Monday, August 1, 2011

U.S. healthcare 2010--2020: more value for the money?

Two studies issued this month confirm that even after ACA implementation has begun in earnest, the U.S. health care system will remain one of the most expensive in the world. Less clear is whether U.S. citizens can expect to see improvements in the quality of their care.

Last week CMS actuaries predicted trends in U.S. health care costs during the period 2010--2020. Costs will continue to go up, they say, at an average rate of 5.8 percent for the ten year period. CMS experts project that the peak annual increase (8.3 percent) will occur in 2014, when, due to the ACA, an estimated 22.9 million people become insured, either via state health exchanges or an expanded Medicaid program.

After that, increases level off for the period 2015--2020 to an average of 6.2 percent per year. This smaller cost increase is due in part to the excise tax on "Cadillac" plans due to kick in 2018. (The excise tax will force plans to provide incentives to enrollees to choose plans with lower premiums and higher cost-sharing requirements, thus slowing the growth in health services.)

Impact of wellness? While this study takes into account the impact of increased coverage under health reform, it doesn't directly address the potential impact of wellness initiatives in the ACA. These include the increased premium discounts that will be available for wellness participation beginning in 2014. But, a look at a recent comparison of the U.S. health system to 12 other developed countries suggests that perhaps the next study should focus on wellness.

Not surprisingly, the Commonwealth Fund found the U.S. health system (using 2008 data) to be by far the most expensive health system among the nations studied. In contrast, it found the quality of U.S. health care to be a mixed bag. Perhaps reflecting a penchant for early screening efforts, U.S. 5-year survival rates for certain cancers (breast, cervical, colorectal) were quite high.

Other results were less encouraging. The U.S. ranked near the middle on the number of patients suffering from heart attack or stroke who died within 30 days of their hospitalization. And, the U.S. had the highest rate of hospitalization for three chronic diseases (asthma, congestive heart failure and diabetes).

Sources: "National Health Spending Projections Through 2020: Economic Recovery and Reform Drive Faster Spending Growth",, July 2011; "The U.S. Health System in Perspective: A Comparison of Twelve Industrialized Nations," July 2011,


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