10 Questions on Rising Health Care Costs
Wisconsin has 4th highest costs in nation. When will our leaders take on the issue?
How about a little quiz on one of the nation’s biggest issues that got almost no attention in the state and national midterm elections?
Quiz Question 1: What’s the second largest economic challenge facing the country? Roaring inflation is on top. In second, it’s health costs that are crippling the budgets of every private employer, government at all levels and households. The voracious Medical Industrial Complex (MIC) quietly and destructively keeps chewing up an ever bigger share of our economic pie. Health costs now consume almost $1 of every $5 of the U.S. economy (GDP).
Quiz Question 2: What is the projected increase in premiums for 2023 for the average American? Various projections put next year’s cost and premium increases at 5.6% to 7.4%. With health costs at least $22,000 for a family of four, the 2023 increase will be around $1,300 per family per year. That constitutes a major hit to family and business budgets.
Question 4: How is Wisconsin doing on health cost control? Not well. A Rand Corporation study put us at 4th highest in the nation. Froedtert Health is our highest cost/price system.
Question 5: Are there any answers for controlling costs? The best managed plans in the private sector bring in high quality care for about $12,000 per family or per employee, about half of the national average. Best practices at self-insured companies have worked successfully over the last 20 years to keep their people out of expensive hospitals and then steer them to centers of excellence for major procedures.
Question 6: Why don’t political leaders listen to business leaders who have reformed healthcare from the bottom up? Again, who knows? Politicians do a lot more talking than listening and learning. They are not students of management, the missing link in the health cost quagmire.
Question 7: Why does the MIC not use lean disciplines? American companies learned 20 years ago that they had to follow the lean business philosophies pioneered by Toyota and Honda. They learned they would get their asses kicked if they didn’t. Lean philosophies and methods eliminate defects and waste, resulting in dramatic quality improvements and deep cost reductions. Only a few health providers have taken the lean journey. Major buyers of health care could install quality and cost audits tomorrow. They audit every other kind of vendor.
Question 8: What is the primary building block for health cost reduction? Proactive primary care through independent on-site clinics keep people out of the hospital. Every American should have a medical home at the primary care level. It allows payers to control the front end of the MIC supply chain.
The best answer is totally transparent bundled prices that are being contracted by smart buyers in the private sector. They buy joint replacements for $16,000 to $29,000, versus an average charge of $50,000 to $60,000. Why would any intelligent system pay doubled prices for the same procedure?
Last Question 10: Why are drug prices so far out of control, including drugs that cost $50,000 a year and up to a half million dollars or more? The problem is so horrific that government regulation seems to be the only answer. Congressional and legislative hearings are needed to unravel the cost and benefit equations. Some of the expensive drugs bring near miraculous results. But, if they bankrupt families, can they be justified? I don’t have an answer on this question.
How did you do on the quiz? Probably no one did very well. The challenge of taking on the MIC is daunting, and its collusive leaders play the political game par excellence.
Instead of wasting time and energy on phony issues like “stolen election,” the leading lights in the political world need to elevate health care economics to front and center. There are answers out there.