How can we rationalize our health care system?

Issue: November 2005

ByDouglas W. Jackson, MD

Douglas W. Jackson, MD [photo] --- Douglas W. Jackson, Chief Medical Editor

As a provider of health care, a purchaser of health insurance for my family, and a small-business employer providing health coverage, I am acutely aware of the disconnected incentives and internal problems that can impede efforts to provide affordable health care. Do not mistake my recognition of the piecemeal insurance coverage available in our country as a condemnation of the medical care potentially available. It is as good or better than medical care almost anywhere.

However, we have a wide spectrum of health care service levels when it comes to access and quality. This spectrum arises from many factors, including insurance coverage, choice and escalating costs for technology and treatments. Often underlying those factors are haphazard disincentives built into in the system that block meaningful change towards cost-effective, value-added health care.

Disrupting disincentives

These disincentives — plus deeply held public attitudes — involve complex interactions in the political, social and economic spheres, and include the following notable examples:

Patients want all the potential benefits of a single-payer, unified health and medical care system, while at the same time desiring free choice of physicians, access to the latest treatments, and no financial risk or wait lists.
The public has a wide sense of entitlement when it comes to health care. It believes the government should provide a safety net and pay for part — or all — of it.
Patients lack an overall sense of responsibility for their own health care. They get no reward for using services prudently, nor do they enjoy incentives — such as significant premium reductions — that would prevent illness and encourage well-being.
Our system supports “illnesses” related to personal excesses, unhealthful habits and addiction. These excesses and lack of self discipline cause all of us to subsidize the health care costs related to smoking, drinking and alcoholism, unhealthful eating habits, overuse of drugs (prescription and non-prescription), domestic and community violence, reckless driving, etc.
Most health care costs are shielded from the discipline of the market, creating major disconnects between patients’ service expectations and decisions by third-party payers. Since patients don’t pay directly for services, they have little financial incentive to restrict the services they consume. Likewise, any potential savings flow elsewhere.
The patient pays his dollars to a third party that has major incentives not to spend all those dollars because it will own any savings. What kind of financial incentives are these?
An increasing number of elderly people want lower out-of-pocket costs and view the government as responsible for paying for their health care. How much of society’s dollars will go for providing health care to one group of individuals while being paid for by others? Taxpayers eventually must reckon with this.

The start of solutions

Some approaches for the future — and some questions they raise — are as follows:

While many policy makers and patients consider equal access to be the only just system, cost constraints will dictate some limits no matter what. Could part of a workable plan offer equal access to the essentials of health care alone?

“Decide what percentage of our national wealth we should spend on health care and fund that amount.”

We may have to live with a quality gap between the baseline essential, guaranteed care most people receive and the best care we could possibly provide. Is it achievable to provide all the possible care to everyone (eg, the latest technology, treatments and nongeneric medications)?
People who find safe ways to cut their health care costs should get rewarded, and we should create incentives for prevention and wellness.
We probably need to decide what percentage of our national wealth we should spend on health care and fund that amount. At present, with no ceiling, costs have risen so much they now affect our overall business performance as a nation and our international competitiveness. Keeping this in mind will help inform what amount we are willing to fund.
Patients and providers are being buried under a mountain of potentially valuable — but often unusable — health information. We as a nation, and those of us who are health care providers, need to make it easier to tap this rapidly increasing medical data resource to educate and benefit our patients.
We need to share more experience about what works well. Best-practice guidelines based on scientific medical evidence can help cut costs by avoiding care not based on demonstrable, value-added, cost-effective principles. This will challenge the traditional art of medicine and will require broad-based input and decision-making.