Newtown, CT – November 6, 2015
It’s too bad when important policy points are drowned out by incoherent arguments – In a recent Health Affairs Blog post, Jeff Goldsmith argues that we must transcend the current “simplistic” narrative of conservatives and liberals that all health care woes will be solved by supply-side reforms or demand side reforms. While Jeff is right that the singular focus on one or the other can occult the view that there are very important social and economic factors that contribute mightily to the overall rate of spending on health care, the twists and turns of his arguments leave us somewhat baffled. On the one side, Jeff argues that demand side restraints through high deductibles and co-insurance are unlikely to change the underlying factors for health care spending such as the increase in chronic illness, he later acknowledges that these restraints have helped to stabilize the rate of growth of health care. Similarly, he makes the argument that supply side restraints through payment reform can’t truly be effective because it fails to account for the differences in overall spending observed in the U.S. today, he acknowledges that there are significant savings to be made by cutting out wasteful spending and reducing provider practice variation. As if wasteful spending and practice pattern variations will magically disappear without applying supply side restraints.
What this means to you – An honest assessment of the current state of health care in the U.S. would be that it’s still not affordable for many (even for those who can now buy coverage), delivers mediocre to poor quality for most, and ignores the most vulnerable. On one side, the benefits reforms of the early part of this century have had an effect and continue to have an effect. Patients have turned into consumers and large chunks of the industry are adapting to the new retail rules of routine sick care and preventive care. On the other side, these benefit reforms are also making the management of common chronic conditions, or the affordability of needed procedures, unaffordable. And that’s bad. Payment reform is also starting to have effects. One, a bad one, has been the increased consolidation of providers and higher prices for the private sector. But another has been a genuine focus on reducing the wasteful spending that Jeff refers to, as well as an increase in compliance with care protocols, and that’s good. We must therefore pause to better understand the negative side effects of demand and supply side restraints and find ways to rapidly mitigate them. However, and this is the important part of Jeff’s message, it doesn’t mean that these two incentive levers will solve the underlying and upstream causes of unnecessary health spending. And it’s the reason why the Robert Wood Johnson Foundation, the Colorado Health Foundation and others have shifted to looking at instituting a real culture of health. Because if we don’t take on the social determinants of health, then we cannot achieve the stated goals of the Founding Fathers, that “we hold these truths to be self-evident: that all people are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty, and the pursuit of happiness.” Too many today are denied life, the liberty to make choices, and the pursuit of any kind of happiness. All deserve to be treated with dignity, but the disadvantaged often have none, and that must change. Financial incentives for providers and consumers are part of the solution, not simplistic theories, but they are only one part, not the whole.