"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Tuesday, January 8, 2013

Health Care Spending

I saw a report from the Department of Health and Human Services this a.m. that health care spending is slowing.  Even though Medicare spending is up and the nation's health care cost is $2.7 trillion annually, Medicaid spending is down along with hospital spending.  That is three years in a row that spending in both Medicaid and hospitals is down.  The country saw a 3.9% increase, but it is the lowest in some time.  Health care spending pacing economic growth is a good thing.  When health care spending outpaces our economy therein lies the problem, making recovery very difficult.  Spending increases were seen in drug and physician costs along with private health insurance.  More people are now covered by insurance and that rate is expected to grow.  Premium increases are also expected to be high this year in anticipation of the continued Affordable Care Act rollout.  The news is good; however, we have to continue to focus on getting cost out of the system and not simply cutting payments to hospitals and doctors.  Align incentives for providers, reimburse for quality, enact tort reform on a national basis and work with the health care industry as we attempt to address the sickest 5 % of our patients who account for nearly 50% of the cost.

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