The conference began with opening remarks by Greg Anrig, vice
president, policy, at The Century Foundation, who welcomed the audience and
speakers and Karen Davis, president of The Commonwealth Fund.
employer-based healthcare including:
After all, we’re the wealthiest nation in the world. And what is more important than the health of our citizens?
Nevertheless, even in the U.S. resources are finite. And in 2007, Congressional Budget Office director Petter Orzag warns, “The central fiscal challenge facing the nation involves rising health care costs.” In a recent letter to the House Subcommittee on Health chairman Pete Stark, Orzag frames the problem in a way that no one can ignore by comparing how much faster healthcare spending is growing than income per capita. “The rate at which health care costs grow relative to income is the most important determinant of the nation’s long-term fiscal balance,” he explains. “It exerts a significantly larger influence on the budget over the long term than other commonly cited factors such as the aging of the population.”
Let’s cut to the bottom line: If health care inflation continues to outstrip income growth over the next forty years at the same rate that it has over the past 40 years, spending on Medicare and Medicaid alone will rise to 20 percent of GDP in 2050. (To give you a sense of how big a slice of the pie that is: today, the entire federal budget equals roughly 20 percent of GDP).
Barry—
Thanks for your comment on “Should 21-Year Olds Pay Less . . .” While we’re in agreement on many points, I have to disagree with your first sentence—that “in theory the Massachusetts approach of charging older people up to twice as much as younger people for health insurance is more reasonable, in my opinion, than pure community rating because younger people, as a group, incur far lower healthcare costs.”
I believe that insurance, by definition, is supposed to get everyone into one pool so that those who need less care can help those who need more care. You are, of course, right that younger people incur far lower costs—until they get older. At that point, another generation of young people will help pay for their care. That’s how insurance is supposed to work.
“If we stopped paying for everything that had no evidence of benefit, we would be a very unpopular organization," Dr. Steve Phurrough, director of Medicare’s coverage and analysis group told the Boston Globe last week.
First, thank you for you comments. This is a fledgling blog, but your comments are far from fledgling.
I plan to respond to all of them in the next couple of days–translating, where it might be needed, for people who are not health care industry professionals.
I want to spread a wide net with this blog; at the same time I greatly appreciate the well-informed opinions that come form industry insiders. I take it as my responsbility to mediate (and translate) between most of us (potential patients) and the professionals.
Before I comment, I woud be delighted if more readers respond to your comments. Ulimately, I would like to see this blog become a dialogue among readers while I moderate . . .
Commenting on "Should 21-year-olds pay more " Barry Carol writes:
Several points on this.
First, in theory, the Massachusetts approach of charging older people up to twice as much as younger people for health insurance is more reasonable, in my opinion, than pure community rating because younger people, as a group, incur far lower healthcare costs. Even the modified community rating approach used in MA probably charges younger people considerably more than their actuarial risk would justify. As for employer coverage, Bob also pointed out that if the employees do not sign up when insurance is first offered, they must show evidence of insurability if they want it later.
Affordability is an increasingly challenging issue for both employers
(especially small businesses) and those seeking coverage in the individual market. I suspect that the eventual solution will likely be taxpayer financing.
Should insurers be able to offer less expensive policies to the young and healthy? Or should they be required to offer the same benefits to everyone at the same price?
In states where insurance is mandated, should twenty-somethings get a break? In a post on Health Care Policy and Marketplace Blog Robert Laszewski addresses these questions. He begins by focusing on a report just released by the health insurance trade association (AHIP). The study looks at state health insurance reforms of the 1990s that tried to eliminate discrimination by insisting that insurers must sell “individual” policies to people who are not covered by an employer or another group without discriminating on the basis of health, age or gender. According to the AHIP, these reforms have had some “unintended consequences.”
A New York Times article stated that anemia drugs, given by injection, have been heavily advertised, and there is evidence that they have been overused, in part because oncologists can make money by using more of the drug. Lichtenfeld told United Press International, "Probably more than a billion dollars is spent on erythropoietin each year, which makes it one of the most expensive cancer drugs."
Why are so many drugs withdrawn from the marketplace after physicians realize that their patients are suffering serious, sometimes life-threatening side effects? Why aren’t these products thoroughly tested before being sold to the public? The current issue of The New England Journal of Medicine (Sept. 6) places the blame right where it belongs—with the FDA. In “Sidelining Safety—The FDA’s Inadequate Response to the IOM” Sheila Weiss Smith describes the Food & Drug Agency’s weak response to the Institute of Medicine’s sharply critical report on the agency’s failure to “embrace a culture of safety.”