PHA-Exch> High and rising health care costs: Demystifying U.S. health care spending

[Claudio Schuftan]

From: Ruggiero, Mrs. Ana Lucia (WDC) <ruglucia at paho.org>
crossposted from: EQUIDAD at listserv.paho.org


 *High and rising health care costs: Demystifying U.S. health care spending*



Paul B. Ginsburg, President, Center for Studying Health System Change

*THE SYNTHESIS PROJECT - RESEARCH SYNTHESIS REPORT NO. 16 - OCTOBER 2008*



Available online as PDF file [32p.] at:
http://www.rwjf.org/files/research/101508.policysynthesis.costdrivers.rpt.pdf



Why is this issue important to policy-makers?

- In 2006, the United States spent $2.1 trillion, or 16 percent of gross
domestic product (GDP), on health care.
  This translates to $7,026 per person annually   (Reference 1).

- U.S. spending on health care is greater than that of any other developed
country, yet unlike other countries, which provide near-universal coverage,
  16 percent of Americans are uninsured (Reference 2).

-  Without steps to restrain growth, increases in health care spending will
eventually consume almost the entire GDP.



Policy-makers have a number of options available to restrain health care
spending growth, none of which are easy. With research consistently showing
that medical technology is the largest cost driver, applying technology more
selectively to patients needs to be an element of any long-term approach.



To accomplish this, policy-makers could:

·         Increase funding for research on effectiveness. This is the
beginning of an approach that supports the appropriate application of
medical technology to the patients likely to receive the highest benefit.

·         Reform provider payment systems. Distortions between payments and
costs of services lead to undesirable provider incentives to emphasize the
most profitable services. These unintended incentives tend to favor services
incorporating new technologies.

·         Increase use of consumer financial incentives and support. To the
degree that consumers bear some of the financial risk of medical spending,
they are likely to be judicious concerning the use of technologies with low
value to them as patients. For this to work as intended, however, patients
must be provided information on treatment alternatives and their
effectiveness, and on the quality of different providers of care, and must
face incentives to favor more effi cient providers. Use of this approach is
limited by the need to maintain adequate financial protection for the costs
of illness or injury.



*Content: *

- Introduction

- Findings

- Implications for Policy-Makers

- The Need for Additional Information

- Appendix I References



Policy brief:
http://www.rwjf.org/files/research/101508.policysynthesis.costdrivers.brief.pdf

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