How to Control Rising Health Care Costs - Room for Debate Blog - NYTimes.comWith the House’s passage of a health care bill and the Senate legislation possibly moving to the floor for debate next week, many analysts are saying that neither bill goes far enough to slow rising health care costs — an issue that President Obama has made central to his reform agenda.
We asked some experts what are one or two provisions not in the bills that could help contain health care costs going forward?
Jacob S. Hacker is a professor of political science at Yale and the author of “The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream.”
Many critics of the Democratic reform bills are concerned that the bills don’t do enough to slow the rise of health spending. Oddly, many of these critics are also against one of the most important immediate steps needed to create real spending restraint: a strong public insurance plan with the authority to bargain for lower prices for medical goods and services, including prescription drugs.
Health policy experts have shown — and some revealing new evidence drives home — that American insurers pay much more, on average, for goods and services than do insurers in other rich nations. There is also a huge disparity in the prices and the administration of payments that insurers pay.
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To bring real cost restraint to American health care, not only should the public plan be strengthened to have greater bargaining authority, but private insurers should also be allowed to piggyback on it in setting their own rates.
Most observers of health care know that the insurance market has become increasingly consolidated, with one or a small handful of insurers enrolling most of the privately insured. Less well known is that providers, too, have grown increasingly consolidated. Many insurers admit they cannot negotiate fair rates in local markets because of provider oligopolies.
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Len M. Nichols is director of the Health Policy Program at the New America Foundation.
The Medicare payment reforms in both the House and the Senate bills will help to slow the growth of costs by rewarding value over volume, as will the proposed Medicare commission and the tax on insurers who offer high-cost health plans, which are in the Senate Finance Committee bill. And both House and Senate legislation also include “innovation centers” which will allow us to test different payment models and health care processes.
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Daniel Callahan is the co-founder of the Hastings Center, a nonpartisan research institution dedicated to bioethics and public policy. He is author of “Taming the Beloved Beast: How Medical Technology Costs Are Destroying our Health Care System.”
There are two important elements missing in the bills: permitting Medicare to consider costs in making its benefit coverage decisions, and a provision setting a “trigger point” to control insurance premiums if competition does not work to hold down cost increases.
The Medicare program has been forbidden since its inception in 1965 from allowing costs to be considered in its benefit coverage decisions. That ban makes no sense for a program facing insolvency in the next eight years or so, particularly since it now covers drugs and treatments that are far more costly than their health value. That limitation should be eliminated.
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Leslie Greenwald is a principal scientist and division vice president at RTI International, a nonprofit research institute. She worked at the Health Care Financing Administration (now the Center for Medicare and Medicaid Services) on health care, among other issues, under Republican and Democratic administrations.
Identifying an effective method for controlling and reducing health care costs is the most difficult element of health care reform. Unfortunately, so far, the health care reform bills under consideration largely avoid the core problem of runaway health care spending: Americans consume too much expensive health care, driving up costs with little or no marginal improvement in their health status or longevity.
The current health care reform bills include some provisions that may have an impact on lowering health care prices. Inclusion of a public option is one way to lower health insurance pricing. Government sponsored health insurance options, like the Federal Medicare program, have a number of structural differences that make them inherently less expensive than private insurance.
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