Last week, Leadership Health Care (LHC) members were treated to an impactful discussion on today’s health care spending.
“Follow the Health Care Dollar,” the last LHC Fundamentals series program of the year, was led byPaul Keckley, managing director, Navigant Center for Healthcare Research and Policy Analysis. Keckley spoke to a sold-out crowd of more than 200 LHC members about the current state of health care expenditures, along with its history and future projections.
Keckley began by framing the economy of health care today.
Of the $3.9 trillion federal budget, 35% or $1.054 trillion, is allocated to health care – including veteran’s health, military health, and Medicaid and Medicare. It has been shown that despite fluctuations in the U.S. economy, the health care industry continues to maintain growth, employing 14 ½ million. The industry is recognized as one that, despite the economic downturn, has actually seen an increase of one million jobs since 2008.
During the program, Keckley looked at health care spending from the points of view of the federal government, employers and consumers.
The U.S. health care system is one of the most expensive systems in the world, and expenditures have increased by 7.2% per year for the last decade, forcing tough questions about the sustainability of the system. Questions are now being raised about the necessity and efficacy of medical decisions being made every day, with no clear answer on who should be responsible for answering those questions.
Health care is clearly a hot button topic for employers. Keckley described a current movement by U.S. employers looking to protect their businesses and employees that will drastically impact the health care spend. Employers are faced with three options for health care benefits:
1. Drop employee coverage all together
2. Enact a high deductible, narrow network plan
3. Retain benefits at the expense of employee’s wages
Keckley went on to describe the consumer point of view as passive and uncomprehending, although health care spending consumes more of an average household budget than any other category. However, discretionary spending is lower than it has been since 2008, causing health care bills to pile up, often the last to be paid.
Keckley concluded by noting six trends that the health care community in Nashville needs to have at the top of its priority list.
2.Consumerism and retail health
3.Expanding government sponsored coverage
4.Price and cost transparency
5.Medical necessity (supply-driven demand)
Keckley ended the program with a nod to Nashville’s unique ability to influence health care expenditures: “If there is a private sector answer to the issues facing health care spending today, Nashville could develop, operate and achieve it.”
The discussion with Paul Keckley is part of ongoing programming for the Council’s Leadership Health Care initiative, offering members insight from national industry leaders in an interactive setting. For more information about Leadership Health Care, visit www.leadershiphealthcare.com.