The most recent report from the Centers for Medicare and Medicaid Services (CMS) pegged national health spending in dollars.4.5 trillion By 2022, it will reach just over 17% of gross domestic product (GDP). This is actually lower than previous government projections, but CMS actuaries now expect the pace of growth to accelerate again. KFF's 2023 Employer Survey also showed that premiums rose even more rapidly last year after several years of modest increases. Despite various efforts to control medical costs, there are always peaks and troughs in medical costs, and increases in medical costs cannot continue for long. My colleague Larry Levitt and I called this “The sad history of medical cost containment” In an article I wrote a while ago.
However, health care costs are not a single issue, but a multidimensional one. That's one reason we often have conversations about health care costs. We are talking about different issues. There are national health care costs, consumer out-of-pocket costs, federal health care costs (mainly Medicare and Medicaid), state health care costs (mainly Medicaid), employer premiums, and currently prevalent cost issues. better value for money. healthcare dollar. Like a Venn diagram with sets that don't necessarily overlap, these are each different challenges, often with different and sometimes contradictory solutions. Although we address all these aspects of health care costs in his KFF, two health care cost issues stand out as legitimate health policy crises. and National Health Expenditures (Subject to CMS Annual Report).
About a quarter (24%) of Americans say they or a family member has struggled to pay medical bills in the past year alone. For people in good health or in poor health, this figure rises to 33%. The worst offenders are those who are sick and uninsured. Of that group, 51% reported having trouble paying their medical bills. A survey we conducted several years ago of people with employer insurance showed that half of people with serious health problems, such as cancer, asthma, and heart disease, said they had Or, I found out that a family member said they had one of the following illnesses: problem You've paid premiums, deductibles, or copays over the past year, racked up credit card debt due to high equity, used up most of your savings, or taken on an extra job as a result. That's the heart of the affordability crisis. Too many people are unable to pay their medical bills when they get sick.
Most people do not use many medical services each year, and while it is natural that people who need more medical services have higher medical costs, the fact that they cannot afford them , is not what a functioning and effective health care system should be. work. Approximately 100 million people have catastrophic medical debt, according to a large, ongoing KFF Health News study. ”Diagnosis: Debt” was shown.
These out-of-pocket costs can make health care a much more real issue for voters than national health spending, which is more of a concern to economists and policymakers. The surprise of the poll for me was that in the most recent follow-up poll, the “affordability” of health care ranked second as a concern for voters, barely trailing the biggest issue, inflation, and drug costs. This is a 16 point increase. , this issue has been in the news a lot and has been at the center of recent health policy debates. We know this because we put it in our list of choices to see where it ranks. Poll questions about voters' priorities typically don't include the general overarching “health” or “health care.” That alone doesn't tell us much about what voters mean when they choose “health” as a priority at the polls.
At the same time, policy experts and policymakers are understandably concerned about another major health care cost issue: national health care spending. CMS Actuary project Health spending will grow by 5.4% per year on average until 2031, outpacing the projected average growth rate of 4.6% per year in nominal GDP, resulting in health spending reaching almost 20% (19.6%) of GDP by 2031 will be consumed. In total, each person spends $20,425 on health care. All this health spending creates jobs for health workers and supports a lot of health care, but it is well established that we are not getting enough health care. good value for money It has better health outcomes than other wealthy countries that spend far less as a share of GDP, straining federal and state budgets and wages while crowding out spending on other priorities.
Spending growth These days it's not as high as it used to be. Forecasting medical spending is not an exact science, and CMS has historically overpredicted spending growth. Real-world events such as the pandemic impact usage and spending. We have all been told for years that healthcare consumes one-fifth of the economy. With an aging population, advances in technology and expensive new drugs, and a for-profit health care system driving price increases, CMS' projections suggest that health care spending will probably continue to rise over the next decade, if not earlier. It probably means that they will officially reach that level somewhere within the next few years.
Solutions to these twin crises often work at cross-purposes with each other. These days, addressing affordability means increasing spending to cover more people, enhance coverage, and subsidize coverage, as we have done through the ACA Marketplace and Medicaid expansion. It means. The reality is that the government (taxpayers) is increasing spending to lower people's medical costs. Similarly, increasing deductibles or taking other measures to suppress demand for care increases out-of-pocket costs for consumers. This is another example of how health policy is a series of difficult trade-offs.
The two issues also have different political developments. Making health care more affordable is politically popular, but reducing the rate of growth in overall health spending is not. It could reduce Medicare and Medicaid payment rate increases that providers are resisting, contain prices and regulate rates (same), or reduce consolidation to maintain the appearance of a competitive market. It means to do (the same thing). Provider resistance can often garner support from the public. When you ask Americans whether they support spending more or less on health care, most of them say they support spending more, especially when it comes to local health care providers. Masu. Years ago, some colleagues and I worked together to “streamline” the health care system through what was then the National Health Planning and Resource Development Program, an elaborate system of federal, state, and local agencies supported by the Certificate of Needs Agency. I wrote a book about my efforts to do this. Local residents may demonstrate against planning authorities if they decide that their hospitals, maternity services, trauma centers, etc. are “unnecessary” or should not be expanded. Ta. This law, now largely forgotten, was repealed.
It has long been established that high prices are the rule culprit This is behind the high national medical expenses. But there are few efforts to seriously address price. transparency These efforts are an attempt to drive up prices by helping consumers get better deals, but useful information is hard to come by and people don't really care when they're sick. I can't shop around and the results are lackluster. Global budget and cost targets for hospitals in some states require more aggressive spending and price targets, as well as efforts to prevent further consolidation of the already largely consolidated hospital and insurance industries. measures.
This is one of the major exceptions to medical expenses. The actions taken by policymakers include giving the Department of Health and Human Services more power to negotiate prices for some drugs purchased by Medicare and lowering monthly copayments for seniors for insulin, one of the most high-profile drugs. The amount was lowered to $35. In some ways, what was remarkable about this policy was how difficult it was to achieve, given its widespread popularity and the relative unpopularity of drug companies. These measures could be a stepping stone to further action, which is why they were so fiercely resisted. but, numbersPharmaceutical spending remains less than 10% of total healthcare spending (compared to nearly 20% for many individual purchasers).
One reason for the fragmented approach to addressing health care costs is that there are currently no national health spending goals, no requirements for a Congressional-mandated national strategy, and a lack of government agencies and agencies responsible for national plans to address health care. It could be that the official is not present. Nursing care costs are included in the overall fee. CMS's Office of the Actuary tracks health care spending and makes projections, but it doesn't work on solutions. Although parts of CMS handle specific programs (Medicare, Medicaid, ACA), CMS does not view its work as controlling costs for the entire health care system (although the agency has had a broader vision since its founding). , the Health Care Financing Administration). As a result, we face two larger health care cost crises. One is an acute crisis of affordability, the other is a chronic crisis of spending, and there are several other serious health care cost issues, and there is no national strategy on health care costs, and no comprehensive plan to avoid discussion. There isn't even a policy in place. Let me explain all of these issues a little bit.
