Monday, April 13, 2009

Hope vs Reality - Health Care Reform

A key tenet of providing universal access to health care for all in the US involves controlling health care costs. While our current system is fiscally unsustainable due to the high cost of caring for a growing population of uninsured Americans, some of the cost - savings strategies offered in the UHC discussion (health information technology, preventive care, comparative effectiveness, etc.) may not be as effective as we think.

The Annals of Internal Medicine have published an interesting essay on the topic of the "Politics of Cost Control". To some extent, I agree with them. We're probably going to face much tougher choices in finding ways to lower the high cost of US health care, but we have many good examples to learn from.

All other rich democracies concentrate purchasing power to counter the medical industry's efforts to increase costs (34). If, as in Canada and Sweden, overall medical costs are on public budgets, then officials have powerful incentives to restrain increases in medical costs to avoid reducing the funds for other public programs or having to raise taxes (36). In other countries, such as Germany and France, insurers are nongovernmental entities (sickness funds) that are financed through payroll contributions from employers and employees. The governments of these countries regulate insurers and help them control costs (34). Germany, for example, regulates the level of social insurance contributions (taxes) paid by employers and workers, thereby limiting the budget for all sickness funds.


The Obama team's approach to health reform does not, however, fully embrace the central lesson of international cost-control experience. Effective cost control requires strong government leadership to set targets or caps for spending in the various sectors of medical care (hospital, pharmaceutical, and physicians), either directly or through insurers. The targets may not always be binding, and these caps would be on total expenditures, not services. But without explicit targets and continual efforts to enforce them, no health care system can control costs. That lesson is evident in countries ranging from Canada, Sweden, and the United Kingdom to France, Germany, and Japan (34). In Germany, for example, caps adopted in 1986 had a dramatic effect on spending for physician services.

Link to article

Tough choices ahead, but well worth the effort.