What are the ethical and economic challenges related to policy decisions
What are the ethical and economic challenges related to policy decisions such as
those presented in the Washington Post article attached? How does this type of situation contribute to the tension between cost and care?
State of the Nation (A Special Report): Voices —A Good StartReinhardt, Uwe E . Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Jan 2010: R.5.ProQuest document linkABSTRACT[…] — and this must be said bluntly — for decades the providers of health care and the insurance industry haveconspired to keep our health-care system opaque as to the prices of health services and their quality.FULL TEXTAny major effort at health reform can be likened to a freight train parked at a station and being loaded with cargo.One can put too little cargo on the train, in which case it is a wasted effort. One can also load too much on it, inwhich case the train won’t move.During the 2008 election campaign, Barack Obama held out the hopeful vision that our health system could bereformed so as to make the highest-quality health care in the world affordable to all American families.Practically, it meant substantial federal subsidies to help lower-income families obtain private or public healthinsurance. It also meant “bending the cost curve,” as the jargon goes, which means reducing the annual increasesin national health spending. That spending has outpaced the growth in the rest of gross domestic product by 2.5percentage points annually throughout the past four decades and has doubled every decade. At that rate, healthspending will absorb 40% of GDP by 2050.Finally, the vision held out for health reform during the election campaign implied an increase in what is called thecost-effectiveness of American health care. That term implies either higher quality of care for the same spending,or lower spending without reducing the existing quality of care.All told, the vision was quite a heavy load for the reform train. Once in the White House and challenged with thechore of governing, President Obama and his allies in the Congress quickly realized that health reform cannotovernight realize the entire vision held out during the election. It had to be achieved in stages — expandinginsurance coverage first, bending the cost curve and greater cost-effectiveness later.Extending health-insurance coverage to the millions of Americans who now find themselves priced out of themarket for health insurance is the easiest part of health reform. In the bill now working its way through Congress,an estimated 30 million or so lower-income, otherwise uninsured Americans are expected to gain adequatecoverage with the aid of between $800 billion and $1 trillion in federal subsidies over the next decade.That may appear a staggering sum, until one realizes that it is only about 3% or so of the $35 trillion or so nowprojected by actuaries to be spent on U.S. health care in the coming decade, even in the absence of reform.The bill in its current state lays important foundations for obtaining better value for our health-care dollar — moreresearch into cost-effective care, a move away from piece-rate (fee-for-service) payment of doctors and hospitalsand toward bundled payments for entire medical treatments, and perhaps an independent Medicare Commissionwith power to control Medicare spending.Critics complain that the bill does not do enough actually to bend the cost curve down in the foreseeable future, orto assure greater cost-effectiveness.Many of these critics believe that presumably savvy American patients know what they want from our healthsystem and that they would become powerful agents in the quest for greater cost-effectiveness in U.S. health care,if only they were given information on the cost and quality of the care rendered by different doctors, hospitals andPDF GENERATED BY SEARCH.PROQUEST.COMPage 1 of 3
other providers. They would like the bill to have forced Medicare to take the lead in providing such information.But it has yet to be demonstrated that typical American patients actually will use such data if they are presentedwith it. I harbor serious doubts that they will.The state of Pennsylvania, for example, has for many years published fairly sophisticated information on the costand quality of the heart surgery performed by individual doctors and hospitals in that state. Published researchfound that neither patients nor the referring cardiologists actually made much use of the data.In any event, educating American patients to be smarter, more cost-conscious users of health care is, at best, along-run strategy. It will take a decade or more.Indeed, if patients actually were known to be reliable cost- and quality-control agents in health care, why has theprivate health-insurance sector failed in the past to make such data available to their insured, as it easily couldhave? Why would we have to wait for government to solve the problem?Finally — and this must be said bluntly — for decades the providers of health care and the insurance industry haveconspired to keep our health-care system opaque as to the prices of health services and their quality.Although some insurers now gingerly experiment with providing some such data to their insured, most Americansstill approach the health-care system as the analogue of blindfolded shoppers pushed into a department store.They shop for whatever the sales clerks push on them.—Dr. Reinhardt is the James Madison professor of political economy at the Woodrow Wilson School of Public andInternational Affairs, Princeton University, Princeton, N.J.Credit: By Uwe E. ReinhardtDETAILSSubject:Reforms; Health insurance; Government subsidies; Federal legislation; Series&special reports; Health care expenditures; Health care policyLocation:United States–USClassification:9190: United States; 8210: Life &health insurancePublication title:Wall Street Journal, Eastern edition; New York, N.Y.Pages:R.5Publication year:2010Publication date:Jan 20, 2010Publisher:Dow Jones &Company IncPlace of publication:New York, N.Y.Country of publication:United StatesPublication subject:Business And Economics–Banking And FinanceISSN:00999660PDF GENERATED BY SEARCH.PROQUEST.COMPage 2 of 3
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