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Co Chairmen

Co Chairmen

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Published by: SHOUTAmerica on Nov 14, 2009
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12/07/2009

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HealthCare
and
TheFederalBudget
 July 2009
Summary
Thena'on’s2009annualhealthcarebill
:
$2.5trillion
—$18outofevery$100producedbythedomes7ceconomy(grossdomes7cproductorGDP).
1
Projectedhealthexpendituresin2018
:
$4.4trillion
$1outofevery$5produceddomes7cally.
Healthcarecostforeachman,womanandchild
:
$8,050
in2009;$12,104in2018(adjustedforinfla7on).
Health‐relatedspendinginthefederalbudget
:
$870billion
in2009—21percentoftotalspending—morethanamountsprojectedforSocialSecurity($680billion)orna7onaldefense($645billion,excludingdefensehealthcarecosts).
Thefederalbudget’sshareofthena'onalhealthcarebill
:
35percent
in2009.
Healthcare’srankwithinoverallconsump'on
:
#1
—Americansspendmoreforhealthcarethanforanyothertypeofgoodorserviceincludinghousing,food,ortransporta7on.Thehealthcareindustryisthesecondlargestprivateemployeraerretailopera7ons.
Committee for a Responsible Federal Budget
1
Co-Chairmen
Bill FrenzelTim Penny Charles W. Stenholm
President
Maya MacGuineas
Director
s
Barry AndersonRoy AshCharles BowsherSteve CollDan Crippen Vic Fazio Willis Gradison William Gray, III William Hoagland James R. JonesLou Kerr Jim Kolbe James T. Lynn James T. McIntyre, Jr.David MingeMarne Obernauer, Jr. June O’NeillRudolph PennerPeter PetersonRobert Reischauer Alice RivlinGene SteuerleLawrence SummersDavid StockmanPaul A. VolckerCarol Cox WaitDavid M. Walker Joseph Wright, Jr.
Senior Advisors
Henry BellmonElmer StaatsRobert Strauss
 
DespitethesizablelevelofresourcesdevotedtohealthcareintheUnitedStates,thereareseriousproblems:
Comparedwithotherindustrializedna7ons,theUnitedStatesspendsthemostperpersonbutranksattheboVomofhealthindicatorsincludinginfantmortalityratesandlifeexpectancyatage60.
46millionpeoplelivingintheUnitedStatesdidnothavehealthinsurancein200.Another1millionmaybeunderinsured.Thosesta7s7cspointtoinequi7esinaccesstoandtheaffordabilityofhealthcare.
Thehighrateofgrowthinannualhealthcarespendingstrainspublicandprivatebudgets.Theexcessivegrowthincostsalsoraisesseriousconcernsabouttheefficiencyandequityofthena7on’shealthcaresystem.
Accordingtoopinionpolls,morethanfouroutof10Americansratena7onalhealthcarequalityasonly“fair”or“poor,”andabouttwiceasmany—eightoutof10—aredissa7sfiedwiththetotalcostofhealthcare.Yetwhenitcomestotheirownhealthcareexperience,peoplearegenerallyposi7veaboutitsquality,andmostreportthattheyaresa7sfiedwiththeamounttheypay.
2
3
Thehealthcareeconomyinvolvestangledandcompe7ngincen7ves.MostAmericans(59percent)arecoveredthroughtheiremployers.Aspa7ents,theyusuallydonotdecidewhatservicestobuy.Becausepa7entsrarelypaythefullbilldirectly,theyhavefewopportuni7esandliVleapparentneedtocomparisonshop.Employers,whobuyhealthinsuranceonbehalfoftheiremployeesandareconcernedaboutworkers’welfare,mustalsopayaVen7ontotheirbalancesheets.Governments,inthedesignandopera7onofpublicprograms,mustrespondtopoli7calandeconomicpressuresaswellaspolicyimpera7ves.Thesuppliersofhealthcareservices—physicians,hospitals,andotherhealthcareproviders—mustbalancetheireconomicwellbeingwiththehealthneedsoftheirpa7entsandcustomers.
Committee for a Responsible Federal Budget
2
 
TheU.S.healthcaresystemiscomplex,inefficient,andhardtounderstandformostofitsstakeholders.Itencouragestheoveruseandmisuseofservices.Manypa7entsdonotreceivethetypeofwell‐coordinatedandmanagedcarethatprovidesthebestopportuni7esforgoodhealthoutcomes.Effortstocontaincostsinanyoneareacancausecostsinotherareastogrow.ThetruthisthatmostAmericanshavenoideahowmuchthecurrentsystemcoststhem.Un7ltheydo,theyhaveliVlereasontosupportthetypesofreformsrequiredtomakethena7on’shealthcaremoreaffordable—andtokeepitfromconsumingincreasinglygreatersharesofoureconomicresources.
Opportuni)es
HealthcarereformhastheaVen7onofWashingtonpolicymakers.ThePresidentandcongressionalleadersareengagedinseriouseffortstoenactlegisla7onthatwouldchangethehealthcaresystemtomeetthreegoals:beVerquality;improvedaccess;andlowercost.StudiesbytheCongressionalBudgetOffice(CBO)andotheranalystsindicatethatthereareopportuni7estodomorewithless.Healthcareresearchersbelievethatasignificantpor7onoftheresourcesdevotedtohealthcaremaynotcontributetoahealthierpopula7on.Ifso,reformscouldproducesizablesavingsforpublicandprivatebudgetswithoutharminghealthoutcomes.Clearly,controllingthegrowthinhealthcarecostsisessen7altopreventmorepeoplefromlosingtheirhealthinsurance.CBOes7matesthatifcostscon7nueontheircurrentpath,in10yearsthenumberofpeoplewithoutinsurancecouldgrowto54million,comparedwith45millionin2009.
4
Isitpossiblethatelimina7ngoveruse,underuse,andmisuseofhealthcareservicescouldreinincostgrowth
and 
freeupenoughresourcestocovertheen7repopula7on?Tonosmallextent,expandingaccessandcontrollingcostsarecompe7ngobjec7ves.Whiletherearesavingsopportuni7esfromuniversalcoverage,theywould,bythemselves,beinsufficienttopayfortheaddedcostsofbroadercoverage.AccordingtotheCBO,itwouldtake10yearsbeforesavingsfromcomprehensivehealthcarereformoffsetthecostofexpandedcoverage.Onlyinthefollowing10yearswouldsystemicchangesbelargeenoughto“bendthecurve,”orreduceoverallhealthspendingbelowitscurrent,unsustainabletrajectory—butnoteventhenifthecommitmenttoconstraincostsisnotmaintained.
5
NoEasyAnswers
Successfulhealthcarereformwillrequiremajorchangesinthewaymedicineisprac7cedintheUnitedStates,withcorrespondingchangesinthewaythena7onfinanceshealthcare.Thecountryreliesonapatchworkofpublicandprivateinsuranceandindividualpaymentstopayitshealthcarebills.Mostpeoplehavehealthinsurance,but15percentofthepopula7ondoesnot.
Committee for a Responsible Federal Budget
3
“...The health care system suffers from serious and pervasive problems; access to health care isconstrained by high and rising costs; and the quality of care is not consistent and must be improved, in order to improve the health of our citizens and our economic security.” 
Executive Order No. 13507 April 8. 2009

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