Okay, so I have been talking to you a little bit about the fact that there are some basic dilemmas, that lead to government responses in health care, and that these dilemmas do not cause the same responses in every country. There are vast differences across countries. One of the most important and salient differences between the United States, and other countries in health care is by orders of magnitude, the United States spends much more on health care than any other country. The differences between our spending and health care, and other advanced nations is not a minor one, nor is it one that can easily be attributed to our greater wealth. If you look on the right you can see that as a percentage of GDP, the US currently spends something like 18% of GDP on health care. That means for every dollar that is produced in the American economy, 18 cents of it is allocated to health care, and that has gone up dramatically over time as recently as 1980, we were only around 9%. And our level of health care spending is on the order of twice as much, of other advanced wealthy nations including Netherlands, France, Germany and so on. This is part of the reason why a concern about health care costs has been at the top of the policy agenda. Why a concern about what health care cost might be doing to the stagnation of wages, as I just mentioned before. If the gap is providing it's employees a dollar in health care insurance subsidies, that's a dollar that can't be given to the employee in the form of wages. So as we are spending more as a society on health care, there is no free lunch. It means we're devoting other kinds of investment to other services less. At the governmental level, the rise in health care costs for programs like Medicare and Medicaid are crowding out invests in other programs including education, infrastructure, defense, research and investment. These are issues about which people can disagree about the appropriate level of healthcare spending, but there can be no disagreement that there are tradeoffs. And that as we spend more on healthcare, we are going to necessarily spend less on all other goods. One of the reasons why this has become such an area of policy concern, is that it is not the case that the United States' healthcare system on all dimensions is unambiguously superior to other countries' health care systems. One could talk about areas in which the US is infact, the best in the class, the best in the world. There is some kinds of treatments for advance cancers, for advance heart disease, where we are clearly the leader of the world. But if you look across overall performance of the health care system, effective care, safe care, coordinated care, patient centered care, how timely the care is provided. And then not only efficiency concerns, but how equitably we give care. Do we cover everybody? Do we make sure that we are investing in preventative medicine? Are we getting good value for our money? Most studies suggest that as a minimum the United States is in the middle of the pack internationally on some dimensions we're very, very good, on other dimensions we are not. So one would hope, ideally, that if we were spending as much as we are, ideally, we would be doing better than other countries. But there's reasons to believe we are not. Now of course many of you are probably thinking, and quite correctly, that there a lot of factors that shape our health care outcomes, besides health care. And that is absolutely right. When we think about why Americans are healthy or not healthy, the most important factors are probably not health care. It's diet, and exercise, and genetics, and stress, and all the lifestyle factors that shape health care. But even when we control for those factors, even when we statistically take them into an account, there's a lot of evidence that suggests the United States spends more on health care than other countries. And that our return or value is not an ambiguously better at a minimum, and it's perhaps quite wasteful at the extreme. One thing that you might think is, well, the U.S. spends more than other countries because Americans go to the doctor more than people in other countries. That's actually false, Americans go to the doctor less than is the case, in many other advanced countries. Here are some OECD data, and you can see that the average annual number of physician visits per capita, in 2009, was 3.9 in the U.S.. In Japan, the average Japanese citizen goes to the doctor over 13 times per year. In Germany, over eight times per year. So it's not the case that the US, we have people that are always going to the doctor, what we have in the US, rather, is our health care prices are significantly higher. Charges are much higher, because government doesn't regulate how much pharmaceuticals can charge. We don't have regulations about for example the number of MRI machines that a given town can have. Physicians are better paid, and we use more intensive use of expensive technolog. So we have higher prices, we have higher drug costs, we have more technology and we spend more on it. Now again these are all issues on which people can debate about whether these are good things or bad things, but at a minimum we can say that part of the reason why the US spends more in health care, is not because Americans are getting more visits to physicians. It's, or, we don't even have more hospital beds per capita, it's rather we are paying more for it. And we're using more interventions, advanced technology, pharmaceuticals, and we're not regulating the prices that those, charge. Okay, I mentioned earlier that in addition to the high cost of American health care, one of the big dilemmas, one of the biggest concerns for the last 50 years has been the fact that many Americans, despite the fact that we spend more than any other country in the world on health care, many Americans lack health insurance. This has been, of course, one of our major policy dilemmas in the United States, the fact that 16% of all Americans lack health insurance. And there has been a struggle, a political struggle, going back to the 1930s to try to address this problem. This has been a struggle that has involved politics, economics, disagreements, good faith disagreements between Americans about the appropriate role and scope of government. Philosophical disagreements about the trade off between liberty and freedom on the one hand and equality and fairness on the other. It's involved the struggle that has involved the role of doctors, businesses, activists, policy entrepreneurs. Many different actors over the last half century have played a role in this ongoing struggle. As early as the 1930s there was an effort in the FDR administration to include health insurance coverage as part of the landmark Social Security Act of 1935, this was unsuccessful. The American Medical Association did not want this, for fear that it would lead to socialized medicine. Again in 1949, FDR's successor, Harry Truman, called for universal health care as part of his Fair Deal, but Southern Democrats and conservatives and the medical profession adamantly opposed that effort. In 1965, during the great society under Lyndon Johnson, we did see a significant legislative move in the creation of Medicare and Medicaid after the sweeping Democratic Party victory in the 64 election, following Kennedy's assassination. Liberal Democrats at the time, believed that the passage of Medicare and Medicaid would pave the way to universal health insurance, whether you agreed with that policy or not, that's what people thought at the time. They said, we will pass Medicare and Medicaid, these programs will grow in popularity. They'll build up a constituency, and then, before long, we will have universal health insurance, but in fact, that did not happen. And by the 70s, we saw President Nixon, a Republican, but a remoderate Republican, a pragmatist, was pushing for a health insurance system based on employer mandate, not wholly dissimilar from aspects of Obamacare. And yet at the time this was an error of liberalism many liberals opposed it because they believed it was too incremental and modest. In the 1990s, Bill Clinton made a major push for comprehensive health reform, but he could not generate support even within his own party. And then of course, in 2010, we had the historic passage of the Affordable Care Act, under President Obama.
