The next president’s health agenda

Note: This post first appeared at Goozner’s blog, Gooznews.

Picture_4A year ago, health care held a solid lead in the polls as the number
one concern of the American people. But by the time the Iowa caucuses
closed, and Barack Obama surged to his unexpected win, it had been
supplanted by the economy, a changing reality I noted in this New Year’s Day post.

As my daughter and I stood in a crowd of well over 100,000 people
last night in Manassas, Virginia, and heard the Democratic nominee give
his stump speech for the last time, I was struck by how little of it
was devoted to any issue beyond the core economy. His mom’s struggle
with paying her bills as she lay dying of cancer and the need to put
health into our sick care system got a line; but so did the war in Iraq
and going after bin Laden. As in 1992 when the last Democrat got
elected for the first time, it’s the economy, stupid.

But unlike some pundits who say the health care issue will be put on
the backburner for the first half of the next president first term, I
do not believe the nation will have that luxury. Curbing the growth of
health care spending will reassert itself as an issue next year because
it is key to restoring this nation to economic competitiveness.
American businesses are at a competitive disadvantage when they must
pay twice what companies in other countries pay (whether premiums or
taxes) to provide their workers health coverage.

The morning after reality for the next president is that the U.S.
spends more on health care than any other nation on earth — 16 percent
of gross domestic product and rising. Yet nearly 50 million Americans
go without health coverage during the year, and in traditional markers
of national well-being — longevity and infant mortality — the U.S.
ranks below many former Communist bloc nations of Eastern Europe.

The only possible explanation for this paradox of great wealth
producing ill health is that a substantial amount of the money that
gets poured into health care is wasted. How much? The generally
accepted figure is $700 billion a year or nearly a third of the total
— about what the Treasury was given to bail out the financial sector.
In other words, health care payers (employers and individuals, through
their premiums, taxes and co-pays) are ponying up the equivalent of a
bank bailout each and every year for unnecessary medical care.

It would seem, then, that the path forward for the next president is
clear. To cover the uninsured and to improve health care outcomes, the
first order of business must be an aggressive campaign to cut back on
medical waste — and we’re not talking here about what to do with used
needles, urine samples and latex gloves. It’s the useless procedures,
unnecessary images and meaningless heroic interventions at the end of
life that must be curtailed if the U.S. is ever going to limit health
care cost growth to the same level as the rest of the economy. And, as
this story in today’s New York Times
reveals, it will also require giving Medicare and other insurers the
legal power to pay for the least costly alternative when it’s been
shown to be just as effective as more expensive medical interventions.

The steps are easy to articulate and hard to accomplish, and not
just because one man’s waste is another man’s paycheck. It is
undeniably true that special interests — the drug and device
industries, the hospitals, the specialty clinic operators, the
physician guilds — will fight like cornered beasts against any
attempts to rein in costs at their expense.

But there is another roadblock to any systematic effort to root out
waste: the American public’s seemingly bottomless thirst for
technological fixes to cure what ails them, which often substitute for
more common sense approaches to their health problems. Last week, we
learned that the diabetes rate has doubled in the past decade, and my
television at night is filled with ads for better ways to measure and
control blood sugars.

But where are the ads instructing people that poor diet and
inadequate exercise are behind this costly epidemic? Where are the
policies that would help the vast majority Americans avoid Type II
diabetes — a largely preventable disease? And where is the
coordination and organization of care for people with preventable
chronic diseases like heart failure, diabetes and many cancers — the
25 percent of patients that consume 75 percent of all health care —
that would minimize their cost to the system? That’s where the big
potential cost savings are.

A lot of reformist energy gets aimed at the modestly useful
interventions that cater to the worried well or the barely sick or
those who are dying. But as Henry Aaron of the Brookings Institution
accurately points out in the latest New England Journal of Medicine,
individuals vary and all health care is a one-on-one enterprise. Will
Americans ever stand for a strict cost-benefit approach to rationing
care that is ultimately derived from an arbitrary cost cutoff point
determined by how that intervention affects the entire population? "The
very definition of waste is unclear, and the term is fraught with
ethical ambiguity," he wrote.

Moreover, the limited number of cost-effectiveness studies out there
have largely been written by providers of health care. It’s neither
comprehensive nor trustworthy. "It is scandalous that Congress fails to
dedicate, say, 1 percent of Medicare and Medicaid spending to support
research, conducted by an apolitical body, on the effectiveness and
relative costs of medical procedures and to require private payers to
make a similar contribution." I called for such a reform in my book and
on the op-ed page of the New York Times in 2004; Aaron put it
in a book in 2003; Princeton health care economist Uwe Reinhardt, with
his deep knowledge of European practices, publicly called for such an
agency in 2001.

So as we turn to the new year with a new president, look for
legislation to create a comparative effectiveness agency to be one of
the first bills to get extensive hearings in the Senate Health
Education Labor and Pension committee and in the House Energy and
Commerce and Ways and Means committees. It is a reform that is long

But it also is only the first step in getting health care costs
under control because its new information will be for naught until
payers and medical providers use it. And that, Aaron accurately points
out, will only be possible if everyone is insured.

If spending limits cause providers to withhold some
beneficial care because it costs too much, they will tend to do so
selectively, favoring strong payers (the insured) over weak ones (the
uninsured). In a world with effective spending limits, being uninsured
would take on a whole new and terrifying meaning. Societal revulsion
toward the resulting inequalities and deprivation would threaten the
entire cost-control effort.

It is the ultimate irony of the health care cost conundrum. Only by
paying more to insure the uninsured now will we be in a position to
save money down the road. It’s called investment in the American
people, a theme I heard repeatedly in Barack Obama’s final stump speech
of the 2008 presidential campaign.

4 replies »

  1. Merrill–
    I totally agree with everything you write about unpublished reserach. I am told that CMS also has a lot
    of research that they just haven’t been allowed to implement when making coverage decisions.
    In addition, the Preventive Services Task Force has info on so-called “preventive servcices” that just aren’t that effective. Then there’s all of the research that has been done abroad . .
    A Comparative Effectiveness Institute doesn’t have to reinvet the wheel. They could begin by drawing all of this reserach together, analyzing it and synthesizing it, while also assigning new studies in areas that they think are particulalry important (and expensive)
    Just one quibble–Aaron writes:
    “If spending limits cause providers to withhold some beneficial care because it costs too much, they will tend to do so selectively, favoring strong payers (the insured) over weak ones (the uninsured). In a world with effective spending limits, being uninsured would take on a whole new and terrifying meaning. Societal revulsion toward the resulting inequalities and deprivation would threaten the entire cost-control effort . . ”
    This seems to assume that cost-effectiveness reserach will show that the most expesnive care is the most beneficial.
    But everything we know says the opposite– in the case of advanced medical technology, newer is almost always more expensive, and too often, newer is no better, or is better for only a tiny group of patients. In recent years, we’ve been hitting a point of diminishing returns in many areas. We know that, the most
    aggressive, intensive care high-tech (that patients recive in areas where there are more beds and specialists) is not, overall, better
    Also, the newest technology is put into practice in the U.S. much faster than in other countries, yet outcomes are bettter– in most areas–in other countries. This again suggests that our faith in newer advanced techologies is exaggerated.
    Bottom line: As Steve Schroder puts it, most often “higher quality and lower costs go hand in hand.”
    So I don’t see a widespread problem with uninsured people being denied the most effective treatment–I see a problem with insured people being very upset when they are told that the newest, most expensive treatment is not covered, because it is no more effective.
    I agree with you that the comparative effectiveness

  2. Merrill’s point about the limited number of cost-effectiveness studies is well noted.
    A recent Pharmalot posting reminded us that less than 20% of registered clinical trials of cancer drugs are eventually published in medical journals, according to a review published online by The Oncologist medical journal. And a subsequent search of the National Library of Medicine’s PubMed database showed that just 17.6% of the trials were eventually published in peer-reviewed medical journals.
    The publication rate was particularly low for industry-sponsored studies, such as those funded by drugmakers (just 5.9% compared to 59%) for studies sponsored by collaborative research networks. Of published studies, nearly two-thirds had positive results in that the treatment worked as hoped. The remaining one-third had negative results like the outcome was disappointing or did not merit further consideration of the tested treatment.
    Researchers at the University of Washington and Fred Hutchinson Cancer Research Center feel it is likely that many unpublished studies contain important information that could influence future research and present practice policy. Unpublished trials may have special importance in oncology, due to the toxicity and/or expense of many therapies. In other words, the knowledge base is incomplete. And who does that help?

  3. Establishing a universal budget will get rid of the waste pretty fast. But as is pointed out until everyone has equal access to healthcare the uninsured will be tossed aside even more. That’s why we need universal single-pay, it will establish a budget AND see that it has some rational relationship to need not income. Another way to get us away from sugar and fat in the food system is to shift subsidy money to fresh fruit and vegetables and away from corn, wheat, and sugar, and impose a tax on fast food that could be dedicated to healthcare. I know, radical stuff, but if we don’t start taking this seriously then we’ll have another system failure that will have to be fixed in crisis.