Healthcare In Crisis: Beyond Economics 101: Insights Into Healthcare Reform From the Congressional Budget Office

Thursday, December 11, 2008

Beyond Economics 101: Insights Into Healthcare Reform From the Congressional Budget Office

As we seek to improve the efficiency of the health sector, let’s learn some lessons from economics.

Excerpted from Peter Orszag’s keynote address at the October 2008 Kaufman Hall Financial Leadership Conference.

(Peter R. Orszag, PhD, served as director of the Congressional Budget Office (CBO) from January 2007 until November 2008. He resigned that post upon being nominated by President-elect Barack Obama to be director of the Office of Management and Budget. Under Orszag’s leadership, the CBO significantly expanded its focus on areas such as health care and climate change.)

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Statistics Collection

80 percent of the hospital closures nationwide occured in states that didn’t expand Medicaid. 2019
About 75,000 patients with hospital-related infections died in 2011.
A recent study conducted by the Kresge Foundation and published in Health Affairs found that treating children who are exposed to air pollution, toxic chemicals and other pollutants costs a staggering $76.6 billion dollars a year. The study also found that children with existing allergies to common airborne allergens are even more vulnerable to chemical pollutants than others.
About 27.8 million people without coverage are working, either part or full time.
The rate of prescription drug use for the American South, with West Virginia the worst off, is higher than the rest of the country. West Virginia filled 17.7 prescriptions per capita compared to a national average of 11.5.
Nearly 45,000 people die in the United States each year -- one every 12 minutes -- in large part because they lack health insurance and can not get good care, Harvard Medical School researchers found
Insurance and HMO Industries Spend Nearly $700,000 Per Day to Kill Health Care Reform.
86.7 million Americans were uninsured at some point in 2007 and 2008.
About 67 percent of medications dispensed in 2007 were generic drugs — up from 63 percent the year before. Generics can cost as little as one-third the price of brand-names.
Health care continued to take up a greater share of the economy in 2007, as spending on hospitals, doctors and other services increased 6.1 percent to $2.2 trillion.
Several major U.S. insurance companies, like Blue Cross Blue Shield of South Carolina and southern California are now considering sending patients overseas for surgeries. (5/07)
Experts predict that the medical tourism industry will grow to $40 billion by 2010.
An estimated 500,000 Americans travel out of the U.S. every year for some type of medical care. Care they can't afford here.
rising costs and deteriorating coverage cause more than one-in-four (28 percent) to go without needed care because they can't afford it.
In 2007, 75 million working-age adults were either uninsured or underinsured, up from 61 million in 2003.
It is estimated that, nationwide, 18,000 adults between the ages of 25 and 64 died in 2000 because they did not have health insurance. Subsequently, The Urban Institute estimated that at least 22,000 adults in the same age group died in 2006 because they did not have health insurance.
In 2006, nearly 5,000 community hospitals provided uncompensated care costing $31.2 billion
Roughly one-half of America's hospitals operating in the red
Bad debts for hospitals in 2004 were estimated to be between $26bn and $30bn, representing about 12 per cent of their revenue and rising.
The administration of the health care system today consumes approximately 31% of the money spent for health care.
The American Hospital Association, which represents 5,000 hospitals and health care systems, spent $7.3 million in the first half of 2007 to lobby the federal government, according to a disclosure form.
Record numbers of Americans are travelling abroad for medical treatment to escape the American healthcare system – with 100,000 patients expected to fly out this year for cosmetic surgery alone
Half the nation's 47 million uninsured workers are employed by small businesses.
47 million uninsured in 2006 up from 44.8 million uninsured in 2005. 17.1 million people under age 65 were underinsured in 2003, including 9.3 million people with employer-based insurance.
A recent New America Foundation white paper estimates the average family pays about $1,186 a year in "hidden taxes" through health insurance premiums to cover the uninsured.
15.8% of Americans are uninsured, that's one in 6.
In the US more than a million people go bankrupt each year because of illness or medical debt. 29 million Americans -- 14 percent of all adults -- are in serious medical debt.
As few as 44,000 and as many as 98,000 people die in hospitals each year because of preventable errors.
There are about 1.7 million hospital-acquired infections a year in the United States, and 99,000 deaths annually as a result.
From 2003-2005 there were 247,662 potentially preventable deaths in U.S. hospitals.
The excess cost to Medicare associated with patient safety incidents was $8.6 billion from 2003 to 2005.
At the heart of the shortage is the difference between typical reimbursements for primary care doctors and specialists. The former can expect to earn $160,000 a year, according to national data, while obstetrician/ gynecologists earn an average $230,000 and dermatologists $300,000.