The supercommittee’s health spending paradox, in three charts

Source: Sarah Kliff via Washington Post

As every health care interest group girds for potential deficit reduction cuts, the Medical Imaging Trade Association sent around these charts to make the case that they’re not the bad guy on costs. They show that the use of medical imaging and associated costs has decreased over the past few years:

That jives with larger trends across Medicare, where cost growth has slowed in recent years, at least partially due to this drop in utilization. Here’s how the S&P; Health Economics Index charts it:

Medicare is, on average, seeing beneficiaries access less medical care than it has historically. There’s a bit of debate over what’s driving this trend; some speculate it’s the rough economy, where seniors are less willing to pay for medical services, while others contend that doctors have gotten better at coordinating care. Either way, utilization looks to be dropping. And that begs the question: If seniors are using less health care, how do we end up with this chart?

How does use of medical care go down, but federal health care spending go up? It’s largely wrapped up in demographics: A wave of baby boomers have begun aging into the program, expanding its size. AARP projects that Medicare enrollment will hit 79 million in 2030, more than double enrollment in 2000. So even if each patient uses fewer medical services, in aggregate, they still consume more medical care than if the entitlement program had to support fewer elderly patients.

In a lot of ways, this speaks to how some of the health spending challenges are outside of the supercommittee’s power. A few options might address this in roundabout ways, such as cutting doctor reimbursements or raising Medicare’s eligibility age (which raises issues about cost shifting). But the underlying challenge – that our population is getting a lot older – isn’t one that the 12-member panel can address with new policies.


About James Crist

How do we stop America's decline? The country is in trouble and we can all feel it. Where did we go wrong? How do we fix it? We now have an auction-based government, for sale to the highest bidder. Politicians have become nothing more than corporate whores and pawns for the rich. If we want our representatives to represent us, let them get their campaign money from us, their constituents. We have to amend the constitution to get the big money out of politics.
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