Posts Tagged ‘health-care spending’

New study explains why US health care spending increased $1 trillion

November 9, 2017
November 7, 2017
Credit: CC0 Public Domain

A new study finds that the cost of health care in the United States increased nearly $1 trillion from 1996 to 2013 and measures the causes behind this immense growth.

The study, published today in JAMA, reveals that price and “intensity” (variety and complexity) of services accounted for 50% of the increase.

“Part of the reason we spend more on health care each year is the nation’s growing and aging population,” said Dr. Joseph Dieleman of the Institute for Health Metrics and Evaluation at the University of Washington and lead author of the study. “But factors relating to the health system, such as increased price, intensity, and utilization, are driving most of the  increase.”

Five factors contribute to the rise in  in the US: (1) more people; (2) an aging population; (3) changes in disease prevalence or incidence; (4) increases in how often people use ; and (5) increases in the price and intensity of services. This research measures the impact of these different drivers on the total increase in health care spending and for the increases caused by specific health conditions and types of care.

An in-depth data visualization is available at:

The study covers health care spending for individuals and includes spending on inpatient care, outpatient care, nursing facilities, emergency departments, dental care, and prescribed pharmaceuticals. It also includes funding from all payers, such as private insurance, Medicare, Medicaid, and households’ own spending.

“When we added up all the health conditions, increasing population size led to a 23% increase in ,” Dr. Dieleman said. “People getting older led to a 12% increase in spending, and increases in price and service intensity, that is the variety and complexity of services, led to a 50% increase in spending.”

Most importantly, increases in spending also vary dramatically depending on people’s conditions and types of care, such as inpatient, outpatient, pharmaceuticals, and others, he said. Health care spending on  increased a dramatic 85% between 1996 and 2013, largely due to increasing use of services. Spending on inpatient care grew 59% because of price increases and service intensity.

“These findings offer insight into why the US spends so much on  care,” said Dr. Jay Want, executive director of the Peterson Center on Healthcare, which funded the study. “Increased  spending is driven more by how care is priced and delivered to patients than by the population’s size or age. The research suggests the need for more efforts to address those forces that control pricing.”

 Explore further: How much money is spent on health care for kids, where does it go?


The Panama Papers and Income Inequality

April 5, 2016


The exposé arrives at a time when income inequality is a major issue worldwide, and it suggests that global tolerance of tax havens is one of the important roots of the rich-poor gap.

By Mark Trumbull
Christian Science Monitor

People demonstrate against Iceland’s Prime Minister Sigmundur David Gunnlaugsson in Reykjavik, Iceland, Tuesday. Mr. Gunnlaugsson became the first major casualty of the Panama Papers revelations, stepping down on Tuesday after leaked files showed his wife owned an offshore firm with big claims on the country’s collapsed banks.

With the so-called “Panama papers” shedding light on how a global elite hides fortunes offshore, experts say this isn’t just a tale of corruption – it also goes to the heart of the world’s yawning chasm of economic inequality.

It may seem obvious enough: If people with connections are able to shelter their money from scrutiny and taxation, those rich people get richer. Yet the import of this fact may be obscured by the raw and personal details emerging this week as investigative journalists report on how one Panama-based company has helped hide well- or ill-gotten money in the anonymity of shell corporations.

Headlines include news about friends of Russian President Vladimir Putin moving $2 billion overseas, about shell companies being created by Chinese power brokers including a relative of President Xi Jinping, and about a firm set up years ago as a tax shelter by the father of British Prime Minister David Cameron. Revelations about secret dealings toppled Iceland’s prime minister Tuesday after citizens took to the streets.

And corruption probes that threaten governments in South Africa and Brazil, which were in motion before this week, include ties to the same Panama entity as all those others – the law firm Mossack Fonseca.

The questions go beyond whether the financial activities were legal or illegal. The news puts names and faces on the problems of political cronyism and tax evasion by the wealthy, and on the global scale of these problems. That’s politically volatile in its own right. But the news, arriving at a time income inequality is an issue of high worldwide concern, also suggests that global tolerance of tax havens is one of the important roots of the rich-poor gap.

“Financial secrecy enables inequality. Tax havens enable inequality,” says Matthew Gardner, executive director of the Institute on Taxation and Economic Policy, a nonprofit research organization in Washington.

“It may feel like window into a different world,” he says, referring to the Panama Papers data, which was reported Sunday by the International Consortium of Investigative Journalists (ICIJ). “But it is also a window into how our financial system works in the United States” and beyond.


Panama, and the specific law firm whose records were leaked to the ICIJ, is just the part of a much larger network of tax havens worldwide – including opportunities to hide assets in the United States as well as in smaller nations such as Luxembourg and the Cook Islands.

“The cache of 11.5 million records [from the firm Mossack Fonseca] shows how a global industry of law firms and big banks sells financial secrecy to politicians, fraudsters and drug traffickers as well as billionaires, celebrities and sports stars,” the ICIJ reporters write in an overview of their findings.

Shell corporations lie at the center of this secretive realm. Individuals can easily set up entities to park their money in, maintaining effective control of it while tapping other individuals to be publicly listed as directors.

The basic process isn’t illegal, and the fact that prominent or wealthy people use such havens isn’t much of a surprise. But the scale and detail of the ICIJ’s Panama Papers makes the issue concrete to an unprecedented degree.


And the reports sketch the connection between financial secrecy and inequality. For instance, one ICIJ report calls out a Ugandan company for avoiding taxes on a $400 million oil deal – and notes that the forgone tax revenue would be enough to cover a shortfall in health-care spending that currently leaves some Ugandan patients sleeping on hospital floors.

The tax-avoidance tactics help rich individuals and firms become wealthier still, and they deprive nations of tax revenue that’s as needed in Kalamazoo, Mich., as it is in Kampala, Uganda. If the wealth was ill-gotten to begin with – whether through activities like drug trafficking or politicians accepting bribes – the adverse impact on average people is all the worse, experts say.

“For those who are seeking to use the financial system to steal money, … anonymous corporations are basically their getaway car,” says Mr. Gardner, who spoke to the Monitor by phone.

How much of global inequality stems from this problem? It’s hard to say with precision, and most economists say some degree of rich-poor gap is inherent even in a well-functioning free market system. But experts on income disparities generally say inequality has reached troubling proportions – and that problems like those revealed in the Panama Papers are a meaningful factor.

Now the big question may be whether the Panama Papers result in strong public pressure for financial reforms – and in a shift away from the idea that tax havens and secrecy for the rich are to be accepted as the way the world works.

“It’s interesting how crisis can be a catalyst,” says finance expert Tom Cardamone, referring to the way the 9/11 terror attacks prompted actions to improve transparency in the global banking system.

“Hopefully these revelations will also be seen as  a type of crisis,” says Mr. Cardamone, managing director of Global Financial Integrity Global Financial Integrity, a research and advocacy group in Washington, a reminder of “how dark it is in many, many places around the globe.”

The potential for a pointed public response has already been revealed in Iceland, following the news that the prime minister’s wife had an offshore company holding bonds in failed Icelandic banks, at a time when her husband was part of a government negotiating as a creditor of the banks after the 2008 financial crisis. Sigmundur David Gunnlaugsson resigned as prime minister on Tuesday.


Raymond Baker, an expert on global corruption and shadow finance who founded Global Financial Integrity, has called dirty money “the most damaging economic condition hurting the poor.”

“The best thing that can be done to lift people out of poverty and cut inequality is to clean up the global financial system,” he writes in his book, “Capitalism’s Achilles Heel: Dirty Money and How to Renew the Free-Market System.”

And Branko Milanovic, a economist who focuses on global inequality, tweeted on April 3: “The #panamapapers have a huge importance for figuring out global wealth #inequality. An iceberg we knew existed but had no idea of the size.”

This data leak, actually, merely hints at the size by showing the dealings of just one prominent law firm in the shell-company arena. Details from the data leak are still emerging. (Some 100 news organizations aided the ICIJ effort, but so far the ICIJ has not made its data available for wider public view.)

For its part, the firm Mossack Fonseca has says its actions have been within the law and that it doesn’t knowingly harbor illicit money. (And in one instance cited by ICIJ, a founder of the firm sought to ensure that it stopped harboring money from Iran.)


Although concern about inequality is strongest on the political left in the US and other nations, plenty of people across the ideological spectrum view it as problem threatening individual opportunity, trust in government, and even the basic rate of economic growth.

It’s now routine for the largest global corporations to tally up their revenue in low-tax locales and avoid liabilities in high-tax ones. In the US, corporate income taxes now supply just 11 percent of federal tax revenue, down from about one-third in 1945, according to numbers tracked by the Center for Budget and Policy Priorities in Washington. That means individual taxpayers have to pay more.
Gabriel Zucman, a finance expert at the University of California, Berkeley, has estimated that at least 8 percent of the world’s wealth is held offshore rather than in the owners’ home nations – costing some $200 billion or more in annual tax revenue.

Much of that lost tax revenue is in relatively well-off countries in Europe, North America, and Asia. But as a percentage of overall national wealth stashed offshore, some leaders in his calculations are Arab Gulf countries (57 percent offshore), Russia (50 percent), Africa (30 percent), and South America (22 percent).

In his book, Baker argues that the problem is nothing inherent in capitalism, but rather in a look-the-other way acceptance of cronyism. The solution, he argues, is in comitting to put the rights of individuals and the rule of law first.

A crucial next step of reform may be targeting the ease of creating shell companies. Cardamone calls for a push by G8 and G20 nations “to require that corporate ownership has to be public. It cannot be secret. There has to be a flesh and blood person attached to every company that’s incorporated.”

The US could show leadership by passing federal legislation, to limit the leeway that states like Delaware currently use to allow corporate secrecy. Such legislation hasalready been proposed but has lacked the momentum to pass.



Deaths Cast Light on India’s Ailing Public Health System

December 9, 2014


For Most of Country’s Poor, Underfunded and Hard-to-Access Public Medical Care Is Only Option

 Women who underwent a sterilization surgery at a government surgery camp lie in beds for treatment at the Chhattisgarh Institute of Medical Sciences hospital in the city of Bilaspur last month.   

Women who underwent a sterilization surgery at a government surgery camp lie in beds for treatment at the Chhattisgarh Institute of Medical Sciences hospital in the city of Bilaspur last month. Reuters

By Gabriele Parussini and Shanoor Seervai
The Wall Street Journal

NIRTU, India—When Ranjita Kumar died after sterilization surgery at an Indian government population-control camp in November, a wave of fear spread among her neighbors.

They decided not to participate in the state-run program that pays poor women to undergo assembly-line operations.

But Kishore Kumar Patel, a community health volunteer, said they would go eventually; there are no other foolproof birth-control options, and most can’t risk the cost of another child. “To get it done at a private clinic is just too expensive,” Mr. Patel said.

The deaths of Ms. Kumar and 12 other women after sterilization procedures in the central Indian state of Chhattisgarh cast a harsh light on the multiple failings of India’s chronically underfunded public-health system.

Forensic specialists who conducted autopsies on the dead women said it appeared they were killed by severe infections spread by improperly cleaned surgical instruments. Laboratory tests also discovered traces of toxic substances in antibiotics they were given, state health officials said. At the time, 83 women were operated on over the course of a few hours.

In 2012, India’s government health-care spending amounted to just 1.3% of its gross domestic product, among the lowest rates globally, according to the World Health Organization. That level of expenditure puts India behind Afghanistan and Angola. China’s government spends 3% of GDP on health care. In the U.S., the rate is about 8.3%.

Over the past two decades, Indians’ life expectancy has grown by seven years, reaching its highest level—66 years—in 2012. Infant mortality has been almost halved.

India’s growing middle class can increasingly afford better care at private hospitals, whose revenues have been rising by 20% a year, hitting $70 billion in 2013, according to a recent study by Assocham, an Indian business group. But for more than half of Indians—who, like many of the 1,800 people who live here in Nirtu, subsist on less than $2 a day—government-provided health care, which can be bare-bones and hard to access, is often the only affordable option.

Dr. Yogesh Jain, who moved from New Delhi to the district of Bilaspur, set up a non-profit hospital in Ganiari for villages that lacked proper health care. His hospital’s yearly budget of about $350,000 is financed by donors in India and abroad.  

Dr. Yogesh Jain, who moved from New Delhi to the district of Bilaspur, set up a non-profit hospital in Ganiari for villages that lacked proper health care. His hospital’s yearly budget of about $350,000 is financed by donors in India and abroad. Gabriele Parussini/The Wall Street Journal

“Health care is becoming increasingly polarized in India,” said Kriti Kapila, an anthropologist at the King’s College India Institute in London. “Some have access to excellent services and others to nothing.”

Raj Kumar, who is considered the village doctor in Nirtu, has no medical degree. He says he graduated from high school and took a paramedic course. Mostly, he said, he dispenses painkillers or cold medicine if someone has a headache or cough.

“I don’t have the education or facilities to treat people for big diseases,” Mr. Kumar said. “The health situation here is very bad.”

There is a government-run primary health center in a shabby, yellow-painted building about 10 miles away in another village, Ganiari, which is staffed by physicians and nurses. Aparna Mishra, a doctor there, said the center, which treats 50 to 60 patients a day, is only equipped to provide basic care and refers the seriously ill to bigger hospitals. “Many medicines are not available,” Dr. Mishra said. “We tell patients to get them from outside.”

Government-run camps are used to provide cut-rate surgery. Surgical sterilization has become a mainstay of New Delhi’s efforts to keep the country’s birthrate down and slow the growth of its 1.2 billion-strong population.

Ms. Kumar was operated on at a camp on Nov. 8, conducted in a disused hospital whose floors were covered with rat and dog feces. Dozens of women were made to lie on sheets stretched on the floor of an operating room for the surgery.

Villagers likened it to veterinary medicine. “It’s like they were sheep or cows,” said Anjora Suryavanshi, the mother of another woman who died after surgery that day.

Soon after Ms. Kumar returned home, she began to experience severe pain and vomiting, said her husband, Santosh Kumar. She was almost unconscious when she was taken to the hospital by ambulance on the night of Nov. 10. “This death is a huge betrayal,” Mr. Kumar said. “If we knew this could happen, we would never have gone.”

Ramanesh Murthy, medical superintendent of the Chhattisgarh Institute of Medical Sciences where some of the women were treated, said those who died were dehydrated and malnourished by the time they were admitted.

For a 14-mile return trip to a hospital in Bilaspur, villagers from Nirtu spend as much as 60 rupees—a daily laborer’s wage. But they first need to find a private or collective taxi because of the lack of public transport in the state.

Police detained the surgeon who operated on Ms. Kumar and the other women on Nov. 8, R.K. Gupta, and said they are investigating whether he should be charged with culpable homicide. Dr. Gupta has been released on bail.

“The allegation is unthinkable,” Dr. Gupta’s lawyer, Kanak Tiwari, said. “There is no clinical evidence that my client committed an error in judgment.”

Police in the state capital, Raipur, have also detained two directors of local drug company Mahawar Pharma Pvt. Ltd., which supplied the state with the allegedly tainted ciprofloxacin given to the sterilized women after surgery.

Police said Mahawar didn’t manufacture the drug itself and they are investigating where the antibiotic came from.

In 2011, the company was found to have violated manufacturing norms, and its license was temporarily suspended before being reinstated. The state continued to buy drugs from the firm.

“Our clients did everything according to regulation,” said Asif Ganj, a lawyer for the company’s directors, Ramesh Mahawar and his son, Sumit Mahawar. “The government had given them a license, renewed it many times and done inspections.”

An independent investigation published by three nongovernmental health organizations said Dr. Gupta and his staff used the same injection needles, syringes and suture needles for all 83 procedures at the camp and never changed their gloves.

“This camp is symbolic of the pervasive apathy of the system and blatant violations of accepted standards in sterilization camps, which have been normalized and justified as responding to a large unmet need,” the report said.

In a separate report, the New Delhi-based advocacy group Human Rights Law Network said: “Chhattisgarh’s ill-equipped public health system, coupled with the state’s relentless pursuit of family planning targets, creates an environment where death becomes inevitable.”

In an effort to improve medical care for the poor, the government in 2008 launched an insurance plan for families living before the poverty line that pays up to 30,000 rupees, or about $485, in health care expenses a year.

The insurance covers major costs such as surgery and hospitalization but doesn’t cover routine expenses such as drugs and X-rays. Doctors say this creates perverse incentives for doctors and hospitals to admit patients and do unnecessary procedures.

Several doctors in Chhattisgarh were suspended after a human-rights group alleged they performed unnecessary hysterectomies on more than 2,000 women to claim money from the government insurance program.

A state investigation concluded that the “operations could not be termed as wholly unneeded.”

Three years ago, when dozens of people were left blind in one eye after cataract surgery at government-run camps in the state, Chhattisgarh’s health minister Amar Agrawal blamed negligence by medical teams at the camp.

This week, it was discovered that 16 elderly patients had lost their eyesight after undergoing cataract surgery last month at a camp run by a nongovernmental organization in the northern state of Punjab.

“The system is geared against the poor,” said Yogesh Jain, a doctor who is one of the founders of a not-for-profit community hospital in Ganiari. “It’s as if it was not your right to get free treatment.”

In Nirtu, Rajim Yadav, a friend of Ms. Kumar’s, says that after giving birth to four daughters, she wants to be sterilized to keep her family from growing too large.

But with the free-of-charge sterilization camps bearing a death risk and private hospitals in the region charging anywhere between 5,000 and 15,000 rupees for tube ligation, she feels she has hit a dead end.

“I don’t know how I’ll get the money,” she said.

Corrections & Amplifications

Ranjita Kumar was one of 13 women who died after sterilization surgery at an Indian population-control camp in November. An earlier version of this article said the deaths occurred earlier this month.

Unions Say ObamaCare “Destroys the foundation of the 40-hour workweek.”

August 6, 2013

By Carmel Lobello

 A group of unions said ObamaCare would "destroy the foundation of the 40-hour workweek."

A group of unions said ObamaCare would “destroy the foundation of the 40-hour workweek.”

        The Affordable Care Act is losing some of its biggest supportersAfter providing crucial support for the Affordable Care Act, unions have started changing their tune.

Last month, leaders from three powerful unions wrote in a letter to Senate Majority Leader Harry Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) that ObamaCare would “shatter not only our hard-earned health benefits, but destroy the foundation of the 40-hour workweek that is the back bone of America.”

Their complaint? That ObamaCare is to blame for employers hiring more part-time workers — specifically, a deferred provision that would require employers with 50 employees or more to provide all their full-time workers with health care coverage. (Not everyone subscribes to this theory.)

“Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly,” they wrote. “The impact is two-fold: fewer hours means less pay while also losing our current health benefits.”

Furthermore, the letter lamented the impact ObamaCare would have on multi-employer, non-profit health plans, which feature benefits arranged between a union in a particular industry and small employers in that industry. Under ObamaCare, employees under such plans, known as Taft-Harley plans, would not receive subsidies that are available in other plans, while being taxed at the same rate. Twenty million workers are covered by Taft-Harley plans, says Forbes.

Finally, unions are also unhappy about the so-called Cadillac tax, a provision that will levy a hefty tax on the most expensive plans. Starting in 2018, plans that cost more than $10,200 for individuals and $27,500 for families will be taxed 40 percent for each dollar they go above that threshold.

The rule is meant to get employers to lower costs, a grand goal of ObamaCare that will theoretically make the country’s health spending sustainable. “But it also infuriates workers,” says Ezra Klein at The Washington Post, “and, in some cases, the unions that represent them.”

After all, they’re getting something for all that health-care spending. Their plans feature vast networks, low out-of-pockets costs, and much else. Some of that will be ratcheted back. [The Washington Post]

This is also going to be a problem for state and local government workers, whose benefits are negotiated by unions.

“Cities including New York and Boston, and school districts from Westchester County, N.Y., to Orange County, Calif., are warning unions that if they cannot figure out how to rein in health care costs now, the price when the tax goes into effect will be steep, threatening raises and even jobs,” says The New York Times.


Both Presidential Candidates Are Glossing Over What’s Next on Big Issues

October 18, 2012


THE SECOND presidential debate was snappier than the first and useful in illuminating contrasts in personality and political philosophy between President Obama and former Massachusetts governor Mitt Romney. But as a guide to actions either man might take in response to the biggest challenges he will face, the debate — like most of this campaign — was close to useless. Someone tuning in for the first time Tuesday night might assume that the principal conundrums of the next term will be how to lower taxes on the middle class and how to mine more coal.

Washington Post Editorial

The reality is starkly different. On Jan. 1, even before the next president is inaugurated, a series of tax hikes and spending cuts is due to take effect, and the Congressional Budget Office has flatly warned it would send the nation back into recession. Among the cuts are reductions to defense spending that Defense Secretary Leon Panetta has warned would be catastrophic to national security. If any of this is to be avoided, a reelected Mr. Obama or a President-elect Romney will have to work with the lame-duck Congress to fashion some way out.

This so-called fiscal cliff is only the most immediate test in the longer-term challenge that will surely consume much of the president’s term: how to get the nation’s fiscal house in order. The country has to find a way not to undermine recovery in the short term while getting debt under control in the longer term. The alternative — the track we are on — will see health-care spending and interest payments crowd out just about every other government function.

Both candidates know that, to avoid that grim scenario as the population ages, Americans will have to make some sacrifices. Taxes are going to go up, and not just on the rich. The retirement age will have to be pushed back.

Yet regarding the fiscal cliff, neither candidate had one word to offer. And on the longer-term challenge, here’s what Mr. Romney had to say: “I want to get middle-income taxpayers to have lower taxes.” And Mr. Obama: “I want to give middle-class families and folks who are striving to get into the middle class some relief.” Mr. Obama attacked his opponent for refusing to raise taxes on the rich. Mr. Romney glancingly attacked the president for having failed to reform Medicare. And that was it.

The discussion on energy presented a similarly dismal picture. “Few challenges facing America — and the world — are more urgent than combating climate change,” Mr. Obama said. “Now is the time to confront this challenge once and for all. Delay is no longer an option. Denial is no longer an acceptable response.”

Don’t remember those words? That’s because Mr. Obama spoke them in 2008, just after his election. At Tuesday’s debate, there was no mention of climate change. Instead, Mr. Obama boasted of “increases in coal production” during his first term. Mr. Romney assailed him because he “has not been Mr. Oil, or Mr. Gas, or Mr. Coal” — these being the fuels that are warming the climate, coal above all.

Many voters do not want to hear about sacrifice — about carbon taxes or benefit cuts. But true leaders occasionally look beyond their focus-group results.