HCI3 Update From the Field: Small Growth in Healthcare Spending Reason to Celebrate?

Submitted by francois.debrantes@hci3.org on Friday, January 10, 2014 - 01:39

Is a 3.7% growth in U.S. health care spending a cause for celebration? The government seemed to think so. We beg to differ – The U.S. health care bill stands now at $2.8 TRILLION…a mind-blowing number. And while the GDP's share of health care hasn't grown (which is good news), it's still twice that of any other country. The paper announcing the "good news" was published last week and seemed to offer much needed relief to the government given the debacle of the health insurance exchange. However, to put this growth percentage into context, we have to look at the growth in personal income, and there the picture continues to be bleak for the majority. According to the Bureau of Economic Analysis, personal income grew at an anemic rate of 1% for most of 2013 – or roughly $510 per household for the year – while health care costs for a family grew by $820. The net result, as it has been for most of this century, is the continued impoverishment of the average American family for the benefit of the few who continue to produce more services than are needed and charge a price that is egregious in most instances, and highway robbery in some. The day of reckoning, however, is at hand.

What this means to you – Deep in the weeds of the U.S. Congressional legislative process is a bill that is making its way through both Houses. It replaces the formula that should have been used to adjust physician fees (but hasn't because Congress has repeatedly voted to ignore the Law that instituted the formula) with a set of simple and effective mechanisms that, over time, kill off the majority of fee-for-service payments in Medicare. The message couldn't be clearer: the days of unfettered production of services is over. This, of course, is far better news for the U.S. and eclipses the "good news" of a 3.7% growth. Tie that to the growing movement for cost and quality transparency and we have a real shot at remaking this bloated and ineffective industry so that it delivers true value to the American public. That might mean negative trend rates over time, not just a tempering of positive ones, and we're certainly looking forward to those days. To help accelerate the timeline, we're adding a few gears to our transformation engine. One is a new website devoted entirely to consumers, to arm them with the tools they need to fight the status quo and demand real and lasting change. We plan to create an army of foot soldiers who can carry this critical mission to every state and fight the agents of the status quo who have benefited long enough at the expense of the average working family. We don't rejoice at a 3.7% increase and neither should anyone else, let alone the government. Our expectations as a nation should be for far better results. Let's go make them a reality.