Controlling Health Care Costs
By Paul B. Ginsburg, Ph.D.
The New England Journal of Medicine
October 14, 2004
In reality, there are four basic options for slowing the trends in health care spending: one can increase the efficiency of health care delivery; increase the financial incentives for patients to limit their use of medical services; increase the administrative controls on the use of these services; or limit the resources available to the health care system.
Government may be able to contribute to the efficiency of the health care system by supporting the development and installation of information technology to improve the coordination of patient care… Greater adherence to the practice of evidence-based medicine, additional research on the effectiveness of medical treatments, and greater assessment of technology before it is used outside research settings may all lead to gains in efficiency…
In recent years, employers have taken such steps as increasing deductibles in order to shift more costs to employees, giving them a financial incentive to use fewer services. Innovation is under way in this area: new benefit structures have been developed, including consumer-directed health plans, which typically have employer-funded spending accounts tied to insurance policies with a large annual deductible that exceeds the annual contribution to the account. Having patients share more costs can benefit consumers when it leads them to forgo care that has very limited benefits. But when the tools are used bluntly - as when they are applied equally to care that is deemed essential and care that is considered to be more discretionary - they can pose a barrier to important care or cause financial hardship for patients with low incomes or substantial medical needs.
An approach stressing administrative controls, relying on tools such as restrictive provider networks, prior authorization for services, and payment of providers on a capitated or episode basis, was used extensively by managed-care plans but proved highly unpopular.
Restricting the resources that go into the medical care system and the prices paid to providers is an approach that has been used extensively in Canada and Western Europe but has never gained much of a foothold in the United States. Attempts to regulate facility expansion and hospital rates were common in the United States during the 1970s but declined with the expansion of managed care and increased competition in medical care.
We can only hope that whoever is elected president will move beyond campaign-trail rhetoric and provide the leadership needed for a candid national discussion about health care costs. If not, we will find ourselves on a downward spiral, as more and more resources are used to pay for the health care of fewer and fewer Americans - a potentially intolerable situation.
http://content.nejm.org/cgi/content/full/351/16/1591
Comment: Quiz time. There are many ways to control health care costs. Regular readers of the Quote of the Day messages should be able to identify which measures will slow the growth of health care costs while ensuring that each patient will have affordable access to higher quality health care services, and which measures will slow the growth of costs by making care unaffordable to individuals with significant health care needs, while failing to direct our resources to care which is less costly but with better outcomes.
You have ten minutes to select the beneficial approaches and discard those that are detrimental. When finished, aggregate your answers and then share them with others as you initiate your own efforts at grassroots reform. Without your participation, reform won’t happen.