US and International Health Care:

Trends in Spending, Costs and Prices

Presentation to Society of American Business Editors and WritersBy Susan DentzerOctober 27, 2014

2International Comparison of Spending on Health

1980-2008

Average spending on healthper capita ($US PPP)

Source: OECD Health Data 2010 (June 2010).

Total expenditures on healthAs a share of GDP

International Slowdown in Health Cost Growth ?

Source: Lorenzoni L, Belloni A, Sassi F, “Health-care expenditure and Health Policy In the USA versus other high-spending OECD Countries,” The Lancet, 2014; 384:83-92

Annual Growth Rates, Gross Domestic Product (GDP) And National Health Expenditures (NHE), Calendar Years 1990–2023.

Sisko A M et al. Health Aff doi:10.1377/hlthaff.2014.0560

Health Spending Projections, CMS

Exchanges, subsidies and Medicaid expansion

2% gapremains;cost curvenot bent

The Role of Prices

• Since 2000, rising prices of hospital charges,

professional services, drugs, devices, and

administration costs have produced 91 percent of the

increases in health spending

• US prices for almost every aspect of health care

greatly exceed those in all other high-income

countries

• Sources: Moses H et al, “The Anatomy of Health Care in the United States,” JAMA 2013; 310(18):1947-1964;

International Federation of Health Plans

International Price Variation: An Example

“At $84,000, Gilead Hepatitis C

Drug

Sets Off Payer Revolt”

Bloomberg.com, Jan. 27, 2014

Specialty Pharmaceuticals: The Case of Sovaldi

High Cost-Sharing in Exchange Plans

Exchange plans at lower tiers impose high cost-sharing requirements on individuals before they reach their out-of-pocket maximums.

Source: Avalere Health

More than double the average deductible in an employer-provided plan

All-Payer Claims Databases

States Move To Require Health Care Price Transparency

Cost estimator toolallows patients to calculate what they will pay out-of-pocket

e.g., for a Medicare patient receiving a hip replacement, $5207

Disruptive Technologies: Potential to Lower Spending?

• Digital health, mhealth

(mobile), apps

• Pushing care out of

institutions and into homes

and offices

• Enabling more self care

• Engaging patients and enhancing sense of knowledge, confidence, activation

New entrants into health care: Apple

• Apple Health dashboard allows consumers to compile and view health care information

• Apple’s HealthKit: new platform for health apps

• Apple Watch has heart rate sensors; annual sales of 485 million predicted

• Link with Epic EHR• Exploring incorporation of blood

pressure and glucose monitoring into iPhone

The End