Solving the U.S. Health Care Mess

Neither Obama's nor McCain's health plans comes to grips with the out-of-control U.S. health system. I don't blame them. The public needs to understand some difficult truths, and candidates don't want to prescribe bitter pills in a political campaign!

The October 23 New England Journal of Medicine has two excellent articles written for whoever wins next week's election - "Three 'Inconvenient Truths' About Health Care" (by the distinguished health economist Victor Fuchs) and "Slowing the Growth of Health Care Costs - Learning from International Experience"(by Karen Davis, president of the Commonwealth Fund).

Here are Victor Fuchs's "inconvenient truths":

1. Over the past 30 years, U.S. health care expenditures have grown 2.8% per annum faster, on average, than the rest of the economy. If this differential continues for another 30 years, health care expenditures will absorb 30% of the GDP - a proportion that exceeds that of current government spending for all purposes combined.

2. Advances in medicine are the main reason why health care spending has grown 2.8% per annum faster than the rest of the economy.

3. Universal coverage requires subsidies for the poor and those too sick to afford insurance at an actuarially appropriate premium; it also requires compulsion for those who don't want to help pay for the subsidies or who want a 'free ride,' expecting that they will get care if they need it.

In other words, there's no point talking about health care reform without tackling costs head on, and we can't pretend that managing "waste, fraud and abuse" will do the job for us.

Karen Davis shows that costs can be controlled - but only if we have guts and leadership. In what is perhaps the understatement of the year, Davis comments that "the United States has been slow to learn from countries that have systematically adopted policies that curtail spending and enhance value." Davis's analysis draws on experience in Australia, Canada, Germany, the Netherlands, New Zealand and the United Kingdom: (1) Achieve universal health insurance; (2) Develop comparative cost effectiveness information in a big way; (3) Disseminate IT that allows patient information sharing across sites and supports evidence-based decision making; (4) Shift the balance between primary and specialty care; (5) Get the government involved in negotiating payment for care; and, (6) Have payment systems reward preventive care and improved outcomes for chronic conditions.

None of this is rocket science. But none of it is easy. Starting with Medicare reform may be the most feasible approach. The new president can take his first speech on health care from the two New England Journal articles.