Controlling the Cost of Care

Large Medical bill with scary teeth chasing a cartoon man

Health Cost Debt

Everyone understands that American health care is expensive. Our health care costs roughly twice as much as the care in other developed countries and the most common triggering event for personal bankruptcy in the US is medical debt.

Everyone also knows that we are not getting twice as much effective care for our money.

The growth of cost is a system issue:

  • As our population ages, there will be a decrease in wage-based taxes to covering those costs.
  • As our population ages, there will be an increase in the requirement for health care, though not as great as is often anticipated based on current levels of age-related medical conditions and disability.
  • The shift from the traditional fee-for-service to managed care was to slow health care costs that had sky-rocketed as medical providers gained leverage to inflate costs faster than other services and products in our society.
  • We waited far too long (because of cultural and political forces) to try seriously to manage these costs. Health care is now 17% of our economy, and any dramatic effort to reduce this will have inescapable and terrible economic and personal impacts.

So, we are left with the very slow strategy of effective medicine becoming progressively less expensive because of curative and technical breakthroughs, and the relentless efforts to slow the growth of health care costs that we have lived with since the Health Maintenance Organization Act of 1973.

Everyone who uses health care through an insurance system knows about all the many ways that managed care tries to make you judge whether seeking care is worth the cost. One notion that is new is the idea of tying the amount that health insurance covers to the therapeutic benefit of the treatment or service. This idea is the subject of the article at the end of this post.

One underlying flaw in the way we cover and pay for treatments, services, and supports is the gap between those who are rich enough to pay for whatever they want, and the rest of us. It is unfair to allow some people to live and the rest to die because of wealth disparities, and the development of health insurance and payment has been partly driven by an effort to ethically balance out disparities, especially as they manifest themselves in life or death.

The idea of tying payment to therapeutic benefit is better than most current payment principles, if only because it will tend to drive research and technical development toward treatment, supports, and services whose costs are roughly proportional to their benefit. See http://healthaffairs.org/blog/2017/04/26/health-policys-gordian-knot-rethinking-cost-control/

But there are significant problems with the way research and the concept of “evidence-based practice” impact people with disabilities that obviate some of the potential benefits of all principles of payment. And I’m going to do a couple of posts on those issues.

Next Post: Medication Research and People With Disabilities

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