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xmlns=\u0022http:\/\/www.w3.org\/1999\/xhtml\u0022 id=\u0022content-block-markup\u0022 xmlns:xhtml=\u0022http:\/\/www.w3.org\/1999\/xhtml\u0022\u003E\u003Cdiv class=\u0022article fulltext-view \u0022\u003E\u003Cspan class=\u0022highwire-journal-article-marker-start\u0022\u003E\u003C\/span\u003E\u003Cdiv class=\u0022section abstract\u0022 id=\u0022abstract-1\u0022\u003E\u003Ch2\u003ESummary\u003C\/h2\u003E\n            \u003Cp id=\u0022p-1\u0022\u003EThis article outlines the state of health care economics globally and in the United States and offered some reasons why we are often unhappy with our health care system.\u003C\/p\u003E\n         \u003C\/div\u003E\u003Cul class=\u0022kwd-group\u0022\u003E\u003Cli class=\u0022kwd\u0022\u003EPrevention \u0026amp; Screening\u003C\/li\u003E\u003C\/ul\u003E\u003Cul class=\u0022kwd-group clinical-trial\u0022\u003E\u003Cli class=\u0022kwd\u0022\u003EPrevention \u0026amp; Screening\u003C\/li\u003E\u003Cli class=\u0022kwd\u0022\u003ECardiology\u003C\/li\u003E\u003Cli class=\u0022kwd\u0022\u003EExclusive Article - For home page\u003C\/li\u003E\u003C\/ul\u003E\u003Cp id=\u0022p-2\u0022\u003EIn a keynote address, Uwe Reinhardt, PhD, Princeton University, Princeton, New Jersey, USA, outlined the state of health care economics globally and in the United States and offered some reasons why we are often unhappy with our health care system.\u003C\/p\u003E\u003Cp id=\u0022p-3\u0022\u003EDr Reinhardt noted that health care is expensive, more so in some countries than in others, particularly the United States. In 2011, Americans spent twice as much on health care compared with any other country. As an example, in other countries the cost of magnetic resonance imaging (MRI) ranges between $118 and $1110; in the United States it costs between $522 and $2900.\u003C\/p\u003E\u003Cp id=\u0022p-4\u0022\u003EWhen health spending increases, it displaces spending on other desirable things. The things that are given up represent the opportunity costs of added health care spending. These opportunity costs can include reductions in money spent for education, research and development, and infrastructure, less investment in cultural institutions and on internal and external security, as well as giving up things a family might want. One can calculate the net social value added by the health system by subtracting the opportunity costs from the gross value added by health care to patients. For example, between 2011 and 2012 the individual State General Fund spending on Medicaid increased by $15,862 million (based on 2011 data for enacted budgets), while at the same time, the money available for education, public assistance, and transportation decreased (based on 2012 governor-proposed budgets).\u003C\/p\u003E\u003Cp id=\u0022p-5\u0022\u003EOther reasons offered for our dissatisfaction with the US health care system are related to redistribution of cost and perceived inequality of compensation. In most modern countries, well-to-do people pay for the health care of less well-off people. Doctors are sometimes unhappy as they perceive inequality between their input and reward. They help restore health and often save lives, and yet, noted Dr Reinhardt, in general they are paid much less than people in other sectors whose contributions they perceive as having less value. Health care is one of the highest value-added sectors of the economy, because good health is really the most valuable thing to human beings. Although the work can be psychologically rewarding, it is often conducted in an environment full of strife and suspicion. Neither patients nor the public or private insurers who pay on behalf of patients really understand what doctors are doing, thus they often suspect that they are made to pay for unnecessary services.\u003C\/p\u003E\u003Cp id=\u0022p-6\u0022\u003EAt the moment, major economic forces are buffeting health care: slower economic growth, rising income inequality, anger at waste in health care, and poor health behavior. Per-capita health care spending grows more quickly when the overall economy is rapidly expanding. We are living in a time when economic growth is slowing, and future growth worldwide is projected to be lower than it has been in past decades. World trade and production have been decreasing since 2010, leading to decreases in gross domestic product (GDP) globally [International Monetary Fund (IMF). \u003Cem\u003EWorld Economic Outlook\u2014Recovery Strengthens, Remains Uneven\u003C\/em\u003E. Washington, April 2014]. This trend of slower growth is projected to continue out to 2025.\u003C\/p\u003E\u003Cp id=\u0022p-7\u0022\u003EThe IMF forecasts that China\u0027s inflation-adjusted GDP will continue to slow over the rest of the decade, down to nearly 6% from a high of 10.4% in 2010 [IMF. \u003Cem\u003EPeople\u0027s Republic of China\u003C\/em\u003E. IMF Country Report No. 14\/235. 2014]. Between 1965 and 2000, US GDP had an annual growth rate of 2%. Between 2009 and 2013, GDP growth rate was 1.3%. This will result in more pressure on revenues\u2014both through utilization and price pressures, for doctors and other health care providers.\u003C\/p\u003E\u003Cp id=\u0022p-8\u0022\u003EIncome inequality is growing worldwide, mainly because of technological change and globalization. In the emerging markets, inequality in income and wealth is particularly pronounced, but it is happening in Europe as well, especially in the United Kingdom. Annual medical costs are increasing rapidly and leading to strains on the average family. In 2001, the medical costs for a typical family of 4 was $8414\/y [Milliman, Inc. Milliman Medical Index. 2005]. Today that amount is $23,214, almost 3 times as much [Milliman, Inc. Milliman Medical Index. 2014]. If we look at household median income ($51,017), the difficulty of spending $23,000 on health care becomes obvious [DeNavas-Walt C et al. \u003Cem\u003EIncome, Poverty, and Health Insurance in the United States: 2012\u003C\/em\u003E. Washington, DC: US Census Bureau; Current Population Reports, P60-245. 2013]. Thus, the poor are being priced out of health treatment in every country.\u003C\/p\u003E\u003Cp id=\u0022p-9\u0022\u003EAlthough the US per capita GDP grows by roughly 1.5% per year, the bulk of that growth goes to the bank accounts of the highest top 10% of earners. Although this is a bit less applicable to Europe, the situation is similar in the emerging markets. The contract of social solidarity in health care that had been the dream in most highly developed countries after World War II will be severely tested in the years ahead-especially in the United States. Social solidarity has never existed in the emerging market economies and may never come to life there.\u003C\/p\u003E\u003Cp id=\u0022p-10\u0022\u003EMany are angry with what they see as waste in the health care system. In the United States, we spend more on health care than any other country, but our mean life expectancy is lower than most European countries (\u003Ca id=\u0022xref-fig-1-1\u0022 class=\u0022xref-fig\u0022 href=\u0022#F1\u0022\u003EFigure 1\u003C\/a\u003E).\u003C\/p\u003E\u003Cdiv id=\u0022F1\u0022 class=\u0022fig pos-float  odd\u0022\u003E\u003Cdiv class=\u0022highwire-figure\u0022\u003E\u003Cdiv class=\u0022fig-inline-img-wrapper\u0022\u003E\u003Cdiv class=\u0022fig-inline-img\u0022\u003E\u003Ca href=\u0022http:\/\/d282kpwvnogo5m.cloudfront.net\/content\/spmdc\/14\/30\/4\/F1.large.jpg?width=800\u0026amp;height=600\u0026amp;carousel=1\u0022 title=\u0022Life Expectancy in Years vs Per Capita Health Care Spending by Country\u0022 class=\u0022fragment-images colorbox-load\u0022 rel=\u0022gallery-fragment-images-597791459\u0022 data-figure-caption=\u0022Life Expectancy in Years vs Per Capita Health Care Spending by Country\u0022 data-icon-position=\u0022\u0022 data-hide-link-title=\u00220\u0022\u003E\u003Cimg class=\u0022fragment-image\u0022 alt=\u0022Figure 1.\u0022 src=\u0022http:\/\/d282kpwvnogo5m.cloudfront.net\/content\/spmdc\/14\/30\/4\/F1.medium.gif\u0022\/\u003E\u003C\/a\u003E\u003C\/div\u003E\u003C\/div\u003E\u003Cul class=\u0022highwire-figure-links inline\u0022\u003E\u003Cli class=\u00220 first\u0022\u003E\u003Ca href=\u0022http:\/\/d282kpwvnogo5m.cloudfront.net\/content\/spmdc\/14\/30\/4\/F1.large.jpg?download=true\u0022 class=\u0022highwire-figure-link highwire-figure-link-download\u0022 title=\u0022Download Figure 1.\u0022 data-icon-position=\u0022\u0022 data-hide-link-title=\u00220\u0022\u003EDownload figure\u003C\/a\u003E\u003C\/li\u003E\u003Cli class=\u00221\u0022\u003E\u003Ca href=\u0022http:\/\/d282kpwvnogo5m.cloudfront.net\/content\/spmdc\/14\/30\/4\/F1.large.jpg\u0022 class=\u0022highwire-figure-link highwire-figure-link-newtab\u0022 target=\u0022_blank\u0022 data-icon-position=\u0022\u0022 data-hide-link-title=\u00220\u0022\u003EOpen in new tab\u003C\/a\u003E\u003C\/li\u003E\u003Cli class=\u00222 last\u0022\u003E\u003Ca href=\u0022\/highwire\/powerpoint\/11904\u0022 class=\u0022highwire-figure-link highwire-figure-link-ppt\u0022 data-icon-position=\u0022\u0022 data-hide-link-title=\u00220\u0022\u003EDownload powerpoint\u003C\/a\u003E\u003C\/li\u003E\u003C\/ul\u003E\u003C\/div\u003E\u003Cdiv class=\u0022fig-caption attrib\u0022\u003E\u003Cspan class=\u0022fig-label\u0022\u003EFigure 1.\u003C\/span\u003E \n            \u003Cp id=\u0022p-11\u0022 class=\u0022first-child\u0022\u003ELife Expectancy in Years vs Per Capita Health Care Spending by Country\u003C\/p\u003E\n         \u003Cq class=\u0022attrib\u0022 id=\u0022attrib-1\u0022\u003EReproduced from OECD (2013), \u003Cem\u003EHealth at a Glance 2013: OECD Indicators\u003C\/em\u003E, OECD Publishing. \u003Ca href=\u0022http:\/\/dx.doi.org\/10.1787\/health_glance-2013-en\u0022\u003Ehttp:\/\/dx.doi.org\/10.1787\/health_glance-2013-en\u003C\/a\u003E. With permission from OECD Publishing.\u003C\/q\u003E\u003Cdiv class=\u0022sb-div caption-clear\u0022\u003E\u003C\/div\u003E\u003C\/div\u003E\u003C\/div\u003E\u003Cp id=\u0022p-12\u0022\u003EIn 2009, it was estimated that 31% of total health care spending ($2.5 trillion) in the United States was waste (\u003Ca id=\u0022xref-table-wrap-1-1\u0022 class=\u0022xref-table\u0022 href=\u0022#T1\u0022\u003ETable 1\u003C\/a\u003E) [Institute of Medicine (IOM). \u003Cem\u003EThe Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary\u003C\/em\u003E. Washington, DC: The National Academies Press, 2010]. This included unnecessary services, inefficiently delivered services, and excess administrative costs, which alone amounted to $190 billion. These administrative costs account for 25.3% of total US hospital expenditures, significantly higher than any other country [Himmelstein DU et al. \u003Cem\u003EHealth Aff (Millwood)\u003C\/em\u003E. 2014].\u003C\/p\u003E\u003Cdiv id=\u0022T1\u0022 class=\u0022table pos-float\u0022\u003E\u003Cdiv class=\u0022table-inline\u0022\u003E\u003Cdiv class=\u0022callout\u0022\u003E\u003Cspan\u003EView this table:\u003C\/span\u003E\u003Cul class=\u0022callout-links\u0022\u003E\u003Cli class=\u00220 first\u0022\u003E\u003Ca href=\u0022\/\u0022 class=\u0022table-expand-inline\u0022 data-table-url=\u0022\/highwire\/markup\/11905\/expansion?postprocessors=highwire_figures%2Chighwire_math%2Chighwire_inline_linked_media%2Chighwire_embed\u0026amp;table-expand-inline=1\u0022 html=\u00221\u0022 fragment=\u0022#\u0022 external=\u00221\u0022 data-icon-position=\u0022\u0022 data-hide-link-title=\u00220\u0022\u003EView inline\u003C\/a\u003E\u003C\/li\u003E\u003Cli class=\u00221\u0022\u003E\u003Ca href=\u0022\/highwire\/markup\/11905\/expansion?width=1000\u0026amp;height=500\u0026amp;iframe=true\u0026amp;postprocessors=highwire_figures%2Chighwire_math%2Chighwire_inline_linked_media\u0022 class=\u0022colorbox colorbox-load table-expand-popup\u0022 rel=\u0022gallery-fragment-tables\u0022 data-icon-position=\u0022\u0022 data-hide-link-title=\u00220\u0022\u003EView popup\u003C\/a\u003E\u003C\/li\u003E\u003Cli class=\u00222 last\u0022\u003E\u003Ca href=\u0022\/highwire\/powerpoint\/11905\u0022 class=\u0022highwire-figure-link highwire-figure-link-ppt\u0022 data-icon-position=\u0022\u0022 data-hide-link-title=\u00220\u0022\u003EDownload powerpoint\u003C\/a\u003E\u003C\/li\u003E\u003C\/ul\u003E\u003C\/div\u003E\u003C\/div\u003E\u003Cdiv class=\u0022table-caption\u0022\u003E\u003Cspan class=\u0022table-label\u0022\u003ETable 1.\u003C\/span\u003E \n            \u003Cp id=\u0022p-13\u0022 class=\u0022first-child\u0022\u003ESources of Estimated Excess Costs: United States 2009\u003C\/p\u003E\n         \u003Cdiv class=\u0022sb-div caption-clear\u0022\u003E\u003C\/div\u003E\u003C\/div\u003E\u003C\/div\u003E\u003Cp id=\u0022p-15\u0022\u003EReducing US per capita spending for hospital administration to Scottish or Canadian levels could save more than $150 billion (2011 dollars) with a simpler and less market-oriented payment scheme [Himmelstein DU et al. \u003Cem\u003EHealth Aff (Millwood)\u003C\/em\u003E. 2014]. This money could then be repurposed for medical innovations and other long-term benefits.\u003C\/p\u003E\u003Cp id=\u0022p-16\u0022\u003EThe United States is among the wealthiest nations in the world, but our life expectancy and health status lag behind those in other high-income countries, even though we spend more per person on health care than any other nation [National Research Council and Institute of Medicine. Woolf SH, Aron L, Eds. \u003Cem\u003EU.S. Health in International Perspective: Shorter Lives, Poorer Health\u003C\/em\u003E. Washington, DC: The National Academies Press, 2013]. Poor health behavior among US adults is a major factor in the paradox between the amount spent on health care and outcomes. For example, the percentage of US adults who are obese or who had diagnosed diabetes increased dramatically between 1994 and 2010 [Centers for Disease Control and Prevention (CDC). Diabetes Public Health Resource. \u003Ca href=\u0022http:\/\/www.cdc.gov\/diabetes\/statistics\/comp\/fig7_overweight.htm\u0022\u003Ehttp:\/\/www.cdc.gov\/diabetes\/statistics\/comp\/fig7_overweight.htm\u003C\/a\u003E. Accessed October 2, 2014].\u003C\/p\u003E\u003Cp id=\u0022p-17\u0022\u003EDr Reinhardt concluded that, while poor health behavior actually contributes to the increase of health care income, no doctors want their patients to be unhealthy. Health care consumption is important when determining the health status of any nation and consumption can be affected by many factors including the economic status of its people, the environment, and the educational system.\u003C\/p\u003E\u003Cul class=\u0022copyright-statement\u0022\u003E\u003Cli class=\u0022fn\u0022 id=\u0022copyright-statement-1\u0022\u003E\u00a9 2014 MD Conference Express\u00ae\u003C\/li\u003E\u003C\/ul\u003E\u003Cspan class=\u0022highwire-journal-article-marker-end\u0022\u003E\u003C\/span\u003E\u003C\/div\u003E\u003Cspan id=\u0022related-urls\u0022\u003E\u003C\/span\u003E\u003C\/div\u003E\u003Ca href=\u0022http:\/\/mdc.sagepub.com\/content\/14\/30\/4.abstract\u0022 class=\u0022hw-link hw-link-article-abstract\u0022 data-icon-position=\u0022\u0022 data-hide-link-title=\u00220\u0022\u003EView Summary\u003C\/a\u003E\u003C\/div\u003E  \u003C\/div\u003E\n\n  \n  \u003C\/div\u003E\n\u003C\/div\u003E\n  \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/div\u003E\u003Cscript type=\u0022text\/javascript\u0022 src=\u0022http:\/\/mdc.sagepub.com\/sites\/all\/modules\/highwire\/highwire\/plugins\/highwire_markup_process\/js\/highwire_figures.js?nzlwy2\u0022\u003E\u003C\/script\u003E\n\u003Cscript type=\u0022text\/javascript\u0022 src=\u0022http:\/\/mdc.sagepub.com\/sites\/all\/modules\/highwire\/highwire\/plugins\/highwire_markup_process\/js\/highwire_openurl.js?nzlwy2\u0022\u003E\u003C\/script\u003E\n\u003Cscript type=\u0022text\/javascript\u0022 src=\u0022http:\/\/mdc.sagepub.com\/sites\/all\/modules\/highwire\/highwire\/plugins\/highwire_markup_process\/js\/highwire_tables.js?nzlwy2\u0022\u003E\u003C\/script\u003E\n\u003C\/body\u003E\u003C\/html\u003E"}