How to Really Lower Health Care Costs

Prescription pills and tablets Photo by from Pexels Copy

When analyzing health care spending, drug costs usually bear the brunt of the scrutiny. While prescription drugs account for 15% of United States health care spending, Ruth L. Newhouse Associate Professor of Health Care Policy Anupam B. Jena, MD, PhD, says in The Washington Post that in order to truly address health care spending we must expand our scope to encompass more than just prescription drug spending.

Americans spend more on all health care services than nearly any other industrialized nation. In the United States, hospital care and doctor’s services account for 31% and 20% of health care spending, respectively. However, drugs get special attention when examining spending because people are exposed to them more regularly. Many drugs are taken regularly, whereas people visit the doctor or the hospital with much less frequency.

A heavier focus is often put on drugs because it is easier to collect data on prescription drugs- what works, what doesn’t work, their cost, and how they compare to one another. Data like this does not exist in the same capacity for hospitals and doctor’s offices. The federal government requires rigorous testing and research on drugs before they are released, whereas treatments and decisions in hospitals and doctor’s offices are not held to the same arduous standards. 

“The fix isn’t to stop conducting rigorous analyses of value for drugs,” Jena says, “But to root out additional waste, we must hold all health care to the same evidentiary standard for value.”

Jena suggests that more data focused on health care services outside of prescription drugs such as hospital pricing and physician care delivery can help more effectively address health care spending.