Two HSC Articles Appear in September/October Health Affairs

Is U.S. Health Care Spending Excessive and What Can be Done About It?; Medicare Governance and Provider Payment Policy

Media Advisory
Sept. 9, 2009

FURTHER INFORMATION, CONTACT:
Alwyn Cassil (202) 264-3484 or acassil@hschange.org

WASHINGTON, DC—Two September/October Health Affairs articles from researchers at the Center for Studying Health System Change (HSC) explore whether U.S. health care spending is excessive and the role of Medicare governance in provider payment policy. HSC is a nonpartisan health policy research organization funded in part by the Robert Wood Johnson Foundation, which supported the articles through its general support of HSC.

Is Health Spending Excessive? If So, What Can We Do About It? by Henry J. Aaron of the Brookings Institution and Paul B. Ginsburg of HSC

The authors conclude that the evidence that U.S. health care spending is excessive is overwhelming. To lower health spending growth without lowering net "welfare"-the well-being that people derive from consuming goods and services-the authors maintain that the health care system must:

• Organize the delivery of care to promote efficient cooperation among the many providers and practitioners involved in delivering modern medical treatment. The current fee-for-service payment system works against efficiency, and provider payment reform has a critical role to play in promoting efficient and coordinated care delivery.
• Conduct costly research over many years to identify which procedures are effective at reasonable cost; develop protocols that enable providers to identify in advance patients whose expected benefits of treatment are low or negative; design incentives that encourage providers to act on these protocols; and educate patients about why such protocols should be sustained.
• Continue research to maintain medical innovations to help ensure that spending reductions remain beneficial over time.

Medicare Governance and Provider Payment Policy, by Hoangmai H. Pham of HSC, Paul B. Ginsburg of HSC and James M. Verdier of Mathematica Policy Research

Medicare’s decision-making processes leave policies on provider payment vulnerable to "micromanagement" by Congress and the White House. The status quo could jeopardize delivery system changes central to current health reform proposals. Ad hoc intervention in response to pressure from narrow interests can result in policies that do not serve the broader priorities of beneficiaries and taxpayers and that are unsound economically. Establishing a new Medicare policy board, as proposed by the Obama administration and Congress; transforming the Medicare agency into an independent agency or new department; and conducting analyses of congressionally proposed payment policy changes before they are voted on could further insulate payment decisions from political interference.

The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by the Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.