The 131st Annual Meeting (November 15-19, 2003) of APHA

Abstract #73758

Thomas Bodenheimer, MD, MPH, Department of Family and Community Medicine, University of California at San Francisco, Bldg 80-83, SF General Hospital, 1001 Potrero Ave., San Francisco, CA 94110, 415 206 6348, tbodie@earthlink.net

Following the temporary dip in health care cost increases during the latter half of the 1990s, health care costs are again rising rapidly. An important contributing factor to health care cost inflation is excessive prices and quantities of care.

This problem can be found in invasive diagnostic and treatment procedures performed by physicians, with the support of the hospital who share in the benefits of medical excess, particularly in the for-profit sector.

The clearest example of high prices and quantities of medical services contributing to health care inflation can be found in the pharmaceutical sector. About 85% of new and expensive pharmaceutical products introduced over the past ten years are no more effective nor safe than already existing products that are far less expensive. As a result of pharmaceutical promotion to physicians combined with direct to consumer television advertising of high-cost medications, the volume of expensive medications prescribed is excessive. The result of high prices and volumes of prescription medications has had a major impact on health care costs and on people’s access to needed prescriptions.

If health care costs are to be controlled, mechanisms must be created that keep the prices and quantities of medical services under reasonable control, consistent with evidence-based medical practice.

Learning Objectives:

• To appreciate that cost = price X quantity and that increasing either the price or the quantity (or both) of medical services will increase costs
• To be made aware of some examples of excess prices and quantities of medical services that have contributed to the recent surge of medical inflation
• To understand what mechanisms are available to keep prices and quantities of services under control in a manner that is consistent with the practice of evidence-based medicine

Keywords: Cost Issues, Cost-Effectiveness

Presenting author's disclosure statement:
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.