Health care spending rose 10 percent in 2001, and triggered an average hike of 12.7 percent in health premiums for employer-provided plans this year.
The jump represents the first double-digit increase in health care spending in more than a decade, the nonpartisan research organization study said. It attributed more than half of the spending hike to increased inpatient and out-patient hospital care, and to higher payment rates secured by hospitals.
People are getting more tests and treatments as managed care plans abandon tight restrictions on care, but higher hospital prices are playing a role as well in rising costs.
Many analysts have suggested recently that hospitals have engaged in "pushback" - an effort to recoup discounts given in the early days of managed care - and organized into networks to exercise greater power at the negotiating table and extract higher fees for services. The 7.1% increase in inpatient and 16.3% rise in outpatient hospital spending together accounted for more than half of the year's total increase.
Hospital costs were mainly fueled by an increase in spending on outpatient care, such as surgeries, emergency visits and certain diagnostic exams. More patients are using outpatient centers, drawn by advertising, convenience, the availability of many types of surgical procedures and by their insurers, which generally prefer outpatient care to more expensive in-hospital services.
The study also found more employers passing along more costs to workers. With profits lagging and the labor market less tight than in recent years, employers "bought down" coverage by a combination of increased cost-sharing and decreased benefits by an average of 15% in 2002. Increased cost-sharing for prescription drugs and increased out-of-network deductibles for members of preferred provider organizations accounted for the largest increases faced by workers.
One of the study's surprising findings was that the aging of the baby-boom generation is actually playing a smaller role in rising health spending than many assumed. While people do consume more healthcare as they age -- approximately $74 for each additional year between age 18 and 64 -- "differences in aging are not large enough and the US population is not aging quickly enough to make aging a major cost-driver for the under 65-population.
Center for Studying Health System Change September 24, 2002
The overall headline is that the costs of "health care" are going up by over 10%. The problem with the headline is that "health care" in the US is absolutely not "health care," but more aptly, "disease care." The last thing the traditional paradigm does is to produce or encourage health.
If they did focus on health they would have to worry much less about disease. However, please study the table above. It is a very important piece of data that is slipping by everyone. I have been highlighting the increase in drug spending that has been increasing by 15-20% the last three years. Last year we spent $175 billion on drugs and this year it will be over $200 billion dollars.
However, it appears that inpatient hospital spending doubled last year. This is alarming! If spending continues to rise, our economy is going to be in deep trouble. This spending does not result in any increase in productivity as the vast majority of care results in the worsening of people's health, not improvement.
As Nick Regush said earlier this year:
"There is no way to be nice about this. There is no point in raising false hopes. There is no treatment or vaccine in sight. There is no miracle breakthrough on the horizon.
"Medicine, as we know it, is dying. It's entering a terminal phase.
"What began as an acute illness reached the chronic stage about a decade ago and progression towards death has been remarkably swift and well beyond anything one could have predicted.
"The disease is caused by conflict of interest, tainted research, greed for big bucks, pretentious doctors and scientists, lying, cheating, invasion by the morally bankrupt marketing automatons of the drug industry, derelict politicians and federal and state regulators - all seasoned with huge doses of self-importance and foul odor."
The US currently spends about 1.5 trillion dollars for healthcare, and the projections are that it will double in less than ten years.
The sad tragedy is that we are spending all of this money on disease management focused on drugs and surgery and our return on this investment is profoundly poor. More and more people do not have the energy they need to get through the day while millions of others are suffering with painful crippling diseases because they have violated basic health principles.
Many of their choices were made out of ignorance and it's my passion to make increase the public's awareness of these health tragedies. I hope to give you, the consumer, the tools to become a major force for good health and the alleviation of disease and suffering.
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