Printer Friendly

Controlling health care costs.

Robert Louis Stevenson wrote, "These are my politics: to change what we can; to better what we can." Health care in the 21st century requires a change from old ways of thinking and doing business to better the lives of all Americans.

The articles by Peter Orszag ("Time to Act on Health Care Costs") and Elliott S. Fisher ("Learning to Deliver Better Health Care") in the Spring 2008 Issues are just two of the growing number of articles discussing the broken health care system in America. Orszag reports that the runaway costs of the Medicare program are attributed to the rising costs per beneficiary, not solely to the increasing numbers of older adults. Fisher rightly states that this increased cost, due to more frequent physician visits and hospitalizations, referrals to multiple specialists, and frequent use of advanced imaging services, varies across the country and does not better the lives of patients. Perversely, higher spending seems to lead to less satisfaction with care and worse health outcomes.

Fortunately, it is possible to improve the health of individuals, families, and communities while controlling costs. Congress is acting to immediately introduce legislation to improve the care that Medicare beneficiaries receive. For example, it is my hope that Medicare legislation that Congress intends to pass this year will include policies to improve the quality of care patients receive and increase access to health promotion and disease prevention services. Further, the Senate Committee on Finance has set an aggressive agenda of hearings this year to identify additional strategies for health care reform. As part of this series, on June 16, we will convene a full-day Health Summit to bring together health care leaders and Congress to explore viable strategies to improve the health of Americans.

The demand for health care reform goes beyond Medicare and Medicaid. The overall quality and cost of care must be addressed. Public and private payment systems can be tools used to obtain more appropriate health care while controlling costs. Payment should support clinical decisions based on the best available evidence, instead of irregular local practices. The judicious and appropriate use of technology will improve the lives of Americans and stimulate innovation. Because approximately three-fourths of the health care dollar goes to treating the complications of chronic illness, preventing disease and carefully managing chronic conditions are vital, and we should target the most expensive medical conditions first.


In the 16th century, Richard Hooker wrote, "Change is not made without inconvenience, even from worse to better." This remains true in the 21st century. We know what needs to be done and how to do it. We have the political will to make the necessary changes. It will require continued commitment from all health care providers and payers to meet the expectations of the American public.


Democrat of Montana

When it comes to health care, we all want the best. We want the latest, most sophisticated care for ourselves and our loved ones. We want the steady, unencumbered march of medical innovation that will bring us tomorrow's treatments, cures, and preventions. And we want this high-quality, accessible, and forward-moving care at a fair and sensible price. Once a year, most Americans make a price-driven decision about our choice of health insurance. Throughout the rest of the year, we don't want money to be a factor in the decisions made about our care.

The articles by Peter Orszag and Elliot S. Fisher present thoughtful perspectives in the ongoing debate about medical costs, quality, and access. The authors note the significant variations in the health care costs and practices across different regions of the country and point out that certain higher-cost practices do not necessarily translate into better outcomes. They advocate for a system that balances care, efficiency, and costs in part by identifying best practices, sharing them openly, and embracing them willingly. Orszag also demonstrates that the aging of our population is likely to drive inexorable increases in our society's health care spending.

Health care providers should clearly look to one another to share practices that make the most sense for patients and for society. We need to rigorously study and analyze promising ideas and methods that can bring greater value to our health care system, and we need to adopt these best practices widely and universally. Controlling health care costs will also require stronger effectiveness reviews of drugs, devices, and technology to evaluate whether new products are a good value and what their reimbursement should be. The recent widespread dissemination of the da Vinci robot is a good case study about the consequences of the absence of such a review system. Implementing electronic medical records and expanding information systems that enhance care coordination among providers and support clinical decisions also offer great cost-saving potential. Another important tool in cost control is process improvement, which identifies unnecessary steps and removes waste from the system while enhancing quality and safety.

Adopting best practices and injecting more uniformity into health care should help curb health care costs, but this approach won't work in isolation. We also must take a hard look at payment reform. It is important, for instance, to find ways to reward those who practice evidence-based medicine, those who offer effective disease management programs and those who provide ongoing preventive care. In addition, we need to embrace well-designed pay-for-performance programs that provide appropriate incentives to do the right thing for patients, but no more or less.

The road leading to high-quality care, ongoing innovation, and cost control is long and winding. But given the national attention to these issues, now is the time to make choices and decisions. We must act quickly as a nation to develop the necessary policies and programs to do so. Doing so may allow us to trim the unnecessary fat in our health care system and not be forced to cut into the muscle.



Massachusetts General Hospital

Boston, Massachusetts

Peter Orszag suggests that the United States could reduce growth in health care costs by pruning low-hanging fruit--unwarranted variation--from the invasive vines of health care spending.

For more than 30 years, John Wenn-berg, Elliott Fisher, and colleagues at Dartmouth have documented remarkable regional variations in Medicare spending across the United States. Dartmouth Atlas research has shown that the quality of care is actually worse when spending and use of care (more visits and tests) are greater. Fisher says that if all U.S. regions would safely adopt the organizational structures and practice patterns of the lowest-spending regions, Medicare spending would decline by about 30%.

This demonstrates a tremendous opportunity for providers to improve quality and decrease health care costs; in other words, to increase the value of the care we provide to patients. Here are two ways to move the health care industry in that direction.

Coordinate care. Traditionally, physicians have been trained in a competitive environment that rewards knowledge and independence. Yet we know that the highest-value care is delivered in regions where providers work in teams in various organizational models. Patients, particularly those with chronic or complex illnesses, need and deserve coordinated care, in which physicians are team members, working as partners with patients, families, nurses, and other health care professionals.

Pay for value. Because our current reimbursement system rewards piecework (more reimbursement for performing more visits, diagnostic tests, and procedures), it's natural that U.S. health care is laden with it. To get the value we want, payers should begin to reward those who deliver high-quality care at a lower cost over time. Currently, physicians who offer efficient high-quality care are financially penalized. In addition, our current system does not reward providers who offer coordination of care for patients, who often do not need a physical visit to the doctor's office.

Orszag suggests that moving from a fee-for-service to a fee-for-value system, in which higher-value care is rewarded with stronger financial incentives could yield the largest long-term budgetary gains. Fortunately, some standardized data, including the Dartmouth Atlas (measuring cost) and the Medicare Provider Analysis and Review File (measuring mortality), are now publicly available. In fact, Medicare could use these data to change the way they pay by giving fee increases to only those providers that are delivering value to their beneficiaries. Taking that step is not the long-term solution but would definitely create incentives to increase the value of health care.

It's possible to restrain swelling health care costs, and we don't have to sacrifice quality to do it. Coordinating care and reforming the way we reimburse providers can help us move along the path toward this goal.


Executive Director

Mayo Clinic Health Policy Center

Rochester, Minnesota
COPYRIGHT 2008 National Academy of Sciences
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2008 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:FORUM
Publication:Issues in Science and Technology
Geographic Code:1USA
Date:Jun 22, 2008
Previous Article:Golgi's Door.
Next Article:Design and the Elastic Mind.

Related Articles
What's driving the increases? Higher health premiums? Don't blame hospitals.
Doctors, patients diverge on health care priorities.
Highlights of a Forum: Health Care 20 Years From Now--Taking Steps Today to Meet Tomorrow's Challenges.
Uncertain prognosis; Containing health care costs a major challenge.
Value vs. cost: advice from an expert: focus on long-term results, not short-term savings.
Getting to 'the too of the hill': economy gives need for health reform a new urgency.
2009 NHBR Health Care Forum.

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |