 13%
Medicare
Total = 307.9 million
Military

32. What We Will Cover Today
1. Big Picture Orientation
2. What Makes the US System Different
3. What is Health Insurance
4. Diabetes and Associated Costs
5. Who Pays, Who Wins and Who Loses
6. What’s the Problem
7. Some Positives

33. Diabetes Costs
• According to the American Diabetes Association, 25.8
million Americans are currently diagnosed with diabetes
(8.3 percent of the population) and seven million are
currently undiagnosed.
• 7th leading cause of death in the US
• 79 million American have pre-diabetes
• 60% of cases, diabetes is associated with obesity
• From a health insurance standpoint, the need for
expensive and often lifelong care make diabetes an
overwhelming cost driver

34. Diabetes Costs
• Total annual health care costs for a person with diabetes
was more than $11,744 in 2007 according to the
American Diabetes Association.
• Diabetics have medical expenditures more than twice as
high as those who do not have diabetes.
• Insurance companies are beginning to resist paying for
what they view a lifestyle management issue rather than
acute medical care.
• Estimated to kill 4.8 million Americans
in 2012

35. Expected Medical
Costs for Diabetes
The most common expenses for diabetics are
prescription medications including insulin, medical
supplies and equipment.
• Insulin syringes
• Insulin
• Blood glucose test meters and test strips
• Injectable medication
• Doctor visits

36. Diabetes Medications
• A 500-millgram dose of metformin （二甲双胍）
costs on average $18 a month, found in stores like
Wal-Mart and Target.
• Actos, a newer drug with a different method of
action, costs on average $241 for a month’s supply of
the 30-milligram pills.

37. Diabetes Supplies
• Blood glucose monitors range from $10 to
$80, depending on the model.
• Test strips average $0.60 to $0.80 each
• Costs not covered by insurance add up to hundreds
of dollars a year in out-of-pocket expenses.

38. Insurance Coverage for
Diabetes Patients
• These medications and supplies are not covered all
by insurance so this leaves a significant cost to the
individual diabetic and their family.
• Even the insurance plans that cover diabetic
prescriptions and supplies may still have significant
deductibles, co-payments and other requirements
that make the insurance coverage insignificant
relative to the overall out of pocket costs.

39. Medicare & Diabetes
Related Medical Expenses
• Medicare covers supplies for people with
diabetes, whether or not they use insulin.
What’s included?
• Glucose testing monitors
• Blood glucose test strips
• Lancet devices and lancets
• Glucose control solutions
• Therapeutic shoes
• Self-management training
• Nutrition counseling
• Eye exams

40. Medicare Payments
• Medicare will pay 75% of all drug costs after a $250
deductible is paid, up to $2,250. Medicare will pay
0% of drug costs between $2,250 and $5,100
Beyond this amount, Medicare will again pay.
• This equals $3,600 out-of-pocket expense for
diabetes patients.

41. What We Will Cover Today
1. Big Picture Orientation
2. What Makes the US System Different
3. What is Health Insurance
4. Diabetes and Associated Costs
5. Who Pays, Who Wins and Who Loses
6. What’s the Problem
7. Some Positives

42. Who Pays?
• Insurance Companies – Employer Based or
Purchased Privately
• The Government
• Medicaid
• Medicare
• Military
• Paying Out of Pocket

43. Payment –
Insurance Companies
• The cost of health insurance will depend on your
age, how healthy you are, where you live, your income
and your job status.
• There is a fee that must be paid monthly to the
insurance company called a premium – Average
monthly premium for an American family is $530.
• For those who are employed typically have their health
insurance paid for by their employer or a large
percentage.
• If you are self-employed you must pay for your own
insurance and the price of the premium will depend on
what health insurance plan you choose.

44. Payment –
US Government
• Helps to pay for insurance for the elderly and those
below the poverty line through Medicare and Medicaid.
• Medicare provides health insurance to people who are at
least 65 years old.
• Medicaid is a health program for those with low
incomes and resources. It is jointly funded by the states
and federal government.
• The poverty rate in 2010 was 15.1 percent—up from
14.3 percent in 2009.

45. Payment –
Out of Pocket
• Two options: to buy health insurance or to hope they do
not need to use the healthcare system.
• Many choose not to pay for insurance and cannot afford
health care at regular clinics.
• The average expense for a physician's office visit was
$155.
• As a result, the emergency room of the hospital is abused
because it cannot turn people away due to lack of
insurance or ability to pay.

46. Emergency Room Care
• US law requires all hospitals to accept all
patients, regardless of the ability to pay, for
Emergency Room care.
• ERs are typically at or over capacity
• Long wait times
• ERs charge very high rates for services
• ―Safety-net‖ for uninsured

47. Who Wins?

48. Profits
• The top executives at the five largest for-profit health
insurance companies in the United States combined to
receive nearly $200 million in total compensation for
2010.
• According to a report by Health Care for America
Now, America's five biggest for-profit health insurance
companies ended 2010 with a combined profit of $12.2
billion.
• There were more than two dozen pharmaceutical
companies that made over a billion dollars in profits each
during 2010.

49. Who Loses?
Who’s uninsured?
Nearly 50 million, or 16.4%
of Americans are uninsured
By ethnicity, the rate of those who lack insurance is
15.4% White 20.8% Black
18.1% Asian 30.7% Hispanic
Source: US Census Bureau

50. Uninsured and Death
• Lack of health insurance is associated with as many
as 44,789 deaths per year in the United States.
• People without health insurance had a 40 percent
higher risk of death than those with private health
insurance, a result of being unable to obtain
necessary medical care.

51. Why Are People Uninsured
1. Unemployment
2. Lack of a requirement for employers to provide
insurance
3. Lack of a requirement for employees to purchase
health insurance when it is offered
4. Lack of eligibility for government-funded
programs.

52. What We Will Cover Today
1. Big Picture Orientation
2. What Makes the US System Different
3. What is Health Insurance
4. Diabetes and Associated Costs
5. Who Pays, Who Wins and Who Loses
6. What’s the Problem
7. Some Positives

53. What’s the Problem?
US System Has:
• Duplication
• Overlap
• Inadequacy
• Inconsistency
• Complexity
• Inefficiency
• Financial manipulation
• Fragmentation
• Waste

54. $3 Out of Every $10 is Waste
Missed Fraud
$75 billion Unnecessary
Prevention
Services
Opportunities
$210 billion
$55 billion
Excess Inefficiently
Administration Delivered
Costs Services
$190 billion $130 billion
Prices That Are
Too High Source: Economist Intelligence Unit
$105 billion

55. Healthcare Prices
• So what would happen if shopping were like U.S.
health care? "Product prices would not be
posted, and the price charged would vary widely
within the same store, depending on the source of
payment.‖

56. Fraud

57. Relatively Few People Account
for Most Personal Health Spending
100 100.0
90 Top 1% of spenders account for >20% of spending ($275 billion)
Cumulative Percent of Total Spending
80 78.2
70
Top 5% of spenders account for almost half of spending ($623 billion)
60
50 Total Personal Health Care Spending
50.5
40 = $1.259 Trillion
34.8
$36 Billion $1,223 Billion
30
18.8
20
10.4
10 2.9
5.6
0.0 0.1 0.4 1.3 95 99
0 15.4
0 10 20 30 40 50 60 70 80 90 100
Percent of Population by Health Care Spending

58. Annual Costs of Chronic Disease
Heart Disease & Stroke $448 billon
Smoking & Tobacco Use $193 billion
Diabetes $174 billion
Obesity $117 billion
Cancer $89 billion
Arthritis $81 billion
Pregnancy Complications $1 billion
Total $1.1 trillion

59. WHO Health Care Rankings
1. France
18. England
25. Germany
30. Canada
36. Costa Rica
37. United States
38. Slovenia

60. Life Expectancy

61. What We Will Cover Today
1. Big Picture Orientation
2. What Makes the US System Different
3. What is Health Insurance
4. Diabetes and Associated Costs
5. Who Pays, Who Wins and Who Loses
6. What’s the Problem
7. Some Positives

62. Some Positives in the US
Healthcare System
• The U.S. has one of the best medical research systems in
the world. Researchers from institutions such as Harvard
Medical School, the Mayo Clinic and the Cleveland
Clinic are world-renowned for the advances they are
making in medicine, largely because of the current free-
market system.
• For those who have jobs with great benefits or those who
can afford it, some American insurance plans are some of
the best in the world.

63. Some Positives in the US
Healthcare System
• The Medicaid program gives Americans who are poor a
chance to receive some health care for free.
• The United States takes care of it's elderly population by
provided them with a limited plan of healthcare through
Medicare and pay for doctor visits and hospital stay.
• The State Children's Health Insurance Program (SCHIP)
administered by the Centers for Medicare and Medicaid
Services, makes funds available to states that have in
place federally approved programs providing health
insurance coverage to uninsured children.

64. Free Health Clinic

65. What Does the Future
Look Like
• From 2011 to 2015, the commercial health insurance
system will convert from coverage that focuses primarily
on covering unexpected medical bills to the management
and control of existing and ongoing medical problems
like obesity and diabetes.
• Insurance coverage is beginning to shift from drug-based
therapy to treatment focused on behavioral change.
• The healthcare system is changing, with a greater focus
of value, reducing errors and giving more quality and
cost-effective care.