Restructure Medicare & Medicaid: Isolate and Address the Key Drivers
of Rising Healthcare Costs
USA Total Healthcare Spending Has Risen Faster than Peers’ (France, UK and Japan)*
Total Healthcare Spending as % of GDP
1970 ,
vi n a il 5% 11% A ~ 5% 0 ZS 0 0 0 8% 5% 0 Note: *Ranked by total healthcare spending in 2007; 1970 comparable data not available for Germany because of reunification. Source: OECD, U.S. Department of Health & Human Services, Kaiser Family Foundation. www.kpcb.com ne. at Might a Turnaround Expert Consider? B kpeb USA Inc. | What Might a T dE Consider? 279
Restructure Medicare & Medicaid: Incentives Support Healthcare Cost Growth
¢ Consumers demand healthcare services with less regard for the full economic impact as they pay only a fraction of the true cost out of pocket.
¢ Healthcare service providers are generally rewarded for pushing more services through the system, largely with relatively less regard for cost effectiveness.
Bottom line = Powerful forces encourage spending
related to social / economic / legal issues throughout the healthcare system.
KP Source: Doug Simpson, Morgan Stanley Healthcare Research. www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 280
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