Why Health Care Costs Too Much

How Much Is Too Much? An Analysis of Health Plan Profits and Administrative Costs in California

Introduction Health insurance premiums in California are increasing much faster than most other areas of the state’s economy. Between 2002 and 2007, premiums rose 86 percent compared to an overall inflation rate for the state of less than 20 percent.1 At the same time, policymakers and the public are eager to identify ways to address rising health care costs, often pointing to health plan admin...

Health care cost containment: what is too much?

An iconoclastic view of health cost containment.

Calls for medical care cost containment are all around us. Although the evidence that costs are too high is strong, the evidence that they are rising too quickly is much weaker. The principal cause of increasing costs appears to be the increased capabilities of medicine; the scant evidence available suggests that to date the public has wanted to pay for most of these capabilities. Effective glo...

Why managed care has failed to contain health costs.

Much evidence points to the fact that managed care plans (health maintenance organizations and preferred provider insurance) reduce costs and offer value for money. Yet they apparently have not helped to slow national health expenditures. One explanation is that the practices of purchasers (including government and employers), the tax laws, and other market imperfections have reduced the demand...

Too much medicine happens too often: the teachable moment and a call for manuscripts from clinical trainees.

A columnist at theNew York Times asked readers, “Have you experiencedtoomuchmedicine?”Shereceivedmorethan1000 responses detailing examples ranging fromunnecessary testing and hospitalizations to useless office visits and specialist referrals.1 Patients are not the only ones worried about too muchmedicine: 42%of anational sampleofprimary carephysicians believe that patients in their own practice...