The Rise in Health Care Spending and What to Do about It

Department of Health Policy and Management, Rollins School of Public Health, at Emory University in Atlanta, Georgia, USA.
Health Affairs (Impact Factor: 4.97). 11/2005; 24(6):1436-45. DOI: 10.1377/hlthaff.24.6.1436
Source: PubMed


Reforms for slowing the growth in health care spending and increasing the value of care have largely focused on insurance-based solutions. Consumer-driven health care represents the most recent example of this approach. However, much of the growth in health care spending over the past twenty years is linked to modifiable population risk factors such as obesity and stress. Rising disease prevalence and new medical treatments account for nearly two-thirds of the rise in spending. To be effective, reforms should focus on health promotion, public health interventions, and the cost-effective use of medical care.

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    • "As the costs and outcomes of health care in industrialized countries were compared, it also was recognized that the US was maintaining a costly system that yielded poor health outcomes for our citizens (Commonwealth Fund, 2011). In addition, the cost of health care was increasingly tied to health conditions brought on by modifiable risk factors, such as obesity and stress (Thorpe, 2005). Thus the context for the idea of a wellness focus was building. "
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    • "The lessons learned have not yet been widely applied. Most projections of " health care costs " do not carefully address the disparity between micro and macro estimates, and may not even explicitly acknowledge that such a divergence exists (Lee and Miller, 2002; Seshamani and Gray, 2004; Stearns and Norton, 2004; Goldman et al, 2005; Thorpe, 2005). For example, the Rand Health Insurance experiment, considered a " gold standard " for testing the effects of price elasticity and insurance coverage on individual expenditures, is often misused to create estimates of aggregate regional or national spending, a purpose for which it was not designed, for which it is ill-suited (Finklestein, 2005). "
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    • "Certain reforms have a potential to improve cost, particularly if healthcare systems are oriented toward prevention and consumers become habituated to developing healthy lifestyles. Thorpe (2005) notes that nearly two-thirds of the rise in US healthcare spending has been linked to the rise in certain diseases (such as diabetes) and to expensive innovations in treatment. Behavior such as over-consumption of food, lack of exercise, smoking, and stress is related to approximately 40-50 percent of morbidity and mortality. "
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