The Henry J. Kaiser Family Foundation (KFF) is out with a new study today that predicts a rise in health care costs. The analysis concludes that by 2019, health care costs will likely grow at a percentage closer to the national historic average, which is above 7%, compared to the 3.9% increase observed in 2009 - 2011. The authors found that the recent lag in health care cost growth was a result of the economic downturn, and pending recovery will likely coincide with increasing health care costs. The study did state that growth may be mitigated by the health care delivery-system reform attributable to the Affordable Care Act (ACA), but the most promising predictor of health care costs remains to be the country's economic status.

The Bipartisan Policy Center (BPC) recently released a new national health care cost-containment strategy. Funded in part by the Robert Wood Johnson Foundation, A Bipartisan Rx for Patient-Centered Care and System-Wide Cost Containment, proposes strategies that would save $560 billion in health care expenditures over the next 10 years. BPC's main source for cost-containment is the alteration of the Sustainable Growth Rate (SGR) formula, which accounts for nearly $300 billion of the proposed savings. Other cost-containment measures prescribed included the expansion of Medicare networks, a concept very similar to Accountable Care Organizations, and instituting the competitive bidding practice among Medicare Advantage plans.

According to a new report released by the Commonwealth Fund, a new set of proposed policies designed to accelerate innovation in care delivery could slow health spending growth by $2 trillion over the next decade. The report outlines a comprehensive set of policies to modify the way public and private purchasers pay for care, improve the accessibility of high-value care options, and address forces driving skyrocketing health care expenditures. Commonwealth estimates indicate that if the policies are implemented soon, with public and private payers acting in concert, federal spending could be reduced by $1.04 trillion, state and local government spending by $242 billion, and employer spending by $189 billion over the next decade. The proposed policies would also realize significant savings for families ($537 billion over a decade) as a result of lower future health insurance premiums and out-of-pocket costs. Click here for an executive summary of the report.

The Alliance for Health Reform recently published a new report examining drivers of rising health care costs in the United States. The report names medical waste, fee-for-service-payments, medical technology, and chronic illness as some of the major contributing factors to this mounting issue. The authors also offer examples of activities already underway to control costs.

In a report released yesterday, the Center for American Progress (CAP) introduced the Senior Protection Plan, a proposal to reduce federal spending on health care delivery. Instead of shifting costs and/or ultimately increasing costs, the Senior Protection Plan, according to CAP, would improve health care delivery efficiency, eliminate waste, and improve the quality of care. This approach, in theory, would ultimately reduce health care spending. The Senior Protection Plan serves as an alternate to the other proposals made in the past years with the goal of reducing health care spending. Such proposals include transforming Medicare into a premium support or voucher program, raising Medicare's eligibility age to 67, increasing cost-sharing, and slashing Medicaid and increasing long-term care costs for seniors. The Senior Protection Plan would enhance competition based on price and quality, increase transparency of price and quality information, reform health care delivery to provide better care at lower cost, repeal the Sustainable Growth Rate (SGR) mechanism, reform graduate medical education and the workforce, reform Medicare premiums and cost-sharing, reduce drug costs, bring Medicare payments into line with actual costs, cut administrative costs and improper payments, reduce the costs of defensive medicine, reform the tax treatment of health insurance, and promote better health. CAP's Senior Protection Plan yields substantial savings, as scored by the Congressional Budget Office, without harming beneficiaries. The plan would save over $385 billion in federal expenditures over 10 years. In addition, the tax policies related to health care would generate up to $100 billion over 10 years. The plan also includes an array of reforms that would bend the cost curve over the long term. For the report summary, click here.

In a new analysis, the conservative think tank, the American Action Forum, reported that new Affordable Care Act (ACA) regulations have cost states and private companies over $27 billion. The report found that about $20 billion in ACA compliance costs will fall to private businesses, while $7.2 billion will fall to to state governments. Medicaid eligibility expansion will cost states approximately $580 million while private businesses will spend $757 million complying with new menu-labeling provisions, for example. State initiatives will include creating an insurance exchange, while the total for private employers is attributable to complying with the new healthcare requirements and coverage mandate. Already, the federal government has awarded billions of dollars in grants to help states establish exchanges and comply with other ACA provisions.

According to the 2012 Health Confidence Survey published by the Employee Benefit Research Institute (EBRI), confidence regarding the various aspects of today's health care system has remained fairly level before and after the passage of the Affordable Care Act (ACA), and has not been significantly impacted by the June 2012 Supreme Court decision. Asked to rate the health care system, Americans offer a diverse perspective: 28 percent consider it to be “good,” 28 percent say “fair,” and 26 percent rate it “poor,” while 12 percent rate it very good and 5 percent say it is “excellent.” However, the 2012 Health Confidence Survey finds that the percentage of Americans rating the health care system as poor doubled between 1998 and 2004 (rising from 15 percent to 30 percent). Dissatisfaction with the health care system appears to be focused primarily on cost.

A study recently released by the Health Care Cost Institute (HCCI) found that health costs paid by insurers grew faster in 2011 than the previous year. The 4.6 percent growth rate for 2011 (about $4,547 per person) trumped the 2010 rate of 3.8 percent. The report cited the primary drivers of these growing health costs as the rising prices that insurers pay doctors, hospitals, and drug companies. The authors discussed that it is not clear whether the data represent a return to the higher growth rates of the past, or if the rate is anomalous in the general slowdown. The data are based on 6 billion claims paid by insurers covering approximately 40 million people. Not included in the data were spending for consumers covered by Medicare, Medicaid, or for those who buy their own coverage. The study found that consumers spent more of their own money on health care in 2011, with out-of-pocket costs averaging $735 per person.