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Kenneth E. Thorpe, Curtis S. Florence, and Peter Joski, Which Medical Conditions Account For The Rise In Health Care Spending?, Health Affairs Web Exclusive, August 25, 2004 [Abstract] [PDF] [HTML Version] [Reprints & Permissions]

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Rising Health Care Costs

Thomas Shubnell   ( 14 October 2004 )

Rising Health Care Costs 14 October 2004
Thomas Shubnell, Principal Cardinal Consulting Send comment to journal: Re: Rising Health Care Costs tom{at}shubnell.com Thomas Shubnell	I do not dispute the facts in the article by Ken Thorpe and colleagues. However, I think that it is a stretch to blame the cost of care increases on providers. Today's headline was that HMO profits to exceed 12.5%. Other facts are that insurance cost is rising at a rate of at least two times the rate of increase for providers. Payer profits are four to five times as high as those for providers. The real issue appears to be the rising cost of health insurance--not health care. Since insurance is but a segment of the business, it would seem that these increases could be easily controlled. The problem is that the payers have unified political clout and providers do not. Politicians would rather deal with a fragmented group than upset a unified group with deep pockets and highly paid expert lobbyists. What the health care industry needs is a change from the old way of doing business to a completely new model that rewards prevention, effeciency, and wellness. There is no current financial incentive for any one group to be efficient. Until that changes, it is inevitable that costs will continue to rise.