Why are Health Care Costs So High?

“Northwest Wisconsin continues to be the highest cost [health insurance] region of the state,” the report reads. Eau Claire is the highest cost metro area.

The report, Wisconsin Health Insurance Cost Rankings 2009 , pointed out a 22% variation between the Eau Claire and Madison - the lowest cost metro area. Pierce, Dunn, Pepin and Eau Claire counties all made it into the top fifteen high cost counties. Buffalo County made the top ten of counties with the highest increases in costs over the past eight years.

Many of us feel the pinch of high health care costs. Families struggling to pay bills struggle to pay health care bills. According to a Families USA study, health insurance premiums have risen almost five times faster than wages since 2000.

The recent cost study, released the end of October by Citizen Action of Wisconsin, reports health insurance rates in Wisconsin have increased 30% faster than the national average.

Why are health care costs rising so fast? And why are costs in our region higher than areas to the south?

There are many reasons why health care costs are rising so fast. Some we can change and some we can’t. It’s helpful to think about these reasons as we ponder how to change things.

Our population – American – and western Wisconsin is aging. We see declining enrollment in our schools and all the gray hair at church on Sunday. We know older people need more health care.

Medical technology – is growing at an astounding rate. New technology saves lives. It also costs money. Not only do medical professionals have more options to use to save lives, but the intensity of treatments is much greater than previous generations and other counties.

Paperwork and administrative costs – we spend roughly thirty cents of every health care dollar on administrative costs. That translates to about twelve billion dollars a year or $2,440 per man, woman and child in Wisconsin.

Uncoordinated care and duplicated care – depending on the source I read, anywhere from 30 percent to 40 percent of every health care dollar is spent on costs associated with “overuse, underuse, misuse, duplication, system failure, unnecessary repetition, poor communication and inefficiency.”

And, finally, chronic conditions – diseases such as congestive heart failure, asthma, diabetes, coronary artery disease and depression. These five diseases account for almost fifty percent of all health care costs in the United States.

Why are costs so high in our part of the state?

Dr. Robert Craig, the author of the recently released cost study, speculated about the advantages for those buying health insurance in Madison. He explained there is a “competitive bidding process” in Madison - put in place in 2003. In addition, most people in the Madison area are part of a large insurance pool. These two factors help keep costs lower than other parts of the state.

Clearly there is more to learn about how to curtail rising costs in general and specifically in Western Wisconsin.

Unfortunately recent campaign messages left the impression illegal aliens are somehow responsible for our health care crisis. I wonder why someone hiding from government authorities would sign up for a “government-run” health care system. Something is not making sense.

I sincerely hope our friends and neighbors see through the scare tactics and join in the important discussion of the changes we all know we must make – with health care reform and so many other serious issues facing our great state and nation.

If you have ideas, please do not hesitate to call or write. Senator Kathleen Vinehout State Capitol P.O. Box 7882 Madison, Wisconsin 53707-7882 or 877-763-6636 (toll free) or email me at Sen.Vinehout@legis.wisconsin.gov