Just What Causes Health Care Inflation?


Aging of the population and increased demand for services are not why costs have risen so quickly in health care, according to a study in the Journal of the American Medical Association.

“Between 2000 and 2011, increase in price (particularly of drugs, medical devices, and hospital care), not intensity of service or demographic change, produced most of the increase in health’s share of GDP,” say the authors of “The Anatomy of Health Care in the United States” in JAMA’s November 13 issue.

In 2011, health care expenditures totaled about $2.7 trillion, nearly 18% of the economy.

Since 2000, about 91% of health care inflation can be pinned on hospital charges and the cost of drugs and devices.

“The continued increase of health care as a portion of the economy can largely be [attributed] to the failure of the rest of the economy to increase much at all,” the authors argue.

It might get worse, they add, citing a growing focus on population health.

“Clinicians increasingly are expected to substitute social and economic goals for the needs of a single patient,” says the study. “These contradictory forces are difficult to reconcile, creating risk of growing instability and political tensions.”

They add, “The relative decline in personal spending on health care accompanies (and abets) the shift from medicine’s historical commitment to a single individual and substitutes responsibility for groups of people, representing ascendancy of the public health and social policy perspectives over that of traditional, individually focused medicine. This change produces many ethical, cultural, and economic questions.”

The study also contradicts the common assumption that people pay more out of pocket and in premiums than in the past. Those charges have increased “more slowly than employers’ share of premiums for private insurance and Medicare. . . . These data contradict another common perception that personal out-of-pocket spending for premiums and copayments [has] increased faster than [spending by] government and employers.”

Career Opportunities

HAP, a subsidiary of Henry Ford Health System, is a nonprofit health plan providing coverage to individuals, companies and organizations. This executive develops strategies to meet membership and revenue targets through products, pricing, market segmentation and advertising.  Aligns business among Business Development, Commercial Sales, Medicare and Public Sector Programs and Product Development. Seeks to enhance and be responsible for business development and expansion through the development of an effective product portfolio, strong interpersonal relationships and service excellence.

Apply via email to jfedder1@hfhs.org or online at http://p.rfer.us/HENRYFORDlXqAJA

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