Another View on How to Reduce Health Spending

We all agree that health spending is high in the United States and that its growth rate needs to be slowed, if not stopped.  Various prescriptions for slowing that spending, however, often seem to ignore research findings and to be heavier on theory and wishful thinking than on the realities and complexities of why a lot of money is spent on health care in the United States.  The Commonwealth Fund created a commission to identify how we can create a better system and the commission has now issued its report, which unfortunately falls into the not-too-helpful category.     (Commonwealth Fund Report)  The report authors come up with a list of “synergistic” reforms which it says will save $2 trillion dollars in spending that would otherwise occur in the next ten years.  The reforms include provider payment reform, basically value-based purchasing using delivery vehicles like ACOs and medical homes; policies that give consumers more information and help them make better decisions on quality and cost; and systemwide action to improve health markets, reducing admin costs and even setting regional and national growth targets.  Sounds great.  Encouraging provider consolidation through vehicles like ACOs, however, is only likely to exacerbate provider market power and ultimately lead to higher prices and premiums.  There is no significant research suggesting that these vehicles actually will reduce costs.  There is a limit to how rational consumers are about any purchasing decision, much less a complex, emotional subject like health care.  Five percent of the population accounts for an alarming high percent of total spending and many of these people are really incapable of making decisions for themselves, especially those near the end-of-life, and their caregivers are very reticent to reduce the care these people receive.  And government intervention in the health market has worked so well, we really should do a lot more of it.  That is just a few quibbles about this fantasy idea of how health care spending can be reduced.