One way of confronting growing costs is by accelerating bundled payment arrangements, according to a Commonwealth Fund study that looks at ways to slow down the rate of increases. “More-inclusive bundled payments in which a single payment is made for all care provided during an episode of care involving a hospital stay — including physician services — would provide incentives for teamwork and accountability for the total costs of care and outcomes associated with hospital episodes of care.”
The Commonwealth study, “Confronting Costs: Stabilizing U.S. Health Spending While Moving Toward a High Performance Health Care System” (http://www.commonwealthfund.org/Publications/Fund-Reports/2013/Jan/Confronting-Costs.aspx), offers a wide range of approaches to do just as the title suggests. The goal is to hold health care spending to no more than “the rate of long-term growth in the economy while improving health care quality and outcomes.”
Among those approaches is bundled payment for acute care episodes. Bundling payment would “make it easier for patients as well as payers to compare and access the total costs of care and quality for certain procedures and conditions such as hip replacement surgery, appendectomy, or heart bypass surgery.”
Everybody agrees that something needs to be done. The cost of premiums already amounts to 23 percent of median family income. “If projected trends continue, the average premium for a family plan would exceed $24,000 by 2021 — the equivalent of 31 percent of median family income, intensifying pressure on family budgets across the country,” the study says.
Meanwhile, total business, household, and federal spending on health is expected to increase from $2.9 to $5.5 trillion in the next 10 years.
Health spending is a problem for the private sector as well as public programs. “While spending on publicly funded programs is currently a focal point of federal budget debates, for the past several years both Medicare and Medicaid spending per enrollee have been growing at rates well below spending for those who are privately insured.” The slower rate of growth for public programs is expected to continue over the next decade.
Medicare vs. employer-sponsored
Average annual per-capita increases, actual and projected
Average family premium as a percentage of median family income, 2013–2021
Projected national health expenditures by source, 2013–2023
Source: “Confronting Costs: Stabilizing U.S. Health Spending While Moving Toward a High Performance Health Care System,” Commonwealth Fund, January 2013