Healthcare stub: Increased consumption not driving costs

[So, I know healthcare isn’t usually a blog topic of mine, but I’m oddly interested in it, and my blog is a good way for me to keep track of articles and research.]

“Many believe that we in America are using too much health care. They argue that because many lack ‘skin in the game,’ they consume too much care. This report shows that actual utilization is stable to decreasing in many areas. It’s the prices per unit of care that are going up, pretty much across the board. That will continue, even if we find new ways to incentivize people to avoid care. That’s a dangerous trend. If it continues, it means that we will be getting less and less health care, but paying more and more each year. –Aaron Carroll Dr. Aaron E. Carroll is an associate professor and vice chair of health policy and outcomes research in the department of pediatrics at the Indiana University School of Medicine.”

I was really pleased to stumble across this research summary–there are more details in the link–because it fits with my experience–which is that just having a baby, a normal life medical event, has wiped out our health savings completely in each year that one of our kids was born.

“Well, it turns out that care in America is extremely expensive. The average inpatient admission to the hospital cost $14,662 in 2010. If you were admitted to the hospital for a surgery, the average cost was $27,100. The average newborn delivery – if things went well – cost $7,371. Instruments like cost sharing and high deductible health plans that are designed to empower consumers lose much of their appeal when confronted with numbers like these. If you have a baby, or need to go to the hospital just once in a year, you’ve likely already spent as much as allowed out-of-pocket, meaning that any cost-sharing incentives to reduce spending are gone. Moreover, it appears that prices, not utilization are the cause of increases in spending:”

This seems accurate. Most plans nowadays are high deductible, which in my opinion is anything over $1,000.00. As quoted, that means that one hospitalization or birth will wipe out the alleged value of saving money through HSAs and high deductibles. It means that we are incentivized not merely to “price shop,” though anyone who has tried it knows what a tangle it is, but to avoid care. That’s what many families do, frankly, even those with “good insurance.” It can be dangerous.

I appreciate the stats here that show that we American’s aren’t just getting unnecessary tests, office visits and hospitalizations. Many of those measures are down. The prices have just spiked.

That means that as America turns its eye again to healthcare legislation, the issue of access and affordability is far more complex that the lip-service would have us believe. As I’ve said before, a basic truth of modern life, unpopular and unacknowledged, is that healthcare is a high quality, high cost modern resource, a limited resource; it is not infinite. And our society lacks a consensus, and in my opinion even a firm understanding, of what a fair distribution might look like or if it is even possible.