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Serious and Unstable Condition: Financing America's Health Care.

"A major national debate on restructuring the U.S. system of paying for health care is inescapable during the 1990s." This book is a readers' guide to this debate, encompassing economic issues, organization of current financing arrangements, and terms of the debate. Already, debate is emerging among those who are aware that today's system is unsustainable and must be changed because costs are high and rising, millions of Americans are either inadequately insured or not insured at all, and evaluation of many common medical procedures is lacking.

Aaron begins his discussion of "Economic Issues" with analysis of consumption and insurance, focusing on benefits and costs. He summarizes his argument in four propositions:

* "Insurance creates incentives for patients to demand and for physicians to provide health care that is expensive relative to benefits."

* "Powerful forces are reducing the capacity of insurance to serve as many people in the future as it has in the past."

* "Any system of health care that rests on many separate, privately negotiated contracts and that involves multiple channels of payment to providers for each patient will have major advantages, but these advantages will be purchased at enormous administrative cost."

* "Multiple channels of payment inherent in the current U.S. financing system make it difficult or impossible to reduce the amount of low-benefit, high-cost care."

Continuation of the current financing system will reduce the number of people with health insurance and continue to increase the amount spent on low-benefit care.

Addressing "Organization and Finance," Aaron attempts to provide an understanding of "why costs have been rising, how current financing arrangements work, and how well they are operating." He provides much detail pertaining to the causes of rising expenditures - technology, malpractice, sources of payment, the role of government, and the uninsured.

A chapter on "International Comparisons" examines differences in costs, pertinent demographics, measures of health status, differences in organization, and arguments about the impact of competition. "The U.S. health care system compares poorly by broad indicators with European and Canadian systems but performs well in many specific areas." Aaron cites particulars. From these comparisons he derives two broad sets of problems facing the United States:

* "How to achieve the universality of access to health care that is commonplace in other countries."

* "How to reduce the quantity of relatively low-benefit, high-cost care."

Major stakeholders in the emerging debate on financing of U.S. health care include "physicians and hospital administrators, management and labor, insurers, suppliers of equipment and pharmaceuticals, elected officials, and the general population." All are increasingly dissatisfied with the current system. Debate will become serious when:

* Support for the current system deteriorates further because of continuing rising costs, failure of cost control efforts, and narrowing coverage, all of which are likely.

* Reduction in the federal deficit becomes a national priority.

* "Determination by a president or presidential candidate to make reform of health care finance a central issue."

Aaron hazards no guess as to when a critical mass will trigger serious debate. He concludes by offering "A 1990s Agenda for Health Care Financing" based on a universal access, single-payer health plan "to provide acute and long-term health care insurance for all U.S. residents and to create a framework that can be used to limit the growth of spending." It is based on four propositions:

* "Presupposition that the current system can never provide coverage for people with little or no connection to the work force."

* "Control over health care spending must be concentrated in one or a few hands."

* Presumption "that federal action is necessary to set a floor under the provision of insurance coverage but that, in a country as large and diverse as the United States, the allocation of health care spending and many elements of the design of health care benefits should be permitted to differ regionally."

Specifics of this plan and their rationale follow an outline of the plan. Particular attention is given to "Benefits and Plan Design," "Reorganization of Federal Health Care Activities," and "Financing."

Aaron acknowledges that such a plan, like any major reform of an important institution, is subject to criticism. He offers rebuttals to some objections to this type of plan. Adoption of this plan would not automatically ensure high-quality care, which, "under any system of paying for health care, hinges on continuation and expansion of publicly sponsored effectiveness research." The plan would establish "universal health insurance coverage now and can immediately strengthen capacity of the system to combat rising costs, while leaving for later debate the divisive question of what role private insurance should ultimately play."

Reform of health care financing will most likely require some sacrifice by every stakeholder, all of whom should find this volume valuable in defending their own turf and in seeing the larger picture.
COPYRIGHT 1993 American College of Physician Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Dimmler, Charles L., Jr.
Publication:Physician Executive
Article Type:Book Review
Date:Jul 1, 1993
Previous Article:Curing Health Care: New Strategies for Quality Improvement.
Next Article:Leaving the Bedside.

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