Financing Health Care — Finding the Money Is Hard and Spending It Well Is Even Harder
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《新英格兰医药杂志》
In this issue of the Journal, Mongan and Lee argue persuasively that physicians should lead the way in confronting the unpleasant truth that we cannot achieve universal health care coverage in the United States without tax increases.1 There is a second unpleasant truth that we must confront: if we are going to create a sustainable system of health care financing in which there is a balance between the costs and benefits of care, then the government must become more involved in influencing how the money is spent. And although the difficulties of figuring out desirable ways of raising money are primarily political, there are substantial political and technical difficulties in figuring out desirable ways of spending money.
The calls for universal health care in this issue of the Journal, including a proposal for a voucher system by Emanuel and Fuchs,2 raise at least four questions in thinking about publicly financed systems. First, what role, if any, should there be for state governments? Second, what role, if any, should there be for health plans? Third, how should decisions be made about the rate of growth in expenditures? And fourth, what mechanisms of accountability are built into the system to ensure that resources are used well? Unfortunately, there are no obvious right answers to any of these questions.
Administration by the federal government has the advantages of increasing the chances of equitable treatment across the country and potentially providing greater protection to low-income persons and racial and ethnic minorities than does administration by state governments. However, administration by the federal government also has disadvantages. First, federal administration requires uniform rules, which make it difficult to respond to geographic diversity in the preferences of patients and providers.3 Second, federal administration is less flexible than state administration.4 Third, and most important, a federal agency will have great difficulty understanding the needs of local communities. In a nation as large and diverse as ours, it will be difficult for a federal agency to do a good job of assessing needs at the local level.
In a similar way, it is not clear whether payments should be made directly from the government to providers or whether risk-bearing intermediaries should be used. Direct payments have the great advantages of simplicity and low transaction costs. Approximately 20 percent of the resources used in health care are devoted to making payments and collecting money, and a single-payer system would allow many of those resources to be used in other ways.5 Direct-payment systems also promote equity and uniformity in coverage policies.
However, it is hard for the government to determine whether services that physicians provide do much to improve patients' health. A fee-for-service structure is antithetical to the development of systems capable of providing the kind of well-coordinated, patient-centered care that is needed by the growing number of people with chronic illnesses. And direct payments make it difficult to reallocate resources, because the incumbents — providers who have received funds in the past — are able to hold on to those resources even if they would be better used elsewhere.
Paying health plans as intermediaries can potentially solve some of these problems. In theory, health plans can be more flexible in their internal allocation of resources than can governmental direct-payment systems. If changes in technology allow resources to be shifted out of the hospital into the community, it will be difficult for the government to claw funds out of hospital budgets, but it may be more feasible for private plans to do so. Health plans may be better able than the government to determine which services are most valued by patients and shift resources to those services. In the best plans, doctors have a strong voice in the allocation of resources. A system that is based on competing private health plans could create a dynamic in which physicians and hospitals are rewarded, with more revenue and members, if they do a good job.6 Health policy analysts and politicians have engaged in intense disputes about whether the government should be a single payer of providers or a single payer of health plans; these debates will doubtless continue.
Figuring out how quickly the rate of expenditures should grow is a difficult problem for any method of health care financing. As we grow richer, and as the technological frontier of medicine expands, many of us might be willing to devote a larger part of our income to health care in return for a better quality and quantity of life.
Emanuel and Fuchs propose a value-added tax that would serve as a "rheostat," with the public's demand for additional services balanced by voters' willingness to support a tax increase. If the public had well-formed and consistent preferences, and if the political system were perfectly responsive to those preferences, then we could be confident that the Congress and the President would set the rheostat at a level that reflected the public's willingness to pay. But politics is a messy business, and we should not be confident that we will get the level exactly right. In a publicly financed system, there would be ongoing debate about whether we are using too many or too few resources in health care, and we are unlikely to arrive at exactly the right answer. Although this is an unpleasant prospect, unfortunately there are not any feasible alternatives.
Some analysts, politicians, and physicians hope that health plans with a high deductible would allow consumers to balance their willingness to pay with the value that they receive from health care. According to this theory, if we just let patients decide whether the care they are receiving is worth their money, the invisible hand of the market would determine the proper level of resources and the efficient allocation of them. However, with any reasonable level for the deductible — for example, $3,000 per person — the preponderance of health care expenditures will be for services above the deductible and will be covered by insurance.7 Thus, the rate of growth of total expenditures would still be determined largely by expenditures covered by insurance, and some combination of the heavy hand of health plans and the government would be needed to get this growth rate right.
Underlying all discussions of reforming health care financing is the desire to create a system that is accountable to patients. Accountability is elusive in health care for two primary reasons. First, it is difficult for anyone (patients, insurers, the government, or providers) to measure output well, since it is difficult to determine the relationship between care received and health produced. Second, because insurers pay for most services for most patients, we do not use our wallets to hold providers accountable.
The proposal by Emanuel and Fuchs envisions a variety of mechanisms to create accountability. At the public level, the proposed Federal Health Board would be partially accountable to the Congress and the President. To the extent that competition among plans worked as intended, health plans would be accountable to both patients and providers for their performance. These accountability mechanisms are far from perfect, but there is no perfect method of creating accountability in health care.
As messy and difficult as a publicly financed system is likely to be, the alternatives are worse. Under the status quo, expenditures are increasing at a rate that is unaffordable, many resources are used in clinical and administrative activities that do little to improve health, and accountability mechanisms are weak. Voluntary, employer-sponsored insurance will continue to recede as health care expenditures increase more quickly than workers' wages or productivity.8 The resulting increase in the number of uninsured people will lead to additional health and financial catastrophes, increase the strain on the safety net, and increase political pressure for change.9 And if health expenditures increase at "only" 2 percent per year more quickly than personal income (a rate that is lower than the historical record), we can expect our standard of living to decline within 20 years.10 This would surely be unacceptable, and voters would demand change.
We do know how to ensure universal coverage, but we do not know how to ensure that our money will be spent well. We should not let uncertainty about how best to spend money prevent us from supporting proposals for universal coverage in the context of a system that would be less chaotic and more affordable. Emanuel and Fuchs offer a thought-provoking suggestion for moving in that direction.
Source Information
From the Department of Family and Preventive Medicine, University of California, San Diego, La Jolla.
References
Mongan JJ, Lee TH. Do we really want broad access to health care? N Engl J Med 2005;352:1260-1263.
Emanuel EJ, Fuchs VR. Health care vouchers -- a proposal for universal coverage. N Engl J Med 2005;352:1255-1260.
Kronick R, Rice T. A state-based proposal for achieving universal coverage. In: Meyer JA, Wicks EK. Covering America: real remedies for the uninsured. Washington, D.C.: Economic and Social Research Institute, June 2001:121-34.
Weil A. There's something about Medicaid. Health Aff (Millwood) 2003;22:13-30.
Woolhandler S, Campbell T, Himmelstein DU. Costs of health care administration in the United States and Canada. N Engl J Med 2003;349:768-775.
Enthoven AC. Managed competition in health care and the unfinished agenda. Health Care Financ Rev 1986;Special No.:105-19.
Berk ML, Monheit AC. The concentration of health care expenditures, revisited. Health Aff (Millwood) 2001;20:9-18.
Gilmer T, Kronick R. The calm before the storm: expected increase in the number of uninsured Americans. Health Aff (Millwood) 2001;20:207-210.
Committee on the Consequences of Uninsurance. Hidden costs, value lost: uninsurance in America. Washington, D.C.: National Academies Press, 2003.
Chernew ME, Hirth RA, Cutler DM. Increased spending on health care: how much can the United States afford? Health Aff (Millwood) 2003;22:15-25.(Richard Kronick, Ph.D.)
The calls for universal health care in this issue of the Journal, including a proposal for a voucher system by Emanuel and Fuchs,2 raise at least four questions in thinking about publicly financed systems. First, what role, if any, should there be for state governments? Second, what role, if any, should there be for health plans? Third, how should decisions be made about the rate of growth in expenditures? And fourth, what mechanisms of accountability are built into the system to ensure that resources are used well? Unfortunately, there are no obvious right answers to any of these questions.
Administration by the federal government has the advantages of increasing the chances of equitable treatment across the country and potentially providing greater protection to low-income persons and racial and ethnic minorities than does administration by state governments. However, administration by the federal government also has disadvantages. First, federal administration requires uniform rules, which make it difficult to respond to geographic diversity in the preferences of patients and providers.3 Second, federal administration is less flexible than state administration.4 Third, and most important, a federal agency will have great difficulty understanding the needs of local communities. In a nation as large and diverse as ours, it will be difficult for a federal agency to do a good job of assessing needs at the local level.
In a similar way, it is not clear whether payments should be made directly from the government to providers or whether risk-bearing intermediaries should be used. Direct payments have the great advantages of simplicity and low transaction costs. Approximately 20 percent of the resources used in health care are devoted to making payments and collecting money, and a single-payer system would allow many of those resources to be used in other ways.5 Direct-payment systems also promote equity and uniformity in coverage policies.
However, it is hard for the government to determine whether services that physicians provide do much to improve patients' health. A fee-for-service structure is antithetical to the development of systems capable of providing the kind of well-coordinated, patient-centered care that is needed by the growing number of people with chronic illnesses. And direct payments make it difficult to reallocate resources, because the incumbents — providers who have received funds in the past — are able to hold on to those resources even if they would be better used elsewhere.
Paying health plans as intermediaries can potentially solve some of these problems. In theory, health plans can be more flexible in their internal allocation of resources than can governmental direct-payment systems. If changes in technology allow resources to be shifted out of the hospital into the community, it will be difficult for the government to claw funds out of hospital budgets, but it may be more feasible for private plans to do so. Health plans may be better able than the government to determine which services are most valued by patients and shift resources to those services. In the best plans, doctors have a strong voice in the allocation of resources. A system that is based on competing private health plans could create a dynamic in which physicians and hospitals are rewarded, with more revenue and members, if they do a good job.6 Health policy analysts and politicians have engaged in intense disputes about whether the government should be a single payer of providers or a single payer of health plans; these debates will doubtless continue.
Figuring out how quickly the rate of expenditures should grow is a difficult problem for any method of health care financing. As we grow richer, and as the technological frontier of medicine expands, many of us might be willing to devote a larger part of our income to health care in return for a better quality and quantity of life.
Emanuel and Fuchs propose a value-added tax that would serve as a "rheostat," with the public's demand for additional services balanced by voters' willingness to support a tax increase. If the public had well-formed and consistent preferences, and if the political system were perfectly responsive to those preferences, then we could be confident that the Congress and the President would set the rheostat at a level that reflected the public's willingness to pay. But politics is a messy business, and we should not be confident that we will get the level exactly right. In a publicly financed system, there would be ongoing debate about whether we are using too many or too few resources in health care, and we are unlikely to arrive at exactly the right answer. Although this is an unpleasant prospect, unfortunately there are not any feasible alternatives.
Some analysts, politicians, and physicians hope that health plans with a high deductible would allow consumers to balance their willingness to pay with the value that they receive from health care. According to this theory, if we just let patients decide whether the care they are receiving is worth their money, the invisible hand of the market would determine the proper level of resources and the efficient allocation of them. However, with any reasonable level for the deductible — for example, $3,000 per person — the preponderance of health care expenditures will be for services above the deductible and will be covered by insurance.7 Thus, the rate of growth of total expenditures would still be determined largely by expenditures covered by insurance, and some combination of the heavy hand of health plans and the government would be needed to get this growth rate right.
Underlying all discussions of reforming health care financing is the desire to create a system that is accountable to patients. Accountability is elusive in health care for two primary reasons. First, it is difficult for anyone (patients, insurers, the government, or providers) to measure output well, since it is difficult to determine the relationship between care received and health produced. Second, because insurers pay for most services for most patients, we do not use our wallets to hold providers accountable.
The proposal by Emanuel and Fuchs envisions a variety of mechanisms to create accountability. At the public level, the proposed Federal Health Board would be partially accountable to the Congress and the President. To the extent that competition among plans worked as intended, health plans would be accountable to both patients and providers for their performance. These accountability mechanisms are far from perfect, but there is no perfect method of creating accountability in health care.
As messy and difficult as a publicly financed system is likely to be, the alternatives are worse. Under the status quo, expenditures are increasing at a rate that is unaffordable, many resources are used in clinical and administrative activities that do little to improve health, and accountability mechanisms are weak. Voluntary, employer-sponsored insurance will continue to recede as health care expenditures increase more quickly than workers' wages or productivity.8 The resulting increase in the number of uninsured people will lead to additional health and financial catastrophes, increase the strain on the safety net, and increase political pressure for change.9 And if health expenditures increase at "only" 2 percent per year more quickly than personal income (a rate that is lower than the historical record), we can expect our standard of living to decline within 20 years.10 This would surely be unacceptable, and voters would demand change.
We do know how to ensure universal coverage, but we do not know how to ensure that our money will be spent well. We should not let uncertainty about how best to spend money prevent us from supporting proposals for universal coverage in the context of a system that would be less chaotic and more affordable. Emanuel and Fuchs offer a thought-provoking suggestion for moving in that direction.
Source Information
From the Department of Family and Preventive Medicine, University of California, San Diego, La Jolla.
References
Mongan JJ, Lee TH. Do we really want broad access to health care? N Engl J Med 2005;352:1260-1263.
Emanuel EJ, Fuchs VR. Health care vouchers -- a proposal for universal coverage. N Engl J Med 2005;352:1255-1260.
Kronick R, Rice T. A state-based proposal for achieving universal coverage. In: Meyer JA, Wicks EK. Covering America: real remedies for the uninsured. Washington, D.C.: Economic and Social Research Institute, June 2001:121-34.
Weil A. There's something about Medicaid. Health Aff (Millwood) 2003;22:13-30.
Woolhandler S, Campbell T, Himmelstein DU. Costs of health care administration in the United States and Canada. N Engl J Med 2003;349:768-775.
Enthoven AC. Managed competition in health care and the unfinished agenda. Health Care Financ Rev 1986;Special No.:105-19.
Berk ML, Monheit AC. The concentration of health care expenditures, revisited. Health Aff (Millwood) 2001;20:9-18.
Gilmer T, Kronick R. The calm before the storm: expected increase in the number of uninsured Americans. Health Aff (Millwood) 2001;20:207-210.
Committee on the Consequences of Uninsurance. Hidden costs, value lost: uninsurance in America. Washington, D.C.: National Academies Press, 2003.
Chernew ME, Hirth RA, Cutler DM. Increased spending on health care: how much can the United States afford? Health Aff (Millwood) 2003;22:15-25.(Richard Kronick, Ph.D.)