Exhibit ES-4. Cumulative Impact on National Health
Expenditures (NHE) of Insurance Connector Approach
Plus Selected Individual Options
Dollars in billions
$2,000
$1,554
Cumulative impact
Annual net impact
$1,258
Savings to NHE
$1,600
$997
$1,200
$770
$573
$800
$163
$400
$0
$31
2008
$272
$407
$84
2009
2010
2011
2012
2013
2014
2015
Note: Selected individual options include improved information, payment reform, and public health.
Source: Based on projected expenditures absent policy change and Lewin estimates.
2016
2017
Exhibit ES-5. Total National Health Expenditures, 2008–2017
Projected and Various Scenarios
Dollars in trillions
4.4
$4.5
Projected under current system
$4.0
Insurance Connector plus selected
individual options*
4.1
Spending at current proportion (16.2%)
of GDP
$3.5
3.7
3.4
3.2
$3.0
2.8
2.6
2.4
$2.5
2.3
2.7
2.9
3.2
3.0
3.9
3.6
3.4
3.0
4.1
3.9
3.6
3.4
3.3
3.1
3.0
2.9
2.8
2.6
2.5
2.4
$2.0
2007
2008
2009
2010
2011
2012
2013
2014
* Selected individual options include improved information, payment reform, and public health.
Source: Based on projected expenditures absent policy change and Lewin estimates.
2015
2016
2017
Exhibit 1. Projected National Health Expenditures (NHE)
by Payer Source, 2005–2016
Projected
Total
2005
2011
2016
$1,987.7
$2,966.4
$4,136.9
16.0%
17.5%
19.6%
$1,085.0
$1,566.1
$2,123.3
Consumer Payments*
943.8
1,347.0
1,811.9
Other Private Funds
141.2
219.1
311.4
902.7
1,400.3
2,013.6
Federal
643.7
1027.4
1,486.5
State and Local
259.0
372.9
527.1
NHE (in billions)
NHE as percent of GDP
Payer Source
Private
Public
* Consumer payments include out-of-pocket payments and private health insurance.
Source: J. A. Poisal, C. Truffer, S. Smith et al., “Health Spending Projections Through 2016: Modest Changes
Obscure Part D’s Impact,” Health Affairs Web Exclusive (Feb. 21, 2007):w242–w253.
Exhibit 2. International Comparison of Health Spending,
1980–2005
Average spending on health
per capita ($US PPP)
7000
6000
Total health expenditures
as percent of GDP
16
United States
Germany
Canada
France
Australia
United Kingdom
14
12
5000
10
4000
8
3000
6
2000
4
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
0
Source: OECD Health Data 2007.
2
0
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
1000
United States
Germany
Canada
France
Australia
United Kingdom
Exhibit 3. Financial Burden for Low- and Middle-Income Families
Is Increasing
Percent of nonelderly adults spending 10% or more of disposable income
on family out-of-pocket medical costs and premiums
50
1996
2003
33
26
25
24
24
23
16
7
10
0
<100% FPL
100% to <200% FPL 200% to <400% FPL
400%+ FPL
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 the
Population 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 Uninsured
or Underinsured, as Are Two-Thirds of Low-Income Adults
Uninsured during year
Underinsured*
Percent
Insured, not underinsured
100%
80%
26
13
4
49
9
60%
40%
65
20%
83
19
32
0%
Total
200% of poverty or more Under 200% of poverty
* 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.
Exhibit 5. Growth in National Health Expenditures (NHE)
Under Various Scenarios
NHE, in trillions of dollars
4.25
4.00
3.75
3.50
Cumulative savings projections to 2016:
One-time savings of 5%: $1.56 trillion
Slowing trend by 1% annually: $1.72 trillion
Combination of one-time savings and
slowing trend: $3.19 trillion
$4.14 T (19.6% GDP)
$3.93 T (18.6% GDP)
$3.77 T (17.8% GDP)
$3.58 T (16.9% GDP)
3.25
3.00
2.75
2.50
2.25
2.00
$1.99 T
in 2005
Baseline NHE
One-time savings scenario
Slowing trend scenario
Reduced level & trend scenario
1.75
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: The Commonwealth Fund; data from 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.
7
Exhibit 8. Distribution of 10-Year Impact on Spending
from Promoting Health Information Technology
COSTS
Dollars in billions
$40
$20
$0.2
$0
-$20
-$19.3
SAVINGS
-$40
-$27.2
-$41.4
-$60
-$80
-$100
-$87.8
Systemwide
Federal
State and
Private
Gov't
Local Gov't
Payer
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Households
Exhibit 9. Distribution of 10-Year Impact on Spending
from Center for Medical Effectiveness
and Health Care Decision-Making
COSTS
Dollars in billions
$200
$100
$0
-$49.1
SAVINGS
-$100
-$113.6
-$200
-$97.7
-$107.1
Households
-$300
-$400
-$367.5
Systemwide
Federal
State and
Private
Gov't
Local Gov't
Payer
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Exhibit 10. Distribution of 10-Year Impact on Spending
from Patient Shared Decision-Making
COSTS
Dollars in billions
$2
$0
-$0.2
-$0.4
Federal
State and
Private
Gov't
Local Gov't
Payer
-$2
-$1.2
SAVINGS
-$4
-$6
-$8
-$10
-$7.6
-$9.2
Systemwide
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Households
Exhibit 11. Distribution of 10-Year Impact on Spending
from Reducing Tobacco Use
Dollars in billions
COSTS
$100
$50
$0
-$50
-$38.5
Federal
State and
Private
Gov't
Local Gov't
Payer
-$68.2
-$100
SAVINGS
-$34.9
-$48.9
-$150
-$200
-$190.5
-$250
Systemwide
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Households
Exhibit 12. Distribution of 10-Year Impact on Spending
from Reducing Obesity
COSTS
Dollars in billions
$100
$0
-$100
-$51.8
-$57.2
Federal
State and
Private
Gov't
Local Gov't
Payer
-$101.2
-$72.5
SAVINGS
-$200
-$300
-$282.6
-$400
Systemwide
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Households
Exhibit 13. Distribution of 10-Year Impact on Spending
from Positive Incentives for Health
COSTS
Dollars in billions
$10
$2.2
$5
$0
-$5
SAVINGS
-$10
-$25
-$5.2
Households
-$11.5
-$15
-$20
-$4.5
-$19.0
Systemwide
Federal
State and
Private
Gov't
Local Gov't
Payer
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Exhibit 14. Distribution of 10-Year Impact on Spending
from Hospital Pay-for-Performance
COSTS
Dollars in billions
$20
$10
$0
-$0.8
SAVINGS
-$10
-$1.7
-$4.1
-$20
-$30
-$40
-$27.4
-$34.0
Systemwide Federal Gov't
State and
Local Gov't
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Private Payer Households
Exhibit 15. Distribution of 10-Year Impact on Spending
from Episode-of-Care Payment
COSTS
Dollars in billions
$200
$90.1
$100
$18.3
$39.7
$0
-$100
SAVINGS
-$200
-$300
-$229.2
-$400
-$377.4
-$500
Systemwide
Federal
State and
Private
Gov't
Local Gov't
Payer
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Households
Exhibit 16. Distribution of 10-Year Impact on Spending
from Strengthening Primary Care and Care Coordination
COSTS
Dollars in billions
$100
$50
$0
-$4.1
-$9.1
Federal
State and
Private
Gov't
Local Gov't
Payer
-$50
-$23.4
SAVINGS
-$100
-$150
-$200
-$250
-$156.9
-$193.5
Systemwide
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Households
Exhibit 17. Distribution of 10-Year Impact on Spending from
Limit on Federal Tax Exemptions for Premium Contributions
COSTS
Dollars in billions
$200
$129.7
$150
$100
$50
$0
SAVINGS
-$50
-$19.3
-$100
-$150
-$200
-$55.2
-$131.1
-$186.2
-$250
Systemwide
Federal
State and
Private
Gov't
Local Gov't
Payer
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Households
Exhibit 18. Distribution of 10-Year Impact on Spending
from Reset Benchmark Rates for Medicare Advantage Plans
COSTS
Dollars in billions
$200
$150
$74.4
$100
$50
$0.0
$0.0
Federal
State and
Private
Gov't
Local Gov't
Payer
SAVINGS
$0
-$50
-$100
-$49.6
-$150
-$124.0
Systemwide
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Households
Exhibit 19. Distribution of 10-Year Impact on Spending
from Competitive Bidding
COSTS
Dollars in billions
$178.3
$200
$100
$0.0
$0.0
Federal
State and
Private
Gov't
Local Gov't
Payer
$0
SAVINGS
-$100
-$200
-$104.2
-$300
-$282.5
-$400
Systemwide
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Households
Exhibit 20. Distribution of 10-Year Impact on Spending
from Negotiated Prescription Drug Prices
COSTS
Dollars in billions
$40
$17.1
$20
$3.5
$7.5
$0
-$20
SAVINGS
-$40
-$60
-$43.4
-$80
-$71.5
-$100
Systemwide
Federal
State and
Private
Gov't
Local Gov't
Employer
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Households
Exhibit 21. Distribution of 10-Year Impact on Spending
from All-Payer Provider Payment Methods and Rates
COSTS
Dollars in billions
$60
$40
$20
$0.0
$0.0
$0
-$20
-$17.7
-$40
SAVINGS
-$60
-$80
-$100
-$104.7
-$120
-$140
-$122.4
Systemwide
Federal
State and
Private
Gov't
Local Gov't
Payer
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Households
Exhibit 22. Distribution of 10-Year Impact on Spending
from Limit on Payment Updates in High-Cost Areas
COSTS
Dollars in billions
$150
$100
$62.1
$50
$12.6
$27.3
$0
-$50
SAVINGS
-$100
-$150
-$200
-$157.8
-$250
-$259.7
-$300
Systemwide
Federal Gov't
State and
Local Gov't
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.
Private Payer
Households
Exhibit 23. Cumulative Changes in Annual
National Health Expenditures, 2000–2007
Percent change
125
Net cost of private health insurance administration
100
Family private health insurance premiums
109%
Personal health care
91%
Workers earnings
75
65%
50
25
24%
0
2000
2001
2002
2003
2004
2005
2006*
2007*
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).
Exhibit 24. Cumulative Impact on National Health
Expenditures (NHE) of Insurance Connector Approach
Plus Selected Individual Options
Dollars in billions
$2,000
$1,554
Cumulative impact
Annual net impact
$1,258
Savings to NHE
$1,600
$997
$1,200
$770
$573
$800
$163
$400
$0
$31
2008
$272
$407
$84
2009
2010
2011
2012
2013
2014
2015
Note: Selected individual options include improved information, payment reform, and public health.
Source: Based on projected expenditures absent policy change and Lewin estimates.
2016
2017
Exhibit 25. Net Federal Spending with
Insurance Connector Alone Compared with Net Federal
with Insurance Plus Savings Options
Federal spending offset
Dollars in billions
Net federal with insurance plus savings options*
$250
$205
Insurance Alone
$200
$150
$100
$50
$0
$82
Insurance Alone
$50
$31
2008
$122
Insurance Alone
$195
$109
$13
$10
2012
2017
* 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 options
compared with projected federal spending under current policies.
Exhibit 26. Total National Health Expenditures, 2008–2017
Projected and Various Scenarios
Dollars in trillions
4.4
$4.5
Projected under current system
$4.0
Insurance Connector plus selected
individual options*
4.1
Spending at current proportion (16.2%)
of GDP
$3.5
3.7
3.4
3.2
$3.0
2.8
2.6
2.4
$2.5
2.3
2.7
2.9
3.2
3.0
3.9
3.6
3.4
3.0
4.1
3.9
3.6
3.4
3.3
3.1
3.0
2.9
2.8
2.6
2.5
2.4
$2.0
2007
2008
2009
2010
2011
2012
2013
2014
* Selected individual options include improved information, payment reform, and public health.
Source: Based on projected expenditures absent policy change and Lewin estimates.
2015
2016
2017