Writing in an article published on March 7 in JAMA Network online, healthcare policy researchers found in a nuanced analysis of recent healthcare cost data that, while overall U.S. healthcare system cost inflation is currently moderating, employers are intensifying their shift of costs onto their employees.
In their article, “Next Phase in Effective Cost Control in Health Care,” Aaron Glickman, Sarah S. P. DiMagno, and Ezekiel J. Emanuel, M.D., Ph.D., write, “There is some good news on cost control in the United States. In 2017, the last year for which data are available, health care expenditures were 17.9 percent of gross domestic product (GDP). This is similar to the 2010 level of 17.3 percent when the Affordable Care Act (ACA) was signed into law. On April 22, 2010, one month after enactment of the ACA, the U.S. Department of Health and Human Services’ (DHHS) Office of the Actuary released a report. Actual spending has been much better than the official estimates from the Office of the Actuary.”
In fact, they write, “In 2017, total health care costs were almost $650 billion less than anticipated (Table). Expenditures for Medicare were $72 billion less than the projections and Medicaid and the Children’s Health Insurance Program (CHIP) were $250 billion less than the projections. Some of the Medicaid and CHIP savings may be because not all states expanded Medicaid under the ACA; however, that is a small fraction of the $250 billion. In recent years, government reports indicate that “overall healthcare spending growth slowed.” Importantly, this slowdown of cost growth and total spending occurred while insurance coverage increased to include an additional 20 million individuals in the United States through the exchanges, Medicaid expansion, protecting patients with preexisting conditions, and allowing children stay on their parents’ health plan, among other mechanisms.”
On the other hand, the researchers report, “There is also troubling news. In 2017, the per-capita health care spending in the United States was $10 739, about 27 percent more than Switzerland, which is the country with the next most expensive health care expenditures. The average family premium for employer-sponsored health insurance was $19 616 in 2018, representing almost one-third of the median household income of $61 372.3 Employees are paying more of that cost than ever because employers are shifting more of the premiums onto workers and increasingly adopting high-deductible plans. Simultaneously, prices for specialty drugs are increasing substantially, with the cost for some drugs and gene and cellular therapies exceeding $300 000 per course of treatment.”
The authors recommend that the federal government actively work to better control drug prices; they recommend that the Secretary of Health and Human Services set national and state-level benchmarks for total healthcare cost growth linked to economic growth and population aging; they recommend that the federal government expand the adoption of alternative payment models in the private market; and they recommend that the Centers for Medicare and Medicaid Services “use the power granted by §1115A of the ACA to begin implementing bundled payments as a permanent part of Medicare reimbursement”; and they urge the federal government to “wield antitrust powers to address hospital consolidation with other hospitals (horizontal) and through purchasing of physician groups (vertical).”
