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Healthcare Costs Soar Above Overall Inflation



The new numbers are consistent with a trend that from August 2000 to August 2010 has seen healthcare inflation rise 48% while overall Consumer Price Index has risen 26% for the same period, U.S. Bureau of Labor Statistics data show.



5 comments on "Healthcare Costs Soar Above Overall Inflation"
John kircher (10/4/2011 at 9:15 AM)

Comparisons of health care inflation with the over-massaged consumer price index just confuses the issue. Any measure of inflation that counts the devaluing of a major asset (such as real estate)as a reduction of the cost of living cannot be used as a realistic basis for a rational comparison. For example, an individual's ability to borrow to cover a large medical bill is critical to any discussion of medical inflation because the [INVALID]native is a possible default with the impact THAT has on the health care provider. Also to the extent that the new health care legislation depresses employment, it stresses the health care system as much as medicare underpayments. Speaking of which, how can we honestly discuss 'healthcare inflation' without carving out the hidden medicare tax burdening the system? If we don't use these factors to discount healthcare inflation, we will never be able to assess it, much less deal with it.
Jerry Scherer (10/22/2010 at 1:32 PM)

It is unfortunate that we have not come to grips with the healthcare cost conundrum that plagues Americans and that to-date "efforts" toward resolution have exacerbated this crisis. It seems that there are numerous opportunities judge and point blame including service access and quality issues; provider and payer greed; fraud and abuse; legal costs; duplication of services; aging population; technology; uninsured individuals; ... and the list goes on. Our culture and healthcare delivery model have been impervious to multiple attempts in the last 40 years to control and manage these factors. The history speaks for itself and current prominent reform initiatives are equally ill advised. Because healthcare costs have risen to a level that threatens the health delivery system and the entire economy, we are forced to consider cultural and delivery model changes ... abdicating these responsibilities to government is no improvement. Culture and delivery model solutions need to be identified by and controlled by consumers and not by special interests that include government, the health industry, and consultants; "experts" driven by their self-interests rather than the consumer's. The healthcare industry creates a significant portion of its own demand by marketing to consumer fears, not managing patient expectations, encouraging dependencies, catering to patient misconceptions, and focusing on healthcare rather than health. Consumers need to engage and acknowledge accountability for their health. Business has started some positive initiative and can provide the lead. Public education is an essential first step.
Donald First (10/22/2010 at 1:29 PM)

Sorry Sir, your conclusion is faulty. This descerpancy between CPI and Health insurance increases is not caused by discounts. It has been going on for Decades. There have been periods of time in the 70;s 80's and 90's when the trends for Medical care were in excess of20%. In fact in 1983 Great West offer no rate guarantee to atract business. It is caused by a number of factors, mostly greed and gaming the system. New technology and too much access has increased the cost!
Jerry Scherer (10/22/2010 at 1:28 PM)

It is unfortunate that we have not come to grips with the healthcare cost conundrum that plagues Americans and that to-date "efforts" toward resolution have exacerbated this crisis. It seems that there are numerous opportunities judge and point blame including service access and quality issues; provider and payer greed; fraud and abuse; legal costs; duplication of services; aging population; technology; uninsured individuals; ... and the list goes on. Our culture and healthcare delivery model have been impervious to multiple attempts in the last 40 years to control and manage these factors. The history speaks for itself and current prominent reform initiatives are equally ill advised. Because healthcare costs have risen to a level that threatens the health delivery system and the entire economy, we are forced to consider cultural and delivery model changes ... abdicating these responsibilities to government is no improvement. Culture and delivery model solutions need to be identified by and controlled by consumers and not by special interests that include government, the health industry, and consultants; "experts" driven by their self-interests rather than the consumer's. The healthcare industry creates a significant portion of its own demand by marketing to consumer fears, not managing patient expectations, encouraging dependencies, catering to patient misconceptions, and focusing on healthcare rather than health. Consumers need to engage and acknowledge accountability for their health. Business has started some positive initiative and can provide the lead. Public education is an essential first step.
Bernard Emkes (10/22/2010 at 10:07 AM)

All these statements are true, but still miss the ONE most important fact. Health care inflation simply has to be 50% or more higher than CPI inflation due to the large discounts off charges demanded, negotiated and received by the large commercial payers. If a physician or hospital needs to increase net revenues by CPI, charges have to increase almost double CPI because large payers extract 30-40% discounts. So if 5% is the needed increase in net revenues to pay staff supply costs, etc., charges have to increase 7.1% to 8.3% just to get to the 5%. Therefore large discount payers are one of the MAJOR causes of this trend. This also means everyone else pays more, because charges must be the same for all patients. In fact, the DOJ recently filed suit in Michigan against BCBS Michigan for just this reason. I wrote an article explaining this phenomenon in 2006.