Health care premiums eat up an average 24 percent of yearly household incomes, while average spending per capita is $9,000 annually.
Over the past 10 years, annual public-private health care spending has grown 77 percent. Today, it totals $2.7 trillion and is growing at a rate of 3.9 percent a year. Spending comprises 18 percent of our gross domestic product — 50 percent more as a share of GDP than other industrialized nations spend — yet we don't have longer lives and better health to show for it.
The Commonwealth Fund President David Blumenthal is a former primary care doctor who worked at Massachusetts General Hospital, where he saw the use of evidenced-based medicine, engineered into the network's electronic health records, dramatically reduce the number of radiology tests ordered, and ensuing costs, “by simply reminding doctors of best practices at the point of making a decision.”
Building a high-performance health system, Blumenthal said, will be about “unleashing that kind of bottom-line, innovative spirit,” including standardizing claims, processing and billing services; and bundling payments for acute hospital episodes.
The Houston-based Actuarial Research Corp. has shown that The Commonwealth Fund's initiatives would slow health care spending by an estimated $2 trillion by 2023, holding increases in national health expenditures to no more than long-term growth.
The benefit to individuals would be the real win.
“I don't think the answer (to controlling costs) is to make a frail 85-year-old woman a better shopper,” said Stuart Guterman, fund vice president.
“There's an alternate to rationing and taking away stuff,” Blumenthal said, “and that's to make the system better.”