Have healthcare costs already slowed their rise?
Healthcare costs risk the entire future of Social Security and Medicare, destabilizing our economy further, and passing costs along to a generation that did not cause the problem and does not have enough people to fund the health-care deficit.
A recent article in the New York Times summarized Centers for Medicare and Medicaid Services numbers that show some hope. In 2009 and 2010, healthcare costs rose by 4 percent a year, the lowest rise in decades. In 2010, the percentage of our economic output that goes to health care did not grow for the first time. It held steady at 17.9 percent.
The reasons for this are not yet clear. The recession caused millions of Americans to lose insurance, so people made decisions not to consume healthcare, and many of those decisions will simply lead to deferred and more expensive care later on. Analysts reviewing this data believe, however, that there is more to this slowing of growth in costs than just the recession. Health-care costs for many hospitalized seniors declined. This should not be due to the recession. So there is speculation that healthcare providers and patients are changing behaviors in ways that can save money.
It's a little early to have a party. 17.9 percent of GDP is nearly twice what other industrialized nations pay for health care, and they have better outcomes than we do. So the work ahead remains daunting. The lack of growth in the percentage does suggest that the incremental work that's been done over the past decade is having some effect.
I believe major care redesign is needed. This is not incremental change, but very new and different ways of caring for patients. Some economists believe revolutionary change in the way we pay for care is also needed. I agree with them. However, for decades politicians have been tinkering with how care is paid for. Dealing only with the payment system is not enough. We learned that in Massachusetts, when we dramatically improved access to a system that consumes and wastes too many resources. Changes in the way care is paid for can actually work when redesign of care delivery to reduce costs and improve outcomes increases efficiency.
So, the new numbers from CMS give me hope and redouble my enthusiasm for getting the care redesign done fast.
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