NYT: Why Both Republicans and Democrats Are Wrong About Health Care

If you want top quality healthcare – you can’t get it without someone paying – a lot. The cost goes up every year as more and more procedures and meds are developed. And professional staff is expensive – I have a young ICU nurse client in a major Westchester hospital. Not counting benefits her salary is 140K and no doubt worth every cent.

Giving patients more skin in the game — essentially what Republicans say they want to do — can help, but only a little. High-deductible plans and health savings accounts have limited impact on what the nation spends on health care overall. They’re useful when it comes to medical services where price transparency is possible and clinical stakes are moderate — regular doctor visits and relatively minor treatments for which costs are foreseeable — but not for chronic and catastrophic health conditions. How many of us would comparison shop for heart transplants while in cardiac failure, or try to negotiate the price of chemotherapy? Health insurance exists precisely to insulate individuals from these types of risks.

In complex cases, patients often lack the expertise to evaluate the necessity or quality of proposed treatments and procedures, and they rely heavily on doctor recommendations. That means physician discretion — as opposed to patient choice — plays an outsize role in overall spending levels.

Data from The Dartmouth Atlas of Health Care has long shown that Medicare spending per beneficiary varies greatly by region, with no correlation between higher spending and more effective care. Patients in high-spending regions simply receive more tests, more procedures and more hospital days.

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This “place effect” hypothesis was recently tested using data from the Military Health System, which found that the vast majority — up to 80 percent — of regional spending variation has nothing to do with patient conditions. Studying treatment of American personnel and their families at different locations, researchers assessed that high costs are largely a function not of sicker patients, but of local medical cultures that favor more aggressive care.

The path to greater affordability is clear: alter how physician decisions are made, reducing the amount of unnecessary care physicians call for without harming health outcomes.

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Estimates suggest that as much as one quarter of health care spending in the United States is wasteful. With premiums for a family of four with employer-sponsored health coverage amounting to more than $26,000 per year on average, eliminating waste through more evidence-based approaches to care could save such families thousands annually.

This won’t be easy. Most Americans under 65 have employer-based health coverage, and many may be reluctant to tinker with the system, despite recognizing that their premiums keep increasing. But a real fix is not found in the debate over who pays the needlessly bloated bill. Unless we actually address what makes health care so expensive, the fight we’re having today will keep coming back around.