Over the past year, or at least when gas prices were soaring to $4 a gallon, there was a lot of talk about resources and sustainability. A similar concern over the sustainability of the nations healthcare system ought to be a major issue for our policymakers. Some choices need to be made or the system likely wont be sustained, because, like anything unsustainable, it will collapse.
Sustainability comes to mind after the federal number-crunchers released their annual report on the nations healthcare spending. This report, which covers 2007 expenditures, offers lots of fodder for behavior-changing thought. The CMS study says health spending grew at its lowest rate in nearly a decade, but continued to eat up a huge slice of the nations economy and outpaced general inflation. Overall expenditures reached $2.2 trillion, or $7,421 per person, and edged up to 16.2% of the gross domestic product from 16% in 2006. Hospital spending increased 7.3% to $696.5 billion, marking a third straight year of relatively stable growth. Strong Medicaid spending contributed to the hospital increase.
For those who worry about runaway health costs, the report showed at least one bright spot. Slower growth in prescription-drug spending helped keep a lid on total expenditures. Analysts say wider use of generic drugs and regulatory safety warnings helped restrain the cash flow. In addition, the pace of Medicare drug spending slowed because the starting costs of the bizarrely designed prescription program tapered off after 2006.
And that project is one subject for contemplation about the future and resources. There seems to be a growing consensus that all Americans should have access to healthcare and that the government may have to take the lead in getting that doneentailing some serious spending. Certainly the incoming Obama administration is talking about trying to achieve near-universal coverage. If so, the government cant afford to squander money by, for instance, banning Medicare from negotiating lower prices from pharmaceutical companies. Likewise, its not a good idea to pay private insurers substantially more to serve Medicare beneficiaries than what Medicare ordinarily spends.
It might also be a good time to decide whether the administrative costs of private insurance in general are worth the price. Americans ought to ask themselves if this system could use some tweaking when up to a third of premium dollars go to something other than care, people cant get insurance, those who can get it pay huge out-of-pocket costs, and top executives pocket astronomical compensation.
Providers, too, could do some rethinking. Shortly after the CMS report hit the media, New York Times health columnist Jane Brody looked at invasive cardiology in the U.S. The story featured one critic who contends that the vast majority of many conventional heart surgical procedurescosting $60 billion annuallymay be unnecessary or even harmful.
That argument may be overstated, but it adds to a growing body of literature by physicians and health experts who say that much of whats done in American medicine is merely revenue-driven and wasteful, if not dangerous. We can thank a payment system that rewards doctors per procedure for a lot of that problem. Also credit the overabundance of specialists and the dearth of primary-care physicians, the latter of which is undermining the intent of the Massachusetts universal program.
We are spending a lot of increasingly precious dollars on a healthcare system that fails to keep us healthy and is teetering on the verge of collapse. Perhaps the pain of hard times can lead to the birth of a more sustainable system.