Restructure Medicare & Medicaid: Social + Economic + Legal Factors Drive Incentives to Spend 1) Social — Growing + aging population (with related disproportionate spending on end-of-life care) and unhealthy lifestyles. 2) Economic — Healthcare service providers have financial incentives to perform more services and drive revenue while consumers often have little incentive to manage incremental cost. 3) Legal - Rising overhead from defensive medicine (to avoid lawsuits) and from regulatory compliance costs. Source: Morgan Stanley Healthcare Research. (@)) www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 281 Restructure Medicare & Medicaid: Social Forces that Push Up Healthcare Spending 1) Growing and Aging Population 2) Unhealthy Lifestyles 3) Possible Solutions (@)E) www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 282 HOUSE_OVERSIGHT_020982