National Health Spending at $3.5 Trillion in 2017, CMS Says:
CMS is reporting healthcare spending was $3.5 trillion in 2017. National healthcare spending grew by 4.6%, up 3 tenths of 1% from 2016. The increase was blamed on increased spending for Medicare and higher premiums for healthcare insurance. The increase in healthcare premiums can be partially attributed to Republicans blocking the Risk Corridor – Reissuances Programs which eliminated competition through withdrawal of insurance companies and bankruptcy of Coops.
Some contributing factors:
• Spending on physician, clinical care increased 5%, to $698 billion. This is a decline from 5.4% in 2016. High deductible plans have more than likely caused this reduction. Price increases for both were 2.4% and expected to increase in 2018.
• Healthcare spending as a portion of GDP is expected to grow from 17.9% to 19.7% between 2018 and 2026. Much of this will be the result of increased prices for medical supplies and services, income growth, and increased enrollment in Medicare.
• The insured portion of the population is expected to drop to 89.3% from 91.1%.
• Private healthcare insurance spending is expected to have grown at 4.7% in 2017 due to higher deductible plans, employer management of their plans, and an aging baby boomer population.
• Hospital Care is expected to grow at 5.5% annually over the decade. It is expected to be at $1.1 trillion in 2017 or a 4.6% increase over 2016 and similar in growth. Private healthcare insurance payments to hospitals is expected to slow by almost 1%.
• Pharmaceutical spending is expected to increase at a rate of 6.6% annually from 2017 to 2026. “Growth in pharmaceuticals is expected to take a bit of a jump soon, from an estimated 2.9% increase in 2017 to a 6.6% increase in 2018.”
Report: Use, Not Price, Drives State Health Costs
“In healthcare, costs of individual services and products make less of a difference in state-level spending than the overall use of those products and services, a new report indicated.” A report of rising costs at the state level being attributed to use as opposed to the rising cost of healthcare products/pharma, hospital/clinal care, and a service for fees cost model impact cost. As I wrote in answer to this perspective:
“If this is leading to people being the cause of higher costs, this is certainly the first time it is being raised in such a manner. One of the much-maligned factors in the ACA was having, as Congress called it, “skin-in-the game” which spells out in the form of higher copays, deductibles, and no discount to charge master and other pricing till the deductible is paid. It is a drag on usage by those with lower income and not qualifying for Medicaid.
Speaking of which (Medicaid) was expanded in 33 states with 18 states abstaining. Dependent upon what time period this study covers, the increased usage and state costs could be the result of such. Maryland is in a unique situation in that it uses an all payer system to control costs. I do not believe the other states intrude upon healthcare costs the same as there.
So what is the direction of this study, lower usage to control cost? It is already being done with the deductibles, copays, and payment schemes. Limit healthcare to those who can pay? If the current administration has its way, the Medicaid experiment will end. I need to see more of the detail. The article cites 3 years of data which would mean from 2014. Are we going to base rising costs upon the implementation of Medicaid and not look at time periods before 2010?
Healthcare costs are still rising at a faster rate than inflation with only the cost of getting an education beating it out from time to time. Pharma is able to raise pricing whenever they choose with little interference other than the media. Services for fees business model still exists. Hospitals and clinics are in a mad dash to consolidate to bargain better. Non-profit hospitals disappeared a long time ago.
Caring for Ms. L. — Overcoming My Fear of Treating Opioid Use Disorder
New England Journal of Medicine had an article on the human side treatment of opioid addiction by a PCP. This story does not end well for the patient. Feeling normal again is what many work towards and never quite get there. Intermingled are the political interests protecting the commercial interests who spend inordinate amounts of money to influence decisions. Pharmaceutical companies have spent $880 million in lobbying all 50 state legislatures and in state campaign contributions to influence politicians to prevent laws restricting Opioid prescriptions. Their spending has outstripped those advocating for greater controls on prescriptions by 200 times giving them greater influence at the state level.
“Ms. L. always showed up 10 minutes early for her appointments, even though I always ran late. Her granddaughter would rest her cheek against Ms. L.’s chest, squishing one eye shut, and scroll through Ms. L.’s phone while they waited. After reviewing her blood sugars, which Ms. L. recorded assiduously in a dog-eared blue diary, we’d talk about smoking cessation. That was a work in progress. ‘There’s just nothing like a cigarette,’ she’d sigh. “Don’t you ever start,” she’d admonish her granddaughter, kissing the top of her head.
One day, I knew something was wrong the moment I opened the door. Ms. L. was alone. Sweat dotted her lip and forehead. She closed her eyes and looked away, and tears fell onto her lap. ‘I need help,’ she whispered, and it all came out: she had taken a few of the oxycodone pills prescribed for her husband after a leg injury, then a few more from a friend. And like a swimmer pulled into the undertow, she was dragged back into the cold, dark brine of addiction. I tried to hide my shock. I’d known she was in recovery from opioid use disorder (OUD), but it had simply never come up. She hadn’t used in decades.
‘No one can know that I relapsed,’ she said. ‘If my kids find out, they won’t let me see my granddaughter.’ She wanted to try buprenorphine and was frustrated to hear that I could not prescribe it. ‘Why not?’ Annoyed, she rocked in her chair. ‘I just want to feel normal again, and I know you. I don’t want to tell anyone else.’”
Just a few short notes on what I have been reading as of late. If you have some time, please click on the links and read the articles. They are not lengthy. More to come as I finish up.
“Healthcare spending as a portion of GDP is expected to grow from 17.9% to 19.7% between 2018 and 2026. Much of this will be the result of increased prices for medical supplies and services, income growth, and increased enrollment in Medicare.”
A greater share of the population will be covered explaining part of this increase. But of course that Baumol Cost Disease thesis also applies. More on the latter at Econospeak.
True, it would have bearing on the increase. JAMA does a nice job explaining what comes to bear. Factors Associated With Increases in US Health Care Spending Abstract 1996-2013 It is not all labor/service driven which is why I hesitated in saying much. I have not read the entire JAMA article yet as I have been too busy cornering doctors on the Opioid situation and pissing them off.
Question How are 5 factors—population growth, population aging, disease prevalence or incidence, service utilization, and service price and intensity—associated with health care spending increases in the United States from 1996 to 2013?
Findings Health care spending increased by $933.5 billion from 1996 to 2013. Service price and intensity alone accounted for more than 50% of the spending increase, although the association of the 5 factors with spending varied by type of care and health condition.
Meaning Understanding the factors associated with health care spending increases, and their variability across conditions and types of care, can inform policy efforts to contain health care spending.
This Healthcare Costs and Its Drivers Today Down at the bottom I show some graphs. Of the $66 billion associated with Diabetes Care ~2/3rds of it is associated with the Drugs used, a material cost. Of the ~$934 billion cost increase, this is a significant part of it. There are others also such as EpiPens. Read the entire post as there are other factors also.
Pharma, hospital supplies, hospital overhead make up a large portion of the increasing cost of healthcare (former pill and hospital supply manufacturer. I do look forward to your post though.
On Healthcare costs you’re missing the fundamentals and trying to thin trees in the forest.
Kenneth Arrow told everybody what the problem is 1963. We have chosen to ignore his clear economics basis intentionally because it serves the interests of capital owners and the medical professions and all that rely on income from that source.
Parsing health care cost “reasons” is a futile exercise,, and in fact a simply furthers ignoring the fundamentals.. It is a misdirection.
Kenneth Arrow (1963, Uncertainty and the Welfare Economics of Medical Care)
““In healthcare, costs of individual services and products make less of a difference in state-level spending than the overall use of those products and services, a new report indicated.”
it is not the patients that “use” those products. it is the Doctors.
The increase in “use” results from over treating… and that is not just “defensive medicine.” That is aggressive, dishonest milking the system,
I cut my thumb a while back. Needed about ten stitches. So far so good. The Hospital and “independent contractor” doctors billed Medicare over 4 thousand dollars. But of course there were all those X rays and IV’s and the cast and splint…. none of which were needed.
Heavy pressure was brought on me to have my hand operated on.
There was no need and I refused, and the hand (thumb) healed all by itself.