IWF: Don't let government 'help' rising health care costs

Friday, February 16, 2018
 | 
Chris Woodward (OneNewsNow.com)

stethoscope and cashA health care analyst says no one should be surprised by rising health care costs but warns about manipulating a system that is working overall. 

The Department of Health and Human Services (HHS) projects health care spending will rise an average of 5.5 percent annually or one percentage point faster than economic growth, thereby squeezing public insurance programs and private employers who provide coverage.

HHS cites an aging population as one driver, along with an increase in health care services and prescription drugs.

"We've really done nothing to try to contain the cost of health care," responds Hadley Heath Manning, director of policy at Independent Women's Forum (IWF).

Manning

She recalls that the Affordable Care Act was supposedly aimed at reducing health care costs but it did so depending on the health insurance market.

"So there are a lot of subsidies in the ACA for health insurance, and there is a Medicaid expansion," she observes, "but those policy provisions don't really touch on the actual health care services that people consume and don't put the right incentives into place to hold prices down."

When it comes to prescription drugs, liberals and conservatives agree something needs to be done about the cost but are divided on how to solve the problem.

Liberals, for example, want price controls.

doctor writing prescription"The cost of drugs is not something we're going to solve via price controls," responds Manning. "Other countries have tried that and instead the result is usually drug shortages and more difficult access to the drugs that people need - a slow-down in innovation. And those foreign price controls actually come back to haunt American customers because we end up paying more because of foreign price controls."

Pointing to the HHS report, Manning says there are very steep increases in the cost of prescription drugs due to the fact that the cost of bringing those drugs to market has increased over past years.

"The cost of research and development (R&D) is so high," she says, "because the cost of FDA trials is so high, and because drugs go through a period where they are patented and there is market exclusivity for the creators of new drugs where there is no market competition."

That allows the initial investors to recoup their up-front costs for research and development, she observes, but those drug prices drop when the patent expires.

"So some of this is just inherent to our system that protects intellectual property," Manning says. " But there is also other things that we can do to make it easier to fast-track the development and testing of new drugs that come to market, because these are obviously innovations we want to see."

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