Consumer Reports: New report on consumer advocates and health care costs

CU health costs cover3Recently Adam Linker and I (yes, that’s us on the cover to the left) were part of a great meeting put together by Consumers Union (the publisher of Consumer Reports magazine) and the Robert Wood Johnson Foundation on health care costs.  The aim of the meeting was to bring consumer advocates together with the best health policy people on health costs and start a conversation about how to get consumers involved in the important discussions going on right now about reducing costs in our health system. Although health care cost growth has gone down a great deal in the last few years, the US still spends significantly more than any other wealthy country on health care and we don’t get anything for it. Here’s the chart on costs:

 US health costs chart2

This increased cost has a ripple effect throughout the economy.  As related in the report:

“Health care spending consumes more than one of every six dollars we earn, but many consumers are often unaware of the real cost of health care. The impact of high health care costs goes beyond the sticker shock of a medical bill—it affects everyone and seeps into every segment of our lives. The impact is felt by individuals, families, employers, and those crafting state and federal budgets:

• Rising health care costs undermine wage growth. Between 1999 and 2009, almost

all increases in compensation have taken the form of paying rising health premiums and almost none have been allocated to increasing the take-home paycheck.1

• Rising health care costs put the squeeze on household incomes, as families struggle to pay for insurance as well as the care not covered by insurance or—even worse—go without needed care.

• Rising health care costs force trade-offs in our national and local government budget priorities, reducing the money available for education and other important programs.

Our current path is unsustainable and we know that good, quality health care can be delivered for less money. When compared to other countries, we aren’t getting the return that we should. Americans spend far more than patients in other countries, but these dollars don’t translate into better health outcomes. Too much health care spending is wasted on medical services that are not effective, are unnecessary or are even harmful to patients.”

Read the full report here.

8 Comments

  1. Lucinda

    February 15, 2014 at 2:16 am

    Here’s the underlying problem: there is no financial reward (profit motive) for providing _appropriate_ quality care. Doctors increase their profits by doing more stuff, whether it’s needed or not. Insurance companies increase their profits by paying for less stuff, again, whether it’s needed or not. There is no financial incentive for doctors or insurance companies to do the _right_ stuff for the patient.

  2. JeanneFromClearhealthcosts

    February 15, 2014 at 12:52 pm

    Great work!

    There’s plenty to be done in the cause of advancing transparency. In our view, payers and providers should reveal all charges and payments. If we could all see what is charged and what is paid, that would be one very large step toward finding real solutions to this seemingly intractable problem.

    The opaque marketplace and misaligned incentives create many opportunities for bad behavior. Free the data!

  3. LayintheSmakDown

    February 16, 2014 at 3:36 pm

    This is why we need to go to a market based system vs. the system we have now. If health insurance worked like any other kind of insurance then we would be in a much better state. You don’t have your car insurance change your oil, your homeowners insurance does not clean your gutters as a couple of examples. You can however change your oil for $20-30 and have your gutters cleaned for $50 because there is little to no insurance or government involved in those transactions.

    Cue Alan/ML paid troll comment in 3…2…1…

  4. JIMFITZSR

    February 17, 2014 at 8:24 am

    WILL SOME ONE IDENTIFY THE ACTUAL COST TO THE STATE AND LOCAL GOVERNMENTS TO PAY FOR MEDICAID AND INDIGENT CARE IN NORTH CAROLINA?

    DO THE HOSPITALS HAVE TO ABSORB ALL OF THE ADDITIONAL COSTS BY NOT EXPANDING MEDICAID. I KNOW EXPANDED MEDICAID AND OBAMACARE WOULD HAVE PAID FOR MOST OF THESE COSTS.

  5. Lucinda

    February 17, 2014 at 10:06 am

    To Jennifer, Understanding _all_ the costs involved in healthcare and looking at differences, even in our own country, between what different doctors and hospitals charge (and why) would be helpful. “Follow the Money,” is always an enlightening path to take.

    To LSD, a market-based system wouldn’t solve the underlying problem. Neither doctors nor insurance companies would have a financial incentive to provide appropriate quality care. Doctors would still be making money more money for doing more, and insurance companies would still be making more by doing less. Neither would see any _financial_ reward for doing the right thing by the patient.

    Comparing medical care to other services can be misleading. Getting your gutters cleaned or having your oil changed isn’t affordable because insurance doesn’t cover it, it’s affordable for a combination of reasons including the level of education, knowledge and skill it takes to do the work and its cost to acquire as well as the costs of actually providing the service.

  6. Alan

    February 17, 2014 at 11:40 am

    Yeah, we need “a market based system” instead of the solialized, gov’mint run healthcare system that we now have. LOL…

  7. LayintheSmakDown

    February 17, 2014 at 5:31 pm

    Thanks for the troll there Alan…the free market must work otherwise you would not have a job monitoring the RSS feed and getting your commission.

  8. Alan

    February 17, 2014 at 5:44 pm

    Still having issues with projection? No commission for me, I have no connection to Policy Watch. How’s your commission plan over at Civitas, or JLF? It’s clearly a full time job for you.