While the Affordable Care Act makes important strides in expanding coverage, much more is needed to rein in the rising cost of health care. More than one-sixth of the U.S. economy is devoted to health care spending and that percentage continues to rise every year. Regrettably, our system is not delivering value commensurate with the estimated $2.5 trillion spent annually on health care. Experts agree that an estimated 20 to 30 percent of that spending – up to $800 billion a year – goes to care that is wasteful, redundant, or inefficient.
Rising health care costs punish our nation on multiple fronts. For working families and seniors, the soaring cost of medical care means less money in their pockets and forces hard choices about balancing food, rent, and needed care. For small businesses and Fortune 500 employers alike, they make it more expensive to add new employees, more difficult to maintain retiree coverage, and harder to compete in the global economy. For federal, state, and local governments, rising health care costs lead to higher Medicare and Medicaid costs, and reduced funding on other priorities such as infrastructure, education and public safety.
The net results of rising health care costs are far-reaching and ominous: the fraying of the nation’s safety net, an erosion in our global competitiveness, and long-term fiscal insolvency. If our system could capture even a portion of the estimated 20 to 30 percent spent annually on wasteful or inefficient care, this money would go a long way towards lowering costs and funding needed coverage expansions.
Follow the links below to learn more about rising costs, their impact on health insurance premiums, and what can be done to reduce the rate of growth in health care:
Latest Documents
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Center for Policy and Research
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03/09/2012
Excellus Blue Cross Blue Shield - Keeping Medications Affordable
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Center for Policy and Research
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03/09/2012
Excellus Blue Cross Blue Shield Video - Overcoming Confusion about Medications after a Hospital or Rehab Stay
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Center for Policy and Research
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03/09/2012
Excellus Blue Cross Blue Shield Video - Protecting Patients from Adverse Drug Interactions
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Center for Policy and Research
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03/09/2012
HealthPartners Video - Achieving Results that Make a Difference for Diabetes Patients
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Center for Policy and Research
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03/09/2012
HealthPartners Video - Coaching Patients on Reaching Goals for Better Health
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Center for Policy and Research
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03/09/2012
Health Partners Video - Empowering Patients with Diabetes to Improve Their Health
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Center for Policy and Research
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03/09/2012
HealthPartners Video -The Diabetes Wizard
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Center for Policy and Research
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03/09/2012
Independence Blue Cross video - Enabling Doctors and Nurses to Realize their Goals for Excellence
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Center for Policy and Research
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03/09/2012
Independence Blue Cross's doctors, nurses, medical assistants, and pharmacists work together to make sure that patients have the lab tests, primary and specialty care, and patient support they need to live healthy lives.
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Center for Policy and Research
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03/09/2012
Kaiser Permanente Video - Making Exercise a Vital Sign
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Center for Policy and Research
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03/09/2012
Kaiser Permanente Video - Offering Culturally Sensitive Counseling for Weight Loss
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Center for Policy and Research
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03/09/2012
Kaiser Permanente Video - Using Web-Based Learning and Social Media to Help Patients Lose Weight
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03/09/2012
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03/08/2012
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03/08/2012
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03/08/2012
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03/08/2012
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03/08/2012
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03/08/2012
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03/08/2012
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03/08/2012
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03/08/2012
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03/08/2012
AHIP released a statement from its CEO and President Karen Ignagni on the release of the National Health Expenditure data.
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Strategic Communications
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01/09/2012
AHIP member company produced video - Amerigroup: Coordinated Case Management
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AHIP member company produced video - Amerigroup: Dedicated Doctors and Nurses
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AHIP member company produced video - BCBS of Massachusetts: The Alternative Quality of Contract
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Breaking Down U.S. Health Care Spending - In 2010, total spending on health care in the United States was nearly $2.6 trillion.
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AHIP member company produced video - Cigna: A Cigna Member Tells How the Health Plan Helped Her Following a Car Accident
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AHIP member company produced video - Cigna: A Cigna Member with Diabetes Tells How the Health Plan's Wellness Program Turned Her Life Around
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Efforts to fight health care fraud and abuse in private and public health insurance programs play an important role in protecting patients and payers. Fraud and abuse in the health care system has an enormous adverse impact on health care quality and safety, while also imposing higher costs on consumers, employers and taxpayers. The financial losses to health care fraud nationwide are estimated to range from $75 billion to $250 billion a year (National Health Care Anti-Fraud Association). Fraud and abuse also can result in serious harm to people who are subjected to unnecessary or inappropriate medical services – or to services by providers who are not licensed or qualified to provide them. Health plans are leaders in fighting health care fraud and abuse, and their effectiveness is demonstrated by the increasing degree that government health programs are adopting private health plan practices.
AHIP member company produced video - Group Health Cooperative: Living Well with Chronic Conditions
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AHIP member company produced video - Group Health Cooperative: The Medical Home
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AHIP member company produced video - Humana: Humana Cares
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AHIP member company produced video - Molina: Shorts for Shorties and Check Up or Check Out
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Health insurance premiums are a reflection of the underlying costs of care. When the cost of medical services such as doctor visits, hospital stays, and medical devices increases, these costs drive a corresponding increase in premiums. Federal government data show that over the past 20 years health benefit costs (i.e. how much the nation has spent on medical procedures, treatments, doctors’ visits, etc.) have increased by an average of 7.2 percent annually and premium increases have averaged 7.1 percent annually. These data demonstrate that health care costs and premiums go hand-in-hand.
If history is any guide, reducing the rate of growth in health care costs requires a collaborative, inclusive, and bipartisan approach. While there is no simple formula for lowering the growth in health care costs, stakeholders have long recognized that there are many areas where common ground can be found.
AHIP member company produced video - SCAN Health Plan: A Better Way to Care
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AHIP member company produced video - Sentra/Optima Health: The Wellness Payoff
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Medical inflation continues to be a chief factor driving premium increases. According to the 2009 National Health Expenditures report issued in January 2011, price increases accounted for nearly two-thirds of the increase in health care spending. Additionally, the report notes “Growth in non-price factors fell noticeably during the recession, mostly because people reduced their consumption of health services.” In order to bring the cost of coverage down, policymakers must embrace workable solutions to reduce the rate of medical inflation.