August 03, 2011

The Cost of Health Care in America

By: Cerner Corporation

It’s no secret that health care costs in the United States are significant. Ask anyone who has been to the ER recently, or someone managing chronic health issues and taking several different prescription medications. Two recent reports discuss how much Americans can expect to spend on health care, and how that spend compares with other countries.

The first report, from The Centers for Medicare and Medicaid (CMS) Office of the Actuary, found that “average annual health spending growth (5.8 percent) is anticipated to outpace average annual growth in the overall economy by 1.1 percentage points (4.7 percent). By 2020, national health spending is expected to reach $4.6 trillion and comprise 19.8 percent of GDP.” Those numbers are staggering.

The second report, from The Commonwealth Fund, examined data from the Organization for Economic Cooperation and Development (OECD) and found that “in 2008, health care spending in the U.S. reached $7,538 per capita – far more than in any other country studied and more than double the OECD median of $2,995.”

Looking at these numbers, strides must be made in order to bend the health care cost curve. In The ABCs of Systemic Healthcare Reform, Cerner Chairman, CEO and co-founder Neal Patterson laid out a plan for driving $500 billion in annual savings out of the U.S. health care system. The plan encompasses the following points:

Automate the current health care system by implementing workflow and EMR systems.
Base decisions on evidence, not anecdotal memory.
Coordinate care across the fragmented elements of our current health care system.
Disrupt the current cumbersome claim-based transactional system used to pay health care providers by enabling a modern, streamlined, all-electronic method of health care commerce.
Evolve to a standards-based system of lifetime personal health records for every American.
Financial innovation must accompany the investment in IT to complete the transformation.