This article is about a panel at Health Journalism 2008.
Panelists:
• Joy Drass, M.D., president, Georgetown University Hospital
• Paul Fronstin, senior research associate, Employee Benefit Research Institute
• Paul Ginsburg, Ph.D., president, Center for Health System Change
• Gail Wilensky, Ph.D., senior fellow, Project Hope
• Moderator: Bob Rosenblatt, independent journalist, Annandale, Va.
By Keith Darcé
The San Diego Union-Tribune
In the "Economics of health 101" on Friday morning, the panelists discussed how much money is spent on health care, where it goes and why the job of slowing down spending growth is so difficult.
Moderator and independent journalist Bob Rosenblatt opened the session with some of the basics:
- Health care spending in 2006 was 16 percent of the U.S. gross domestic product, up from 12 percent in 1990.
- 46 percent of money spent on health care comes from government payers.
- While the number of uninsured Americans has grown in recent years, their proportion of the population has remained fairly steady over the past decade. They accounted for 15 percent of the population in 1993 and 15.8 percent in 2006.
Paul Fronstin, senior research associate for the Employee Benefit Research Institute, said the notion that employer-provided health insurance coverage is disappearing doesn't reflect the full story. About 60 percent of Americans receive coverage through employer-sponsored plans, according to the most recent statistics.
Most employers with 200 or more employees continue to provide health insurance to their workers, he said. And while the proportion of smaller employers who provide coverage fell from 68 percent in 2000 to 57 percent in 2007, the current level isn't much different than it was in 1996.
Gail Wilensky, a former director of Medicare and Medicaid, provided an overview of the two government health programs:
- Medicare covers about 44 million people (7 million disabled and the rest elderly) and accounted for $425 billion in spending in 2007.
- Medicaid covers about 60 million people (two-thirds are mothers and children) and accounted for $310 billion in spending in 2005.
The latest report from the trustees who oversee the federal government's trust fund for Medicare indicates that the fund will run out of money by 2019, and that beginning this year spending will outpace annual revenue from the wage tax that funds much of the program.
"It's a big issue that will only get bigger in the future," she said. "It's going to be a really serious political problem." The increases in spending haven't translated into higher quality of care, she said.
She suggested several ways to address the problem:
- Realign financial incentives for providers so that those who provide higher-quality and efficient care are rewarded.
- Increase competition in the healthcare system (she pointed to the success of the Medicare Part D drug program as an example).
- Increase the eligibility age for receiving full Medicare benefits for those without disabilities to 70 or 72.
- Reduce coverage for people with higher incomes.
"None of these will be easy, and the last two will probably be the hardest," she said.
Paul Ginsburg, president of the Center for Health System Change, said the rising cost for health care, driven largely by the expansion of technology, is undermining the mechanisms that pay for the care.
He said the United States spends $477 billion more a year on health care than any other developed country when adjustments are made for income.
He said the much-reported role of aging Baby Boomers in the rising cost of healthcare is "vastly overstated."
Most politicians don't have the stomach for dealing with the healthcare financing problem because doing so runs the risk of angering constituents. "There is so much fear among political leaders of talking about costs," he said. "I think containing costs will include some pain."
Joy Drass, president of Georgetown University Hospital, said staff shortages are rapidly increasing the cost of operating hospitals, and they're quickly expanding beyond the ranks of nurses.
Georgetown currently pays as much as $72 an hour to employ temporary specialized nurses.
Hospitals also are feeling pressure to spend more on services from patients who have rising expectations of what their hospital experience should be, she said. "When they come into a hospital, they're not only going to have a good quality outcome but will have a hotel experience."
