Ezekiel J. Emanuel, MD, PhD
JAMA
February 27, 2008
According to recent polls, many Americans consider health care reform the No. 1 domestic issue. Presidential candidates, other politicians, health policy experts, labor leaders, business groups, and others have responded with numerous reform proposals. And somehow in the clamoring, health care reform has become equated exclusively with expanding coverage to the 47 million uninsured Americans.
This is a mistake. As serious as it is, the problems of the uninsured and lack of coverage are symptoms, not the underlying problem. …the diagnosis and treatment need to focus on health care costs. The fundamental problem arises because of a cost-coverage trade-off. Without controlling health care costs, any attempt at universal coverage will be transient.
Warnings that costs are too high and cannot go higher are a perennial and recurrent theme dating back to at least the 1970s. But costs always increase, and the system has thus far accommodated them. This time, however, things may be different.
…employers and workers are simply finding premiums too high. Providing family health care coverage to 1 worker is like hiring a second worker at minimum wage. A cost of approximately $12 000 per year for family health insurance–about a quarter of the median income–seems to constitute a cost “brick wall” that begins to make health insurance coverage unaffordable despite other positive economic factors.
The cost-coverage trade-off does not mean that cost control and universal coverage should occur sequentially. Waiting to cover all Americans until costs are controlled is like blaming the victim. The uninsured are not driving health care cost increases. Moreover, lack of insurance adversely affects their health and economic well-being. Cost control and universal coverage must occur simultaneously. Expanding coverage and then worrying about controlling costs, as was done in Massachusetts, is not a tenable policy. Without policies to restrain cost increases over time, universal coverage will not be sustainable.
What is a serious cost control plan? True cost control means reducing how much health care cost increases from year to year, to about 1% more than overall economic growth. Vague promises of savings from cutting waste, enhancing prevention and wellness, installing electronic medical records, and improving quality are merely “lipstick” cost control, more for show and public relations than for true change. Reducing the waste from insurance underwriting, sales, and marketing costs is valuable but constitutes a 1-time savings. Furthermore, because these costs are in large part a consequence of selling insurance individually to more than 6 million businesses, they can be achieved only by completely revamping employer-based insurance. Cost control will require comprehensive reform of both employer-based insurance and the dysfunctional health care delivery system that will take years of sustained effort.
…there are real political advantages from focusing on costs. The politically powerful constituencies whose support is integral to any health care reform really care about rising health care costs. Employers worrying about global competition, state governors handcuffed by rising Medicaid bills, and the 85% of insured Americans all care about rising premiums, deductibles, co-payments, and prescription drug prices. Because of self-interest, costs can motivate these groups in ways that covering the uninsured has not. In the strange calculus that is American politics, the more politically salient issue of costs may provide a better way to achieve the comprehensive reforms necessary to cover the uninsured than the hitherto futile direct moral appeal.
http://jama.ama-assn.org/cgi/content/full/299/8/947
Comment:
By Don McCanne, MD
Ezekiel Emanuel is certainly correct when he states that we must focus on health care costs as we expand health care to everyone. He is also correct when he implies that current political proposals such as electronic medical records, wellness programs, quality incentives, and disease management programs would not have any significant impact on controlling spending. But he is wrong when he implies that there is no reform proposal that would both control costs and cover everyone.
A single payer national health program is specifically designed to include everyone automatically, and to slow the rate of growth in spending, while shifting funds from wasteful administrative services to more beneficial health care services.
He concedes that reducing the waste of the insurance industry is “valuable,” but then he dismisses it as a “1-time savings.” Since it is a fundamental structural change in the health care financing system, it is not a one-time savings, but rather it is a change that shifts the curve of the health care spending down to a new lower trajectory – permanently. All of the other cost-saving features of the single payer model each have the effect of further lowering this trajectory.
Although he mentions that cost control will require comprehensive reform, his own model, which he developed with Victor Fuchs, doesn’t seem to address the cost issue that he says (and we agree) is so important. They would establish a voucher system for purchasing private insurance and fund it with a regressive value-added tax (VAT). They would control spending by providing only a “basic” plan for everyone, but allow individuals to purchase services or coverage beyond the basic plan.
Victor Fuchs and I participated in a panel debate at Stanford. I asked him if providing a walker would be a basic service for a patient with disabling osteoarthritis of the hip, whereas hip replacement surgery would be an option for those willing (and able) to pay for it. He emphatically insisted that hip replacement surgery is a basic benefit, even though it is an elective surgery. My point is that all reasonable beneficial health care services should be covered, and we should not be distracted by the fictional concept that there is an inexpensive, lower tier of services that would satisfactorily address the health care needs of all of us, with an opt-up for extra services. That lower tier includes most of our health care services and products (excluding vanity cosmetic surgery and the like), and it is very expensive.
Dr. Emanuel also states in his article, “…health reform proposals by presidential candidates or others should be critically evaluated primarily on whether they establish a financing structure and incentives for the delivery system reform that really control costs. If they lack a serious plan, they are not credible reforms.”
Physicians for a National Health Program (www.pnhp.org) has advanced a highly credible reform proposal. Anyone else?
