What does "cutting healthcare costs" really mean?

Posted by Jay on

Sunday, March 28, 2010

Sunday, March 28, 2010

Sunday, March 28, 2010

Sunday, March 28, 2010

Health insurance premiums double every 8 years because healthcare costs double every eight years. We also spend almost double on healthcare per person compared to other countries. So what does this mean now that we’ve mandated sickcare insurance? The bill contains wording around czars and experimental pilot projects looking to “cut healthcare costs.”

A conservative estimate is that these programs are at least a decade away from having the data that proves any sort of significant cost savings. By that time, health insurance will cost about $30,000 per employee per year.

So by the time novel ways to pay for healthcare might pay off we can hope that these new payment mechanisms hold at $30,000 + inflation per year?

Is $30,000 a year the definition of “cutting healthcare costs?” Or is it our hope that we cut costs in half so that we manage per capita health for the same cost and quality as other countries?

Are Americans able to spend $30,000 a year on health insurance in just ten years?

Make your own interpretation…the reality is this: 

The cost of healthcare in America depends upon:

  • the normal rate of increasing disease in an aging population

  • the rate of new diseases that can be invented/discovered

  • the rate of new therapies that can be invented to treat either invented diseases or established diseases

  • the rate of new tests that can be invented to treat new or established diseases

  • the maximum volume of patients a doctor can see in a given year (increasing every year)

Selling healthcare in a fee-for-service business model is designed at its core to produce skyrocketing costs in an aging population with advancing technology. The only free-market solution in healthcare is to create a new business model that purchases wellness, not sickness.