Rising Health Spending Spurs Reform Debate

Main Category: Health Insurance / Medical Insurance
Article Date: 04 Jun 2009 - 4:00 PDT

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A new study shows that - in the words of Jon Gabel, its lead author - "American families with employer-based [health] coverage were worse off in 2007 than they were in 2004," the Wall Street Journal reports. The study, published in Health Affairs, found that out-of-pocket costs, such as co-pays and deductibles, increased 34 percent between those years. "The main reason for rising out-of-pocket costs was the growth in overall health spending," the Journal reports (Gerencher, 6/3).

The report came Tuesday as White House economists pitched health reform as a way to bolster the sagging economy. A top administration economist, Christina Romer said "'billion-dollar bills [are] lying on the sidewalk' if the nation can find a way to make the system more efficient," the San Francisco Chronicle reports. The White House report suggested that by reducing waste, and making other changes, the rising costs could be slowed by 1.5 percentage points a year, putting as much as $2,600 into the pockets of the typical American family of four. While Republicans were skeptical, Douglas Holtz-Eakin, an economist and GOP adviser, said "we should not squander" the "economic growth opportunity" (Lochhead, 6/3).

"The American people feel like they've been hit by a wrecking ball, and it's in the form of health care costs. Fixing the economy and holding down health care costs are two sides of the same coin," Sen. Ron Wyden, D-Ore., told CQ Politics. Wyden introduced a plan two years ago to save money and cover more people that has become a favorite among Republicans, according to the report. Despite the reform debate's recent shift to focus on cost, lawmakers appear to favor proposals that could increase spending, CQ Politics reports (Wayne, 6/3).

Officials in Minnesota, meanwhile, were grappling with a local report that predicted the state's health spending to double over the next nine years, to 20 percent of their economy. The state health department plans to use that estimate as a benchmark, and beginning next June, issue analyses that compare actual spending to the projections in an effort to gauge the effectiveness of health reforms, the Minneapolis Star Tribune reports (Wolfe, 6/2).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

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