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Perspectives

PERSPECTIVE

Reframing The Debate Over Health Care Reform: The Role Of System Performance And Affordability

Abstract

 
The failure to pass comprehensive national health care reform requires a new approach for framing and structuring the debate. Since 85 percent of Americans have health insurance, framing the debate around the affordability of coverage is important. More important is understanding the factors responsible for driving growth in spending, and crafting effective interventions. Our work shows that much of the rise in spending is linked to the rise in the prevalence of treated disease—much of which is preventable. Reform strategies that address this issue are not inherently partisan and may prove to be a fruitful starting point for launching the debate.

Starting and ending the reform debate on expanding coverage is a politically difficult, if not impossible, approach for national health care reform. Those with health insurance are politically more active than the uninsured. For starters, approximately 96 percent of those who voted in the last round of elections in 2006 had health insurance.¹ That is not to say that expanding coverage to the forty-five million uninsured Americans is not an important issue to voters; it is. However, many voters judge health care reform by how effective the proposals will be in making health insurance more affordable and less administratively cumbersome over time.² In this respect, reform proposals should include efforts to make health care more efficient and effective—improving the value and performance of the system—as well as extending coverage to the uninsured.

Crafting effective approaches for making health care more affordable requires a clear understanding of where we spend our health care dollar and the forces driving the rise in spending. Health services research—and several papers in Health Affairs in particular—have been effective in highlighting answers to the first issue: where we spend our money. That body of work, including my own, has shown that approximately three-fourths of all health care spending is associated with patients that have one or more chronic health care conditions. Moreover, from a prevention and performance perspective, we do a poor job of delivering health care to these patients. Chronically ill patients receive approximately 56 percent of the clinically recommended preventive health care services.³ This is not attributable to lack of clinical understanding about the efficacy of the procedures but is a function of how we pay for and deliver health care services.

My interest in this area has focused more on the second issue: what accounts for the rise in health care spending over time. When I first started looking into this question, health services research had produced a wealth of information on where we spent our health care dollar (that is, the sources and uses of health care); remarkably little work had been completed on the factors driving the rise in spending. Perhaps the most recent comprehensive examination of this issue was completed by Joseph Newhouse.⁴ He examined the share of the rise in spending assumed by the usual demand-side drivers of care: the rising share of spending flowing through insurance, medical malpractice, rising real income, and demographics. Collectively these factors accounted for approximately 40 percent of the rise in spending over time. The residual has commonly been attributed to medical advances.

Innovations in health care clearly assume a major role in driving the rise in spending; however, my sense was that other factors were clearly in play. Technology plays an important role in expanding the share of patients with a disease we can treat, as well as replacing older treatment modalities with newer, often more expensive, and sometimes more effective interventions. However, missing in the technology explanation are increases in the clinical prevalence of disease, as well as changes in how aggressive physicians are in treating asymptomatic or mildly symptomatic patients. Indeed, most of the economic work in this area had not considered the roles that the rise in the true clinical prevalence of disease that, ceteris paribus, clearly accounts for some of the rise in spending. What struck me over the past several years was the explosion of articles published by epidemiologists highlighting the rising incidence and prevalence of key chronic diseases such as diabetes, hyperlipidemia, and pulmonary diseases (asthma and chronic obstructive pulmonary disease). The role that the shifting mix of disease burden assumes in accounting for the rise in health spending has been largely ignored.

I believe that a new framework for thinking about this issue would be of interest. First, it would provide a new context for policymakers seeking to make health care more affordable, with new information on the drivers of spending increases; second, it would integrate the best of economics and epidemiology in attacking this issue. The view of my colleagues and me was that the rise in spending could be decomposed into three parts: the rise in the prevalence of treated disease, the rise in spending per treated case, and the interaction of these factors.⁵ Our work highlighted the fact that about two-thirds of the rise in health care spending was associated with the rise in the prevalence of treated disease and that about 27 percent was associated with the doubling of obesity over time.⁶ The rise in obesity is by itself responsible for virtually all of the 53 percent increase in the clinical prevalence of diabetes since 1980.⁷

Our series of papers, and related work published over the past several years in Health Affairs, provides an important context for re-framing the debate about health care reform—around the affordability of health care. Collectively, the results highlight the need to develop more-effective, next-generation approaches for getting better value from where we spend our health care dollar (the 75 percent that goes to pay for chronically ill patients). Moreover, it also highlights the need to take population-based prevention and primary care approaches to health care reform more seriously. Reducing the incidence and prevalence of disease could, in the short run, lower the rise in health care spending. Although we know little about the lifetime costs of healthier Americans, some work points to lower lifetime spending among people age sixty-five and older who are not disabled and do not have a chronic illness.⁸

The implication for health care reform is that attacking the affordability issue along these dimensions—better care management (including information technology tools that enable effective management) and the prevention of disease—is not inherently partisan. Developing more-rational policies for thinking through the trade-offs of innovation, higher attendant spending, and potentially better outcomes has to be part of the equation as well. Starting the health care reform debate around the affordability agenda, with a clear understanding of the forces driving the rise in spending, seems a more attractive approach than limiting the debate to how best to pay for including the uninsured in an underperforming health care system. Integrating the uninsured into a more efficient, better-performing system, while still contentious, may prove an easier next step with this approach.

Editor's Notes

 
Ken Thorpe (kthorpe{at}sph.emory.edu) is the Robert W. Woodruff Professor and Chair, Department of Health Policy and Management, Rollins School of Public Health, at Emory University in Atlanta, Georgia.

The author thanks his colleagues David Howard and Curtis Florence for their collaboration on this line of research.

NOTES

Top NOTES

 

1. Lake and Associates, unpublished poll for Americans for Health Care, November 2006.
2. See Lake and Associates, "Health Care in the 2006 Elections," Slide 8, November 2006, http://lspma.com/polls/pdf/Health%20Care%20in%20the%202006%20Elections%20_%20Lake%20Research.pdf (accessed 14 August 2007).
3. E.A. McGlynn et al., "The Quality of Health Care Delivered to Adults in the United States," New England Journal of Medicine 348, no. 26 (2003): 2635–264.[Abstract/Free Full Text]
4. J.P. Newhouse, "An Iconoclastic View of Health Care Cost Containment," Health Affairs 12 Supp. (1993): 152–171.[Abstract]
5. K.E. Thorpe et al., "The Rising Prevalence of Treated Disease: Effects on Private Health Insurance Spending," Health Affairs 24 (2005): w317–w325 (published online 27 June 2005; 10.1377/hlthaff.w5.317)[CrossRef]; and K.E. Thorpe et al., "The Impact of Obesity on Rising Medical Spending," Health Affairs 23 (2004): w480–w486 (published online 20 October 2004; 10.1377/hlthaff.w4.480).[Abstract/Free Full Text]
6. Thorpe et al., "The Impact of Obesity."
7. E.W. Gregg et al., "Secular Trends in Cardiovascular Disease Risk Factors According to Body Mass Index in U.S. Adults," Journal of the American Medical Association 293, no. 15 (2005): 1868–1874.[Abstract/Free Full Text]
8. G.F. Joyce et al., "The Lifetime Burden of Chronic Disease among the Elderly," Health Affairs 24 (2005): w5-r18–w5-r29 (published online 26 September 2005; 10.1377/hlthaff.w5.r18).[CrossRef][Medline]

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