Ben Wheatley – The Health Care Blog

The Sweet Spot of Health Care Cost Containment

Jul 19, 2023

BY BEN WHEATLEY

As health care continues to move in the direction of unaffordability, policy makers are considering a range of options to bring down health care costs. The Health Affairs Committee on Health Care Spending and Value has identified four broad areas for reform, including administrative savings, price regulation and supports for competition, spending growth targets, and value-based payment. These measures appropriately target health care’s supply side and the excesses that exist in the health care system.

In this blog, I would like to highlight another avenue for savings: one that focuses on the demand side of the equation. It is possible to reduce health care expenditures by reducing the demand for care. This is distinct from rationing, which is the denial of needed care. I’m referring to genuine health improvements that make health care less necessary in the first place. This type of health improvement is the sweet spot of health care cost containment, benefiting both patients and purchasers.

In a previous blog, I posed the question: in an ideal world, how much would we spend on health care? I posited that in a perfect world, we would spend zero on health care because no one would be sick. While such a perfect world may be unachievable, having the goal in mind can serve to guide our way in the present moment—like entering a destination into GPS.

Measures that promote genuine health improvement can alleviate the burden of illness while at the same time reducing the cost of care. They move us in the direction we want to go. In this blog I provide several such examples.

In an Ideal World, How Much Would We Spend on Health Care?

May 11, 2023• 1

BY BEN WHEATLEY

We have heard it said before, and it is no longer shocking to say, that in 2021 the United States spent $4.3 trillion on health care. To put this gaudy number in some perspective, we measure it as a share of our economy and report that health care comprised 18.3% of our gross domestic product. CMS projects that health care will approach 20% of GDP in coming years—one-fifth of everything we buy and sell in this country.

In a recent report, the Health Affairs Council on Health Care Spending and Value said that “it is unclear what percentage of GDP would represent the ideal level to devote to health care. Nevertheless, the council believes that the current expenditure and rate of growth are higher than they should be….” The council observed that the dollars devoted to health care seem “disproportionate to the health they produce” and noted that the spending places a “significant burden on families, employers, employees, and government.”

We spend approximately $12,900 per person per year on health care. By comparison, the average cost of health care per person in other wealthy countries is only about half as much.

These metrics seem to indicate that the United States is spending too much on health care, but nevertheless we struggle to identify the “right” amount. However, if someone were to ask me: “In an ideal world, how much would we spend on health care?” I would propose a very simple answer: zero. This is because, clearly, in an ideal world, no one would be sick.

988 and 911: Justice System Involvement in Mental Health Crises

Apr 4, 2022

BY BEN WHEATLEY

A woman was walking in the crosswalk of a busy intersection as the rain started to come down. She looked cold, but more than that, she looked off. She had no shoes on her feet and her countenance was in disarray. It seemed to me that she was in the midst of a mental health crisis.

The woman approached where I was standing and I suggested that she go into the Starbucks on the corner to look for her shoes. At least in there, it would be warm. She didn’t go inside, but instead went to the entrance and sat down on the ground.

Someone must have called 911 because a policeman and an ambulance with an emergency medical technician showed up. The EMT brought a stretcher down from the ambulance as the policeman watched over the situation. The woman got on the stretcher and the EMT placed a blanket over her. As this played out, the policeman stood in the background, allowing the EMT to take primary responsibility for the interaction. Since the woman seemed to pose little risk to herself or others, the response seemed to be the appropriate one.