Q+A: With or Without the ACA, Health Costs Will Keep Climbing


With Congress gearing up to send a bill with provisions to repeal core components of the Affordable Care Act to the desk of President Barack Obama, Drexel’s Robert Field is concerned about the effects on health care business, much of which has come to rely on the law. On top of that, he believes that a repeal would have no effect on the relentless rise of health care costs.

Forbes reports that rises in health care costs continue to outpace inflation, with premiums growing more quickly than income. In 2013, health care inflation stood at 2 percent while inflation for everything else was 1.5 percent. Family premiums rose 3.8 percent compared to an increase of just 0.7 percent for income.

As health care costs increase, the effect trickles down to many other facets of the American economy.

Field, PhD, MPH, JD, a professor in the Dornsife School of Public Health and the Kline School of Law, sat down to discuss why things may be coming to a head.

What are the primary drivers of rising health care costs?

I think the biggest driver is the newer technologies — including drugs, devices and procedures — that get more and more expensive all the time.

Now, we’re reading about drugs that cost more than $100,000 a year for a course of treatment. And the ante keeps getting upped and upped. In the past, we were amazed at MRI machines that cost a million dollars. Today, there are proton beam accelerators that cost a hundred million dollars.

New technologies can produce miracles, so we want as much of them as we can get. The demand keeps sending costs skyward.

As things stand, do you think it’s possible for costs to stabilize?

Health care costs will always exceed overall inflation because there will always be a huge amount of demand that puts pressure on prices.

To stabilize costs, we have to turn off the spigot. We’re not going to be able to get as much of the new technologies as we want. Some people call it rationing; some call it choosing wisely. But one way or another, it needs to be done.

Cost-effectiveness analysis is one key to doing this. It’s one thing to spend $100,000 to save a life, it’s another to spend it on a drug that’s useless. We have to figure out which technologies are which.

Overall, we need to be smarter about what’s worth the cost. We need to make people more cost sensitive and encourage them to shop wisely for health care. They need to choose treatments they really need and that will actually help them. That may be the most important piece of it all.

The developing science of genomics will help with this. It allows physicians to analyze a patient’s DNA to better determine how their body will react to different treatments. But its full promise is still years off.

How long can prices increase before the situation becomes untenable?

I think we’re seeing the first major pushback against high costs in the form of high-deductible insurance policies. Insurance companies and employers are saying to patients, ‘You pay the first few thousand dollars of care each year and figure out what you truly need.’ Unfortunately, this sometimes means that people choose not to get needed care, along with care that is unnecessary.

The pushback against costs is not going to be pleasant. Some people will not get things they want. Whether it’s doctors or patients or drug companies, somewhere along the line, someone is going to have to lose out.

Going forward, part of the issue is that we are becoming a health care economy. Health care now represents almost 20 percent of [the United States’] gross domestic product. This makes it harder to cut spending without hurting the larger economy. If we are not careful, we could end up toppling of house of cards.

Field is the author of “Mother of Invention: How the Government Created ‘Free-Market’ Health Care.”

Media interested in speaking with Field can contact Frank Otto at 215.571.4244 or at fmo26@drexel.edu.

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