The next big battle in healthcare will almost certainly be about costs!

Mounting frustration from employers and employees will put cost controls on the table faster than you might think, making the next big battle in healthcare almost certainly about costs!

Right now frustration over healthcare costs is starting to percolate, particularly over the concern that the industry already maxed out the existing tools for cost control.

California, for example, has proposed moving the state to an all-payer system, to give the state more control over doctors and hospitals insurance plan charges (only Maryland has an all-payer system). Are we really going to have a debate about all-payer? Is this one of those times when California is the wacky outlier state, or one of those times when it’s a trendsetter?

Once employers reach the end of their rope on healthcare costs, the cost-control debate is going to ratchet into a higher gear. That is the prelude to a debate over all-payer in every state, but government intervention will probably be on the table, at least in some states. The cost-containment debate is coming because policymakers are not going to put too much new revenue on the table, and that means that both the private sector and Medicare will be paying the most.

Costs have risen modestly over the past few years, and private insurance has responded, in large part, by shifting more of those costs onto consumers through higher copays, deductibles, and coinsurance. But we’re at the end of what the market will bear on cost-sharing.

This is a scary position for providers. If employees are at their breaking point on cost-sharing, and employers reach their breaking point on cost growth, expect political systems to get serious about cutting those costs themselves. The question remains … are healthcare organizations and doctors ready for real changes in reimbursement?

 

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