Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, December 26, 1993 TAG: 9403180051
SECTION: EDITORIAL PAGE: B-3 EDITION: METRO
SOURCE: By JAMES F. HOLMAN, M.D.
DATELINE: LENGTH: Long
For starters, the premise that we have the best system in the world has to be examined in more detail. In terms of technology and talent, there is worldwide agreement: We have the most advanced medical technologies, the best-equipped hospitals and the best-trained physicians on the planet.
But a system analysis requires more. What about value in our system? How do we stack up? We spend 40 percent more per person on health care than do Canadians, 80 percent more than do Germans and 120 percent more than do the Japanese. Is there evidence that these higher expenditures improve the public health of Americans?
The answer is no. By many public-health measures, unfortunately, we stack up worse. Admittedly, many measures of public health, such as infant-mortality rates, are influenced by social factors not currently considered health issues. Social conditions aside, however, one is hard-pressed to find evidence for increased value commensurate with our higher outlays.
Can we continue to afford our system? This concern, in reality, is the primary driving force for health-care reform, because the answer is a resounding no. We presently spend about 14 percent of our gross domestic product on health care. (Canada and most European countries spend 8-9 percent; no one else spends more.) If we continue on present course, we would be spending 18 percent by the year 2000; about a third of the way through the next century, a third of our economy would be spent on health care. That is clearly an unsustainable course and isn't going to happen, which brings us to the next question.
How well does our system control costs? These days, that's not hard to answer: Not well at all. Prices in most economic systems are controlled either by market-driven competition or by regulation. We have long favored the former option in this country, but in the health sector, market forces - at least the unfettered, laissez-faire variety - have so far been a failure.
There are definite reasons the market hasn't worked.
For one, there are stark differences between purchasing health care and buying most commodities. According to classical market theory, consumers armed with good information on price and quality can shop among competing suppliers to make choices that are in their own best interest. Purchasing health care is an entirely different proposition. Sick and worried patient-consumers are often in no position to shop for services. And even if they are, the choices are complicated, unstandardized and don't lend themselves to comparison shopping.
Also, in many cases the options aren't optional. If you have pneumonia, an antibiotic is not a discretionary purchase.
Another reason the market has failed is the way our health-insurance system works. In the late '40s and early '50s, when insurance for hospital and physician services became widespread, the economic complexion of the medical encounter changed drastically. With the premium paid largely by the employer, and the insurance company acting as a third-party economic buffer between patient and provider, the stage was set for a system of inflationary incentives.
Patients had little incentive to concern themselves with cost - insurance picks up the tab. Physicians could treat with little concern for their patients' pocketbooks when they had insurance. And as long as insurance companies could raise premiums to cover rising costs, their profitability didn't suffer. In fact, it improved.
As costs soared, the federal government tried to stem its outlays with a regulatory measure: prospective payment by diagnosis. This tactic succeeded only in shifting costs onto the private sector, failing to make a blip in total health expenditures. Private insurers responded by instituting utilization review (e. g., mandatory second opinion and preauthorization), which also had little impact other than to spawn an entire new industry of reviewers and drive up administrative costs. So far, at a system level, there has been no effective cost control.
Does our system guarantee access? Thirty-seven million Americans would attest not, at least not access through the "front door." Another 20-25 million are hanging on by their nails, one job or one illness away from losing their insurance, or one serious illness away from bankruptcy.
So, do we have the best system in the world? It depends on how one looks at it. I think we have the best health care in the world - no small claim - if you can get it and if we can afford it. These are big ifs. We aren't the only country in the world struggling with cost control, but to say we do not have major problems is world-class denial.
Whatever flavor of reform one favors, the system needs an overhaul. It is broke. We are on an unsustainable course, and change is inevitable. Many changes, indeed, are already under way, but developing a comprehensive, coherent, coordinated system that works for all Americans will require major legislative reform. We all need to understand why reform is necessary, because the task ahead of us is challenging.
James F. Holman, M.D., is an infertility specialist and physician adviser with Carilion Health System in Roanoke.
by CNB