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With support from:

Welcome to Considering Health Spending

For today's newsletter, we are launching the new monthly Considering
Health Spending newsletter, written by Senior Editor Laura Tollen.

To receive this monthly email, sign up here
.

Sign Up for Considering Health Spending

We're also excited to keep the conversation going with the launch of a
brand-new LinkedIn group .

Join the discussion today .

"Does the US spend too much on health care?"

Since the first issue of

**Health Affairs** in 1981, this question and its implications have
inspired hundreds of studies published in the pages of our journal and
elsewhere.

While

**Health Affairs'** focus on this topic is not new, we are pleased
today to bring our readers a new forum for engaging with emerging
research that sheds light on how much the nation spends on health care
and how we might improve the value of that spending or even change the
spending trajectory.

These questions have taken on increasing urgency in the face of the
COVID-19 pandemic, which has laid bare striking disparities and
shortcomings in health and well-being, suggesting a mismatch between
what we spend on health care and the outcomes we hope to achieve.

The Considering Health Spending newsletter is an opportunity to dig into
the latest work and some pieces from the

**Health Affairs** archives, all about health care spending and value.

A Classic Piece on Health Spending

This inaugural issue seems an appropriate place to remind readers of one
of the most influential and often-cited papers on this topic -
2003's "It's the Prices, Stupid
" by Gerard
Anderson, Uwe Reinhardt, Peter Hussey, and Varduhi Petrosyan. 

The authors made a compelling argument that on a per-capita basis, the
US does not use more health care than any other country in the OECD -
yet our total per capita spending is far greater because we simply pay
much higher prices for the same goods and services. 

This seminal paper has influenced two decades of additional research,
including 2019's "It's Still the Prices, Stupid
" by
Anderson, Hussey, and Petrosyan, and a large and growing body of work on
the drivers of US health care prices - much of which will be featured
in future issues of this newsletter.

Are We There Yet?

Another ongoing question that's occupied researchers is whether -
and when - the US economy will be unable to sustain further increases in
the share of the Gross Domestic Product devoted to health care - a
share that reached 17.7 percent in 2019
.

Have we reached that point yet? How would we know?

Two pieces from the archive address this question, finding that while we
may never know how much health spending is "too much," we already know
current spending is poorly allocated and often wasteful.

In a 2018 perspective piece, economist David Cutler argues the US has
reached a point where increased spending on medical care has become
harmful to the US economy
. He
cites wasted dollars and increasing health and economic disparities as
the main reasons.

In a 2019 blog post, William Frist and Margaret Hamburg, co-chairs of
the

**Health Affairs** Council on Health Care Spending and Value
,
contend that "our health dollars are not reaching all who need care
,
nor are they necessarily providing appropriate care in the manner that
would be most effective."

Looking Ahead

Notwithstanding the important work described above, there remain many
unanswered questions about US health care spending.

If "it's the prices," then

**why** is it the prices? 

This question has inspired scholarship focusing in particular on
hospital prices, exploring issues of price variation, provider market
concentration, labor market dynamics, and many more factors.

Other key questions relate to the health value produced for our dollar,
with researchers working to quantify the value of health outcomes,
identify high- and low-value spending, and suggest ways to encourage the
former while discouraging the latter. 

To make sure you don't miss the latest discussion, please sign up to
receive this monthly newsletter
and join the LinkedIn
group .

Read More on Considering Health Spending

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Advertisement

 

Featured Article

Regulating Hospital Prices Based On Market Concentration Is Likely To
Leave High-Price Hospitals Unaffected

By Maximilian Pany, Michael Chernew, and Leemore Dafny

The researchers asked whether consolidation is a good "marker" for high
prices. They found that high-price hospitals are prevalent across
markets with varying levels of concentration, and most are in
unconcentrated or moderately concentrated markets.  Read more »

Related Articles

Controversy Over Using Quality-Adjusted Life Years In Cost-Effectiveness
Analyses: A Systematic Literature Review

By Leah Rand and Aaron Kesselheim

This literature review identifies and addresses both methods-based and
ethical criticism of the quality-adjusted life year as a tool to support
cost-effectiveness analysis. Read more »

Quantifying the Economic Burden Of Drug Utilization Management On
Payers, Manufacturers, Physicians, And Patients

By Scott Howell et al

The combined costs associated with drug utilization management, shared
across drug manufacturers, payers, providers, and patients is at least
$93.3 billion per year. Read more »

Public Payment Rates For Hospitals And The Potential For
Consolidation-Induced Cost Shifting

By Michael Chernew et al

The concept of "consolidation-induced cost shifting" recognizes that
changes in public prices for hospital care can affect market structure
and, through that mechanism, affect commercial prices. Read more »

View Other Articles from This Series

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Podcast: A Health Podyssey

Leemore Dafny on Hospital Prices, Markets, and Antitrust Regulations

Podcast: A Health Podyssey

Scott Howell on the Very Large Costs of Drug Utilization Management

Podcast: A Health Podyssey

Leah Rand on Pushing Against the QALY Criticism in Drug Pricing

Health Affairs'

**Considering Health Spending** initiative is supported by the National
Pharmaceutical Council and Anthem, Inc.
and includes three components, all of which
will be featured in this monthly newsletter:

·       A journal series

·       A blog series

·       The Health Affairs Council On Health Care Spending and
Value

Check out our Considering Health Spending landing page
, where you can find
every journal and blog article in the series and information about the
Council, plus related podcasts and other events.

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mailto:[email protected]

About Health Affairs

Health Affairs is the leading peer-reviewed journal
at the intersection of health,
health care, and policy. Published monthly by Project HOPE, the journal
is available in print and online. Late-breaking content is also found
through healthaffairs.org
,
Health Affairs Today , and
Health Affairs Sunday Update
.  

Project HOPE is a global health and
humanitarian relief organization that places power in the hands of local
health care workers to save lives across the globe. Project HOPE has
published Health Affairs since 1981.

Copyright © Project HOPE: The People-to-People Health Foundation, Inc.
Health Affairs, 1220 19th Street, NW, Suite 800, Washington, DC 20036, United States

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