Economics Alone Drives Healthcare Reform

John Commins, for HealthLeaders Media , April 2, 2012

The stats on healthcare costs are familiar. The rate of growth in healthcare spending in this country is unsustainable. According to the Kaiser Family Foundation, healthcare costs grew from $256 billion in 1980 to $2.6 trillion in 2010, and healthcare spending now consumes about 18% of the nation's gross domestic product. Although healthcare spending growth has slowed of late, thanks largely to reduced utilization during the economic downturn,  that growth still easily outstrips general inflation.

For three decades we have been living in an era where healthcare "cost containment" has been a euphemism for passing the buck to healthcare consumers. Kaiser Family Foundation reports that since 2001, employer-sponsored health insurance premiums have grown 113%.

It's not hard to see why wage growth is stagnant. Payers are stressed and tired by this arrangement, and they are demanding reforms. That's not going to change if the Affordable Care Act is overturned.

Rather than hypothesize about what may change if the individual mandate is struck down, or if a Republican or a Democrat is in the White House, we should focus instead on the constants of healthcare that will still be in place in the coming years regardless of what happens between now and November.

"The constant is going to be the focus on the federal budget deficit and the continued increase in healthcare costs," says Dean Diaz, vice president and senior credit officer at Moody's Investors Service. "Regardless of what happens in the Supreme Court now there will be continued debate on how to rein in the growth in healthcare costs."

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