Health Reform and the Economy by the Numbers

Health care spending is out of control. Spending on health care in 2008 made up 17 percent of the U.S. gross domestic product, up from just 6 percent in 1965. And national health care spending is expected to account for 25 percent of our GDP by 2025. Without reform, federal spending on Medicare and Medicaid alone will exceed the entire defense budget by 2019. Health care spending will be higher than total spending on all domestic discretionary programs by that year, and it will even surpass spending on Social Security.

Health care reform will not only make care available to more Americans; it stands to save taxpayers and the government billions of dollars while providing an infusion of jobs into the economy.

Reforming the way health care is delivered will translate into real savings and better care.

$2 trillion: Amount we can save over the next 10 years by promoting cost-saving innovations and reducing waste and inefficiencies.

$196 billion: Administrative savings associated with technology and payment reform.

$299 billion: Estimated savings as a result of increased use of preventative care, better management of chronic illness, and reduction in medical errors leading to fewer and less expensive acute care episodes.

Medicare reform, one major component of the health care reform bills now being considered in Congress, could save billions over the next 10 years.

The Congressional Budget Office projects that in 2020 outlays for Medicare and Medicaid—the two largest health care programs—will be a full 2 percentage points of GDP higher than they were in 2008.

14.2 percent: Medicare’s share of the federal budget in 2009, up from 13 percent in 2008. Medicare also went from comprising 3.2 percent of GDP in 2008 to 3.5 percent in 2009.

$499 billion: Federal Medicare spending in 2009. If no health reform is enacted, expected federal spending on Medicare will nearly double, totaling $1 trillion in 2020.

14 percent: The amount by which Medicare overpays private insurers in the Medicare Advantage program. Taxpayers will save an estimated $175 billion over the next 10 years by reducing Medicare overpayments to private insurers.

$17.4 billion: The estimated cost of unplanned rehospitalizations of Medicare beneficiaries. Approximately one-fifth of Medicare beneficiaries who had been discharged from a hospital are unexpectedly readmitted within 30 days.

$12 billion: Estimated savings to taxpayers over the next 10 years by creating incentives tied to the quality of care for Medicare beneficiaries.

$38 billion: Estimated Medicare savings over the next 10 years by realigning Medicare’s payments to teaching hospitals to track actual costs of physician training and to encourage primary care training. Medicare pays teaching hospitals more than twice the cost of indirect expenses incurred from training physicians attributable to Medicare patients.

Health care reform translates into new jobs for Americans who badly need them.

400,000: Number of jobs that could be created per year if health care reform is enacted that reduces the growth of insurance premiums.

120,000: Number of jobs added to the economy for every 10 percent reduction in excess health care cost growth.

Our current health care system is wasteful and inefficient, and many commonly used procedures rack up costs without providing any benefit to the sick and injured.

$800 billion: How much waste and inefficiencies in our health care system cost us each year.

One-third or more: The estimated number of treatments and procedures performed in the United States that have no proven benefits.

Between $18 billion and $33 billion: How much the overuse of radiology services costs Americans each year.

$550 million: How much the overprescription of antibiotics costs the nation each year.

$700 million: How much we could save each year by eliminating unnecessary heart stents.

More than $2 billion: How much we spend each year on arthroscopic knee surgery for people with osteoarthritis—a surgery we now know does not help these individuals.

Up to 70 percent: Percentage of hysterectomies performed that have been judged as inappropriate by experts.

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