Contributors
Joseph Chazan: How to contain our health costs
07:51 AM EDT on Thursday, March 29, 2007
RAPIDLY ESCALATING Rhode Island health-care costs have prompted Governor Carcieri to charge the state health and insurance directors to address the causes of and propose solutions to the problem. I recently attended a meeting of the Health Services Council at the Health Department, where these officials presented their proposals. These included more state regulation and control; a more robust, cybernetic medical-information system; emphasis on wellness and attention to the obesity epidemic; revamping nursing-home care; and ensuring that all segments of the population have access to health services.
These approaches are logical and may in time result in a healthier, more equitably served population with some cost containment. However, they are likely to have little impact in the near future on controlling costs because of various societal and health-care issues that must also be addressed. My perspective is that of one who has worked in the Rhode Island medical community for the past 40 years as a practicing nephrologist and academician, as well as a medical administrator.
About 20 years ago, Rhode Island had one of the most regulated and controlled health-care systems in America. State laws required the Health Services Council and the head of the state Department of Health to approve the opening of virtually any new health-care facility (“certificate of need”). That sustained the status quo by delaying or preventing competitive facilities from operating but failed to control increasing costs. This was in part because advances in medicine were “halfway measures,” effective in treating and diagnosing conditions but not in curing or preventing them. Discontinuing these restrictions did not result in a greater escalation in costs.
In addition, there is a prevailing sentiment by the regulators that providers are generally unwilling to provide free care, leaving a segment of the population without access to health care except in emergencies.
A return to the past, increasing controls and restrictions, is again unlikely to yield meaningful cost containment, will further burden an already overloaded and under-funded regulatory system, sustain the status quo and delay the implementation of advances in diagnostic and therapeutic procedures. That only two private insurance companies operate in Rhode Island — United Healthcare and Blue Cross — prevents market forces from effectively influencing health-care costs. The state, rather than increasing regulations, should encourage new insurance companies to enter the marketplace so that market forces can drive competitive pricing and options for consumers.
Some of the escalation in health-care costs can be ascribed to Rhode Island’s rapidly aging population. Multiple medical conditions, coupled with increased available treatments that have become much more sophisticated diagnostically and therapeutically, drive costs higher. Now available services, including artificial joints, insemination and organs, new and more complicated surgical and radiologic interventions, and advances in prescription medications result in many individuals living longer with improved health.
As long as technological advances are palliative but not curative or preventive and virtually every individual receives every available benefit, societal health-care costs cannot be contained. In my practice over time, I have seen an increasing use of illicit drugs, an increasing number of people speaking English as a second language, and an ever-increasing disparity in education and economic levels within the population. Therefore, many of those who need services are unable to access and use the health-care system in an efficient and effective manner, thus potentially increasing costs. Until the societal problems are addressed and the situation improved, substantial reductions in health-care costs cannot be anticipated.
Controlling health-care costs as well as addressing societal dysfunctions poses many complex challenges. The following suggestions if enacted would have an impact on the near and foreseeable future:
• All parties should acknowledge the negative impact of realities, including increased obesity, smoking, use of illicit drugs and alcohol, and the disparity in education and socio-economic opportunities, and recognize that solutions to societal ills are essential to containing health-care costs.
• Government controls and regulators should recruit new insurance companies to enter and compete in the marketplace and mandate that everyone receives needed care regardless of ability to pay as part of the cost of doing business.
• Recognize that individuals demand all the advances that have occurred in medical technology and prescription medications without concern for their costs. It is unlikely that health-care costs can be contained without some limitation or rationing of services. However, this will require a frank debate and the acceptance that to contain costs, not every patient can receive every available service.
• Regulators need to enter into a new era of trust and cooperation with providers. Most providers are honest, competent, conscientious individuals trying to provide excellent care. They are not primarily motivated by economic gain but believe they are entitled to receive fair compensation for their efforts and the years of training they have undertaken.
• Finally, permit a robust, honest, forthright, uncensored debate to occur among parties: government, regulators, providers, insurers and consumers included. These interested parties negotiating in good faith and understanding that progress must be made in many societal areas before positive impact can occur on health-care costs could craft meaningful changes, striving for incremental changes rather than complete transformation is most likely to be successful.
Joseph A. Chazan, M.D., is a clinical professor of medicine at the Brown Medical School and a nephrologist.
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