Monday, January 31, 2011

Bending the Curve

This is a nice, succinct analysis from the Commonwealth Fund that places health reform into a deficit reduction context and that argues that all parts of the health care system need to have 'the cost curve bent' and not just federal health care spending.

I am increasingly convinced that the hardest part of health reform and bending the cost curve is not technical, but cultural. By that, I mean that people say that they want to slow health care cost inflation, but they don't seem to understand that if that happens, it will mean that we somehow spend less on health care than what we are now projected to spend. You can only cut payment rates so much. Eventually, if we slow health care cost inflation, it will mean that care that could be provided, is not. For example, a surgery that doesn't extend life, or improve quality of life, doesn't take place, when it could have. I think it can be done in a way that helps patients and doesn't harm them, but it will be hard. And we won't know unless we actually try.

Whether you think that some sort of expert-based rationing of care via guidelines and federal boards is the way to go about this, or believe that privatizing Medicare and having competition drive down costs (and everything in between) is the best route to take in bending the curve....the last step if health care cost inflation does slow is that less care will be provided than would be provided under the status quo.

I think we need that. Most say they want want it, but I am not sure I believe them.


  1. That cost control will be as much driven by culture as an astute observation. In the US, I think as long as there is the spectre of OPM (other people's money) people are less likely to accept the need for tradeoffs. I think this is particularly evident in end of life care. I think the average citizen will not form a coherent view on these matters unless they are confronted with the cost in a direct manner.

  2. There are very few people who could afford a major health care crisis without insurance of some sort, which means other people's money via risk pooling. Medicare is key since about 8 in 10 deaths each year occur among Medicare beneficiaries. Here are a few thoughts on the EOL savings

  3. I oversimplify when i talk about OPM. Without a doubt, some form of insurance is necessary. With that said, under its current form, Medicare seems to align the interests of seniors and providers at the expense of cost control. Seniors are typically not going to vote themselves benefit cuts. I think that is where the reforms that Paul Ryan has proposed (though tellingly ommitted in his SOTU response) are necessary. That said, one of the ironies that republicans and conservative fail to appreciate is that the risk pooling inherent in PPACA is really a predicate for Ryan's propsals to actually function.