Reagan, Deregulation & America's Exceptional Rise in Health Care Costs: NYT
- "Reagan, Deregulation and America’s Exceptional Rise in Health Care Costs," June 4, *2018, NYT. Ed.- Some readers and experts have responded to a recent article by pointing out that the 1980s increase in U.S. health costs coincided with a broad push toward deregulation.
--------
Why did American health care costs start skyrocketing compared with those of other advanced nations starting in the early 1980s?
At the same time this was happening, American longevity gains were failing to keep up with peer countries. In addressing these twin mysteries in a recent article, experts suggested 2 main reasons: The US didn’t impose the same types of government cost controls on health care that other nations did, and we invested less in social programs that also promote health. Many readers have since commented that it had to do with the Reagan-era zeitgeist, or increasing obesity.
I have spoken with many more health care experts and readers — about their ideas — and several, while believing the article essentially covered the answers, offered intriguing new observations. The 1980s divergence in health costs, some of them observed, coincided with a broad push toward deregulation. - Health Care in the US. Mississippi’s first serious attempt to expand Medicaid under the Affordable Care Act collapsed after an agreement reached by lawmakers disintegrated and last-minute scrambling for a compromise failed.
Collusion in Health Care Pricing?: Recent revelations about a data analytics firm’s role in determining medical payments have heightened concerns about possible price fixing in health care and led to a call for a federal investigation. Hospital vs. Insurer: After months of stalled contract negotiations, Mount Sinai Health System in NYC, and the insurance giant UnitedHealthcare announced a deal that will keep Sinai’s hospitals and doctors in network. Gary Gaumer, assoc. prof. at Simmons College School of Business, pointed to changes in how hospitals and doctors were paid. Before the early 1980s, payments by Medicare and other insurers were tied to costs.
If it cost a hospital, say, $5,000 for a patient’s surgery, that’s what the hospital was paid, plus a bit more for reasonable profit.
But then payers (private insurers & govt. health care programs like Medicare) began to shift financial risk to providers like hospitals and doctors. It started with a law that began in 1983, changing how Medicare paid hospitals to a fixed price per visit, regardless of the actual costs. This approach later spread to other Medicare services and other payers, including private insurers. If providers could get costs down, they made money. If they couldn’t, they lost money. “Hospitals and other providers began to behave more like businesses,” Mr. Gaumer said. “And the culture of health care delivery began to change.”
To lessen risk, hospitals sought revenue at every turn, starting new programs and offering new services...
https://www.nytimes.com/2018/06/04/upshot/reagan-deregulation-and-americas-exceptional-rise-in-health-care-costs.html?unlocked_article_code=1.tU0.-Ay_.ZxF_fwzsMFZe&smid=url-share
https://www.nytimes.com/2018/06/04/upshot/reagan-deregulation-and-americas-exceptional-rise-in-health-care-costs.html
