Share Of Health Care Spending Research Articles

Decomposition of medical imaging spending growth between 2010 and 2021 in the US employer-insured population.

Medical imaging, identified as a potential driver of unsustainable US health care spending growth, was subject to policies to reduce prices and use in low-value settings. Meanwhile, the Affordable Care Act increased access to preventive services-many involving imaging-for employer-sponsored insurance (ESI) beneficiaries. We used a large insurance claims database to examine imaging spending trends in the ESI population between 2010 and 2021-a period of considerable policy and benefits changes. Nominal spending on imaging increased 35.9% between 2010 and 2021, but as a share of total health care spending fell from 10.5% to 8.9%. The 22.5% growth of nominal imaging prices was below inflation, 24.3%, as measured by the Consumer Price Index. Other key contributors to imaging spending growth were increased use (7.4 percentage points [pp]), shifts toward advanced modalities (4.0 pp), and demographic changes (3.5 pp). Shifts in care settings and provider network participation resulted in 2.5-pp and 0.3-pp imaging spending decreases, respectively. In sum, imaging spending decreased as a share of all health care spending and relative to inflation, as intended by concurrent cost-containment policies.

Century-Long Trends in the Financing and Ownership of American Health Care.

Who pays for health care-and who owns it-determine what care is delivered, who receives it, and who profits from it. We examined trends in health care ownership and financing over a century. We used multiple historical and current data sources (including data from the American Medical Association, the American Hospital Association, government publications and surveys, and analyses of Medicare Provider of Services files) to classify health care provider ownership as: public, private (for-profit), and private (not-for-profit). We used US Census data to classify physicians' employers as public, not-for-profit, or for-profit entities or "self-employed." We combined estimates from the official National Health Expenditures Accounts with other data sources to determine the public vs. private share of health care spending since 1923; we calculated a "comprehensive" public share metric that accounted for public subsidization of private health expenditures, mostly via the tax exemption for employer-sponsored insurance plans or government purchase of such plans for public employees. For-profit ownership of most health care subsectors has risen in recent decades and now predominates in several (including nursing facilities, ambulatory surgical facilities, dialysis facilities, hospices, and home health agencies). However, most community hospitals remain not-for-profit. Additionally, over the past century, a growing share of physicians identify as employees. Meanwhile, the comprehensive taxpayer-financed share of health care spending has increased dramatically from 9% in 1923 to 69% in 2020, with taxpayer-financed subsidies to private expenditures accounting for much of the recent growth. American health care is increasingly publicly financed yet investor owned, a trend accompanied by rising costs and, recently, worsening population health. A reassessment of the US mode of health care financing and ownership appears warranted.

85 Differences in Emergency Department Use Among Cancer Patients Who Have Used an Oncology Urgent Care Clinic

Potentially avoidable emergency department (ED) visits constitute a large share of health care spending in patients recently diagnosed with cancer. As an alternative to the ED, health systems have created oncology urgent care clinics (UCC) to treat common acute care needs. Prior work in our urban university health system found slowed growth in total ED visits through 2016 after the start of our UCC despite limited UCC use. A more direct analysis of differences in ED visits after UCC use would identify whether patients reverted to using the ED after the UCC.

Variation In Emergency Department Admission Rates Among Medicare Patients: Does The Physician Matter?

Hospitalizations account for the largest share of health care spending. New payment models increasingly encourage health care providers to reduce hospital admissions. Although emergency department (ED) physicians play a major role in the decision to admit a patient, the extent to which admission rates vary among ED physicians even within the same hospital remains poorly understood. In this study we examined physician-level variation in ED admission rates for Medicare patients. We found meaningful variation in admission rates: The mean physician-level adjusted admission rate was 38.9percent and ranged from 32.2percent to 45.6percent for physicians at the tenth and ninetieth percentiles, respectively, of the estimated distribution within the same hospital. In contrast, the predicted risk for admission based on patient characteristics varied little among these physicians, suggesting that the variation in admission rates was not due to differences in patients seen. Our results suggest that strategies targeting physician decision making could modify (by either increasing or decreasing when appropriate) rates of admissions.

The share of health care spending in the structure of GDP as a criterion for the healthcare system effectiveness

Effective work of the healthcare system is becoming increasingly important in modern conditions, which actualizes the task of finding tools to increase the effectiveness of its functioning; this should ultimately lead to a decrease in morbidity and an increase in life expectancy. One of the main criteria for social development in modern conditions is the share of health care spending as a percentage of GDP; since this reflects the degree of attention and concern of the state about the health and life of citizens. The research hypothesis states that the share of health care costs does not affect the quality of the health care system, which is expressed in the average life expectancy of the population. To confirm the hypothesis, an analysis was made of the degree of influence of the share of expenditures on health care development on GDP on average life expectancy in the context of countries using a simple pair correlation and correlation between ranks; A cluster analysis of the countries was also carried out on the basis of their grouping according to the level of health spending as a percentage of GDP. It has been established that there is no connection between the share of health expenditures from GDP in countries and average life expectancy in them, which confirms the failure to use this indicator as a criterion for assessing the development of the health system. A cluster analysis of the countries under consideration showed that the effectiveness of the health care system is a complex category, depending not only on the level of state funding, but also on a number of other aspects.

Characteristics and behavioral health needs of patients with patterns of high hospital use: implications for primary care providers

BackgroundA small percentage of patients relies extensively on hospital-based care and account for a disproportionately high share of health care spending in the United States. Evidence shows that behavioral health conditions are common among these individuals, but understanding of their behavioral health needs is limited. This study aimed to understand the behavioral health characteristics and needs of patients with high hospital utilization patterns in Camden, New Jersey.MethodsThe sample consisted of patients in a care management intervention for individuals with patterns of high hospital utilization who were referred for behavioral health assessments (N = 195). A clinical psychologist conducted the assessments, which informed a multiaxial evaluation with diagnostic criteria from the Diagnostic and Statistical Manual of Mental Disorders and a Mental Status Examination, to facilitate accurate diagnosis. Demographic characteristics, housing instability, exposure to trauma, and health care service utilization data were also collected through self-report and chart reviews.ResultsNinety percent of patients were diagnosed with a psychiatric and/or active substance use disorder. Depression was the most common psychiatric disorder and alcohol use was the most common substance use disorder. However, only 10% of patients with an active substance use disorder were in treatment, and only 17% of patients with a mental health diagnosis were receiving mental health treatment. Nearly all (91%) patients reported having a primary care provider at the time of assessment and most had seen their primary care provider within three months of their last hospital discharge. Non-medical barriers to health and wellness, specifically housing instability and exposure to trauma, were also common (35 and 61% of patients, respectively) among patients.ConclusionFindings highlight the importance of identifying and treating patients with behavioral health needs in the primary care setting. Developing connections with community agencies who provide behavioral health and substance use treatment can enhance primary care providers’ efforts to address their patients’ non-medical barriers to treatment, as can embedding behavioral health providers within primary care offices. The study also underscores the need for trauma-informed care in primary care settings.

Financial Health Economics

We provide a theoretical and empirical analysis of the link between financial and real health care markets. This link is important as financial returns drive investment in medical research and development (R&D), which, in turn, affects real spending growth. We document a “medical innovation premium” of 4–6% annually for equity returns of firms in the health care sector. We interpret this premium as compensating investors for government-induced profit risk, and we provide supportive evidence for this hypothesis through company filings and abnormal return patterns surrounding threats of government intervention. We quantify the implications of the premium for the growth in real health care spending by calibrating our model to match historical trends, predicting the share of gross domestic product (GDP) devoted to health care to be 32% in the long run. Policies that had removed government risk would have led to more than a doubling of medical R&D and would have increased the current share of health care spending by more than 3% of GDP.

Assessing and improving clinical insight among patients "in denial".

Assessing and improving clinical insight among patients "in denial".

Where Population Health Misses the Mark

Conventional population management theory, predicated on prevention and keeping the healthy majority healthy, fails to address the root cause of the unsustainable health care spending trajectory in the United States. The national health care agenda has been heavily influenced by the assumptions that disease prevention and the general promotion of "population health" will be sufficient to reduce health care spending to a sustainable level. However, a very small subset of the population with chronic and complex conditions account for a disproportionate share of health care spending, and unnecessary variation in the care of those chronic and complex episodes wastes 20% to 30% of the episodic spending. Health care spending follows what is known as "the 80/20 rule," with 80% of all spending being incurred by only 20% of the population. Whether a population is defined as a company, a county, or a country, the overwhelming majority of their health care spending comes from a small minority of the individuals, and the bulk of that spending is associated with either largely unavoidable and unpredictable single events or complex episodes of care. Achieving an economically sustainable health care system will require more efficient and effective delivery of those complex episodes of care.

The Effect of a Compulsory Schooling Reform on Disability Pensioning – Evidence from the Danish Registers

A growing literature is examining the effects of compulsory schooling reforms on various measures of health later in life (SRH, hospitalization, mortality, BMI, health behaviors and self-reported work disability). However, few studies explore spillover effects of education on disability, and even fewer allow for heterogeneous treatment effects by gender. Yet, disability pensions constitute a large share of health care spending and have implications for health care utilization. Using comprehensive register data from Denmark providing administrative data on both health and disability on the entire Danish population coupled with a major compulsory schooling reform from 1958 that substantially lowered the costs of education and enhanced its quality in rural areas, we estimate Probit, OLS and linear treatment effects models which show that both men and women in rural born cohorts subject to the reform have a lower rate of disability pensioning and fewer medical diagnoses for chronic illnesses later in life compared to urban born counterparts and pre-reform cohorts from both regions. Furthermore, we find that an important channel of transmission of education to disability and health for both men and women is through higher income. A possible explanation for the symmetric effects of education on male and female disability in this setting could be that women in older cohorts in Denmark are more active on the labour market compared to other countries.

Construction of a business model to assure financial sustainability of biobanks.

Biobank-suisse (BBS) is a collaborative network of biobanks in Switzerland. Since 2005, the network has worked with biobank managers towards a Swiss biobanking platform that harmonizes structures and procedures. The work with biobank managers has shown that long-term, sustainable financing is difficult to obtain. In this report, three typical biobank business models are identified and their characteristics analyzed. Five forces analysis was used to understand the competitive environment of biobanks. Data provided by OECD was used for financial estimations. The model was constructed using the business model canvas tool. The business models identified feature financing influenced by the economic situation and the research budgets in a given country. Overall, the competitive environment for biobanks is positive. The bargaining power with the buyer is negative since price setting and demand prediction is difficult. In Switzerland, the healthcare industry collects approximately 5600 U.S. dollars per person and year. If each Swiss citizen paid 0.1% (or 5 U.S. dollars) of this amount to Swiss biobanks, 45 million U.S. dollars could be collected. This compares to the approximately 10 million U.S. dollars made available for cohort studies, longitudinal studies, and pathology biobanks through science funding. With the same approach, Germany, the United States, Canada, France, and the United Kingdom could collect 361, 2634, 154, 264, and 221 million U.S. dollars, respectively. In Switzerland and in other countries, an annual fee less than 5 U.S. dollars per person is sufficient to provide biobanks with sustainable financing. This inspired us to construct a business model that not only includes the academic and industrial research sectors as customer segment, but also includes the population. The revenues would be collected as fees by the healthcare system. In Italy and Germany, a small share of healthcare spending is already used to finance selected clinical trials. The legal frameworks could serve as templates for the business model proposed here.

Debating the oncologist's role in defining the value of cancer care: we have a duty to society.

Unsustainable Increases in Health Care Spending The rising costs of health care in general and cancer care in particular have prompted increasing concern in recent years. Data from the Organisation for Economic Co-operation and Development suggest that health care expenditure as a percent of gross domestic product is not only higher in the United States than in other developed nations but is also rising at a steeper rate. In 2011, the United States spent a staggering 18% of gross domestic product—$2.7 trillion— on health care. Although some have been optimistic that the rate of growth is finally slowing, perhaps reflecting the impact of payment reforms and the Affordable Care Act, experts warn that the evidence is more consistent with the effects of the recent recession and one-time changes that will not ultimately result in a long-term flattening of the cost curve. Cancer care accounts for a substantial share of health care spending and appears to be growing even faster than health care costs overall; US expenditures for cancer care were $72B in 2004 and $126B by 2010. Evidence suggests that this increase reflects not only those advances in early detection, prevention, and treatment that have led to improvements in cancer mortality but also the increasing use of aggressive therapy near the end of life, raising concerns that increases in cost have not been accompanied by commensurate improvements in quality. Although we as oncologists recognize that measures such as expenditures in the last months of life are imperfect, most of us also have direct experiences that validate the underlying concern that we do not always direct scarce resources optimally. Many have voiced concerns about the potential impact of this pattern of health care spending on economic stability and, somewhat ironically, population health within the United States. The substantial and increasing share of resources devoted toward health care inevitably crowds out other types of essential spending. This includes education and social services which, like health care, have an important impact on population health.

Financial Health Economics

We provide a theoretical and empirical analysis of the link between financial and real health care markets. This link is important as financial returns drive investment in medical research and development (R&D), which in turn, affects real spending growth. We document a “medical innovation premium” of 4-6% annually for equity returns of firms in the health care sector. We interpret this premium as compensating investors for government-induced profit risk, and we provide supportive evidence for this hypothesis through company filings and abnormal return patterns surrounding threats of government intervention. We quantify the implications of the premium for the growth in real health care spending by calibrating our model to match historical trends, predicting the share of GDP devoted to health care to be 32% in the long run. Policies that had removed government risk would have led to more than a doubling of medical R&D and would have increased the current share of health care spending by more than 3% of GDP.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Unauthorized Immigrants Spend Less Than Other Immigrants And US Natives On Health Care

Unauthorized immigrants and other immigrants who have been in the United States for less than five years have few options for accessing health care through public programs. In light of the ongoing national debate about immigration reform and the impact of the Affordable Care Act on immigrants, we examined differences in health care spending by nativity and legal status using Medical Expenditure Panel Survey data for the period 2000-09. We found that unauthorized, legal, and naturalized immigrants together accounted for $96.5 billion in average annual health care spending, compared to slightly more than $1 trillion for US natives. Unauthorized immigrants' share of health care spending was $15.4 billion-the smallest of the groups. Just 7.9 percent of unauthorized immigrants benefited from public-sector health care expenditures (receiving an average of $140 per person per year), compared to 30.1 percent of US natives (who received an average of $1,385). Policy solutions could include extending coverage to unauthorized immigrants for the prevention and treatment of infectious diseases or granting them access to the Affordable Care Act's insurance marketplaces, which start in 2014. The final version of federal immigration reform might also include strategies to expand immigrants' access to health care.

The Link Between Health Care Systems and Financing: Evaluation of Payment Systems in Selected OECD Countries

Background: Financial incentives and institutions play a key role in determining health care expenditures. The health care sector in Europe is mostly publicly funded and financed in contrast to other OECD-countries. The financing is through taxes and service provision by public hospitals and health centers in the Nordic countries. In contrast the corresponding public shares are close to or below 50 percent in the Netherlands, in Switzerland especially in the USA. Aims: The following questions are to be investigated in this article. Firstly how does the budgeting model influence health care spending. Secondly how does the public share of health care spending correlate with total spending. And thirdly how do other factors, such as exogenous technological change, relative prices of health care etc. affect health spending. Methods: The research panel data is drawn out from OECD Health Data 2007. It includes 10 industrialized countries with different health care systems from 1971 to 2005. A dynamic nonlinear regression model is estimated for the data. Results: The main results of the study are that in the sample the fee-for-service system in primary care is 22 percent higher in HCE costs and on the contrary the global budgeting of hospitals is 34 percent lower in costs. Conclusions: The key in provision of specialized health care services is that the political and economic incentives of budget setters are passed through to service providers more closely when they act in the same organizational framework. Publicly financed and produced systems do well in comparison to insurance based and privately funded and organized health care schemes.

Health Care Politics in the Age of Retrenchment

AbstractThis article examines the debate between the power resources and ‘new politics’ scholars concerning the politics of welfare state retrenchment in advanced industrial democracies. Both approaches make competing claims concerning the relevance of partisan differences in the current age of welfare reform. This article tests the new politics hypothesis that partisanship has had a declining impact on welfare politics over time through an analysis of the growth in the public share of health care spending in 18 countries from 1960 to 2000. Consistent with the new politics approach, the results reveal that the partisan character of government no longer plays a significant role in determining changes in public responsibility for health care during the new politics period. This suggests that the current period is characterised by general agreement across party lines on the broad parameters of the health care system, reducing the intense partisan conflicts of the past to debates over reform at the margins of the health care system.

Using Tax Reform to Drive Health Care Reform

INCREMENTAL CHANGE AND POLICY MAKING BY INACTION have left US health care finance in disarray. Aaron has called existing health care finance arrangements “an administrative monstrosity, a truly bizarre melange of thousands of payers with payment systems that differ for no socially beneficial reason.” The ever-growing roster of health care funding sources now includes employer-paid and employee-paid insurance premiums; patient co-pays and deductibles; federal and state income and payroll tax subsidies; the itemized deduction for medical expenses; tax subsidies for health savings accounts, Archer medical savings accounts and section 125 “cafeteria” plans; the Medicare Part A payroll tax; Medicare Part A, B, C, and D premiums; and federal, state, and local general revenues. Even this is only a partial list. Directly and indirectly, tax financing now covers more than 60% of US health care costs. In the abstract, it is possible to distinguish between public and private health care funding, but in operation the 2 are inextricably entangled. It is difficult to say where one ends and the other begins. It is time to consider a thorough overhaul of this nonsystem. The goal would be not only to strengthen health care finance for its own sake, but also to achieve fundamental reform of health care. In other words, along with a small but increasing number of other commentators, we contend that comprehensive tax reform could be a powerful driver of health care reform. Much of the health policy literature takes the polar opposite approach. Taxes are assigned a passive role, regarded merely as a source of revenues, and not a direct instrument of policy. For example, proponents of singlepayer plans support broad-based taxes to pay for universal health insurance but seldom provide much detail. This relegates the tax component of such proposals to secondary status by default. Another well-known means of achieving universal coverage, evident in the 2008 presidential campaign, attempts to sidestep tax issues by using health insurance mandates. Mandates serve the important purpose of minimizing disruption to patients’ relationships with insurers and clinicians, but a perceived political advantage is reduced reliance on taxes. Economically, this is an illusion, as mandates function much as a highly regressive tax. Mandates have also fared poorly thus far as a national political strategy. The Congressional Budget Office’s pronouncement that the mandates in the Clinton administration’s Health Security Act were “taxes” for official budget purposes was a watershed event in that legislation’s demise. One tax issue that has played a more prominent role in health policy discussions concerns the exclusion of the value of employer-provided health insurance from taxable income. Proposals to modify this tax subsidy, such as Republican presidential candidate John McCain’s plan to replace it with a refundable tax credit, would constitute a major revision of the personal income and payroll taxes. These proposals would, however, leave the overall structure of the tax system unchanged, including the relative share of health care spending implicitly paid for by income, payroll, corporate, and other taxes. Comprehensive tax reform, by contrast, would mean reexamining and reengineering the entire structure. The 60% of US health care costs financed by taxes equals 10% of US gross national product or more than one-third of federal and state tax revenues. That is, de facto US tax and health policy already devotes more than one-third of all US taxes to health care. For decades, the composition of this enormous revenue base has been determined by historical accident and political stasis. The purpose of tax reform would be instead to harness these revenues to serve explicit, consciously chosen health, tax, and budget policy goals. Such an approach would result in 3 fundamental changes. First, rather than relying on a confusing welter of finance sources, it would use taxes and other funding that are as simple and transparent as possible. This would result in significantly increased accountability of government policy mak-

What is the Business Case for Improving Care for Patients with Complex Conditions?

INTRODUCTIONPatients with complex conditions account for a disproportionate share of health care spending. Although evidence indicates that care for these patients could be provided more efficiently, the financial impact of mechanisms to improve the care they receive is unclear.DESIGN/METHODSNumerous mechanisms—emphasizing patient self-management, care coordination, and evidence-based guidelines—aim to improve the quality of care and outcomes for patients with complex conditions. Assessing the overall “business case” for these mechanisms requires carefully estimating all relevant costs and financial benefits, then comparing them in present value terms. Mechanisms that are not cost-saving may still be implemented if they are cost-effective. We reviewed articles in peer-reviewed journals, as well as reports available on publicly accessible websites, which contained data about the business case for mechanisms to improve care for patients with complex conditions.MAIN RESULTSPublished studies do not provide clear evidence that current mechanisms are cost saving. This literature also has several major methodological shortcomings with respect to providing an understanding of the business case for these mechanisms.CONCLUSIONSFurther research using standardized methodologies is needed to understand the business case for mechanisms to improve care for patients with complex conditions. Implications for VA business case analyses include the necessity of establishing appropriate time horizons, scope of services, and target populations, as well as considering the impact of existing VA systems.

Role of the pharmaceutical industry in health care cost containment

The pharmaceutical industry in the United States is comprised of 50 major companies whose total sales for 1983 were approximately $17 billion, slightly more than 10% of the total revenues of the hospital industry in the same year. Prescription drugs have long been considered a highly cost-effective treatment. Past history, consumer price indexes, a decline in share of health care spending and recent Pharmaceutical Manufacturers Association studies all indicate that drugs represent an economical form of treatment that can reduce overall health care costs. It is clear that the pharmaceutical industry can play a prominent role in containing costs within the health care delivery system. Research-directed companies can effect economies by developing innovative therapies that replace less effective, older or more costly ones. The federal government has recently provided powerful incentives to foster expansion of the industry, in addition to enacting legislation to contain public health care costs. During 1985, the research-directed industry will invest close to $4 billion in both basic research and specific product development projects. The largest portion of these funds continues to be devoted to developing superior cardiovascular drugs. The industry is also searching for better ways to define, document and present the cost-effectiveness of its products.