COMMENTARY
Managed care could offset healthcare costs
By Max Botticelli, M.D.
It makes sense to treat a simple headache with an aspirin. If the headache persists, it makes sense to examine whether it's a symptom of a much more serious malady.
So it is with our healthcare. For years now, we've been living with the headache of rising healthcare costs without fully examining its causes, leaving the industry in a state of hyperinflation — a critical condition.
The Congressional Budget Office Report, "The Long Term Outlook for Health Care Spending," concludes that unless something is done, "federal spending on health care will reach unsustainable levels." According to this report, in 1960 healthcare spending as a percent of Gross Domestic Product was about 5 percent. In 2005, it was 14.9 percent and it is projected to reach 25 percent in 2025 and 49 percent in 2082.
The consequences of healthcare hyperinflation are obvious: we have less money to cover other basic necessities; employer-based health insurance programs are threatened; the number of uninsured has increased; Medicare and Medicaid continue to reduce reimbursements to providers with the result that more physicians, struggling to cover costs that include hefty malpractice insurance premiums, are deciding to leave.
It is convenient, but misdirected, to focus on health plans and premium rates as the problem. According to the Centers for Medicaid and Medicare Services, health insurance premiums grew 7.2 percent a year from 1993 to 2003, while healthcare costs grew 7.3 percent a year during the same period. Premium rates do not drive costs — costs drive premium rates. They are a symptom of a problem with multiple causes:
The solution? Managed care.
We may not like it, but managed care is the only real solution available to deflate the ballooning cost of healthcare. Most national health programs manage care by rationing, or reducing the availability of services. Another model manages use through gate-keeping. Both work but are unlikely to be embraced by Americans.
More acceptable, perhaps, are the following solutions:
The reward for bringing healthcare inflation under control is huge. It would improve Medicare financing, allow Medicaid to expand its programs to include at least some of the uninsured, reduce healthcare costs for employers, increase access to physicians and hospitals and, most importantly, improve the quality of healthcare for those who need it.
Can it happen? You bet your life. But only if we begin focusing on the causes of healthcare hyperinflation rather than the symptoms.
Max G. Botticelli, M.D., is chief executive officer of University Health Alliance. He wrote this commentary for The Advertiser.
