Alta Vista

  • by: Peter Pitts |
  • 11/04/2016
As they say, everything you read in the newspaper is true -- except for those things you know about personally.

According to the latest report from the Altarum Institute, “moderate 2016 health spending growth continues a slow downward trend.” Unfortunately this doesn’t fit the narrative of those who want to talk about runaway trains – especially for pharmaceuticals.

Here are the numbers: Hospital spending represents 32% of American healthcare spending, 20% goes to physician and clinical services, 15% goes to “other health spending,” and 10% is for prescription drugs.

If the media had covered this story -- which they have not -- the headline would have been, "Pharmaceuticals represent 10% of American healthcare spending. A dime on the dollar. A smaller percentage than almost every nation in Europe."

And here’s the subhead – Spending on pharmaceuticals is growing at a slower rate (under 4%) than either hospital (just under 5%) or physician costs (just over 5%). This breakdown is based on the Bureau of Economic Analysis monthly spending data, including its most recent update released on August 29th of this year.

While pharmaceutical spending seems to be the only issue of interest to the media and politicians, the Altarum account isn’t the one they’re telling. Almost every story and every speech on the drug sector focuses on price without the context of value, using a few bad actors to represent the entire industry. Unfair? Sure -- but life is unfair. There is, however, no excuse for slanted stories and untrue, accusatory political oration.

Disease is the enemy. Practicing physicians know this, but their professional association – the American Medical Association – seems in need of some education. The AMA’s new program, “,” is entirely silent on the actual metrics of healthcare spending and the value of pharmaceutical innovation. Ignorance is not bliss.

Healthcare innovation saves lives, saves money, promotes economic growth, and provides hope for hundreds of millions of people (both patients and care-givers) in the United States and around the world. It deserves respect – or at least honest reportage.

Does this sound naïve? Perhaps, but as Schopenhauer said, “All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.”

The complete Altarum report can be found here.

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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