The Facts About Rising Health Care Costs

1. The Facts About Rising Health Care Costs

2. Health Care Costs Are Rising Insurers, hospitals, pharmaceutical companies, employers, lawmakers, physicians, employees…we all have a role to play in keeping health care affordable As health care costs rise, individuals are paying more and they’re looking for help in making sense of it all Physicians can help families make wise health care choices – which helps keep health care affordable for everyone

3. Health Care Costs Are Rising Why? • Prescription drug use is rising, and the cost of new drugs is increasing rapidly • National prescription drug spending rose 11.1 percent between1998 and 2001 • Utilization of hospital services and medical technology is rising • Outpatient hospital care spending grew 15 percent from 1998-2001 • Inpatient hospital care jumped 5.9 percent during the same period • Medical technologies and treatments are becoming more advanced… and more expensive • Use of specialty care is on the rise • Specialty physician services increased 6.7 percent in 2001 • Emergency rooms are over utilized for non-emergency care Sources: BCBSA; Center for Studying Health System Change,“Tracking Health Care Costs,” 2002;national figures

4. Prescription Drugs • In the US, on average 10.4 prescriptions are written in 2001 for every man, woman, child costing $155 billion • About half of the $22.5 billion increase in spending on prescription drugs was driven by big increases in the number of prescriptions for 27 drugs (out of almost 9,500) • The average price of a prescription bought at a retail pharmacy rose 10.1 percent from 2000 ($45.27) to 2001 ($49.84) • Drug companies spend more on sales and promotion of brand name drugs than on research and development: $2.5 billion on direct-to-consumer advertising in 2000 Sources: The National Association of Chain Drug Stores, “Industry Facts At A Glance,” 2001;Center for Medicare and Medicaid Services, “National Health Statistics,” June 2002;Institute of Health Care Management, “Prescription Drug Expenditures in 2001,” 2002

5. Unnecessary Trips to the E.R. • An estimated 11.5 million visits to hospital emergency rooms are for non-emergency care every year in America • E.R. visits nationally cost on average $383 – more than six times the average visit to a doctor’s office • When someone in a health plan goes to the E.R. instead of a doctor’s office for non-emergency care, everyone in the health plan pays for it through higher insurance premiums, copayments and deductibles Sources: New England Journal of Medicine, “The Costs of Visits to Emergency Departments,” 1996American Medical Association, “Physician Socioeconomic Statistics,” 2001

6. The Impact of Lifestyle Choices How we live, and the choices we make, have an impact on our overall health – and how much we all pay for health care • Sedentary lifestyles and chronic diseases • Preventable Injuries

7. Physically Inactive Americans Sedentary Lifestyles and Chronic Diseases • 61% of the U.S. adult population are either obese or overweight • 14 percent of all deaths in theUnited States are attributedto activity patterns and diet • Increasing regular moderatephysical activity among themore than 88 million inactiveAmericans over the age of 15might reduce annual healthcare costs by as much as$76.6 billion Sources: U.S. Department of Health and Human Services,“National Health Interview Survey,” 1997-98

8. Sedentary Lifestyles and Chronic Diseases • Rapid increases in rates of chronic diseases like diabetes, congestive heart failure and their associated health problems are major contributors to rising medical costs • 17 million Americans had diabetes in 2000 at a health care cost of $98 billion, with about $44 billion of that in direct medical costs • In 2000, the total costs attributed to obesity amounted to an estimated $117 billion – this includes costs associated with diabetes, heart disease, and hypertension Sources: American Diabetes Association, “National Fact Sheet,” 2002;U.S. Department of Health and Human Services, “Surgeon General’s Call to Action toPrevent and Decrease Overweight and Obesity,” 2001.

9. Preventable Injuries • Preventable injuries cost billions of dollars each year across the U.S. • The National Highway Transportation Safety Board estimates that in just one year, using seat belts would prevent nearly 12,000 fatalities and 325,000 serious injuries and would save $50 billion in medical care, lost productivity and other injury-related costs • Wearing bicycle helmets would prevent an estimated 500 bicycle-related fatalities and 151,000 nonfatal head injuries each year, and would save more than $3 billion in health care costs Sources: National Highway Transportation Safety Administration,“Economic Impact of U.S. Motor Vehicle Crashes, 2002, and Centers for Disease Control and Prevention, “National Bicycle Safety Network,” 1999

10. Your Choices Have an Impact • Learn about the role you can play in helping to keep health care affordable for everyone • Learn about steps you can take -- to improve your health, control out-of-pocket costs and learn more to inform your choices • Focuses on ways your family can live a healthier life and prevent health problems down the road – which in turn, helps keep health care affordable