Healthcare cost increases is the issue that never goes away. It threatens the health and well-being of millions of Americans, insured and uninsured alike. Working people must deal with the consequences of higher healthcare costs translating into fewer or less-generous benefits; or more ominously, loss of insurance coverage altogether. Higher healthcare costs cause senior citizens to face higher out-of pocket costs, even with coverage. Uninsured Americans are affected, as higher costs push premiums for coverage that they already cannot afford even further out of reach.
Policymakers are confronted by escalating healthcare costs squeezing already tight budgets for public health programs-particularly Medicaid-at a time when recession is casting millions into the ranks of the unemployed and uninsured. Insurers are caught in the crunch, as higher costs push up premiums at a time when employers and employees struggle to maintain existing coverage. Hospitals and other providers see the effects of higher costs firsthand, as they deal with increased demand for their services and the prospect of reduced government payment.
In short, when it comes to healthcare cost increases, employers, employees, patients, payers, providers and taxpayers are in the same boat, and regardless of their position or perspective, that boat is listing perilously.
Everybody agrees that healthcare and access to healthcare are top priorities. Everybody agrees that Americans should get the best care available. And everybody agrees that Americans should get care that keeps up with advances in technology and medicine. Therein lies the conundrum. Americans want, expect and demand high-quality healthcare, and as the state of the art continues to advance, Americans want their care and coverage to advance with it. But Americans also want, expect, demand and deserve affordable healthcare-for themselves, their families and for people who lack health coverage.
In a limited sense, the national dialogue about how best to help seniors afford prescription drugs offers a microcosm of the healthcare cost conundrum. Important advances in science carry the promise of improved, less invasive and perhaps someday less-expensive medical practice. Demand for new drugs rises steadily, while the nation's overall spending on drugs is expected to increase on average as much as 18% per year for the foreseeable future. Although new advances offer the possibility of lower overall healthcare spending, the current increase in spending for drugs makes it more difficult for payers to maintain current levels of coverage and care, let alone pay for expanded drug coverage.
As the drug debate shows us, healthcare innovation carries with it a considerable cost. If experience is a reliable indicator, this cost will continue to climb. Therefore, those who pay for care must be constantly vigilant about healthcare cost drivers, but also must maintain clear responsibility for ensuring that the dollars to fund this care will continue to be available.
Hospitals have a unique perspective about the consequences of escalating costs. Hospitals, in their roles of emergency caregivers, caregivers of last resort and, increasingly, primary-care providers, treat the sickest patients, who by definition require the most intensive and costly kinds of care. Because hospitals treat the sickest of the sick, it is easy to see why more dollars are spent in hospitals than in any other health sector.
Greater demand for care-including from aging baby boomers with increasing healthcare needs-accounts for some of the cost increases affecting hospitals. But other factors also play a significant part. For example, hospitals have to compete for nurses and other highly trained workers with outpatient-care centers, nursing facilities and other care providers. Double-digit cost increases for prescription drugs continue every year, and hospitals must invest in new technology, which is expected to account for up to a third of new healthcare spending increases in the next few years. Hospitals have to deal with significant price increases for liability, malpractice and property/casualty insurance. And hospitals must invest in new equipment and training so that they can prepare against potential chemical or bioterrorism attacks.
If anything, the number of cost drivers affecting hospitals and other healthcare providers seems to be ever-increasing, while the pool of available funds to pay for healthcare appears at best to be relatively static, even adjusting for inflation. Meanwhile, more and more people now must depend upon hospitals as their doctor's office as the number of Americans without health insurance increases significantly.
In short, there are many reasons the issue of healthcare cost is ever-present, ever-contentious and unfortunately unlikely to go away. Talking about cost and analyzing the reasons behind cost increases are fairly easy. What is difficult is deciding what we as a society want from our healthcare system and what we are willing to pay for.
Hospitals are the focal point of our nation's healthcare system, serving as community institutions assisting Americans in times of greatest need, and as the nexus linking the public to the highest quality healthcare our nation has to offer. This is the role that society wants and deserves from hospitals. It also is the role that hospitals want and are proud to play, as they continue to work with other providers, payers and consumers to ensure that the public's health dollars go to fund high-quality, appropriate care.