Spiraling Health Care Costs

Of course, the problem of spiraling health care costs in the U.S. has several sources, including aging demographics, obese population, etc. Yet I have argued that you can date the problem from 1982 when Medicare imposed price controls on inpatient hospital bills through its prospective payment / DRG system. The New York Times reports today that “Employers and consumers are paying billions of dollars more a year for medical care to compensate for imbalances in the nation’s health care system resulting from tight Medicare and Medicaid budgets, according to Blue Cross officials and independent actuaries.”

I am encouraged by the fact that

“Business leaders, health plans and groups representing hospitals and doctors plan to meet in July to review the report and make policy recommendations. “Although many state budgets are overwhelmed by rising Medicaid costs, health care reforms intended to reduce the ranks of the uninsured that were recently enacted in Massachusetts and Vermont include more state money for Medicaid. Blue Cross Blue Shield of Massachusetts and Partners Healthcare, the largest hospital group in Boston, jointly supported the Medicaid increases. “‘That was a real-world example of hospitals and insurers seeing that the had common interests,’ said Paul Ginsberg, a health economist who is president of the Center for Studying Health Systems Change, a nonprofit research group in Washington.”I hope that the medical professionals arguing for a single payer system take note of this study. There is no magic potion to cure this problem, but I have confidence that the provider and payer communities can tackle the problem if they work cooperatively. As the Health Data Management article (mentioned two posts below) points out, there are helpful elements in the payer’s consumer driven health care strategy that tie in with the medical community’s concern about chronic care expressed in the NEJM editorial mentioned one post below.