U.S. Healthcare Spending Spiraling Out of Control

As the mainstream media, Washington and the Obama administration throws their weight on #GruberGate – the Jonathan Gruber scandal which pretty much suggests the entire Affordable Care Act was based on unscrupulous means – the real story that many may not be focusing on is the latest influx of data showing how costs associated with U.S. healthcare spending continue to be astronomical.

Since President Obama entered the White House in 2009, he promised to reduce the amount of money the federal government and consumers spends on medical care each year. As the president has two years left in his administration, has he and his party actually cut healthcare spending? Nope.

The Deloitte Center For Health Solutions published the results of a new study on healthcare spending based on health data from 2012. According to the organization’s findings, the National Healthcare Expenditure (NHE) stood at $3.46 trillion two years ago, which includes $672 billion in consumer out-of-pocket expenses.

healthcare spending

According to the Centers for Disease Control and Prevention (CDC), the per capita national health expenditures is approximately $9,000.

Here is what the Deloitte Center states in its latest report on healthcare spending:

“These increases are expected to continue as employers shift to high-deductible offerings and individuals gain coverage through insurance marketplaces. The annually reported national estimates do not tell the whole story. Deloitte’s Center for Health Solutions has analyzed data from the Medicare Expenditure Panel Survey and other sources to develop a more complete picture of resources going to health care, including the out‒of‒pocket costs incurred by consumers.”

This means that consumer and government healthcare spending are dominating budgets.

Has Obamacare cut healthcare costs?

Although the president has averred that healthcare inflation has gone down in the past four years because of Obamacare, healthcare economists and other groups say this is a bit disingenuous.

The Wall Street Journal reports that costs are still rising – the pace is even faster than any other sector of the economy. In fact, medical inflation remains at least double of any other kind of price growth.

Another important area that financial and health experts allude to is the government’s immense appetite for healthcare spending. At the present time, the government spends close to 20 cents of every dollar on healthcare, and it may not slowdown anytime soon. Its growth rate persists in making the ascension pattern.

Waste is inflicting healthcare

A new report from a government watchdog was released this week and it discovered that Medicare’s error rate for payments to hospitals, doctors and other medical care providers shot up nearly 13 percent in one year, resulting in costs of $45 billion, something that the program can easily waste considering its state of financial insolvency.

The payments are identified as Fee-For-Service and this is one of the most important elements to Medicare. The Department of Health and Human Services’ Inspector General noted that the soaring error rates for Medicare, Medicaid and Foster Care violate the Improper Payments Information Act of 2002.

“One program, Medicare Fee-for-Service, reported an error rate of over 10 percent,” said the IG. “Two other programs, Medicaid and Foster Care, also reported error rates that increased from the error rates reported [last year].”

Meanwhile, another study published in the JAMA Internal Medicine found that Medicare wastes billions of dollars in unnecessary care, interventions and services. It cited numerous examples, including testing people’s lung function before low-rick surgeries, which experts say doesn’t enhance the surgical results, and stenting coronary arteries for those patients with stable heart disease.

Perhaps, if elected in 2016, the Republican Party will introduce healthcare reforms, but if their record highlights anything, most people will bet against that from even happening.