Consumers’ share of the cost of health care is getting too little attention when it comes to reform efforts in Rhode Island. We have been celebrating the success of our individual and small-market health-benefits exchange, HealthSource RI, which has extended coverage to more than 90,000 Rhode Islanders through both private health insurance plans and Medicaid.
Predictions are that we will cut our uninsured rate in half, and this is wonderful news. However, that work was all part of ACA, Part I. As Dr. Nick Tsiongas, founder of HealthRIght, said at a recent R.I. Senate Health and Human Services Committee hearing, now it is time for ACA, Part II. As they learned in Massachusetts, the focus of Part II is on cost containment.
What consumers pay for health care has been rising much faster than most other household expenses. Since 1960, health expenditures have risen 55-fold. If prices of common goods rose that much, today we would pay $16.50 for a gallon of gas, $22.55 for a gallon of milk, or $31.45 for a dozen eggs.
Consumers’ share of the growth of costs has increased, too. Since 1999, premiums have increased 138 percent, and the growth in workers’ contributions to premiums (159 percent) has dramatically outpaced the growth in earnings (42 percent) and inflation (31 percent).
Of course, our health care has improved dramatically since the 1960s, but have our health outcomes gotten 55-fold better?
In a 2013 report by the National Research Council and Institute of Medicine entitled “U.S. Health in International Perspective: Shorter Lives, Poorer Health,” the authors state that “Americans live shorter lives and experience more injuries and illnesses than people in other high-income countries.”
Unfortunately, the poorer outcomes also come at a significantly higher price. In a 2011 report by The Commonwealth Fund, “The U.S. Health System in Perspective: A Comparison of Twelve Industrialized Nations,” the author states that in 2008, health care spending in the United States amounted to $7,538, more than double the Organization for Economic Cooperation and Development median of $2,995 (the OECD studied health care data from Australia, Canada, Denmark, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom and the U.S.).
The issue of high health care costs is also about jobs and Rhode Island’s ability to compete. With the recent leadership changes in the state House, there has been a renewed emphasis on economic development for our state – everyone wants to see job growth. But how can employers add more jobs when the health care costs associated with them are so high, and are getting higher? How can we expect to be competitive with other states and countries, where health care is more affordable and has better outcomes?