October 25, 2014

Controlling Health Care Costs Remains Primary Challenge for Public and Private Sectors

  • The American health care system is a patchwork of public and private programs that serve citizens in different ways, depending on their age, military...

As Washington wrestled with its immediate budget problems last week, an Iowa gathering of national, state and local experts considered the opportunities and challenges ahead with one of the key drivers of federal spending: health care.

Concord Coalition Executive Director Robert L. Bixby discussed how health care costs absorb nearly 25 percent of non-interest federal spending, totaling $717 billion in Fiscal 2012. In the next 25 years, health care will be trumped only by interest payments as the greatest source of growth in federal spending.

Although the growth in health care costs has slowed in the past few years, Bixby said, “the country will face increases in health care spending as the population ages and millions more people qualify for Medicare.”

Bill Hoagland of the Bipartisan Policy Center indicated that recent analysis by the Congressional Budget Office had failed to explain most of the recent slowdown in health care costs, making it hard to know whether the trend can continue. He also stated that the Affordable Care Act “needs further realignment to address the drivers of health care costs.”

Nick Gerhart, Iowa’s insurance commissioner, discussed the Iowa Health and Wellness Plan, a federal-state partnership to expand Medicaid. He also reiterated the state of Iowa’s commitment to ensuring the success of the health care exchange program despite early technical glitches.

Laura Jackson, executive vice president for Wellmark, outlined that company’s strategy for transforming the health care system in Iowa by reducing its annual increase in health care costs to the rate of inflation. Other key strategies include patient-focused, high-quality, and physician-directed care at the local level and a focus on improved health status through community transformation.