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COPYRIGHT 2003 Thomson Financial Inc.
This is the second in a series of Perspectives on the new wave of cost concerns in health care. The first was published June 16.
High prices paid to providers and revenue-boosting utilization increases that may do little or nothing to improve care are key reasons why U.S. health care costs a lot and the costs keep climbing, a number of analysts have said in recent months.
Among recent commentaries spelling out reasons why spending is high and likely to keep going higher are the following:
* Technology bites, and will bite again, With some blockbuster medications going over the counter or losing patent protection, increases in drug spending have slowed recently, said Alliance Capital Senior Vice President Norm Fidel at a June 18 forum sponsored by the Center for Studying Health System Change (HSC). But don't expect the situation to last, he said.
It may be eight or ten years before it happens, but drug spending will rise high and fast again, Fidel said.
In a little under a decade--or just in time for the first wave of baby-boom generation retirements--the first medicinal fruits of the genomic revolution will hit the market. Many will be expensive, and many will be so-called specialty-pharmacy treatments that require monitoring and administration by medical personnel. It will be "much harder to control spending" on these medications, because each is likely to be "the only drug in town" for a given condition, said Fidel.
* Some providers are big winners in the battle for market power. Hospital-industry consolidation is a major cause of purchasers' woes in California, where members of CalPERS, the big public-employee purchasing...
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