Research at the Dartmouth School of Medicine in New Hampshire shows how high-spending regions of the country are driving the spiralling costs. Insurers and the government pay set fees for each medical intervention performed. In some regions, doctors in institutions that are competing to become "centres of excellence" in high-paying fields may use unnecessary diagnostic tests, and surgeons often perform expensive procedures when cheap drugs may be a better option.
The main proposals now before Congress won't do much to tackle this problem. Rather, they concentrate on the important issue of expanding access to health insurance, and the Congressional Budget Office calculates that they will increase spending by hundreds of billions of dollars over the coming decade.
Cutting costs would involve more research into the comparative effectiveness of different tests and treatments, and giving doctors incentives to deliver quality care, not just paying them more for doing more.
Why the reluctance to tackle these issues? Partly it's because no politician wants to be accused of rationing healthcare. One way forward might be to inform the public that sometimes less can be more. "When people understand, they're less likely to choose expensive, invasive procedures," says Shannon Brownlee of the New America Foundation a think tank based in Washington DC.
Dartmouth has research on "Health Care Spending, Quality,
Dartmouth: The Policy Implications of Variations in Medicare Spending Growth
The best way to lower healthcare costs is to find more real cures.
Past, present and future US federal budgets