The ghost of past, present, and future health care – cost.

On Christmas Eve, Uwe Reinhardt posted a piece which raised a familiar ghost of healthcare past, present, and future: cost. The post reminds us that between 2000 and 2009, Medicare spending on physician services per beneficiary rose a whopping 61 percent, even though physician fee rates only increased by 7 percent. Reinhardt argues that he culprit behind this pattern of cost increases is increased utilization, with the fastest growing sectors of health care utilization (imaging and diagnostic testing) increasing by 80% between 2000 and 2009. Increased use of health care resources is not necessarily a sign of bad healthcare, but it is a sign of expensive healthcare. If we knew what was driving increasing utilization and how to control it, we would be able to largely rein in skyrocketing health care costs. Although a portion of these increases may reflect new, valuable health care technology and improvements, a larger portion likely just reflects more health care. The underlying etiology of this latter type of health care spending includes self-referral, a misaligned fee for service reimbursement model, and patient demand. A prospective model of health care would address all of these issues by coordinating patient care and removing duplication of diagnostic testing, providing rational reimbursement to discourage unneeded and self-referral driven testing, and engaging the patient in the decision making process so that they might be less likely to demand costly services that often lead to little, no, or potentially negative health benefit.

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