The document discusses various topics related to health care economics and financing in the United States, including the legislative process for health reform, current issues, health care financing models, sources of health insurance coverage, national health expenditures, payment reform efforts, and principles of health economics.

1. Health Care Economics and Financing 2009 Daniel B. McLaughlin

2. The legislative process - Update House Energy & Commerce House Ways & Means House Education & Labor Senate HELP Senate Finance Full Senate Full House Conference Committee Old & New Agencies

5. Health Care Financing “ You know – in health care its not the money, it’s the money” – famous health care executive

8. General Financing Model Government Productivity Personal Assets Employers Taxes Insurance Individual Health Medical Care

9. Employers Remain Primary Sponsor of Coverage Distribution of 307 Million People by Primary Source of Coverage Employer Direct 164m 53% Uninsured 49m 16% Medicare 39m 13% Medicaid 42m 14% Medicare 41m 13% Individual Direct 14m 5% Employer Direct 55m 18% Total Employer 164m (53%) Total Individual 14m (5%) Source: The Lewin Group, The Path to a High Performance U.S. Health System: Technical Documentation (Washington, D.C.: The Lewin Group, 2009).

10. Distribution of National Health Expenditures, by Type of Service, 2007 Note: Other Personal Health Care includes, for example, dental and other professional health services, durable medical equipment, etc. Other Health Spending includes, for example, administration and net cost of private health insurance, public health activity, research, and structures and equipment, etc. Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health Expenditures by type of service and source of funds, CY 1960-2007; file nhe2007.zip).

11. Relative Contributions of Different Types of Health Services to Total Growth in National Health Expenditures, 1997-2007 Notes: Percentages may not total 100% due to rounding. Other Personal Health Care includes, for example, dental and other professional health services, durable medical equipment, etc. Other Health Spending includes, for example, administration and net cost of private health insurance, public health activity, research, and structures and equipment, etc. Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health Expenditures by type of service and source of funds, CY 1960-2007; file nhe2007.zip).

24. Government vs. Free Market Government Control Free Market Market Failure Corrections

25. Government vs. Free Market Government Control Europe Moldova Free Market Market Failure Corrections USA Alternative Medicine USA Medical Care

30. Payment Reform in the United States

37. Tiering Example Minnesota Advantage Minnesota Advantage Health Plan Annual First-Dollar Deductible, 2006 Tier Individual Family 1 $30 $60 2 $100 $200 3 $280 $560 4 $500 $1,000

38. Tiering Example Minnesota Advantage Number of Primary Care Clinics in Each Payment Tier for Minnesota Advantage, 2004 and 2006 2004 2006

41. Mean Time Spent with Physician (in Minutes), 1989-2006 Minutes Note: Includes ambulatory care visits made to nonfederally employed physicians’ offices in the United States (excluding physicians in the specialties of anesthesiology, radiology, and pathology). Visits to private, nonhospital-based clinics and HMOs are included if they are not federally operated facilities or hospital-based outpatient departments. Only visits where face-to-face contact with the physician occurred are included. Time spent with the physician excludes time spent waiting to see the physician, receiving care from someone other than the physician without the presence of the physician, or time spent by the physician in reviewing patient records and/or test results. Source: Center for Disease Control and Prevention, National Center for Health Statistics, Division of Health Care Statistics: 2006 data at National Health Statistics Reports, No. 3, August. 6, 2008, National Ambulatory Medical Care Survey: 2006 Summary , Table 28, p.36, at http://www.cdc.gov/nchs/data/nhsr/nhsr003.pdf .

42. Thank You Dan McLaughlin [email_address] 651-962-4143