FIRST NATIONAL HEALTH POLICY CONFERENCE:
CRITICAL ISSUES FOR A NEW ADMINISTRATION
Preface
On Feb. 1-2, 2001, just weeks after the inauguration of a new president, health policy leaders from the public and private sectors came together in Washington, DC, at the First
National Health Policy Conference sponsored by the Academy for Health Services
Research and Health Policy and the journal Health Affairs to consider important health policy issues for the year ahead. Their wide-ranging agenda included Medicare reform, the uninsured, prescription drug benefits for the elderly, the impact of advances in genomics and new technologies in health care, changing dynamics in health care markets, and the implications of electronic communication for health care consumers. Key federal policymakers, state health officials, business executives, and health services researchers explored the nation’s health policy agenda for the year ahead, identified critical issues, and engaged in a lively exchange of ideas, experiences, opinions, and information. This conference report is a distillation of those discussions.
More than 700 people attended the conference, and the Academy and Health
Affairs plan to make it an annual event. Work on the Second National Health Policy
Conference in 2002 is already underway.
Contents
• Introduction
• Health Care 2001: Shifting Forces Cast Issues in a New Context
• The Outlook for Health Care Legislation in Congress: A Mixed Forecast
• States Feel Pinch of Increasing Health Care Costs
• The Private Sector’s Search for Solutions
• Conclusion: Assessing the Social Value of Health Care
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Introduction
The development, implementation, and outcomes of policies affecting the delivery and financing of health care are driven by many forces – some from the private sector and others from the public sector. In virtually all discussions, cost is a critical issue. This year, with a new president presiding over a sharply divided Congress and the slowing growth in the economy, the course of the nation’s health policy agenda is shifting. Policy discussions may be viewed as playing out at three levels: federal, state, and private sector. These three major sectors are, for the most part, acting independently of each other.
At the National Health Policy Conference, participants discussed areas where their interests converge and how the various health care stakeholders can work together to address critical issues. Among the questions that were addressed:
• Federal Issues.
Is there enough support in Congress to pass some type of assistance for the uninsured? What is the likely shape and scope of a Medicare prescription drug benefit? Will patient protection legislation be enacted this year?
What impact will the tax cut debate have on health policy legislation at the federal level?
• State Issues.
What are states’ most viable measures for containing spiraling medical assistance costs while keeping up with growing public demand for services? How much and what type of flexibility do states need from the federal government? How can states maintain health plan and physician participation in
Medicaid, especially if they are forced to further decrease payment rates?
• Employer Issues.
How will employers respond to rising health care costs? What is the future of defined contribution? Can quality be successfully used as a lever for controlling health care costs?
• Consumer Issues. How will public interest in and support for specific health policy issues change over the next year? How and at what level do consumers want to be “empowered”? How will they respond to employers’ efforts to rein in health care costs?
• Biotech and Ethical Issues . How will scientific breakthroughs in genomics and pharmacology change health service delivery? How should the medical education community respond to these developments? How can we address the ethical concerns raised by these changes?
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Health Care 2001: Shifting Forces Cast Issues in a New Context
In many ways, the health policy issues confronting the country have changed very little since 1992, when national health reform was at the forefront of debate. The number of Americans without health insurance has increased – the current estimate is approximately 43 million – and although proposals are under consideration by Congress and the White House, the problem is far from solved. After several years of modest to zero growth, health care costs are on the rise again – prompting concerns among private and public purchasers that they will spiral out of control. The direction and design of
Medicare are up for discussion. Except for general agreement on the need for a prescription drug benefit, there appears to be no consensus on an appropriate course for
Medicare. Finally, questions remain about the need to regulate managed care plans and legislate consumer protection in a “patient’s bill of rights.”
Although these issues are virtually the same, the political, social, and market forces affecting them have changed significantly.
A New Emphasis
Most obviously, a new administration and a sharply divided Congress are now responsible for shaping health policy in Washington. Because President Bush’s agenda is so focused on winning Congress’ approval of a federal tax cut – originally proposed at
$1.6 trillion over 10 years – health policy issues are receiving less attention than they have in the past, as are other social policy issues. Robert D. Reischauer, Ph.D., president of the Urban Institute and former director of the Congressional Budget Office, noted too that six of the nine chairs of health-related committees and subcommittees are relatively new to their jobs. Finally, it is unclear how and to what extent Democrats and
Republicans will decide to work together. One or both parties may decide that cooperation – and its attendant compromises – are simply not in their political interests.
“If those kinds of arguments rule the day, there will be very little opportunity for significant progress on health care policy,” Reischauer concluded.
At the same time, interest in health policy as a national priority has declined in the
White House and Congress and even among the public. In Washington, the priorities of the new administration, the focus in both parties on the President’s tax cut proposal, and the failure of past efforts at health reform have contributed to a reduced emphasis on health-related issues. “The Health Policy Restaurant is no longer in a prime location,”
Reischauer observed. “It was on Main Street. The former president passed by every day and stopped in for occasional snacks (after losing the battle for a new feast), and the former vice president was interested and had plans to go back for another meal. Now the traffic’s been rerouted down Tax Cut Boulevard.”
Declining Public Interest
The attention shift in Washington mirrors a similar trend in the general public, according to national polling data. Voters are still interested in health care issues – but
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not as much as they were less than a decade ago. “Health care is a second-tier policy issue with the public after education,” said Robert J. Blendon, Sc.D., director of the
Harvard Opinion Research Program. Research that Blendon conducted in December
2000 shows that no single health policy issue dominates the public’s attention. Voters expressed interest in a number of issues – prescription drug coverage for the elderly, the future of Medicare, the uninsured, patient rights, and long-term care – but signaled that they support incremental as opposed to large-scale change. They are also concerned about rising health care costs. In addition, voters generally are not in favor of increased government regulation, except in the areas of health care quality, prescription drug costs, and managed care, according to Blendon.
Blendon noted that these views could change if the economy takes a severe downturn. Celinda Lake, president of Lake Snell Perry & Associates, Inc., reported that, when asked about a possible recession, a majority of respondents said that they would be most worried about losing their health care benefits. Thus, public interest in health policy issues could surge again if voters feel personally threatened. In the meantime, however, voters have sent no clear mandate to Washington on health-related issues for the year ahead.
The Impact of Science
Meanwhile, continuing advances in genetics, pharmaceutical development, and health care technology are prolonging and improving life for millions of Americans, driving health care costs, reshaping health care delivery, and giving rise to difficult social and ethical questions.
“To some extent, we have to recognize that we are the victims of our own success,” said Jack A. Meyer, Ph.D., president of the Economic and Social Research
Institute (ESRI). In his view, the same scientific breakthroughs and discoveries that are curing illness and alleviating pain for so many people are also the primary forces driving health care costs. “A few of them save money, but mostly they are bringing on-stream new approaches to medicine that will introduce or increase costs, and we’re going to have to make some painful choices about how much success we want,” he said.
The other key cost driver, according to Meyer, is simple demography. With the aging of the population, longer-living Americans require more health care services.
Medicare provides a perfect example. Marilyn Moon, , Ph.D., senior fellow at the Urban
Institute, said that Medicare currently serves 40 million beneficiaries; by 2020, it will serve 77 million. “When you intersect the advances in medical technology with an explosion in the aging of our population, then you have the underlying forces that are driving up health care spending – not doctors’ and hospitals’ fees,” Meyer said.
A Brave New World?
The ongoing revolution in medical science will also profoundly affect how health care is delivered. Francis S. Collins, M.D., Ph.D., director of the National Human
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Genome Research Institute at the National Institutes of Health, said that by 2010, genetic tests capable of predicting a dozen common illnesses will be available. By 2030, he said, comprehensive genomics-based health care will be the norm. Doctors will practice preventive medicine tailored to the unique genetic dispositions of each of their patients.
Illnesses will be detected and treated earlier by molecular surveillance. Gene therapy and gene-based drug therapy will be used to treat many diseases.
But with these tremendous benefits will come daunting challenges. Policymakers at the federal and state levels are already debating how to ensure genetic privacy and protect against genetic discrimination. On the delivery side, physicians and other health professionals will need education and training to practice genetic medicine. Consumers will need to become genetically literate. Ethical and social questions arise. Will the benefits of advances in genetic science only be available to the privileged few who can afford to pay for them? Should limits be set for safety and ethical reasons on genetic technology for trait enhancement? Will humans some day “take charge” of their own evolution?
Another technological transformation that could help redefine health care is taking place on the Internet. According to Clifton R. Gaus, Sc.D., president of The Gaus
Group, some 15,000 to 20,000 websites currently dispense health-related information.
Approximately 70 million U.S. adults seek health information on the Web and two-thirds of physicians surveyed said that their patients use information they obtained from the
Internet to question their treatment. Clearly, the “democratization” of health information on the Internet has the potential to educate and empower consumers and change the way they interact with their providers and their health plans. But, as Mark D. Smith, M.D., president and CEO of the California HealthCare Foundation, noted, numerous political, cultural, and organization obstacles remain. Critical issues to be resolved include privacy and regulation of health data, standardization of data exchange, and reimbursement policies for “virtual” health encounters.
These developments – political, social, scientific, and economic – are significantly influencing policy discussions and actions on major health-related issues in both the private and public sectors and at the federal and state levels. The health policy agenda for 2001 is crowded and complex. It is certain to evolve as the various forces continue to play out and as federal, state, and private-sector decisionmakers take specific actions.
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The Outlook for Health Care Legislation in Congress:
A Mixed Forecast
Although there is a lot of talk in the halls of Congress on health policy proposals ranging from prescription drug benefits for the elderly to patient protection legislation to refundable tax credits for the uninsured, it is difficult to predict how much of that talk will result in action. “We have bipartisan agreement that something should be done on all of these issues,” said Sen. Jim Jeffords, R-VT, chairman of the Health Education,
Labor, and Pension Committee. But agreement is frequently absent when it comes to deciding exactly what should be done to address important health policy issues.
Opinions vary on the prospects for new health policy legislation in Congress this year. Part of the uncertainty stems from the intense focus on President Bush’s tax cut proposal. “The key debate in Congress is not on health care – it’s on the tax cut,” said
Sen. Jay Rockefeller, D-WV. In his view, the future of all 2001 program policy, including health care, depends on the size of the tax cut that is ultimately approved.
Gail R. Wilensky, Ph.D., a senior fellow at Project HOPE, disagreed. Health care, she said, was an important issue in the Bush campaign, and President Bush has an agenda for helping the uninsured, creating a Medicare prescription drug benefit, and addressing other health-related concerns. The question, she said, is whether the new administration can successfully navigate its way through a closely divided Congress.
Administration officials “seem to have a grasp on the reality of the situation,” Wilensky said.
Shifting political dynamics complicate a number of health policy proposals currently under consideration by Congress.
The Uninsured
Providing for the uninsured, for example, is a recurring issue for which two possible solutions are being discussed: expanding existing government health insurance programs or enacting a refundable tax credit to partially subsidize health insurance purchasing by families and individuals. Some lawmakers support a combination of the two approaches. Jeffords said he favors refundable tax credits or vouchers of up to
$2,500 to help low- to moderate-income people purchase health insurance, as well as extending the State Child Health Insurance Program (SCHIP) to cover parents of eligible children.
Wilensky noted that Health and Human Services Secretary Tommy Thompson is a strong proponent of states’ rights and predicted that he will champion flexibility in
Medicaid and SCHIP, as well as a streamlined waiver application process. But given the financial problems that many states currently face, few may be willing to expand their programs, Reischauer, of the Urban Institute, said. Other proposals would allow the uninsured to buy into Medicare or the Federal Employee Health Benefit Plan (FEHBP) at
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a discount. Such plans, however, are politically controversial, and Reischauer expressed doubt that Congress would approve an expansion of Medicare or FEHBP.
Tax credit proposals, on the other hand, have fairly widespread bipartisan support, but they could fall victim to their own complexity. A number of difficult issues – including whether policies should have to meet certain standards, the merits of community rating versus underwriting, and the logistics of balancing a retrospective tax accounting system with prospective insurance payment – would need to be resolved before any refundable tax credit could be made workable. Wilensky said that President
Bush is committed to a tax credit that will help low-income working Americans. But
Reischauer was skeptical that a refundable health insurance tax credit can be incorporated into tax reform legislation. “I think the tax cut train is overloaded,” he said.
Wilensky said that Congress is deeply divided on what to do about the “non-poor” uninsured – those with incomes 200 percent above the federal poverty level. She indicated that this will be a difficult issue to resolve.
Patient’s Bill of Rights
Patient protection legislation sponsored by Rep. Charlie Norwood, R-GA, and
Rep. John Dingell, D- MI, is already under debate and elements of the proposal have attracted solid support from both parties. But there is deep division on a key issue that could kill the bill: whether patients should have an unrestricted right to sue their health plan for delayed or denied services. President Bush and many Republicans in Congress have declared their opposition to this proposal, saying it will result in unnecessary and costly litigation. They prefer to provide for an administrative review process that would allow consumers to appeal plans’ decisions. Democrats, however, question whether such a process would be unfairly tilted in favor of health plans, thus providing little substantive recourse for consumers. As a result, according to Rockefeller, patient protection is “doable” this year but “it’s not necessarily going to get done.”
Medicare Reform and Prescription Drugs
Discussions concerning Medicare have focused mainly on adding a prescription drug benefit for the elderly, but there is talk too of restructuring the entire program. Most members of Congress support a Medicare prescription drug benefit, but they disagree sharply on how the benefit should be structured and how much the government can afford to spend, particularly in light of the President’s proposed tax cut. Current proposals before Congress would pay for less than half of prescription drug costs and leave considerable out-of-pocket expenses for seniors to pay, Reischauer said. Yet, despite their limitations, he added, these proposals could increase Medicare spending by
7 to 10 percent.
Meanwhile, President Bush’s proposed “helping hand” initiative – which would provide temporary drug coverage for low-income elderly through state block grants with some catastrophic coverage for all – has met resistance from wary states fearful that they
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will be left holding the bag for an expensive new benefit once federal support runs out.
Wilensky said that the helping hand proposal is intended to provide immediate assistance for those elderly who need it most. Even if broader legislation is enacted this year, she noted, it will take two years before seniors actually receive new drug benefits. “We need a short-term solution or acknowledge that we’re not going to do anything to help seniors, especially low-income seniors, for two years,” she said.
Rockefeller expressed concern that Medicare prescription drug legislation won’t be addressed without broader Medicare reform. Bill McInturff, partner and co-founder of
Public Opinion Strategies, observed that some lawmakers view the prescription drug benefit as the carrot needed for tackling the more politically divisive issue of restructuring. Under that line of reasoning, if a drug benefit is passed first, there would be no incentive left to address Medicare’s wider-ranging problems. “It’s an enormous mistake to hold seniors hostage to something called Medicare reform, which means something different to everyone, and not do prescription drugs,” Rockefeller said.
Donald W. Moran, founder of The Moran Company, observed that part of the difficulty with trying to reform Medicare is that the issues extend far beyond health policy. Medicare plays a key role in the country’s social insurance system, and also, increasingly, in the national economy. One issue, he said, is how to balance the health needs of the elderly against their other income security requirements. Another issue, said
Moon, of the Urban Institute, is how to distribute financial responsibility for the overall needs of the elderly across workers in a way that is fair to everyone.
In one sense, the choices facing Medicare are similar to those facing private employers who purchase health insurance benefits. A defined contribution approach – in which the government would subsidize a set amount of beneficiaries’ health insurance premiums – would shift greater risk onto beneficiaries. To continue with the current defined benefit approach, however, would require raising additional revenues to support the program.
Rockefeller predicted that substantial Medicare reform will not be achieved this year because of widespread disagreement on what to do. Reischauer echoed that assessment. Few people are persuaded of the urgency for restructuring, and both parties are reluctant to make a misstep, he said. Wilensky, formerly chief of the Health Care
Financing Administration (HCFA), indicated that she believes some restructuring is needed, saying that HCFA – which oversees Medicare, Medicaid, and SCHIP – has too much on its plate. Restructuring, she said, would be an “appropriate area” for the administration and Congress to consider.
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States Feel Pinch of Increasing Health Care Costs
While federal action on various health proposals is in the air, states are under very real pressure to respond to rising medical assistance program costs and, in some cases, meet increasing service demands. In February, the National Governors’ Association proposed dramatic changes in Medicaid that would permit states to provide health insurance to millions of additional people – but with less generous benefits. In a New
York Times article, Maryland Gov. Parris N. Glendening, the chairman of the association, explained that “health care costs are rising at the same time tax revenues are declining in many states.” Some governors are also looking for ways to reduce the number of people without health insurance in their states.
At the National Health Policy Conference, health officials from two states,
Washington and Tennessee, described recent cost and enrollment trends, coverage expansions through Medicaid and SCHIP, and decreasing participation by providers and health plans in those initiatives. The state officials said that they are hard-pressed to meet increasing demands for health care assistance, and called on the federal government to provide not only financial support but also flexibility so that states can more easily adjust their programs and respond quickly to new developments.
Washington, which prides itself as a bellwether for state health care reform, has significantly extended and expanded medical assistance benefits during the last 16 years through its Basic Health Plan for the uninsured and its Medicaid and SCHIP programs.
Total enrollment has more than doubled since 1989, from 400,000 to a projected 850,000 by fiscal 2003, according to Dennis Braddock, secretary of Washington’s Department of
Social and Health Services. Expenditures have increased five-fold, despite a shift toward managed care. As health care dollars claim an increasing share of the state’s budget, support for other social services, such as those for children and the mentally ill, is being crowded out, Braddock said.
At the same time, providers are increasingly reluctant to continue accepting
Medicaid patients. If the state has to decrease payment rates, that problem will get worse.
“We’re waiting for the inevitable train wreck when the state can’t afford more funding and the feds won’t bail us out,” Braddock said.
Now the state is looking for new ways to manage medical assistance costs and scale back on benefits. Short-term measures include cuts in optional Medicaid and
SCHIP services, such as adult dental care, vision care, and assistance to the medically indigent. State officials are also considering whether to discount provider rates, increase deductibles, and reduce eligibility thresholds for all programs.
Tennessee is also experiencing problems with TennCare, which was launched in
1994 as a managed Medicaid program and subsequently expanded to cover people who are uninsurable because of pre-existing medical conditions and the working poor. The
$5.2 billion program currently serves more than 1.3 million adults and children, including approximately 802,500 Medicaid enrollees and 553,500 uninsureds and uninsurables,
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according to John F. Tighe, deputy to the governor for health policy. Challenges include enrollment growth, rising costs, particularly for prescription drugs, and a slow and indecisive HCFA. Tighe noted that the program is experiencing an enrollment shift from the private sector, where coverage denial is increasing. At the same time, commercial
HMOs are abandoning TennCare. Tighe expressed concern that the program is losing its integrity, with some enrollees being dropped inappropriately by plans.
TennCare has revamped its business model in response to these problems and to bring costs back under control. It is also waiting for HCFA to approval its request to implement flat copays and deductibles.
Tighe said that TennCare has accomplished many of its goals: It has increased access to health care, decreased ER and inpatient admissions and days, and improved health outcomes. The program, he said, is “a good deal for Tennesseans, but it needs commitment from the federal government.”
Braddock agreed that states need federal support to sustain and continue coverage expansions. The bottom line, according to both speakers: States are struggling to meet their residents’ needs for medical assistance. They need both financial support and flexibility from the federal government as they seek to respond to increasing cost pressures by adjusting their program designs and benefits. They also need relief from new federal reporting requirements and delayed implementation of HIPAA privacy rules, which Braddock said will increase health plan costs. Finally, he noted, “Medicaid by itself can’t be the answer to universal access. There must be national participation beyond Medicaid.”
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The Private Sector’s Search for Solutions
With health care costs once again on an upward trend, employers are acknowledging that managed care is not a panacea for controlling costs. Robert Galvin, M.D., director of global health care for General Electric, noted that during the 1990s, employers reaped tremendous cost savings in health care, with no evidence of a decrease in quality. Now, health care costs as a percentage of corporate income are starting to rise again – and, once again, employers are looking for ways to bring them under control. Among the strategies they are considering:
Consumer empowerment. Through a combination of education, cost-shifting, financial incentives, and advances in information technology, some employers believe that they can engage their workers to become more discerning and more active participants in their own health care decisionmaking.
In some cases, employees would become their own health insurance purchasing agents with a defined contribution from their employer toward their premiums. By giving their employees a flat allowance to purchase their health insurance, these employers hope to shift the responsibilities – both financial and administrative – of health insurance purchasing onto consumers. Armed with comparative information that describes the relative strengths and weaknesses of available health plans, these consumers would use their employer contributions and their own resources to make their selections based on their own values and needs.
Lee Newcomer, M.D., chief medical officer for Vivius, Inc., argued that a defined contribution approach would help empower consumers – giving them good reason to become both better informed and more selective – and make markets more competitive.
In contrast, Galvin identified three problems with defined contribution strategies. First, the information that would empower consumers to make smarter decisions is not available to them. Second, numerous questions remain regarding tax treatment for defined contributions and the impact on risk pooling. Third, employees have demonstrated no demand for defined contribution plans. Indeed, research by Berenson suggests that most consumers are happy with the current system of employer-sponsored coverage. Other evidence does not indicate strong consumer interest in using detailed quality and cost information to compare and shop for health plans. But both sides of the defined contribution debate emphasize that this mechanism would not change the underlying drivers of health care costs.
Some consumer empowerment strategies focus more on specific clinical choices – for example, whether to undergo prostate surgery – or provider selection for a high-risk, high-cost procedure. Evidence suggests that consumers are avid seekers and users of health-related information when they or a family member has a serious health problem.
And they are also increasingly turning to the Internet for this information. However, it is not yet clear whether or how much money can be saved Through the consumer empowerment strategy.
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“E-health.” Some see that making use of new information technology, e-health systems would cut costs* (Note: need source here) by reducing “face time” between patients and health professionals through email consultations, web sites that promote patient self-care, and other information-based strategies. A number of e-health companies are offering a variety of services – including health insurance sales and marketing, administrative transactions, care management, and consumer and patient health education. Clif Gaus predicted that information technology on the Internet will be one of the most important drivers of health care change during the next 10 to 20 years, especially if the industry continues to move toward more open choice and defined contribution products. But Galvin was skeptical that the new e-health systems will have much impact on costs, although he acknowledged that they could help reduce administrative costs. Still, he said, 70 percent of plans’ costs are medical, and most of those costs are incurred by a small number of very sick enrollees who value direct contact with their doctors.
Improving quality and appropriateness of care.
There is continued interest among a select group of large employers in improving quality, and, indeed, in leveraging quality to control or reduce costs. Some of these employers, such as GE, are collaborating with providers and plans to improve quality and reduce inappropriate care. Still, it is not yet clear whether these experiments will yield the cost savings that employers are seeking.
Meyer, of ESRI, said that there is an “extraordinary amount” of inappropriate and unnecessary medical care that both increases health care costs and puts consumers at risk.
Mounting an “all-out effort to uncover inappropriate and unnecessary care and reward those practitioners who engage in best practices and put some heat on those who don’t” will be an important step to bringing health care costs under control, he said.
In Galvin’s view, cost control needs to be integrated with quality improvement.
Currently, he said, the market contains no mechanisms for supporting quality. Purchasers don’t buy according to quality. Consumers assume that quality is not only acceptable but also generally the same everywhere. Health plans do not permit providers to differentiate themselves on quality, and there are no agreements or conventions for paying providers based on the quality of care that they produce.
An employer-led coalition known as the Leapfrog Group, which includes 75 large companies, HCFA, and several states, is working to develop purchasing principles, educate consumers, and explore ways to reward providers who deliver better care.
Galvin, who is a member of the Leapfrog Group, said that employers are shifting their focus from health plans to providers and consumers. They are trying to find a “sweet spot” through actions that save money and make sense to providers.
“Quality’s time is here,” Galvin said. “The private sector is not going to make any more progress by continuing to drive down costs and reduce excess capacity. We have to focus on quality.”
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Meanwhile, he said, concerns about patient safety and medical errors are capturing the attention of the news media and consumers. Galvin likened this growing interest to the consumer-based movements that developed around automobile safety and the environment. The public sector is moving away from regulatory approaches to quality and trying to identify purchasing techniques that can help ensure and improve quality.
Providers are jumping on the quality bandwagon, and the overall bell curve for quality is moving forward, Galvin said.
Galvin viewed these as positive developments, and said that, working together, the public and private sectors can accomplish a great deal. The public sector, he said, can help set rules for the market, while the private sector can more easily reward and motivate providers to improve quality. Both sectors, he said, need to be involved in educating consumers – a task that he believes is both necessary and difficult.
Meyer agreed that the public and private sectors will need to work together to address health care costs, but he said that they will have to confront some difficult choices. On the policy side, the current system of open-ended tax subsidies for health insurance distorts markets and shields employers and employees from the true costs of health care.
In addition, HCFA must be allowed to change the way it purchases health care for
Medicare, Meyer said. Currently, HCFA is not permitted to contract selectively the way that the private sector and state governments do. More broadly, though, the most important challenge is to face up to the costs incurred by continuous advances in health technology, carefully assess and evaluate new technologies, and commit to using them more judiciously. “Then we can begin to think about who gets appropriate care that works, under what condition, and for how long,” Meyer said. That, he admitted, “is an extremely tough issue.”
Conclusion: Assessing the Social Value of Health Care
Uwe E. Reinhardt, Ph.D., professor of economics and public affairs at Princeton
University, called attention to the fact that health care, in the end, is more than a business or a commodity – it is a social good. Market forces, he said, are ill-equipped to evaluate the social consequences of changing the distribution of health resources. That, he said, is a function better served by health services researchers, whose work can provide direction and guidance to public policymakers and private-sector decisionmakers.
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