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Sound Health Care Cost Analysis



Health Care cost continue to increase because of the population of aging people. Patients are sicker than ever before. Hospital costs are on the rise. The history of health care cost control suggests that the chances of long-term success of any particular idea are low. Is it possible that we can  reduce health care cost by providing better care ? I heard this story on NPR a couple weeks ago and it is fascinating in my experience because the rising cost of health care is a huge obstacle to my early retirement plan. 


The increase of drug use and poor various living styles has increased medical costs. The rise in patients filing Mal-practice suites on doctors also increases medical costs. Some insurance providers are promoting programs for good health. During these programs people are awarded for healthy diet plan, exercise programs and making good choices in their lifestyle. Dr. Brenner and the team were able to lower the overall health care cost by taking better care of these most difficult cases. They accompanied with patients to make sure they took their medication, tried to get them to quit smoking, and encouraged them to rejoin their churches and communities. 


They were basically coaching these patients to consider better care of themselves. Their efforts were very successful and many patients improved their long-term health and their overall costs were lowered as a result. The analysts posited that the effect of excess cost growth on economic outcomes depends on the percentage of workers with employer-sponsored insurance (ESI). Health care cost growth might have a stronger effect in industries which have a larger percentage of workers with ESI: Increased health care costs can translate into higher labor costs, that might cause firms to hire fewer workers, produce less output, or raise prices. 


This back-and-forth between the government and industry signals the difficulty of developing, enacting, and implementing effective measures to bend the health care cost curve. What should be clear, however, is that a strictly voluntary effort to slow the growth in costs is unlikely to be successful, and that health reform will need to incorporate legislative provisions and enforcement mechanisms to make sure that spending targets are met. The extent that an increase in  health care costs affects output and employment in different industries depends  on how much total compensation rises because of health care cost inflation.  


Industries where health care benefits really are a larger share of total employee  compensation will experience a larger increase in total compensation,  consequently leading to a larger reduction in employment and output. I believe our Nation's long-term fiscal problems, and the problems caused by the growth of per capita health care spending, are higher priorities to resolve than reducing the number of uninsured Americans now. I would rather solve America's health care cost problems of the future than expand government now. This really is my value choice. I expect and believe that others will disagree.