NEJM: Ensuring the Fiscal Sustainability of Health Care Reform (Michael E. Chernew, Ph.D et. al)

The focus of this article is on the fiscal sustainability of health care, which is also my biggest concern with health care reform. The articles starts off by saying that "health care reform is an economic issue as much as, if not more than, a health issue." A well stated comment with which I could not agree with more. The authors state that currently health care reform emphasizes cost neutrality for only a 10 year period, but, with health care spending rate exceeding income growth by 2 percent, one quickly realizes that spending growth rate is what needs to be contained in order to create a sustainable health care system.

The article also points out that low-spending is not the same thing as low-spending growth. For example, Rochester, Minnesota, and Salt Lake City are all known for their high-quality care centers with respectively low levels of Medicare spending. But looking more closely at the numbers reveals that these mini health care systems have health care spending growth rates that exceed the national average. Therefore, left unconstrained, these paragons of high-quality, low-cost care will eventually catch up to their high-spending peers.

A number of options have been proposed for lowering healthcare spending growth:

"These include delivery-system reform, especially the development of “integrated” organizations to reduce costs and improve patient outcomes; payment reform solving a greater role for bundled payments, including episode-based payments and various forms of capitation; and “promarket” strategies that make individuals more sensitive to costs and rely on individual choices to constrain spending, such as benefits packages with substantial cost sharing, taxing of high-cost plans, and insurance- and provider-market reforms that enhance competition."

Unfortunately none of the these solutions are particularly easy to implement nor are they without their pitfalls. The authors go into details about each, but the interplay between the government and private sector seems to be at the root of many difficulties. For instance, more government regulation would be a way to control costs, but politically influenced health care may not result in the best quality care possible and could be downright dangerous. Relying on the market itself to set health care costs might not work because too little or too many competitors can impede the decision making process of healthcare consumers. Also, people sometimes simply don't choose the most economical option when presented with health care choices. And then nobody wants to cut physician pay or ration care. It seems there are no perfect (or easy even) solutions for controlling health care spending rate.

Ensuring the Fiscal Sustainability of Health Care Reform