Healthcare reform proposals are suggesting a major overhaul of the current healthcare delivery system as the way to overcome our ills.
The Clinton administration's program is long on supply intervention, but it's woefully lacking in details of how to manage the demand for services. Competing proposals also lack aggressive demand management.
To extend coverage universally, the administration's reform plan seeks a major restructuring of health delivery that affects hospitals, physicians, insurance companies, employers, managed-care organizations, suppliers and others as well as federal, state and local governments.
The administration's plan calls for a redistribution of current and future health-directed resources. It suggests a massive, regional collective-bargaining approach that will define the health services to be offered, the price at which they will be delivered and the quality level that will be acceptable.
The plan aims to improve the efficiency of delivery, create a basic benefits package and cover the 37 million people who don't have health insurance.
If the total national demand for health services remains constant or declines, then it should be possible to pay for needed services under the proposed global budget.
But if more individuals seek services than what the global healthcare budget can afford, there appears to be two primary options: Either a limit will be placed on who can be served (sometimes called rationing), or tighter limits will be established on the professional fees that can be charged (sometimes called wage and price controls).
Demand is a slippery factor to weigh. Everyone represents potential demand for health services; no one can tell when any of us will have a heart attack, be diagnosed with cancer, deliver a high-risk baby or require treatment for a car or firearm mishap.
In gauging demand, the best we can do is talk in generalities. For example, it's known that 5% to 10% of the population will generate the majority of healthcare expenditures in any given year, and that the 5% to 10% usually will change randomly from year to year.
Published reports indicate that most major health episodes are preventable; they're caused by our lifestyles and controllable health risks, such as smoking, high cholesterol levels, unmanaged stress, lack of exercise, substance abuse, unsafe driving and so on. However, many of these risk factors can be measured and managed before they become acute-care, high-cost episodes. These facets-the prevention side of healthcare-have been all but overlooked in the debate over reform.
The discussion of managed competition tends to overlook this point as well. Managed care has been gaining significant market share in the past decade, and its growth has been accelerating. But health costs for many organizations, even those with strong managed-care programs in place, continue to escalate at two or three times the rate of general inflation.
Unidimensional healthcare cost control efforts that focus almost exclusively on managing the supply of healthcare services are destined to fail. New approaches-oriented primarily toward a redistribution of current resources or attempts to squeeze 20% to 25% from customary costs through mass collective bargaining-seem to be a Pyrrhic victory if the unmanaged risk factors that cause much of this cost were eliminated in the first place.
Kenneth R. Pelletier, director of the corporate health program for Stanford University's Center for Research in Disease Prevention, lists some impressive information in updating outcome studies of comprehensive health promotion and disease prevention programs at the work site in the September/October 1993 issue of the American Journal of Health Promotion.
"Of the studies which analyzed cost-effectiveness or cost benefits, every one indicated a positive return. When anyone cavalierly dismisses 48 studies with the glib dismissal of `there is no evidence,' they are simply ignorant of more than 13 years of increasingly sophisticated research with documentation of both health and cost outcomes," Mr. Pelletier said.
Significant societal demand factors also are causing the rise in healthcare costs. They are outside the ability of business organizations or healthcare providers to control them. They, too, must be addressed as part of any universal coverage program that hopes to succeed.
Violence. Firearms have almost overtaken motor vehicle crashes as the leading cause of injury-related death, federal statistics show. More than 20,000 people are murdered each year, more than 10,000 with handguns, and tens of thousands more are injured and require billions of dollars of medical care.
Growing older. Aging people use increasing amounts of health resources. Most hospitals' admissions and inpatient days are for Medicare-eligible patients; this population is growing at a fast pace.
Underweight, addicted and undernourished babies. These infants may use as much as 100 times more medical resources than those without these encumbrances.
Vehicle trauma. More than 43,000 people died in motor-vehicle accidents in 1991, and hundreds of thousands were injured, at a cost of tens of billions of dollars. A high percentage of accidents are caused by drinking and driving.
AIDS. Each infected person may use $50,000 to $100,000 in medical resources.
Demands for healthcare services must be addressed in any attempt to reform how healthcare services are planned, delivered, managed, budgeted or rationed.
Future costs under any healthcare reform plan will far exceed today's costs without a national effort to control the demand for healthcare services. The primary focus must be on rationing illness rather than the supply or price of available services.
For providers, a commitment to adopt organizational strategies directed toward the management of health risk factors, within the organization and the community, may well be the best way to control "healthcare pain" in the long run.
This must include appropriate incentives to adopt healthy lifestyles. It also means adopting strategies that focus on disease and injury prevention in communities. Without such steps, the goals of health reform, whatever approach is the ultimate winner, will remain unattainable.