Vision
Guide the transition of the United States to sustainable health spending growth by analyzing and tracking spending, developing solutions, and advocating for meaningful change.

Long-Term U.S. Fiscal Crisis: Introduction to Altarum’s Triangle of Painful Choices. This short video describes a novel way to understand the long-term fiscal challenge the U.S. faces in light of choices regarding tax revenues, national health care spending, and federal spending on non-health items. It convincingly demonstrates that severe sacrifices are needed along all three dimensions if the country is to regain fiscal balance at reasonable debt levels.

Why is Achieving Sustainable Growth in Health Spending a Critical Systems Issue?
Health spending has grown faster than the economy for decades, resulting in growth of the health care share of national economic output (gross domestic product (GDP)) from about 7% in 1970 to over 18% today. This inexorable increase in health care spending is a problem for individuals, families, businesses, government, and the overall economic health of the country. This is particularly evident when viewing federal, state, and local government budgets. About half of health care spending is publicly financed, mostly through Medicare and Medicaid, and the current rate of growth for these programs is not sustainable as it crowds out other priorities, such as infrastructure needs or education.  A sustainable solution requires a long-term reduction in the health spending growth rate relative to GDP or “bending the health care cost curve.”  

What Are Our Core Strategies for Approaching This Work?
Our Center builds upon decades of multidisciplinary policy research experience and advanced economic modeling for public, private, and philanthropic clients. With the Center, Altarum is focusing this research and policy expertise on the macroeconomic trends and key drivers of health care spending to formulate strategies for sustainable growth.

Core strategies are:

• Timely tracking and forecasting of health spending and cost factors; 
• Systems-level evaluations of options for bending the cost curve;
• Research to fill data gaps and develop new promising strategies;
• Pilot projects/demonstrations of strategies in particular geographic areas; and
• Development of and advocacy for policy recommendations to advance proven approaches.  

Why is Altarum Uniquely Positioned to Do This Work?
Altarum brings objectivity and a systems approach to the myriad advocacy positions concerning U.S. health care cost drivers and cost reduction strategies. Many years of research analyzing components of U.S. health spending have given us the indepth knowledge of health spending issues, data sets, and analytic techniques critical to this work. We have developed close relationships with many of the nation’s top researchers through collaborative work and our use of expert advisory panels, and have achieved national recognition for this initiative through publications, conference presentations, and media coverage.

Leadership
The Center is directed by Dr. Charles Roehrig, a health care economist and econometrician who is nationally known for estimating national health spending by medical condition, and analyses of health spending and their implications. Ani Turner, with over 20 years experience on health workforce modeling and other decision-oriented, quantitative analysis in health care policy, is the Center's deputy director. Other senior members are Dr. George Miller, an Altarum Institute fellow, who leads Center research on prevention spending, and Paul Hughes-Cromwick, a senior economist who leads Center outreach activities, and developed the HSEI briefs.

Products and Services

• The Center publishes monthly Health Sector Economic Indicators (HSEI) briefs, widely released in conjunction with Politico.  HSEI briefs analyze timely data on health sector employment, spending, and prices/utilization.  Official government estimates of national health expenditures are available annually only for the previous year; 2009 estimates were released in January 2011. Examining updated health spending on a monthly basis significantly improves our ability to track trends and progress toward our goal of sustainable growth. We plan to expand beyond the briefs by building interactive, Web-based, public-use tools to explore the data underlying the HSEI.
• The Altarum Health Sector Model (AHSM) forecasts health spending as captured in the National Health Expenditure Ac­counts (NHEA), based upon population demographics, disease prevalence, pre­vailing treatment patterns, insurance coverage/care access, and payment rates. This structure makes AHSM a powerful tool for integrating broad research strains related to health expenditure determinants. We plan to create state-based ver­sions.
• Spending by Medical Condition. While the NHEA track expenditures by type of ser­vice and source of funds, they exclude spending by medical condition. Yet such information is critical to understanding the value of expenditures, and where to direct efforts to improve health and control costs. In Health Affairs (February 2009), Altarum reported annual estimates from 1996 through 2005 for 32 all-inclusive and mutually exclusive conditions. Mental disorders and heart conditions led the list. Spend­ing growth rates were lowest for lung cancer, chronic obstructive pulmonary disease, pneumonia, coronary heart disease, and stroke, perhaps reflecting benefits of prevention. Research on the impact of disease-specific prevalence on spending growth appears in the September 2011 Health Affairs. 
• Spending on Prevention versus Treatment. Many believe that the U.S. health care system needs to transition from a culture of reactive disease treatment to one of proactive health promotion/disease prevention. To move effectively in this direc­tion, methods are needed to determine the current distribution between prevention and treatment spending, and to examine what should be spent on preven­tion and how to best distribute that amount among prevention activities. Altarum researchers have produced annual estimates of the share of national health expenditures going to prevention, finding that this share has been close to 9% in recent years when all the elements of primary and secondary prevention are included – significantly larger than the commonly cited figure of 3%.  
• Modeling Prevention, Treatment, and Research Tradeoffs. Under a National Institutes of Health grant, Center researchers are developing a dynamic model of the impacts of alternative investments in treatment and prevention of cardiovascular disease.  We hope to improve knowledge of the ways in which alternative allocations of funds interact to produce effectiveness as­sociated with such allocations. The model will include downstream impacts of investments in research to develop new treatment and prevention interventions. It will also incorporate policy resistance which reduces the effectiveness of interventions as individuals engage in unhealthy behaviors as a result of improved prevention and treatment options.
• Health Workforce Modeling and Analysis. Spanning 3 decades, Altarum has conducted over 40 health workforce studies for the federal government, states, and professional societies. Center researchers are national experts in the development and application of models of health workforce supply and requirements. We have studied phy­sicians, nurses, pharmacists, dentists, physical thera­pists, audiologists, and speech-language pathologists. Altarum has supported the federal Health Resources and Services Administration, and workforce planning efforts in California, Michigan, New York, New Jersey, Utah, and Colorado.
• Spending on Health Employment. Understanding that every dollar spent on health care is a dollar of income to health sector work­ers and suppliers, the Center conducts research to estimate health employment and compensation by detailed occupation in the health care services categories of the NHEA. This includes nonlabor inputs to the production of health services. Time series data addresses both descrip­tive and policy-related questions regarding efforts to bend the cost growth curve (presented at the 2011 AcademyHealth and International Health Economics Association meetings).

Contact Information
To learn more about the Center for Sustainable Health Spending, please contact:

• Charles Roehrig at charles.roehrig@altarum.org
• Ani Turner at ani.turner@altarum.org
• Paul Hughes-Cromwick at paul.hughes-cromwick@altarum.org
• George Miller at george.miller@altarum.org

For general information about Altarum Institute, contact Jeff Moore at jeff.moore@altarum.org.