Technology and Health Care Spending
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Technology and Health Care Spending Bruce Steinwald February 5, 2008
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Technology and Health Care Spending. Bruce Steinwald February 5, 2008. Unsustainable Spending Trends How does technology manifest itself in health care spending Potential Congressional action. Growth in Health Care Spending: Health Care Spending as a Percentage of GDP. Percent. Year. - PowerPoint PPT Presentation
Transcript of Technology and Health Care Spending
Technology and Health Care Spending
Bruce SteinwaldFebruary 5, 2008
• Unsustainable Spending Trends
• How does technology manifest itself in health care spending
• Potential Congressional action
Growth in Health Care Spending: Health Care Spending as a Percentage of GDP
8.410.6
13.716.0
19.6
0
5
10
15
20
25
1976 1986 1996 2006 2016
Source: The Centers for Medicare & Medicaid Services, Office of the Actuary.Notes: The figure for 2016 is projected. The most current data available on health care spending are for 2006.
Percent
Year
0
10
20
30
40
50
2006 2015 2030 2040Fiscal year
Percent of GDP
Net interest Social Security Medicare & Medicaid All other spending
Effect of Entitlements on Federal Budget: Assuming Discretionary Spending Grows with GDP After 2007 and All Expiring Tax Provisions are Extended
Revenue
Source: GAO’s January 2007 analysis.
Cumulative Growth in Health Care Spending Per Capita, Medical Inflation, GDP Per Capita, and General Inflation, 2000-2006
Source: Bureau of Labor Statistics, The Centers for Medicare & Medicaid Services, Office of the Actuary, and the Bureau of Economic Analysis.Note: The most current data available on health care spending per capita are for 2006.
Cumulative percentage46.68
26.6928.91
17.07
Changes in Volume and Intensity of Physician Services Provided per Medicare Beneficiary, April 2000 to April 2005
Type of service
Average annual percentage change in the number of services per beneficiary
(volume)
Average annual percentage change in the intensity of services per
beneficiary, as measured in RVUs
All services 4.4 5.2
Evaluation and management services 2.4 3.7
Procedures 5.7 4.3
Major -0.7 2.3
Minor 6.3 5.2
Imaging 6.9 10.5
Tests 9.1 13.9
Source: GAO analysis of Medicare Part B claims data from CMS.
Differences in Services Provided by Level of Medicare Spending
Service Type Percentage
Imaging Chest radiography 60%
Computed tomography (CT) or magnetic resonance imaging (MRI) of head or brain
80%
CT or MRI of lumbar spine 50% Minor or Diagnostic Procedures
Skin biopsy 120% Holter monitor 290% Diagnostic upper-GI endoscopy 60%
Percentage more services provided in highest Medicare-spending regions as compared to lowest Medicare-spending regions for select services for three chronic disease cohorts
Source: Elliot S. Fisher, David E. Wennberg, et. al, “The Implications of Regional Variations in Medicare Spending. Part 1: The Content, Quality, and Accessibility of Care,” Annals of Internal Medicine, vol.138, no.4 (February 2003).
Diagnostic Technology Advances Subject to Multiplier Effect
• Diffusion of Dx Technology leads to …
• More Diseases/Conditions Diagnosed, leading to …
• More Treatment, which results in …
• More Spending on both Dx and Tx
Sources of Information on Health Care Reform
• Presidential Candidates’ Proposals• President’s 2009 Budget• Non-governmental Organizations (e.g.,
Commonwealth’s “Bending the Curve,” (12/2007)• Potential Congressional Actions (e.g., CHAMP, Summer
2007)
Congressional Action Driven By…
• Faith-Based Beliefs (e.g., IT, CE, Consumerism)
• The Need to Fix Medicare’s Sustainable Growth Rate (SGR) Problem
Near Term Congressional Action on Medicare
• Replace SGR with Differential Fee Updates
• Adjust Relative Prices in Medicare’s RBRVS
• Expand Bundled Payments
• Physician Profiling and Feedback
Long Term: What Can We Afford?
Trend: Real GDP + 2.5% … Unsustainable
SGR Standard: Real GDP + 0 % … Unacceptable
Medicare Trustees: Real GDP + 1% …Reasonable?
