New Health Spending Numbers: It’s Time to Break the Cycle
December 6, 2018
Health spending numbers are out, and the New York Times headline could not be more clear: “Sharp Rise Predicted in Health-Care Costs in the Next Decade.” Except that’s not today’s headline. It’s from two decades ago, when health care spending was at record levels, breaking the $1 trillion mark.
Twenty years later and we’re having the same discussion, only health care in the United States isn’t a $1 trillion problem. It’s more than three times bigger. Just-released statistics from the Centers for Medicare and Medicaid Services and published on the Health Affairs Blog shows we spent $3.5 trillion, or $10,739 per person, another record.
Health spending is rising at an unsustainable level. It’s pressuring state budgets as Medicaid spending swells, raising tough questions about the future of Medicare, and having an impact on employers and employees as premiums creep up even as benefits diminish.
At the same time, we’re not seeing America getting healthier and healthier. Indeed, life expectancy is falling, and while deaths from drug abuse and suicide rightfully garnered headlines, last year saw a significant increase in the death rate from stroke, diabetes, respiratory disease, Alzheimer’s, and the flu and pneumonia.
That’s the bad news.
The good news is that there is also a record degree of partnership among health care stakeholders, and a shared sense of responsibility for returning the U.S. system to sustainability. While coalitions to tackle thorny health care issues aren’t novel – indeed, they are almost a Washington cliché – the extent of such efforts is growing, expanding from traditional health care players to philanthropic groups and a coordinated push from the White House to find new solutions.
But collaboration isn’t enough. It’s time for action. That means applying scrutiny to every part of the health care system, even parts that make us uncomfortable. Is the annual physical worthwhile? Do we over-use cancer screening tools? In which patients can we justify spinal surgery? Are there opportunities in society determinants of health that we’re overlooking? How about in preventive health? These are challenging questions that need evidence, answers, and action.
Looking at the health care system in that kind of broad-based way is not how we’ve typically approached health spending controversies, instead choosing to concentrate a great deal of attention on narrow areas. Changing drug pricing – a favorite target of lawmakers – isn’t going to turn down the heat (indeed, moderating prescription medicine prices are pulling down the rise in health spending yet again). That doesn’t mean that considering medication costs isn’t important, only that it must be done in a broader context.
For years, the staggering health care spending numbers have been an abstraction: what is a trillion here or a trillion there? But with accelerating out-of-pocket spending, we’re all footing the bill. The time for hand-wringing is over. If we’re serious, we’re going to move forward on the kind of research and the kind of action that is long overdue. Those actions won’t always be pleasant, but the alternative – tacking on additional trillions in health spending—will be far worse.