Rising costs, declining health: U.S. health care system in dire straits

The U.S. health economy is the most expensive in the world, and according to a report by Trilliant Health, national health expenditures have increased from $2.8 trillion in 2012 to $4.5 trillion in 2022 despite relatively little change in demand or utilization.

The report argues this current reality is unsustainable and that health economy stakeholders who focus on value optimization will have a competitive advantage in the future of health care based on emerging trends that will shape the health economy in the coming year. 

The physical and mental health of Americans continues to decline, along with a growing prevalence of chronic health conditions. The U.S. continues to spend more on health care despite seeing less care and worse results – the first major trend identified by the study. 

According to the report, the U.S. spends 2X more on health care than peer countries, yet U.S. health care utilization has remained largely unchanged while it has increased by 7% in peer countries since 2000. 

The report contends that the current practice of extracting maximum revenue without regard to cost or quality among health economy stakeholders is not sustainable and must give way to a model that prioritizes “better outcomes at equivalent costs or equivalent outcomes at lower costs or the long-hoped-for better outcomes at lower costs.” 

Another major trend identified by the report is the continued reduction in preventative health care while the demand for behavioral health care increases without enough providers to meet the demand. The report predicts this will result in greater overall morbidity and mortality rates throughout the U.S. 

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In response to decreasing overall health and changing needs among Americans, the report emphasizes that widespread government innovation and regulation throughout the U.S. health care industry have historically failed to produce value. There is a large disparity between value and cost when it comes to the quality of care in the U.S. 

“Employers are better positioned today to demand greater value from their investments in health benefit plans as health plan price transparency not only exposes the wide variation in rates but also the lack of correlation between rates and quality,” said Sanjula Jain, Ph.D., SVP Market Strategy and Chief Research Officer. 

In order to respond to these emerging trends, the report recommends that organizations shift their focus to acquiring increased value for cost rather than continually raising prices. “By adopting specialized, efficient and consumer-centered care models, stakeholders can achieve a sustainable competitive advantage,” the report said.