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Exhibit ES-4. Cumulative Impact on National Health Expenditures (NHE) of Insurance Connector Approach
Plus Selected Individual Options
$31
$1,554
$1,258
$997
$770
$573
$407
$84
$163$272
$0
$400
$800
$1,200
$1,600
$2,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Cumulative impact
Annual net impact
Dollars in billions
Note: Selected individual options include improved information, payment reform, and public health.Source: Based on projected expenditures absent policy change and Lewin estimates.
Savin
gs
to N
HE
Exhibit ES-5. Total National Health Expenditures, 2008–2017 Projected and Various Scenarios
3.0
3.2
3.4
3.6
3.9
4.1
4.4
2.3
2.8
2.6
2.4
2.9
3.0
3.2
3.4
3.7
3.9
4.1
2.7
3.6
3.4
3.3
3.1
3.0
2.8
2.6
2.52.4
2.9
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Projected under current system
Insurance Connector plus selectedindividual options*
Spending at current proportion (16.2%)of GDP
* Selected individual options include improved information, payment reform, and public health.Source: Based on projected expenditures absent policy change and Lewin estimates.
Dollars in trillions
Exhibit 1. Projected National Health Expenditures (NHE)by Payer Source, 2005–2016
* Consumer payments include out-of-pocket payments and private health insurance.Source: J. A. Poisal, C. Truffer, S. Smith et al., “Health Spending Projections Through 2016: Modest ChangesObscure Part D’s Impact,” Health Affairs Web Exclusive (Feb. 21, 2007):w242–w253.
Projected
Total 2005 2011 2016
NHE (in billions) $1,987.7 $2,966.4 $4,136.9
NHE as percent of GDP 16.0% 17.5% 19.6%
Payer Source
Private $1,085.0 $1,566.1 $2,123.3
Consumer Payments* 943.8 1,347.0 1,811.9
Other Private Funds 141.2 219.1 311.4
Public 902.7 1,400.3 2,013.6
Federal 643.7 1027.4 1,486.5
State and Local 259.0 372.9 527.1
Exhibit 2. International Comparison of Health Spending,1980–2005
0
1000
2000
3000
4000
5000
6000
7000 United StatesGermanyCanadaFranceAustraliaUnited Kingdom
0
2
4
6
8
10
12
14
16
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
United StatesGermanyCanadaFranceAustraliaUnited Kingdom
Source: OECD Health Data 2007.
Average spending on healthper capita ($US PPP)
Total health expendituresas percent of GDP
Exhibit 3. Financial Burden for Low- and Middle-Income Families Is Increasing
2624
16
7
33
24 23
10
0
25
50
<100% FPL 100% to <200% FPL 200% to <400% FPL 400%+ FPL
1996 2003
Percent of nonelderly adults spending 10% or more of disposable incomeon family out-of-pocket medical costs and premiums
Note: Financial burden includes out-of-pocket costs for premiums for private insurance and other health services.Source: J. S. Banthin and D. M. Bernard, “Changes in Financial Burdens for Health Care: National Estimates for thePopulation Younger than 65 Years,” Journal of the American Medical Association, Dec. 13, 2006 296(22):2712–19.
Exhibit 4. One-Third of Adults Ages 19–64 Are Uninsuredor Underinsured, as Are Two-Thirds of Low-Income Adults
6583
32
19
4
9
26
49
13
0%
20%
40%
60%
80%
100%
Total 200% of poverty or more Under 200% of poverty
Uninsured during year
Underinsured*
Insured, not underinsured
* Underinsured defined as insured all year but experienced one of the following: medical expenses equaled 10% or more of income; medical expenses equaled 5% or more of incomes if low-income (<200% of poverty); or deductibles equaled 5% or more of income.Data: 2003 Commonwealth Fund Biennial Health Insurance Survey (Schoen et al. 2005b).Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006.
Percent
Exhibit 5. Growth in National Health Expenditures (NHE)Under Various Scenarios
Source: The Commonwealth Fund; data from J. A. Poisal, C. Truffer, S. Smith et al., “Health Spending ProjectionsThrough 2016: Modest Changes Obscure Part D’s Impact,” Health Affairs Web Exclusive (Feb. 21, 2007):w242–w253.
NHE, in trillions of dollars
7
1.75
2.00
2.25
2.50
2.75
3.00
3.25
3.50
3.75
4.00
4.25
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Baseline NHE
One-time savings scenario
Slowing trend scenario
Reduced level & trend scenario
$1.99 Tin 2005
Cumulative savings projections to 2016:One-time savings of 5%: $1.56 trillionSlowing trend by 1% annually: $1.72 trillionCombination of one-time savings and slowing trend: $3.19 trillion
$4.14 T
$3.93 T
$3.77 T
$3.58 T
(19.6% GDP)
(18.6% GDP)
(17.8% GDP)
(16.9% GDP)
Exhibit 8. Distribution of 10-Year Impact on Spendingfrom Promoting Health Information Technology
-$87.8
$0.2
-$19.3 -$27.2
-$41.4
-$100
-$80
-$60
-$40
-$20
$0
$20
$40
Systemwide Federal
Gov't
State and
Local Gov't
Private
Payer
Households
Dollars in billions
SA
VIN
GS C
OSTS
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Exhibit 9. Distribution of 10-Year Impact on Spendingfrom Center for Medical Effectiveness
and Health Care Decision-Making
-$367.5
-$97.7-$49.1
-$107.1-$113.6
-$400
-$300
-$200
-$100
$0
$100
$200
Systemwide Federal
Gov't
State and
Local Gov't
Private
Payer
Households
Dollars in billions
SA
VIN
GS C
OSTS
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Exhibit 10. Distribution of 10-Year Impact on Spendingfrom Patient Shared Decision-Making
-$9.2
-$7.6
-$0.4-$0.2-$1.2
-$10
-$8
-$6
-$4
-$2
$0
$2
Systemwide Federal
Gov't
State and
Local Gov't
Private
Payer
Households
Dollars in billions
SA
VIN
GS C
OSTS
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
-$190.5
-$68.2-$48.9-$38.5-$34.9
-$250
-$200
-$150
-$100
-$50
$0
$50
$100
Systemwide Federal
Gov't
State and
Local Gov't
Private
Payer
Households
Exhibit 11. Distribution of 10-Year Impact on Spendingfrom Reducing Tobacco Use
Dollars in billions
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
SA
VIN
GS C
OSTS
-$282.6
-$72.5-$101.2
-$57.2-$51.8
-$400
-$300
-$200
-$100
$0
$100
Systemwide Federal
Gov't
State and
Local Gov't
Private
Payer
Households
Exhibit 12. Distribution of 10-Year Impact on Spendingfrom Reducing Obesity
Dollars in billions
SA
VIN
GS C
OSTS
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Exhibit 13. Distribution of 10-Year Impact on Spendingfrom Positive Incentives for Health
-$19.0
-$11.5
-$4.5 -$5.2
$2.2
-$25
-$20
-$15
-$10
-$5
$0
$5
$10
Systemwide Federal
Gov't
State and
Local Gov't
Private
Payer
Households
Dollars in billions
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
SA
VIN
GS C
OSTS
Exhibit 14. Distribution of 10-Year Impact on Spendingfrom Hospital Pay-for-Performance
-$34.0
-$4.1-$1.7-$0.8
-$27.4
-$40
-$30
-$20
-$10
$0
$10
$20
Systemwide Federal Gov't State and
Local Gov't
Private Payer Households
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Dollars in billions
SA
VIN
GS C
OSTS
Exhibit 15. Distribution of 10-Year Impact on Spendingfrom Episode-of-Care Payment
-$229.2
-$377.4
$39.7$90.1
$18.3
-$500
-$400
-$300
-$200
-$100
$0
$100
$200
Systemwide Federal
Gov't
State and
Local Gov't
Private
Payer
Households
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Dollars in billions
SA
VIN
GS C
OSTS
Exhibit 16. Distribution of 10-Year Impact on Spendingfrom Strengthening Primary Care and Care Coordination
-$9.1
-$193.5
-$156.9
-$4.1-$23.4
-$250
-$200
-$150
-$100
-$50
$0
$50
$100
Systemwide Federal
Gov't
State and
Local Gov't
Private
Payer
Households
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Dollars in billions
SA
VIN
GS C
OSTS
Exhibit 17. Distribution of 10-Year Impact on Spending from Limit on Federal Tax Exemptions for Premium Contributions
-$131.1
-$55.2-$19.3
$129.7
-$186.2-$250
-$200
-$150
-$100
-$50
$0
$50
$100
$150
$200
Systemwide Federal
Gov't
State and
Local Gov't
Private
Payer
Households
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Dollars in billions
SA
VIN
GS C
OSTS
Exhibit 18. Distribution of 10-Year Impact on Spendingfrom Reset Benchmark Rates for Medicare Advantage Plans
-$49.6
-$124.0
$0.0 $0.0
$74.4
-$150
-$100
-$50
$0
$50
$100
$150
$200
Systemwide Federal
Gov't
State and
Local Gov't
Private
Payer
Households
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Dollars in billions
SA
VIN
GS C
OSTS
Exhibit 19. Distribution of 10-Year Impact on Spendingfrom Competitive Bidding
-$104.2
-$282.5
$0.0 $0.0
$178.3
-$400
-$300
-$200
-$100
$0
$100
$200
Systemwide Federal
Gov't
State and
Local Gov't
Private
Payer
Households
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Dollars in billions
SA
VIN
GS C
OSTS
Exhibit 20. Distribution of 10-Year Impact on Spendingfrom Negotiated Prescription Drug Prices
-$43.4
$7.5$17.1
$3.5
-$71.5
-$100
-$80
-$60
-$40
-$20
$0
$20
$40
Systemwide Federal
Gov't
State and
Local Gov't
Private
Employer
Households
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Dollars in billions
SA
VIN
GS C
OSTS
Exhibit 21. Distribution of 10-Year Impact on Spendingfrom All-Payer Provider Payment Methods and Rates
-$122.4
$0.0 $0.0
-$17.7
-$104.7
-$140
-$120
-$100
-$80
-$60
-$40
-$20
$0
$20
$40
$60
Systemwide Federal
Gov't
State and
Local Gov't
Private
Payer
Households
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Dollars in billions
SA
VIN
GS C
OSTS
Exhibit 22. Distribution of 10-Year Impact on Spendingfrom Limit on Payment Updates in High-Cost Areas
-$157.8
-$259.7
$62.1$27.3$12.6
-$300
-$250
-$200
-$150
-$100
-$50
$0
$50
$100
$150
Systemwide Federal Gov't State and
Local Gov't
Private Payer Households
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Dollars in billions
SA
VIN
GS C
OSTS
Exhibit 23. Cumulative Changes in AnnualNational Health Expenditures, 2000–2007
0
25
50
75
100
125
2000 2001 2002 2003 2004 2005 2006* 2007*
Net cost of private health insurance administration
Family private health insurance premiums
Personal health care
Workers earnings
Notes: Data on premium increases reflect the cost of health insurance premiums for a family of four/the average premium increase is weighted by covered workers. * 2006 and 2007 private insurance administration and personal health care spending growth rates are projections.Sources: A. Catlin, C. Cowan, S. Heffler et al., “National Health Spending in 2005: The Slowdown Continues,” Health Affairs, Jan./Feb. 2007 26(1):143–53; J. A. Poisal, C. Truffer, S. Smith et al., “Health Spending Projections Through 2016: Modest Changes Obscure Part D’s Impact,” Health Affairs Web Exclusive (Feb. 21, 2007):w242–w253; Henry J. Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits Annual Surveys, 2000–2007 (Washington, D.C.: KFF/HRET).
109%
65%
91%
24%
Percent change
Exhibit 24. Cumulative Impact on National HealthExpenditures (NHE) of Insurance Connector Approach
Plus Selected Individual Options
$31
$1,554
$1,258
$997
$770
$573
$407
$84
$163$272
$0
$400
$800
$1,200
$1,600
$2,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Cumulative impact
Annual net impact
Dollars in billions
Note: Selected individual options include improved information, payment reform, and public health.Source: Based on projected expenditures absent policy change and Lewin estimates.
Savin
gs
to N
HE
Exhibit 25. Net Federal Spending withInsurance Connector Alone Compared with Net Federal
with Insurance Plus Savings Options
$50$109
$195
$10$13$31 $0
$50
$100
$150
$200
$250
2008 2012 2017
Federal spending offset
Net federal with insurance plus savings options*Dollars in billions
* Selected options include improved information, payment reform, and public health.Source: Lewin Group modeling estimates of insurance option alone or insurance in combination with savings optionscompared with projected federal spending under current policies.
$82Insurance Alone
$122Insurance Alone
$205Insurance Alone
Exhibit 26. Total National Health Expenditures, 2008–2017 Projected and Various Scenarios
3.0
3.2
3.4
3.6
3.9
4.1
4.4
2.3
2.8
2.6
2.4
2.9
3.0
3.2
3.4
3.7
3.9
4.1
2.7
3.6
3.4
3.3
3.1
3.0
2.8
2.6
2.52.4
2.9
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Projected under current system
Insurance Connector plus selectedindividual options*
Spending at current proportion (16.2%)of GDP
* Selected individual options include improved information, payment reform, and public health.Source: Based on projected expenditures absent policy change and Lewin estimates.
Dollars in trillions
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