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American health care continues to get more expensive, but the increase is driven by us getting overcharged more for the same services and not by us utilizing more health care. This is a key finding of a new Health Care Cost Institute report on 2010 health care costs.
Rising prices for care were the chief driver of health care costs for privately insured Americans in 2010, according to the first report from the newly formed Health Care Cost Institute (HCCI). The per capita spending on inpatient and outpatient facilities, professional procedures, and prescriptions drugs rose 3.3 percent in 2010 for beneficiaries under age 65 with private, employer-sponsored group insurance. HCCI data show that this 3.3 percent increase follows spending increases in 2008 (6.0%) and 2009 (5.8%). Hospital and ambulatory care facility prices rose by 5.1 and 10.1 percent, respectively, in 2010. Increases in facility prices were offset by decreases in the number of inpatient admissions (-3.3 %) and use of outpatient facilities (-3.1%). HCCI confirmed 2010 prices for the privately insured grew more than utilization after accounting for changes in the mix of medical services provided in hospitals (0.7%) and outpatient facilities (4.6%).
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Utilization Trends. Overall use of health care services declined in 2010. Usage dropped by more than 5 percent for medical inpatient admissions, emergency room visits, primary care provider office visits, and radiology procedures. On average, each insured person filled more than nine prescriptions in 2010. The number of brand name prescriptions dropped by nearly 4 percent, while the number of generic prescriptions increased by 2.5 percent.
KEY FINDINGS
- Prices were the main driver of increases in per capita spending from 2009 to 2010.
- 6.4% The increase in the average price paid for an inpatient surgical admission in 2009 ($25,469) compared to 2010 ($27,100).
- 8.9% The increase in average facility price paid for outpatient surgery in 2009 ($3,163) compared to 2010 ($3,443).
- 11.0% The increase in the average facility price for an emergency room visit in 2009 ($1,195) compared to 2010 ($1,327).
- 13.0% & -6.3% The change in average price per brand name and generic drug prescription, respectively (2009 to 2010).
It is worth repeating that American health care is so expensive simply because we pay way more for the same drugs, procedures and tests than any other country (See chart). Efforts to try to make people better health care “consumers” through cost shifts and private insurance exchanges are not workable solutions. We already have incredibly high out of pocket costs, yet we still have the most expensive health care in the world.
If you want to bring down health care spending, you need to deal with our extremely high prices. You need a system wide method to unify and control the prices charged for health care services and products. Every first world country does this either through all-payer, even where there are multiple insurance companies, or directly through a single payer system.
We would effectively eliminate our long-run deficit issue by adopting an all-payer system. But so many health care providers and companies are making such huge, unjustifiable profits under our broken system they are able to bribe provide enough campaign and think tank donations to prevent the idea from ever even being seriously debated in Congress.
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About FDL Action
reg·u·la·tion/ˌregyəˈlāSHən/
Noun:
A rule or directive made and maintained by an authority.
In accordance with regulations; of the correct type.
We can haz raygyoolayshunz?
“If you want to bring down health care spending, you need to deal with our extremely high prices”
No, that’s step 2. Step 1 is to create a political class that doesn’t whore for pharma, AMA, AHA, the insurers, etc.
Jon, please define all-payer system.
is that when individual insurers can negotiate prices with hospitals and docs, but the docs and hospitals have to charge all the same?
how does that work?
We simply are taxed a lot less and simply pay a lot less for energy, especially for gasoline.
The societies with single-payer and all-payer pay out a lot more in taxes (income and consumer-use).
A significant part of the US medical costs include tests and procedures that are seldom prescribed in other societies simply because private insurance will cover them.
Not terribly surprising. There is nothing to stop the thieves from increasing their prices.
If you want to bring down health care spending, you need to spend less on healthcare.
I have a High Deductible Health Plan (HDHP). It costs almost nothing but still covers catastrophic concerns. I pay all healthcare costs out-of-pocket for the first $5,000, so I’m very careful to only spend for what I need.
Ezekiel Emanuel or vice versa, is an oncologist, he should know better, or he is just another entitlement cassandra.
how to spot an entitlement gouger: anyone who lumps Medicare and Social Security together, and says they have problems.
as many have pointed out, the issues are entirely different and the degree of difficulty are as separate as a triple-pike reverse and a cannonball.
oh yea, and, his entire article, after lumping the two together, is really all about Social Security.
He ignored the Medicare issue completely; that is to say, he never discusses the high cost of care in US vs. Other First-Worlders, and he never discusses something he knows first-hand — the high-cost of dying and last years of life, as well as the medical establishment’s headlong rush for expensive care as opposed to effective care.
Horseshit. The study showed even when health care services were utilized LESS, their cost went UP. THAT’S what you have to fix. And the only way to “fix” it is to regulate it. No amount of free market fairy dust in the universe will work as it’s already been tried and shown to result exactly what anyone with a brain knew it would result in…. HIGHER health care costs.
Let me ask you something alan. Let’s say a group of people get on a one of those submarine rides they have in some amusement parks. You’re all down there, and something goes wrong, and it dies at the bottom. And starts to fill up with water. Everyone has 10 minutes to live.
As it happens, a man who sells high tech underwater breathing equipment happened to be one of the riders. So, he calmly opens up his case, pulls out one of about 100 re-breathers, and puts it on, and waits. The other passengers see this, and ask him to share the rest. He agrees…. for $150,000. Free market at work right? Yet you see no moral problem with that at all???
And if you DO see a moral problem with that, then how is that any different than through bad luck someone develops cancer and wouldn’t you know it there’s a cancer cure right down the road…. for $150,000.
That’s why free market fairy dust will never work on health care. It’s not a “choice” consumption.
Health care is a RIGHT, not a privilege for only those with money. If someone is hurt/sick, then that someone should be able to turn to it’s government for aid just it like it turns to it’s government for aid in defending itself and policing itself and education itself. Period.
knock me down with a feather…
Which is why Single Payer was, and is, the best option.
There’s a word for all this: unregulated private monopoly. Great work if you can get it.
As I said, if you want to bring down health care “spending”, you need to spend less on healthcare.
You turned that into “costs” which is not the same thing. It doesn’t matter to me how much an MRI costs if I don’t need an MRI, which I never have. I take care of myself as best as I can and self-insure for small things and then buy catastrophic coverage for the “unexpected”.
To follow your game, I wouldn’t get on one of those rides because that would constitute risky behavior that I try to avoid. However, should an accident occur, and something go wrong, I’d whip out my $5000 deductible and buy one of the re-breathers, free market worked.
As I said, I pay a tiny insurance premium for catastrophic coverage and then set aside my deductible in a Health Savings Account which rolls over year after year in my name.
As far as any moral dilemma goes, I pay 2.9% of my income to Medicare and Medicaid like everyone else so that those who don’t use my plan or are too poor to buy some other acceptable plan can still get government provided healthcare to get their re-breathers.
Aren’t the only two industries not subject to the regulations in.re. monopolies Major league Baseball and the Insurance Industry? The government keeps telling us that there is no appreciable inflation, yet insurance rates see double digit percentile increases year after year. Our government wouldn’t be lying to us would they?
Oddly enough in Japan they have made the argument that increased utility is actuallt something that helps drive prices downward rather than upward. For example, MRIs are said to be less expensive(our costs are tenfold) because they are commonplace.