Addressing health care costs -- the right way

The AMA has put forward four broad strategies to reduce health care spending and improve value.

Editorial. Oct. 15, 2007.

Tired of seeing headlines like the one on the front page of the Oct. 1 AMNews: "Health insurance premiums up 6.1%, fast outpacing inflation and wages"?

More important, are you weary of experiencing what that statistic and others that document rising health care costs mean to you and your patients in real life terms -- a higher number of people without health insurance, more paperwork for your practice, soaring administrative costs?

Well, it's possible to change the status quo. A fundamental first step is to properly address the issues of cost, value and efficiency in the U.S. health care system.

The latest rise in health insurance premiums -- only a part of the nation's roughly $2 trillion annual health bill -- is a timely example of why attention turns so quickly to rising health care costs. The figures, compiled by the Kaiser Family Foundation, represent the smallest rate of premium increase since 1999. But that's a dubious distinction given that the rise is more than twice the overall inflation rate of 2.6% and far ahead of the 3.7% increase in wages.

And if insurance costs go up at that rate, expect also a rise in the number of uninsured Americans. Another of our page one headlines, only two weeks before the premium news, announced a dramatic increase in the latest U.S. Census Bureau tally of the uninsured -- to 47 million.

When insurance rates rise, according to researchers, fewer workers can afford to pay premiums and medium- and small-size firms give up offering coverage. One striking figure: In 2001, 68% of firms smaller than 200 workers offered health benefits; at last count it was 59%.