Part 3: What do Americans Spend on Traditional and CAM Medical Care?

 

How Much Money is spent on Traditional Health Care?

As far as costs go “The United States spends a larger share of its gross domestic product (GDP) on health care than any other major industrialized country." (Agency for Healthcare Research and Quality)

 

 

“Health expenditures in the United States neared $2.6 trillion in 2010, over ten times the $256 billion spent in 1980… Since 2002, employer-sponsored health coverage for family premiums have increased by 97%, placing increasing cost burdens on employers and workers. In total, health spending accounted for 17.9% of the nation’s Gross Domestic Product (GDP) in 2010.” (Kaiser EDU)

 

National Health Expenditures, 2010

 

Total = $2.3 Trillion Source: Martin A.B. et al., “Growth In US Health Spending Remained Slow in 2010; Health Share of Gross Domestic Product Was Unchanged from 2009,” Health Affairs, 2012. Health care expenditures will continue to rise because, “About 1.6 million baby boomers are expected to enroll in Medicare annually while the working population decreases, almost half the U. S. population has a chronic condition that requires some type of treatment, and nearly 2/3 of adults are overweight or obese.” (Appleby and News)

 

Also driving up the cost of healthcare is the fact that hospitals are buying out private practices and becoming dominant providers with little competition. As a hospital gets bigger the negotiating power of insurance companies drop and prices for services ultimately rise. According to Stephen Brill, “The hospitals’ continuing consolidation of both lab work and doctors’ practices is one reason that trying to cut the deficit by simply lowering the fees Medicare and Medicaid pay to hospitals will not work. It will only cause the hospitals to shift the costs to non-Medicare patients in order to maintain profits — which they will be able to do because of their increasing leverage in their markets over insurers. Insurance premiums will therefore go up — which in turn will drive the deficit back up, because the subsidies on insurance premiums that Obamacare will soon offer to those who cannot afford them will have to go up.” (Brill)

 

Another reason healthcare costs are increasing is that prescription drug costs are unregulated and pharmaceutical companies are allowed to charge whatever they like for a pill, even if that medicine is the only one available for the treatment. “More than $280 billion will be spent this year on prescription drugs in the U.S. If we paid what other countries did for the same products, we would save about $94 billion a year…Just bringing these overall profits down to those of the software industry would save billions of dollars. Reducing drugmakers’ prices to what they get in other developed countries would save over $90 billion a year. It could save Medicare — meaning the taxpayers — more than $25 billion a year.” (Brill)“Federal law also restricts the biggest single buyer — Medicare — from even trying to negotiate drug prices. Instead, Medicare simply has to determine that average sales price and add 6% to it. Similarly, when Congress passed Part D of Medicare in 2003, giving seniors coverage for prescription drugs, Congress prohibited Medicare from negotiating.” (Brill)

 

As far as looking at costs in terms of medical conditions a report on Web MD shows the costliest conditions as:

 

Heart Conditions	$95.6 Billion
Trauma	$74.3 Billion
Cancer	$72.2 Billion
Mental Disorders	$72.1 Billion
Joint Disorders(including osteoarthritis)	$57.0 Billion
Chronic obstructive pulmonary disease (COPD) (Includes the lung diseases emphysema and chronic bronchitis)	$53.7 Billion
Hypertension	$47.4 Billion
Diabetes	$45.9 Billion
Hyperlipidemia	$38.6 Billion
Back Problems	$35.0 Billion
Normal Childbirth	$35.0 Billion

 

 

Furthermore, According to the Agency for Healthcare Research and Quality, twenty-five percent of the U.S. community population was reported to have one or more of five major chronic conditions:

• Mood disorders.
• Diabetes.
• Heart disease.
• Asthma.
• Hypertension.

 

No matter how the numbers are examined, the cost of healthcare is enormous. Even with the passage of the PPACA, the number of people expected to enroll in Medicare in the upcoming years will strain healthcare to the breaking point if it continues unchanged. These costs open the door for CAM, as it tends to use less costly means to treat patients than conventional medicine. At the Kotsanis Institute, Constantine A. Kotsanis, MD combines traditional medicine, functional medicine and nutrition to optimize your health, wellness, and anti-aging process. Dr. Kotsanis knows that good nutrition provides the base that optimal health is built on. In fact, “the largest diabetes-prevention trial, completed in 2001, found that lifestyle intervention, including diet, exercise, and behavior modification, reduced by nearly 60 percent the chances of developing type 2 diabetes in those at high risk. In comparison, drug therapy (with Metformin) produced only a 31 percent reduction.” (Wadyka, How Integrative Medicine Can Help You Be Healthier) Dr. Kotsanis is also a skilled at acupuncture, and “Acupuncture is also widely used for a variety of conditions, including nausea (from chemotherapy or pregnancy), infertility, fibromyalgia pain, arthritis, PMS, and menopausal symptoms. It has the backing of many randomized, controlled trials, and "the National Institutes of Health concluded that there is promising evidence for using acupuncture in specific conditions," (Wadyka, How Integrative Medicine Can Help You Be Healthier) As the healthcare system continues trying to manage costs with care, and its eventual form is still undetermined, a promising way of controlling costs with the integration of CAM practices into the traditional medical system was seen in a study in Washington State that compared the costs of people suffering from back pain, fibromyalgia, and menopause symptoms, with insurance that used CAM to those with the same insurance coverage that did not use CAM found that:

 

• “CAM users had lower average expenditures than nonusers. (Unadjusted: $3,797 versus $4,153, p = 0.0001; beta from linear regression -$367 for CAM users.)” (Lind, Lafferty and Tyree)
• “CAM users had higher outpatient expenditures that which were offset by lower inpatient and imaging expenditures.” (Lind, Lafferty and Tyree)
• “The largest difference was seen in the patients with the heaviest disease burdens among whom CAM users averaged $1,420 less than nonusers, p < 0.0001, which more than offset slightly higher average expenditures of $158 among CAM users with lower disease burdens.” (Lind, Lafferty and Tyree)

 

How Much is Spent on Complementary and Alternative Medicine?

A 2007 study by the National Institute of Health estimates that “U.S. adults spent about $33.9 billion out of pocket on visits to CAM practitioners and on purchases of CAM products, classes, and materials. This equates to 1.5% of total health-care expenditures in the United States and to 11.2% of out-of-pocket health-care expenditures (7). Almost two-thirds of CAM costs were associated with self-care therapies such as nonvitamin, nonmineral, natural products; homeopathic products; and yoga…and the data in NHIS data indicate that the U.S. public makes more than 300 million visits to CAM providers each year. The table below show that the public is willing spend billions of dollars out of pocket for CAM treatments.” (Barnes, Bloom and Nahin)

 

 

Dollars Spent out of pocket To Purchase nonvitamin, nonmineral, natural products	Dollars Spent out to pocket to Purchase Pharmaceuticals	Dollars Spent out of Pocket on visits to CAM providers	Dollars Spent out of Pocket for Conventional Physician Services
$14. 8 billion	$47.6 billion	$12.4 billion	$49.6 billion

Data for the above table was found in the 2007 National Institute of Health study. (Barnes, Bloom and Nahin)

 

Conclusions

In looking at the health care system, the doctor-patient relationship, and costs, several observations can be drawn,

• The health care system is ever evolving, always seeking to balance costs with patient care.
• The doctor-patient relationship is a vital part of the care, and needs to be a priority.
• Spending more on healthcare does not always translate into “better” healthcare.
• As baby boomers age and enroll in Medicare, the costs of care will continue to go up, and more financial burden will be placed on the health care act going into effect.
• As more doctors leave private practice for hospitals or bigger health organizations, competition decreases and costs could rise.
• There is a real risk of a doctor shortage in the near term.
• A shortage of primary care doctors will dramatically affect how people receive medical care.
• People are taking more control of their health as can be seen by the number of people seeking care from complementary and alternative medicine.
• Complementary and alternative medicine is growing and becoming more accepted by mainstream practioners.
• The public is showing support for CAM by willingly spending billions of dollars on CAM options.

 

Sources:

1. http://www.ahrq.gov/research/findings/factsheets/costs/health-care/index.html

2. http://www.kaiseredu.org/Issue-Modules/US-Health-Care-Costs/Background-Brief.aspx

3. http://www.webmd.com/healthy-aging/medical-cost-disability-11/slideshow

4. http://www.ahrq.gov/research/ria19/expendria.htm#MostExpensive

5. http://www.ncbi.nlm.nih.gov/pubmed/20423210