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Researchers: U.S. Health Care Costs Are Out Of Control

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NU Online News Service, May 21, 2003, 12:03 p.m. EDT – Health policy researchers at the Center for Studying Health System Change, Washington, say efforts to control U.S. health care cost increases seem to have broken down.

Most U.S. employers have given up on using health plans to hold down costs and improve the quality of care, and doctors and hospitals are rushing to add expensive services of questionable value, the researchers conclude in a report on trips to four major health care markets.

The health systems center sends researchers to look at 12 markets every two years. The latest round of community visits included Cleveland, Indianapolis, Seattle and northern New Jersey.

Some employers have been trying to hold down cost increases by adopting a “defined contribution” approach and agreeing to pay only a fixed amount for health coverage for each employee. Other employers have simply increased the premium contributions and out-of-pocket costs employees must pay to get traditional health coverage.

Advocates of the “consumer-driven” approach contend that workers themselves will rein in health care providers once they have financial incentives to do so.

But the health systems center researchers predict that the long-term benefits of a defined contribution, consumer-driven approach will be modest.

Some organizers of defined contribution health programs boast that they provide the cost and quality information that workers need to be good health care shoppers. But, in reality, few workers have enough information about the cost, quality or accessibility of health care to make informed choices, the researchers argue.


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