Thought Leader -- Health Care Reform's New Deal

July 16, 2009
Health care policy expert Dr. Pauline Rosenau says expect increased access, quality improvement and cost control to shape health care reform.

With five committees of Congress working on three bills, Pauline Rosenau says it's anyone's guess how the details of a final health care reform bill will shape up. She's quick to note that Congress will be heavily influenced by constituent wishes, not the learned papers of health policy "wonks." But the professor of management, policy and community health at the University of Texas School of Public Health is confident that health care reform will be passed and that it will provide "impressive changes" in the nation's health care system.

Rosenau said the key to improving health care is to ensure that everyone has health insurance. Citing evidence from a number of other countries, she said universal coverage is a common factor in systems "which are truly efficient and deliver high performance." Rosenau said universal coverage would help to realign the incentives in the United States, which reward hospitals and physicians for the quantity of procedures performed rather than the effectiveness of care and result in a disproportionate amount of care to those with good insurance. "If everyone has health insurance, then there is no reason for a hospital or doctor to focus more on the patient that is well-insured and neglect the ones that don't have health insurance," she says. "In a sense, good health insurance that reimburses generously is a health risk in a system such as ours."

Despite the fact that nearly 50 million Americans are uninsured, the United States has by far the most expensive health care system in the world. In 2007, health spending in the United States accounted for 16% of the gross domestic product, compared with 11% in France and 8.4% in the United Kingdom. Americans spent $7,290 on health per capita, compared with an average in developed nations of $2,964. In sum, the United States spent $2.2 trillion on health care in 2007 and was projected to spend $4.3 trillion by 2016. High administrative costs are one reason the U.S. system is so expensive. "Estimates vary depending on how you define administrative costs, but 15 to 35% of our health care dollars go to paperwork," Rosenau points out. "No other country matches that."

Much of the uncertainty surrounding health care reform revolves around proposals to fund expanded coverage and to introduce measures to control costs. Current bills are expected to add approximately $1 trillion in costs over a 10-year period. Sponsors say many proposals being put forth, such as a public health insurance option, would result in cost savings. On July 2, for example, President Obama said the "public option would make health care affordable by increasing competition, providing more choices and keeping the insurance companies honest." But Rosenau cautions that cost-control measures such as electronic medical records have not been proven to provide the huge savings promised by their advocates.

While business groups are concerned about added costs arising from health care reform, Rosenau says one aspect of reform that should benefit employers is portability, or allowing workers to take their insurance with them when they change jobs. This would allow a worker to take a job offer, for example, without worrying that a spouse with a serious health condition would be unable to get insurance coverage under a new plan.

Americans commonly believe they have the best health care system in the world. Rosenau says we simply have the most expensive system. A number of health outcome measures, such as infant mortality, are worse in the United States than in other industrialized nations. Both the stimulus package and Congressional bills have provisions to fund independent research to compare treatment protocols and determine which are most effective. Rosenau said many doctors would welcome this information because they frequently have to make decisions based on their intuition, not scientific tests.

Rosenau says while agreement on reform elements such as guaranteed issue and community rating are "so important that no would have guessed that they could possibly pass six months ago," health care reform will necessarily be a product of compromise. "A lot of people are going to be disappointed. Nobody is going to get exactly what they want. Everybody is going to have to give up a little."

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