The Numbers Game: Rising Health Costs Affect Us All

March 10, 2012

Several new reports were released this week that shed troublesome news on the financial state of our health care system as it pertains to insurers, providers and patients alike. Representing the three most significant population groups present in the health care “eco-system,” so to speak, it’s clear our need for sustainable health reform is more imminent than before. Not only are care providers facing cuts and growing performance pressure, but patients are increasingly having more difficulty paying their medical bills due to rising health costs.  More details are below, but at the Partnership to Fight Chronic Disease, we fully recognize how more education, strengthened care coordination and better access to prevention programs can go a long way in solving these related conflicts.

  • Bloomberg reported the continuing cuts to Medicare coupled with changes in reimbursement formulas by insurers are putting increased pressure on care providers. According to a Moody’s Investor’s Services report issued this week, smaller hospitals are looking to form new mergers with larger, more lucrative hospital groups as a means to reduce their financial risks in light of the impending health care reform and current, unsustainable payment system. This appears to be a repeating trend, as Medicare reductions included in the Balanced Budget Act of 1997 also drove also hospital consolidations in the 1990s.  
  • Earlier this week, the New York Times reported troubling evidence against the benefits of electronic medical records (EMRs), and cited recent Health Affairs research that claims EMRs are unlikely to cut health care costs and may actually encourage doctors to order expensive tests more often.  The study showed that doctors with access to electronic health technology ordered image testing for patients 40 percent more than doctors who rely on paper records. “Our research raises real concerns about whether health information technology is going to be the answer to reducing costs,” said Dr. Danny McCormick, the lead author of the study, who is an assistant professor at the Harvard Medical School and a member of the department of medicine at the Cambridge Health Alliance. Health experts, however, argue the use of EMRs is meant to give doctors an integrated view of a patient’s care, including medical history, treatments, medications and past tests. “It is ‘one of a small minority of studies’ that have doubted the value of health information technology,” said Dr. David Blumenthal, a professor at the Harvard Medical School.
  • NPR highlighted a recent National Center for Health Statistics survey  that found a growing number of Americans are having difficulty coping with the high cost of health care. After surveying 50,000 people, it was found that 1 in 3 people belonged to a family that’s had trouble paying for its medical bills within the last year.  Most strikingly, even those over age 65 reported having trouble paying for medical care despite this age group being almost universally covered by Medicare. According to the article, nineteen percent of those between ages 65 and 74 and 12 percent of those over age 75 reported some financial burden for medical care –  figures that do not look promising as an average of 11,000 people a day turn 65 in America and enter Medicare.