A Solution to Exorbitant Health Care Spending?

posted by Lyric Hughes Hale on May 9, 2016 - 2:51pm


Although slow growth seems to be a persistent malady, one segment of the economy, healthcare, continues to expand.  Americans spent an incredible $9523 per person on healthcare in 2014, about $3 trillion overall.  Current predictions are for 5.8% annual increases.  Post Obamacare, the search is on for new policies to reduce this acceleration, such as CDHP’s or Consumer-Directed Health Plans.  The theory is that when given the choice, patients will choose less expensive health care options.  A new Stanford paper examines whether this is likely to work.  We also asked EconVue expert David Johnson, for his views: 

Like rock ’n roll, these CDHPs or HDHPs are here to stay. They’re a bit of a blunt instrument, but can improve. Principal issues are people avoiding necessary preventive care because the deductible is too high and limited impact on care costs once patients meet the deductible. I generally like the idea of catastrophic coverage - most Americans are over-insured and this creates moral hazard. My sense is that hands-on relationship-based, trust-building primary care companies, like Harken, can address most flaws imbedded in HDHPs. 

Dave’s new book, Market vs. Medicine: America’s Epic Fight for Better, Affordable Healthcare will be available on June 1st.