The health care system should produce health.

As the announcement of President Clinton's health care reform proposal approaches, there is growing optimism and hope that health care as a right, and not a privilege, for all American may be in sight. Achievement of the campaign goals of guaranteed universal coverage for a basic benefit package and workable cost controls would be a historic accomplishment, one that has alluded social reformers since the 1930s. This is such a major undertaking that it could easily take until the year 2000 to fully accomplish these objectives.

Without minimizing in any way the importance of such an accomplishment, I would like to suggest that it be conceived and implemented in the context of a more fundamental vision for change - that the health care system should have as its purpose continuous, measurable improvement in the health and functional status of individuals and communities, rather than simply providing health services to all.

Why does this need to be stated as a fundamental objective? Aren't health care providers and patients always working toward the goal of producing health? The answer is yes - and no.

Clearly, most individual providers and institutions have this objective, and many times they achieve it. The nature of the professional relationship mandates it, and most medical professionals work diligently and compassionately toward improving health. But the predominantly fee-for-service payment system has created overwhelming financial incentives toward health services rather than health status.

As a result, health care expenditures are out of control, consuming more than 13 percent of our nation's wealth, with the potential to approach 18 percent by the end of the decade. At the same time, there is little proof that these rapidly increasing expenditures have improved the overall health of Americans, and a growing body of evidence suggests that many procedures and services are not appropriate for certain patients.

Our society has not concentrated on these broader and more elusive goals for several reasons. Our professional socialization, financial incentives, and legal system implicitly, if not explicitly, assume that more health services will produce better health. Patients often unwittingly conspire with providers in a cultural norm that "more is better."

How would a new system that focused on health rather than services be organized? No ideal model exists, but coming closest are integrated delivery systems based in large group practices. Because these systems encompass hospital care, physician services, prevention, and even elements of long-term care, they can address the full range of services a patient may need. Because the providers stand to profit only if they can provide care more efficiently, they can take on the difficult task of deciding which services produce improvement in health at the lowest cost.

Imagine that a significant part of such a system's income was tied to the improvement of its patients' health and functional status. In addition to curing illness, the system would be expected, for example, to decrease the number of days of employment lost to illness and to limit hospitalizations and expensive diagnostic procedures to those known to be health promoting. Such incentives would unleash the same capitalistic creativity toward health that currently exists for health services. Organizations that have traditionally operated out of a predominantly medical model will begin to experiment with different combinations of health professionals, patient education, preventive and social services, and more sophisticated cost-benefit analyses to achieve this goal.

This is not a vision that can be accomplished in one or two presidential terms, and reform should appropriately focus on the immediate goals of universal coverage and cost containment. Such systems take years to develop; they cannot be mandated overnight. But reform can anticipate and facilitate the broader new vision in the following ways.

* Move away from fee-for-service payments toward capitation financing. This will curb the strong financial incentives in the fee-for-service mode to increase the number of individual services whether or not they improve health. While fee-for-service price and volume regulation will likely be needed for cost containment in the short run, they should be implemented in a way that facilitates the transition to capitation for all.

* Stimulate the long-term growth of prepaid group practices and integrated delivery systems. These organizations contain the management and financial structures to make cost-effective decisions that will maximize the health of communities and populations. Federal and state financial and regulatory incentives can speed the growth of such delivery systems over time.

* Move toward including long-term care, some social services, mental health, and prevention in the same annual capitation payment. Different sources of funding for different types of health services often lead to fragmentation and duplication. Less expensive and more effective services, such as prenatal care, home care, and social support services, are often not provided because more expensive acute care services are covered or because trade-offs cannot be made.

* Identify linkages with other sectors, such as education, welfare, and labor, that are interrelated with health outcomes. Old barriers in our thinking, our organizations, and our public bureaucracies must be examined and recast to support the new vision. The boundaries between medical care and social services that contribute to health status and quality of life must be examined and redefined.

* Increase research on health and functional status measurement and on financial incentives for rewarding improvement at the community and population levels. We currently have neither the tested measurement tools nor the financial incentives and structures to put such a system in place, but there is a growing pool of outcome-oriented health service researchers who are ready for the challenge. It is essential that incentives be created for health status so that multiple experiments can help us to find the most cost-effective approach to continuous improvement.

* Clearly state that improvement of community health and functional status is the goal of the U.S. health care system. This would be a shift in our thinking about health and would serve as a beacon to guide our and other health care systems toward an integrated social objective. The plan should indicate that by 2000, or earlier, we will attempt to pay providers for health outcomes rather than for services.

There are lessons in history that suggest that such changes will be difficult. In Paul Starr's The Social Transformation of American Medicine,(*) the chapter on the growth of private health insurance is titled "The Triumph of Accommodation." This refers to the success of professional organizations in supporting coverage for more people, greatly increasing their revenues, while eliminating changes in the delivery system that would affect existing structures and professional control. This can happen again, unless providers and patients alike realize that more fundamental reform is needed and is possible now. Establishing this new vision as the purpose of health expenditures will help ensure that short-run improvements are made in the context of a long-term goal - continuous improvement of the health and functional status of the American population.

(*) Starr, P. The Social Transformation of American Medicine. New York, N.Y.: Basic Books, Inc., 1982.

David A. Kindig, MD PhD, is Director and Professor, Programs in Health Management, Department of Preventive Medicine, School of Medicine, University of Wisconsin, Madison.