Tag: health spending

So what can we do about health care costs?

Feb 20, 2024

By MATTHEW HOLT

Last week Jeff Goldsmith wrote a great article in part explaining why health care costs in the US went up so much between 1965 and 2010. He also pointed out that health care has been the same portion of GDP for more than a decade (although we haven’t had a major recession in that time other than the Covid 2020 blip when it went up to 19%). However, it’s worth remembering that we are spending 17.3% of GDP while the other main OECD countries are spending 11-12%. Now it’s true that the US has lots of social problems that show up in heath spending and also that those other countries probably spend more on social services, but it’s also clear that we don’t actually deliver a lot more in services. In fact probably the most famous health economics paper of the last 50 years was Anderson & Rienhardt’s “It’s the Prices, Stupid”, which shows we just pay more for the same things. Anyone who’s looked at the price of Ozempic in the US versus in Denmark knows that’s true.

But suspend disbelief and say we actually wanted to do something about health care costs, what would we do?

There are 4 ways to cut health care costs

Cut prices
Cut overall use of services
Reduce only unnecessary services
Replace higher priced services with lower priced ones

Number 3 or reducing only unnecessary services is the health policy wonks dream.

Last Month in Oncology with Dr. Bishal Gyawali

Jan 4, 2019• 1

By BISHAL GYAWALI MD

Long list of news in lung cancer

September was an important month in oncology—especially for lung cancer. The World Conference in Lung Cancer (WCLC) 2018 gave us some important practice-changing results, also leading to four NEJM publications. The trial with most public health impact is unfortunately not published yet. It’s the NELSON trial that randomised more than 15000 asymptomatic people at high risk of lung cancer to either CT-based screening for lung cancer or to no screening and found a significant reduction in lung cancer mortality rates among the screened cohort compared with the control cohort. This reduction was more pronounced among women, although they constituted only 16% of the trial population. I am looking forward to reading the full publication and am particularly interested in knowing if there were any differences in all-cause mortality rates and the rates of overdiagnoses.

A new ALK-inhibitor on the block—brigatinib—has significantly improved PFS versus crizotinib when used as first-line therapy in ALK-positive non-small cell lung cancer (NSCLC) patients. However, I assume that it will be difficult for brigatinib to replace alectinib in this setting, since the latter has already been tested in two different RCTs and has more mature data.

With Keynote 407, pembrolizumab has entered into the treatment arsenal for squamous NSCLC by improving overall survival in combination with chemotherapy versus chemotherapy alone as a first-line regimen. However, when A B is compared with A, it is important to know whether A B is better than A followed by B. In this trial, 32% of patients who were in the control arm received a PD-1 inhibitor upon progression. Nivolumab is already approved as a second-line option in this setting after first-line chemo; so how much benefit in Keynote 407 is due to more than half of control arm patients not getting PD-1 inhibitor at all versus the benefit of combining pembrolizumab with chemo upfront is an important question.

Health Care-Related Public-Private Partnerships Will Likely Become the Norm in 2019

Nov 26, 2018• 3

By MARY SCOTT NABERS

The United States ranks number one in the world for health care spending as a percentage of GDP. That sounds great… but, for instance, Texas ranks only 11th worldwide when it comes to performance. That’s because of access to care.

The country’s health care rankings are likely to get worse as 673 rural hospitals in the U.S. are at risk of closing. Here’s what has happened: the need for care greatly outpaces available funding, especially for public hospitals. Something must be done.

If public funding is no longer available, alternative funding can be secured in numerous ways. The simplest way to access alternative funding is through a public-private partnership (P3) engagement. However, alternative funding for public hospitals, health care clinics and university medical centers can be found from other sources as well. Finding funding is not a problem when private-sector investors, large equity funds, pension programs, asset recycling and EB5 programs all stand ready to invest in public-sector projects.

Moving to a P3 health care model would allow hospitals to secure immediate funding and utilize private-sector expertise and best practices while transferring all risks. The launch of health care P3s would also ensure new construction, new jobs and hundreds of additional health care options for people.
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The Long and Short of Health Numbers

Jun 24, 2014• 67

By Ceci Connolly and Rick Judy

The notable five-year contraction in healthcare spending growth comes to an end next year, but not in a way that marks a dramatic reversal—at least, not yet. The Medical Cost Trend: Behind the Numbers 2015 report released today from PwC’s Health Research Institute (HRI) projects a medical cost trend of 6.8% for 2015, up only slightly from the 6.5% projected for this year. Our analysis, which measures growth in the employer-based market, incorporates input from health policy analysts, industry executives, earnings statements, government data and actuaries from more than a dozen insurance companies, whose companies cover a combined 93 million members.

Much of this is simple and not surprising based on historical analysis: the healthcare “economic recovery” lags behind the broader economy. So we are now beginning to see the recovery—with more employed workers and more disposable income—loosen up spending on things such as doctor visits and diagnostic tests. Many Americans, after postponing care, are once again spending on their health needs.

Some underlying nuances in the health numbers are more complex and uncertain: greater total spending on health services is not the same as higher costs per person. Even as private health spending ticks upward, evidence reveals that structural changes over the past few years have produced greater efficiency in the $2.8 trillion US health industry. As with any evolution, there is uncertainty. Some of our big healthcare investments today are a financial gamble. Most notably, the burst of high-cost “specialty” drugs could result in lower treatment costs on chronic conditions in future years or signal the start of painfully expensive pharmaceutical bills.

The most durable long-term factors holding down costs are those that instill a new philosophy about care delivery. For instance, health systems and hospitals striving for “systemness,” in which care teams seek to achieve more by working together. They are focusing specifically in two areas: streamlining administrative work and consolidating and standardizing clinical programs, which can provide higher quality care through consistent processes and outcomes.

With about 60% of hospital budgets spent on labor, personnel costs are a top priority. Since 2012, hospital employment growth has slowed and is projected to continue on this trend—evidence that providers are achieving improved efficiency with fewer resources.

Drugmakers May Win Big in Effort to Curb Gun Violence

Feb 13, 2013• 2

By Matt Barry

Reducing gun violence by increasing access to mental health services may cost billions of taxpayer dollars and give drugmakers that help treat mental illness a revenue windfall. But will it reduce gun violence? The answer is uncertain.

In the wake of the tragic shooting at Sandy Hook Elementary School, there have been repeated calls to increase access to mental health services as a way to reduce gun violence in the U.S., even though the evidence is weak at best that those services actually reduce gun violence.

Absent from these calls to action is any sense of how much that policy would cost. Many argue that any cost is worthwhile if it prevents just one needless death due to gun violence. But we live in austere fiscal times and knowing the price tag before taking action makes sense (click on the image above to enlarge).

A just-published Bloomberg Government Study estimates that the potential impact on the federal deficit due to increased spending on mental health services could exceed $260 billion from 2014 to 2021.

Barking Up The Wrong Tree: Affordability, Not Cost Growth, Is The Policy Challenge

May 8, 2012• 6

By Jeff Goldsmith

A recent spate of commentaries on the continuing health spending moderation raise an important policy question: If the cost curve is well and truly bent, why are we investing so much of our policy energy on bending it further, when the more pressing problem is the declining percentage of Americans that can afford our health system’s astronomical costs?

Health spending the past two reported years (2009 and 2010) have grown in the high 3 percent range, the lowest growth rates since Dwight Eisenhower’s last year in office (1960), five years before Medicare. Medicare’s actuaries have pointed to the recession as a root cause. Yet even Medicare spending growth has subsided to about 5 percent in 2010, a development hard to attribute to recession since so few Medicare patients have first-dollar cost exposure. This analyst’s extensive industry contacts suggest no spending rebound in 2011 and 2012, despite an aging population and fee-for-service’s pernicious volume-increasing incentives in full force.

Pharmaceutical spending. The two most explosive cost problems of the 1980’s and 1990’s, pharmaceutical spending and imaging — which together now represent about 20 percent of total health spending — are now seeing low single digit growth, and seem likely to remain quiescent. In the pharma case, the main contributor is the ruinous outflow of branded drugs from patent protection, and the failure to replace them with new protected drugs. This outflow continues unabated until 2018. Branded drug prescriptions are shrinking by 5 percent per year, and the only things preventing pharmaceutical sales from actually declining are brand price increases and growth in generics, which now represent almost 80 percent of prescriptions, according to IMS Health. While specialty drugs (biologicals) remain a concern, those too begin losing patent protection in earnest in the next few years.