Health care debate shifts to new area: consumption

December 19, 2007|By Jim Jaffe

While presidential candidates natter about health reforms that focus on insuring more Americans, a quiet but potentially very disruptive shift in defining the problem is under way in Washington.

The long-standing conventional wisdom that rising health costs are inevitable as the population ages is being challenged by a view that patients in comparable conditions are simply consuming a lot more care than they once did - without an improvement in their health status.

The older view accepts that consumption will rise and seeks to focus on who pays (accelerating the existing shift to insurers, especially the government, whose share of medical bills has actually grown in recent years) or lowering the price of service (the basis of the current Medicare debate to slash physician reimbursement by 10 percent).

The new hypothesis would focus instead on volume. If less were done, cost pressures would ease. Fewer tests and operations would force spending down.

The idea that doing less for patients might improve their health while controlling costs has been quietly bouncing around in the health policy community for years. But there's been a reluctance to discuss it in public, lest it be defined as "rationing" - typically perceived as denying patients care they need.

Dr. John Wennberg of Dartmouth Medical School has been making this argument for a quarter-century now. His research demonstrates that there are tremendous geographic disparities in the amount of care delivered that don't seem to influence outcomes.

In 2000, for instance, the average Medicare cost per patient was $9,200 in Miami vs. $3,500 in Santa Fe, N.M., though there's no evidence that the patients in Florida fare better. Prudently reducing services could cut Medicare bills by 30 percent while improving patient care, Dr. Wennberg estimates. That would save more than $100 billion annually.

But Dr. Wennberg's arguments have never developed public traction, partly because of the perception that the real problem was that sick patients - especially uninsured, poor ones - were being denied the care they really needed, often by insensitive insurers or managed-care plans. That suggested that providing adequate care for all would necessarily involve spending even more.

The "less is better" view gained momentum recently when it was embraced by the Congressional Budget Office, whose director, Peter R. Orszag, explained it in a report and a two-part article in the New England Journal of Medicine.

He says the problem has been "misdiagnosed" previously, and the aging of our population is a relatively minor component in increasing costs. Greater consumption is five times more important.

There's little we can do quickly about the demographic pattern, but consumption patterns are more amenable to change. Simply find out what works, Mr. Orszag argues, and make that the norm. Then stop doing all the things that don't work, increase costs and put patients at risk.

Such a strategy would not be painless. It would be accurately perceived as a threat to many providers and communities - Baltimore being a prime example - that view medicine as an economic development tool. Whatever its faults, medicine has been responsible for creating more good jobs at good wages in many American communities than any other industry.

But an official acknowledgment that our bloated medical bills reflect the fact that we're consuming too much - to our fiscal and physical disadvantage alike - is a major step forward.

If Mr. Orszag convinces his congressional bosses that he's right - and he's a relentless and able salesman with good political skills - any debate about health reform in Congress next year could be very different from what presidential candidates are promoting today.

Jim Jaffe is vice president of public affairs for the Center for the Advancement of Health, a nonpartisan Washington think tank. His e-mail is jimjaf@gmail.com.

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