Skyrocketing Cost of Health Care Shifts to Individuals
Wednesday, June 13th, 2007Several recent articles drive home two key trends that are unlikely to change direction any time soon:
- Health care costs continue to spiral upward.
- More of these costs are being borne by individuals (you).
Runaway Costs
The first article (Health Care as if Costs Didn’t Matter) in the NY Times, highlights the large differences in care depending on geographic location.
In Idaho Falls, Idaho, anyone suffering from the sort of lower back pain that may conceivably be helped by the fusing of two vertebrae is quite likely to have the surgery. It’s known as lumbar fusion, and the rate at which it is performed in Idaho Falls is almost five times the national average. The rate in Idaho Falls is 20 times that in Bangor, Me., where lumbar fusion is less common than anywhere else …
… But it’s not clear that their patients are any better off. The evidence for lumbar fusion is incredibly mixed. It seems to help people with certain kinds of pain, but many others recover just as well without the surgery. Of course, doctors are almost always better off if the surgery is done: The typical hospital bill for lumbar fusion is roughly $50,000.
This is about as good an example as you can find of the health care mess. The number of lumbar fusions performed in this country has more than tripled since the early 1990s, and Medicare now spends more than $600 million a year on the procedure. It’s one reason your health insurance bill has gone up.
The article’s author notes that the call for universal health care may be a good idea, but that without dealing with the key cost driver (increasing usage of the system, especially expensive procedures), such an approach will be infeasible.
If we are really at the start of a once-in-a-generation push to fix health care, we need to be clear about the true problem. The main reason so many people lack health insurance is because of its cost. And a big reason for that cost is the explosion of expensive, medically questionable care, be it knee replacement, preventive angioplasty or lumbar fusion. The route to an affordable health insurance solution runs straight through this thicket.
Several individuals, including politicians on both the left and right and even the head of the Congressional Budget Office, have suggested that a cost-effectiveness institute needs to be established to figure out which kind of health care services really work.