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No End In Sight to Rising Healthcare Costs

Karen Minich-Pourshadi, for HealthLeaders Media, October 25, 2010

 
Also of note, thanks to fewer patients coming through the doors and the erratic predictability of reimbursements ratings agencies are more inclined to give hospitals lower investor ratings.

If a possibly lower investor rating and declining hospital admissions aren’t enough to grab your attention, perhaps data released in the S&P Healthcare Economic Composite Index will be.

According to the report, the average per capita cost of healthcare services covered by private insurance and Medicare programs rose 7.32% over the 12 months ending August 2010. Hospital and physician claims for patients covered under commercial health plans were the hardest hit, as claim costs associated with commercial health plans rose 8.66% while Medicare claim costs for services rendered by hospitals and physicians rose the least at 5.08%.

That’s a pretty large and steady increase for an industry that’s supposed to be tightening its belt. Now if you consider that the average consumer will receive a 2%-3% raise this year (if they’re lucky), then you can see that the numbers aren’t showing a bright financial future for patients or providers.

With the current rate of per capita cost of services rising by more than double what consumers will see as increases in their own paycheck, patients simply will not be able to afford to pay their share for care much longer. That’s an equation that isn’t healthy for anyone’s bottom line.


Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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5 comments on "No End In Sight to Rising Healthcare Costs"


chuck (10/26/2010 at 11:29 AM)
Let's get real[INVALID]you want to REALLY cut costs?? Do what all the other industrialized countries of the world have already done[INVALID]go to a SINGLE PAYER SYSTEM for EVERYONE. This reduces costs drastically by eliminating the 25% of costs that go to administrative waste and demands universal healthcare standards so outcomes are better. Single Payer also allows for preventive care to take precedence over medical care. Plus. sigle payer covers everyone[INVALID]1/6th of Americans will no longer be uninsured, costing us even more in the long run. Unfortunately in the US, so many people are making money off the current system that they don't really want it to change[INVALID]insurance companies, doctors, hospitals, etc., want the current system to stay in place so their profits won't be harmed. Of course, no one is really looking long-term when an inevitable system collapse will harm ALL profits. Little fixes like high deductible health plans, malpractice reform, etc., may make mild improvements to the system, but they're not stopping this runaway train. DRASTIC measures need to be taken if everyone is really serious about reducing spending for healthcare.

bob (10/26/2010 at 9:57 AM)
No knowledgeable analyst has ever expected health care costs to decrease during the next decade. Rather, the goal is to reduce the rate of increase. If the rate of increase will be reduced annually by just one per cent, that will make a tremendous difference in Medicare expenditures and everything else. Notice that S&P just reported that "looking across the family of S&P Healthcare Indices, we have seen a trend of moderation in the annual growth rates, particularly in the last 12 months. This is most prominent with Medicare claims costs. In November 2009 those costs were rising at an annual rate of 7.94%. With August's report we see that the rate has fallen to +5.08%. That is the big news. Spread the word!

bob (10/26/2010 at 9:42 AM)
No knowledgeable analyst has ever expected healthcare costs to stop rising in the decade ahead. The goal is to bend the cost curve and decrease the rate of increase. If the rate of increase goes down just one per cent annually during the decade, that will make a tremendous difference in Medicare expenditures and everything else. That is what is going on right now. Notice that S&P reports that "looking across the family of S&P Healthcare Indices, we have seen a trend of moderation in the annual growth rates, particularly in the last 12 months. This is most prominent with Medicare claims costs. In November 2009 those costs were rising at an annual rate of 7.94%. With August's report we see that the rate has fallen to +5.08%." That is the big news!