Medical costs coming under control.

Medical costs coming under control. A new report from the Council of Economic Advisers indicates that after half a century of medical costs outpacing GDP, the rise in costs is coming under control. Per capita medical costs from 2007 to 2010 rose annually at an average of 1.8%. Since 2010, annual per capita medical costs have risen 1.3%. The slow down is partly the recession, but mostly due to the constant political turmoil resulting in less aggressive medical pricing. Studies covering the past sixty years show that whenever Congress seriously considers healthcare reform, the rise in medical costs has slowed. They soon go up again because there is no incentive to keep them low. Hospitals and doctors are fee-paid. More services mean more income. Costs are passed on. Billing forms are unreadable.  Patients rarely question a cost. The merry-go-round of irresponsibility fosters rising prices. Since the Affordable Care Act medical costs are being determined by ”reference based pricing. Disclosure of the variation between hospital charges for the same value service is leading to competition. Competition is already reducing hospital prices. If a patient opts for added service they pay out of pocket. What is more important than government involvement is that the medical industry itself has invested a trillion dollars in healthcare reform. Instead political “repeal or replace,” hospitals and doctors are stepping in to “refine and repair.” Like all reforms the incentive to keep quality up and costs down must be built in not left to personal responsibility. The real value of laws like The Affordable Care Act, Medicare, and Social Security is that when regulation is built-in, reason rules instead of profit.  Richard Dorsey, Hacienda Heights, CA.

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