American Health Economy Illustrated

How much does the average American spend on health care? Are costs and quality of health care equal across US states? Do Americans get good value for money spent on health services compared with citizens of other developed nations? Are current health spending trends sustainable through the 21st century? All too often, policymakers and the public alike form judgments about health care based on myths and misconceptions. A common refrain is that US health care is too expensive - both in costs to the taxpayer and costs to the consumer. But few realize that despite its lack of national health insurance, the United States leads nearly all other industrialized nations in the share of health spending paid by third parties, whether public or private. Americans, therefore, are less sensitive to health care prices than citizens of other nations. American Health Economy Illustrated sifts through nearly a century of data to examine - and debunk - the most common myths about the US health care system. With an unbiased, just-the-facts approach and hundreds of color illustrations, Christopher J. Conover assesses the strengths and weaknesses of the current system and evaluates whether current health cost trends are sustainable. Wide-ranging, accessible, and provocative, this book is a must-read for anyone concerned with the future of American health care.

Autorentext

Christopher J. Conover is a Research Scholar in the the Center for Health Policy & Inequalities Research at Duke University, an adjunct scholar at AEI, and a Mercatus-affiliated senior scholar. He has taught in the Terry Sanford Institute of Public Policy, the Duke School of Medicine and the Fuqua School of Business at Duke. His research interests are in the area of health regulation and state health policy, with a focus on issues related to health care for the medically indigent (including the uninsured), and estimating the magnitude of the social burden of illness. He is the recent author of The American Health Economy Illustrated and is a Forbes contributor at The Health Policy Skeptic.

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Acknowledgments Foreword, Mark V. Pauly Preface Chapter 1: Rise of a Massive Health Sector 4. Over eight decades, constant dollar health spending per person increased five times as much as real output per capita. 6. Inflation-adjusted health output per capita has increased at least 8-fold over the past 80 years. 8. The health sector absorbs an increasing share of national resources. 10. Health spending per capita is significantly more in the United States than in other large "rich" countries-18 percent more than second-ranked Norway. 12. For 80 years, growth in real per capita health spending almost always outpaced growth in the rest of the economy by as much as six percentage points. 14. In the past 50 years, health spending as a share of GDP has risen in all advanced countries. 16. Most of the world's population live in countries where health spending per capita is much less than that of the United States, yet the gap has been increasing for some of the largest countries in recent years. Chapter 2: How is Each Health Dollar Spent? 20. Most health spending is for personal health services; for 40 years, such spending has exceeded 80 percent of all health expenditures. 22. From 1929 to 2009, inflation-adjusted personal health spending per capita has doubled approximately every 25 years. 24. Insurer administrative costs decline as group size increases and vary by type of coverage. 26. The combined percentage of health spending related to hospitals and nursing homes doubled from 1929 to 1989 but currently is declining. 28. More than half of health spending is for chronic diseases; chronic illness accounts for an increasing share of health spending. 30. At least half of personal health spending is for behavior, lifestyle, or other avoidable causes. Chapter 3: Who Pays for Health Services? 34. Regardless of how it is measured, the public sector role in U.S. health financing has increased. 36. Private health insurance pays for a smaller share of health spending than public insurance does, even though many more Americans have private insurance. 38. For the past 70 years, virtually all growth in health spending relative to the economy has been financed by public and private health insurance. 40. Though far less visible to the average American, federal tax subsidies for health exceed federal spending on Medicaid. 42. For 80 years, the out-of-pocket share of health spending has declined while the portion paid by third parties has increased. 44. Despite a much lower publicly financed share of health spending, the U.S. out-of-pocket share of spending is among the lowest in the world. 45. The elderly and disabled constitute 25 percent of Medicaid enrollees but more than 75 percent of Medicaid spending. 46. Beneficiaries directly pay less than 15 percent of Medicare costs, but Medicare also covers less than half of all their health spending. 48. From 30 to 65 percent of all health spending by individuals who are uninsured all year is subsidized by taxpayers or private payers. Chapter 4: The Employer Role in U.S. Health Care 52. A growing share of worker compensation is paid in the form of wage and salary supplements, including social insurance-such as Medicare-and private health insurance. 54. The tax subsidy for employer-provided health insurance increases with income; high-paid workers get a larger subsidy-in both dollar terms and in the fraction of premiums subsidized-than do low-paid workers. 56 For a variety of reasons, workers in small firms, health care and retail trade are least likely to be offered health coverage at work. 58. Despite relatively stable health insurance offer rates, there has been a secular decline in employer-based health coverage across almost all firm-size categories. Chapter 5: Government Expenditures, Taxes, and Deficits 62. Real government expenditures for health rose 30-fold during the past 50 years-or 17-fold in per capita terms. Between 1966 and 2007, the entire increase in government's share of GDP is attributable to growth in tax-financed health care. 64. Tax-financed health expenditures have risen much faster than government spending on defense, income support and education. 66. Tax-financed health expenditures explain little of the difference between the United States and its major competitors in public sector spending as a percent of GDP. 68. The public sector pays 80 percent of health costs for people in poor health. 69. Taxpayers finance almost half of health spending for the highest-income families. 70. Almost all Medicare beneficiaries pay less in payroll taxes than the dollar amount of benefits they receive from the program. 72. The Medicaid share of state health spending varies by a factor of three across states. Chapter 6: Health Services and the Family Budget 76. Health care is currently the second largest component of personal consumption. Since 1929, the share going to health care has risen faster than any other major category of personal consumption. 78. Because so much health spending is hidden, direct family spending on health care and health insurance premiums has accounted for only five percent of income for 20 years. 80. In the past 25 years, the relative burden of paying for health care has grown slightly faster among families that have the highest incomes. 84. The elderly and children rely more heavily than others do on tax-financed health coverage. 85. The risk of being uninsured is at least three times as high among young adults as among children younger than 10 or the elderly. 86. The risk of being uninsured is substantially higher among young adults than among children or the elderly. 86. The average American's chance of being uninsured has declined substantially over the past 70 years. 88. Although per capita health costs for persons uninsured all year are less than half the amount spent for those with private coverage, more than 65 per…