Health Care Costs: Fact vs Fiction

In a recent NEJM paper some of the creators of the current ACA system comment on Health Care costs.They discuss what they see as the current trends and then they comment on the reduction in costs and reduction in demand.

As to costs they state:

In an analysis of inflation-adjusted (“real”) spending, the major factor in cost growth during the past 50 years has been the development and diffusion of new medical technology. The specific innovations have varied over time — from cardiac procedures to prescription drugs to advances in imaging — but the importance of technology as a whole has not. Estimates suggest that about half the annual increase in U.S. health care spending has resulted from new technology.

Namely, it appears that one blames the technology. True, there is a great deal more technology but also true, it is oftentimes quite effective. When I first studied there was no CAT scans available and one would look carefully at shadows in plain film to try to determine what was the problem. This was of little use in the case of strokes as one tried to ascertain a block or a bleed. The result was high mortality and lower follow up costs. Thus technology has substantially prolonged life, at a cost, and has reduced some morbidities, while frankly increasing others, but then reducing mortality. It is not as simple as we would have hoped.

As to demand they state:

Some authors have suggested that slow cost growth may result from a reduced need for care, since  trends in rates of obesity have flattened. Such changes are small as compared with overall medical  spending, however. During the 2000s, rates of obesity increased by 3.8% annually, leading to  projected spending growth of 0.3% annually; between 2009 and 2010, this increase was cut in half,  implying a slowdown of 0.1% in growth annually...

On the demand side, many people are now facing very high cost sharing, and this discourages the use of health services.A total of 20% of Americans with employer-sponsored coverage have high-deductible plans Percentage of Covered Workers Enrolled in a High-Deductible Health Plan or Medical Savings Account (MSA), 2006–2013.), and the typical plan deductible exceeds the typical family's available savings. In addition, many consumers have insurance policies that reward them financially for using lower-cost services.

Here they argue two points. First the demand decreased due to a reduction in comorbidity proclivities. Second a demand reduction due to costs. Frankly we have reduced smoking in men greatly and tus the reduction in smoking related disease but we have seen an explosion in obesity and the comorbidities there. The advantage of lung cancer is rapid death, the disadvantage of the sequellae to obesity if a long life at a high societal cost.

The arguments are a bit loose and are still hand waving in presentation. The conclusions are somewhat useful but frankly they do not relate in any way yet to the ACA. The results they present are somewhat hopeful in the long run.