The critical question is not who gets care and who doesn’t, but how it’s delivered.
We spend too much on health care in this country—U.S. health care spending has spiked to more than 17 percent of our gross domestic product. Insurance has become outrageously expensive, which is one of the reasons we need health care reform.
To understand why the cost of health insurance continues to increase, we need to understand why the cost of overall health care spending is rising. Most health care over the past 20 years has been reimbursed under a fee-for-service model, a flat sum for each test or procedure provided to patients regardless of outcome. As a result, the U.S. both orders and spends more on medical tests and treatments per person than any other country. Yet, we show no better health outcomes for patients.
This lack of accountability for outcomes compounded with a model that rewards volume over value has created a bloated system. While an MRI in the U.S. costs four times more than an MRI in France, increases in U.S. life expectancy have flatlined relative to Western Europe.
Physicians and business school professors often speak of “bending the cost curve”—decreasing the rate at which health care costs rise. If we can redesign health care delivery to reduce overall spending and improve patient outcomes, then the cost of providing health insurance becomes a much smaller problem. The flip side of that equation is that if we don’t tackle issues of quality and efficiency in the health care system, then whatever way Congress ends up choosing to provide health care coverage won’t matter; health care costs will become increasingly unaffordable and erode access to coverage as everyday Americans are priced out of the insurance market.
Initiatives from the Affordable Care Act, including Accountable Care Organizations and Medicare’s bundled payment program, began shifting some health services from fee-for-service to fee-for-value, evaluating quality relative to cost. These included penalizing health systems for high readmission rates and linking physician payments to better patient health outcomes. Recent evidence suggests that these programs may be linked with fewer readmissions, a good proxy for better outcomes, and reduced health care spending respectively.
The Senate health care bill, on the other hand, has no theory of cost control. It simply cuts funding for health care without addressing the root cause of rising costs. Even the last-minute horse trading over health savings accounts and opioid funding has largely focused on who pays for health care, rather than how we receive it. GOP proposals over the past year have largely placed the burden on health insurance companies to drive down the overall costs of care, calling for high deductibles and co-pays that shift costs directly to patients to make them “smarter buyers” of health services.
But there is no easy way for a patient to become “smarter” at purchasing health care. Insurance companies can experiment with financial incentives—or disincentives—all they want, but those can be dangerous for patients’ health. People can’t compare and purchase health care the same way they do with apples or airline tickets. The cost of medical treatment is shrouded in mystery and runs tens of thousands of dollars. The choice of which service is right is dependent on expertise that the patients often don’t have. When deductibles are too high, evidence suggests patients may opt to forgo care entirely. That may lower costs in the moment, but it won’t make anyone healthier. And it won’t lower the financial burden in the long run.