What is driving New York’s health care costs?

Americans are facing sky-high health care costs – and they’re only getting higher. So what’s driving this phenomenon?

“Hospital costs, initially, drove that,” Dr. Jerry Frank, senior vice president of medical delivery at EmblemHealth, said during a panel discussion at City & State’s recent “Healthy New York Summit.” When it comes to managing those costs, he cited “care management, reduction in readmissions, reduction in length of stay for many conditions.”

Other options, such as relying more on ambulatory care services and freestanding ambulatory centers, which do not require hospital admission, can also help avoid hospital costs.

Pharmaceutical companies also bear some responsibility, Frank said. These companies are driving up “costs of what was once relatively low cost (medication),” contributing to rising prices. Additionally, more advanced, targeted forms of treatment, such as gene therapy and chemotherapy, have a tradeoff – increased costs for a better quality of life and longer life expectancies, according to Frank.

But some of it may be due to societal norms. Dr. Richard Park, the CEO and founder of CityMD, said during the panel discussion that the conversation around high health care costs involves not only practical solutions and policy, but also societal behavior since “we are an affluent, wasteful society.” This dynamic is driven by an increased desire for immediacy, and is not exclusive to the health care industry. “Who says health care is more inefficient and more expensive?” Park said. “All of America – everything we do is inefficient.”

Park also pointed out to the need to assess the value of care. “It’s never about decreasing costs, it’s value,” he said. “You’re going to have a decision to make, we’re trying to have an improved quality of life. As a society, we have to decide … what do we value, what is more important?”

Several panelists also talked about the promise of data and improved communications to better serving patients.

Anne Schettine, acting director of the New York State Department of Health Office of Quality and Patient Safety, mentioned importance of information like electronic health records, making them more user-friendly and interoperable among different providers. “Being able to standardize information, make it more available and readily usable, to be able to look at where our outcomes are and where we’re going” can result in more successful care.