Click for OECD document source on US health costs.

Without reform, annual per employee health care costs for American companies will triple to nearly $29,000 by 2019 according to a report commissioned by the Business Roundtable, an association of chief executive officers of leading US companies.

The United States spends an estimated $2 trillion annually on health care expenses, more than any other industrialized country. According to data from the Organization for Economic Cooperation and Development (OECD), the United States spends two-and-a-half times more than the OECD average: Americans consumed $7,290 of health services per person in 2007, almost two-and-a-half times more than the OECD average of just under $3,000 (adjusted for the differences in prices levels in different countries). Norway and Switzerland spent around $4,500 per person. Americans spend more than twice as much as relatively rich European countries such as France, Germany and the United Kingdom.

The OECD says the United States spent 16% of its national income (GDP) on health in 2007. This is by far the highest share in the OECD and more than seven percentage points higher than the average of 8.9% in OECD countries. Even France, Switzerland and Germany, the countries which, apart from the United States, spend the greatest proportion of national income on health, spent over 5 percentage points of GDP less: respectively 11.0%, 10.8% and 10.4% of their GDP.

Journalist Chrissie Long reported on Thursday from San José, Costa Rica for The Christian Science Monitor, that conservative talk-show host Rush Limbaugh said this week he’d go to Costa Rica for medical treatment if Congress passes proposed reforms to the US health care system.

Long says that might sound like an unusual choice, since Costa Rica is a country with one of the longest standing socialized health care systems on the planet. Everyone there (including resident foreigners), are required to pay into the government-run health system, whether they use it or not.

But Limbaugh’s choice may also serve to advertise what many Americans traveling there for medical treatment already know: Long says Costa Rica is a fabulous place for medical tourism.

Life expectancy in the Central American country surpasses that of the United States and at one point, back in the early 2000s when the World Health Organization rated countries’ general health, Costa Rica ranked higher (No. 36) than its northern neighbour (No. 37), despite spending 87% less on health care per capita.

The multimillionaire Limbaugh, an admitted drug addict, who has been treated in the US system for an addiction to pain killers, can well afford to oppose reform.   

Turkey, Mexico and the US, are the only members of the OECD without universal health care.

People listen as President Barack Obama delivers remarks on Medicaid fraud and health care reform at St. Charles High School in St. Charles, Missouri., March 10, 2010.

Employer-funded coverage is the principal element of the US health insurance system. According to the US Bureau of Labor Statistics, about 71% of private employees in the United States had access to employer-sponsored health plans in 2006. However, increasingly small companies cannot afford to cover employees.

Health premiums for workers have risen 114% in the last decade. Small businesses are less likely than large employers to be able to provide health insurance as a benefit. At 12%, health care is the most expensive benefit paid by US employers, according to the US Chamber of Commerce.

The current employer-based system also has a cost in reduced mobility as health care issues can impact the incentive to move jobs or become an entrepreneur.  

The Business Roundtable commissioned Hewitt Associates to produce a report that explores the cost of inaction around health care reform and identifies ways to build an improved, and more efficient delivery system.

Hewitt concluded:

• Without significant marketplace reforms, if current trends continue, annual health care costs for employers will rise 166% over the next decade, from $10,743 per employee today to $28,530 by 2019.
• These runaway costs, combined with a $56 billion cost shift to payers from uncompensated care, would cripple the employer-based system that currently provides coverage for the majority of Americans and their families.
• If nothing changes, by 2019, total health care spending will reach $4.4 trillion, consuming more than 20% of the US GDP.

  The report says health insurance coverage should be expanded to as close to universal levels as can reasonably be achieved. There is compelling evidence that the economic benefits of expanding coverage could potentially result in a positive return on investment if done right. Potential benefits include improving markets, reducing cost shifting, encouraging innovation, improving health and productivity, enabling greater workforce mobility, improving personal financial health, narrowing disparities in care, and more.

Read the full report

OECD Health Data 2009

President Obama makes his case for health care reform at Arcadia University in Glenside, Pennsylvania, Tuesday March 09, 2010:

The non-partisan Congressional Budget Office says the $875 billion, 10-year plan approved by the US Senate,  would provide coverage to 31 million people who'd otherwise be uninsured. And it says the cost would be more than offset in savings from changes in Medicare and other programs.

On Wednesday in St Charles, Missouri, President Obama said his plan would end the worst practices of private health insurers.

''Thousands of uninsured Americans with pre-existing conditions will be able to purchase health insurance for the very first time in their lives or since they got sick,'' he said.

The President is pushing for congressional approval, before he leaves on Thursday for Indonesia, where he spent four years as a child, and Australia. The trip was timed to coincide with his daughters’ spring break and Republicans are urging him to cancel it.

Speaker Nancy Pelosi said Thursday that the House would soon approve the Senate bill and a separate package of changes, using a procedure known as budget reconciliation to avoid the threat of a filibuster against the second bill in the Senate. So the Senate could pass the final bill with a simple majority.

Republicans are determined to prevent Obama claiming victory for a signature reform.

Insight on the President's recent push for health care and financial regulatory reform, with CNBC's John Harwood and discussing federal worker pay, with Robert Reich, former Labor Secretary; James Pethokoukis, Reuters Breaking Views and Dan Henninger: