"Bending the Curve": What Really Drives Health Care Spending
Wall Street Journal, February 19, 2010
By: JASON FODEMAN, M.D. AND ROBERT A. BOOK, PH.D.
Much of the motivation driving health care reform is grounded in the belief that U.S. health care spending is too high and rising too quickly. Whether measured by individual insurance premiums, average spending per person, total national spending, or federal and state government health spending, U.S. health care expenditures are growing faster than inflation, faster than average wages, and faster than the gross domestic product (GDP). Thus, the President has declared that one key purpose of health care reform is to "bend the cost curve" downward.[1]
However, this strong consensus that health care spending is too high and growing too fast has not led to agreement on the causes or the appropriate responses. The most commonly proposed explanations for increases in overall health care spending include:
•Increasing prevalence of disease, whether due to an aging population, unhealthy lifestyle choices, or other factors;
•The inefficient structure of the health insurance system;
•Expensive new health care technologies, such as new drugs, medical devices, and other treatments; and
•Wasteful spending, such as over-treatment, "defensive medicine," excessive malpractice costs, and fraud.