The list of contradictions in health care is long and mind-boggling. But here’s the one that bothers me the most: The number of inpatient surgeries at hospitals decreased by more than 16 percent from 2012 to 2016. Over the same period, prices increased almost 30 percent.
The result is that total spending on inpatient surgeries went up. Because hospitals simply raised their prices to make up for the loss.
We’re spending more for less care
Guy Boulton, of the Milwaukee Journal Sentinel, finds similar trends in regional statistics. In Eastern Wisconsin, for example, inpatient surgeries fell almost 13 percent, while surgery prices rose 30 percent. The result? Total health care spending on inpatient surgery increased almost 14 percent in the region.
Meanwhile, the cost of living over the four-year period rose about 5 percent. Boulton’s depressing conclusion:
. . . health-care spending increased at roughly three times the inflation rate, even though people were using the same amount or fewer health care services.
Hannah Nephrash, health economist and assistant professor at the University of Minnesota, summarizes the problem: “It’s becoming increasingly clear that our health-care spending problem is really a problem of prices.”
Who will tackle high prices?
But, if prices are the problem, where is the outcry?
The answer can be found in our current system of health insurance, which shields us from awareness of those high and escalating prices. More than half of U.S. workers get their health insurance from their employers. Once you meet your deductible, the cost of your care becomes almost invisible. Yes, there are staggering sums on your hospital bill, but if your share of these amounts is zero, why would you care?
Perhaps a better question is why don’t employers care? They’re on the hook for the lion’s share of rising health care costs for their employees, and their recent strategy of boosting employees’ share of such costs—by raising premiums and deductibles—is backfiring.
Some employers are indeed fighting back. But there are still too few constraints on health care providers who wish to raise their prices.
Who can fix this?