This document discusses strategic issues facing the U.S. healthcare system. It argues that the U.S. does not have a functional competitive healthcare market, leading to higher costs, marginal quality improvements, and opportunistic innovation. It analyzes factors contributing to market failure and addiction to the growing healthcare economy. The document advocates for embracing concepts like consumerism, quality reporting, and globalization to increase competition and innovation in healthcare.

1. STRATEGIC THINKING IN HEALTH CARE JULY 18, 2008 DON MCDANIEL SAGE GROWTH PARTNERS STRATEGIC THINKING, QUALITY AND ECONOMICS IN U.S. HEALTHCARE

8. TOTAL NATIONAL HEALTH EXPENDITURES Source: American Hospital Association via the Centers for Medicare & Medicaid Services, Office of the Actuary. Data Released January 8, 2008

9. PERCENT CHANGE IN TOTAL NATIONAL HEALTH EXPENDITURES Source: American Hospital Association via the Centers for Medicare & Medicaid Services, Office of the Actuary. Data Released January 8, 2008

10. NATIONAL HEALTH EXPENDITURES AS A PERCENTAGE OF GROSS DOMESTIC PRODUCT Source: American Hospital Association via the Centers for Medicare & Medicaid Services, Office of the Actuary. Data Released January 8, 2008

11. GROWTH IN NATIONAL HEALTH EXPENDITURES (NHE) $2.02 trillion in 2005 $3.71 T $3.85 T $4.04 T Source: Based on C. Borger et al., “Health Spending Projections Through 2015: Changes on the Horizon,” Health Affairs Web Exclusive (Feb. 22, 2006):w61–w73. 20% of GDP

12. GROWTH IN MEDICARE SPENDING VS. PRIVATE HEALTH INSURANCE SPENDING Source: American Hospital Association via the Centers for Medicare & Medicaid Services, Office of the Actuary. Data Released January 8, 2008

13. AVERAGE PERCENTAGE INCREASE IN HEALTH INSURANCE PREMIUMS COMPARED TO OTHER INDICATORS, 1988-2007 3.7% 2.6%

14. STRATEGY FRAMEWORK: Improvement, Innovation and Change

22. NATIONAL SUPPLY AND DEMAND PROJECTIONS FOR FTE RNS Source: National Center For Health Workforce Analysis, Bureau of Health Professions, Health Resources and Services Administration, 2004. Shortage of over 1,000,000 nurses in 2020

24. Comparison of Spending on Health, 1980–2004 Data: OECD Health Data 2005 and 2006. Average spending on health per capita ($US PPP) Total expenditures on health as percent of GDP Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006.

25. The World IS Flat!