Rising Healthcare Costs

Rising Healthcare Costs



hi I'm Macy Spencer and in today's presentation we're going to take a look at health care cost we will briefly discuss the causes of rising healthcare costs the implications for state federal and individual pocketbooks as well as some of the considerations opportunities and challenging cause political leaders across the United States are concerned with rising healthcare costs for the past several years the discussion is largely surrounded repealing the Affordable Care Act and rolling back Medicare programs a national platform measures to reduce health care costs are slim but there have been many practical reforms at the state level to ease the financial burden health care affords our society to further understand health care costs and the measures our leaders are taking we must understand what exactly health care costs are and what's driving these costs up our health care costs to health care providers health care costs are the expenses incurred to deliver health care services to patients to payers or insurers it is the amount that pay to providers for services rendered and to patients is the amount they pay out-of-pocket for health care services as you can see from the various operational definitions health care costs are complex and include a variety of stakeholders to consider this complexity leads us directly to the first driver of rising health care costs the highly complex health insurance system in the United States forces health care providers and insurers to participate in an overwhelming amount of excess administration according to Princeton Medical Nui Reinhart the McKinsey Global Institute estimated that excess spending on health administration and entrance accounted for as much as 21 percent of the estimated total excess spending or 477 billion dollars in 2003 brought forward that 21% of excess spending on administration raishin would amount to about a hundred and twenty billion dollars in 2006 and about a hundred and fifty billion dollars in 2008 the Robert Wood Johnson Foundation published a report high and rising healthcare costs and noted administrative cost as a key reason why spending in the United States exceeds that of other advanced countries the Robert Wood Johnson Foundation published another report in which the authors agree that techno is the most important driver of health care spending increases over time it was estimated that about half of health expenditure growth is largely in part because technologies are not required to demonstrate effectiveness before broad use and patience an article published in September of 2012 by the Journal of the American Medical Association indicated that total knee replacement surgeries have soared one point five percent among Medicare participants in the past twenty years and will continue to grow as United States 77 million baby boomers age in 2010 people aged 65 and older underwent two hundred and forty three thousand eight hundred and two operations to replace damaged knees or to revise previous replacements the number is up from ninety three thousand two hundred and thirty replacements or revisions in 1991 at about fifteen thousand dollars each the total knee replacement tab for patients at every age is now about nine billion dollars by comparison and according to the Kaiser Family Foundation Medicare spending for 2011 was estimated at five hundred and fifty billion dollars the good news is that such procedures have eased the pain and improved the quality of life especially for a rapidly aging population the bad news is that it can be viewed as another stress on government individuals and businesses struggling with the current growth in health care cost just another example of new check is robotic surgery which is not performed in more than 36% of hospitals across the United States of America according to PwC s health record Institute according to an August 19th 2010 article in the New England Journal of Medicine the cost of robotic surgery was estimated to be 2.5 billion dollars and growing defining new technology as encompassing the use of any new procedure drugs or devices the Congressional Budget Office estimated in 2008 that technology so define accounts for anywhere between 38 percent to more than 65 percent of new healthcare spending even though technology is the most impactful driver of cost it's not the only one pharmaceutical costs because of the transition from chemical agents to more costly biological agents in pharmaceuticals it also has mandated insurance benefits which expand insurance coverage to include providers such as chiropractors podiatrists social workers and massage therapists benefits such as mammograms well child care drug and alcohol abuse treatment and now they include populations such as non-custodial children and grandchildren another reason for a cost rising is the American lifestyle the American lifestyle is another factor causing healthcare prices to skyrocket more than 43 million or about one in five you in US adults smoke and thirty five percent of US adults are obese according to federal data the costliest 1 percent of patients account for 20% of all healthcare spending in the United States ten percent of the population consumes 63 percent of the total healthcare dollars in the country people with three or more chronic disease conditions generally fall into that 1 percent category according to Linda Dunbar and vice president of care management Hopkins health care experts seem to all agree that more than 75% of health care costs are due to chronic conditions such as heart disease cancer stroke diabetes and arthritis the National Center for chronic disease prevention and health promotion says that chronic diseases cost 7 and 10 deaths each year in the United States these cost drivers that we've just discussed are definitely not the only ones with the ARB the most impactful for the bottom line of our government and our personal budgets according to a Henry J Kaiser Family Foundation study in May 2012 entitled Hearst's health care cost a primer key information on health care costs and their impact the u.s. spent two point six trillion on health care in 2010 they were quoted as saying the rate of growth in health care spending is a single most important factor undermining the nation's long-term fiscal condition according to Jack Ginsberg unless we control costs total health care expenditures will far exceed what they would be under free market conditions if this occurs Americans would have to forego other goods and services as more and more funds have to be allocated to health care so how can we reduce healthcare costs and prevent this tragedy from half when considering methods to reduce health care cost it is important to consider good health outcomes despite reduced spending limiting healthcare resources means that health care expenditures should be correlated with high quality and efficiency of service to improve overall health of patients with these considerations in mind several solutions to the rising healthcare cost epidemic in the u.s. include reducing avoidable in effect services and technologies second solution is considering regulators that should analyze cost and benefits before introducing new technologies to the market they should also ensure accurate and adequate pricing of services to provide price transparencies for all paying parties involved it would also be beneficial to remove unnecessary or redundant administrative tasks health insurance claims should be uniform and medical necessity determinations could come from a universal system to provide providers real-time data access as a society we can promote wellness prevention chronic care management and encourage patient responsibility for health and cost consciousness while the nation as a whole has not implemented these solutions several states have taken proactive so far the results are promising Maryland has implemented an all payer rate-setting system which generated more than 500 million dollars in Medicare savings Massachusetts has established a benchmark for annual cost growth and Oregon has implemented a Medicaid coordinated care organizations model that is generated 2.2 billion dollars in state and federal savings even further Arkansas has reduced costs through their multi-payer bundled payments for certain courses of care and patient centered medical home models even though these reforms say different approaches they all share focus on driving down costs and maintaining their commitment to quality care while the no state has the magic wand to correct our constantly rising healthcare costs it is refreshing and exciting for our future to be able to see such initiatives from our state leaders thanks so much for listening and I additional ideas for ways to save money in health care you

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