- Prices are the main drivers of healthcare spending, Health Care Cost Institute’s Governing Board Chair Martin Gaynor said today at America’s Health Insurance Plans’ 2016 National Health Policy Conference in Washington, D.C.
- Gaynor says building a national healthcare data warehouse should be made a priority to improve transparency with the goal of decreasing costs.
- The institute’s research shows the number of consolidations is increasing, particularly in the hospital sector, and there is evidence they lead to increased costs and lower quality of care.
While the growth of healthcare spending is slowing down, it is still increasing primarily due to prices, as opposed to utilization, according to the Health Care Cost Institute. Healthcare spending growth is high and unsustainable, Gaynor said. Costs increased by 5.3% in 2014, CMS data show.
Another major concern in the healthcare field is the increase in consolidations.
Due to consolidation within the hospital sector, only one to three large hospital systems dominate most urban areas in the country, according to Gaynor. There have been more than 1,200 consolidations in this sector since 1994. In 2014 alone, 100 deals were made.
“There are some real potential benefits of payers and providers coming together,” Gaynor said. “But a key thing is consolidation is not integration and this is true in every sector of the economy. “
Compared to independent providers, on average, consolidation does not reduce costs or improve quality, research shows. According to Gaynor, mergers can lead to significantly higher prices, less investment in care coordination, a lack of innovation, and lower quality of care. Physician practice mergers and hospital acquisitions of these practices can also lead to price increases.
Having more cost sharing and more transparency is a fine thing to do, but it’s not realistic to expect this stuff to drive the whole system, Gaynor said. “So I think that means that we need to focus on the supply side,” he said.
Gaynor suggested the nation make improvements in two main areas: Competition policy -- including transparency -- and payment policy. He emphasized the first step in making the healthcare system more value-based should be building a data warehouse that would include payment information.
He said the data are already out there so they can be put together and productively used.
“My concern is that we will wake up one day and realize that we're not going to be able to make the progress that we need to make to have a well preforming healthcare system,” Gaynor concluded.