The ACP Advocate Blog
by Bob Doherty
Wednesday, January 7, 2009
Who is to blame for health care spending?
One way to look at health care costs is to do an evidence-based analysis of the factors contributing to expenditure growth, and based on the evidence, come up with remedies.
But that isn't very much fun, is it? The first recourse for most of us is to point the finger at someone else, usually based more on our own personal experiences.
So doctors will blame "greedy" lawyers and lawyers will blame "greedy" doctors. Conservatives will blame the government. Liberals will blame for-profit companies. John Q. Public gets his share of the blame, too - for not doing enough to stay healthy and then demanding too much when sick. Even McDonalds gets the blame for making us obese.
And just about everyone blames the drug companies. I've seen internists stand up at ACP chapter meetings to fume about how drug companies rip off patients. If only we could bring down drug prices, they say, we could bring overall health costs under control.
Maybe, but the data suggests otherwise. Prescription drug spending is a smaller factor in rising health costs than say, physician and hospital services.
Yesterday, Health Affairs published the Medicare's actuaries' annual report on health care spending. The title pretty much says it all: National Health Spending In 2007: Slower Drug Spending Contributes To Lowest Rate Of Overall Growth Since 1998.
In 2007, total national expenditures were $2,241.2 billion. Out of this, $227.5 billion was spent on prescription drugs, $696.5 billion on hospital care, and $478.8 billion on physicians and other professional services.
One reason that prescription drug spending decelerated is because of increased dispensing of generic drugs. The authors explain that "loss of patent exclusivity for several major blockbuster medications in 2006, including Flonase, Pravachol, Zocor, and Zoloft, had a large impact on the 2007 prescription drug trend, as six month generic exclusivities expired for some of these drugs and additional generic medications became available". They also attribute the drop-off it to an increase in the number of "black box" warnings issued by the FDA.
I know ... I know ... The big drug companies don't deserve credit for a slow down that was driven by increased competition from generics and people being scared off of their products. And we are still spending a lot of money on prescription drugs. Still, as Jacob Goldstein observed yesterday in the Wall Street Journal health blog, it's a tough time to be in the drug business.
Following the rule of "going where the money is" (which, Wikipedia says, is wrongly attributed to bank robber Willie Sutton), it would seem like prescription drugs would not be the first place to look for big savings.
Today's questions: Do you agree or disagree that the big savings aren't in prescription drugs? Where are they, then?
About the Author
Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog
Email Bob Doherty: TheACPAdvocateblog@acponline.org.Follow @BobDohertyACP
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