Moral Failure And Health Costs: Two Simplistic Spending Narratives

What to do about the seemingly inexorable rise in health spending has been the central health policy challenge for two generations of health economists and policymakers. In 1965, before Medicare and Medicaid, health spending was about 5.8 percent of GDP. In 2013, it was nearly 18 percent. And GDP quadrupled during this same period Over the past 30 years, there are been two warring political narratives explaining health spending growth, with two different culprits and indicated remedies. At their cores, these narratives blame the main actors in the health care drama—patients and physicians—for rising costs. The Conservative Narrative: The Patient As Culprit The conservative thesis holds that the demand for health care is unlimited because it has been, historically, a free good for many patients. Moreover, the argument runs, much illness is driven by bad personal health choices — for example, smoking and obesity, and the heart disease and diabetes that follows. Thus, much of our cost problem is actually the patient’s fault. Since patients have historically paid a relatively small fraction of health costs, the conservative remedy is that patients must have more “skin in the game,” that is, pay more of the cost themselves. If we do this, people will exercise more discipline in their personal health habits, and also “shop” for care when they need to use it, and costs will go down. Adherents to this explanation point to Joseph Newhouse’s nearly forty-...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Costs and Spending Equity and Disparities Featured Health Professionals Hospitals Insurance and Coverage Long-term Services and Supports Medicare Payment Policy Population Health Public Health Affordable Care Act conservative phy Source Type: blogs