Question

1. What are some of the reasons for increased health care costs that are attributed to the providers of medical care? Answer should be one page long.

Answer 1

For many years and in countless articles, physicians have been the scapegoat for rising health care costs in the United States. In fact, they have been blamed by many critics for the United States leading the world in health care expenditures.

In the January/February 2013 issue of Missouri Medicine, we saw a close examination of the data that indicates that this blame is misplaced – that delving into key components in health care spending reveals something else. While there is general disagreement among the so-called experts as to the degree of impact of each component, almost everyone seems to agree that new technology – not physicians – is number one on the list of contributors to rising health care costs.

In this issue of Missouri Medicine, the Physicians Foundation examined data on the leading key components and found that chronic disease conditions, life style – including obesity and addictions, administrative expenses, hospitals, pharmaceuticals, mandated insurance benefits, aging, end-of-life care, defensive medicine and health disparities have all had anywhere from a moderate to significant impact on rising overall health care costs.

In the final section, entitled “Interesting Statistics about U.S. Health Care System”, we examine why infant mortality rates can be a poor indicator of the success or failure of a health care system. The same applies for life expectancy statistics. Issues such as medical innovation need also to be considered in the general discussion of a health care system’s success or failure.1. We reward medical providers for doing more, rather than being efficient

Most insurers -- including Medicare -- pay doctors, hospitals, and other medical providers under a fee-for-service system that reimburses for each test, procedure, or visit. On top of this, our medical system is not integrated which leads to repetitive tests and over-treatment.

2. We're older, sicker, and fatter

Nearly half the U.S. population has one or more chronic conditions such as asthma, heart disease or diabetes, which drive up costs. Two-thirds of adults are either overweight or obese, which also leads to chronic illness and inflated medical spending.

3. New drugs, technologies, and procedures are expensive

Medical advances can improve our health and extend our life, but they also add to the cost of health care. Patients and doctors often demand the newest (more expensive) treatments, even if there is little or no evidence that they are better.

4. Employer-sponsored health benefits are tax-free, so most consumers don't pay directly for their health care

The majority of people with insurance get it through their job and are disconnected from making true consumer decisions about the cost of their care or their coverage (read why employers offer health insurance in the first place).

5. We (consumers) don't have enough information to make fully informed decisions about medical care, and it's cost

Despite a wealth of information at our finger tips via medical journals and the Internet, there is no uniform or quick way to understand treatment options and the costs associated with them. We would never buy a car without comparing models, features, gas mileage, cost, and payment options. But this is how we buy health care. And according to KHN, Americans vary widely in how they view end-of- life issues, with some desiring every possible medical intervention to stave off death in every situation, no matter how small the possibility of success.

6. Hospitals and other providers are increasingly gaining market share and are better able to demand higher prices

According to KHN, while mergers or partnerships among medical providers or insurers may improve efficiency and help drive down prices, consolidation can also have the opposite effect, allowing near-monopolies in some markets and driving up prices. Increasingly, hospitals are buying up rivals and directly employing physicians, creating larger medical systems.

7. Fear of malpractice lawsuits drives spending

Malpractice premiums and jury awards are part of what drives spending. However, it is also doctors prescribing unnecessary tests or treatment out of fear of facing a lawsuit.

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