EDITOR’S NOTES: Heading Towards That $5 Trillion Annual Price Tag on U.S. Healthcare Spending
As seems always to be the case in such situations, we as a society are facing a “good news-bad news” scenario around U.S. healthcare spending. Indeed, as I wrote in a blog back in October, the new numbers coming out of the federal Centers for Medicare and Medicaid Services (CMS) in October were—and should be—alarming. The article, “National Health Expenditure Projections, 2013-23: Faster Growth Expected With Expanded Coverage and Improving Economy,” written by a large group of actuaries in the Office of the Actuary at CMS, headed by Andrea M. Sisko, appeared in the October issue of Health Affairs. Essentially, for a variety of macroeconomic, healthcare-economic, policy, and societal reasons, the actuaries predicted, overall U.S healthcare spending is set to rise faster in the coming years than it has in the past few.
With the U.S. economic recession technically over and beginning to fade in reality, and with millions more Americans now accessing health insurance coverage through the Affordable Care Act (ACA), things are set to change soon. As the article’s abstract puts it, “The combined effects of the Affordable Care Act’s coverage expansions, faster economic growth, and population aging are expected to fuel health spending growth this year and thereafter… Because health spending is projected to grow 1.1 percentage points faster than the average economic growth during 2013-23, the health share of the gross domestic product is expected to rise from 17.2 percent in 2012 to 19.3 percent in 2023.”
What’s more, the CMS actuaries note, total U.S. spending on healthcare is expected to go from $3.056.6 trillion this year to $3.207.3 in 2015 to $4.042.5 in 2019, to $5.158.8 trillion in 2023. That’s right: healthcare will cost our country more than five trillion dollars a year—and will consume 19.3 percent of our gross domestic product—within 10 years.
Some of us remember how, back in the 1990s, many asserted that our entire economy and society would fall apart if U.S. healthcare spending went over the $2 trillion mark or over 15 percent of GDP. Well, obviously, that hasn’t happened. But healthcare has continued to consume an ever-larger proportion of our economy’s financial energy. What’s more, the growth in healthcare expenditures as a percentage of GDP from 17.6 percent this year to 19.3 percent by 2023 should alarm any thinking person. That level of growth will compel every single person, from all stakeholder groups (purchaser, payer, provider, and consumer)—in other words, every one of us—to do what is possible to improve outcomes and efficiency and help control costs.
In the November/December issue’s cover story, we discuss how the forward evolution of accountable care organizations and population health strategies is impacting imaging informatics. What’s clear is that significant savings will be possible in reducing or eliminating redundant diagnostic imaging procedures and improving results reporting and reporting-based actions, even as it is becoming clearer by the day that the way forward in terms of imaging informatics will not be through the creation of gigantic repositories of images, studies, and other data, but rather through the creation of mechanisms for direct communications and connectivity between and among providers. What’s more the articles immediately following the cover story help point to ways in which imaging informatics and other leaders are doing things to improve care delivery and cost containment.
Such development work will inevitably provide one element of a broader solution to our exploding healthcare cost crisis. And frankly, as we speed rapidly towards spending over $5 trillion annually on healthcare within the next decade, every single area of solution will be critically important.
