HOW TO CONTROL HEALTH CARE INFLATION

Dr. Wes links to a WSJ article that delivers some predictable news on health care spending. The pontifications of the NYT and various “progressive” policy wonks notwithstanding, aging baby boomers will put enormous upward pressure on health care expenditures during the next decade. The bill is expected to reach $4.3 trillion by 2017:

David Catron

Dr. Wes is justifiably frustrated by the widely-believed myth that physician salaries are a major driver of health care inflation, and that draconian cuts in physician reimbursement will somehow get costs under control:

Heck, why not make it an even 20.7% to keep costs the same? After all, doctors are clearly the cause of the problem.

Obviously, even if one disregards the damage CMS has already done to primary care with its ill-considered price controls, the amount of money that can be saved by cutting physician payments is a mere drop in the bucket.

The Health Affairs blog has a very sensible post by Rep. Paul Ryan (R-WI) on what should be done to get costs under control. His prescription? Remove the market distortions created by the government:

The government is the single greatest contributor to this problem by the nature of the tax code and the structure of health care entitlement spending; and these can be corrected with fundamental changes in public policy to restore the market’s vitality.

Ryan advocates a solution built around personal ownership, transparency,  and entitlement reform.  The first two would put the patient back in charge of her own health care, and the third would deal with the unsustainable smorgasborg of ”benefits” onto which our politicians pile new goodies every election cycle.

The last of these is the most difficult, of course. But the relentless increase in health care expenditures can’t be stopped if entitlements aren’t brought under control. No amount of prices controls imposed on doctors and hospitals will do the trick. We need, in other words, a “reality-based” policy to deal with this issue.

Comments 1

  1. Steve Gwiazdowski MD wrote:

    The reality is that physicians control 80% of the total cost of care in this country. Cutting salaries will no longer attract the best and the brightest. I recent study reported in the WSJ suggests that this migration has already taken place with the cream of the crop going into finance. The ongoing “brain drain” will drive up the cost of care as the less talented cause more medical errors, procedural complications and inefficient approaches to solving diagnostic dilemmas that evidence-based guidelines cannot address.

    Posted 26 Oct 2008 at 5:07 pm

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