ASPIRIN, ANGIOPLASTY, AND PROTON BEAM THERAPY: THE ECONOMICS OF SMARTER HEALTH CARE SPENDING

Abstract: The growing share of the U.S. economy devoted to health care spending is cause for concern both because of the share that is publicly financed and because of the inefficiency with which those resources are used. Fueled in part by demographic transitions, unchecked increases in entitlement spending will necessitate some combination of tax increases, the elimination of other public spending, or public debt levels that far exceed those currently observed in Greece. Despite these spending levels, highly cost-effective treatments like aspirin and flu shots are underused, while angioplasty is used in both lifesaving and inappropriate cases and exorbitantly unproven procedures such as proton beam therapy are generously reimbursed by public programs. Driven by expenditures on such expensive care, public insurance spending is rising unsustainably at the same time that a fifth of the population goes uninsured. In an efficient system, more spending on health care would not be a cause for concern. Achieving this means improving the incentives and infrastructure for providers to deliver – and patients to consume – high-value care, as well as wrestling with the difficult question of whom to cover versus what to cover in public insurance programs. But the wide prevalence of inefficiencies also offers hope, for there is scope for fundamental reforms to improve the productivity of health care spending and the fiscal health of the U.S