The Dose

Welcome to The Dose, which tackles the finances behind local health care and life sciences and points to the most interesting national analysis. Your host is J.K. Wall.

Health Care & Life Sciences / Life Science & Biotech

Rotten Teeth Report Card

May 28, 2014

We Hoosiers spend more than we should on health care.

But if we’re looking for someone to blame, we should look in the mirror.

Quite literally.

Indiana ranks 10th in the nation for the highest spending on health care and 10th in the nation for the number of adults missing six or more teeth, according to trove of health care data released last month by the New York-based Commonwealth Fund.

That’s not a coincidence.

Hoosiers do a poor job all around of taking care of themselves, according to the numbers collected by the Commonwealth Fund. Missing teeth are just an example of it that you can’t miss.

And we end up paying for it in higher taxes and health insurance premiums.

How much more?

I figure nearly $400 more per person each year than the national average, as you can see in this database. That’s a 5.5 percent surcharge for Hoosiers that the average American does not pay.

If Indiana’s health care spending were at the same level as Minnesota’s, each Hoosier would be paying $1,450 less per year. That means a 24 percent surcharge for Hoosiers.

It’s important to note these “surcharges” are not directly paid out of Hoosiers’ pockets. The Medicare payments are funded by taxpayers from around the country. And many of the private insurance premiums are paid for by employers.

But higher health spending certainly does necessitate higher state and federal taxes, and lower wages from employers, none of which is good for the economy.

Hoosiers, via their health insurance plans, are spending more money on health care than all but nine other states. You can see how the states stack up in this spreadsheet.

The Commonwealth Fund’s numbers let us see that because the Fund adjusted private health insurance premiums and Medicare spending on doctors and hospitals to reflect the differences from state to state in how much health care workers are paid.

In other words, when adjusted for what it costs to actually deliver the care locally, Hoosiers are spending more than 80 percent of the rest of the country. (For you wonks, you might also be interested to know that the Commonwealth Fund's calculations remove all Medicare payments for graduate medical education and for treating low-income patients.)

The higher spending is good for health care businesses around Indiana. I’ve written elsewhere that Indiana’s health care industry receives $5 billion more per year than it would if Hoosiers spent at the same level of their incomes as average Americans.

Some of that clearly goes to health insurance companies, which appear to have higher profits in Indiana than in other states.

And some of it clearly fills the coffers of hospital systems, whose prices have been documented as running higher than their peers.

But the data collected by the Commonwealth Fund make it clear that high health care spending goes hand in hand with poor health. Sick people tend to consume more health care.

Consider these facts from the Fund's data:

- Significantly more Hoosiers smoke and are obese than their peers across the country. Slightly more Hoosier adults than their peers across the country die from breast cancer, colorectal cancer and suicide.

- Hoosiers die from preventable conditions 8 percent more often than Americans overall. The Commonwealth Fund reports “mortality amenable to health care.” That’s number of people that die from one of 33 different causes before age 75 (or as a child, for some of the causes). Each of the 33 conditions, which include some infections, some cancers, diabetes, hypertension, influenza, pneumonia and maternal death in childbirth, are “treatable or preventable with timely and appropriate medical care,” notes the Commonwealth Fund. That means patients aren’t getting medical care soon enough and health care providers aren’t catching illnesses until they’re expensive-to-treat crises.

- Also, public health looks pretty bad in Indiana, where infant mortality is significantly higher than the rest of the country. Dr. Bill VanNess, the state health commissioner, is working on attacking this terrible problem, which has dogged Indiana for quite some time.

- The kicker for me on health status is the percentage of working-age adults, aged 18 to 64, that are missing six or more teeth. Indiana is tied for 10th worst among states, at 13 percent. The national average is 10 percent. West Virginia leads in this Rotten Teeth Report Card, at 23 percent.

I totaled up the rankings of all 50 states in 11 categories of health status, and then ranked the states by this aggregated ranking. You can see all the data in this spreadsheet.

The result? Eleven of the 15 highest spending states were also among the 15 that ranked worst in health status.

Indiana was one of those 11. It ranked 10th in health care spending and 12th in health status.

Other states that also made this high cost-poor health list were Indiana’s next door neighbors Kentucky, Michigan and Ohio, southern states Alabama, Mississippi, Louisiana and Tennessee, as well as Oklahoma, Missouri and West Virginia.

It’s a perverse system that financially rewards health care providers and insurers simply for serving higher numbers of sick people. A better system would encourage doctors, health systems and insurers to prevent the most expensive treatments in the first place (which, by the way, is starting to happen, albeit slowly).

But the source of the high spending does not appear to be the hospitals, doctors and insurers themselves. It’s us.

So, while we can gripe and complain about the high cost of health care, the answer looks fairly simple: Be healthier.

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