Morning Read: How much does it cost to grow old?

Highlights of the important and the interesting from the world of health care:

How much does it cost to grow old? We know that health care U.S.A.-style is expensive and we know that it’ll cost more as we get older. But exactly how much it’ll cost once we retire is probably a mystery to most, and the numbers are startling. Even with Medicare, a 65-year-old couple without chronic conditions will likely need more than $200,000 to cover out-of-pocket health costs during retirement, according to a number of cost estimates compiled by U.S. News and World Report. Add in a chronic condition or two and you can imagine what happens to that number, and while we’re at it, factor in the rate of inflation for health costs if you really want a scare. Median out-of-pocket costs for the typical senior are expected to rise from about $2,600 in 2010 to $6,200 in 2040 in constant 2008 dollars, according to a recent Urban Institute report.

So where do all those costs come from?

• Medicare premiums, which currently run at about $140 a month including prescription drug coverage.
• Cost sharing with Medicare, such as the 20 percent copay on all medical bills. Further, Medicare has no out-of-pocket spending limits, unlike most private insurance policies.
• Uncovered expenses, such as dental care, eyeglasses, and hearing aids.
• Long-term care. Medicare pays for 100 days of nursing home care, then you’re on your own.

For hospitals, it pays to wield market power: Why do some hospitals get three times more money than others for performing the same procedure? Simply because they can. Records from Massachusetts’ second-largest insurer, Harvard Pilgrim Health Care, have been made public as the state’s government examines why health costs are rising so rapidly. Digging into the numbers, the Boston Globe reports that, for example, two premier, brand-name hospitals receive 15 percent to 60 percent more for essentially the same work as other hospitals, even though the quality is not superior. The hospitals shoot back by saying the costs are justified because they treat sicker patients, treat more complex cases and provide uncompensated care.

All of which are true to some degree, but the real story here is how hospitals use their market power to gouge consumers and line their own pockets–because they can. That should be music to the ears of insurance companies, who’d love to deflect as much blame for high health costs as possible onto hospitals, doctors and others in the medical industry. As one Health and Human Services official said, “So much of what drives costs now is the revenue that hospitals want to generate.”

Shooting down reform myths: Two leaders from consume-advocate group Consumers Union have written a post at Health Affairs that attempts to refute a number of myths about health reform. From “It’s a government takeover” to “It will destroy Medicare,” the post is worth forwarding to friends who may still have misconceptions about the health overhaul. Consumers Union also tackles what may be the most persistent misconception about reform: “We can’t afford it/It will bust the budget.” As the authors correctly note (and this can’t be said enough) the best estimates we have from the Congressional Budget Office indicate that the overhaul plan will reduce the deficit in the long run. There are plenty of legitimate reasons to oppose health reform, but “We can’t afford it” isn’t one of them.

Who says bad news sells? Faced with a negative media report, many newsmakers like to retort, “They’re just doing that to sell papers,” with the implication that “bad news” sells. Apparently that selling power doesn’t translate to cancer, however. A study in the Annals of Internal Medicine finds that news reports paint an overly optimistic view of cancer, emphasizing aggressive treatment far more often than end-of-life care, for example. “It is surprising that few articles discuss death and dying considering that half of all patients diagnosed as having cancer will not survive,” the authors write. So maybe the media is overly negative, but not when it comes to reporting on cancer.

Photo from flickr user Tobyotter