Tackling the Big Issues in Health Spending

The Health Affairs and National Pharmaceutical Council event, “Health Spending: Tackling the Big Issues,” convened a crowd of more than 450 to ask critical questions about how the United States invests its health dollars – more than $3 trillion in spending a year – and what information is needed to help make those investments more wisely.

The daylong session raised questions rather than suggesting fixes, underscoring both the complexity of the problem as well as the concerns that spending trends will continue unless new thinking is brought to bear.

“This is like Groundhog Day,” Robert Dubois, NPC’s Chief Science Officer and Executive Vice President, told attendees, referring to the 1993 comedy flick. “We've had the same finger-pointing exercise for several decades. I'm hoping that we can learn, like Bill Murray did, and go in a different direction.”

Setting the Stage

The day’s first speakers, Amitabh Chandra, the Malcolm Wiener Professor of Public Policy at Harvard University, and David Cutler, the Otto Eckstein Professor of Applied Economics, Harvard University, outlined the depth of the challenge. Chandra noted that a series of shifting targets have been identified over the years, from investing more in prevention to hamstringing pharmaceutical companies to reforming malpractice, all without impacting costs (even if the interventions improved health). Chandra suggested the answer was not necessarily in spending less. “The problem is that we think we should be getting more for what we spend.”

Cutler outlined the challenge in a different way, noting that to spend less, someone will have to say “no” to certain care, yet there are barriers to each part of the system – patients, insurers, governments, and physicians – pumping the breaks. “We know that that spending is there to be taken out. We have theoretical ways of doing it, but each has significant difficulties.”

The Research Agenda

The conference also highlighted a number of ongoing research projects, some supported by the National Pharmaceutical Council, that are designed to shed light on more effective solutions to wise investment in health.

• Leslie Greenwald, Chief Scientist at RTI International, previewed work on why the United States pays more for health care. The initial conclusion: the U.S. GDP is so large that Americans are simply going to spend more. “We need to shift from how much we spend to how and where we spend our dollars,” she said.
• Melinda Buntin, Professor and Chair of Department of Health Policy at Vanderbilt University School of Medicine, outlined an important aspect in American health care: why Medicare spending growth remains modest by historical standards, and what lessons from that lower-than-expected growth can be applied to the system at large.
• Craig Mitton, Professor in the School of Population and Public Health at the University of British Columbia, is examining lessons from around the world, with a blunt assessment: “It's amazing that [Americans] don't think tradeoffs need to be made. Every other country has figured this out. Accept that there will be tradeoffs.”
• Amber Barnato, Susan J. and Richard M. Levy Distinguished Professor of Health Care Delivery, The Dartmouth Institute, Geisel School of Medicine at Dartmouth, highlighted a fundamental reality that patients are deeply impacted by the financial impact of health care costs, a perspective that is not always recognized by others in the health care system.

Other Questions

A series of panelists suggested that the questions to be addressed were even more broad. Mitton garnered applause by suggesting that health should be looked at as broadly as possible, including a focus on ensuring basic needs – food, housing, social supports—are a part of the discussion. That thread was picked up by the Chief Medical and Scientific Officer of the American Cancer Society, Otis Brawley, who built on the sentiment by noting that if all Americans had the same cancer death rates as college graduates, 155,000 deaths a year might be averted. And Katie Martin, Vice President for Health Policy and Programs, National Partnership for Women and Families, cautioned that patients must be a part of the dialogue. “We can’t forget the patient experience,” Martin said. “Solving the spending problem could end up creating an outcomes problem.”

The issue with public conversations, however, becomes more difficult with a public that is not necessarily aligned with systemic reform. “They're not worried about what we spend as a society,” Mollyann Brodie, the Senior Vice President, Public Opinion and Survey Research at the Kaiser Family Foundation. “They're worried about what they personally pay.” There is a role in the provider side, too, though there may not be any magic wands in that area. Pay for performance has not had an outsized impact on outcomes, said Harvard T.H. Chan School of Public Health’s Ashish Jha. “We haven’t gone very far down the road of payment reforms,” said Mark McClellan, Director of the Duke-Margolis Center for Health Policy and the former head of the Food and Drug Administration and the Centers for Medicare and Medicaid Services.

The Road Ahead

The presentations, in sum, suggested that while health spending was addressable, it would require collaboration among a variety of stakeholders and take some time and effort. “This is not going to happen quickly. This is a multi-year process,” said Dubois. “What we’re talking about is culture change.” You can watch the archived webcast on the Health Affairs website here.