This document discusses the key challenges facing the U.S. healthcare system: cost, quality, and access. It notes that total U.S. healthcare expenditures reached $2.7 trillion in 2011, or 17.9% of GDP. Around 15.4% of the population, or 47.96 million people, lacked health insurance in 2012. Private health insurance covered 63.9% of the population, while government programs like Medicaid and Medicare covered 32.6%. International comparisons show the U.S. has higher costs but lower life expectancy and higher mortality rates than countries like Japan and Germany.

1. Economics of Healthcare
Professor: Sherrie Lu, PhD

2. Agenda for Today
• Challenges in the Healthcare System
• Q & A
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3. Challenges in the Health System
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Three most important challenges in the
healthcare
1. Cost
In 2011, total healthcare expenditures reached $2.7
trillion (2.6 in 2010) = $8,608 (8,402 in 2010) per
person or 17.9% of the nation's Gross Domestic
Product (GDP)
2. Quality
?
3. Access
Ability to pay
Available healthcare professionals and facilities

4. 2

5. Data from U.S. Census Bureau
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oUninsured :15.4% (47.96 million) in 2012 vs. 15.7% (48.6
million) in 2011
oInsured: 84.6% (263.2 million) in 2012 vs. 84.3% (260.2
million) in 2011
Private health insurance was 63.9% (198.8 million in 2012
vs. 197.3 million in 2011)
Government insurance:101.5 million (32.6%) in 2012 vs.
99.5 million (31.2%) in 2011
 Medicaid: no significant different at 50.9 million
(16.4 %)
 Medicare: 48.9 million (15.7%) in 2012 vs. 46.9
million (15.2%) in 2011

6. 2

7. 20

8. 2011 Japan Germany U.S.A.
Life Expectancy at
Birth (M / F) 79 / 86 78/ 83 76 / 81
Child Mortality per
1,000 (both) 3 4 8
Adult Mortality per
1,000 (M / F) 84 / 46 96 / 51 131 / 77
Japan Germany U.S.A.
Total Health
Expenditure per
Capital (2011) $3,174 $4,371 $8,608
Total Health
Expenditure as a %
of GDP (2011) 9.3% 11.1% 17.9%
Data source: World Health Organization Statistics
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9. References
Investopedia US. (2013). Economics basics: Supply and demand.
Retrieved from
http://www.investopedia.com/university/economics/economics3.asp
Feldstein, P. J. (2011). Health care economics (7th
ed.). Mason, OH:
South-Western Cengage Learning.
U.S. Census Bureau. (2013). Income, poverty, and health insurance
coverage in the United States: 2012. Retrieved from
http://www.census.gov/prod/2013pubs/p60-245.pdf
World Health Organization. (2013). Germany. Retrieved from
http://www.who.int/countries/deu/en/
World Health Organization. (2013). Japan. Retrieved from
http://www.who.int/countries/jpn/en/
World Health Organization. (2013). United States of America. Retrieved
from http://www.who.int/countries/usa/en/

10. Questions