Health Care Topic: Costs & Economic Analysis

Center for Sustainable Health Spending colleagues George Miller, Ph.D. and Paul Hughes-Cromwick have the following thoughts.

Innovation in health care products, services, delivery models and processes has emerged as a popular solution to spiraling U.S. health care costs as the Centers for Medicare & Medicaid Services launches its $1 billion challenge to the public and private sectors to demonstrate and scale value-driven innovations that reduce health care costs while maintaining or improving quality. Innovations proven in pilot and demonstration projects offer the potential for improvements in health care efficiency, effectiveness and affordability.

As we embark upon a presidential campaign season, we can anticipate many lively debates on the topics of taxation and spending in this nation. As health spending in the United States accounts for 18 percent of our gross domestic product—a rate often called unsustainable—it is critical that we be clear-eyed in our understanding of the tradeoffs between tax revenues and a sustainable rate of national health spending.

How interested are consumers in the price of health care services? Results from our Consumer Opinion survey indicate that most consumers have never asked about the price of a health care service before getting care.  Fewer than 30 percent asked about price in the past year. Findings like these suggest that consumers are not in the habit of inquiring about cost. Some reasons for this include: not being motivated to ask about price (because someone else pays), not feeling comfortable asking about price, or not feeling certain as to where to get the information.