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By: Ralph Neas
May 27, 2011
|Rising costs throughout the U.S. health system are a form of internal bleeding likely to doom any economic recovery or deficit reduction plan that does not address the problem directly and systemically.Any efforts to bring our nation to fiscal or economic health will be futile if the hemorrhaging of health care costs remains unchecked.
Even in spin-saturated Washington, some facts are undeniable. Total expenditures on health care represented 17 percent of the gross national product in 2010 and are projected to reach 20 percent by the end of this decade. The federal government already spends more for health care than for defense, Social Security or any other single spending category. The nonpartisan Congressional Budget Office has emphatically identified rising health costs as the greatest threat to our fiscal future.
It doesn’t have to be this way. Our current system is devastatingly inefficient. The United States spends 141 percent more on health care than other economically advanced nations. But our far higher bill is not buying us a healthier population.
Roughly 30 percent to 40 percent of medical and hospital costs can be attributed to waste and inefficiency. That means, America is on a path to squander $10 trillion over the next decade. That hemorrhage would leave our economy — and our cities, states, small businesses and middle-class families — on life support.
Given our financial condition, preventing this kind of spending and the economic drag it represents should be the kind of urgent national problem that overrides ideological differences and encourages us to find common purpose.
Recognition of this reality is growing. Cost containment provisions in last year’s Affordable Care Act are an important step in the right direction. In recent months, President Barack Obama and House Republicans have each offered prescriptions to reduce federal health care spending.
They are wildly different approaches — but have one major flaw in common. Neither does enough to address the unsustainable growth in health costs across the entire economy.
The key to any reform is tackling the whole problem, not just one piece — like health care spending by the federal government, for example, or even the public sector as a whole. Unless spending on health care is curbed systemwide, federal reforms run the risk of just shifting skyrocketing costs to those least able to handle this added burden.
Medicare reform can begin the kind of systemic change needed to improve quality, value and efficiency. But without additional action, everyone — from private employers, to struggling cities and counties, to middle-class families, as well as the elderly and disabled — is likely to face a backbreaking burden of higher costs.
America desperately needs a new strategy — one that takes on rising costs across the public and private sectors and is driven by verified data and evidence about why and how our national spending is growing. This can only be possible if we make every part of our hybrid public and private system more transparent and accountable.
We need a serious national effort to collect accurate data about cost drivers and price trends, medical decision making and quality of care. This data, collected across all 50 states, could guide policy, give consumers understandable ways to compare health care outcomes and options and create a foundation for a more fair, responsible and sustainable health care system.
A broad coalition that includes business, labor, health care providers and health industry leaders has united behind a commitment to reform our health system. We believe that, without addressing costs, the U.S. won’t be able to resolve concerns about access and quality of care. Indeed, access to quality care inevitably will suffer without a long-term resolution of the cost question.
If our diverse coalition can find consensus on the urgent need for systemwide health cost containment and on specific policy principles needed to achieve it, surely our elected leaders can overcome their differences to support solutions that improve health outcomes and the economy’s prospects.
The need for action to curb ever-increasing health spending, while increasing value, should be the one area of policy on which it is easiest to reach bipartisan agreement.
In coming weeks, elected officials are expected to debate a variety of ideas to get America’s economic house in order. Any policy prescription that does not deal seriously and systemically with rising health costs while improving health outcomes would be a self-defeating exercise in ideological grandstanding — not the relief our country badly needs.
And that’s something America cannot afford.
Ralph G. Neas is president and chief executive officer of the National Coalition on Health Care.
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