New government data show that the growth of health spending is slowing. According to the annual health expenditure data gathered by CMS, the rate of growth for 2010 was just 3.9 percent; for 2009 it was 3.8. This is the slowest annual pace in more than five decades. Is the health care cost crisis over? What gives?
First of all, don’t pop the champagne cork just yet. We still have a problem. Health spending continues to rise, just not at the terrifying speed it has in the past. But it’s still rising much faster than the cost of living. It still accounts for almost 18 percent of our gross domestic product, far more than in any other country. And keep in mind that another high rate in recent years is unemployment: think of how many people lost their health insurance coverage along with their jobs. Much of the spending slowdown can be explained by the recession.
Much, but not all. Many experts consulted by the New York Times think the recession only partly explains the change. Another possible cause: a steep increase in the use of high-deductible plans, which offers consumers lower premiums but greater out-of-pocket costs, with deductibles starting at $1,000 for individuals and $2,000 for families. That means patients have an incentive to think twice about heading to a doctor or getting an extra test. Politicians—who like to call this incentive “skin in the game”—argue that it’s one key to curbing health care spending: if people have to open their wallets for each procedure, they might choose fewer procedures.
Turns out that’s true. A study of more than 800,000 families found that when families switched to health insurance plans with high deductibles, health spending went down an average of 14 percent.
So that’s great, right? Right. Except that frugality isn’t always the healthiest option. One of the study’s authors concludes that “people are cutting both necessary and unnecessary care.” Some even cut back on basic and needed medicine. That’s bad news from a health status perspective, but it could also be bad news financially. Couldn’t skipping necessary care ultimately increase spending over time? If a patient skimps on cardiac rehab after surgery, for example, that patient is far more likely to end up back in the hospital for another expensive stay.
High-deductible plans are the right option for some people; for some, it’s the only option. And I think it’s great if patients have an incentive to, say, choose a generic over a brand-name drug. But the question is: how do you get people to save on things that don’t affect their health and spend on things that do?
Health Care Perspectives 
great article!
I always felt the policy holder never had ENOUGH skin in the game, hence the abuse. You are damned if you do go to a physician, and you are damned if you DON’T go for reasons you have giv en. I do believe with the employer dumping more resonsibility on the employee, and the use of the high deductable plans, we will curb the abuse. Thanks!
JAD
Wow, this is a great article!
I am left thinking of other ways we can cut cost. There are many people walking around that have chronic issues that have been not diagnosed and have been ineffectively treated. In these cases, doctors benefit by having repeated visits. Other doctors will also benefit, eventually person seeking wellness will go elsewhere and look for a doctor who may be helpful. Are there stats or anyone who monitors the amount undiagnosed symptoms cost us? What would happen if doctors took the time to listen and understand the patient and worked with a team of other doctors, instead of writing a quick script and saying try this? What skin does a doctor have in the game? What if there were penalties for failure to diagnose and effectively treat and rewards for returning a patient to wellness. Those who are seeking wellness have their wellness in addition to the cost of healthcare. In their search, they may also find effective treatments that are not covered by insurance. Are these costs to medical care considered in the numbers that are presented?
I agree that taking the time to ask and to listen are most important and may be key not only to less expenditure but better medicine. It’s been shown that time and again that the best medical course is often the less costly course. But it is all to easy for patients to demand and providers to consider one more test, one more prescription or one more visit to a specialist. Mechanisms which will allow providers and insurers the ability to evaluate and reward systems that are more efficient and lead to better outcomes-need to be developed,. I think this is being worked on from the perspective of Medicare, hospitals and some insurers.
Hospitals, Doctors and insurers need to consider other mechanisms to keep a check on things, and do their part. For example, and I am not sure if this is still available with MVP (since they went green, and I don’t see their newsletter as often), but ready access to a healthcare professional, i.e.. ask a nurse via toll free number… when the question arises, or assigned medical managers ( I know that I have received a phone call from MVP on occasion to check with follow-up of an issue) –MVP health professionals assigned to check on how one is following up on care steering things in the right direction. Sometimes this is done at the level of one’s provider; some medical offices are better than others in this, but even so, there is some incentive to schedule at least an office visit to respond to most queries, which still taxes the system.
As more individuals become eligible for healthcare of some type, and this will happen regardless of Obamacare, and given the availability of more and better tests and medical options, the system will need to be more watchful and thoughtful about medical care, procedures and testing.
S. Bonnie Liebers
Genetic Counselor
Hi Bonnie,
The 24/7 Nurse Advice Line is still available to our members. There is more information available on our website at https://swp.mvphealthcare.com/wps/portal/mvp/home/members/finddoctor/adviceline.
MVP Health Care