Signs of a Slowdown in Health Care Spending
http://thedianerehmshow.org/shows/2012-05-03/signs-slowdown-health-care-spending
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There are signs that health care spending growth has slowed down in the last few years. Diane and her panel of experts look at what higher deductibles, a move away from fee-for-service plans and other changes could mean for future health care costs.
Guests
Annie Lowrey
economic policy reporter, the New York Times.
Peter Orszag
vice chairman of global banking at Citigroup Inc.; former director of the Office of Management and Budget in the Obama administration; former director, Congressional Budget Office, and author of "Saving Social Security"
Karen Davis
president,The Commonwealth Fund, former deputy assistant secretary for health policy in the Department of Health and Human Services from 1977–1980
Joseph Antos
Wilson H. Taylor Scholar in Health Care and Retirement Policy at the American Enterprise Institute, a commissioner of the Maryland Health Services Cost Review Commission and a health adviser to the Congressional Budget Office
Comments
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Health care spending is slowing down: in my opinion many people do not have the money to pay for health care.
The cost of health insurance is way up.
The real unemployment rate is up.
And even if you have a full-time job, business interests have cut health benefits so that even basic services - such as a co-pay - become a monetary issue.
Where is the surprise in this? A consumer economy, in order to function, requires that people have money to start with, and that they spend it. More and more people have less and less money. While technology certainly creates new jobs, I believe that over the last 100 years it has eliminated far more jobs than it has created. The American dollar, according to measuringworth.com, is currently worth somewhere between 0 and 7 cents!
I have a health care policy from my former employer which I can keep two more years until I'm 65. The premium has doubled in three years. My current policy covers the first $500 of medical expenses, and then I'm liable for the next $1000 before regular coverage resumes. Two or three visits to a doctor will wipe out the $500 initial coverage very quickly.
I believe that those who, in recent years, have claimed that our lifestyles are unsustainable are actually right. Whether we like it or not, it could very well be true that the "unsustainability" factor is in fact true, and that we are headed into a period of "reverse progress".
There will be those who will hoot at this. So let them explain where the money to sustain our unsustainable lifestyles is going to come from. I'll tell you where it won't come from. It won't come from constant population increases and job decreases.
This is just one more turnip that we can't get blood out of. LOL
Here is what higher deductibles will mean for future health: poorer health. The right wing is WRONG about "personal responsibility" and being better "consumers". Health care is not a "commodity" for at least three reasons (aside from moral, legal, or compassionate grounds):
#1 We do not choose the illnesses or injuries we suffer the same way we could choose an item available on the open market, a "market good". They choose us.
#2 Medical costs can rapidly escalate to such high amounts that a person with an average income could not reasonably be expected to pay for them, as with homeowners' or auto insurance, which cover catastrophic costs most individuals could not cover on their own, such as a house fire or car accident. This is true insurance: sharing losses and preventing financial calamity. Our health insurance does neither. It is very revealing that we call it "health" insurance; it is just for the healthy. German-speaking countries call it "Krankenversicherung", or sickness insurance. Insurance should be for the sick.
#3 You cannot realistically negotiate for health care costs the way you can with real market goods. Have you ever seen a price list on a doctor's office wall? No, I didn't think so. We are not able to get the information to make these decisions; try getting this information from a doctor or insurance company. Or, try being admitted semi-comatose to an ER and negotiate for cheaper care. Besides, even in sound mind, are you seriously going to bargain on price if you really need the care?
People on high deductible plans have to pay for most of their health care out of their own pocket. Therefore they will delay and deny until they are really sick, instead of getting the best prevention possible: early intervention. Higher deductibles are a very bad idea. So are HSAs, which only help better off people. These are gimmicks of the health insurance industry.
We deserve better - a nationalized health-care-for-all system.
Topic: Cost in Lives, Anyone?
Many, including Secretary Kathleen Sebelius have correctly detailed monetary savings expected from the Affordable Care Act. What about savings in lives? There are two sets of data measuring cost in lives to consider when passing
judgment on this legislation.
First, according to Wilper and colleagues (2009) in the American Journal of Public Health, approximately 44,000 plus Americans die each year because of lack of access to health insurance.
Second, the National Academy of Sciences 2001 report on medical errors estimated that approximately 44,000 to 98,000 Americans die because of medical errors each year. A midpoint approximation is about 71,000 Americans. According to Lucien Leape, MD, from Harvard,who served on the Academy of Sciences Committee, "accidental injuries result from faulty systems not from faulty doctors and nurses.."
That is, the 71,000 dead per year, who have access to the health care system, i.e., overwhelmingly with insurance, die because of dysfunctional aspects of the system. That means 44,000 without insurance + 71,000 with insurance die
per year because of our current health care system. If that's not an epidemic, what is? And those with insurance are subject to the roll of the dice, as well.
Well, Obama Care appears better than de facto High Wire (not High Option) Care. Do we want 1,000,000 plus tragic deaths per decade?
America is better.
I work for a top hospital in Cleveland Ohio and we are lowering cost by getting our employees healthy. The healthier you are the lower are your premiums. This has also lead to increased self esteem and overall moral. Also about 40000 employees are involved in the program. The programs are simple walking 10000 steps per day or Weight Watcher etc.
Anyone remember a "60 Minutes" story that used MRI costs in the US versus Japan as a comparison point in health care charges?
I seem to recall that in Japan, the costs were at least 50% lower than in the US.
Such a data point says much about the US Health Care "business."
It is important to remember that insurance policy holders are the commodity for insurance companies. As long as health care is for profit, the true customer of the insurance company is the stockholder. Therefore, costs need to be kept at a minimum and profits at a maximum. That, not health and wellness, is the priority for insurance companies.
Since my third child was born in 2005 our family has NEVER exceeded our annual insurance deductible. It is currently $3000 per person. Our annual premium is approximately $9600.
While our family income has dropped by a third since 2007, our premium has increased every year by as much as 40%. This is why people become uninsured. I am grateful that we are still able to afford our coverage but it would be very tempting to drop it if we had a financial emergency.
We are all in good health but I do find myself 'rationing' care. I have significant varicose veins in one of my legs. Treatment would be 'covered' by insurance. But that would be after I spend $3000 out of pocket. I am also afraid that we would face an even greater premium increase the next year.
I am a financial analyst with a concentration in the healthcare services. Over the past 5-10 years I have seen a huge increase in the incomes of both physicians and in executives within the healthcare services. It is not unusual to see entry level doctors at large hospitals with salaries of $300k coming out of a residency program. Specialists within a group practice commonly earn $800,000 per year or more. I regularly see healthcare executives with incomes greater than $500,000 per year and over $1 million is not uncommon. Until this is addressed the profit motive and greed will continue and cost to the consumer will increase.
Recently our mother was treated for a fractured pelvis. The lack of continuity of care was our biggest issue. Is this being addressed in the new healthcare law?
One global fee is also financially beneficial to hospitals in another way. Fee for service requires a large quantity of man hours to review the medical records and code for each and every procedure. Which of course leads to a"when in doubt, code up" mentality. In addition, fee for service coding, makes it nearly impossible for patients to understand a bill and exactly what service and procedures they are being charged for.
My daughter works for a company that is hired by hospitals to supply ER docs - they start at $400,000 per year and the company provides malpractice insurance - REALLY!
Matters of Public health affairs should not and must not be the primary foundation for leeches and bloodsuckers to profit from. After the “insurance industry” took over the economics of health care, the greediness to make more profit increased the bureaucracy and thus the cost of maintaining healthcare, with the falsehood pretense and fabrication that hospitals and doctors are the direct cause of these runaway costs, they have been hammered with huge reductions in service fees that in some cases go as high as 95%. Doctors have been forced to see more patients on a daily basis and many practices have closed because of the constant chocking that the industry has subjected them to, adding the need to increase the overhead and hire more personnel to cover the needs of administrative burden imposed by the industry bureaucracy.
Besides the subsequent decrease in the quality and delivery of health care that has emerged as a direct result of the above, the continuing escalation of the patient’s out of pocket cost, also limits the patient’s access to good healthcare.
The administration of healthcare affairs and its issues belong to the very same patients/users who contribute to the capital collected for healthcare expenses. The current administration by the insurance industry cannot profit more, paying deorbiting bonuses of $80 million to CEOs that have saved (call it in reality profits because it is money that has never gone back to the patients in returns, only the leeches in Wall Street do profit) the company millions to billions, meanwhile even patients with insurance are struggling to obtain adequate care and see themselves paying out of pocket in deductibles and co-payments more than ever, in turn the leeches pocket more money.
Has anyone looked at the dramatic increased use of Hospice care and how much Medicare spends on Hospice? I had four elderly relatives under Hospice care in the last 7 years. Hospice sells themselves as palliative care which focuses on non-invasive care at home instead of costly nursing home care. In my elderly relatives case this translated into little if any care which must have saved a tremendous amount of money for healthcare, but was a tremendous burden on all the family members who cared for them at home instead.
The administration of health capital/revenue belong to the users/contributors themselves. Just as our founding father said the people should be able to govern themselves, “We the people” should govern healthcare not the insurance companies’ leeches.
Mr. President, Members of Congress, Senators, no- one, absolutely no-one, must profit from the ailments and diseases of those who contribute to the capital/revenue collected for healthcare. Those capitals should only be destined for patient care. The so-called “healthcare industry” has increased the cost of healthcare by creating a bureaucracy that lives lavishly and that only cares about profits without any regard or respect to the patients’ dignity. The “insurance industry” has stolen the patients’ dignity and now is steadily eroding the doctors’ dignity as well. Doctors are simply puppets called “providers” that have to treat their patients as the insurance mandates with limited options because other alternatives or quantities are not allowed or require prior authorization (I wonder why my doctor ordered such thing, just for the heck of it?, I mean where is his judgment and knowledge?). They cannot follow the standards of care because insurance companies deny or delay care, yet, the physician is held directly accountable.
Mr. President, Members of Congress and Senators
If You don’t take away the funds from HealthCare away from the paws of the “insurance industry” and leave the administration of these assets to the constituents through a unique National Health Fund or HealthCare Cooperative, you do not deserve to be where you are because the interests of lobbyists are paramount over the dignity of your constituents and electorates in your decision making.
Currently, there are 40 million + people in the US without healthcare coverage, there is a great probability they can contribute to the Healthcare fund according to an Income Tax sliding scale, $10-30 a month, this could translate into $400-1,200M/month to a Unique National Health Fund or Health Care Cooperative or whatever name you can call it, “members” owned like Credit Unions are, and that will get the support of the other insured or contributors to the fund (grossly 281 million putting into the pot $40-$1,500/month or $11.2 -$421.5 billion that added can be $11.6-$422.7 billion ). If the employers are asked to contribute with at least 10% matching amount ($1.16-$42.27 billion adding to $12.76-$464.97 billion). The government’s contribution can be in the form of a tax deduction equal to the amount paid in your contributions to the fund. The government should not put their hands in the fund and should not worry about a problem that now does not exist for them anymore, where corruption is out the question because of the nature of the fund where doctors and administrators are made accountable by their own members, where patients can choose their doctors and hospitals with freedom of choice at the same time promoting the excellence in quality of care and where patients approve the transaction as care received via a PIN and a health card so there are no false/fraudulent claims.
This is what we were told by the CEO of the hospital our mother was in told us when we questioned by she was moved overnight to a sister hospital. He said he probably had over-emphasized efficience - in otherwords the patient is NOT the priority - and this is a not-for-profit hospital.
Also, to add to the fund, the money that doctors pay in malpractice insurance can be deposited in the fund to treat the immediate catastrophes and determined limited sliding scale compensations. Through these measures, doctors will not be forced to practice defensive medicine that increases the cost of healthcare because tests are ordered more for “CYA” reasons, than because they are truly necessary.
This is far from socialized medicine even though it may look so because of the commonness of the fund. In reality, it is the best way to return the dignity to the patients and to those who deliver the warmest and truthful healthcare.
You are absolutely RIGHT ON!! My family is in the same situation. Our annual family deductible is $4000 with premiums of $6000 per year which is at least a 30% increase, however our annual income has gone down 25% since 2007! My husband has been forced to choose between his high blood pressure medication and asthma medication (asthma Rx won) because we now have to pay RETAIL under a Health Savings Account with a very large well known national insurance company. Each prescription costs at least $150 per Rx per month retail!! I now treat my children's colds at home with home remedies because we can't afford the $185 doctor office charge for each visit for three children. Yet all my relatives who have health care jobs and pharmaceuticals haven't been affected in the least by the economy... they're still getting great pay and great insurance!! What's up with that?
From listening to the show I was unsure what was included in the denominator "health care spending" Are you referring to public expenditures or combination of out of pocket and public expenditures?
I am a teacher in the state of North Carolina. I make 32,000 over ten months. I have 2 daughter and a husband. I can't afford to insure them on my health care plane because it would cost us $600 a month, that does not include co-pays and prescription drugs. My youngest daugher has a per-existing condition and my husband suffers from serious depression. I haven't had a raise in 4 years, my cost of living has greatly increased and the health insurance isn't affordable. Something needs to change and families like mine need to stop paying the price.
I just want to remind people that many people in this country still are forced to rely on the old rural county hospital system. These folks don't have choice, so it does not matter if the local county hospital has a massive readmission rate and infection rate they have to use it.
We need to be dealing directly with the issues we can't hope that market forces with encourage people to fix these problems.
Rose, lives in Frederick MD
What is the benefit of the "middle man" insurance companies. Why don't hospitals provide "insurance policies" themselves. I, or my business, could buy insurance from the hospital directly; using physicians who have priviledges at the hospital. Then, not only will the hospital do its best to keep costs down, but if they keep them so far down that care is compromised, the market will correct with policy holders choosing medical centers with the best reputation for care.
Medical cost should Never override compassion and right action.
Further indication of how terribly off track this expensive system is.
We should all protest this to medical community and government agencies as well.
I do!
Thank you for your program,
Janet
Dallas tx
While I applaude the efforts of many health care practitioners to create a culture of patient and family centered care, it seems more than coincidence that this big push comes at a time when Medicare is threatening to base compensation on outcomes and patient satisfaction. When a financial incentive is needed to to the right thing, I wonder about the motivations.
Until the financial incentives are changed, costs will continue to be an issue. . . Large, integrated hospital systems continue to hire more physicians to use their market power to extract 25-30% larger rates. Then, employed physicians keep all the downstream tests, procedures, ect., within the system. Why would a hospital scrutinize it's MDs for ording too many tests, lower its revenue? It’s costing billions. Except for the higher deductable plans, patients usually don’t have any idea what the providers are being paid.
To Sheila (who called in to the show)
I am outraged ON YOUR BEHALF! $22k a year out of pocket for a retired couple is crazy! I feel your pain w.r.t. the prescription mgt. plan. My company's insurance switched prescription mgt. at the beginning of the year and every month it like getting blood from a turnip to get a refill. The RX provider's software has issues that they refuse to acknowledge so I find myself going back and forth between the pharmacy and my doc to get a PA that was sent previously. The level of incompetence I see w/ this company is reminiscent of what was reported with the big bank's fumbling the paperwork that homeowners had to send over and over due to the bank losing it, etc. I don't know-- maybe the health insurers thought that was a good model to follow...LOL. Willful incompetence!
Peter Orzag trumps the other panelist.Exceptionally informed about the details of trends and consequences.So why did you
not get back to him after station break
34 years as healthcare professional.
18 clinical and administrative acute, home and long term care
balance as clinical informatic specialist developing products for clinical decision support and self management
1 patent
I am 55 yo
diabetic 48years
heapatitis c
severe disabling chronic pain syndrome
now unabel to work as my insurance 1 out of four other major insuracnces is th only one that will not pay for a therapy I received that actually worked. The system business rules are pushing me to street
I have lecture program and patient advocate blog.
the lack of transparancy on value added and price accross the supply chain has left the american consumer blinded to a shell game.
this is a 100 year lold problem
no one to blame but us
we need to think 100$ inclusion NOT socialism WITH tight cost controls and limitations
PLEASE LISTEN TO US
It's true that health care insurance companies make money by covering healthy people. It's also true that they make money by denying or delaying payments whenever possible. My husband and I found that out when I was diagnosed with cancer four years ago. We call it our descent into health care hell.
Your discussion danced around the obvious: extend Medicare as a national insurance plan to anyone who wants it. It's much more affordable than the so-called Affordable Care Act. Medicare's overhead is about 5%. Insurance companies as part of the "Affordable" Care Act are still allowed a profit of 15-20%. It's simple math, folks.
And if Medicare is already doing a modestly effective job curbing costs, which we hope will continue and expand, let's simplify the system by eliminating the insurance middle man, who's planted squarely between patient and doctor. Save money and save lives by offering a Medicare-for-all national health care system.