May 2011 final

Economic Indicators:

Challenges for the 7 Rivers

Region

I hardly have any idea about what I might say

today, so of course my employer and the

sponsors are not liable for what comes out of

my mouth.

Standard Disclaimer:

A Tip Jar

Do we have a health care

crisis?

We have a financing of health

care crisis.

0

10

20

30

40

50

1960 1980 2000 2020 2040 2060 2080

Total Health

Spending

Medicare and

Medicaid

Ryan’s Cap

Percent of GDP

0

10

20

30

40

50

1960 1980 2000 2020 2040 2060 2080

Total Health

Spending

Medicare and

Medicaid

Ryan’s Cap

Percent of GDP

$0

$150

$300

$450

$600

1960 1980 2010 2030

Th

ou

san

ds

Lifetime Medicare benefits Lifetime Medicare taxes

One-earner couple earning the average wage ($43,100 in 2010)

If you turn 65 in...

1960 1970 1980 1990 2000

National Compensation Measures as a Share of GDP, NIPA 1960-2006

Source: Kaiser Family Foundation analysis of data from the U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 1960-2006, Tables 1.1.5, 2.1, 6.11B, 6.11C, & 6.11D, 2008.

2006

Wages

Other Fringe Benefits and Payroll Taxes

51.8%

Private Group Health Insurance

0.6%

3.8%

45.6%

4.1%

6.7%

56.3% of GDP

56.4% of GDP

Employee Contributions Increasing

Higher Deductibles

Lower Wage Growth

Employer Based Insurance

The rise of corporate

wellness programs.

Can we rein in the growth

of health care costs?

Expenditures = Price X Quantity

Costs?

Not Likely.

Can we rein in the growth

of health care expenditures?

Cancer

Heart Disease

Stroke

Car Accident

Diabetes

The Race to Death

Cancer

Heart Disease

Stroke

Car Accident

Diabetes

The Race to Death

X

Cancer

Heart Disease

Stroke

Car Accident

Diabetes

The Race to Death

X

~Robin Hanson

“Cut half of all medical spending”

We have a “do something” bias.

And we don’t use information provided.

Can’t Trust the Consumers

- 10.0 20.0 30.0 40.0

Rising Incomes

Physician Salaries

Prescription Drugs

Government Intervention

Medical Malpractice/Litigation

Which is the most likely cause of rising health care costs...

$0

$2,000

$4,000

$6,000

$8,000

$10,000 $20,000 $30,000 $40,000 $50,000

To

tal e

xp

en

dit. o

n h

ea

lth

/ca

pita

, $

P

PP

GDP Per Capita $PPP

France

US

Korea

Copy other countries?

“If something can't go on forever, it

won't.“

~Herb Stein

We will be doing Health Care

reform for the rest of our lives.

~ Former CBO Director Doug Holtz-Eakin

Sorry to be such

a downer.

Thanks.