Tuesday, November 24, 2009

The cost of doing nothing

There has been enormous focus - as there should be - on the cost of national health reform. But in order to have a meaningful debate, we must also consider the cost of no reform. Here are just a few basic facts about the status quo. Per capita spending on health care in the United States is this highest of any country in the World. But not just a little higher. It is double the spending in other industrialized countries with high standards of living. This includes Germany, Canada, France, Australia and the United Kingdom. But that's not all. Our costs are growing at a faster rate than these other countries and our health spending is a higher percentage of GDP than these other countries. In short, by any conceivable measure, we are a huge outlier compared to the rest of the planet. But surely we must be delivering better quality of care for all of this extra spending, right? Wrong. Under most standard measures of quality (except perhaps for "rescue" care), other countries are delivering far better results than we are. If we were a business, we would be on the verge of bankruptcy. And the only way a business avoids bankruptcy is to substantially reform its business. (If you are interested in two views on the economic benefit lost from not pasing health reform, see this Op Ed in the Globe from earlier this month by Linda Bilmes and Rosemary Day.

So who do we spend our money on? This may be a surprise to some, but the "healthy" 50% of our population make up only 3% of total expenditures. The sickest 10% make up 64% of total expenditures. Many of these individuals suffer with chronic diseases. One of those chronic diseases is diabetes and one of the causes of diabetes is obesity. Before I share some sobering facts about obesity, I should first mention that one of the goals of health reform is to force more focus on primary care and prevention (including giving many more people insurance) to more effectively manage everyone's care, but especially those with chronic diseases. This will improve health and lower costs. (If you are interested in how wacky the current reimbursement system is for physicians (and why primary care is relegated to second class status), see this interesting and provocative piece by Darshak Sanghavi from Slate magazine.)

Now - back to obesity. Obesity is defined as 30 pounds overweight for a 5'4" person. In 1990, there were no states in our country where more than 14% of the population was obese. By 2005, there were no states where less than 14% of the population was obese: 47 states had rates above 20%; 13 states had rates over 25%; and in 3 states, over 30% of the population was obese. And I am sure the numbers are still worse today. Not unlike our trajectory of health care costs, the rate of increase of obesity in our population is a national crisis.

Will national health reform solve all of these problems? Of course not. The legislation will be far from perfect and these problems are complex. But it will be a start. As a nation, our health care situation is too dire to let perfection be the enemy of good. We simply cannot squander this opportunity again. (Sources for the above include Commonwealth Fund slides from their National Scorecard on U.S. Health System Performance, 2006; and "Prescription Drugs and the Changing Concentration of Health Care Expenditures", Health Affairs, Jan/Feb. 2007 26(1):249-57.)

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