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Unveiling Healthcare Spending: Understanding Costs and Waste

Delve into the complexities of healthcare expenditures, cost drivers, and pricing mechanisms. Explore data and analyses shedding light on the staggering figures and impacts within the American healthcare system.

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Unveiling Healthcare Spending: Understanding Costs and Waste

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  1. OPENING THE BLACK BOX: HEALTH CARE SPENDING, COST AND WASTE http://copahi.org/ The website 'Healthcare Colorado' is a product of the 'Colorado Progress and Health Initiative' a bipartisan group of people interested in research and fact finding.

  2. The American Healthcare System Source: Elisabeth Rosenthal, An American Sickness: How Healthcare Became Big Business and How you Can Take it Back), 2017

  3. A Free Market?

  4. Spending

  5. The Amount of Money We Spend on Health Care

  6. In 6 Years Health Expenditures Will Reach $5.1 Trillion

  7. The Cost of Health Care for American Families 2016 • Source: Sentier Reserach from U.S. Census Bureau Source: Milliman Medical Index 2016 / http://publications.milliman.com/periodicals/mmi/pdfs/milliman-medical-index-2016.pdf

  8. Why are Healthcare Costs So High? Source: http://www.rwjf.org/en/library/research/2012/09/what-is-driving-u-s--health-care-spending.html

  9. COSTS & SETTING PRICES

  10. If the Price of Other Commodities had Increased at the Same Pace as Healthcare Costs According to the Institute of Medicine, if the price of other commodities had increased at the same rate as health care costs between 1945 and 2010 10 Source: http://resources.iom.edu/widgets/vsrt/healthcare-waste.html

  11. The Practical Result of Rising Hospital Costs Source: Elisabeth Rosenthal, An American Sickness: How Healthcare Became Big Business and How you Can Take it Back), 2017

  12. 2013 Commonwealth Fund Healthcare Scorecard Source: http://www.commonwealthfund.org/publications/press-releases/2014/jun/us-health-system-ranks-last

  13. Health Care Spending is a Major Driver of Premium Increases On average, across the individual and small group markets in the U.S. premiums increased $25.26 per month from 2015 to 2016. 69% of this premium increase($17.35) was due to hospital outpatient, inpatient, physician and prescription drug spending $7.91 of the premium increase was not related to health care costs Caroline F. Pearson - Nov 16, 2015, Health Insurance Premium Increases Largely Mirror Spending http://avalere.com/expertise/managed-care/insights/health-insurance-premium-increases-largely-mirror-spending

  14. Prices Not Utilization are the Major Driver of Cost Trend PwC’s Health Research Institute (HRI) annually projects the growth of medical costs in the employer insurance market Medical cost trend: is the projected percentage increase in the cost to treat patients from one year to the next, assuming that benefits remain the same. “In the early 2000s, price and utilization contributed to the growth in healthcare costs. Since then, the use of services has declined and higher prices are driving the growth.” 14 Source: PWC / HRI Medical Cost Trend: Behind the Numbers 2018

  15. Source: PWC / HRI Medical Cost Trend: Behind the Numbers 2017 Source: GM CEO R. Wagoner, Testimony before the House Financial Services Committee, December 5, 2008 Health Care Costs for Employers 2007 and 2017 15

  16. Price Variation for Similar Treatment

  17. Source: Archives of Internal Medicine, “Health Care as a ‘Market Good’? Appendicitis as a Case Study,”, 2012 Archives of Internal Medicine /Vol. 172 (No. 10) May 28, 2012 Price Variation: Case Study #1 17

  18. Source: Archives of Internal Medicine, “Health Care as a ‘Market Good’? Appendicitis as a Case Study,”, 2012 Archives of Internal Medicine /Vol. 172 (No. 10) May 28, 2012 Price Variation: Case Study #1 18

  19. Source: Does price transparency legislation allow the uninsured to shop for care? Kate Stockwell Farrell, Leonard J. Finocchio,, Amal N. Trivedi, and Atee Mehrotra, University of Pittsburgh School of Medicine, 2009 Price Transparency / Variation: Case Study #2 19

  20. Price Variation Colorado 2012 20 Source: https://cha.com/resources/publications/

  21. Price Variation Colorado 2012 21 Source: https://cha.com/resources/publications/

  22. Drug Prices

  23. Prescription Drug Spending U.S. spending on prescription drugs has increased by 67% since 2004 and is projected to increase by another 64% over the next 8 years Source: Kaiser Family Foundation 10 Essential Facts About Medicare and Prescription Drug Spending Jul 07, 2016 http://www.kff.org/infographic/10-essential-facts-about-medicare-and-prescription-drug-spending/

  24. Source: USA Today: Preemie birth preventive spikes from $10 to $1,500, March 9, 2011 Source: Jim Doyle (March 10, 2011). "KV boosts prenatal drug price 100-fold". St. Louis Today. Source: Daily Mail (March 9, 2011). "Preemie outrage: Cost of drug that prevents premature birth to rise from $10 to $1500.". Health Care Pricing: Prescription Drugs 24

  25. Source: Elisabeth Rosenthal, An American Sickness: How Healthcare Became Big Business and How you Can Take it Back) Source: Lazarus, David, LA Times Sick: The biggest increase in healthcare costs in 32 years,, September 2016 Source: Herper, Matthew, Forbes, Why Did That Drug Price Increase 6,000%? It's The Law, Feb. 2017 , Health Care Pricing: General Trend / Prescription Drugs 25

  26. Source: Elisabeth Rosenthal, An American Sickness: How Healthcare Became Big Business and How you Can Take it Back) Source: http://www.mmm-online.com/commercial/drugmakers-again-boost-dtc-spending-to-56-billion-in-2016/article/642028/ , Research vs. Advertising: Prescription Drugs 26

  27. WASTE

  28. Spending and Waste: 2009 Data Source: http://www.kaiserhealthnews.org/daily-reports/2012/september/07/iom-report.aspx Source: Institute of Medicine, Best Care at Lower Cost: The Path to Continuously Learning Health Care in America, September 6, 2012 http://www.iom.edu/Reports/2012/Best-Care-at-Lower-Cost-The-Path-to-Continuously-Learning-Health-Care-in-America.aspx Source: http://www.thefiscaltimes.com/Articles/2013/02/21/~/media/Images/Inline/2013/02/02212013_medical_costs.ashx?w=560&h=386&as=1

  29. Spending and Waste Source: http://healthaffairs.org/healthpolicybriefs/brief_images/82-2-full.jpg Source: www.pbs.org/wnet/need-to-know/economy/the-true-cost-of-the-bank-bailout/3309/ Source: https://www.nationalpriorities.org/campaigns/military-spending-united-states/ Source L https://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2014301

  30. Policy Solutions

  31. Possible Solutions Source: http://www.latimes.com/business/hiltzik/la-fi-hiltzik-healthcare-mergers-20160527-snap-story.html

  32. Possible Solutions Source: http://www.latimes.com/business/hiltzik/la-fi-hiltzik-healthcare-mergers-20160527-snap-story.html

  33. Possible Solutions Source: http://www.latimes.com/business/hiltzik/la-fi-hiltzik-healthcare-mergers-20160527-snap-story.html

  34. Possible Solutions Source: Emanuel, E., Sharfstein, J., Sprio, T., O’Toole, M. State Options To Control Healthcare Costs and Improve Quality. http://healthaffairs.org/blog/2016/04/28/state-options-to-control-health-care-costs-and-improve-quality/

  35. Possible Solutions Source: Emanuel, E., Sharfstein, J., Sprio, T., O’Toole, M. State Options To Control Healthcare Costs and Improve Quality. http://healthaffairs.org/blog/2016/04/28/state-options-to-control-health-care-costs-and-improve-quality/

  36. Why Charges May Vary: Colorado Hospital Assoc. 36 Source: Colorado Hospital Association report on Hospital Charges and Average Length of Stay, July 2015

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