Table of Contents

5  EXECUTIVE SUMMARY
7  HEALTHCARE EXPENDITURE TRENDS
7  Healthcare expenditure indicators
8  US has the highest healthcare spend in the world
9  A range of factors have contributed to high US healthcare spending
11 US health outcomes are low versus healthcare expenditure, mainly due to inequity of access
to care
11 Pharmaceutical expenditure is set to grow substantially from 2014 onwards
13 HEALTH INSURANCE SYSTEM
13 A number of public and private health insurance schemes exist in the US
15 Private insurance has evolved over the last few decades, and PPO plans are currently the most
popular
19 Public insurance coverage has grown through progressive Medicare expansions over the last
few decades
24 The ACA is changing the provision of US public and private healthcare
26 HEALTHCARE REFORM
26 Why are key healthcare reforms needed?
26 Summary of key measures of the healthcare reform law
32 How will ACA provisions impact the pharmaceutical market?
36 Impact on insurers
37 ACA rollout will differ across states
38 Healthcare reform focuses on cost control but doubts abound on whether that will be
achieved
41 BIBLIOGRAPHY
41 References
46 APPENDIX
46 About the author

LIST OF FIGURES

8 Figure 1: Total healthcare spending as a percentage of GDP in Japan, the US, the five major EU
markets, Australia, Canada, and the BRIC countries, 2010
11 Figure 2: Pharmaceutical spending per capita, 2007–10
13 Figure 3: Types of insurance coverage in the US
14 Figure 4: Split between privately insured, those with public schemes, and the uninsured, 2009
16 Figure 5: Breakdown of private insurance by enrollment type, 1988–2012
16 Figure 6: US – types of private healthcare insurance organizations, 2013
19 Figure 7: Number of Medicare, Medicaid, CHIP, Tricare, and VA beneficiaries, 2012
20 Figure 8: Medicare program offers four types of benefits, 2013
31 Figure 9: The focus of the key ACA provisions is to improve access to healthcare insurance
32 Figure 10: US – impact of US health reform on branded pharma
37 Figure 11: Number of states that are likely to participate in insurance exchanges as part of
ACA Medicaid expansion, November 2012
38 Figure 12: Breakdown of CBO estimates of public healthcare program spending, 2012–22

LIST OF TABLES

7 Table 1: Health expenditure and pharmaceutical spending, 2007–10
21 Table 2: Different drugs covered by Medicare Part B and Part D, 2013
25 Table 3: CMS US health insurance enrollment projections (millions of people), 2010–20
26 Table 4: Key points of the US healthcare reform law (the Affordable Care Act)