Report homes in on true drivers of healthcare cost

A new study by the Bipartisan Policy Center concluded that fee-for-service care, fragmented services and chronic illness are the greatest cost-drivers for healthcare delivery in the United States. The report is the first from the Bipartisan Policy Center, which is headed by several former U.S. Senators and former Congressional Budget Office Director Alice Rivlin.

The 27-page report noted that people who have chronic diseases account for 84 percent of all healthcare spending, and accounts for similar dramatic differences across all parts of the spending spectrum. For example, people with chronic conditions receive 73 percent of all spending on the uninsured, and 99 percent of all Medicare spending.

However, the study did not break out the specific expenditures on chronic diseases versus spending on people with chronic diseases as a whole. It also did not reference the fact that several studies have noted that spending has slowed considerably in recent years.

The report noted that the aging of the U.S. population added one-half of 1 percent to spending every year, and the use of fee-for-service payment mechanisms incentivize providers to deliver care on volume rather than efficiency, according to Kaiser Health News, which noted that none of the drivers "will surprise policy wonks."

The Bipartisan Policy Center will release a report next year with recommendations on how to confront cost drivers, noted KHN.

To learn more:
- here's the report (.pdf)
- read the Kaiser Health News article

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