The next president's health agenda

By Merrill Goozner

Note: This post first appeared at Goozner's blog, Gooznews.

A year ago, health care held a solid lead in the polls as the number one concern of the American people. But by the time the Iowa caucuses closed, and Barack Obama surged to his unexpected win, it had been supplanted by the economy, a changing reality I noted in this New Year's Day post.

As my daughter and I stood in a crowd of well over 100,000 people last night in Manassas, Virginia, and heard the Democratic nominee give his stump speech for the last time, I was struck by how little of it was devoted to any issue beyond the core economy. His mom's struggle with paying her bills as she lay dying of cancer and the need to put health into our sick care system got a line; but so did the war in Iraq and going after bin Laden. As in 1992 when the last Democrat got elected for the first time, it's the economy, stupid.

But unlike some pundits who say the health care issue will be put on the backburner for the first half of the next president first term, I do not believe the nation will have that luxury. Curbing the growth of health care spending will reassert itself as an issue next year because it is key to restoring this nation to economic competitiveness. American businesses are at a competitive disadvantage when they must pay twice what companies in other countries pay (whether premiums or taxes) to provide their workers health coverage.

The morning after reality for the next president is that the U.S. spends more on health care than any other nation on earth -- 16 percent of gross domestic product and rising. Yet nearly 50 million Americans go without health coverage during the year, and in traditional markers of national well-being -- longevity and infant mortality -- the U.S. ranks below many former Communist bloc nations of Eastern Europe.

The only possible explanation for this paradox of great wealth producing ill health is that a substantial amount of the money that gets poured into health care is wasted. How much? The generally accepted figure is $700 billion a year or nearly a third of the total -- about what the Treasury was given to bail out the financial sector. In other words, health care payers (employers and individuals, through their premiums, taxes and co-pays) are ponying up the equivalent of a bank bailout each and every year for unnecessary medical care.

It would seem, then, that the path forward for the next president is clear. To cover the uninsured and to improve health care outcomes, the first order of business must be an aggressive campaign to cut back on medical waste -- and we're not talking here about what to do with used needles, urine samples and latex gloves. It's the useless procedures, unnecessary images and meaningless heroic interventions at the end of life that must be curtailed if the U.S. is ever going to limit health care cost growth to the same level as the rest of the economy. And, as this story in today's New York Times reveals, it will also require giving Medicare and other insurers the legal power to pay for the least costly alternative when it's been shown to be just as effective as more expensive medical interventions.

The steps are easy to articulate and hard to accomplish, and not just because one man's waste is another man's paycheck. It is undeniably true that special interests -- the drug and device industries, the hospitals, the specialty clinic operators, the physician guilds -- will fight like cornered beasts against any attempts to rein in costs at their expense.

But there is another roadblock to any systematic effort to root out waste: the American public's seemingly bottomless thirst for technological fixes to cure what ails them, which often substitute for more common sense approaches to their health problems. Last week, we learned that the diabetes rate has doubled in the past decade, and my television at night is filled with ads for better ways to measure and control blood sugars.

But where are the ads instructing people that poor diet and inadequate exercise are behind this costly epidemic? Where are the policies that would help the vast majority Americans avoid Type II diabetes -- a largely preventable disease? And where is the coordination and organization of care for people with preventable chronic diseases like heart failure, diabetes and many cancers -- the 25 percent of patients that consume 75 percent of all health care -- that would minimize their cost to the system? That's where the big potential cost savings are.

A lot of reformist energy gets aimed at the modestly useful interventions that cater to the worried well or the barely sick or those who are dying. But as Henry Aaron of the Brookings Institution accurately points out in the latest New England Journal of Medicine, individuals vary and all health care is a one-on-one enterprise. Will Americans ever stand for a strict cost-benefit approach to rationing care that is ultimately derived from an arbitrary cost cutoff point determined by how that intervention affects the entire population? "The very definition of waste is unclear, and the term is fraught with ethical ambiguity," he wrote.

Moreover, the limited number of cost-effectiveness studies out there have largely been written by providers of health care. It's neither comprehensive nor trustworthy. "It is scandalous that Congress fails to dedicate, say, 1 percent of Medicare and Medicaid spending to support research, conducted by an apolitical body, on the effectiveness and relative costs of medical procedures and to require private payers to make a similar contribution." I called for such a reform in my book and on the op-ed page of the New York Times in 2004; Aaron put it in a book in 2003; Princeton health care economist Uwe Reinhardt, with his deep knowledge of European practices, publicly called for such an agency in 2001.

So as we turn to the new year with a new president, look for legislation to create a comparative effectiveness agency to be one of the first bills to get extensive hearings in the Senate Health Education Labor and Pension committee and in the House Energy and Commerce and Ways and Means committees. It is a reform that is long overdue.

But it also is only the first step in getting health care costs under control because its new information will be for naught until payers and medical providers use it. And that, Aaron accurately points out, will only be possible if everyone is insured.

If spending limits cause providers to withhold some beneficial care because it costs too much, they will tend to do so selectively, favoring strong payers (the insured) over weak ones (the uninsured). In a world with effective spending limits, being uninsured would take on a whole new and terrifying meaning. Societal revulsion toward the resulting inequalities and deprivation would threaten the entire cost-control effort.

It is the ultimate irony of the health care cost conundrum. Only by paying more to insure the uninsured now will we be in a position to save money down the road. It's called investment in the American people, a theme I heard repeatedly in Barack Obama's final stump speech of the 2008 presidential campaign.