Congress is now going back to the drawing board after the Joint Select Committee on Deficit Reduction, commonly known as the "Super Committee," failed to reach agreement on a plan to reduce the federal deficit. The problem isn't just partisanship and unwillingness to compromise. Congress can't control the deficit unless it can find a way to reduce the growth of health-care costs, since one-half of the projected growth in federal spending over the next decade will come from growth in the Medicare and Medicaid programs.
Health-care costs aren't a problem for just the U.S. government. High health insurance premiums are increasingly making businesses uncompetitive, and they're making health insurance less and less affordable for persons and families.
The biggest driver of health-care cost increases is hospital care. Over one-third of the growth in national health-care spending over the past decade has been caused by higher spending on hospital care, far more than spending on either physician services or pharmaceuticals. Any long-term solution to health-care costs will require that we significantly reduce the growth in spending on hospitals.
Nowhere is this more true than in Pittsburgh. According to American Hospital Association data, southwestern Pennsylvania has more hospital beds relative to the size of its population than any of the 40 largest metropolitan regions in the country. "More" is actually an understatement -- the Pittsburgh region has 50 percent more hospital beds per capita than the U.S. average, and three times as many beds per capita as Dallas, Detroit or Seattle.
Not only do we have more hospital beds, we fill them with patients more often than other regions. In 2008, the Pittsburgh region had the highest rate of hospital admissions per capita among the top 40 regions in the country. We also had the fourth highest rate of emergency room visits and the second highest rate of surgeries per capita of any major region in the country.
The high rate of hospitalization here is not because we have an older population. In fact, if you just compare hospitalization rates among Medicare beneficiaries, you find that the seniors living in Pittsburgh are hospitalized much more often than in other regions. All that hospitalization doesn't lead to better health, either; it just leads to higher costs. (See " Regional Insights: Less Health Care Could Be Better for Us ," Post-Gazette, Aug. 7, 2011.)