Health Care Spending Explosion May Lead to a Drastic Solution

Health care spending averaged $7,026 per person in 2006, according to our cover story by contributing editor John Carroll. By 2017, that number will shoot up to $13,101, accounting for 20 percent of GDP (this year, it’s estimated at 16.3 percent of GDP).

Over the years, many approaches have been used to try to control spending, many of them becoming the subjects of stories for this publication. Without much trying, I can think of a dozen: disease management, pay for performance, formulary tiers, consumer-directed health care, managed Medicare, provider- quality ratings, wellness, cooperation among players, tax reform, employee education, wellness promotion, benefit-based copayments.

And capitation.

Still, the costs keep rising, thanks mostly to our inventiveness. A study by the Congressional Budget Office titled “Technological Change and the Growth of Health Care Spending” says that advances in technology account for about half of health care spending in the last several decades. Nobody wants to give up the technology, though.

Marylou Buyse, MD, director of the Massachusetts Association of Health Plans who is quoted in our update on RomneyCare on page 46, will often ask audiences: “If you could take health care insurance premium rates back to where they were in 2000, would you?” Unanimously: Yes.

Would you go back to those rates even if it meant losing the technology gained since 2000? Unanimously: No. In fact, it’s a unanimous “no” even when the go-back-to year is 2005.

“I don’t think that there’s an appetite in the public to give up what it considers to be even marginal, incremental gains in technology,” says Buyse.

I don’t recall if we’ve ever done a cover story on rationing, but maybe it’s worth considering.

MANAGED CARE May 2008. ©MediMedia USA

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