Managed Care - May 2008 - (Page 25) government-controlled health care spending in the U.S. “It’s really going to be a question of what direction do we want to go that will be acceptable to the American public,” says Wilensky. “My preferred strategy is harnessing the large amount of information we have about what works when and making a serious investment in finding out what we don’t yet know on new procedures and technologies. The alternative that other countries have attempted is very aggressive control of the total amount of spending.” In a country generally dubious about giving government control of the market, that may never work. “If you try to enforce global budgeting, you can control spending, but that’s not what the country will probably want to do,” says Wilensky. Government spending controls in the U.S. historically are reserved for short-term emergencies, not as a longterm strategy. “We need to do away with the fee-forservice system and go back to something resembling some form of bundled payment or, if you’ll excuse the expression, capitation,” says Altman. “We need to re-energize the integrated delivery system and coordinated care, which were aggressively moving forward in the ’90s. We need to restructure delivery, invest money in comparative effectiveness, and use value-based pricing. “We don’t necessarily want to do like it like England, where they don’t pay for those services,” but higher tiers could be created that would require people to pay more for high-cost, low-value health care. “Our National Coalition on Health Care reform program does change the whole system, not just the cost of care but the quality of care, the organization of care, and most of the major drivers of why the system is out of control today,” says Simmons. “The other reason other nations ensure universal coverage and spend less per capita is that they have taken the steps necessary. Their citizens are every bit as healthy, they spend less, and they’re more satisfied. Cost of managed care’s light touch Many observers say that after a burst of energy in the early 1990s, managed care lost the ability or the will to seriously put the brakes on spending. Physician and hospital services account for 60 percent of the private insurance health care dollar. How private insurance health care dollar is spent Durable medical products Nursing home and home health 2¢ 1¢ Other professional services Dental services 3¢ 6¢ Hospital Administration 14¢ 14¢ 29¢ 31¢ Prescription drugs Source: CMS Physician Good old days? The double-digit rise in health insurance premiums began slowing in 2003, but whatever solace people might draw from that is sure to be short-lived. Workers’ salaries have been stagnant, and not close to keeping pace with premiums. Inflation, too, has been fairly stagnant — until now. The surge in gasoline and food prices is already beginning to eat into family budgets. Annual percentage increases in premiums, earnings, inflation 14% 12% 10% 8% 6% 4% 2% 0 2002 2003 2004 Overall inflation Workers’ earnings 2005 2006 2007 Health insurance premiums Source: “Employer Health Benefits 2007 Annual Salary,” Henry J. Kaiser Family Foundation and the Health Research Educational Trust MAY 2008 / MANAGED CARE 25
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