Monday, September 14, 2009

Drivers of Health Care Costs


National health spending is expected to reach $2.5 trillion in 2009 (

(Wall Street Journal Video Clip)
Dr. Robert Levine, author of "Shock Therapy for the American Health System," tells Kelsey Hubbard that while he supports comprehensive reform, he does not believe that President Obama's plan goes far enough.

Dr. Levine believes that Washington's health care plans does not address costs.

1. Unnecessary care: 30% of total costs (CBO estimate)
2. Administration Costs: 15-20% costs

He cites main drivers of health care costs and suggests that the health care reform should work towards to decreasing these cost buckets. In terms of next steps, he suggests that physicians should be salaried to prevent incentives to order more tests (fee for service model).


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