Health Care System Crisis

Growing Challenges Point to Need for
Fundamental Reform
---

Health Care System Crisis: Growing Challenges Point to Need for Fundamental Reform. Presented to the participants of the GAO Health Care Forum, held on January 13, 2004. The slides from this presentation will be finalized with the publication of the Forum's proceedings in Spring 2004 and will be periodically updated thereafter.

HEALTH CARE SYSTEM CRISIS: Significant Challenges Point to Need for Fundamental Reform

HEALTH CARE SYSTEM CRISIS: Significant Challenges Point to Need for Fundamental Reform

Federal Fiscal Challenges: Changing Composition of the Federal Budget

Composition of federal spending by budget function

Selected fiscal exposures: sources and examples (end of FY 2002)

Composition of federal spending as a share of GDP under baseline extended, assuming all tax cut provisions expire.

Composition of federal spending as a share of GDP, assuming discretionary spending grows with GDP after 2003 and all tax cut provisions expire.

Composition of federal spending as a share of GDP, assuming discretionary spending grows with GDP after 2003 and all expiring tax provisions are extended.

Health Care System Challenges

Health Care System Challenges: Costs

National health expenditures nearly doubled from 1990-2000.

Health expenditures will continue to absorb an increasing share of GDP.

The United States exceeds other industrialized nations in total health spending as a percentage of GDP.

Despite higher spending in the United States, resources devoted to health care are not always higher than in other countries.

Growth in health care spending, 1991-2001.

Composition of spending on personal health care services, selected years.

Change in spending per enrollee, selected public and private purchasers, 1992-2002.

The federal government acts through different tools.

Esitimated federal resources for health care by policy tool, fiscal year 2003

Health care is one of the nation’s top five tax expenditures in fiscal year 2003 (estimated).

Out-of-pocket spending has declined as a share of total health care spending

Spending on health insurance, as a share of average annual household spending on health care, has grown in the 1984-2001 period.

Public program obligations, already burdensome, will be unsustainable for future generations of Americans.

Medicare and Medicaid are projected to grow dramatically as a share of GDP.

Workers per HI beneficiary are expected to decline.

U.S. labor force growth will continue to decline.

Growth in elderly population will strain Medicare and Medicaid in coming decades.

Health Care System Challenges: Access

In 2001, 16 percent of the nonelderly population was uninsured.

In recent years, roughly 40 million Americans have been uninsured.

Significant gaps exist in health care access and coverage.

Simplified view of access to and gaps in health care coverage.

Chart Notes

Simplified view of coverage gaps by payer and benfit type

More states are undertaking Medicaid cost containment strategies in fiscal year 2003.

Health insurance may be out of reach for many individuals in poor health.

Health Care System Challenges: Quality

Life expectancy at birth has continued to rise in recent years.

Mortality rates have continued to decline in recent years.

Mortality rates have continued to decline in recent years for some leading causes of death.

The U.S. continues to lag other industrialized nations in reducing infant mortality rates.

The United States lags other industrialized nations in life expectancy at birth.

The United States exceeds other industrialized nations in potential years of life lost.

U.S. has fostered quality of care through investment and achievements in medical science.

Deaths due to medical errors in hospitals are higher than certain other causes of death in the U.S.

Patients often do not receive recommended treatments and procedures.

Patients often receive unnecessary treatments.

Obstacles to Meeting Health Care System Challenges

Obstacles to meeting challenges: health insurance issues

Obstacles to meeting challenges: information gaps

Obstacles to meeting challenges: market imperfections

Need for Framework to Evaluate Health Care System Reforms

Health care system ideals: incentives, transparency, and accountability

Conclusion: