• U.S. annual healthcare spending = $2.3 trillion
  • $7600 per person
  • 16% of the gross domestic product (GDP)
  • Annual spending is expected to reach $4.2 trillion in 2016, about 20% of GDP
• In 2007, health insurance premiums increased by 6.1%, two times the rate of inflation
  • Annual premium for an employer health plan covering a family of four ~ $12,100
  • Annual premium for single coverage ~ $4,400
• Over the past 30 years, health insurance premiums have increased by 300% after adjusting for inflation
  • During the same period, inflation-adjusted corporate profits increased 200% after taxes but the average hourly earnings of workers decreased 4%
    • This means the cost of higher premiums is passed on to employees in lower wages
• The health insurance industry diverts over $150 billion out of the system in profits and related activities each year
  • The industry increases profits by applying downward pressure on demand and access to care. This includes implementation of strategies to deny or restrict coverage and services to patients and reduce or deny reimbursement to providers for rendered services
  • The third party payment system has led to the consumption of 31% of U.S. healthcare dollars in needless administrative costs
  • Over $350 billion per year can be saved by eliminating or substantially reducing third party administrative hassles
• Physicians receive ~ %20 of healthcare dollars
  • The typical medical practice is %40-%70 overhead
  • On average, each physician spends ~ $50,000 per year on malpractice premiums
  • Many physicians owe $100,000-$300,000 in student loans
  • Physicians’ take-home income represents a very a small fraction of total healthcare spending despite the fact that they are in the frontlines of care
    • Reductions in reimbursement to physicians will not have any tangible effects on overall healthcare spending and will be counterproductive, leading to increased patient loads, further weakening of the doctor-patient relationship, and physician and patient disenchantment

One of the best solutions to rising healthcare costs and uneven access to care is to create direct channels of communication between doctors and patients by reducing the undue influence of the middlemen.

More info: Health Affairs, JAMA, WSJ

Filed under: Health Policy