May 6, 2019

Health care's big spending mismatch

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Adapted from Ezra Golberstein using NHEA data; Chart: Axios Visuals

The health care services that rack up the highest out-of-pocket costs for patients aren't the same ones that cost the most to the health care system overall.

Why it matters: Americans likely have a distorted view of what is costing them the most, which affects where consumers direct their ire after receiving expensive medical bills.

What they're saying: "What you pay for health care is often more influenced by your health insurance than the actual cost of the service," Avalere's Chris Sloan said.

  • "It's hard to have consumer-driven market forces that impact costs if the consumer doesn’t understand how much any service costs and subsequently can’t 'shop around' or negotiate it down," Sloan added.
  • It also means that certain issues, like prescription drug spending, become politically elevated over other areas with lower cost-sharing.

Yes, but: Insurance was designed in part to shield patients from high health care bills, which typically are largest when a patient goes to the hospital. But most people don't go to the hospital in any given year.

  • And cost-sharing was designed to encourage enrollees from inappropriately using health care, even though it's become a way of off-loading costs onto patients.
  • "Most people are not itching to get admitted to the hospital, so it doesn’t make sense for insurance plans to discourage it through cost-sharing," said the Kaiser Family Foundation's Larry Levitt.

The bottom line: The health care costs that are hitting patients' pocketbooks hardest aren't the same ones that are driving health care spending through the roof, meaning that political action to address costs may be somewhat divorced from our long-term problems.

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  1. Global: Total confirmed cases as of 1 p.m. ET: 1,237,420 — Total deaths: 67,260 — Total recoveries: 252,944Map.
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  3. Public health latest: CDC launches national trackers and recommends face coverings in public. Federal government will cover costs of COVID-19 treatment for uninsured. Surgeon general says this week will be "our Pearl Harbor, our 9/11 moment."
  4. 2020 latest: "We have no contingency plan," Trump said on the 2020 Republican National Convention. Biden says DNC may have to hold virtual convention.
  5. States updates: New York Gov. Andrew Cuomo said the state "literally going day-to-day" with supplies.
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