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Health Policy

Health Care Costs

Increased Medical Costs

Patients with the lowest activation scores—having the least skills and confidence to actively engage in their own health care—incurred costs up to 21 percent higher than patients with the highest activation levels.

Source: Health Affairs/RWJF

Saving on Out-of-Pocket Expenses

Nearly 4 million Medicare recipients received $2.1 billion in discounts for out-of-pocket prescription drugs in 2011, for an average savings of $604 per person under the Affordable Care Act. The health care reform law requires drug manufacturers to provide discounted brand name drugs to seniors and people with disabilities and the act subsidizes generic drugs.

Source:  U.S. Department of Health and Human Services

Cost of Chronic Illnesses

Americans are living longer, but also with chronic illnesses that limit a person's functional status, productivity, and quality of life. The medical costs of people with chronic illnesses represent 75 percent-or $1.5 trillion-of the $2 trillion spent annually in the U.S. on health care. An aging population is expected to increase the health care challenges of the chronically ill.

Source:  Institute of Medicine

More Than an Emotional Cost

Child abuse and neglect is a serious and preventable public health problem in the U.S., affecting more than 3 million children in reported cases and 1,780 deaths in 2008. The lifetime costs for each surviving victim of child maltreatment is estimated at more than $200,000, which is comparable to other costly health conditions such as stroke and type 2 diabetes.

Source:  Centers for Disease Control and Prevention

Premiums on the Rise

Health care premiums for family coverage increased 50 percent from 2003 to 2010, and the employee share of premiums saw a 63 percent bump. If the trend continues at the rate prior to the enactment of the Affordable Care Act, the average premium for family coverage will rise 72 percent by 2020 to nearly $24,000.

Source:  The Commonwealth Fund

The Impact of Health Care Expenses

High health care expenses impact poor people at a rate of five times that of high-income earners.

Source:  Agency for Healthcare Research and Quality

Out-of-Pocket Expenses

People with private non-group insurance are nearly three times as likely as people with private, employer-sponsored insurance to have high health premiums and out-of-pocket medical expenses.

Source:  Agency for Healthcare Research and Quality

Private Insurers Still Feel Effects of Health Disparities

Private insurers are not immune to the burgeoning costs of health disparities. Elevated rates of chronic illness among African Americans and Hispanics cost insurers an estimated $5.1 billion in 2009.

Source:  The Urban Institute

Medicare Costs Magnified

As the Hispanic population ages, their impact on Medicare costs will magnify the most compared to other racial/ethnic groups, growing from $5.5 billion in 2009 to $16 billion by 2050 (in 2009 dollars).

Source:  The Urban Institute

Chronic Illness Disparities at a Cost

Elevated rates of chronic illness due to health disparities will cost the U.S. health care system an estimated $337 billion from 2009-2018. About $220 billion of that cost will be incurred by Medicare.

Source:  The Urban Institute

Family Premiums Skyrocket

From 1999 - 2009, family premiums for employer-sponsored health coverage increased by 131 percent, placing increasing cost burdens on employers and workers.

Source:  Kaiser Family Foundation

Patient Engagement Leads to Lower Costs

Patients who received enhanced decision-making support ultimately had overall medical costs that were 5.3 percent lower than for those receiving only the usual support.

Source: Health Affairs/RWJF

The Cost of Harmful Care

One in seven Medicare beneficiaries is harmed annually in the course of care, at a cost to the government estimated at $4.4 billion.

Source:  HealthCare.Gov

The Cost of Medical Errors

Medical errors in the United States cost about $17.1 billion in 2008.

Source:  Health Affairs

Can't Pay the Price of Care

More than half (54%) of U.S. patients did not get recommended care, fill prescriptions, or see a doctor when sick because of costs, versus 7 percent to 36 percent in the other countries.

Source:  The Commonwealth Fund

Effects of Health Inequities

Between 2003 and 2006, the total direct and indirect costs of health inequities affecting racial and ethnic minority populations more broadly - including lost wages and productivity - exceeded $1.2 trillion.

Source:  Joint Center for Political and Economic Studies

Cost of Preventable Conditions

Among African Americans and Hispanics, the cost burden of three preventable conditions-high blood pressure, diabetes, and stroke-was about $23.9 billion in 2009.

Source:  Urban Institute

The Expensive Few

A small proportion of the U.S. population accounts for half of all U.S. health care spending. The five percent of the population with higher health care expenses (>$16,336 annually) was responsible for nearly half (47.5 percent) of total health care spending. The 50 percent of the population with the lowest expenses (<$825) accounted for only 3.1 percent of total spending.

Source:  Kaiser Family Foundation

Why it's More Expensive in the U.S.

Prices, efficiency and insurance administration are the most important reasons U.S. spending is higher than spending in other countries. One study estimated that relative to other major industrialized nations, the U.S. pays 70 percent higher prices for drugs, has substantial excess capacity and low productivity in outpatient facilities, and spends six times more on insurance administration.

Source:  McKinsey Global Institute

Biggest Drivers of Cost

Hospital care and physician and clinical services are by far the largest components of U.S. health care spending. Hospital care accounted for 31 percent and physician and clinical services accounted for 21 percent of overall health care spending in 2006. Prescription drugs accounted for only 10 percent of overall spending, although that is 40 percent higher than its share in 1970.

Source:  Centers for Medicare & Medicaid Services

Costs Up for Employers and Employees

Workers pay 47 percent more now than they did in 2005 for the family health coverage they get through their jobs, while their wages have increased only 18 percent. Employers, in contrast, pay 20 percent more toward their employees' health insurance than they did five years ago.

Source:  Kaiser Family Foundation

Medical Malpractice and Costs

Medical malpractice is not a major driver of spending trends. Premiums for liability coverage and defensive medicine do contribute to health spending at any moment in time, but they are not a large factor nor are they a significant factor in the overall growth of health care spending.

Source:  Issues in Science and Technology

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