The Health Care Spending Dilemma

(soft music) – [Narrator] In 1997,
Minnesota spent $15 billion on healthcare and family
premiums for health insurance were about $5,000 per year. Nearly 20 years later, overall spending tripled with families spending over
$18,000 a year on premiums and the state
spending $47 billion. Take a look at this chart because it illustrates the
real pain of our current path. More and more of the dollars
available on our state and our personal budgets are
getting eaten up by healthcare and it keeps growing
faster than everything else without regard for other prices like housing and transportation. You personally may
have felt this trend like a rubber band that’s
getting harder to stretch. Maybe you feel it in your
increasing deductibles or monthly premiums. It seems like your
policy is covering less for the same price or maybe you feel it in the
way added expense are gobbling any raises or bonuses you
might have landed in the past. And with all the dollars we’re
putting towards healthcare, everyone in our state
still can’t afford it. But it’s not as if a
lot of smart people haven’t been trying to innovate. In the last 40 years, we’ve
attempted all sorts of things. With managed care in
the ’80s and ’90s, patients didn’t like
how their choices of which doctor to see
and when was limited and they pushed back. Health plan spending limits, they were pulled back because they didn’t seem
to constrain spending. Our first attempt at
electronic medical records just didn’t reduce cost
as much as we had hoped. Improved access to quality
and cost information, it does not yet seem to
drive substantive changes. Here are some of the factors we know can push
us over the edge. Healthcare prices rise faster
than our economy grows. New technologies in healthcare
more often increase cost rather than save money. Administrative
costs really add up. More of us at all ages
develop chronic diseases. Many of us live in places that
make it hard to be healthy. There are lots of mergers
in the healthcare industry, meaning there’s less competition
to help reduce prices. And that’s just some of them. There is no one factor that is causing healthcare
spending to grow like this. Of course, we could just
let healthcare spending continue to grow. By 2026, we’d be looking
at spending $95 billion on healthcare in our state with family premiums
reaching $35,000 per family. We’ll be spending $30
billion on hospitals and spending on
Medicaid and Medicare will be twice as high as
it is now $40 billion. Of course, we could
all get together and try to get these
costs under control now. With so many different
things impacting spending, it won’t be simple. For starters, we’ll need to understand we need
more than one solution because there isn’t
a silver bullet. Start investing in
what keeps us healthy including public health
and social supports, not just what tries to
fix us when we’re broken. Make sure the changes we do make are backed up with good data about what actually
reduce costs. Be serious about
trying out new ideas even if they create
winners and losers. Most of us probably
don’t expect to be making twice as much money in
10 years as we are today. And if our incomes
and state budgets can’t keep up with
growing healthcare costs, what are we going to
be missing out on? How far can that rubber band
stretch before it breaks? (soft music)

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