Bending the curve of cost growth has been a expanding issue within health policy discussions – as opposed to the public plan option, which has increasingly been the focus of political health discussions. Recognizing how important cost growth is to health reform, the September/October issue of Health Affairs is dedicated to this topic, and it contains great articles describing various factors causing spending to grow faster than the GDP or general inflation, and some solutions to this ongoing conundrum. However, these articles are like trees in the forest, i.e., they are very important, but a close examination of each one doesn’t provide a broad understanding of the whole forest - or in this case, what bending the curve of healthcare cost growth might look like.
Below are summaries of five of the Health Affairs articles - all are worth a close read. And following that are some illustrations of what bending the curve could look like based upon current projections for healthcare costs, GDP, and inflation.
Trees Within the Forest -High Cost GrowthCauses and Cures
Forest of Trees - What Bent Cost Curves Might Look Like
Henry Aaron’s and Paul Ginsburg’s article comes closest to painting this overarching view of the cost growth situation and its solutions, but I was somewhat surprised that nowhere in the issue is there a simple graphic showing projected healthcare cost growth and some scenarios for literally “bending the curve.” Therefore, below are somewhat simple graphs depicting expected future spending growth and various scenarios for bending the curve of healthcare costs.
First, is a figure showing 8 different cost growth curves with the y-axis showing years
View of the Forest Depends on the Altitude
However, removing some of the options and expanding the time-frame back to 16 years, shows that three options, (between the projected 7% baseline growth rate and the unrealistic immediate shift to 3%), can achieve dramatic savings. In particular, investing in early years to create a system that can both control cost growth and eliminate waste in the long-run, (Maintenance Investing and Cutting curve scenario), brings us to a cost growth rate that approaches what might have been achieved by immediately going to a 3% growth rate. (See figure below)
Of course, the actual dollars spent is a factor of the area under the curve, so the “Maintenance Investing and Cutting” curve does represent more spending on healthcare than some other scenarios - depending upon the time-frame analyzed. However, up-front investing in health system change has already happened. The Federal stimulus bill passed earlier this year included more than $30 Billion in healthcare system changing investments, which is more than 1% of total annual healthcare spending.*
Actually Bending the Cost Curve Requires Organizational and Culture Changes