Tennessee’s Rising Health Care Expenses Linked to Prescription Drug, Technology Use, BlueCross Study Says

One out of every $7 dollars spent in Tennessee goes toward the cost of health care, as the aging population, increasing drug and technology costs, unhealthy habits and low support for preventive medicine have increased medical costs at a "rapi[d]" rate, a new study by BlueCross BlueShield of Tennessee found, the Chattanooga Times & Free Press reports. In the last 20 years, health care costs in Tennessee increased nearly eightfold, almost 50% faster than did costs in the rest of the country, the study says. Advances in technology are responsible for 11.3% of the increase in health care expenses, the study adds. Tennessee has 60% more magnetic resonance imaging devices and 38% more cardiac catheterization labs than the national average. In addition, Tennessee's prescription drug expenses are the highest in the nation, according to the study. Overall, drug costs per person totaled $497.50 in 1999, compared to the national average of $412.48 per person. Further, the study notes that spending on physician and other provider services in Tennessee was 12.9% higher than the national average and 17% higher than that of other Southeastern states (Flessner/Park, Chattanooga Times & Free Press, 3/17). The study also notes Tennesseans are more likely to smoke and be overweight and less likely to exercise, which can lead to increased use of medical services (Flessner/Park, Chattanooga Times & Free Press, 3/18). Dr. Steve Coulter, BlueCross' chief medical officer and the study's author, said, "These types of cost increases beg the question, 'Can the private health insurance market survive in Tennessee under the current conditions?'" (Chattanooga Times & Free Press, 3/17).

Possible Solutions
Addressing the cost increases is expected to be a "vexing" problem for the state. Although the BlueCross study did not offer any solutions, the Times & Free Press reports that state health experts said that the state should improve health education and incentives to promote healthier lifestyles and should encourage a reduction in prescription drug use, unnecessary medical procedures and "redundant" medical facilities. Experts also predicted that individuals will have to pay a "bigger share" of their health care costs. Jerry Burgess, president of HealthCare 21, a coalition of employers attempting to limit insurance costs, said, "There is no silver bullet to solve the runaway costs of health care. It's a systemic problem, and it's going to take time to change it. But it has to change" (Chattanooga Times & Free Press, 3/18).