New Bipartisan Policy Center Report Identifies Key Drivers of Health Care Costs

A new report released today by the Bipartisan Policy Center (BPC) found that health care costs in the United States are expected to increase in coming years due to population growth, utilization and intensity of health care services and increasing prices. The BPC report, entitled, What Is Driving U.S. Health Care Spending? America’s Unsustainable Health Care Cost Growth, identifies an extensive list of health care cost drivers ranging from structural barriers to reducing costs within the current system to the more dynamic, changing aspects that will impact the overall growth rate of health care spending.

The report is the first product of BPC’s new Health Care Cost Containment Initiative, led by former Senate Majority Leaders Tom Daschle and Bill Frist, former Senator Pete Domenici and former Congressional Budget Office Director Dr. Alice Rivlin. The four have been leading BPC’s Health and Economic Policy Programs for the past few years. Over the next several months, the initiative will seek approaches to contain health care cost growth on a system-wide basis, while enhancing health care quality and value. The effort will ultimately produce a comprehensive, bipartisan package of cost containment strategies.

Specific drivers detailed in the report include: fee-for-service reimbursement; fragmentation in care delivery; administrative burden on providers, payers and patients; population aging, rising rates of chronic disease, as well as lifestyle factors and personal health choices; advances in medical technology; tax treatment of health insurance; insurance benefit design; lack of transparency about cost and quality, compounded by limited data, to inform consumer choice; cultural biases that influence care utilization; changing trends in health care market consolidation and competition for providers and insurers; high unit prices of medical services; the health care legal and regulatory environment; and structure and supply of the health professional workforce, including scope of practice restrictions, trends in clinical specialization, and patient access to providers.