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Report: We're going to be spending even more on health care

Pills on money symbolizes costs of U.S. health care

Stacy Vanek Smith: By the year 2020, almost half of the health care spending in this country will come from the government. That's according to new data from the trade journal Health Affairs. Here to talk about this with us is JB Silvers. He teaches health care finance at Case Western Reserve University. Good morning, JB.

JB Silvers: Good morning.

Vanek Smith: Apparently government spending in healthcare is going to reach $2.2 trillion in 2020, which is pretty high. Where is this price hike coming from -- is it healthcare reform? Where is this price increase coming from?

Silvers: No, it's a fairly small amount from health care reform. Just a fraction of a percent. That's mainly due to expended coverage. It's mostly due to expanded use of services -- we just keep using more healthcare every year.

Vanek Smith: What does more government money going into health care mean for the health care industry?

Silvers: Well, if you look at the way the market has seen health care, it's a growth industry -- one of the bell weathers of the economy. That's the good side. The bad side is it means we pay more and more, so for the industry this has been great. For the rest of the world, it's a big expensive thing that they'd rather not be paying.

Vanek Smith: What can be done to cut those costs -- if anything?

Silvers: We need to change how we use health care and how much of it we use in an intelligent way. Using things that really work -- processes that really work -- and medications and such, and not be using so many things on people for which it's not effective. And those are really winners. Basically reorganizing how we provide health care.

Vanek Smith: JB Silvers is the chair of the department of banking and finance at Case Western Reserve University. JB, thank you so much.

Silvers: Thank you.

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