Cost, Cost, Cost

Everywhere you turn, there are new accounts of health costs spiraling out of control.

Premiums for state workers in California will jump a whopping 25% next year, and some businesses are seeing premiums jump 75% or more. Medicaid costs are soaring and causing serious budget problems in every state, and Medicare spending is expected to rise by 9% this year.

What on earth is going on and what can be done?

As with any health care problem, it must begin with a proper diagnosis if treatment is to be effective.

The United States does not have a properly functioning market for health care. Third-party payment systems dominate both public and private sector plans, giving consumers the illusion that someone else is paying for their health care consumption.

Lack of price sensitivity is one of the key drivers in spiraling costs. This also has given political leaders a blank check to enact a mountain of expensive, feel-good health care mandates, regulations, and price controls in various disguises.

Editorials in the Los Angeles Times and the Sacramento Bee may suggest that some are beginning to see a cause and effect:

“Consider the raft of health coverage bills – 18 of them – now pending in the California legislature,” the LA Times writes today. “One, mandating coverage of hearing aids, comes from a group funded in party by hearing aid manufacturers?Most of the bills now pending in Sacramento cross a line, going beyond legitimate oversight and into political micromanagement?[and none has] been subjected to any serious scrutiny of cost.”

Then the Sacramento Bee yesterday editorialized about a bill that would mandate unlimited infertility treatments, warning that this “bill alone could jack up health care premiums in California by another 5 percent? The agenda in the Capitol should be about controlling costs as much as possible and expanding access. Instead, it’s about more lawsuits, mandatory fertility coverage, more hyperbaric oxygen, more acupuncture, more bone marrow testing and other costly micromanagements of a system already on the edge.”

Add this to federal coverage mandates and to regulatory requirements of the Health Insurance Portability and Accountability Act of 1996, and the results of excessive political control of the health care system are being felt in every corner of the country.

There will certainly be two opinions about the best treatment: Those who believe in a single-payer system will insist that the only way to get real control is for government to take over. Take a look at the stories this week in the London papers to see where this leads.

Or we can begin to inject some sanity into the system by engaging the power of consumers to force efficiencies in the health sector, as they do in other sectors of the economy, by demanding the best value for their money. The Health Policy Consensus Group has had it right all along. See our Vision Statement for more:

Grace-Marie Turner


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