By JEFF GOLDSMITH
After I first appeared in The Well being Care Weblog fourteen lengthy years in the past, it was to decry the coverage neighborhood’s obsessive seek for dangerous information in regards to the well being system: https://thehealthcareblog.com/weblog/2007/10/03/the-perpetual-health-care-crisis-by-jeff-goldsmith/. So whereas we struggled with the COVID pandemic, we continued listening to usually about pharmaceutical value gouging, anti-competitive hospital mergers, dangerous labor relations, and supplier burnout. Thus, we will count on to listen to nothing in any respect in regards to the failure of the well being system to take part within the present outburst of inflation within the US economic system.
The Washington suppose tank Altarum Institute tracks such issues, and in its November 16 report https://altarum.org/websites/default/recordsdata/uploaded-publication-files/SHSS-Value-Brief_November_2021.pdf, we study that healthcare costs rose by an annualized fee of simply 2% in October 2021 in comparison with the Client Value Index’s 6.2% and the Producer Value Index’s 8.6%. Altarum commented that this was “stunning on condition that lots of the similar elements impacting economywide costs (labor shortages, provide chain points, and elevated demand for economywide providers) could be anticipated to impression well being care as properly.”
And the moderation isn’t simply price-related. General well being spending has solely risen by 4.4% since January of 2020, and the proportion of GDP dedicated to well being has fallen by greater than half a %, from 18.1% pre-pandemic to 17.5% in October. That is regardless of 4 surges of COVID hospitalizations, overflowing ICUs and ERs, labor shortages, and different COVID-related stresses. Well being system staffing ranges are nonetheless practically a half-million decrease than they have been pre-pandemic. Had the federal authorities not stepped in by the CARES Act, FEMA funding, and short-term suspensions of Medicare fee cuts, the nations’ hospitals would have been critically broken by COVID-related monetary stresses, that are removed from being over.
This moderation in healthcare costs and spending has come at a horrible value: an exhausted and demoralized cadre of direct care staff throughout the system, plummeting working margins, and growing queues for a lot of types of elective care. But, as colleague Ian Morrison and I argued in Well being Affairs Weblog earlier this 12 months, the nation’s hospital techniques particularly actually stepped up in the course of the pandemic and have been one of many solely elements of our nationwide infrastructure that exceeded expectations throughout COVID, probably saving a whole lot of 1000’s of lives: https://www.healthaffairs.org/do/10.1377/hblog20210308.673278/full/
Well being insurers profited from this pause as a result of they constructed greater charges of price escalation into their charges for 2020-2021. Will moderation be taken under consideration when hospitals and doctor teams start demanding of economic insurers some fee reduction within the subsequent spherical of contract negotiations each for employers and public applications like managed Medicaid and Medicare Benefit? Not bloody probably! Neither is the press and coverage neighborhood more likely to stop flogging its record of well being system whipping boys.
The very fact is that there are highly effective financial and political pursuits served by preserving the $4 trillion well being system on the defensive. But take into consideration how a lot worse off our society could be if this care system had not risen to the immense societal problem of COVID. Neither that heroism nor the sustained price moderation match the masochistic well being coverage narrative of the previous forty-plus years. Perhaps it’s time for a actuality verify and a extra balanced narrative.