A new report offers a puncture to the myth that American health spending springs from overtreatment. This theory goes that doctors prescribe too much medical care for various ailments, with the most expensive instrument in the doctor’s office being a pen. As a result, the cost of care rises to unsustainable levels. If we change the incentives, so that doctors are paid on quality of care rather than how much care they prescribe, the cost would drop, with no impact (in fact a positive impact) on outcomes.
This is narrowly true, and it animates the thinking behind the pay for performance provisions in the Affordable Care Act that went into effect yesterday. But a new report from the Census Bureau should give pause to these overtreatment evangelists. What’s actually happening in the marketplace is that people see their doctor less now than they have at any time over the last decade. At the same time, the prices they pay for medical care have skyrocketed.
Among Americans 18 to 64 years old, the average person visited medical providers 3.9 times in 2010, compared to 4.8 times in 2001.
Both healthy Americans and less healthy Americans reported going to the doctor less frequently in 2010 than they did in 2001 [...]
Visits to the doctor and other medical providers may be falling, but health spending is still substantially higher today than it was a decade ago, according to the Labor Department’s Consumer Expenditure Survey.
The typical household (including residents of all ages) spent $3,313 on health care in 2011, compared to $2,771 in 2001, after adjusting for inflation.
This is even true among the uninsured, who see their doctor less now than 10 years ago.
So, spending up, treatment down. Perhaps you can narrowly say that the treatment people get per visit has increased, and that’s driving up the cost. Or you can chalk this up to a supply and demand problem; with less doctor visits, the medical community must charge more to make the same profits. But it also has to do with how cost-shifting has put more of a burden even on those with health insurance. They must shoulder more of the bill, and so they see the doctor less.
As for the reason for the price increases, which are well-documented, we simply don’t have a mechanism in America to keep prices down. An integrated health care system where a single payer can bargain down prices is really the main way to do this, as every other country on Earth has figured out. We’re still working on exchanges, which over three dozen states may be unable or unwilling to operate by the deadline in 2014.