There is a lot of dancing around the core health care challenges in America today. The simple truth is that health care in America costs too much and often delivers too little. About one out of every six dollars in this country is spent on health services, and the price tag continues to skyrocket. The wise Warren Buffet has described health care as the “tapeworm” that is eating away at the American economy. In spite of this enormous expenditure of money, health outcomes for Americans do not lead the world but rather often lag in important measures of quality. Think about this: U.S. health spending per person, per year now stands at more than $10,300, according to the highly-respected, non-partisan Kaiser Family Foundation.
Minnesota has a proud history of leadership on health policy. The state has been in the forefront of innovations that made it possible for those with pre-existing health conditions to find affordable health coverage in the 1970s. In the 1980s and 90s, thoughtful policies brought stability to the small group market, making it possible for more small businesses to provide coverage to their employers. The state created MinnesotaCare – a targeted program that made affordable coverage available to the state’s working poor. In the 2000s, the state continued its work to reduce the harm caused by tobacco, including secondhand smoke, and became one of the first states to prohibit smoking in bars and restaurants.
These policies have been the work of nationally recognized leaders from both parties on health policy. Former U.S. Sen. Dave Durenberger, for example, continues to be a leader in national health reform. The late Sen. Paul Wellstone was one of the leading champions of mental health care.
We are missing that leadership in the Senate today. Instead of big bold ideas, our senators work on the fringes of health policy, taking on a few popular causes and blaming this group or that. At the end of the day though, they refuse to do the heavy lifting that is needed to get our health costs under control.
What can be done?
First, the cost of health care should be transparent. Right now, it’s hard to figure out how much services cost and who pays. Rapidly-growing public programs (Medicaid, for example) hold down costs to taxpayers by under-paying doctors, dentists, hospitals and other care providers. Politicians can pretend that they are saving taxpayers money by under-paying providers, but the reality is that consumers still end up paying the cost. One Minnesota study showed that for every dollar of services provided to enrollees in a government health program, hospitals were paid 67 cents by the state. The lost revenue was shifted to hospital patients with private insurance who were charged $1.33 for every dollar of service provided. As long as the system pays providers to perform more services or gives discounts to some purchasers but not to others, costs won’t be controlled. Pricing should be fair and consumers should know how much they will be charged.
Second, the cost of pharmaceuticals surely needs attention. AARP estimates that pharmaceutical costs are up 208% between 2008 and 2016 and will keep rising. This powerful industry has great sway in congress. For example, the federal government is banned from negotiating prices with the pharmaceutical industry. It’s absurd that the purchaser with the greatest influence can’t use that power to drive down prices for all consumers. Congress could do other things, including speeding the approval of cheaper generic drugs and prohibit issuing new patents for medicines that may change a formula, but mostly replicate what already is available, but at a far higher cost and with no additional benefits.
Third, the health care system needs to take better advantage of big data. The cost of knee replacements in Minnesota hospitals ranges from $6,186 to $46,974, a recent study from the Minnesota Department of Health determined. Better tracking of health costs and outcomes can provide some answers to these huge variations. Analysis of data can tell physicians and other health providers with greater clarity and certainty what treatments are working and which ones are not delivering benefits equal to the cost. This is another area of policy where the country could take the lead from Minnesota. Homegrown organizations like The Institute for Clinical Systems Improvement (ICSI) is a national innovator in measuring and using data to evaluate the performance of health systems to improve clinical outcomes. Minnesota Community Measurement measures and publicizes data to improve the quality of health, the experience of patients and to help shine a light on health care costs. Data can help providers deliver care more quickly, making more accurate diagnoses that lead to earlier and more effective treatment. Monitoring patients leaving hospitals – tracking whether they are receiving the necessary follow-up treatments, for example – can significantly reduce hospital readmissions, a very costly event. These and other uses of data have been shown to dramatically reduce costs and improve quality without interfering with the patient-doctor relationship.
Fourth, we need to make smarter investments in health improvement. The state’s Department of Health determined that health spending for those with at least one chronic disease – diabetes, asthma or congestive heart failure, for example – is eight times the amount for those without one of these conditions. We know that most chronic illnesses are a direct result of poor nutrition, lack of physical activity and tobacco use. Investing in wellness and prevention programs not only improves the health of Minnesotans, it is a key to reducing costs.
Fifth, the U.S. needs to invest more public research dollars to understand what treatments are most effective. This approach isn’t popular with medical device manufacturers or pharmaceutical companies. They prefer consumers trust the data they produce to demonstrate the effectiveness of their products and treatments. What’s even worse, is that the cost of this one-sided data is passed on to consumers in the form of higher prices. What’s really needed is a public investment in comparative effectiveness research. To put it simply, where will we get the biggest bang for our health care buck?
Certainly, there are additional steps that can and should be taken. But these five – some of which are supported by Republicans, others by Democrats – if done well and in concert with one another, would be a significant step forward in controlling health costs. Once we do that, then we can make the necessary investments in making sure every person in Minnesota and the country has access to high-quality, affordable health care.