NEJM Roundtable on Health Cost Control Offers Insights

Last Updated Sep 24, 2009 12:14 PM EDT

If you're interested in a really informed discussion about the key issues in slowing healthcare cost growth, I recommend a video roundtable discussion on the website of The New England Journal of Medicine. The moderator is Atul Gawande, MD, a Harvard professor and renowned author. The panelists, all leading health economists, include Elliott Fisher, MD, of Dartmouth, Jonathan Gruber of MIT, and Meredith Rosenthal of Harvard.

The consensus of the panel is that, without cost control, healthcare reform will fall flat on its face in the long run. As Rosenthal puts it, if the current rate of cost increase continues, we can cover fewer people and provide them with poorer benefits. And Gruber points out that unless health spending is limited, the federal government will either go bankrupt or raise taxes by a shocking amount.

On the other hand, the panelists strongly support the coverage expansion proposed in the current reform bills. That's do-able now and is "our moral obligation," Gruber says, while the battle for cost control is a longer-run part of reform. Rosenthal agrees that "coverage is critical." But the government should ask something in return from industry sectors, like the drug and insurance companies, that stand to benefit from the extra business they will receive from the newly insured, she says.

So how do we control costs? The consensus is that we need to restructure the healthcare delivery system while educating the public about the difference between necessary and unnecessary care, with help from comparative effectiveness research. "Until we can tell patients they can't have everything they want, we can't control costs," asserts Gruber.

Fisher, an expert on geographical variations in Medicare spending, doesn't believe that care must be rationed in a system that already spends so much. In markets where health spending is lower, he notes, people are not aware of rationing. "Most of the savings we need will come from reorganizing the delivery system, not from reducing beneficial care."

Fisher points out that the pending Congressional bills all include demonstration projects to test delivery-system reform ideas such as accountable care organizations (ACOs), medical homes, and payment bundling. Of course, it's a long way from pilots to actually implementing these concepts, and Gruber points out it could take a couple of years before any legislation promoting ACOs, for example, would be feasible. Even then, he says, there's a risk that these large, global-risk-taking organizations would ignite the same kind of backlash that HMOs did in the '90s.

Whatever form delivery reform takes-and whether or not it involves transitional components such as bundling, as Rosenthal suggests-the panelists agree that it must include payment reform, because the current fee-for-service system rewards volume rather than value. In the long run, this would require providers to take financial responsibility for care. But even within the fee-for-service paradigm, Fisher points out, we could do better. For example, he notes, not paying physicians to take time to have a lengthy conversation with a heart patient may mean that he or she is sent to the ER and then admitted to the hospital instead of being taken care of at home, when that might be feasible.

All in all, this is a very satisfying and lively discussion that underlines the importance of health reform while pointing to the need to continue it beyond the current measures under consideration.

  • Ken Terry

    Ken Terry, a former senior editor at Medical Economics Magazine, is the author of the book Rx For Health Care Reform.